86 N.Y.S. 164 | N.Y. App. Div. | 1904
Lead Opinion
The action was brought to recover upon five interest coupons of the sum of thirty dollars each detached from bonds issued by the defendant, the East River Electric Light Company, which was, organized in 1887. In 1892 its name was changed to the Thomson-Houston .Electric Light'Company. ' The. assets of this company were sold upon a mortgage foreclosure in December, 1894, and subsequently purchased by the Madison Square Light Company. The latter company had been organized in December, 1894, pursuant to, an agreement or plan dated September 25, 1894. In' August, 1896, the Madison Square Light Company was consolidated with, the Manhattan Electric Light Company, which is the company upon which the original summons and complaint herein were served. An answer was interposed by it and thereafter the Manhattan Company became merged in the Edison Electric Illuminating Company. An amended complaint was served, to which an answer was interposed for the defendant, the Manhattan Electric Light Company, “ by its. successor, the Edison Electric Illuminating Company.” When the ease was reached for trial the plaintiff moved for judgment upon the ground that the answer of the Edison Company was not an answer on behalf of the defendants named in the complaint, which motion was granted and a verdict directed for the plaintiff. From, the judgment thereupon entered an appeal was taken, which resulted in a reversal, the case being sent back so that the jury could pass, upon the defendant’s liability. (37 Misc. Rep. 490.) Upon the new trial the jury returned a verdict for the plaintiff for the full amount ($276), and from the judgment thereupon entered the defendant appealed first to the General Term of the City Court, which affirmed the judgment of the Trial Term, and then to the Appellate Term, and from the judgment and order affirming the General Term.judgment this appeal is taken.
The issue as originally presented related solely to the question of
With respect, however, to the liability of the defendant for the principal amount represented by the coupons, we have in the original answer the following significant admissions ; “ Defendant further answering admits that it was and is the lawful successor of the East River Electric Light Company, and that it acquired its franchises and properties subject to the said mortgage and the payment by it of the said bonds and coupons. Defendant further answering denies that it has knowledge or information sufficient to form a belief that plaintiff is the holder and owner of the coupon which was issued and attached to one of said bonds, to wit, No. 154, wherein and whereby the said East River Electric Light Company promised and agreed to pay to bearer or the holder of said coupon on the first day of September, 1888, Thirty dollars in gold coin of the United States at the office of the treasurer of. the said company in the City of New York, being six months interest then due on its first mortgage bond, or that the bond therein referred to was one of the series of first mortgage bonds thereinbefore referred to. Defendant further answering denies that when the said coupon became due and payable the East River Electric Light Company or its successor companies failed and neglected to pay the same. Defendant further answering denies that the said coupon was duly presented for payment at the place therein named as the place of payment and payment thereof refused. Defendant further answering denies that the defendants have failed or refused to pay the said coupon or any part thereof. Defendant
The plaintiff, therefore, alleges, as against the defendant sought to be held, that the latter acquired the franchises and property of the' East River' Company and assumed the payment' of the bonds and coupons which were secured by a mortgage théreon; and we have, in the answer the express admissions, as already pointed out, that, such defendant alleges that they “ were, are and have been at all times ready and willing to pay the amount of said coupon to the lawful owner and holder thereof when presented; that the same never has been presented for payment or payment thereof demanded, except when accompanied with a demand for interest, which said demand has been refused, but defendants have at all times been ready- and willing to pay the face of the said coupon, and still are ready and willing to pay the same.”
The plaintiff, in support of his case, offered in evidence the answer originally interposed by the Manhattan Eléctric Light-Company, also a letter delivered to a representative of the plaintiff by the attorney for the Manhattan Electric Light - Company, which read as follows:
“ The bearer' Mr. Baltes has five coupons of the East River Electric Light Company’s bonds which seem to-be all right. We advise that they be paid if there is no record that like numbers -have already be'én paid.”
It further appeared that the Manhattan Electric Light Company had paid"coupons detá,ched'‘'from't'he bbMs’of''the'East1Ri'ver*Electfic Light Company- to the time of the commencement of this action, other than the five in suit.
We think that taking into consideration all these facts, there was made out a prima facie case, and assuming that the plaintiff has made out a prima facie case, there is sufficient to support the verdict of the jury, because it will be noticed that the defendant did not meet it; nor did it put in any evidence to destroy the effect of the inferences which might have been drawn from the testimony .as presented by the plaintiff favorable to his contention. In other words, the defendant relied upon the weakness of the plaintiff’s case rather than upon any defense which it attempted to support by evidence.
This is significant, because with respect to the question of whether the Manhattan Company did or did not assume the payment of these •coupons we have the allegation by the plaintiff to that effect, and though it was made to appear that an agreement or plan of organi.zation was entered into in September, 1894, in pursuance of which the Madison Square Light Company was to be incorporated and to acquire the assets of the Thomson-Houston Electric Light Company (the successor of the East River Electric Company) and did thereafter acquire them, and that the Madison Square Light Company was subsequently consolidated with the defendant the Manhattan Electric Company, the latter company studiously avoided pro-ducing upon the trial such agreement. It is fair to assume that if produced it would not have been unfavorable to the plaintiff’s contention, that there was in its provisions an express assumption of
It follows that the determination appealed from should be affirmed, with costs.
