Opinion
Argued February 29, 1940
Decided April 16, 1940
Appeal from the Supreme Court, Appellate Division, Third Department, SCHENCK, J.
Robert E. Whalen and Frederic R. Sanborn for appellants.
Frank L. Wiswall and Carl O. Olson for respondent.
The plaintiff is the owner and holder of bonds issued by a California corporation of which the defendants are stockholders. By the present action the plaintiff would enforce against each defendant a proportionate stockholder's liability based upon provisions formerly existing in the Constitution and Civil Code of California. Under such provisions of law it is claimed that each defendant herein is individually and personally liable as a stockholder for such proportion of the corporation's debts and liabilities, contracted or incurred during the time the defendant was a stockholder, as the amount of stock or shares owned by him bears to the corporation's entire outstanding capital stock.
Upon the trial of issues framed by the pleadings the plaintiff had judgment against the several defendants ( 158 Misc. Rep. 164) which was thereafter affirmed by the Appellate Division by a divided court ( 254 App. Div. 711-712) and thereafter by the Court of Appeals ( 279 N.Y. 734).
Meantime, on February 26, 1937 — more than fourteen months after the entry of judgment herein — the Supreme Court of California announced its decision in two cases in which the ruling is said to have been made that, despite the former provisions of the Constitution and Civil Code of California, the holder of a corporate bond could not maintain an action based upon such bond against stockholders of the issuing corporation without first complying with a condition of the trust indenture that the bondholder must make written request to the trustee to sue and give the trustee a reasonable opportunity to comply therewith.
Following affirmance by the Appellate Division and the Court of Appeals of the judgment entered in favor of the plaintiff and against the defendants, Special Term granted a motion by the defendants for an order vacating that judgment, permitting the defendants to serve a supplemental answer and granting a new trial herein upon the ground of newly-discovered evidence. Thereafter the order of Special Term was reversed by the Appellate Division on the law and the facts. Upon a motion for leave to appeal to this court the Appellate Division has certified that the following question of law is involved which ought to be reviewed by the Court of Appeals: "Did the judgment herein entered in Albany County Clerk's office December 20th, 1935 ( 158 Misc. 164), the affirmance thereof by this Court's judgment entered in said Clerk's office April 29, 1938 ( 254 App. Div. 711), the affirmance of this court's judgment by the Court of Appeals on January 4, 1939 ( 279 N.Y. 734) and denial by the Court of Appeals on February 28, 1939, of the motion for reargument of the appeal thereto ( 280 N.Y. 570) preclude the Special Term from granting the order herein entered in Albany County Clerk's office April 12th, 1939?"
The newly-discovered evidence, which affords the basis of the Special Term order for a new trial, comprises the two decisions mentioned above rendered by the Supreme Court of California. These decisions were not announced until after the trial herein and the entry of judgment, but more than a year before the argument of the appeal in the Appellate Division. It also appears from affidavits before us in the present record that upon the argument of the appeal in this court attention was directed by counsel to the two decisions by the California Supreme Court. In the circumstances this court had the right to consider these decisions despite the fact that they were not introduced in evidence upon the trial. (Civil Practice Act, § 391 [L. 1933, ch. 690].)
An order granting or denying a motion for a new trial upon newly-discovered evidence is a discretionary order and accordingly is not reviewable by this court. ( Chernuchin v. Barkin, Inc., 243 N.Y. 602; Gaines v. Fidelity Casualty Co., 188 N.Y. 411, 415. See, also, Cohen on Powers of New York Court of Appeals, p. 364; Carmody's New York Practice, vol. 6, § 790, p. 670.)
Furthermore, the record before us makes it clear that an answer to the question certified by the Appellate Division would not determine the correctness of the order sought to be reviewed. ( Public Nat. Bank v. National City Bank, 261 N.Y. 316, 322, 323; Gray v. Vought Co., 243 N.Y. 585; Bowlby v. McQuail, 240 N.Y. 684, 687.)
The appeal should be dismissed, with costs.
LEHMAN, Ch. J., LOUGHRAN, FINCH, RIPPEY, SEARS and CONWAY, JJ., concur.
Appeal dismissed.