The President, Directors, and Company of the Bank of Auburn against Weed and Aiken

New York Supreme Court of Judicature1822-01

19 Johns. 300

Summary · law.co

Holding. The defendant's plea denying the plaintiff's corporate status is bad and must fail, because the plaintiff's corporate existence is an essential fact the plaintiff must prove in the first instance and therefore cannot be put in issue through a special plea. Judgment for the plaintiffs.

The Bank of Auburn sued Weed and Aiken, and the defendants attempted to plead that the bank was not a valid corporation—a plea known as 'nul tiel corporation.' The bank challenged this plea as improper. Although such pleas were permitted in older English law, the court determined that modern pleading standards do not favor them. The court reasoned that a plaintiff in an action must prove its corporate status as part of establishing its right to sue; therefore, a defendant cannot use a special plea to force the plaintiff to prove something it would have to demonstrate anyway under a general denial. Allowing such a plea would contradict established rules of pleading and create unnecessary complexity.

The court distinguished between defenses that deny facts the plaintiff must prove (which should be raised under the general issue, not special pleas) and defenses that assume those facts are true but rely on other grounds to defeat the action (which may be specially pleaded). A challenge to the plaintiff's corporate status falls into the former category because the plaintiff's corporate existence is part of its foundational right to bring suit. The court acknowledged that historical precedent supported pleading nul tiel corporation but concluded that modern practice and sound pleading principles counsel against allowing it.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a defendant may plead nul tiel corporation (denial of plaintiff's corporate status) as a special plea in bar
Proper scope of special pleas versus the general issue in civil pleading
What facts constitute part of a plaintiff's title to recover and must be proven affirmatively

Procedural posture

The case returned to the court after a prior decision setting aside an inquest based on defects in the plaintiff's replication to the defendant's plea, with the court now addressing the substantive question of whether the plea of nul tiel corporation is valid under modern pleading rules.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Spencer, Ch. J.

delivered the opinion of the Court. This case was before us on a former occasion, on a motion to set aside an inquest. To this plea the plaintiffs had replied, that the plaintiffs were a body politic and corporate, and have a right to sue; the defendants demurred to the replication. The plaintiffs, net regarding the demurrer, took an inquest; and we set aside the inquest, on the ground, that we could not say that the defendants had no right to plead such a plea. We held the replication to be bad; and therefore the demurrer was riot frivolous, or for delay ; and we granted the motion, giving the plaintiffs leave tq amend the replication. The question now argued, was then incidentally touched on, but the motion was decided on the point of practice; and the Court did not examine the question now presented.

This is the test whether a plea in bar is bad: as amounting to the general: issue : Any matter of defence, which denies what the- plaintiff, on the generaLissue, would be hound to prove, may, and ought to be given in evidence, under the general issue ; and a plea setting up, negatively, such facts, is bad on special demurrer: But any ground of defence which admits the facts alleged in the declaration, but avoids the action; by matter which the plaintiff would not be bound to prove or dispute, in the first instance, on the general issue, may he specially pleaded. (1 Chitty, 497. 1 Tidds Pr. 599, 600.) Where the defence consists of matter of feet, and the- general issue may, it ought tq -be pleaded, it being, iff stich ease, a-good cause of demurrer, that the plea amounts to the general issue. In Hussey v. Jacob, (1 Lord Raym. 87.) the Court allowed the statute of gaming to be pleaded, in an action on a bill of exchange; but the case is within the distinction already mentioned.

It has been decided, (8 Johns. Rep. 378. 14 Johns. Rep. 244. Hob. 211., and 2 Lord Raym. 1525.) that the plaintiffs are bound to prove, as part of their title, that they are a corporation. This plea, then, is expressly against the rule; for the defendants attempt to put in issue, by a special plea, part of the plaintiffs’ title to recover, and a fact which the plaintiffs must prove, in the first instance.

There is no doubt, that anciently, it was admissible to plead nul tiel corporation in bar. Kyd, (on Corp. p. 284.) recognizes that such was the practice, and he refers to 44 Assizes, pl. 9. and Bro. Corp. 44. In 1 Saund. 340. b. n. 2. the same thing is spoken of, and the same cases are referred to.

The language of this Court, in Kennedy v. Strong, (10 Johns. Rep. 291.) is quite applicable here. In that case, there was a special plea, in an action of trover, and we held the plea to be bad, on a special demurrer, as it amounted to the general issue. It was observed that, “ though the old books contain numerous precedents of special pleas in trover, they are deservedly discountenanced in modern times, as leading to unnecessary expense and troublesome prolixity.”

Though there are precedents of the plea, “ of no corporation,” yet it is opposed to the principles of good pleading in modern times, and ought not to be allowed.

Judgment for the plaintiffs.