Rowell v. Moeller , 98 N.Y. Sup. Ct. 421 ( 1895 )

O’BRIEN, J.

The action was brought to charge the defendant as a stockholder of a corporation, on the ground that no certificate of full payment of the stock was ever filed, and that such stock was not full paid. While the original complaint contained an allegation that no certificate that the stock was full paid had been filed, there was no allegation that the stock was not full paid in property, nor did it contain a statement of how much stock, if any, the defendant owned. The order appealed from granted leave to amend the complaint in these particulars. It will thus be seen that the question presented is identical with the one considered in Rowell v. Janvrin, 69 Hun, 305, 23 N. Y. Supp. 481, wherein this court held that it was error to permit such an amendment, saying:

“The cause of action sought to be set up by the amended complaint was entirely independent of, and had no relation to, that which had been alleged in the original complaint. In the original complaint a liability of a stockholder was sought to be enforced because of the failure to file a certificate that the whole of the capital stock had been- paid in, under sections 10 and 11 of the manufacturers’ act (chapter 40 of 1848). By the amended complaint, a liability upon the part of the stockholder was attempted to be set up, arising from the provisions of section 14 of the same act, in reference to the purchase of property and the issuing of stock therefor. Those were distinct independent grounds of a recovery, the only common feature being that in each the defendant was sought to be charged as a stockholder.”

An appeal from this decision was dismissed by the court of appeals. 138 N. Y. 656, 34 N. E. 514.

Unless there is some later authority, this should be controlling and decisive upon this appeal. We are referred for such an authority to the case of Deyo v. Morss, 144 N. Y. 216, 39 N. E. 81. At special term a motion was therein made to strike out the amended complaint on the ground that it set up a different cause of action, which motion was denied. The general term reversed the special term order, and the court of appeals reversed the general term, and, after adverting to the fact that the view of the general term was that the court had no power to authorize an amendment which changes the cause of action, say:

“Whether an amendment of a pleading shall* be allowed in such a case is, in general, a matter of discretion in the court. The general term has the right to review the exercise of such discretion by the special term, and its order made in the exercise of this power of review could not be reviewed here. * * * The case therefore depends on the power of the special term to authorize an amendment before trial of a complaint, so as to permit a substitution of a different cause of action from that originally alleged. We think this question was, in principle, determined in the case of Brown v. Leigh, 49 N. T. 78. * * * The power of the court to grant or deny the relief, or to impose such terms as justice may seem to require, is an adequate protection against an oppressive exercise of the power. To deprive the court of this, power would in many cases result in injustice, and encourage litigation. The present case is an illustration. The causes of action were legally distinct, but the purpose of both complaints was to compel the application of the decedent’s property to the payment of his debts.”

This case must be regarded as effecting a sweeping change in the practice relating to the amendment of pleadings. The whole-current of authority at general and special terms was against the power of the court to allow an amendment to a complaint which set up a different cause of action. Examples of such decisions are Deyo v. Morss, 74 Hun, 224, 26 N. Y. Supp. 305; Vrooman v. Jackson, 6 Hun, 326; Craig v. Hyde, 24 How. Prac. 313; and in this-category we must place the case of Rowell v. Janvrin, 69 Hun, 305, 23 N. Y. Supp. 481. It is true that in the latter case neither in the order nor in the opinion of the general term is the decision expressly placed upon the want of authority in the court to allow such amendments, but it is quite evident from a reading of the-opinion that such was the view of the court. The fact that it was not placed expressly upon the ground of want of power may account for the dismissal of the appeal to the court of appeals.

As Deyo v. Morss, supra, is authority, therefore, for the proposition that the special term has power to grant leave to amend, the question now presented is whether such power was properly exercised. It is insisted that the amendment should have been refused because the cause of action set up in the amended complaint is barred by the statute of limitations, and therefore the court neither* has the power to, nor should it in the exercise of its. discretion, allow the amendment; and in that connection we are-referred to the case of Quimby v. Claflin, 27 Hun, 611. There the general term said:

“The order appealed from gave leave to the plaintiff to amend his complaint by adding, as a third cause of action, a further claim against the defendant of thirty-four thousand dollars. The claim was barred by the statute of limitations. We are of opinion that the order was unauthorized.”

It will be noticed in that case that an additional or third cause of action was sought to be pleaded, and the attention of the court was directed to a consideration of whether that should be allowed, and we think it was very properly answered in the negative.

In principle, this case is more like that of Elting v. Dayton, 67 Hun, 425, 22 N. Y. Supp. 154. There a judgment for the plaintiff in an action to recover payment for work done under a contract which was, by its terms, to be completed by a certain date, was reversed, and a new trial ordered, on the ground that as the complaint alleged performance, and did not aver an extension of time, and as it was found on the trial that the work was not completed by the date agreed upon, the plaintiff could not, without an amendment of the complaint, recover on the theory that strict performance had been waived. The amendment was there allowed upon the opinion, from which we quote:

“It is said by the counsel for the respondent that the amendment should not be allowed, because a hew suit on the cause of action would be barred by the statute of limitations. Although some laches has been shown on the part of the plaintiff, the fact that the statute of limitation has run against a new action is a strong reason for granting, instead of refusing, the relief.”

See, also, Eighmie v. Taylor, 39 Hun, 366.

The special term therefore having the power, in a proper case, to allow the amendment, the question being one calling for the exercise of its discretion, and as, upon the showing here made, we cannot say that such discretion was improperly exercised, we think the order should be affirmed, with $10 costs and disbursements.

FOLLETT, J., concurs.