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and 118 New York State Reporter lands. Fourth. That the complaint does not state facts sufficient to constitute a cause of action. Demurrer sustained.
Griffin & Ostrander, for plaintiff.
KELLOGG, J. This is an action in ejectment. The plaintiff alleges that it is seised in fee of certain lands in Warren county; that the lands are vacant forest lands; that the defendant is in possession and withholds possession from the plaintiff. The defendant demurs. It is evident from the fact that the lands are vacant, and that fact is established for the purpose of this argument by the demurrer, that the possession of the defendant, if it exists at all (and without its existence this action is not maintainable), exists not as a fact, but only through some fiction of law. Neither can it be constructive possession of the common law, for that would be accorded to the plaintiff, as the conceded owner of unoccupied lands. Its existence, therefore, if it has any, must depend upon statute.
The question of the case therefore is this: Does any statute of the state confer upon this defendant, without any overt action on his part whatsoever, such possession of the property in question that he may be sued in ejectment? The plaintiff, to establish the proposition that defendant is in possession, relies upon chapter 283, p. 482, of the Laws of 1885, and amendatory acts. That act establishes a forest commission, and provides by section 9 that “the forest commission shall have the care, custody and control of the forest preserve." The forest preserve is defined in section 7 of the act to be as follows:
"All the lands now owned or which may hereafter be acquired by the state of New York, within the counties of Clinton, excepting the towns of Altona and Dannemora, Essex, Franklin, Fulton, Hamilton, Herkimer, Lewis, Saratoga, St. Lawrence, Warren, Washington, Greene, Ulster and Sullivan, shall constitute and be known as the forest preserve."
The forest commission is now the forest, fish, and game commission, composed of a single commissioner, but his power and duties in relation to the forest preserve are the same as those of the old forest commission. It will be noticed that the forest preserve is confined to "all the lands now owned or which may hereafter be acquired by the state of New York” in certain counties, including the county of Warren, and hence, while the defendant may be in possession of the forest preserve, he cannot be in possession of the lands in suit unless it is admitted that they are owned by the state—an admission contrary to the conceded facts of the case, and, in any event, fatal to the plaintiff's cause of action.
In reaching the conclusion that the demurrer must be sustained, I have not been unmindful of the decision of the Supreme Court in Turner v. People, 168 U. S. 90, 18 Sup. Ct. 38, 42 L. Ed. 392, nor the decision of the Court of Appeals in the same case in People v. Turner, 145 N. Y. 451, 40 N. E. 400. In that case the question of the constitutionality of a New York statute, being chapter 448, p. 758, of the Laws of 1885, making a deed from the State Comptroller conclusive evidence of title after the lapse of six months from the date of its recording, was considered, and the act held valid as an act of limitation. It was a necessary premise to the conclusion, that, pending the six months immediately preceding the recording of the deed, there was some right of action or method of procedure open to the landowner to test the validity of the Comptroller's deed of his property. The Court of Appeals in that case held that the landowner during this period could apply directly to the Comptroller for a cancellation of the sale; a conclusion directly opposed to a long line of authorities, and held erroneous in the subsequent case of People ex rel. Millard v. Roberts, 151 N. Y. 540, 45 N. E. 941, where the question squarely arose. The Supreme Court, in Turner v. People, sustained the Court of Appeals because that court, interpreting the laws of its own state, had said there was during the six-months interim some remedy open to the landowner, and suggesting that the remedy might be an application to the Consptroller to cancel, or an action against the Comptroller or the forest commissioners in ejectment. The plaintiff argues that, the Court of Appeals having now finally denied the first remedy, and the suggested remedy against the Comptroller having disappeared through a recent repealing act, necessarily the remedy must be an action against the forest commission, the third remedy suggested in the opinion of the Supreme Court. It would seem that an act conclusively presuming any comptroller's deed to be a legaf conveyance of title after a lapse of time from recording would be little less than an act of confiscation, and therefore unconstitutional, unless the owner had or was given during the short time elapsing before the deed became conclusive some remedy by which he could attack the validity of the comptroller's sale and conveyance. There is a great deal of sound sense in this argument, but it appears to me that the argument correctly addressed itself to the propriety of the decision of the Court of Appeals in People v. Turner, before mentioned. That court itself did not find it necessary, in order to sustain its own reasoning in the Turner Case, to decide in People ex rel. Millard v. Roberts, supra, that the remedy of an application to the Comptroller for cancellation was an existent remedy belonging to the iandowner. On the contrary, it held that the landowner had no such remedy, and by doing so completely swept away its own argument in People v. Turner.
