§ 8501.Security for costs.

Subd (a) of this section is based on subparagraphs A, B and C of CPA § 1522 and the first clause of § 1524. The phrase “at any time,” formerly found in CPA § 1524, is omitted as unnecessary since it is implied from the fact that no limitation is embodied in the subdivision. The subdivision provides the exemption for poor persons implicit in CPA §§ 198, 198-a, 199 and part of § 196. Cf. § 1102(d). We have found only one case in which the problem of security for costs as a condition for bringing a habeas corpus proceeding was raised. Untroubled by the mandatory language of the statute, the court denied a motion for security for costs, noting that, “if security for costs may be exacted for the privilege of prosecuting the writ, not only would a restriction on its allowance be imposed without warrant, but its benefit be denied to the friendless and unfortunate—the class most in need of its protecting energies.” People ex rel. James v The Society for the Prevention of Cruelty to Children, 19 Misc 677, 678, 44 NY Supp 1100, 1101 (Sup Ct 1897); see also State v Lyon, 1 NJL 403, 405 (1789). In cases of habeas corpus for release from imprisonment or to obtain custody of a child, the state is not a distinterested party to an adversary proceeding and no security for costs should be required. Subd 1 and 2 of CPA § 1522 have been incorporated in this subdivision in somewhat modified form. The decisions have not been uniform on the meaning of the terms “residence” and “foreign corporation” used in this section. A wife “temporarily” in another state with her serviceman husband has been held not to be “residing without the state” since she lived in New York and intended to return there in Morrison v Reese, 186 Misc 133, 58 NYS2d 99 (Sup Ct 1945); on almost identical facts, the opposite result was reached in Grindle v Westbury Food Market, 135 NYS2d 21 (Sup Ct 1954). The later case relied upon Morek v Smolak, 245 App Div 355, 356, 282 NY Supp 418, 419, 420 (4th Dept 1935) which concluded that “the purpose of the statute is best subserved by holding the words ‘residing without the state’ to relate to actual dwelling rather than to a technical legal domicile.” In the Morek case security was refused where the plaintiff, an alien illegally within the country but living with his family in the state, was “assumed” to be ineligible to acquire any domicile within the country. Although the Morrison case relies strongly on a “domicile” theory while the Morek case disregards domicile and considers only residence, both results seem sound in view of the purpose of this security provision to require security only from that class of plaintiffs which is not likely to be present in the state. Without statutory warrant, courts have reached the sound result that a foreign corporation licensed to do business in New York under the laws of this state becomes a domestic corporation for the purposes of CPA § 1522 and is not required to give security for costs. Standard Marine Ins. Co. v Verity, 243 App Div 639, 640, 276 NY Supp 801, 802 (2d Dept 1935) (insurance corporation); Household Finance Corp. v Worden, 206 Misc 614, 615, 134 NYS2d 608, 609 (Sup Ct 1954) (banking corporation). Contra, Colgate Palmolive Peet Co. v Planet Service Corp. 173 Misc 494, 15 NYS2d 558 (Sup Ct 1939) (general corporation). This result has been explicitly incorporated in this subdivision. The requirement that persons imprisoned under execution for a crime and their assignees must give security for costs, found in subdivisions 3 and 4 of CPA § 1522, has been omitted. A prisoner in a state prison for a term less than for life may not bring an action in the courts. Penal Law § 510; Glena v State of New York, 207 Misc 776, 138 NYS2d 857 (Ct Cl 1955). The provision in former law was, therefore, meaningful only as applied to prisoners in federal prisons, county jails and penitentiaries. Cf. Bowles v Habermann, 95 NY 246, 251 (1884); In re O’Connor, 173 Misc 419, 17 NYS2d 758 (Sup Ct 1940). However, a prisoner is not immune from process and suit by virtue of his imprisonment when he is a cost debtor. Cf. CPA § 165; Bowles v Habermann, supra at 248; Matter of Weber, 165 Misc 815, 816, 1 NYS2d 809, 810 (Surr Ct 1938). Since the purpose of requiring security for costs is to obviate the danger of the property being placed beyond reach of a court’s process by a plaintiff, who has been ordered to pay the costs of litigation, there seems to be no reason why an imprisoned person should be required, solely on the ground of his imprisonment, to give security for costs. The provision of subd 4 of CPA § 1522 which required the assignee or trustee for the benefit of creditors of a debtor or a debtor in possession or a receiver or trustee in bankruptcy to give security for costs has been made discretionary and is covered in § 8101(b). The qualification that security might have been required only when the cause of action arose before the appointment of the trustee or assignee has been omitted. The justification for requiring such persons to give security for costs in all cases does not lie in the fact that they take their title from a person judicially declared to be insolvent, or that matured causes of action transferred to them are indelibly stained by the insolvency of the transferor. Regardless of the past history of the ownership of the cause of action, actions brought by the trustee or assignee do not involve the debtor, except