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Attorney(S)

Porter R. Chandler of counsel [ Edward C. McLean with him on the brief; Davis, Polk, Wardwell, Gardiner Reed, attorneys], for the appellants Close, Grant, Schneider, Fountain and Debevoise. Morris F. Goldstein of counsel [ Abraham P. Inselstein with him on the brief], for the respondent.

Judges

O'MALLEY, J.

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Smart Summary

Nicholson v. Close, App. Div. (N.Y. App. Div., 1st Dept.), Jan. 26, 1940 — O'Malley, J. (Summary)

Factual and Procedural Background

This is an appeal from an order of the Supreme Court, New York County (HAMMER, J.). The caption identifies the plaintiff as Samuel S. Nicholson, suing for himself as a stockholder and on behalf of all other stockholders similarly situated of Lehigh Valley Coal Corporation, a Delaware corporation doing business in New York, and the defendants as Lewis R. Close and others, impleaded with additional defendants.

The opinion addresses the sufficiency and form of the plaintiff's complaint. The Appellate Division considered whether the complaint, particularly paragraphs eleven and sixteen, sufficiently alleged ultimate facts to predicate a cause of action and whether the manner of pleading (using the phrase "some or all of them") was permissible. The appellate court reversed the order below and granted a motion to dismiss, with leave for the plaintiff to plead anew under stated conditions.

Legal Issues Presented

Whether the allegations of ultimate facts in paragraphs eleven and sixteen of the complaint, under the fair intendment rule, are sufficient to predicate a cause of action against some defendant.
Whether the plaintiff's use of the phrase "some or all of them" renders the complaint so indefinite that no particular defendant is charged with wrongdoing.
Whether section 213 of the Civil Practice Act (permitting pleading of alternative liability) justifies the form of pleading used by the plaintiff in this case.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gundlach v. Consolidated Gas Co., Inc. (affirmed, 257 App. Div. 930)	Condemnation of indefinite pleading that fails to charge particular defendants by using imprecise collective language.	The court cited Gundlach as a direct example of the form of pleading condemned when a complaint uses language (such as "some or all of them") that leaves no defendant specifically charged.
Gerdes v. Reynolds, 281 N.Y. 180, 185	Support for the principle that pleadings must adequately identify the wrongdoing and the responsible party.	Referenced alongside Gundlach to demonstrate prior authority criticizing indistinct pleading that fails to attribute specific acts to particular defendants.
Garrett v. McAllister, 137 Misc. 721	Interpretation of section 213 (alternative liability): the section applies where the plaintiff is in doubt as to which of several persons is liable, and where pleaded facts create alternative bases for liability.	Used to show the limits of section 213 and that it does not permit pleading when the only doubt is whether a given defendant is liable at all.
Jamison v. Lamborn, 207 App. Div. 375	Further authority on the scope of pleading alternative liability under section 213.	Applied by the court to reinforce that alternative liability is permissible only where pleaded facts will allow proof of one of the alternatives to fix liability on a defendant; it does not cure a complaint that does not allege any liability against an individual defendant.

Court's Reasoning and Analysis

The court began by applying the "fair intendment" rule and concluded that paragraphs eleven and sixteen of the complaint contain sufficient allegations of ultimate facts to predicate a cause of action against "some one" (i.e., at least one defendant). In other words, the factual substance in those paragraphs, standing alone, could support a cause of action directed at an identifiable party.

However, the court then addressed the form of the pleading. The plaintiff repeatedly used the indefinite phrase "some or all of them," and by doing so rendered the complaint so indefinite that no individual defendant was specifically charged with any particular wrongdoing. The court characterized this manner of pleading as defective and cited Gundlach v. Consolidated Gas Co. and Gerdes v. Reynolds as authorities condemning such imprecision.

The plaintiff relied, implicitly or explicitly, on section 213 of the Civil Practice Act (which permits pleading in the alternative). The court analyzed the scope of that statute, observing that section 213 applies where the plaintiff is in doubt as to which of several persons is liable, but not where the plaintiff's only doubt is whether a particular defendant is or is not liable. The court explained that section 213 is applicable when facts are pleaded under which two alternatives exist and proof of either alternative would result in holding one of the defendants liable. The court cited Garrett v. McAllister and Jamison v. Lamborn in support of this interpretation.

