49 N.Y.S. 887 | N.Y. App. Div. | 1898
The appellants claim that the judgment in this case should be reversed for two principal reasons:
First. Because it appears from the reply in the case that the payment of the mortgage had been extended during the pendency of an agreement dated July 13, 1894, and that the plaintiff has failed to show that such agreement and extension were not still pending.
Second. Because the defendants were not permitted upon the trial to make proof of the counterclaim which is set up in their amended answer.
As to the first proposition, it is true that if plaintiff had averred in. its complaint that the time to pay the mortgage it sought to foreclose had been extended by an agreement dated July 13, 1894, it would have had to prove as well as aver that the operation of such agreement had ceased. But such is not the situation. The reply is a pleading in response, and pertinent only to the new matter set up as a counterclaim. It is not directed to the issue of the defendants’ default which is tendered in the complaint, nor does it operate as a pleading to change that issue. In the orderly conduct of the trial the plaintiff, notwithstanding the reply, could prove the facts as set forth in its complaint and rest its case upon them. The issue which it thus tendered, and which has been met by defendants’ answer, has not been changed by any averment subsequently made in regard to the new matter which that answer contained. Having established its case as set forth in the complaint, it is not called upon
Examining the case from this point of view, we find that the agreement of July 13, 1894, first appears in the case as follows: Portions of it are set forth in the reply to the defendants’ counterclaim, and a copy of it is thereto annexed as an exhibit. The instrument is a voluminous one, consisting of eighteen articles, executed by the guaranty company of the first part, the plaintiff of the second part, and David C. Robinson of the other part, and was referred to in the reply in connection with averments to the effect that by it matters which are set forth in the defendants’ answer, as giving him a cause of action for an accounting and for damages against plaintiff, had been settled and adjusted. By its terms all the matters in difference between the parties seem to have been adjusted and the indebtedness from Robinson fixed, and time to pay the same by installments given him — Robinson on his part assuming many obligations other than the payment of such installments. Among other things, he was' to pay interest semi-annually upon all outstanding balances. The debt which the mortgage in suit was given to secure was, however, not included in the indebtedness then adjusted, but it was provided in such agreement that mortgages held by the parties of the first and second part against property of David 0. and Emma A. Robinson, should be allowed to stand at five per cent annual interest pending this agreement. It is this provision that the defendants rely upon to show an extension of the mortgage in question. Certain parts of the reply were read in evidence by the defendants, but the agreement itself, in which alone the above citation is found, was not read in evidence by either party. If these averments are to be considered as evidence at all, it is because they amount to admissions on the part of the plaintiff ; and it is a familiar rule that the whole of the admission must be taken and considered together. (Grattan v. Met. Life Ins. Co., 92 N. Y. 274, 284.)
Now, these averments and this last instrument are as much in evidence as that of July 13, 1894, and, taken together, they show that whatever extension of time the appellants were entitled to under the provisions of the agreement of July thirteenth, had ceased to he effectual at the time this action was commenced. The admission which defendants rely upon amounts to no more than this: That, by an agreement made July 13, 1894, the payment of the mortgage in question was to be delayed during the continuance of that agreement. But that such agreement ceased to continue in May, 1896, by reason of Robinson’s default and of a subsequent written agreement wherein he substantially acknowledges that it is no longer operative. Considered as evidence, then, the reply does not sustain the defendants’ claim. And even if it be conceded that, under this answer, they could avail themselves of the defense that the mortgage was not due when the action was commenced, yet the admission upon which they rely fails to establish that fact.
As to the second alleged ground of error, it seems that the defendants set up, by way of counterclaim to the debt secured by the mortgage in question, substantially the following facts: That in May, 1893, the defendant Robinson entered into a contract with the plaintiff, whereby it agreed that, if Robinson would execute to it a blanket mortgage on all his property to secure the sum of $750,000, and would procure his wife Emma and his sister Eleanor to release certain claims which they had upon the property to be included therein, it, the plaintiff, would advance thereon the sum of $750,000, and would take up the paper of the defendant Robinson at the Elmira National Bank, provided the bank should be found in other respects to be solvent; that the defendant Robinson, relying upon that agreement, executed to the Guaranty Trust Company, as the
The answer then proceeds to aver that, by reason of this breach of contract, and by reason of the willful mismanagement of the property so transferred to the guaranty company, done under the direction of the plaintiff and for the benefit of itself and its officers, the defendants suffered great loss and damage, for all of which the plaintiff was liable to respond to the defendants. Facts more or less relevant to such claims are set forth in the answer, but with so much detail and in such a confused and unmethodical manner that it is difficult to determine upon just what averments therein the cause of action by way of counterclaim is based. The above, however, is the substance of it, and the relief asked is, that the damages so sustained and the amount that should be found due upon an accounting by the plaintiff for the mismanagement of such trust, be adjudged to the defendants by way of counterclaim in this action.
