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Supreme Court, June, 1900.

[Vol. 32.

ing dividends upon the enormous capitalization of the American Ice Company issued without value as aforesaid.

I am of the opinion that these allegations are sufficient to bring the case within the provisions of the statute and were adequate to justify the order for the examination of the witnesses. It is not necessary to assert that the alleged unlawful combination or arrangement took place in this State, because the statute prohibits any act within the State, pursuant thereto or for the consummation thereof, and authorizes the Attorney-General to bring an action to restrain the alleged illegal acts here wherever the alleged unlawful combination or arrangement was made. Nor is it important that the facts alleged as constituting such arrangement or combination are alleged to have taken place on March 11, 1899, or prior thereto, while the act of 1899 did not take effect until May 25 of that year, for the reason that the substantive provisions of the act of 1899 were but a re-enactment of exactly the same provisions contained in the act of 1897. There can arise, therefore, no question concerning the law being retroactive or ex post facto in character, for it has not been changed at all in this respect during any portion of the time covered by the transactions referred to in the application.

It is also asserted that under the laws of this State, as well as those of Maine and of New Jersey, it was lawful for the American Ice Company to exchange its capital stock for the capital stock of the Consolidated and Knickerbocker Ice Companies. It is true that under section 40 of the Stock Corporation Law (L. 1892, ch. 688) this is so, and it has been held that that section authorizes one corporation to purchase stock in another, although the result might be to destroy competition. Rafferty v. Buffalo City Gas Co., 37 App. Div. 618.

But it may happen that an act otherwise legal, if done with an illegal purpose or intent, becomes by virtue of such purpose or intent illegal, and therefore, to be condemned.

While the law permits one corporation to buy and hold stock of another corporation, the Attorney-General sufficiently alleges that this was done in this case for an unlawful purpose. He alleges in effect that the purpose of the alleged agreement or arrangement between these companies to so combine their interests was to create a monopoly in the ice business and destroy competition in the production, supply and sale of ice in the city of New York in

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Supreme Court, June, 1900.

violation of law, and that in pursuance of such agreement and arrangement, the American Ice Company acquired the stock of the other two companies.

I think, therefore, that he brings the case within the provisions of the law, which condemns every contract, agreement, arrangement, or combination having for its purpose the creation or maintenance within the State of a monopoly of the production or sale of any article of common use or the restraining or preventing competition in the price or supply of any such article, and that his written application is sufficient to justify the order for examination which has been granted.

It is also urged that the provisions of the statute, conferring upon the referee power to punish witnesses for contempt is unconstitutional, but I think that question is not here for determination. It will be time enough to consider that when a case arises making it necessary.

The Court of Appeals has held that a matter of this kind is not a special proceeding, and that any order made cannot affect a substantial right of the witness. Matter of Attorney-General, 155 N. Y. 441. For this reason and for the further reason that full immunity is now given to the witness, I do not deem it essential for me to consider the other constitutional questions urged on this motion.

The motion to vacate the order is denied, with costs. Orders may be prepared in conformity herewith, and if not agreed to by counsel, may be settled before me on two days' notice.

Ordered accordingly.

JOHN MITCHELL et al., Plaintiffs, v. WILLIAM E. ANDERSON, Defendant.

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(Supreme Court, Erie Special Term, June, 1900.)

Attachment Insufficient affidavit, made by attorney, for goods sold Code C. P., § 635.

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A statement, in an affidavit made by an attorney to procure an attachment for his clients, that "the grounds of said claim and cause of action" are for a sale and delivery of certain butter, at a price named, is not a statement that the butter was in fact sold and delivered, and, therefore, does not show that one of the causes of action

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specified in section 635 of the Code of Civil Procedure exists against the defendant.

A further statement of the affidavit, that the affiant made a written demand of payment, and that thereupon the defendant sent him an assignment of a claim against a third party in part payment, when not accompanied by copies of the demand and assignment or by any proof that the demand stated the amount of the claim, does not show that such payment was not in full, or that anything now remains due on the debt.

A further statement of the affidavit that a sum named therein remains due the plaintiffs "over and above all counterclaims and set-offs known to deponent" (the attorney) is defective, as the Code requires this statement to be made on the knowledge of the plaintiffs themselves.

MOTION by a junior attaching creditor to vacate prior attach

ment.

Francis E. Wood, for motion.

Fred O. Bissell, opposed.

