Court Opinion

ID: 5195877
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:43:09.65383+00
Date Added: 2024-06-11T08:27:04.854710
License: Public Domain

O’Brien, J.:
The appellants rely principally upon three grounds for the reversal of this judgment which may be considered in their order.
The first is that the right to recover the penalty did not pass to the receiver, it being a personal one, or, as expressed by the appellants, “ the claim which Marie had against defendants being in *446the nature of a claim to recover a penalty and therefore an action ex delicto did not pass to the plaintiff as receiver in supplementary proceedings.” ;
There are cases, some of which are referred to by the appellants, which hold that an action to recover a penalty for failure to file an annual report does not survive the death of the creditor. (Brackett v. Griswold, 103 N. Y. 425; Blake v. Griswold, 104 id. 613.)
While it is true, however, that the right to sue does not survive the death of a creditor, it is equally true that either by assignment in fact or by assignment in law, which would result from the appointment of a receiver, the creditor being alive, it would pass as an incident to the main debt. Thus, in Bolen v. Crosby (49 N. Y. 183), where a judgment against a corporation for services Was assigned by the creditor, and the assignee sued the trustees for failure to file a report, it was held that the assignment of the judgment carried with it the claim and debt upon which it was founded and all claims against others as collateral and incidental to it, and that the assignee’s right to sue and to all the remedies which his assignor could have had, were perfect. (See, also, Stokes v. Stickney, 96 N. Y. 323.) It follows, therefore, that the plaintiff, as assignee, could sue to recover the penalty.
The second objection urgéd by the appellants is that the complaint did not allege, nor did the plaintiff prove, the giving of the notice required by section 34 of the Stock Corporation Law (supra). This contention is sought to be supported by the argument that where somewhat similar statutes have required the giving of notice in actions brought against municipal corporations, and ,in actions' brought against employers under the Employers’ Liability Act, it has been held that, the giving of such notice was a condition precedent to maintaining the action, and the plaintiff must both plead and prove that such notice was given. It is unnecessary to point out the distinction between the statutes referred to .and the one here presented because the dissimilarity is shown and the question authoritatively settled in Shepard v. Fulton (171 N. Y. 184), wherein the. rule is thus stated: “ Defendant’s liability was created by section 30 of the Stock Corporation Law as it existed on January 1st, 1896. This statute was modified in 1899 by an amendment under which the liability was made to depend upon *447certain conditions. This modification was i/n- the nature of a proviso which the plaintiff was not bound to negative, either in his pleading or proof. The burden was on the defendant to aver and prove that the case was one falling within the terms of the amendment of 1899. Since he failed to plead or prove this essential fact he cannot complain because it is not found.”
The appellants argue that the Fulton Case (supra) turned upon the fact that no notice was necessary therein as the action was begun within the year 1899, and hence it is not controlling. What was therein said, however, in the language quoted with respect to the nature of section 34 of the Stock Corporation Law we regard as decisive of the point here raised. That section of the statute requiring notice is a proviso, that is to say, a clause against the pleader following one for his benefit, whereas in the Employers’ Liability Act (Laws of 1902, chap. 600, § 2) and in the .statute relating to municipal corporations (Laws of 1886, chap. 572, § 1) the requirement is an exception incorporated in the body of the clause. As pointed out in Rowell v. Janvrin (151 N. Y. 67), in the latter case he who pleads the clause must plead the exception, whereas in the former he may plead the clause and leave it to his adversary to show the exception. “ If the modifying words are no part of the enacting clause, but are to be found in some other part of the statute, or in some subsequent statute, * * * he may then state his case in the words of the enacting clause and it will be prima facie sufficient.”
The appellants’ third point is that the plaintiff never qualified as receiver, and was, therefore, not entitled to bring this action. The alleged defect is that in the order appointing the receiver it is provided that his. bond be filed with the “ Clerk of the County of New York,” but it was actually filed with the clerk of the City Court, and not until the trial of this action, when it was desired to offer the bond in evidence, was there any attempt made, to correct the error, an order being then obtained amending the order appointing the receiver nunc pro tune by striking out the provision as to filing with the clerk of the county of New York and inserting the provision that it be filed with the clerk of the City Court, the order reciting that the former provision had been inadvertently and erroneously inserted. The appellants argue that “ the plaintiff failed *448entirely to qualify in accordance with the order of appointment, and should not .be permitted to cure that defect in the midst of the trial three years after the order was entered,” and that the order amending the order of appointment was improperly, obtained. We think that, under section 723 of the Code of Civil Procedure, the court had the power to correct the error and properly did so, and that the defendants were not thereby injured. Furthermore, we, think the respondent is right in the' contention that the appellants cannot collaterally attack the irregularity in the filing of the bond. In this respect the case is similar to Morgan v. Potter (17 Hun, 403), wherein it was said: “ The respondents take the position that the receiver has not filed a bond as required by the. order appointing him. * * * It appears that he executed an undertaking or obligation which was not sealed. In that respect the instrument was irregular, but, we think, the judgment debtor only can take advantage of the irregularity.” And in Wright v. Nostrand (94 N. Y. 31) it was said: “ The only interest which the defendants have * * * in the question of the regularity of the appointment of the plaintiff as- receiver * * * is to see that he rightfully represents such plaintiffs in order that they may not be subjected to other actions for the same cause. *. * * If the judgment in this case be determined to be a bar *' * * then the defendants have secured all the protection to which they aré entitled. * * * This protection seems to have been secured to them by the order * * * authorizing the prosecution thereof.- * ' * * While it is essential in any action-brought by a receiver that he should show an appointment as such receiver * * * it is yet not open to the party in a collateral proceeding to raise every question relating to the validity of such appointment,”
The other contentions of the appellants we have examined, but do not think that .they require discussion, our conclusion being ón the entire record that the court was right in directing a verdict for the plaintiff, and that the judgment and- order should be affirmed, with costs. - ■
Van Brunt, P. J., Patterson, Hatch and Laughlin, JJ., concurred.
Judgment and order affirmed, with costs.