Opinion
October 16, 1908.
Archibald R. Watson, for the appellants.
Sidney Lowenthal and Ira Leo Bamberger, for the respondent.
If this action was to enforce the subscriptions of the defendants to the stock of the corporation, the demurrer would be good because it appears that section 41 of the Stock Corporation Law (Laws of 1892, chap. 688) which requires that each subscriber shall pay in cash at the time of subscription ten per cent of his subscription was not complied with. ( Hapgoods v. Lusch, No. 1, 123 App. Div. 23, and cases cited.) But the plaintiff complains that the loan to the corporation was made at the request of the defendants, upon the security and faith of the agreement executed by subscribers, including these defendants, and upon the promises therein contained which were made in express contemplation of the loan and which authorized the procurement of the loan upon the faith of such agreement. In view of these allegations I think that the complaint can be upheld under the judgment in Knickerbocker Trust Co. v. Hard ( 67 App. Div. 463). I think that the complaint is not bad in that it does not contain any allegation of a precedent judgment against the corporation or any plea of excuse for not obtaining such a judgment. The reason is that the plaintiff does not plead a liability which merely presents the corporation as the "primary debtor" and the defendants as "ultimate and subsidiary" debtors, to use the expressions of the court in Handy v. Draper ( 89 N.Y. 334).
The interlocutory judgment is affirmed, with costs, with leave to plead over on the payment of costs.
WOODWARD, HOOKER, GAYNOR and MILLER, JJ., concurred.
Interlocutory judgment affirmed, with costs, with leave to plead over on payment of costs.