220 A.D. 603 | N.Y. App. Div. | 1927
Certain denials in an answer, together with two separate defenses and counterclaims, have been stricken therefrom by order of the Special Term, upon motion, prior to the trial. Hence this appeal.
The complaint is based upon three written agreements, under seal, signed by the defendant and another, to repay loans by the plaintiff to a corporation. These agreements are annexed to the complaint. Paragraphs III, IV and V of the complaint, respectively, alleged that these agreements were made, executed and signed by the defendant and another.. The defendant has denied any knowledge or information sufficient to form a belief as to the allegations in these paragraphs. Such denials were properly stricken out as frivolous. The facts are presumptively within the knowledge of the defendant. (Rochkind v. Perlman, 123 App. Div. 808; Dahlstrom v. Gemunder, 198 N. Y. 449.) Nor does it avail the defendant to urge that the documents are' several years old and hence that he has forgotten whether he had signed them or not. Under the circumstances his duty is to know the facts where they are at hand and accessible. Among the beneficent provisions of the Civil Practice Act is one affording this remedy (Civ. Prac. Act, § 327), which was wisely taken over from the English Rules of the Supreme Court (Order 31, rule 15), even if at a late date.
Taking up now paragraph VI of the complaint, as to which
“ Under the terms of said written guaranty agreements (Exhibits A, B and C), the defendant Hal H. Williams, and said Rice jointly and severally, for a valuable consideration, undertook and agreed to guarantee, and guaranteed, payment of any and all sums loaned or which might be loaned by the plaintiff to Lummi Bay Packing Company, Limited, and defendant agreed thereunder to repay to plaintiff said sums upon demand, without prior recourse by plaintiff against said Lummi Bay Packing Company, Limited.”
In striking out the denial of this paragraph the learned court at Special Term was in error, since the plaintiff, by the paragraph quoted, has alleged that there was a valuable consideration. Such an allegation, namely, “ for a valuable consideration,” is an allegation of an ultimate fact. Formerly there was a conflict in the authorities in this State as to whether this allegation was a conclusion of law or the pleading of an ultimate fact (Neukirch v. McHugh, 165 App. Div. 406; St. Lawrence County Nat. Bank v. Watkins, 153 id. 551), but it was settled that the allegation was one of ultimate fact in California Packing Corporation v. Kelly S. & D. Co. (228 N. Y. 49), where Judge Pound, for a unanimous court, after calling attention to the conflict in the authorities, wrote: “ We are of the opinion that the allegation is sufficient, as ‘ a plain and concise statement ’ of the ultimate, principal and issuable fact of consideration, to permit the proof of the facts showing the actual consideration.” The rule is well settled that where a complaint is based upon an instrument under seal or which imports a consideration, proof of want of consideration may not be given under a general denial, but must be affirmatively pleaded as a defense. (Recknagel v. Steinway, 58 App. Div. 352, 356; Sprague v. Sprague, 80 Hun, 285; Ryan v. Sullivan, 143 App. Div. 471, 474; National Citizens’ Bank v. Toplitz, 178 N. Y. 464.) Where, however, in such an action as in the case at bar the complaint in addition specifically alleges a consideration, a denial thereof contained in the answer is equivalent to an affirmative plea of want of consideration. As Judge Cullen, later chief judge, wrote, for a unanimous court, in an analogous case involving the Statute of Frauds (Brauer v. Oceanic Steam Navigation Co., 178 N. Y. 339, 343, 344): “ It is urged that the defendant is not in a position to raise this objection, the statute not having been pleaded. Ever since the decision in Crane v. Powell (139 N. Y. 379) the law has been settled in this State, whatever uncertainty there may have been on the subject before, that to avail himself of the defense of the Statute of Frauds the defendant must in a proper case plead the statute. * * * This,
Although the plaintiff did not have to prove consideration in order to make out his cause of action, yet when he alleged that the instruments were given for a valuable consideration and the defendant denied that he had any knowledge or information sufficient to form a belief thereof, this was sufficient to raise the issue that there was no valuable consideration and permit the defendant to prove the same at the trial. The form of the denial as to a valuable consideration, namely, that the defendant had ho knowledge or information sufficient to form a belief, was permissible. The existence of a valuable consideration was not presumptively within the knowledge of the defendant, either because of the nature of the act (as in the case of the signing of the guaranties by the defendant), or because otherwise shown by the plaintiff. Indeed the nature of the transactions alleged tends to show that the consideration was not within the knowledge of the defendant since it consisted of loans made to a third party subsequent to the execution of the guaranties. In view of the denial by the defendant of the loans alleged to have been made by the plaintiff in paragraph VII of the complaint, for the recovery of which loan the plaintiff is suing, the denial of paragraph VI of the complaint does not assume much importance. The defendant, however, is entitled to the benefit thereof. This denial, therefore, was erroneously stricken from the answer, and the order appealed from should be modified accordingly.
Taking up now the two defenses and counterclaims which have been stricken out. In the second defense and counterclaim the defendant has pleaded in effect that the plaintiff made an agreement with the defendant that if the defendant would obtain a release from the American Lummi Bay Packing Company of the debt which the Canadian Lummi Bay Packing Company owed to the American company, and if the defendant would also release his personal claims against the Canadian company, the plaintiff “ would then finance the Canadian company with such funds as were essential and necessary to carry on its business in a proper manner and thereby enable the Canadian company to liquidate its indebtedness to the plaintiff and to the other creditors and thereby release the defendant from his endorsements on the Canadian company paper.” (Italics not in original.) It is then pleaded that the defendant, pursuant to this agreement, obtained the releases and that the plaintiff failed to carry out its agreement with the Canadian company and “ failed and refused to finance the Canadian com
Should the defendant be permitted to serve an amended answer?
He urges that the amount of money necessary depended only upon whether the run of salmon was large or small. In his .pleading, however, defendant has not restricted the uncertainty even to this extent. It does appear, however, by an itemized list of loans annexed to the complaint that the plaintiff claims to have
It, therefore, follows that the order appealed from should be modified by denying the motion to strike out the denial to paragraph VI of the complaint and to permit the defendant to serve an amended answer, upon payment of taxable costs to date, and as so modified affirmed, with ten dollars costs and disbursements to the respondent, with leave to defendant to serve said amended answer within ten days from service of the order to be entered hereon upon payment of said costs.
Dowling, P. J., McAvoy, Martin and O’Malley, JJ., concur.
Order modified as indicated in opinion and as so modified affirmed, with ten dollars costs and disbursements to the respondent, with leave to defendant to serve amended answer within ten days from service of order upon payment of said costs.