Ebbinghousen v. Worth Club

Social Clubs.—Liability of President. A social club, though without formal constitution and by-laws, and without purposes of profit or pecuniary advantage, may be held liable, in an action under the statute, as a joint stock association, or association of seven or more persons having a common interest.* In an action against the president, as such, the evidence showing a purchase by him while acting as a committee for the club, the question should be submitted to the jury, whether the credit was given to the club or not.

Appeal by plaintiffs from a judgment dismissing complaint. TMs action was brought by George Ebbinghousen, George A. Widmayer and John Baumann, composing the firm of Ebbinghousen & Co. In the title of the cause the designation of the defendants was “The Worth Club; William L. Simmons, president of the Worth Club.”- The complaint alleged that the Worth Club “is an association consisting of more than seven members or associates, not incorporated, but associated together in the city of New York, for social and political purposes; and the defendant, Simmons, is the duly appointed president thereof.” That the association was formed in 1871, and during that year the said Simmons was duly elected president, and had continued to act as such. That the said association, through its duly appointed committee, soon thereafter purchased of the plaintiffs about $3,000 worth of furniture, $1,321.05 of which remained nnpaid, and that under the statute said Simmons, as such president, was liable therefor. The demand of judgment was for judgment “against the said defendant, Simmons, president of said Worth Club, as aforesaid,” for, &c. The answer of said Simmons denied membership or presidency of the club, and for a separate defense alleged that the said furniture was sold to one F. B. Spinola individually, and upon his individual credit, and was all paid for by him by his own promissory notes, which had been accepted by the plaintiffs. The case was brought to trial before Hon. George M. Var Hoesest, and a jury. The testimony on behalf of the plaintiff showed that the said club of more than fifty members at first; that William L. Simmons was elected president upon the organization of the club, and a secretary and treasurer were also chosen ; that soon thereafter Francis B. Spinola was appointed a committee to purchase furniture ; that the latter, after consultation with Mr. Simmons and other members of the club, purchased the furniture in question for the club, and it was afterwards used by it; that, as the club was only to pay part cash, and the plaintiffs did not wish to take the notes of the club, but would take individual notes, the said Spinola gave his notes for a part of the purchase-money, and paid the balance with money furnished him by the treasurer of the club; that, in addition to the notes, he gave a chattel mortgage on the furniture ; that these notes were received by the plaintiffs with the understanding that the club was to pay them ; that the entries in the order book of plaintiffs were “ F. B. Spinola, for Worth Club,” or its equivalent, the form not always being exactly the same ; that some of the money due on these notes was paid by others than by said Spinola; that the club, owing to dissensions, had dwindled away. There was some evidence tending to show that the defendant Simmons was not president at the commencement of the action. When the plaintiff rested,— In the case of Park & Tilford c. Judge Spaulding (10 Hun, 128), the facts that were proved were substantially the same as the facts proved here—that the club was not incorporated, had no constitution or by-laws, but that its object was to provide a club house for the members to meet for social intercourse, and a committee was appointed to purchase a stock of cigars and wines. On the state of facts proved there—which are the same as those proved here—Judge Davis said, that upon the facts appearing in the case, the Worth Club, so called, was not a joint stock company or an association within the meaning of the act referred to. Now, I do not see that the facts which you have proved take the case out of that decision. Mr. Hull claimed that he was entitled to go to the jury on the question as to whom the credit was given. No. If the question really is as to whom credit was given, I should be willing to leave it to the jury; but upon this same state of facts that Judge Davis passed upon, I think I should decide the same way. He decided that the club was not within the statute- relating to joint stock associations. Now, if that is so, it is very evident that the defendant cannot be sued here. Then, although on the pleadings you might possibly be entitled to a verdict, and judgment against the club itself, yet, as it appears in this suit that Mr. Simmons’ term as president had expired, and another president took his place, you have no right to sue Mr. Simmons now. At the time this action was brought Mr. Simmons’ term had expired and another gentleman had been elected in his place. I shall have to dismiss this complaint. From judgment entered in accordance with this ruling the plaintiff appealed to- the general term. I. By the act of 1849, “any joint stock company or association, consisting of seven or more shareholders or associates, may sue and be sued, in the name of the president or treasurer” (Laws 1849, chap. 258, § 1). This act was extended “to any company or association, composed of not less than seven persons who are owners of or have an interest in