Humphreys v. New York, Lake Erie & Western Railroad

10 N.Y.S. 461, 63 N.Y. Sup. Ct. 634, 25 Abb. N. Cas. 202, 32 N.Y. St. Rep. 194, 56 Hun 634, 1890 N.Y. Misc. LEXIS 2171

• Court: New York Supreme Court
• Decided: May 23, 1890
• Status: Published

Opinion

Daniels, J.

The action has been brought by the plaintiffs, as the trustees of a voluntary association, to recover eight different amounts upon an agreement entered into with the defendant for certain rolling stock delivered to and used by it. This rolling stock was received by the defendant under and pursuant to the agreement, which was made for the term of 10 years from the 1st of Hovember, 1881, unless sooner terminated, as the agreement or lease itself afterwards provided it might be; and by the covenants or stipulations contained in the agreement the defendant bound itself to pay certain sums of money for the use of the rolling stock, and upon the full and complete payment of which it was to become the owner of that stock. A portion of the payments to be made consisted of half-yearly sums during the term, which should be equal to 6 per cent, per annum upon the whole amount of the principal represented by the certificates of shares issued under the authority of the association, and be outstanding at the time of such payment. On the 17th of March, 1885, a further agreement was entered into, reducing this percentage to the sum of 5 per cent., so far as the reduction had or should be authorized or ratified by the persons holding the certificates of the association. This reduction was qualified by certain other amounts from time to time payable, and not required to be noticed in the decision of the appeal. The holders of a majority of the certificates did ratify or authorize this change in the agreement which originally had been made. But a minority'of about $100,000 in amount declined to do that, and their refusal to ratify the reduction entitled them to the preceding rate of interest agreed to be paid by the defendant; and it was for the recovery of that difference that the action seems to have been brought, and to maintain it eight different causes of action of this description have been set forth in the complaint. It was further alleged that a preceding suit had been brought against the defendant for other and prior installments maturing under the lease or agreement, and that judgment had been recovered in favor of the plaintiffs as trustees for such installments; and it is these allegations relating to the prior recovery which the defendant applied to have stricken from the complaint.

The object of the motion is stated to be to place the defendant at liberty to demur to the complaint on the ground that the plaintiffs are without legal capacity to sue for the recovery of these installments maturing after the commencement of the preceding suit. In support of the motion it has been, apparently, assumed that, inasmuch as the association known as the “Oar Trust of New York, No. 2,” was voluntary and unincorporated, the plaintiffs as trustees could not maintain an action for the recovery of these installments arising under the lease. But by the agreement under which the association was formed, and to which the defendant was a party, it was agreed that the trustees who were to be appointed should be authorized to lease and provide for the sale of the rolling stock as that was done in the agreement with the defendant, and that the installment or money to be paid by the defendant should be paid to or recovered by them, and that vested these trustees with such power and authority as, under section 449 of the Code of Civil Procedure, empowered them to maintain this action. They were, within the language of that section, trustees of an express trust, capable of enforcing the observance of the agreement with the defendant by action for the benefit of themselves and the associates in this manner represented by them; and so it was considered by the court when the preceding action was disposed of by the general term. 3 N. Y. Supp. 913. The manifest object of setting forth the proceedings in the action already determined was to establish the fact, by way of estoppel against the defendant, that the plaintiffs as trustees were authorized to maintain this action. The design and object of the allegations were to support the position that an adjudication to this extent had already been made in favor of the plaintiffs and against the defendant, and in that manner to prevent further litigation of it by the defendant. There certainly appears to be no good reason for depriving the plaintiffs of tills advantage, if it has in this manner been obtained by them. Indeed the court would have no right to divest them of that advantage, for it would be a fact tending to sustain their ability as trustees to prosecute and maintain the action. To strike it out from the complaint would deprive the plaintiffs of a fact existing in their favor, and considered by them to be material to the disposition of the controversy; and that the court should'not do simply for the purpose of exposing their complaint to the liability of a demurrer. If the effect of the preceding judgment is to adjudicate the ability of the plaintiffs to maintain an action for the enforcement of the agreement made with the defendants, they are entitled to its benefit, and to all the aid and assistance which may be secured by it in their favor. If their right or ability to sue is dependent upon this fact, then, by striking out the allegations presenting it, they might be defeated in the action, when, according to the existing circumstances, they would be. entitled to maintain it; and there is no good reason for placing them in that position. If under the agreement, or by virtue of the preceding adjudication, or both together, they have obtained the authority to prosecute the defendant for the payment of these installments, they are entitled to the benefit of both, so far as they will contribute to the maintenance of the action. Facts which contribute to the right of the plaintiffs to maintain their action are in no possible sense either irrelevant or redundant, but they are pertinent to the case; and there is no more authority for striking out such facts in one case than there would be in any other. If these allegations could be stricken out to expose the complaint to a demurrer, then material averments might just as well be stricken out in other cases to afford the defendant the opportunity to demur. That practice would be literally trifling with the administration of the law, opposed not only to its spirit, but also to its language. The application was rightly denied, and the order should be affirmed, with $10 costs, and the disbursements attending the appeal. All concur.