(121 Misc. Rep. 641) (202 N.Y.S.) CONRAD V. CONRAD. (Supreme Court, Special Term, New York County. November, 1923.) Marriage 60 (7)-Evidence held not to show concealment or misrepresentation of mental condition. In an annulment action, evidence held insufficient to show either concealment or misrepresentation by defendant of her mental condition. Action to annul a marriage by Alvis Conrad against Theresa Conrad. Judgment for defendant. Cattano & Gilman, of New York City, for plaintiff. Maurice Bloch, of New York City, special guardian, for defendant. NEWBURGER, J. This is an action to annul a marriage upon the ground of false and fraudulent representations alleged to have been made by the defendant prior to her marriage to the plaintiff. The plaintiff testified that he had known the defendant a year before the marriage, and that he saw her every two or three weeks; that in the course of a conversation he asked her, “Are you healthy, bodily and mentally?" and that she said, "Sure." The physician who had treated the defendant, as he describes it, for various small ailments, colds, and such things, stated in answer to a question that he never treated the defendant for any nervous disease. It appears that five months after the marriage the defendant was taken to Flower Hospital and gave birth to a child, and the physician discovered that her mind was affected. The expert called testified that the fact of her giving birth to a child five months after her marriage may have been an element in bringing about her mental condition. The proof submitted is, in my judgment, insufficient for me to hold that the defendant either concealed or misrepresented her mental condition. The complaint must therefore be dismissed, with costs to the special guardian, Maurice Bloch. I desire to take this opportunity of commending him for the great interest he manifested in the unfortunate defendant as special guardian. Judgment accordingly. (207 App. Div. 319) INSURANCE CO. OF NORTH AMERICA v. WHITLOCK et al. (Supreme Court, Appellate Division, First Department. December 14, 1923.) Trial 11(3)-Judge trying one issue separately not authorized to find one fact involved in such issue and retransfer cause. Where the Special Term ordered the issue whether a general release was obtained by fraud to be tried before the main issue, the trial judge, when it became apparent that the trial of such issue involved the trial of the main issue, had the right to send the case back to the Special Term for trial, but he had no right to find that there was a general release, which was only one of a number of facts involved in the issue sent to him for trial, and then send the other facts to the Special Term for trial. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 202 NEW YORK SUPPLEMENT Appeal from Special Term, New York County. (Sup. Ct. Action by the Insurance Company of North America against Daniel G. Whitlock and others. From an order under which the case was sent back to Special Term to be tried, plaintiff appeals. Order modified, and, as so modified, affirmed. Argued before CLARKE, P. J., and DOWLING, SMITH, McAVOY, and MARTIN, JJ. John B. Doyle, of New York City, for appellant. Feltenstein & Rosenstein, of New York City (Moses Feltenstein, of New York City, of counsel), for respondents. SMITH, J. This action is for an accounting. The defendants set. up a general release. The plaintiff has replied that this release was obtained by fraud and misrepresentation. Application was made to Special Term that the issue raised by the reply of the plaintiff to the effect that the release was obtained by fraud and misrepresentation should be first tried. This application was granted. The trial thereof was begun, and it became apparent as the case progressed that the trial of this issue involved the trial of the accounting action. Thereupon the judge sitting at the trial made an order in which he determined that this was a general release, and sent back the issue raised by the reply to that general release for trial before the Special Term, in connection with the main question upon the accounting. The order was right, as far as it sent back the case for trial. The respondents do not object to this, except that they want the benefit of the conclusion of the trial judge to the effect that this was a general release. But the trial judge had no right to find one fact in the case, and then send all the other facts to another court for trial, when the fact found was only one of a number of facts to be found in order to determine the issue sent to him for trial. He had the right, when it appeared upon the trial of the case that the issue raised by the answer and reply involved the same issue as was raised upon the accounting, to send it all to the Special Term to be tried together, notwithstanding the order of Special Term that it be tried separately. The facts as presented at the trial itself may have been quite different from those presented in affidavits to the Special Term. The order should be modified, and the matter should be sent to the Special Term for trial of all the issues raised by the complaint, answer, and reply. As so modified, the order should be affirmed, without costs to either party. Order modified so as to provide only that all the issues raised by the complaint, answer, and reply be remitted to the Special Term for Trials, and, as so modified, affirmed, without costs. Order filed. All concur. (121 Misc. Rep. 763) (202 N.Y.S.) CITY INVESTING CO. v. GERKEN et al. (Supreme Court, Special Term, New York County. December 7, 1923. On Reargument, January 18, 1924.) 