Opinion
November 16, 1906.
Peter B. Olney, for the plaintiff.
Albert B. Boardman, for the defendant.
The facts were stipulated; at the close of the testimony each party moved the court for a direction of a verdict, and neither thereafter requested any submission to the jury. The court directed a verdict for the plaintiff and ordered that the exceptions be heard by this court in the first instance. The action is not for a conversion, for the plaintiff received the stock and sued for the damages incident to the omission of the defendant to transfer it. The proposition of the plaintiff is that it became the duty of the defendant to make the transfer on or about July 29, 1903, but as it did not make the transfer until October 22 or 24, 1903, it must, therefore, respond for any damages incident to such delay. After the plaintiff received the stock it was sold at public vendue. The plaintiff sued for and has recovered the difference between the price realized and the value of the stock on July 29, 1903 — some $14,000 — with interest.
The stock in a foreign corporation owned by a non-resident was not taxable. ( Matter of Whiting, 150 N.Y. 27.) Therefore, the consent of the State Comptroller, provided for by section 228 of the Tax Law, was not necessary in order to protect the defendant. But I am of opinion that this action does not lie. In Denny v. Manhattan Co. (2 Den. 115) the resident transfer agent of a foreign corporation unjustly refused a transfer, and the plaintiffs brought action on the case. The court held that the action did not lie against the defendant, as it was not the agent of the plaintiffs and owed them no duty, but the agent of the defendant, to whom alone it was answerable for any neglect in the discharge of agency. The judgment was affirmed in the Court of Errors, the chancellor and two of the senators delivering "written opinions in favor of affirming the judgment of the Supreme Court upon the ground upon which its decision was made." (5 Den. 639.) In Colvin v. Holbrook ( 2 N.Y. 129) the court say: "The question must be deemed at rest in this State by the decision in Drury" (misprint for Denny) "v. The Manhattan Co. (2 Denio, 118), affirmed in the court for the correction of errors." (See, too, Montgomery County Bank v. Albany City Bank, 7 N.Y. 459, and 1 Morawetz Corp. [2d ed.] 537, citing Denny's Case, supra.)
The eminent and able counsel for the plaintiff does not quarrel with the rule in Denny's case, but would take this case out of it upon the ground that the defendant is chargeable with a misfeasance, in that "it undertook to do the business in an improper manner." Whether Mr. Wharton is correct when he speaks of the "now exploded distinction between misfeasances and non-feasances" (Wharton's Agency, § 537) it is not necessary to discuss, for it seems clear that under the rule in this State the contention of the plaintiff cannot prevail. In Van Antwerp v. Linton, 89 Hun, 417, 419) the court, per PARKER, J., say: "As between himself and his master he is bound to serve him with fidelity, and for a breach of his duty he becomes liable to the master, who in turn may be charged in damages for injuries to third persons occasioned by the non-feasance of the servant. For misfeasance the agent is generally liable to third parties suffering thereby. The distinction between non-feasance and misfeasance has been expressed by the courts of this State as follows: `If the duty omitted by the agent or servant devolved upon him purely from his agency or employment, his omission is only of a duty he owes his principal or master, and the master alone is liable. While if the duty rests upon him in his individual character and was one that the law imposed upon him independently of his agency or employment, then he is liable.' ( Burns v. Pethcal, 75 Hun, 443.)" The judgment was affirmed on the opinion below ( 157 N.Y. 716). In the case at bar the duty in which the defendant is said to be derelict was one devolved upon it solely perforce of the relation of principal and agent existing between it and the New Jersey corporation. In other words, the injury, if any, was not in failure of duty cast upon the defendant "by law in common with all other men." I recommend that the exceptions of the defendant be sustained and that a new trial be granted, costs to abide the event.
HIRSCHBERG, P.J., HOOKER and RICH, JJ., concurred.
Exceptions of the defendant sustained and motion for new trial granted, costs to abide the event.