Moses May, Respondent, v. Jean I. Charlouis and Elise L. Charlouis, Appellants

Moses May, Respondent, v. Jean I. Charlouis and Elise L. Charlouis, Appellants. Second Department, October 16, 1908. Pleading — loan to corporation at request of third person — judgment against corporation not condition precedent. A complaint seeking to recover a loan to a corporation made at the request of the defendants upon the security and faith of stock subscriptions, including those of the defendants, and upon promises therein contained made in express contemplation of the loan and authorizing the procurement thereof upon the faith of such agreement, states a cause of action. Such complaint need not allege a precedent judgment against the corporation or excuse a failure to obtain one, for the defendants, not the corporation, are shown to be the primary debtors. Appeal by the defendants, Jean I. Charlouis and another, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 8th day of January, 1908, upon the decision of the court, rendered after a trial at the Kings County Special Term, overruling the defendants’ demurrer to the amended complaint. Archibald R. Watson, for the appellants. Sidney Lowenthal and Ira Leo Bamberger, for the respondent. [MAJORITY — Jenks, J.:] Jenks, J.: If this action was to enforce the subscriptions of the defendants to the* stock of the corporation, the demurrer would he good because it appears that section 41 of the Stock Corporation Law (Laws of 1892, chap. 688) which requires that each subscriber shall pay in cash at the time ’ of subscription ten per cent of his subscription was not complied with. (Hapgoods v. Lusch, No. 1, 123 App. Div. 23, and cases cited.) But the plaintiff complains that the loan to the corporation was made at the request of the defendants, upon the security and faith of the agreement executed by subscribers, including these defendants, and upon the promises therein contained which were made in express contemplation of the loan and which authorized the procurement of the loan upon the faith of such agreement. In view of these allegations I think that the complaint can be upheld under the judgment in Knickerbocker Trust Co. v. Hard (67 App. Div. 463).: I think that the complaint is not bad in that it does not contain any allegation of a precedent judgment against the corporation or any plea of excuse for not obtaining such a judgment. The reason is that the plaintiff does not plead a liability which merely presents the corporation as the primary debtor ” and the defendants as “ ultimate and subsidiary ” debtors, to use the expressions of the court in Handy v. Draper (89 N. Y. 334). The interlocutory judgment is affirmed, with costs, with leave tO' plead over on the payment of costs. Woodward, Hooker, Gaynor and Miller, JJ., concurred. Interlocutory judgment affirmed, with costs, with leave to plead over on payment of costs.