1. Corporations 334-Director, ratifying payment of dividends out of capital, liable to creditor. Where all the directors were present at a meeting subsequent to the declaration and payment of a dividend out of capital, and on being advised thereof ratified the payment, held, that a director, who was not present at the time the dividend was voted, is liable to a creditor. 2. Limitation of actions 34(5)—Six-year period not applicable to action by creditor against directors paying dividends from capital. Where a dividend was negligently and knowingly declared by directors from capital, directors' liability to a creditor was not created by statute, and hence the six-year statute of limitations, affecting actions on liability created by statute, does not apply. Action by the City Investing Company against John Gerken and others. Judgment for plaintiff. Edward F. Clark, of New York City (Leonard J. Reynolds, of New York City, of counsel), for plaintiff. Herbert H. Gibbs, of New York City, for defendants Gerken, O'Donnell, and Harris. PROSKAUER, J. The opinion of the Appellate Division on appeal from the result of a previous trial (200 App. Div. 503, 193 N. Y. Supp. 271) establishes as the law of this case that the plaintiff can maintain this suit. I find as a fact that the so-called Ettlinger transaction was merely the repayment of a loan, and not the purchase by the corporation of its own stock, and therefore none of the defendants. is liable therefor. [1] With respect to the dividend, I find as a fact that it was declared and paid out of capital. The defendant Gerken was not at the meeting at which the dividend was voted. If this circumstance stood alone, it would free him from liability, under the opinion of Mr. Justice Clarke in Hutchinson v. Curtiss, 45 Misc. Rep. 484, 92 N. Y. Supp. 70. But the complaint alleges, and the answer admits, that all of the directors were present at a subsequent meeting, "at which they were advised of the declaration and payment of said dividend, and ratified and approved same." This, coupled with the other facts alleged, seems to me sufficient to charge Gerken with personal and affirmative participation in the declaration and payment of the dividend. [2] It is urged on behalf of all of the defendants that they should escape liability under the six-year statute of limitations affecting actions upon liability "created by statute." In Shepard Co. v. Zachary P. Taylor Pub. Co., 234 N. Y. 465, 138 N. E. 409, "liability created by statute" is defined as "a liability which would not exist, but for the statute." The circumstances require a finding that this dividend was negligently and knowingly declared by the directors from capital. Under these circumstances, they were liable, irrespective of statute, though the form of action might be necessarily different. Darcy v. Brooklyn For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes & N. Y. Ferry Co., 127 App. Div. 167, 111 N. Y. Supp. 514, affirmed 196 N. Y. 99, 89 N. E. 461, 26 L. R. A. (N. S.) 267, 134 Am. St. Rep. 827; Johnson v. Nevins, 87 Misc. Rep. 430, 150 N. Y. Supp. 828; Brinckerhoff v. Bostwick, 99 N. Y. 185, 1 N. E. 663; Mason v. Henry, 152 N. Y. 529, 535, 46 N. E. 837; 14a Corpus Juris, § 1971, and cases there cited; Thompson on Corporations (2d Ed.) §§ 5324, 5325. There must therefore be judgment for the plaintiff. Judgment accordingly. On Reargument. Upon the reopening of this case it appears that the declaration of the improper dividend was not formally ratified at a meeting at which the defendant Gerken was present. Nevertheless, in view of his preponderant stock interest, the receipt by him as a stockholder of a substantial portion of the improper dividend, the fact that it was paid out, by him, and other acts of control, he must be held liable under the principle of Godley v. Crandall & Godley Co., 212 N. Y. 121, 138, 105 N. E. 818, L. R. A. 1915D, 632. (121 Misc. Rep. 754) In re HANNA'S WILL. (Surrogate's Court, Westchester County. December 4, 1923.) 1. Executors and administrators 472-No trial of issues on compulsory accounting proceeding. A compulsory accounting proceeding under Surrogate's Court Act, §§ 259, 260, does not contemplate the trial of issues, or of any controverted issues of fact, but only looks to an order directing the filing of an account, to ascertain if there is any surplus distributable to creditors or persons interested. 