Sheldon v. Adams

Potter, J. The first question that arises is, whether the or der of the special term is, appealable. The actions were commenced in the spring of 1854. The complaints were verified by the then plaintiff. The notes are set forth in the complaint as notes made subsequent to the organization of the company, as premium notes given for policies of insurance, to be issued thereon. The notes are such in form, that is, premium notes. Sheldon, the receiver, as such, under the direction, sanction, and authority of the Supreme Court, settled and determined the amount of losses of the company, and the proportions to be assessed upon the said notes against the respective defendants for their proportions of losses and liabilities as members of the said company by reason of the notes; and he alleges that he did assess the notes the sums and proportions against the defendants that are therein sued for, and gave them due legal notice thereof; and then sets forth that the risks and business of the company were divided into two departments, “ The Farmers’ Department,” and “ The' Merchants’ -Department that the risks taken in each of these departments were, by the charter of the company, to be liable in no other department, and then alleges particularly in which of said departments the notes were severally made. The notes are dated in 1851. The actions have never been brought to trial. Mow, in September, 1862, more than eleven years after the date of the notes, an order is granted, authorizing the plaintiff to insert in his complaint an entirely different cause of action, and presenting entirely different questions for litigation. The power to do this is claimed under the 173d section of the Code, “for the furtherance of justice,” and it is now claimed that when this has been adjudged by the court, it is but the exercise of a discretion, and cannot, and will not be reviewed. The right of appeal exists in all cases from an order of a special term or a judge, “ when it involves the merits of the action, or some part thereof, or affects a substantial right.” (Code, § 349, subd. 3.) To say that an entirely new and different cause of action, inserted in a complaint eight years after issue joined, requiring a different defence, does not affect a substantial right — 407 — or involve the merits, cannot be allowed; both reason and authority are against this idea. An appeal lies from such an order. (St. John a. Croel, 10 How. Pr., 253; Harrington a. Slade, 22 Barb., 161.) The amendment, in its nature, is based upon the doubt whether the- plaintiff can recover upon his-complaint as it is, or can recover more than a part of the amount. He now desires (and the amendment is to allow him to carry out that desire) to recover either a larger sum, or for a different cause of action. This, clearly, affects a substantial right. The merits of the motion must then stand upon its being granted “in furtherance of justice.” If it cannot stand upon this ground, it should be reversed. Let us see how it looks in this view. It is now the settled doctrine of the Court of Appeals, that in allowing amendments, no discrimination should be made, in the exercise of that power, between legal defences offered to be set up, on-account of their character; that is, whether they are-such as have sometimes been called unconscionable, as the Statute of Limitations, Usury, &e., or otherwise; that is to say, all defences recognized by statute to be such, are in this regard to stand equal, and that it is not the duty of courts to make discrimination against the spirit of a statute. In other words, that a party has a vested right to set up these defences as well as any other, when they have become perfect; and the Statute of Limitations has been approvingly called by distinguished jui’ists “ the statute of repose.” (8 Cow., 615; 22 Barb., 164.) ' The notes in question, if they were original stock-notes, made for the organization of the company, as they bear date in 1851, had become outlawed as such, and no action could be maintained upon them if the defence of the Statute of Limitations should be interposed. By the effect of this order, these outlawed notes are put into a complaint in an action brought in 1853, as if sued on then, and thus the defendant is cut off from the defence of the Statute of Limitations; and this is claimed to be “in furtherance of justice.” They had been so outlawed four years when the order appealed from was granted. (Bell a. Yates, 33 Barb., 629; Howland a. Edmonds, Ib., 433; reversed 24 N. Y., 307.) By this order, these notes, put to their repose by statute, and to which if sued upon directly, the de — 408 — fendants could interpose a perfect legal statutory defence, are, in the exercise of this power at special term, revived against the defendants, without the promise or acknowledgment by the defendants in writing, required by section 110 of the Code; and to sustain this order is, in effect, to give the plaintiff the right to commence this action by an order, without commencing it by summons and complaint, as is required by section 127 of the Code. Rot only that, but a note which, by the company’s charter, and which, by the defendant’s policy, it is made a condition in his contract shall only be assessed for losses in one class of hazards, is permitted to be sued on as a stock-note