Court Opinion

ID: 5504085
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:05:34.769198+00
Date Added: 2024-06-11T08:34:00.443155
License: Public Domain

BARNARD, P. J.
The plaintiff is the owner of three notes, of $5,000 each, given by the New York Iron Mine to the First National Bank of Negaunee, Mich. The notes were all given in 1877, in April and May. The defendant Wetmore executed the notes in the name of the iron mine corporation, without authority. That corporation is a Michigan corporation. Wetmore applied the proceeds to his own use. The legislative act of Michigan gave the company a lien on Wet-more’s stock in the corporation for his debts to the company. Wet-more charged himself with the payment of the notes upon the books of the company in May, 1877, and assigned the dividends upon his capital stock,—1,333 shares,—and authorized the president of the company to apply the dividends to the payment of the notes in question. Wetmore became a bankrupt in November of the same year. No payments have ever been made on the notes. On the 1st of March, 1889, the iron mine declared dividends upon the Wetmore stock to the amount of $35,000. The complaint alleges that the corporation either holds that sum, or has paid it to the official assignee in bankruptcy. The relief sought by the plaintiff is that he be paid out of that fund. The defendants plead the statute of limitations both by the state of Michigan and New York, and both the six-years and the ten-years limitation. The defense pleaded is not good. The cause of action which is based upon an existing title in the notes only dates from the declaring of the dividends. In the case of Butler v. Johnson, 111 N. Y. 204, 18 N. E. Rep. 643, the right to enforce the claim on the part of the creditor existed. The cases holding that a mere form of the relief sought will not exclude the operation of the statute have no relevancy. The right to the relief in this case is created solely by the defendant iron mine declaring a dividend in 1889. This remedy is indeed incidental to the notes which may be barred by the statute, but' the notes are not paid. The lien on the dividend is not impaired because the right to sue upon the notes is barred. Hulbert v. Clark, 128 N. Y. 295, 28 N. E. Rep. 638. The part of the judgment appealed from is therefore affirmed, with costs. All concur.