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Broderick v. Abrams

Decided: October 29, 1935.


On rule to show cause why the venue should not be changed.

For the rule, John H. Jobes.

Contra, Carl S. Kuebler.

Before Brogan, Chief Justice, and Justices Trenchard and Heher.


The opinion of the court was delivered by

HEHER, J. The final judgment entered herein, striking out the complaint as stating causes of action which, by force of section 94 (b) of the General Corporation act (2 Comp. Stat. 1910, p. 1656), are not maintainable at law in this state, having lately been reversed by the federal Supreme Court, on the ground that this statutory provision is violative of the "full faith and credit clause" (article IV, section I) of the federal constitution (Broderick v. Rosner, 294 U.S. 629; 55 S. Ct. 589; 79 L. Ed. 1100), it now becomes necessary to determine the question of venue raised by this rule to show cause.

The defendants herein, five hundred and fifty-eight in number, are stockholders of the defunct Bank of the United States, a banking corporation organized under the laws of the State of New York, now in process of liquidation by plaintiff superintendent of banks. This officer, having determined that the reasonable value of the bank's assets is not sufficient to liquidate its aggregate indebtedness in full, levied an assessment upon its stockholders under the Banking act of the State of New York (Consolidated Laws, ch. 2, ยง 120), which imposes an individual responsibility upon the stockholders of an institution of this character, "equally and ratably and not one for another, for all contracts, debts and engagements of the bank, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares;" and the object of this suit is the recovery of these unpaid assessments.

One hundred and sixty-three of the defendants reside in the county of Essex, where the venue is laid; one hundred and forty-eight defendants, including the applicants, George W. Muttart and Maude F. Rittleman, and another, J. George Friedman, whose application is, by stipulation, to be ruled by the decision here, are residents of the county of Hudson; and the remainder are scattered through seventeen counties of this state. Apparently, none of the defendants, except

those mentioned, seeks a change of venue. The applicants were served with process in the county of Hudson.

The first insistence is that, as to the defendants who reside in the county of Hudson, the venue is, in virtue of section 202 of the Practice act (3 Comp. Stat. 1910, p. 4113), required to be laid in that county. This, in effect, is a demand for a severance. The applicants interpret this provision as obliging the non-resident plaintiff to "institute suit against a resident defendant in the county in which the cause of action arose, or in the county in which the defendant resides." This is termed an absolute requirement.

The primary inquiry, in the resolution of this question, is whether the several pleaded causes of action have been properly joined. Such joinder would have done violence to settled rules of common law pleading; but it now finds justification in the supplement to the Practice act, enacted in 1912. Pamph. L. 1912, p. 377. Paragraph 6 thereof ordains that "the plaintiff may join separate causes of action against several defendants if the causes of action have a common question of law or fact and arose out of the same transaction or series of transactions." By express provision (section 1), the act, although in derogation of the common law, is to be "liberally construed, to the end that legal controversies may be speedily and finally determined according to the substantive rights of the parties." By rule, this court has defined the term "transaction," as employed in sections 4 and 6 of this supplement to the Practice act, to "include any transactions which grew out of the subject-matter in regard to which the controversy has arisen; * * *." Rule 211 (b).

These causes of action indubitably present a common question of law, and, in the main, common questions of fact. While it is asserted that "one judge and one jury cannot determine five hundred and fifty-eight cases at one time, differentiate the individual defenses and distinguish the defendants who raise them," there is no showing that the defenses interposed by the answering defendants and those to be tendered by the applicants here (their answers have not yet ...

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