Continental Securities Co. v. Interborough Rapid Transit Co.

118 Misc. 11
CourtNew York Supreme Court
DecidedJanuary 15, 1922
StatusPublished
Cited by8 cases

This text of 118 Misc. 11 (Continental Securities Co. v. Interborough Rapid Transit Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Continental Securities Co. v. Interborough Rapid Transit Co., 118 Misc. 11 (N.Y. Super. Ct. 1922).

Opinion

Burr, J.

These actions are brought to recover amounts due to the plaintiff in each case from the defendant “ as the owner and holder of certain notes issued by defendant, each payable to bearer or is registered to the registered holder thereof, with interest at seven per cent,' on the first day of September, 1921, at the office of J. P. Morgan & Co.,” and the complaint in each case alleges “ that the plaintiff is and was at maturity thereof the owner and legal holder of said notes, payable to bearer; that upon the maturity of said notes the same were duly presented for payment and payment demanded, which was refused, and no part of the principal of said notes has been paid,” and judgment is demanded for the amount of said notes, with interest from September 1, 1921. The answer in each case admits the making, presentment, demand and non-payment of the notes specified in the complaint, but puts in issue, by a denial of knowledge or information thereof sufficient to form a belief, the plaintiff’s ownership of the notes and sets up two separate defenses: 1. That the notes in suit are part of an issue [13]*13secured by a collateral indenture made with the Bankers Trust Company, which contains a provision governing the right of the holder of any note thereby secured to institute suit for the enforcement of the indenture, and that the conditions precedent to the institution of such suit had not been complied with by the plaintiff. 2. The pendency of a prior action in the United States District Court for the Southern District of New York brought against the defendant by the Continental Securities Company as plaintiff. It also alleges that the plaintiff is not the real party in interest, but that one Clarence H. Venner is the real party in interest by reason óf his domination and control of both the General Investment Company and the Continental Securities Company. The defendant has given notice, under sections 288, 289 and 290 of the Civil Practice Act, of the taking by depositions before trial of the testimony of certain of the plaintiff’s officers in support of the issues raised by the allegations contained in the second separate defense. The plaintiff now moves in each case (1) that the notice of the taking by deposition before trial of the testimony of the officers and directors of the plaintiff be vacated on the ground that the second and separate defense upon the issues raised by which it is sought to take testimony pursuant to said notice is insufficient in law upon the face thereof and creates no issue; ” (2) to strike out the answer herein and that the plaintiff be granted summary judgment under rule 113 of the Rules of Civil Practice. Upon the argument of these motions plaintiff in each case produced in open court all the said notes sued upon, and presented the affidavit of its secretary or other person having knowledge of the facts showing the acquisition of said notes by purchase in the open market, the presentation and non-payment thereof, and in other respects verifying the plaintiff’s cause of action in support of its demand for summary judgment, and claiming that the first defense interposed by defendant is insufficient upon its face and presents no issue of fact; that the answer is insufficient to raise the defense that the plaintiff is not the real party in interest, and that the second defense, alleging the pendency of the federal suit, is no defense. The defendant in its affidavit submitted in opposition to this motion not only persists in and reiterates the denials and defenses contained in its answer, but insists that this court has already passed upon the matter and held the answer good. In support of this claim it appears that on the 19th day of September, 1921, in the Continental Securities Company case and in the General Investment Company case an order was made ex parte by Mr. Justice Lydon, directing that the issues presented by the pleadings in each case be tried. That order was required by section 1778 of the Code [14]*14of Civil Procedure to.enable defendant to interpose its pleading. A similar order was, on the 6th day of October, 1921, duly made by Mr. Justice Davis in the Venner case. As hereinbefore stated, the answer of the defendant is identical in each of these four cases. On the 26th day of September, 1921, in the Continental Securities Company case and in the General Investment Company case a motion was made by plaintiff “ for an order setting aside and vacating the order dated September 19, 1921, made by Mr. Justice Lydon, directing that the issues presented by the pleadings in the above-entitled action be tried and for judgment in favor of the plaintiff and against the defendant for the full amount prayed for in the complaint, and in case the court shall refuse to grant said relief last mentioned the plaintiff will ask the court for an order striking out the answer of the defendant and such and every part thereof as a sham answer, and that judgment be entered in favor of the plaintiff and against the defendant for the full amount prayed for in the complaint, and in case the court shall refuse to grant the relief last mentioned the plaintiff will ask for an order that judgment be entered on the pleadings in favor of the plaintiff and against the defendant for the full amount mentioned in the complaint.” In his decision denying this motion (N. Y. L. J. Oct. 26, 1921) Mr. Justice Hotchkiss sustained the defendant’s form of denial of knowledge or information sufficient to form a belief as to plaintiff’s ownership of the notes, as authorized by the Code of Civil Procedure, section 500 (see, also, Kirschbaum v. Erchmann, 205 N. Y. 127), and stated that if the views he expressed respecting such form of denial as constituting a defense were sound “it is unnecessary to consider the materiality of the several pleas in abatement contained in the separate defenses.” A motion to strike out paragraphs 8 and 9 of the answer as irrelevant and scandalous, which was also argued before Mr. Justice Hotchkiss at the same time, he granted as follows: “ Motion is granted to the following extent: Folio 11, beginning with the words ‘ and has caused many vexatious actions,’ strike out down to and including the words ‘ real party plaintiff ’ in folio 13.” See N. Y. L. J. Oct. 26, 1921. The 8th and 9th paragraphs of the answer now read as follows: “ As and for a second and separate defense defendant alleges: Eighth. That at the commencement of this action there was, and now is, another action pending in the District Court of the United States for the Southern District of New York against this defendant, in which the Continental Securities Company is plaintiff; that in said action the said plaintiff prays that the court appoint a receiver for the purpose of enforcing the rights and equities of the stockholders and creditors of this defendant, mar[15]*15shal its assets, ascertain the several respective hens and priorities existing thereon and enforce and decree the rights, hens and equities of each and all the stockholders and creditors thereof as the same may be finally ascertained and decreed by the court upon the respective interventions or applications of each and every creditor or stockholder. Ninth. Upon information and behef defendant alleges that Clarence H. Venner, the plaintiff herein, is also the president of Continental Securities Company, the pretended party plaintiff in said action pending in the United States District Court, and verified the complaint in said action as president; that said Clarence H.

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Bluebook (online)
118 Misc. 11, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-securities-co-v-interborough-rapid-transit-co-nysupct-1922.