Van Brunt, P. J., and Hatch, J., concurred; Ingraham and McLaughlin, JJ., dissented.
Dissenting Opinion
I do not concur in the affirmance of this judgment. The coupons in question had been detached from the bonds before delivery ; and after they were detached and before September twelfth, when they became due, they were delivered to Wm. H. Kelly for value.
As they were thus detached from the bonds before delivery by the obligor, they never represented interest on the bonds and were
The defendant, the Manhattan Company, having acquired the property of the East River Company subject to the first mortgage, while under no legal obligation to pay the bonds and coupons representing interest thereupon, was compelled to pay them to avoid a. foreclosure of the mortgage which secured these bonds and interest. The coupons in question, however, having been detached before the bonds were issued, had no relation to the bonds, did not represent interest on them, and were, therefore, simply contract obligations of the East River Company.
The original complaint alleged the execution and delivery of the bonds by the East River Company; that there were annexed to the bonds the coupons in question; that the Manhattan Company became the successor of the East River Company and acquired its-properties subject to the mortgage and the payment by it of the said bonds and coupons; and after setting out the coupons sued on, alleged that the Manhattan Company “is ready and willing and has promised and agreed to pay the principal of said coupons, to wit, thirty dollars; but declined to pay interest thereon.”
The fact that the Manhattan Company had acquired the franchise and property of the East River Company, subject to the payment of the bonds and coupons, and was ready and willing to pay the coupons, imposed no legal obligation unless it had by a valid agreement, based upon a consideration, assumed the payment of the obligations of the East River Company (Fernschild v. Yuengling Brewing Co., 15 App. Div. 29, affd., 154 N. Y. 667) and the only allegation in this complaint which would impose such an obligation is that which alleged that the Manhattan Company had promised and agreed to pay the principal of the coupons. -The defendant, the Manhattan Company, interposed an answer in which it' admitted that, as the successor of the East River Company, it was at all times ready and willing to pay the said coupons to the lawful holder thereof when presented, and still is ready and willing to pay the same, and did not either admit or deny the allegation of the com
I think the complaint should have been dismissed. The original complaint had alleged that the coupons sued on were attached to the bonds and were secured by the mortgage, and that the Manhattan Company was ready and willing and had promised and agreed to pay them. The answer admitted that the company was ready and willing to pay the face value; but that was not an admission of a legal liability to pay, much less an admission of an express promise to pay. . There is no affirmative allegation in that answer which could be construed to be an admission or declaration that any such engagement or promise existed. The failure in that answer to deny the allegation of such an express agreement in the complaint prevented the defendant from disputing that allegation so long as .that answer stood as a pleading in the case; but when the plaintiff served an amended complaint and the defendant interposed its answer thereto, the answer to the original complaint was superseded. While a statement of fact in, the answer was evidence of the fact allege'd, as a declaration of the defendant, it has never been held that the mere omission to deny an allegation was an admission of its truth, except so far as, upon the trial of the action in which the answer failing to
The defendant has made no declaration or statement which admits that it had promised and agreed to pay these coupons ; and the plaintiff’s right to recover depends entirely upon the proof of such an expressed promise by the' defendant. The defendant was quite willing to admit that it stood ready and willing to pay all coupons that represented interest upon bonds secured by the mortgage upon its property. When it appeared, however, that these coupons did not represent interest upon bonds secured by a mortgage upon the property, an entirely different question was presented as to its willingness to pay. And the mere fact that the defendant had failed to deny a promise to pay coupons which were alleged to be those representing interest on these bonds when that issue was presented' was certainly no evidence to show that the defendant had promised and agreed to pay coupons which did not represent interest on bonds secured by mortgage upon its property, but at most represented an ordinary contract obligation to pay money of a corporation with which the defendant was not connected, and -for the fulfillment of whose obligations it was not responsible.
The only other evidence introduced by the plaintiff which it was claimed tended to show that the Manhattan Company had agreed to pay these coupons was a letter addressed to the company by its attorneys. A witness was called by the plaintiff who testified that.
I think, therefore, that the defendant’s motion to dismiss the complaint should have been granted.
But assuming that this answer could be treated as an admission of some legal obligation of the defendant, the Manhattan Company, to pay these coupons, it was simply an admission which the defendant could rebut. On behalf of the defendant a witness was called who testified that he was auditor of the New York Edison Company ; that he was director and secretary of the Manhattan Electric Light Company for four years; that he was a director of the Manhattan Electric Light Company at the time of the consolidation of that company with the Madison Square Company; that the Manhattan Company did not have possession of any of the books of account, ledgers' or any other books formerly owned by the East River Electric Light .Company or the Thomson-Houston Electric Light Company. He was then asked: “ Did you make any agreement at any time to pay any' debts of any other electric light corporation ? ” which was objected to as calling for a conclusion. This objection was sustained, to which there was an exception.
I think that this was error. The question did not call for a conclusion, but for the fact whether any agreement at any time had been made by the defendant corporation. It. was direct evidence to overcome the effect of ,any alleged admission made by the
McLaughlin, J., concurred.
Determination affirmed, with costs.