In its reply to this counterclaim, the plaintiff not only denies the making of such a contract, but avers affirmatively that the only agreement made at the time referred to in the answer, with respect to advancing money upon such mortgage, was such as was embodied in an agreement executed between Robinson and the guaranty company, under date of May 22, 1893. Upon the trial the question .arose whether the defendants under their answer could prove a
In the first place it is alleged that “ the said plaintiff agreed with the said defendant, etc.,” not that any officer, on the part of the plaintiff, but that the plaintiff itself, agreed. Ordinarily, a corporation agrees by written instrument under its seal. Subsequently, after stating what the defendant Robinson did, in reliance upon such agreement, and what the Guaranty Trust Company did, etc., it is averred as follows: “ To each of the agreements, mortgages, deeds, instruments of consent and eontraets above recited, the said defendants will, upon the trial of this action, refer as if the same were fully and at large set forth.” This averment certainly includes the contract upon the breach of which this counterclaim is based ; and that averment clearly indicates that it was a written contract thereafter to be referred to, instead of being then fully and at large set forth. Clearly not a contract made out from conversations had with the president or any other of the plaintiff’s officers. Subsequently the answer states what occurred immediately after the “ execution of the said mortgages and agreements.” Further on in the answer it is averred that “ a clause in the said agreement providing for the said $750,000 mortgage” required said Robinson to execute further papers, if asked for, and to make a general assignment for the benefit of his creditors, if plaintiff so desired. And it is also there stated that the “ letter of the contract required it,” and that the defendant Robinson believed that to be the correct construction of the contract. Now, bearing in mind that there was a written contract executed by Robinson and the guaranty company, to which the mortgage was given, dated May 22, 1893, fixing the terms upon which the $750,000 should be advanced, and arranging many other matters with reference to the mutual obligations of the parties, concerning the collaterals accompanying the mortgage, and providing that Robinson should do some of the very things that he avers he did, relying on the “ said agreement,” the inference is exceedingly strong that the “ said agreement providing for the said $750,000 mortgage ” was the one of May 22, 1893. At all events, the plaintiff had the right to assume that the contract on which the defendants relied was one in writing. It had the right to so interpret the answer, and, hence, it was correct to so consider it upon the trial.
Upon the trial, the first offer to prove the contract on which defendants relied was by calling Robinson’s attention, as a witness, to a conversation had with the plaintiff’s president on May 1, 1893. Upon this conversation being objected to on the ground that the contract was in writing, and that all negotiations prior thereto were merged in it, the defendants’ counsel, during an argument as to its admissibility, stated as follows: “We propose to show, through a space of a period covering several weeks, negotiations between the defendant David C. Robinson and Mr. Cromwell, the treasurer of the company; Mr. McCurdy, the president of the company; Mr. Grannis, the vice-president of the company; Mr. Juilliard and Mr. Baker and Mr. Davies, trustees of the company — Mr. Grannis, Mr. Juilliard, Mr. Baker and Mr. Cromwell constituting a sub-committee having particular charge of this matter, known as the Elmira committee'—-the whole line of negotiations, representations and assurances on the part of this plaintiff that resulted in the delivery to them of a bond and mortgage for $750,000.”
Although many questions were asked and many offers were after-wards made in a variety of forms upon that subject, the above summarizes, I think, just what defendants proposed to show to establish the contract alleged in their answer. That is, “ representations and assurances ” made at different times, through weeks of negotiations, by various officers of the plaintiff. Under an averment of an “ agreement” made with the corporation, was the defendant in a situation to show that he executed the $750,000 mortgage, relying upon such representations and assurances ? And can an “ agreement,” if it be possible to deduce one from such “ negotiations, representations and assurances,” be deemed the one set up in the answer ? Clearly, I think not. The plaintiff had interpreted the answer as setting up a written contract as the basis of its counterclaim, and knowing that there was none on that subject other than that of May twenty-second, had come to trial upon that understanding. In my judgment, the referee was
Moreover, it is to be noted that, aside from the conversation of May 1, 1893, with the plaintiff’s president, and the objection to which, after argument, the referee overruled, the evidence is directed to conversations had with the Elmira committee, so called, and with the president and treasurer, secretary or some director of the plaintiff. The inquiry is to conversations had with several officers, and in each instance seems objectionable because it does not appear that such officers had authority to bind the corporation. Even conceding the proposition that a distinct agreement made with the president of the company and acted upon by the defendant would be obligatory on the company, yet conversations had with him and other officers, the committee for instance, call for matter that is not binding upon the plaintiff. The evidence in response to such a question would be much broarder tí an the defendant would be entitled to. Thus, there is no evidence whatever to warrant the assumption that the “ Elmira committee ” was authorized to make loans for the plaintiff, and no presumption exists that a secretary or treasurer or a trustee of this corporation had authority to make loans for it. Conversations with such officers could hardly create a contract by plaintiff to loan $150,000 upon the blanket mortgage in question. And, above all, the undisputed fact stands out prominent in this case that such mortgage was, in fact, never issued to the plaintiff, but to the guaranty company upon terms specified in the written contract of May twenty-second. It was the guaranty company that was to make the advancements upon the mortgage, and it was to make them according to the terms of the agreement. In the face of such fact, the “ representations and assurances ” of the plaintiff’s officers as to what advancements the plaintiff would make thereon seem to become quite immaterial.
Such evidence being properly excluded, the case was utterly barren of any proof of the contract upon which the defendants based their counterclaim, and, of course, the exclusion of evidence tending to prove damages arising from its breach was also correct.
These considerations lead to the conclusion that the judgment should be affirmed.
All concurred; Landón, J., concurred in result.
Judgment affirmed, with costs.