Ogden v. Raymond et al.

The answer denies (an allegation in the complaint) that said Company "is a corporation duly organized under and pursuant to the laws of the State of New York," and avers that it "has not now or ever had any legal existence as a corporation."

It denies that the Company "had any legal power or capacity to transfer said note to the plaintiff by its indorsement or otherwise."

It avers that said note was loaned to the payee thereof and was and is an accommodation note for which the defendants received no consideration whatever;" that it was given on the agreement that it should not be transferred by indorsement or otherwise, "of all which facts and circumstances" the plaintiff had notice before he took it.

It also alleges that plaintiff claims to hold the note as collateral security for a loan to the Company, and avers that said loan, if ever made, has been paid out of the proceeds of other collaterals placed in his hands, and denies that the plaintiff is the lawful owner and holder, or the real party in interest.

It was proved at the trial by Charles W. Ogden, vice-president of the Company, that the International Insurance Company transacted business as such Company, in the city of New York, from May, 1855, into November, 1856; that Moses Starbuck was President of the Company from the 6th of February, 1856; that the note in suit, with other subscription notes of the Company, amounting in all to about $19,000, were transferred on the 15th of April, 1856, to the plaintiff's father, S. G. Ogden, to secure a loan of $15,000, then made by him to the Company, and that only $12,000 of such loan had been repaid.

That the indorsement of Starbuck's name upon the note was his writing, and that the words over it were written by Leo Del Banco, the Secretary; that the President was in the habit of indorsing the notes of the Company, and that this was known to several of the Directors, and that he "generally, almost universally," indorsed, without there being previous resolutions authorizing the transfers. To the admission of this last named evidence the defendants objected and excepted.

A certified copy of the charter of said Company was read in evidence. The defendants offered in evidence the original minutes of the proceedings of the Company, had on the 20th of

Ogden v. Raymond et al.

May, 1854, and excepted to the decision of the Court excluding them. They then read the original act of April 15, 1844, an amendatory act passed April 11, 1855, and a resolution of the Company to dissolve, passed February 11, 1853, and moved to dismiss the complaint, and excepted to the decision denying such motion.

Charles W. Ogden, (who was Vice-President from the 9th of October, 1855, until a Receiver was appointed on the 16th of November, 1856,) on his cross-examination, having testified that S. G. Ogden got the note in suit "from the International Insurance Company, he got it 15th of April, 1856," was asked (at folio 8) these questions:

"Q. How did he get it?

Q. How many notes were transferred to your father when this was transferred ?"

The questions were overruled, and the defendants excepted. Having testified that S. G. Ogden made several loans to the Company, and "one for $15,000, on the day the note was transferred," that about $12,000 of the $19,000 of securities transferred had been collected, he was asked these questions:

"Q. Have you obtained any judgments on these notes? "Q. Was there any resolution of the Board of Directors authorizing that transfer?

"Q. Did your father make any prior loan to the Company? Q. Did your father at any time receive any other securities from the Company which he could hold as security for this loan? 'Q. What securities does your father hold now for that indebtedness ?"

These questions were severally objected to and excluded, and the defendants excepted. (Folios 11-13.)

The Court excluded evidence upon the question whether there were any losses under a policy which the defendants obtained from the Company about the time the note was given, and the defendants excepted.

The witness having testified to subscriptions, to an agreement to furnish notes as part of the capital stock of said Company, upon condition (among others) "that $200,000 of subscriptions shall be procured from parties satisfactory to the Company," amounting to over $284,000, was asked, in substance, (folio 17,)

Ogden v. Raymond et al.

whether he did not know that more than $100,000 thus subscribed was subscribed by office boys in and about Wall street, less than eighteen years old, and that such fact was not known at the time to the officers of the Company?

And whether, at the time the Company went into existence, there were four hundred applicants for insurance, the premiums on which amounted to $200,000, of which $40,000 was paid in cash, or notes of solvent parties founded on actual and bona fide applications for insurance?

And whether there were notes of solvent parties for $160,000 founded on bona fide applications for insurance, in the hands of the Company at the time they commenced business?

And whether, at that time, the company had a cash capital of $25,000, and eleven trustees?

These questions, on objection, were severally excluded, and the defendants excepted.