2. Jury 19(72)-Right to jury trial on "controverted question of fact" relates to issue on claim. Under Surrogate's Court Act, § 68, providing for a jury trial in probate proceedings on controverted questions of fact to which any party has a constitutional right, the "controverted question of fact" relates to an issue on the claim, and not to the controversy respecting the right of jury trial on the claim. 3. Jury 25 (6)-Creditor not entitled to jury trial before return of citation in compulsory accounting proceeding. Under Surrogate's Court Act, § 68, providing that in a probate proceeding in which any controverted question of fact arises of which any party has a right to trial by jury, the surrogate must make an order directing trial by jury, if seasonable demand is made, a creditor, whose claim was rejected by the executors, was not entitled as of right to a jury trial in a compulsory accounting proceeding, under sections 259, 260, until after the return of a supplemental citation, when the court could decide whether the constitutional right did in fact exist, and when all the necessary parties would be before it. In the matter of the compulsory accounting of Mark A. Hanna and others, as executors of the will of Daniel R. Hanna, deceased. On motion of Jane Avis Evans for an order directing a jury trial, under Surrogate's Court Act, § 68. Motion denied. John B. Johnston, of New York City (Charles F. Dalton, of Port Chester, of counsel), for petitioner. Arthur R. Wilcox, of Port Chester, for executors. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes (202 N.Y.S.) SLATER, S. The matter involved relates to the time when the question of right of jury trial in this court upon a claim shall be determined by the court. Because there are two pending appeals from orders, and another motion is made seeking the same relief, the court feels it should state its reasons for denying similar motions, and for like action upon the instant motion. A claim was presented to the executors by one Jane Avis Evans, and a verified proof of claim was filed in this office December 15, 1922. On January 13, 1923, the claim was rejected by the executors. This raised an issue of fact as to the merits of the claim. Action was not commenced in the Supreme Court pursuant to the provisions of section 211 of the Surrogate's Court Act, and in consequence said claim may now only "be tried and determined upon the judicial settlement" of the executors. On February 27, 1923, a demand for a jury trial was filed in the surrogate's office. On March 8, 1923, the said Jane Avis Evans, creditor, filed a petition praying for the direction of a jury trial of her claim. The application was not made in a proceeding for a judicial settlement. Apparently the claimant confused the demand for, with the right to, a jury trial. In consequence the court dismissed the petition. On March 28, 1923, the said creditor commenced a proceeding for a compulsory judicial settlement of the account of the executors. Citation issued the same day, directed to the executors of said decedent, returnable April 20, 1923. This raised the controverted question of fact concerning claimant's right to compel an accounting. On April 2, 1923, the said creditor made a motion in the proceeding, and asked for an order directing that the issue of fact arising out of the claim be tried by a jury. By order dated April 9, 1923, the court denied the motion as prematurely made. In the same compulsory accounting proceeding, a supplemental citation was issued September 17, 1923, citing the executors of said decedent who were without the state, and service was made upon the clerk of the Surrogate's Court. On October 16, 1923, another motion was. made by said creditor in the same accounting proceeding, asking that the court direct a jury trial to hear the issue of the claim. On October 19, 1923, the court again denied the motion as prematurely made, and the order was resettled on October 30, 1923. Two notices of appeal to the Appellate Division, dated April 19, 1923, and October 30, 1923, from the said orders are on file. On November 23, 1923, an order was entered in the compulsory accounting settlement proceeding, directing that an account be filed on or before December 15, 1923. Upon the filing of the account, the controverted question of fact will be over the disputed claim, and not over the proceeding. On November 16, 1923, the said persistent creditor made the instant motion, asking for an order directing a jury trial pursuant to section 68 of the Surrogate's Court Act (Laws 1920, c. 928). The matter came on to be heard upon this latter motion, and decision was reserved. The trial by jury in the Surrogate's Court is provided by sections 67 and 68 of the Surrogate's Court Act. Section 67 says that: |