Steinway v. Steinway — 29 Abb. N. Cas. 457

Majority

p. 457

STEINWAY v. STEINWAY.

N. Y. Supreme Court, Special Term, First District;

January, 1893.

Headnote

Pleading ; reply to new matter.] In a stockholder’s action to compel the managing officer of the corporation to account as to certain dealings between himself and the corporation,—##*/, that allegations in the answer, for the.purpose of estopping plaintiff, that certain of the transactions complained of were done with plaintiff’s knowledge and approval, and which, if admitted, would not necessarily determine the action, did not contain new matter by the way of avoidance to which plaintiff should be directed to reply.

Motion by defendant for an order directing plaintiff to serve a reply to answer.

The action was brought by Henry W. F. Stein way, in his own behalf, as a stockholder of the corporation of Steinway & Sons, and in behalf of all other stockholders, against William Steinway and Steinway & Sons. The complaint in substance alleged, that William Steinway was the president and managing officer of the defendant corporation ; that while acting as an officer of such corporation, he assisted in establishing in Hamburg, Germany, a piano manufactory, which manufactured and sold pianos bearing the name of Steinway & Sons, in competition with the corporation in this country ; that'the Germany manufactory had been supplied with parts of pianos by the defendant corporation at a loss to the latter; and pianos manufuctured in Germany had been purchased by Steinway & Sons at prices which would realize large profits to the German concern; and that, subsequently, William Steinway had caused Steinway .& Sons to purchase the German business, so as to secure to himself large profits. Plaintiff demanded judgment, that William

p. 458

Steinway account as to all dealings between Steinway & Sons and the German concern.

The answers of defendants denied certain allegations of the complaint; set forth a history of the establishment of the German manufactory and its relation to Steinway & Sons; and also set forth facts to show that plaintiff .was fully cognizant of the relations between Steinway & Sons and the Germany manufactory, that he had approved and assisted in the making out of the yearly accounts between them ; and was present at the meeting of the trustees of the defendant corporation at which the purchase of the German business was consummated, and made no objection.

Defendant moved that plaintiff be compelled to reply to certain portions of the answer, containing the above allegations.

G. W. Cotterill, for the motion.

Sullivan & Cromwell, opposed.

I do not think that this is a case in which the plaintiff should be compelled to reply to the new matter set up in the answer by way of avoidance. The answer is extremely long and alleges a vast number of facts, of many of which the plaintiff can have no knowledge. An admission by the plaintiff of the truth of those allegations of which he may be presumed to have knowledge, would not necessarily determine the action. The object of the provision of the Code, under which a plaintiff may be compelled to reply, is where one definite fact is alleged as a defense by way of avoidance of which the plaintiff is presumed to have knowledge, and where an admission of that fact would determine the action or a cause of action alleged in the complaint, that the plaintiff should be compelled to say whether or not that fact is true, so that the parties may avoid the necessity of a trial

p. 459

when a fact exists that would in effect determine the cause of action. . The principal object of the allegations in the answer would appear to be to estop plaintiff from questioning the acts of the defendants alleging that they were done with his knowledge and approval, and I cannot see that it would aid in the disposal of this case to compel the plaintiff to now state in a pleading which of the facts alleged in the answer he has knowledge.

Motion denied, with $10 costs to abide the event.