possibly as a witness, and all recovery accrues to the estate for the benefit of creditors, and not to the debtor. The trustee or assignee is a fiduciary who, subject to the authority of the court, takes title to all property, real and personal, of the debtor. Debt & Cred Law, §§ 3, 14, 15. Nor could the former provision be justified on the ground that the circumstances of their appointment demonstrated that there was little property from which costs might later have been collected, because this reason would apply to both causes of action arising before and those arising after the assignment. In this connection it is significant that an application to require the plaintiff to give security for costs under CPA § 1523 would have been denied if a plaintiff seemed to have had a good cause of action which he was urging in good faith, on behalf of an estate with little or no assets. McNeil v Merriam, 57 App Div 164, 68 NY Supp 165 (2d Dept 1901); Davidson v Bose, 57 App Div 212, 68 NY Supp 316 (2d Dept 1901); see also 23 Carmody-Wait, Cyclopedia of New York Practice 326–27 (1956). It may be argued that a successful defendant in an action brought in one court may be forced to proceed in another court where the insolvency proceeding is pending to collect from the estate costs already awarded to him and that for reasons of convenience and ease of collection it should be required that the trustee or assignee give security for costs. The court can consider this argument in exercising discretion under § 8101(b). Subd 5 of CPA § 1522 which provided for a case where the plaintiff becomes a nonresident after commencement of the action, is omitted as unnecessary. The motion must, under the new CPLR, be granted if the plaintiff is in an enumerated class when it is made. Also omitted is subd 6 of CPA § 1522 which provided for mandatory security from one adjudicated a bankrupt, or discharged from his debts or exonerated or discharged from imprisonment after the action was commenced. The former law recognized that it would be unjust to penalize a plaintiff, by means of this statute, for past insolvency, and to deny him the fresh start offered by the Bankruptcy Act. The same reasoning applies to cases where he was discharged after suit was commenced. In addition, it is not the policy of this rule that a plaintiff’s access to the courts should be restricted merely because he has little or no assets. The portion of subd 6 which dealt with discharge from imprisonment was particularly harsh and unreasonable. It was included in the statute as early as 1836. 2 NY Rev Stat (1836). The defendant could require security for costs to be given in actions commenced “for or in the name of any person being insolvent, who shall have been discharged from his debts, or whose person shall have been exonerated from prison, pursuant to any law, for the collection of any debt contracted before the assignment of his estate. . . .” The Stillwell Act (NY Laws 1831, c 300) provided generally that the nonfraudulent debtor should be exonerated from imprisonment if he demonstrated his good faith by making a general assignment to an assignee appointed by the court for the benefit of creditors. In such a case, the statute also provided for a discharge of the imprisoned debtor from his debts. These provisions are now found in § 132 of the Debtor & Creditor Law, with the exception that, under § 133, the assignment does not discharge the debtor from his debts, but only from imprisonment. With imprisonment for debt currently all but abolished, the provision operates today only in cases of discharge from imprisonment for contempt or for a crime, where no assignment is required and hence no presumption of insolvency attaches. And, as previously noted, even a presumption of insolvency is not sufficient reason to require security for costs. The provision in subd 7 of CPA § 1522 that a prisoner sentenced to a state prison for a term less than for life after the commencement of the action may be required to give security for costs is omitted from this subdivision. Section 510 of the Penal Law exempts from suspension of civil rights prisoners who are on parole or on whom execution of judgment is suspended. The CPA never has been amended to reflect these merciful dispensations. Even if the provision of CPA § 1522 were restricted to those actually in prison, it would be nugatory, since § 510 deprives such a prisoner of all his civil rights, including the right to sue. Glena v State of New York, supra. Where a plaintiff is so sentenced after commencement of his action, however, the courts will not usually dismiss the action but instead will order the appointment of a committee or a trustee under § 320 or § 350 of the Correction Law to continue the litigation. Shapiro v Equitable Life Assurance Society of the United States, 294 NY 743, 61 NE2d 745 (1945). The disability to sue imposed by § 510 of the Penal Law is personal to the convict and does not attach to his representative or assignee. Kugel v Kalik, 176 Misc 49, 25 NYS2d 327 (Sup Ct), affd 262 App Div 823, 28 NYS2d 734 (1st Dept 1941). See also NY Correct Law, § 323. Under former law, the trustee or committee of the newly incarcerated convict was not required to give security for costs; it is proposed, however, under the new CPLR that the court be given discretion to order security for costs in actions by or against such trustee or committee. See § 8101(b) and notes thereto.

