Park v. Spaulding , 17 N.Y. Sup. Ct. 128 ( 1877 )

Davis, P. J.:

The appeal of the plaintiffs is from the judgment for costs entered against them by the direction of the referee in favor of the defendants Z. E. Simmons and Adams. These defendants were sued with the defendants "W. L. Simmons and Spaulding for an alleged joint cause of action. They did not put in separate answers, but appeared by the same attorneys, and united in the answer with all the other defendants in the action. The referee directed a judgment in their favor for costs, on the ground that the plaintiffs had failed to establish their liability for the cause of action sued upon. In Allis v. Wheeler (56 N. Y., 50), the Court of Appeals held that the provision of section 306 of the Code, as amended in 1851, regulates in all actions the whole subject of the allowance of costs to one or more of several defendants, who obtain judgments in his or their favor, while the plaintiff recovers costs against the other defendants, and that the conditions upon which defendants in such cases can have costs against the plaintiff are: 1. That the successful defendant be not united in interest with those against whom the plaintiff recovers. 2. That they make a separate defense by a separate answer; and 3, that the court award costs to the successful defendants. In respect of these defendants but two of these conditions, to wit, the first and third, are met. The second, that they make a separate defense by a separate answer, is not complied with. The effect of this condition is to deprive them of the right to costs. The referee had no power to award costs to them, and the judgment in their favor for costs must therefore be reversed.

The appeal of the defendants Spaulding and Simmons is from the judgment in favor of the plaintiff.

They were members of an unorganized body of gentlemen calling themselves the “"Worth Club.” This body had no constitution or by-laws, or articles of association. It comprised, however, more than seven members, and it had a president and treasurer at some time, if not all the time, during its continuance.

The appellants claim that this body was a joint-stock company or association, and could only be sued in the name of the president or treasurer under the statute of 1849, chapter 258, and the statute of 1851, chapter 455. If the “Worth Club ” were a company or association within the meaning of chapter 455 of the laws of 1851, still an action might be maintained against the individual members, because the provisions of chapter 153 of the Laws of 1853, which amended the act of 1849 so as to require an action against the joint-stock company or association, and an execution upon judgment to be returned unsatisfied in whole or in part before a suit could be brought against the shareholders of associations individually, do not apply to the cases provided for by chapter 455 of the laws of 1851. But, upon the facts appearing in this case, the “Worth Club,” so called, was not a joint-stock company or association within the meaning of the acts referred to. Its members remained at all times in that nebulous and inchoate condition, in which an aggregation of individuals, assuming a name under which they incur liability, are held personally liable for the benefit of creditors by the application of common-law principles. The referee has found a state of facts in this case upon which, we think, the present appellants are personally liable for the indebtedness to the respondent. The appellant, Spaulding, became a member of the club in the first part of December, 18Y1, and continued his membership as long as the club lasted. The appellant, William L. Simmons, was a member of the club at the time the account was first opened with the plaintiffs in the name of the club. He was one of the committee who made the first purchase of the plaintiffs, and he never notified the plaintiffs at any time of his withdrawal from the club. The goods thus purchased were sent to the club-house, and came into the possession of Richard AL Darling, the steward, who subsequently paid the plaintiffs the amount of that bill. He thereafter continued as such steward to act in making purchases from time to time in the name of the club; and, although a private arrangement existed by which the steward had agreed to make these purchases himself, and to furnish the articles to the members of the club on his own account, yet this arrangement was never communicated to the plaintiffs. Where such a body of gentlemen join themselves together for social intercourse and pleasure, and assume a name under which they commence to incur liabilities, by opening an account, they become jointly liable for any indebtedness thus incurred; and if either of them wishes to avoid his personal responsibility by withdrawal from the body, it is his duty to notify the creditors of such withdrawal; otherwise, if a creditor continues to furnish, in good faith, articles such as have been previously purchased for the use of the club, his responsibility will continue upon the same principle that holds retiring partners to liability for an indebtedness subsequently contracted with former creditors. These principles have been properly applied, we think, in this case, by the learned referee, and the judgment should be affirmed.

Brady and Daniels, JJ., concurred.

Judgment on plaintiffs’ appeal reversed.

Judgment on appeal of Alexander Spaulding and William L. Simmons affirmed, with costs.