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Glenney v. Sted well.

scheme is found to be visionary or founded upon erroneous principles * (Collyer on Partnership, § 297; 3 Kent Com. 68, and cases cited).

The state of feeling between the members of this association shown by the evidence appears to me to bring this case with the authorities referred to, and to call for the appointment of a receiver, for an adjustment of the accounts of the association, and for a decree of dissolution.

As I have found that the dissolution is necessary on account of the acts of both of the factions in the association, no costs allowed.

GLENNEY v. STEDWELL.

Court of Appeals; February, 1876.

DISCOVERY.-EXAMINATION BEFORE TRIAL.-FORM OF AFFIDAVIT. Under the Code of Pro., § 391, and rule 21, the court have power, in a case in which equity would formerly have sustained a bill of discovery, to allow a plaintiff in an action pending, to examine his adversary under oath before trial, even for the purpose of enabling the plaintiff to frame his complaint.

The power given by the Code to examine an adverse party before trial, is a substitute for the bill of discovery in chancery.† Where the court below had power to order examination, the court of appeals will not review the discretion exercised by them below, on

* As to by-law against intoxication, see St. Mary's Beneficial Soc. ↑. Burford, 70 Pa. St. 321; Nash v. Russell, 5 Barb. 556.

See also on this point King v. Leighton, 58 N. Y. 383.

As to the rule in chancery, see note at the end of the case. As to the power to compel production of books and papers, see the case of Smith v. MacDonald (p. 350). As to the weight conceded to the testimony of parties, see Hodge v. City of Buffalo, p. 356 of this

Glenney v. Sted well.

the question whether a necessity for such examination was made out in the moving papers.

The application may be granted for the purpose of ascertaining the names of persons whom the applicant desires to join by amendment as parties.

Whether, before action commenced, the testimony of one expected to be a party to the intended action, can be perpetuated under 2 R. S. 398, § 33, doubted.

Appeal from an order.

William P. Glenney, on his own behalf and on behalf of other policy holders similarly situated, &c., brought an action in the New York superior court, against the World Mutual Life Insurance Co., the New Jersey Mutual Life Insurance Co., and D. J. Noyes, F. J. Mulligan, J. H. Stedwell, John Doe and Richard Roe, to set aside an election of Noyes and Mulligan, and enjoin an alleged threatened perversion of the reserve fund of the first-named company, upon grounds which are indicated below. The action was commenced by service of the summons alone on May 26, 1875. On the next day plaintiff applied to, and obtained, from a justice of the court, an order for the examination of several of the individual defendants, in order to enable him to prepare his complaint. The application was made under sections 389-395 of the Code.

The allegations of the affidavit were as follows:

"That the World Mutual Life Insurance Company is, and has been for many years last past, a corporation created under the laws of New York authorizing the creation of life insurance companies. That deponent, on the 4th of August, 1869, took from said company its policy of insurance for the sum of $400, payable to him or to his assigns, on the 4th August, 1869, [?] or if he should die before that day, to his executors or administrators, which said policy was issued by said company in consideration of $224, then paid said company by defendant.

Glenney v. Sted well.

"That on the 4th August, 1873, deponent entered into another contract with said company, by which said company, in consideration of the cancellation and surrender of other policies issued by it, then held by deponent, agreed to pay to deponent on the 4th August, 1889, the sum of $879, or if deponent should die before that date, then thirty days after notice of such death, to the wife of deponent, both of which contracts are in full force.

"That said company is required by law and by said contracts, to keep invested in securities directed by the statute, a certain sum called the reserve on said policies, which sum is such an one as will, being invested at 4 1-2 per cent. per annum, furnish enough money at the maturity of the contracts as will extinguish the same; calculation of the duration of life being based upon the American experience table of mortality.

"That the plaintiff is ignorant of the amount of this reserve fund.

"That on the first January the said World Company had invested, as appears by its report to the superintendent of the insurance department, a sum equal to the lawful reserve on all its outstanding policies which it held in trust for its policy holders, and for this deponent.

"That the New Jersey Mutual Life Insurance Company is a corporation created under the laws of New Jersey for the insurance of lives. That deponent is informed and believes said last named company, and divers of its officers and directors, to deponant unknown, have conspired with divers of the officers, and directors of said defendant, World Mutual Life Insurance Company, to obtain possession of the assets of said last-named company, and so obtain the reserve fund held in trust by said World Company for its policy holders. That in pursuance of such conspiracy and

Glenney v. Sted well.

scheme, the president and secretary and several of the trustees of said World Company, have resigned their offices, and the defendant, D. J. Noyes, and the defendant, F. J. Mulligan, have been elected president and secretary in their places, persons connected with said New Jersey Company; that deponent does not know the names of the trustees who have resigned, or of those which have been elected in their place, but deponent is informed that such change was made by means of the purchase of the capital stock of the said World Company, by the said New Jersey Mutual Life Insurance Company, or some person acting on its behalf, for the fraudulent purpose of facilitating the transfer of the said reserve fund and assets of said World Company to said New Jersey Company, so that the latter named company can withdraw the same from this State, and deprive the policy holders in the World Company of all interest therein, to their great damage and the damage of the plaintiff. That the defendant, J. H. Stedwell, is president of said New Jersey Mutual Life Insurance Company, and knows all the facts respecting said transactions.

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"That a circular has been issued by defendant, Noyes, to all policy holders in the World Company, advising them to call upon Henry W. Baldwin, an agent of the New Jersey Mutual Life Insurance Company, one of the defendants, and make arrangements for transfer of policies thereto. That such a circular was received by deponent, and also one from said Henry W. Baldwin, agent of said New Jersey Mutual Company, advising deponent to transfer his policy, which deponent declines.

"That deponent has commenced an action in this court, as well on his own behalf, as on that of all other policy holders similarly situated with him, against said World Life Insurance Company, said New Jersey Mutual Life Insurance Company, D. J. Noyes, F. J. Mulli

Glenney v. Sted well.

gan, J. H. Stedwell, and John Doe and Richard Roe, for the purpose of setting aside the election of said Noyes and Mulligan, and for the purpose of restraining all officers of the World Mutual Life Insurance Company from parting with any of the reserve fund of said company, and to restrain said New Jersey Company and said Henry W. Baldwin, from receiving any of said fund, or interfering therewith, in any way, and for other relief.

"That deponent is not able to frame his complaint, and does not know the names of the necessary defendants, and that it is necessary for him, in order to obtain knowledge of said names, and of the facts necessary to frame his complaint, that he should have an order to examine the defendants, J. H. Stedwell, Daniel J. Noyes, Francis J. Mulligan, and Henry W. Baldwin, so that he can obtain from them the information necessary for the purpose aforesaid.

"That deponent has stated the case to Robert Sewell, Esq., of 68 West Forty-fifth street, New York, his counsel, and he is advised by his said counsel that he has a meritorious cause of action, and that the discovery which he seeks is absolutely necessary to enable him to frame his complaint.

"He further shows that this application is made in good faith, and for the very purpose stated, and none other."

The order to attend,* and the summons were in

* On taking the examination of an adverse party who has appeared by attorney, notice to the attorney, as well as personal notice to the party, must be given in order to enforce attendance. Plumer v. Belden, 8 Hun, 455.

A deposition of a party taken de bene esse, under 2 R. S. 392, § 3, should not be excluded at the trial, merely on the objection that notice of the taking it was not given to the adverse party in person. Notice to the attorney, such as enables him actually to attend and cross-examine, is enough, especially where the objection is first raised at the

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