Hudson River Water Power Co. v. Glens Falls Gas & Electric Light Co.

85 N.Y.S. 577 | N.Y. App. Div. | 1904

Smith, J.:

Plaintiff’s objections tó the counterclaim, as specified in the demurrer, are, first, that it is not sufficient in law upon the face thereof; and, secondly, that facts are not therein stated sufficient to constitute a cause of action. The objection first made is not an authorized ground of demurrer to a counterclaim within section 495 of the Code. The contention upon this appeal, that this is not a proper counterclaim within the provisions of the Code, cannot be here made because not specified in the demurrer. The sole question, then, for our determination is as to the sufficiency of the facts alleged in this counterclaim as constituting a cause of action. It is not necessary for üs to discuss whether that cause of action, if one be stated, be in law or equity. If any cause of action be therein stated, the plaintiff’s demurrer must be overruled-.

The determination as to the sufficiency of this counterclaim seems to hinge upon the right of the light company secured under the assignment from the cement company of November fifteenth. The plaintiff claims that that contract was not assignable, and, therefore, that the light company obtained nothing by the pretended assignment thereof. The defendant, however, contends, first, that the contract was assignable as a matter of law; and, secondly, even though not assignable without the consent of the plaintiff, nevertheless the plaintiff has by its acts estopped itself from objecting to such assignment, and has accepted the defendant light company as the proper assignee thereof.

In our view of the facts alleged in the defendant’s counterclaim it is not necessary for us here to decide whether there be in this contract any personal element which would give to the plaintiff the right to insist, that it would perform its contract only with the original contracting party. When this assignment was made upon November fifteenth notice of the assignment was given and a copy forwarded to the plaintiff.- Together with this notification was sent by the defendant light company a' monthly installment due upon the contract, which was accepted by the plaintiff. Upon December sixteenth the plaintiff was notified that the defendant light - company was about to spend a large amount of money in reliance-upon their assignment, and still made no objection thereto. On December eighteenth notice was given that the1 apparatus was actually installed, and a demand was made for power from the' plaintiff. Upon December twentieth the plaintiff, without objection to the assignment, again received from the defendant light company another monthly installment of $1,875, and it was not until December twenty-third, after the plaintiff had written several letters recognizing the assignment, that the plaintiff assumed to offer any objection to the assignment, or made any question, of the rights of the defendant light company thereunder. After the receipt of the money of the light company in payment of the installments upon said contract, with full notice of the assignment thereof, and after having permitted the light company to spend upward of $5,000 in placing apparatus upon the premises of the cement company under the contract, the plaintiff, under well-recognized principles of equity, must be held to be estopped! from making objection to this assignment on the ground of any personal element which may be deemed involved in the performance óf the contract, and must be held to have accepted the light company as the party entitled to the contract which it had executed originally with the cement company, unless there be something in the nature of the contract which renders impracticable its performance with this assignee.

At the time of the execution of this contract it was primarily contemplated that the power should be furnished to the cement company for its use. There are provisions in the contract especially applicable to such contemplated use. I am unable to find any provision of the contract, however, which, by fair interpretation, cannot be adjusted to the use of any assignee of such power. I apprehend that if the cement company had closed and another manufactory had been substituted upon its grounds, whose business in no way rivaled the business of the plaintiff, no question would be raised as, to the assignability of the contract, or as to: such interpretation thereof as to make it adaptable to the purposes of the substituted factory. If after the words “cement company,” wherever the same appear in that contract, should be inserted the words “ or its assigns,” the contract would still be intelligible and consistent. Such words have, in effect, been inserted by the parties to the contract in the 14th provision thereof which provides that the benefits of the contract shall inure to the successors and assigns of the cement company. I can see no reason for limiting the effect of this provision to the successors of the cement company in the cement business. No such limitation is expressed in the contract, and it could -only be justified by the impossibility of its performance with some -other party than a cement company. This view of the contract is also soméwhat enforced by the exception in the contract that the power thus sold should not be used for the manufacture of - pulp or paper or fiber of any kind. Even if we can go out of the record, and take the brief of the respondent in explanation of this provision, it still remains that by this exception is recognized the right of assignment of the power granted by the contract for other purposes.

The respondent further urges that in the counterclaim is shown a proposal of the plaintiff to arbitrate under the contract, which was refused, and, therefore, a breach of the contract which would prevent a recovery by the defendant light company. The clause in question is an agreement to arbitrate “ whenever any question shall arise as to the true intent and meaning of any of the provisions of this •contract.” Inasmuch as the right of the defendant light company rests not only upon the provisions of the contract, but also Upon acts of the plaintiff as constituting a waiver of rights which plaintiff might• otherwise be held to have under the contract, the controversy here is not such a controversy as is contemplated, by this provision -of the contract.

The interlocutory judgment should, therefore, we think, be reversed, and the demurrer overruled.

All concurred.

Interlocutory judgment reversed, with costs, and demurrer overruled, with costs, with leave to the plaintiff to reply upon payment of costs of demurrer.