Applying these principles, the court found that the plaintiff did not allege the existence of specific fact(s) which, if proved, would determine the liability of the defendants as alternatives. Because the complaint failed to allege a cause of action against any individual defendant, there was nothing on which to base alternative liability: "There can be no alternative liability if some liability does not first exist."

On that basis the court concluded that the order below should be reversed, assessed costs and disbursements in the amount of twenty dollars, and granted the motion to dismiss, but with leave to the plaintiff to plead anew within twenty days after service of the order with notice of entry, upon payment of the stated costs.

Holding and Implications

HOLDING: The Appellate Division reversed the order below, allowed the motion to dismiss, assessed twenty dollars costs and disbursements, and granted the plaintiff leave to plead anew within twenty days after service of the order with notice of entry, upon payment of said costs.

Implications:

Direct effect on the parties: The complaint, as framed, was held legally insufficient because it failed to charge any particular defendant with conduct; the case was dismissed subject to the plaintiff's right to replead within the specified time and conditions.
On pleading practice: The opinion reiterates that plaintiffs must plead with sufficient particularity so that individual defendants are charged with specific wrongdoing; blanket phrasing such as "some or all of them" is inadequate. The decision applies existing precedents (Gundlach; Gerdes) and statutory interpretation of section 213 to draw a line between permissible alternative pleading and impermissible vagueness.
Precedential impact: The court relied on established authorities to resolve the pleading issue; the opinion enforces existing pleading standards rather than announcing a novel rule.

Concurrence: MARTIN, P.J., TOWNLEY, GLENNON and UNTERMYER, JJ., concurred. The court's final entry restated the reversal and dismissal with leave to replead and the costs award.

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SAMUEL S. NICHOLSON, Suing for Himself as a Stockholder, and on Behalf of All Other Stockholders Similarly Situated, of LEHIGH VALLEY COAL CORPORATION, a Delaware Corporation, Doing Business in the State of New York, Respondent, v. LEWIS R. CLOSE and Others, Appellants, Impleaded with THOMAS W. LAMONT and Others, Defendants.

O'MALLEY, J.

Under the fair intendment rule we are of opinion that there are sufficient allegations of ultimate facts contained in paragraphs eleventh and sixteenth of the complaint upon which to predicate a cause of action against some one. However, the plaintiff by the use of the words "some or all of them" has made the complaint so indefinite that none of the defendants is charged with any particular wrongdoing. This form of pleading was specifically condemned in Gundlach v. Consolidated Gas Co., Inc. (CALLAHAN, J., below; affd., 257 App. Div. 930). (See, also, Gerdes v. Reynolds, 281 N.Y. 180, 185.)

Nor are these allegations justified under the provisions of section 213 of the Civil Practice Act, which permits pleading of alternative liability. That section applies only where the plaintiff is in doubt as to which of several persons is liable but not where the plaintiff's only doubt is whether a particular defendant is or is not liable. It applies where facts are pleaded under which two alternatives exist, the proof of either of which will result in holding one of the defendants liable. ( Garrett v. McAllister, 137 Misc. 721; Jamison v. Lamborn, 207 App. Div. 375.)

Here the plaintiff does not allege the existence of some fact or facts which, if proved, will determine the liability of the defendants in the alternative. Under the vice of the complaint first pointed out he has failed to allege a cause of action against any one. There can be no alternative liability if some liability does not first exist.

It follows that the order should be reversed, with twenty dollars costs and disbursements, and the motion to dismiss granted, with leave to the plaintiff to plead anew if he be so advised within twenty days after service of order with notice of entry thereof, on payment of said costs.

MARTIN, P.J., TOWNLEY, GLENNON and UNTERMYER, JJ., concur.

Order unanimously reversed, with twenty dollars costs and disbursements, and motion granted, with leave to the plaintiff to plead anew if he be so advised within twenty days after service of order, on payment of said costs.

NICHOLSON v. CLOSE