The note in suit being offered in evidence, the defendants objected, first, That it is not proved to have been made by the defendants; second, That no resolution of the Board of Trustees authorizing the transfer has been proved; and third, Nor any by-law authorizing a transfer by the President without a resolution of the Trustees. The objections were overruled, and the defendants excepted.

The witness, on further cross-examination, was asked these questions, viz.:

"Q. Did your father then (when he received the notes) know that there was no resolution of the Board of Trustees authorizing the transfer?

แ

"Q. Do you mean to say that you never knew of a transaction made by the President without the knowledge of more than two or three Trustees?

"A. I know but of one instance, to Mr. Regan, who was a Trustee.

"Q. What was the amount of these notes?"

The two of the last three questions which are unanswered, were excluded, and the defendants excepted.

The plaintiff having rested, the defendants moved for a nonsuit, on the grounds, first, That the transfer of the note in suit. was not authorized by a previous resolution of the Board of

Ogden v. Raymond et al.

Directors of the Company; second, That it was not indorsed by the Company, nor by the President in office at the time of its transfer to S. G. Ogden. The motion was denied, and the defendants excepted.

William H. Forbes, one of the defendants, testified that he signed the note in question, but was not shown and did not sign any subscription agreement; that the note "was loaned to Mr. Marsh, who was at that time the President of the Company, and loaned to him as the President," without consideration; that "Mr. Marsh promised us that it should remain in the hands of the Company; that he would see that it remained with the Company, and that when the note came due, we should call upon the Company for a check to settle it;" that he said "it was to go to show as part of the capital of the Company; we had an open policy issued to us afterwards; can't say how long afterwards; but the note was issued while we were dealing with the Company;" "we have a claim against the International Insurance Company for losses; the losses were near the amount of the note, but never were adjusted."

Mr. Ogden, being recalled by the defendants, testified thus: "Before the $15,000 loan was made, I had several conversations about it with my father."

"Q. Did you at that time know the condition of the Company? “A. Yes, sir; I communicated it to my father; I told him all I knew about the affairs of the Company; all the notes were in the ordinary form, with two exceptions.

"Q. Did your father know at the time that the parties who signed the notes did not owe the Company the amount expressed in the notes at the time of the transfer?"

This question was objected to and excluded, and the defendants excepted.

Evidence was offered to show that proceedings had been duly taken by the Attorney-General to dissolve said Company; that an order had been entered in them dissolving said Company; that in the course of said proceedings Mr. Scudder was appointed a Receiver of the Company, on the 1st of November, 1856, and that he then notified the defendants not to pay the note in suit to the plaintiff.

Ogden v. Raymond et al.

The case states that "the said Judge thereupon found and decided as matters of fact:

"1st. That the International Insurance Company was originally incorporated by a special act of Legislature, passed on the 15th day of April, 1844, by the name of the Kings County Mutual Insurance Company. The original act of incorporation is chapter 156 of the Session Laws of 1844, page 229.

"(To which finding of fact the defendants, in due time and due form of law, excepted.)

"2d. That under that act of incorporation, the Kings County Mutual Insurance Company organized and commenced the business of insurance, pursuant to the act of incorporation, in Brooklyn, shortly after the date of that act, and they thus continued to transact business until the 23d day of May, 1854, when the Trustees and stockholders passed a resolution to dissolve the corporation, and the same was declared by a resolution adopted by the Trustees to have been dissolved, on or about the 11th day of February, 1853, in the following words, viz.:

"The ordinary business of this corporation having been suspended for one year, it is resolved, That the corporation is dissolved, and that we, the present Trustees, will settle the affairs of the corporation pursuant to the provisions of the Revised Statutes, sections 9 and 10, first volume, page 603.'

"3d. Afterwards a resolution was introduced into the Board of Trustees of the Kings County Mutual Insurance Company, that the charter of that Company be offered for sale; and after much negotiation, the same was sold to George Briggs and others for the sum of five thousand dollars.

"The facts contained in this and the next preceding finding, are stated by the said Justice, but they were excluded by him. He decided that they were inadmissible in this action, and he rules that they are not to be considered in deciding this action.

"(To which decision the defendants' counsel, in due time and form of law, excepted.)

"4th. That on the 11th day of April, 1855, an act of the Legislature of this State was passed, which is chapter 295 of the Laws of 1855, and is in the Session Laws of that year, at page 505.

"5th. On the 1st day of May, 1855, the International Insu rance Company began to transact the business of insurance in