and made liable for all losses. These aré extraordinary favors, certainly, to be conferred upon a plaintiff who has now awakened .after an eight years’ slumber upon his case; and it is in effect, by indirection, extending the provision of the Statute of Limitations, from six to ten years, against the vested rights of the defendants. This is too great an exercise of power to be accomplished by an order; yet we see that all this, it is claimed now, was done “ in furtherance of justice,” and, therefore, not to be reviewed. We do not see it in that light, and it is not probable that the point was presented to the learned justice at special term. But without reference to the absolute inj ustice to the defendants, which would result from the order appealed from if permitted to stand, the papers used upon the motion show a decided preponderance of weight, I think, against the granting of the motion upon the facts. Sheldon, the receiver, who lived at the place of location of this company, the place where its officers resided, where its office of business was kept, who was appointed receiver two years after the organization of the company, and who must be presumed to be cognizant of the facts, from his examination of the books, vouchers, and notes of the company, made in order to the proper assessment upon premium notes, and which assessment he did make while in the possession of all such advantages,—himself verified jhe complaint in April, 1854, which states the notes to be premium-notes, made to be liable in only one of its departments, and made after the organization of the company. Against this quite full and satisfactory evidence, we have only the statement of the present attorney of the present receiver, who resides at Oxford, Ohe — 409 — nango county, made in July, 1862, more than eight years thereafter, who states that he has investigated the affairs of said company, and endeavored to ascertain whether said notes were “ capital stock.or premium-notes, and that this deponent cannot determine, and does not know whether the said notes are capital stock or premium-notes.” Indeed,.there is no ground of merit at all, nor any reason for the order, even had it been moved for in twenty days after issue joined. This is not improved by waiting eight years, and until after the death of the first plaintiff, and of the defendants’ attorney. Such laches should be discountenanced. The excuse offered is not sufficient at any time. We do not intend to reason against the propriety of having two counts in a complaint upon the same instrument, which may even appear to be inconsistent with each other, if necessary to attain justice, or to meet a possible or contingent variance in the proof on the trial. Birdseye a. Smith (32 Barb., 217) is not in conflict with our views, but we mean to say, if after issue joined the party desires a favor by way of amendment, he must show a strong reason ; and if he desires to thus get before the court indirectly a cause of action that he could not recover upon directly, the courts should refuse his application. The order in each of the cases appealed from, except so much as substitutes Frederick A. Sands as plaintiff, should be reversed, with ten dollars costs, and disbursements in each, and with ten dollars costs in each for opposing the motion at special term. Bockes, J. These actions were brought on premium-notes, alleged to have been given to the company prior to its dissolution, and the complaint in each case averred losses and due assessment of the notes, and a recovery was claimed for the amount of the assessments, The amendment allowed by the order from which the appeal was taken, was to the effect that the plaintiff might add in each case a further cause of action or count on the notes, as original formation or stock-notes. I -am unable to see any valid or substantial objection to the order, so far as it permits the substitution of Mr. Sands as plaintiff in the actions in the place of Mr. Sheldon. It seems that — 410 — Hr. Sheldon had been removed, and Hr. Sands appointed in his stead. It was therefore appropriate and proper to allow and direct such substitution. It is urged that the action abated by the death of Hr. Sheldon, which occurred in. July, 1860. But this plainly is no answer' to the motion for substitution. It was not a motion to revive the actions, and the cases stood the same as if Sheldon was still living. If living it would have been proper to substitute Hr. Sands, as soon as he was appointed to supersede or succeed Hr. Sheldon as receiver. The facts disclosed, by the papers are these: Sheldon as receiver, commenced the actions in 1853, and they were put at issue early in the year 1854. In 1859 Sheldon was removed, and Isaac Jackson was appointed in his place. InT861, Hr. Jackson was removed, and Hr. Sands was appointed in his place. Sheldon died in 1860, after his removal. How, so soon as Hr. Jackson was appointed in the place of Hr. Sheldon, it was his right to be substituted as plaintiff in the actions in the place of Hr. Sheldon, and on the removal of Jackson and the appointment of Sands, it was the right of the latter to be substituted in Jackson’s place. The decease of Sheldon did not take away those rights or either of them; indeed, his decease had nothing to do with the question. Hor can it make any difference