It does not seem incumbent upon me to discover and attempt to make effectual other remedies for the landowner in order to support the decision of the Court of Appeals in the Turner Case; especially a remedy of the kind attempted to be pursued in this action, to support which there is no sound basis, either in statute or in reason, but only the argument that because there must be a remedy, this, therefore, is that remedy. The demurrer is sustained, and complaint dismissed, with costs.
Demurrer sustained, and complaint dismissed, with costs.
and 118 New York State Reporter (41 Misc. Rep. 439.)
WEIDENFELD V. HOLLINS et al.
1. DISCOVERY-EXAMINATION BEFORE TRIAL.
A syndicate was formed to buy and sell a controlling interest in a certain corporation through two members of the syndicate appointed as general managers, the profits to be divided among the members of the syndicate in proportion to the liabilities assumed. A member brought an action to compel the managers to account, and for violations of their trust and for secret profits, and alleged that other members of the syndicate, who were his fiduciaries, had, with the connivance of said managers, shared in the fraudulent transactions, by deriving an advantage in which plaintiff had no part. Aeld, that plaintiff was entitled to examine such defendants before trial, in order to show that they were his fiduciaries, and had reaped an indirect advantage from sales made by the syndicate, in which he had not been allowed to participate.
Action by Camille Weidenfeld against Harry B. Hollins and others. Motion to vacate an order for the examination of certain defendants before trial. Order modified.
Coudert Bros., for plaintiff.
Carter, Hughes, Rounds & Schurman, for defendant William H.
Simpson, Thatcher, Barnum & Bartlett, for defendant George R. Sheldon.
Peckham, Miller & King, for defendant George P. Butler.
DAVIS, J. This is a motion to vacate an order made herein on August 6, 1903, for the examination of the defendants Burke, Edey, Govin, Tilford, and Sheldon before trial, pursuant to section 873 of the Code of Civil Procedure. The order was granted upon the application and affidavit of William H. Butler, one of the defendants. Only Burke, Edey, and Sheldon have been served with the order. The principal grounds upon which the motion is based are that the testimony sought is neither material nor necessary, and that the proposed examination is in the nature of an inquisitorial proceeding, and that its purpose is to procure evidence for use in a proceeding not in this court, but pending in the Court of Chancery of New Jersey. It is also urged in support of the motion that some of the defendants sought to be examined have no direct knowledge of the facts upon which they are to be questioned, and that some of the proposed witnesses reside in the state of New York, and have no present intention of changing their residence, but expect to be available as witnesses when the cause shall be reached for trial. The action is brought to compel an accounting by the defendants Tilford and Govin as managers of a syndicate of which the plaintiff and the other parties, except the defendant George P. Butler, were members. The syndicate was formed to purchase a controlling interest in the corporation known as the Henry Clay Bock & Company, Limited. By written agree
ment among the members of the syndicate, the defendants Tilford and Govin were appointed syndicate managers, with power “to purchase, as they may in their discretion deem for the interest of the syndicate, for account of the syndicate, shares of said stock or voting trust certificates at a cost not exceeding in the aggregate the sum of $1,200,000 and to dispose of said shares of stock or voting trust certificates with interest, or any part thereof, from time to time, at public or private sale, whether for cash or stock or bonds or other securities of any corporation, or partly for cash and partly for stocks or bonds or other securities, in their discretion." The limit of cost was afterward increased to $1,500,000. The complaint sets forth the various agreements creating the syndicate, and defining the powers of the syndicate managers, Tilford and Govin, and alleges that the defendants Tilford and Govin agreed with the other members of the syndicate to exercise their powers as syndicate managers in good faith, and solely for the benefit and advantage of the plaintiff and the other members of the syndicate, and that they would, in good faith and with due diligence and reasonable skill, effect a sale of the stock to be acquired by them for the syndicate for not less than its reasonable value, and at the best price and upon the best terms obtainable, and would fully and fairly account for all the proceeds of such sale, and for all the consideration which should induce them to make the sale. The complaint further states that Tilford and Govin have never rendered an account to the plaintiff as to their dealings with the said stock, except that on the 20th day of June, 1902, they informed the plaintiff that the stock acquired by them had been sold to the Havana Commercial Tobacco Company for $2,000,000, and that this sum exceeded the cost of the stock to the syndicate and expenses of management by $250,000, and that the defendants Tilford and Govin tendered the sum of $10,416.67 to the plaintiff as his share of the profit of the same. The complaint further alleges that the reasonable value of the stock so sold was, according to the statement of the defendant Tilford, not less than $10,000,000, and that the pretended sale of the stock to the Havana Commercial Company for $2,000,000 was made in bad faith and fraudulently, and in violation of the trust confided to the defendants Tilford and Govin. The complaint further alleges that the consideration received by the defendants Tilford and Govin was not simply the $2,000,000, but other considerations and inducements received by them, and for them personally, which they have not disclosed or accounted for to the plaintiff or to any of the other underwriters. Judgment is prayed for against Tilford and Govin, requiring them to account for all their dealings with the stock purchased by them as syndicate managers.