any property, right of action or demand, jointly or in common, or who may be liable to any action on account of such ownership or interest” (Laws 1851, chap. 455, § 1). This act thus became a part of the original act of 1849, and any subsequent legislation which is general in its application relates to and affects this act of 1851 as much so as that of 1849. In 1853 an act was passed amending section 4 of chapter 258 of the Laws of 1849, making it necessary for a person to exhaust his remedy against the association before any suit thereon can be brought against any of the individuals composing the association. This amendment related to and affected the act of 1851, as much so as it did the act of 1849 (Laws of 1853, chap. 153, § 1). This action was brought within the provisions of these three acts, and properly so, and was sustained by the testimony given on the trial. The defendant, the Worth club, was a voluntary association, formed for social and political purposes, composed of seven or more members who were owners of and had an interest in this furniture and other club property, and a.s such liable to an action on account of such ownership or interest. They had also a president. As required by the act of 1853, plaintiffs brought their action against the association by their president, intending to exhaust their remedy against the association before enforcing it against the individual members thereof. The defendant is such an association as is contemplated by the statutes,, and the action was properly brought, and should have been sustained (Waller v. Thomas, 42 How. Pr. 346; Witherhead v. Allen, 4 Abb. Ct. App. Dec. 31; Tibbetts v. Blood, 21 Barb. 650; Allen v. Clark, 65 Id. 563, 571; Robbins v. Wells, 26 How. Pr. 15; De Witt v. Chandler, 11 Abb. Pr. 470, 471; Bridenbecker v. Hoard, 32 How. Pr. 296 ; Kingsland v. Braisted, 2 Lansing, 17; and see 4 Duer, 362 ; 1 Robt. 666, 675, 684). II. The defendant William L. Simmons was properly joined as the president, (a) The defendant’s manner of pleading precluded any question before the court as to the proper person being sued as the president, and to the judge’s ruling on that subject plaintiff excepted. It was the duty of the defendant to designate who the president was, if the proper person was not named, and failing in this, it is estopped from raising any such issue on the trial, and the judge at trial term could not act upon any such issue, (b) He was the individual who was the president of the association at the time the debt was contracted, and it is. such officer for the time being that the statute refers to, who must be joined in an action by or against the association. Judge Spaulding was dead. Defendant’s counsel speak of him as the late Judge Spaulding. Suppose all the officers were dead, or had resigned at the time the suit was commenced, would such death or resignation deprive the plaintiffs of their cause of action '?■ Such a doctrine would be absurd. It would open the door to the grossest frauds. Suppose such a club should organize and elect a president and treasurer, and purchase a large amount of property on time, and just before the maturing of the debt the president and the treasurer should resign, and the club elect no one to fill the vacancies. Would it not be absurd to say to a creditor, you have no remedy, you have lost your demand, there is no president or treasurer “for the time being” on whom you can serve your papers. Such a doctrine would make the machinery of the law a mockery. All such technical construction of the law should be brushed aside. I submit that the true construction of the statute would give the creditor a right to sue the man who was the last president, or if he was dead, or half a dozen should be dead, then he might go back and sue the last living president, and above all he may sue the president who .was president for the “ time being ” while the debt was being contracted, and particularly as in this case when no other living president can be found, and when he nowhere denies in his answer that he was president when the suit was commenced. He simply denies, five months after the suit was commenced, that he is the president. III. The question as to whom the credit was given should have been submitted to the jury, and the refusal of the judge to do so was duly excepted to (Maryland Coal Company v. Edwards, 4 Hun, 434; McCoffil v. Radcliffe, 3 Robt. 447; Beebe v. Robert, 12 Wend. 416; Huntington v. Brinkerhoff, 10 Wend. 278; Backmar v. Jenks, 55 Barb. 473). H. M. Whitehead, for respondent, contended, that Park v. Simmons (10 Finn, 128) was conclusive, and established the right of a creditor to sue any individual member without first suing and exhausting his remedies against the association. Mr. Hull, in reply, contended that the case of Park v. Simmons was somewhat unlike this, but he was willing to concede, for the sake of the argument, that the facts were substantially alike, and contended that the rule laid down in that case was not good law, and was entirely repugnant to the doctrine laid down in Whitehead v. Allen, 4 Abb. Ct. App. Dec. 31; Kingsland v. Braisted, 2 Lans. 17; and Waller v. Thomas, 42 How. Pr. 346. Mr. Whitehead contended that they were identically alike, and contended that if the general term of the common pleas did not affirm this judgment, then we would be in a position of having the general term of the supreme court deciding a question in a given manner, and the general term of the common pleas deciding the same question entirely differently.