that Jackson was not in fact substituted in the action as plaintiff, in the place of Sheldon. Hr.. Sands succeeded to the rights and duties of Sheldon and Jackson respectively, as receiver, and his substitution as plaintiff was properly allowed by the order of the special term. The important question on this appeal is in regard to the permission given by the order to amend the complaint in the several actions. The effect of such permission is to allow the plaintiff to introduce into each suit an entirely new and distinct cause of action; one too barred by the Statute of Limitations, unless saved from thé operation of the statute by incorporating it into an old suit. Can this result be attained under the guise of an amendment? It is claimed that it may be under section 113 of the Code, which declares that the court may, in furtherance of justice' and on terms, amend any pleading “by inserting other allegations material to the case.” It becomes necessary now to determine what the plaintiff’s case, was as made or attempted to be made by his complaint. It — 411 — was a case for a recovery on a premium-note, alleged tq have been given on an application for insurance, on which a recovery could be had only after due assessment. And this case it was not proposed to change in any respect. The plaintiff then claimed to recover on a contract of a special character. Did . he base his application to amend on omission of some allegation which by possibility might be material to his right of recovery on it as a premium-note ? Not at all. The amendment was not asked for to cover any error, omission, or mistake in the original pleading. His case as it stood was perfect. He needed then no amendment, for there was no allegation omitted or improperly inserted. But to a perfect complaint he wished to add a cause of action not suggested by the original pleading, a cause of action in direct contradiction of it. Can this be deemed an amendment of the original, when in fact it is destructive of it % Plainly it cannot, and if not, then there is no authority .for the order which allows the addition of a distinct cause of action inconsistent with and destructive of the original, without removing the original from record. Suppose a party holds two promissory notes both past due, and made by the same person, on one of which he commences an action. Oan he after the action has been at issue ten years, introduce into it the other note, under the pretence of an amendment of the original complaint and cause of action ? I think not. In my judgment this was not contemplated by section 173, which admits of amendments of pleadings in furtherance of j ustice, “ by inserting other allegations material to the case.” The case at bar is more objectionable than that supposed, for the reason that the plaintiff proposes to insert, by way of amendment, allegations inconsistent with those on which the action was originally based, and that too without alleging any omission or mistake. It has been stated in several cases that amendments will be allowed, even though the effect may ■ be to change entirely the cause of action or defence. But there is no case within my observation, in which it. has been decided that an amendment may be made by adding a distinct and independent cause of action inconsistent in all its material bearings with that already stated in the complaint. The case of Birdseye a. Smith (32 Barb., 217), is not in point. There was no question in that case as to the power or authority — 412 — of the court to allow amendments of pleadings. The question there was whether the plaintiff should he compelled to elect between the two causes of action stated in the complaint, and •determine on which he would proceed. But if that question were before us on this appeal, as at present advised, I could not accede to the doctrine of that case. In my judgment, a complaint which cannot by possibility be verified—one that is untrue on its face—is not contemplated by the Code of Procedure, the leading feature of which is the attainment of simplicity and truthfulness in pleading. Does a complaint containing two counts, each contradictory •of the other, show or state a cause of action ? The first count is •contadicted on the record by the second, and the second by the first. Certainly, in such case there -can be no recovery until the record is reformed. It seems to me that there is no authority or power in the court to permit by amendment an addition of an independent cause of action, inconsistent with the original. There may be cases where justice would .require a change of the cause of action, but such was not this case. 'It was not proposed to change the action from an action on a premium note to an action on a stock note. If there was no authority in the court to make the order, the granting of the motion was not a matter of discretion simply. The order is therefore open to review on appeal. It is open to review on appeal too, inasmuch as it affects a substantial right. (10 How. Pr., 253; 22 Barb., 161.) The defendants had a right to their defence of the Statute of Limitations, and the order in effect deprived them of that defence. In my judgment the order appealed from should be affirmed, so far as it permits and directs Mr. Sands to be substituted as plaintiff in the action, and reversed as to all the rest.