The defendant Govin, in his answer, admits that he and the defendant Tilford were appointed syndicate managers, and that they sold the whole of the stock acquired by them to the Havana Commercial Company, but states that the sole consideration of the sale was $2,000,000, and that the sale was made in good faith and for a full and adequate value, and that they have not yet accounted for the proceeds of the sale, but are ready to account and pay over. They ask for the dismissal of the amended complaint, or that they be permitted to ac
and 118 New York State Reporter count. The answer of the defendant Tilford is substantially the same as that of his colleague, Govin.
The answer of William H. Butler, at whose instance the order of examination was obtained, brings a new issue into the case. It not only alleges a violation of their trust as syndicate managers on the part of Tilford and Govin, but charges fraudulent conduct on the part of other members of the syndicate with reference to the disposition of the stock; and it asks for judgment against those defendants, requiring them also to account for all profits and considerations directly or indirectly received by them from the disposition of said shares. The answer alleges that the stock was purchased for the syndicate; that the defendants Govin, Wilson, and Tilford, and the defendants Hollins, Burke, Edey, Govin, and Busch, constituting the firm of H. B. Hollins & Co., had entered into a fiduciary relation with the defendant William H. Butler, and were bound in good faith to deal with the stock for the benefit of all parties to the syndicate agreement, and, in violation of their duty, these defendants, Govin, Wilson, Tilford, Burke, Edey, and Busch, fraudulently conspired to procure for themselves, and others connected with them, large profits from the disposition of the stock, and to deprive the defendant William H. Butler of his share thereof, and for that purpose they made a pretended sale of the said stock to the Havana Commercial Company for $2,000,000, which was much less than its real value. The answer also alleges that, as a part of the scheme, a new corporation was to be formed, to which the said shares of the Bock Company or the shares of the Havana Commercial Company, enhanced in value by the acquisition of the Bock shares, should be conveyed in exchange for other securities of large value, from the sale of which large profits would come to the defendants Hollins, Burke, Edey, Busch, Govin, and others associated with them, to the exclusion of the defendant William H. Butler. It further alleges that, pursuant to this conspiracy, the defendants named, without the knowledge or authority of Butler, procured the transfer of the Bock shares to the Havana Commercial Company upon the pretended consideration of $2,000,000, and at that time the defendants Hollins, Burke, Edey, Govin, and Busch were the owners of a majority of the capital stock of the Havana Commercial Company, and the defendant Hollins was its president and one of its directors, and the defendants Burke, Govin, and Jordan were also
barrassed, being actually insolvent or on the verge of insolvency; that its shares of stock were practically worthless, and its business, had shown a loss since its organization; that at the instance of the defendants Hollins, Burke, Edey, Govin, and Busch, it had paid out large sums of dividends, which had not been earned; that its real competitor was the said Bock Company; that a large part of its indebtedness was owing to the Guaranty Trust Company; that the firm of H. B. Hollins & Co., composed of the defendants Hollins, Burke, Edey, Govin, and Busch, had assumed and became liable for the whole or greater part of this indebtedness, amounting to upward of $1,500,000; that the Havana Commercial Company was unable to pay $2,000,000 or any other sum for the shares of the Bock Company; that these