Lacy v. Walcott — 21 N.Y.S. 619

Majority

p. 619

DE LACY v. WALCOTT et al.

(Superior Court of New York City, General Term.

January 3, 1893.)

Headnote

Specific Performance—Pleading—Complaint—Alleging Contract. A complaint alleged that the plaintiff paid to a corporation and its promoters $10,000, for which they agreed to give him an afmount of capital stock and of money equal to whatever the original promoters received, and that defendants refused to give him anything except $10,000 of said stock, and a document stating that he was entitled to $10.000 of first mortgage bonds of another company. The complaint did not show what the amount was that the original promoters were to receive, or that they did in fact receive anything. Held, that the complaint did not state a cause of action, since no breach of the contract was shown.

Appeal from special term.

Action by Peter De Lacy against Alfred F. Walcott, the Rapid Transit & Bridge Construction Company, and others, to compel the delivery to plaintiff of $100,000 of the capital stock of said company, and the repayment of $9,500. A demurrer to the complaint, as not stating facts

p. 620

sufficient to constitute a cause of action, was overruled, and the defendants appeal. Reversed.

For former report, see 13 N. Y. Supp. 800 .

Argued before FREEDMAN and GILDERSLEEVE, JJ.

Lowery, Stone & Auerbach, for appellants.

Hahn & Myers, (E. J. Myers, of counsel,) for respondent.

The first and second paragraphs of the complaint set forth formal matters not necessary to mention here, while the third and fourth and a portion of the fifth set forth the alleged representations made by defendant Alfred F. Walcott as a basis for the agreement in question and inducement to plaintiff to enter therein. In the fifth paragraph the obligations of defendants, created by the agreement, are alleged as follows:

“The said defendant Alfred F. Walcott promised and agreed in his own behalf and in behalf of said defendant Rapid Transit and Bridge Construction Company that, if this plaintiff would invest and contribute the sum of ten thousand dollars towards the said sum of one hundred thousand dollars, that said Rapid Transit Company and said defendant Alfred F. Walcott would pay to this plaintiff the same amount of stock and money which the original promoters of said defendant Rapid Transit and Bridge Construction Company should or would receive from said defendant Rapid Transit and Bridge Construction Company, and that said plaintiff should receive from and be paid by said Rapid Transit and Bridge Construction Company and defendant Alfred F. Walcott an amount equal to whatever the said original promoters received.” ‘

From a perusal of the complaint to the end of the fifth paragraph it appears that defendant Walcott had secured a franchise to build an elevated railroad in Chicago, for which he was to pay, by a certain time, $100,000, or forfeit the franchise. The Rapid Transit & Bridge Construction Company, one of the defendants herein, had been incorporated with a capital of $3,000,000. It had agreed to purchase the franchise, and pay therefor $95,000 in cash and $1,000,000 of its capital stock. The defendant Walcott wanted to raise $100,000 to pay to the city of Chicago, and so avoid the forfeiture, and make the franchise permanent. The object of the agreement was to obtain from plaintiff $10,000 towards making up the $100,000 required. The sixth paragraph alleges the authority of defendant Walcott, to make an agreement of the character in question that would be binding on defendant Rapid Transit & Bridge Construction Company. In this discussion we are not attacking the validity of the agreement, but assume that the transaction was bona fide, and that the agreement was as alleged and a valid and binding one upon defendants Walcott and Rapid Transit Company. In the seventh paragraph plaintiff alleges that, relying upon the statements and promises, as before set forth, and induced thereby, he paid defendant Walcott the sum of $10,000, to be used for the purpose of securing and retaining the franchise aforesaid. In the eighth paragraph the plaintiff alleges that the whole amount of $100,000 was raised and paid to the city of Chicago for said franchise, and that the franchise so obtained was transferred to the defendant the Rapid Transit Company, and that said Rapid Transit & Bridge Construction Company assumed and agreed to carry out the promises, agreements, and undertakings set