Subd (b) of this section is derived from CPA §§ 1522 and 1523 and RCP 176 and part of 177. CPA § 1523 was silent on the procedure for obtaining the exercise of the court’s discretion, but notice of motion has been required. Wood v Blodgett, 49 Hun 64, 66, 2 NY Supp 304 (Sup Ct 5th Dept 1888); McNeil v Merriam, 57 App Div 164, 165, 68 NY Supp 165, 166 (2d Dept 1901). A provision that the motion may be made at any time is omitted, since it is implied from the lack of any explicit restriction. The time at which the motion is made should be one of the factors considered by the court in exercising its discretion under this subdivision. Both CPA § 1523 and CPLR § 8101(b) are more complex than the statutes of other states permitting security for costs to be given in the court’s discretion. Many statutes give the judiciary a broad discretionary power. See Security for Costs Provisions in Other States at pp 817–824, infra. In only two states is the discretion of the court to give security for costs limited to actions by representatives. Ibid. In no state may discretionary security for costs be ordered in actions against as well as by the representative. While the matter is not free from doubt, the Committee has concluded that the estates represented should receive judicial protection from dissipation, vexatious suits, and the possible irresponsibility of their representatives who, since they may have no personal interest in the estate or its assets, may not act as prudently to preserve the estate as if it were their own. Hence, this subdivision retains the provision that security may be required in actions against these representatives. However, this protection is incomplete unless the court may order security to be given upon its own initiative, since the provision is intended to safeguard the interests of persons and estates not parties to the action. The provision, therefore, that the court may make the order on its own initiative is included in this subdivision, which is broadened to include actions against all, and not merely some of the representatives specified. In deciding whether security is to be required the court will consider the fact that the representatives enumerated are subject to the authority of a court—although not necessarily the one in which the action is pending—in the performance of their duties. Those representatives enumerated in CPA § 1522 who have not been omitted from the new CPLR are included in the discretionary rather than the mandatory security for costs provisions since no distinction in treatment between types of representatives is warranted. See notes to § 8101(a). The courts have not been clear on the meaning, if any, of the language in CPA § 1523, “a person expressly authorized by statute to sue or be sued.” A person permitted by law to sue in the name of another person, to the extent of employing the latter’s name, is not in this class. Montgomery v Odell, 73 Hun 424, 427, 26 NY Supp 930, 931 (Gen T 4th Dept 1893), affd 142 NY 665, 37 NE 570 (1894); Board of Excise v McGrath, 27 Hun 425 (Sup Ct 1882). Nor does the phrase include a guardian ad litem. Tropeano v Grimaldi, 173 App Div 534, 536, 159 NY Supp 1025, 1027 (2d Dept 1916). In the light of these decisions, this language is omitted from this subdivision. An early provision that guardians ad litem could be required to give security for costs was deleted from the Code of Civil Procedure in 1904. Laws 1904, c 524. CPA § 205 and § 1205 exempt infants and guardians ad litem from liability for costs unless the court otherwise orders. It is difficult to see how such a representative can be distinguished from the representative of a person judicially declared to be incompetent, included in CPA § 1523. Under § 1205 they are treated in the same way. The inclusion of the guardian or committee allows the court in which the action is being brought to act to preserve the estate of the infant or incompetent where protection from an irresponsible representative seems necessary. It will undoubtedly be a discretion seldom utilized. The inclusion of a receiver in this subdivision is derived from RCP 176 and part of rule 177. Rule 176 permitted the court to order the receiver to give security for costs if he did not have sufficient property in his actual possession to secure the costs of the defendant. However, the policy of that rule did not harmonize with that of the traditional policy of CPA § 1523 that an application for security for costs under that section might have been denied without abusing discretion even though the representative had no assets except the cause of action in suit, if he seemed to have a good cause of action which he was urging in good faith. McNeil v Merriam, 57 App Div 164, 165, 166, 68 NY Supp 165, 166, 167 (2d Dept 1901); Davidson v Bose, 57 App Div 212, 213, 68 NY Supp 316, 317 (2d Dept 1901); see also 23 Carmody-Wait, Cyclopedia of New York Practice 326–27 (1954). Rule 177 required a receiver in a supplementary proceeding to give security for costs unless he filed a written request to bring the action by the creditor on whose behalf he was appointed. It is proposed that all receivers be treated no differently from the representatives enumerated in this rule.

Add, L 1962, ch 308, § 1, eff Sept 1, 1963; amd, L 1981, ch 115, § 29, eff May 18, 1981.