Apple v. National Automatic Weighing Machine Co.

Only questions of law are raised on this appeal. The action was brought to recover on a number of coupons, of which one, for example, reads as follows:

“17. §30. On the first day of Dec., 1911, the National Automatic Weighing Machine Company will pay to the bearer, at its fiscal agency in the city of New York or in the city of London, thirty dollars in gold coin, free from all taxes, being six (6) months’ interest then due on its first mortgage coupon bond.

“No. 677. L. H. Gardner, Treasurer.”

The complaint sets out merely the execution and delivery by defendant of these coupons prior to the date thereof, that the same “came lawfully into possession of plaintiff,” and that no part of the sum has been paid. Defendant rests on its demurrer to the complaint, as not setting forth facts sufficient to constitute a cause of action.

^[1] In McClelland v. Norfolk Southern R. R. Co., 110 N. Y. 469 , 18 N. E. 237 , 1 L. R. A. 299 , 6 Am. St. Rep. 397 , an action was "brought on coupons almost identical in tenor. It was there held that coupons were not negotiable. The court said ( 110 N. Y. 474 , 18 N. E. 239 [ 1 L. R. A. 299 , 6 Am. St. Rep. 397 ]):

“The reference in the coupons to the mortgage and bonds, and in the bonds to the terms and conditions of the mortgage, clearly, we think, charges the holders of both coupons and bonds with notice of the provisions contained in each of such instruments.”

With this in mind, it is clear that plaintiff was bound to allege the issuance and delivery of the bonds, and the lapse of time or other circumstance which would render the six months’ interest due.

[2] I think, also, that the allegation that the coupons came lawfully into possession of the plaintiff is not a sufficient allegation of title.

[3] The plaintiff respondent urges that the appeal should be dismissed on the following ground: That after the defendant appellant’s demurrer had been overruled, leave was given to serve an answer, of which leave it did not avail. Thereafter judgment was entered in favor of the plaintiff, and this judgment respondent characterizes as one entered upon a default, from which the defaulting party is not entitled to appeal. In support of his position, respondent cites the case of Weiner v. Yale Knitting Mills, 138 App. Div. 536 , 123 N. Y. Supp. 327 , a decision of the Appellate Division of the Second Department. It seems to me, however, that we must be guided by the case of Furniss v. Furniss, 133 N. Y. Supp. 46 . See, also, National Park Bank v. Billings, 144 App. Div. 536 , 129 N. Y. Supp. 846 , a decision recently rendered in this department, covering, it is true, practice in the Supreme Court; but I can find no valid distinction, in respect of this matter, applicable to the Municipal Court.

Judgment reversed, and new trial ordered, with costs to appellant to abide the event.

GUY, J., concurs.

I think that, under the authority of Evertson v. National Bank of Newport, 66 N. Y. 14 , 23 Am. Rep. 9 ,