p. 621

forth in the fifth paragraph. In the ninth paragraph plaintiff alleges . that “the defendant Rapid Transit & Bridge Construction Company repaid said guaranty fund, to wit, the sum of ninety-five thousand dollars in cash, and also further issued in payment of said franchise the sum of one million dollars in shares at par of the capital stock of said defendant Rapid Transit & Bridge Construction Company.” The plaintiff does not state in this paragraph to whom the $95,000 were paid, nor to whom the $1,000,000 in shares of capital stock were delivered. The tenth paragraph of the complaint sets forth the extent of the interest which the original promoters had in the transaction, by alleging that they “were to receive from said Walcott and Rapid Transit & Bridge Construction Company, for the moneys invested by them, one million dollars of the capital stock of said defendant Rapid Transit & Bridge Construction Company, and were to be paid in addition thereto ninety-five per cent, of the amount contributed by them to and invested in said sum of one hundred thousand dollars.” It is not alleged when the original promoters were to receive the stock and money; no date or event is named when they would be entitled to claim the sanie. The substance of the eleventh paragraph is that said defendant corporation and Walcott issued and delivered in payment of said franchise to defendant Walcott and divers persons to the plaintiff unknown (who are therefore designated as John Doe and Richard Roe) shares of capital stock of said defendant corporation to the amount par value of the sum of $1,000,-000, and paid to the said Walcott and such unknown persons the sum ■of $95,000 in cash. There is no statement here that the “divers persons,” or any of them, constituted the original promoters, or any of the original promoters, or persons who organized said defendant corporation. The twelfth.and last paragraph of the complaint alleges a demand by the plaintiff of the defendant Rapid Transit & Bridge Construction Company and defendant Walcott for the payment of the sum of $9,500 in cash, and shares 'of the defendant corporation to the ■amount at par value of the sum of $100,000, being the amount of cash money and shares of stock, (what amount or what shares is not stated;) but that “said defendants have refused to pay him the said money, or deliver to him the said stock, excepting only that they delivered to him 100 shares of the capital stock of the defendant Rapid Transit & Bridge Construction Company of the par value of $10,000, and a paper writing, •stating that this plaintiff is entitled to $111,000 of first mortgage bonds •of the Chicago & South Side Rapid Transit Company.

The amended complaint fails to set forth a cause of action in favor ■of the plaintiff, for the reason that it does not allege that the original promoters received any stock or money over- and above what had been delivered to the plaintiff. There is no allegation in the complaint of a breach by defendants, or either of them, of the agreement which the action seeks to enforce by compelling a specific performance thereof. It is clear that by the terms of the agreement the plaintiff was to receive from the Rapid Transit & Bridge Construction Company and defendant Walcott an amount of stock and money equal to whatever the •original promoters received. This was the promise made to the plain

Concurrence

p. 622

tiff, and the inducement upon which he parted with $10,000. No allegation can be found in the complaint that sets forth a breach of this agreement. It is nowhere in the complaint alleged who the original promoters of the said defendant corporation were, or how many there were of them, except that it appears from an examination of the fifth and tenth paragraphs of the complaint that by “original promoters” was meant the persons who organized and exploited the defendant corporation. These were the persons among whom the, plaintiff was to be an equal. Their respective rights were to deterriiine his. The agreement, contemplated a division of the stock and money, and when the division came plaintiff was to have an amount equal to .whatever these persons, called “original promoters,” received. But what this amount was the complaint fails to show. Indeed, it does not appear from the complaint that these promoters received anything. The complaint sets-forth the agreement with great clearness and comprehensiveness, but it fails to allege a violation of it by either the defendant Walcott or the-defendant corporation. It does not state what promise or obligation, created by the agreement, the defendants, or either of them, failed to-per form. There is nothing in the complaint to show that 100 shares-of capital stock of the defendant corporation, which the plaintiff acknowledges having received, are not equal to whatever the original promoters received. It is plain that if the plaintiff has a cause of action it is because he has not received an amount equal to whatever the original promoters received; and we are of opinion that this cause of action is-not set forth in the complaint, and that' the complaint fails to state any cause of action. A defendant may learn outside of the complaint what he is sued for, and thus may be ready to meet plaintiff’s claim on the-trial. He may know precisely what he is sued for when he receives-the summons, yet it is his right to have a complaint from which he can learn what he is sued for, and to insist that it shall state the cause of action which he is called upon to answer. The interlocutory judgment of the special term must be reversed, with costs, and the joint and several demurrer of the defendants Alfred F. Walcott and Rapid Transit. & Bridge Construction Company to the amended complaint must be-sustained, with costs, with leave to the plaintiff to amend the complaint, upon payment of such costs.

I concur. The action not being for an accounting and the recovery of a balance upon facts to be ascertained, but for the recovery of a definite and specific share, the facts upon which the-plaintiff is entitled to such share should have been set forth. The-complaint fails to allege sufficient facts for that purpose.