KENEFICK, J. This motion is based upon alleged defects shown on the face of the affidavit upon which the senior attachment was granted. The affidavit is made by the attorney in the action, and it is apparent therefrom that he has no personal knowledge of the transactions out of which the alleged cause of action arises, or of any other transactions between the plaintiffs and defendant. It appears from the affidavit that the affiant who resides in Buffalo, N. Y., received the claim from the plaintiffs, who reside in Dodge ville, Wis., and thereupon made efforts to collect it. The defects alleged will be briefly noticed.

First. It is claimed that the affidavit did not show that one of the causes of action specified in section 635 of the Code exists. against this defendant.

The portions of the affidavit bearing upon this question are as follows:

"That a summons has been issued in this action; that said action. is for the recovery of money by the above-named plaintiffs against the above-named defendant.

"Deponent further says that a cause of action exists in favor

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Supreme Court, June, 1900.

of said plaintiffs against said defendant for which said action is commenced, and that the amount of the plaintiffs' claim in said action is six hundred and sixteen dollars and thirty-six cents ($616.36), and interest from the 19th day of July, 1899, over and above all counterclaims and set-offs known to deponent, and that the grounds of said claim and cause of action are the sale and delivery to said defendant by said plaintiffs of sixty-six tubs of butter of the price and agreed value of seven hundred one dollars and four cents ($701.04), on which price said defendant paid the sum of $84.68 on account on the 9th day of August, 1899 ".

The mere allegation that a cause of action exists is not sufficient; the cause of action must be disclosed. Manton v. Poole, 67 Barb. 331.

Even if the affiant had personal knowledge of the transaction, there is no sufficient allegation of a cause of action. The affiant states that the grounds of said claim and cause of action are the sale and delivery to said defendant of certain butter, etc.

"There is here no allegation that said goods were in fact sold and delivered, but only that plaintiff's claim is for goods sold and delivered". Chambers & McKee Glass Co. v. Roberts, 2 App. Div. 183.

Within the authority of the above case the statement of the cause of action is clearly defective, unless the further allegation of the written demands made by the affiant and of the payment of a portion of the account cures the defect and proves the existence of a cause of action. Upon this point the affidavit reads: "That deponent received the above-mentioned claim in favor of said plaintiffs against said defendant on the 4th day of August, 1899. That on the morning of the 5th day of August, 1899, deponent personally called at the store of defendant, No. 171 Scott street, in said city of Buffalo, to make demand for the payment of said $701.04 due as aforesaid. That deponent was informed by a person in charge of said store that Mr. Anderson was not in town, but would return the afternoon of said 5th of August, and that he would call Mr. Anderson's attention to the matter. That deponent left his card and a written demand on said defendant, and on the same morning wrote a note to said Anderson demanding payment of said plaintiffs' account. That on Monday, the 7th day of August, deponent received a communication from defendant, containing an assignment to deponent of a certain account in favor of

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said defendant against the J. W. Powell Company in the sum of $84.68, to be applied on account of said plaintiffs' claim, which said account deponent afterwards collected and applied on said plaintiffs' claim ".

It will be observed that no copy of the demands is attached, nor is there a statement of the contents thereof, nor is the communication from the defendant exhibited in which he transmits to affiant an assigned account in part payment of plaintiffs' claim. It does not appear from the affidavit that in affiant's written demands he specified the amount of the plaintiffs' claim, or that in defendant's reply transmitting the assigned account he admitted that any sum still remained due to the plaintiffs.

I am constrained, therefore, to hold that there was not sufficient evidence before the judge who granted the attachment that a cause of action existed.

Second. If, however, we assume that a cause of action was sufficiently shown, the affidavit fails to show "that the plaintiff is entitled to recover a sum stated therein, over and above all counterclaims known to him". § 636, Code.

The affidavit as before stated is made by the attorney in the action, who states that the amount of plaintiffs' claims is $616.36 over and above all counterclaims and set-offs known to deponent".

It is not the knowledge of the agent or attorney which the Code. section requires, but the knowledge of the plaintiff; and allegations such as the one above quoted have been repeatedly held to be defective. Murray v. Hankin, 30 Hun, 37; Smith v. Arnold, 33 id. 484; Smith v. Holt, 37 App. Div. 26.

As above pointed out it does not appear that the defendant, at the time he sent the assigned account in response to the demand of plaintiffs' attorney, admitted that he owed the plaintiffs any further sum. Thus the defective allegation was not cured by any admission of the defendant.

For the above reasons the attachment is vacated, without costs.

Attachment vacated, without costs.

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