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Armstrong v. Sun Printing Publishing Association

Appellate Division of the Supreme Court of New York, Second Department
Apr 22, 1910
137 App. Div. 828 (N.Y. App. Div. 1910)


April 22, 1910.

Herbert C. Smyth [ James M. Beck and Carl A. Mead with him on the brief], for the appellant.

Henry A. Powell, for the respondent.

The odium of the article is that the Attorney-General, backed up by the Insurance Department, contends that the capital and the surplus certified as having been paid in in cash were to a large extent fictitious. No charge of any fault is made against the plaintiff save as it may be inferred from the statements that he was a promoter and is the president of the company. It is not charged that the capital and surplus are fictitious, but that they were fictitious when certified.

Examination of the general statutes then applicable shows that a certain number of persons could become a corporation for fire insurance purposes by filing in the office of the Superintendent of Insurance a declaration, signed by all of them, of intention to form a corporation comprising certain specified particulars, including the amount of capital, which could not be less than $200,000, fully paid in in cash. Before it could carry on business a certificate of the Superintendent of Insurance that it had complied with all the requirements of law was necessary. But the Superintendent could not file the declaration or charter or grant such certificate until they were certified by the Attorney-General. (Ins. Law [Laws of 1892, chap. 690], §§ 10, 12, 110, as amd. by Laws of 1893, chap. 725; Laws of 1898, chap. 171; Laws of 1900, chap. 366, and Laws of 1907, chaps. 206, 503.) After approval of the Attorney-General the statute (Ins. Law, § 11, as amd. by Laws of 1893, chap. 725, and Laws of 1906, chap. 326) provided: "Examination by superintendent. — If the declaration and charter specified in the preceding section shall be approved by the Attorney-General, the superintendent shall thereupon cause an examination to be made by himself or by one or more competent and disinterested persons, specially appointed by him for that purpose, into the affairs of the corporation or proposed corporation. If such persons, after examination made, shall certify under oath, if it be a stock corporation, that the amount of capital required by law has been paid in and is possessed by it in cash, or is invested in the manner required by law; or if a mutual or co-operative corporation, that it has received and is in actual possession of the capital, premiums or engagements of insurance to the full extent required by law, the superintendent shall file such certificate in his department. Every such insurance corporation shall also deposit with the Superintendent of Insurance, before receiving authority to transact business in this State, such sums of money or securities as may be required by law." On the other hand, I am not cited to any law that required promoters, organizers or officers of such corporations to make any certificate on this subject, and I do not find any provision to that effect in the statutes. The learned counsel for the plaintiff concedes in his printed points that part of the innuendo, "and that plaintiff and others had falsely certified to the said false and fictitious capital," "are to be treated as mere surplusage." An innuendo does not enlarge the meaning of words; it is to define them or to show that they relate to the plaintiff. ( Van Heusen v. Argenteau, 194 N.Y. 309.) Any charge that the plaintiff "fraudulently * * * organized" the company must be found in the statement of promotion or in the statement that he is the president. In Dickerman v. Northern Trust Co. ( 176 U.S. 203) the court say: "A promoter is one who `brings together the persons who become interested in the enterprise, aids in procuring subscriptions and sets in motion the machinery which leads to the formation of the corporation itself.' Cook on Stock and Stockholders, sec. 651. Or, as defined by the English statute of 7 8 Vict. chap. 110, sec. 3, `every person acting, by whatever name, in the forming and establishing of a company at any period prior to the company' becoming fully incorporated. See, also, Lloyd on Corporate Liability for Acts of Promoters, 17." Cook on Corporations (6th ed. § 651, p. 1876, n. 3) collates a number of definitions, and among them that given by LINDLEY, J., in Emma Silver Mining Co. v. Lewis (L.R. 4 C.P. Div. 396): "The term `promoter' involves the idea of exertion for the purpose of getting up and starting a company (of what is called `floating' it), and also the idea of some duty towards the company imposed by or arising from the position which the so-called promoter assumes towards it." Morawetz on Corporations (Vol. 1 [2d ed.], § 545) says: "A person, who, by his active endeavors, assists in procuring the formation of a company and the subscription of its shares, is commonly called a promoter. The word `promoter' has no technical legal meaning, and applies to any person who takes an active part in inducing the formation of a company, whether he afterwards becomes connected with the company or not." Note: "In Whaley Bridge, c., Co. v. Green, L.R. 5 Q.B.D. 109, 111, BOWEN, J., said: `The term promoter is a term not of law, but of business, usefully summing up, in a single word, a number of business operations familiar to the commercial world, by which a company is generally brought into existence.'" Promoters are not the corporation ( Battelle v. Northwestern Cement Concrete Pavement Co., 37 Minn. 89), and the term does not imply that they become related to the corporation itself. (Morawetz, ut supra; Ex-Mission L. W. Co. v. Flash, 97 Cal. 610.) A promoter, then, does not necessarily have aught to do with the payment in of the capital or the cash of the corporation. The present president of a corporation is not necessarily connected with the organization of a corporation, even though he had been a promoter thereof.

But it is contended that the article is libelous per se. Words that disparage an officer, professional man or trader are not actionable per se. They "`must touch the plaintiff in his office, profession, or trade;' that is, they must be shown to have been spoken of the plaintiff in relation thereto, and to be such as would prejudice him therein. They must impeach either his skill or knowledge, or attack his conduct therein." (Odgers' Lib. Sland. [3d ed.] 73, and cases cited.) The same author further writes: "`Every authority which I have been able to find, either shows the want of some general requisite, as honesty, capacity, fidelity, c., or connects the imputation with the plaintiff's office, trade or business.' (Per Bayley, B., in Lumby v. Allday, 1 Cr. J. at pp. 305, 306, cited with approval by Lord Denman, C.J., in Ayre v. Craven, 2 A. E. at p. 8, and by Lord Herschell, L.C., in Alexander v. Jenkins (1892), 1 Q.B. at p. 800.)" The business of the plaintiff, so far as we are informed, is that of president of an insurance company. The charge virtually is that certain State officials now contend that the capital and surplus of a corporation, when certified by these State officials as having been paid in in cash were to a large extent fictitious. Does such statement impute "any kind of fraud, dishonesty, misconduct, incapacity, unfitness or want of any necessary qualification" in the calling of him who is now the president of that company? I use the language of Starkie on Slander (4th ed. § 188), approved and adopted in Moore v. Francis ( 121 N.Y. 205). It certainly does not connect that official in his vocation as the present president with acts with which he could have no concern, and which, for aught that appears, were done years ago.

I advise that the interlocutory judgment be reversed, with costs, and the demurrer be sustained, with costs.

BURR, THOMAS, RICH and CARR, JJ., concurred.

Interlocutory judgment reversed, with costs, and demurrer sustained, with costs.

Summaries of

Armstrong v. Sun Printing Publishing Association

Appellate Division of the Supreme Court of New York, Second Department
Apr 22, 1910
137 App. Div. 828 (N.Y. App. Div. 1910)
Case details for

Armstrong v. Sun Printing Publishing Association

Case Details


Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Apr 22, 1910


137 App. Div. 828 (N.Y. App. Div. 1910)
122 N.Y.S. 531

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