People v. New York Central Under-Ground Railway Co. — 39 N.Y. St. Rep. 571

Majority

p. 571

The People, Resp’ts, v. The New York Central Under-Ground Railway Co., Impl’d, App’lt.

(Supreme Court, General Term, First Department,

Filed June 26, 1891.)

Headnote

1. Pleadings—Redundant allegations—Striking out op complaint.

In an action against two defendants, one is not entitled to have redimd

p. 572

ant and irrelevant allegations, which relate only to his co-defendant, stricken out of the complaint.

2. Same—Complaint—Motion T9 make moke definite—When denied.

In an action against two railroad companies to vacate the charter of one of them, whose property, rights and franchises thereunder had been transferred to the other, a motion was made by the defendant vendee to require the plaintiff to more definitely set out in the complaint the lines of the tunnel to be constructed by defendants. Held, that the motion was properly refused, as the maps and profiles filed by defendant vendee’s co-defendant, sufficiently showed the lines of the tunnel.

3. Same—Denied when asking fob conclusions of law.

The motion also asked that the complaint be made more definite as to details of alleged want of authority and usurpation of right on the part of the defendant. Held, that it was properly refused as asking for conclusions of law drawn from the defendants’ articles of incorporation.

Appeal from order of special term denying motion to strike out certain parts of the complaint as irrelevant or redundant, and that certain allegations be made more definite and certain.

Henry D. Sedgwick, George Hoadly and E. Winslow Paige, for app’lt; Theodore Connoly and D. J. Dean, for resp’ts.

—This action was brought substantially to dissolve the N. Y. Underground Railroad Co.

The substance of the amended complaint is as follows : That the New York Central Underground Railway Co. was incorporated by chap. 230 of the Laws of 1868, and chap. 824 of the Laws of 1869; that by these statutes said defendant was authorized to construct and operate a tunnel and railway over a route specified in the complaint in the city of New York; that by the third section of the act of 1868, chap. 230, incorporating defendant, it was provided that defendant should possess all the powers and privileges and be subject to all the provisions of the General Railroad Act of 1850, and the several acts amendatory thereof and additional thereto, except so far as the provisions of the said act are modified by or inconsistent with the provisions of the present act

It was provided by § 47 of the General Railroad Act of 1850' that if any corporation formed under that act should not within two years after the articles of association were filed, etc., begin the construction of its road and expend thereon ten per cent of the amount of its capital, or should not finish the road and put it in operation in five years from the time of the filing of its articles of association, its corporate existence and powers should cease and determine. By chap. 775 of the Laws of 1867, its provisions were amended, by providing that if any corporation formed under the General Railroad Act shall not within five years after its articles; of association are recorded in the office of the secretary of state, begin the construction of its road, and expend ten per cent thereon of the amount of its capital, or shall not finish its road or put it. in operation in ten years from the time of filing its articles of association, its corporate existence shall cease. The defendant was subject to these provisions, except so far as the same were modified or inconsistent with its charter, and the only modification was that in § 11 of the act of 1868, incorporating defendant, and as amended.

p. 573

by the act of 1869x already mentioned, which provides as follows: That the corporation should commence its tunnel and railway within two years from the passage of the act, and should have three years thereafter to complete the same to Forty-second street, and five years thereafter to complete the same to and along the Harlem river, necessary and unavoidable delay from the pendency of legal proceedings against said corporation excepted, and no omission to construct any portion should work a forfeiture of its franchises in respect to any section of said tunnel and railway which might have been commenced or completed.

That the board of directors of the defendant located the main line of the tunnel railway in the city of New York, but that said tunnel and railway as located by them do not conform as to location to the tunnel and railway authorized to be constructed by the acts incorporating defendant

That defendant never controlled sufficient pecuniary means to-successfully construct the railway and tunnel authorized by its charter or to commence to carry out and complete that construction.

That the said company did not commence the construction of its tunnel or railway as required by its charter, and did not begin the construction of the proposed tunnel and railway or spend ten per cent of its capital thereon, or finish the road, or put it in operation in the time limited by chapter 775 of the Laws of 1867, or by § 47 of the general railroad act of 1850, as amended by chapter 775 of the Laws of 1867.

That the defendant, on or about the 15th day of May, 1872,. executed what purported to be a first mortgage of its property and franchises in favor of certain trustees to secure payment of $35,000,000 to be raised upon its bond, to provide for the construction of its railway and other legitimate expenses, and that on July 1, 1873, defendant executed another mortgage to certain trustees to secure the payment of $20,000,000 to be raised upon its bonds to provide for the construction of its railway and branches and connections.

No bonds were issued upon either of these mortgages.

In connection with the obtaining and securing of the charter of incorporation of this defendant, one Vandenburgh received from said company a large amount of the stock thereof, for which he paid nothing.

In connection with the obtaining of the amended charter of the company, the board of directors acknowledged that Vandenburgh became entitled to receive from the company $80,000 on its first mortgage bonds. In lieu of these bonds the directors delivered to Vandenburgh 150 of its certificates of its indebtedness; thereafter Vandenburgh commenced an action against the company, asking for judgment for the principal of the sum of 153 of such certificates, and, no appearance being entered for defendant, thereafter recovered judgment amounting in all to $78,443.37.

At or about the obtaining of this judgment this defendant suspended its lawful business and no effort was made by it to have the work of constructing said tunnel or railway commenced or proceeded with. All or nearly all the officers resigned or refused

p. 574

to act, and thereafter Yandenburgh commenced an action against the trustees of the first and second mortgages of said company and. the mayor, etc., of the city of New York, in which he claimed an indebtedness contained in said judgment being unpaid. That the company was further indebted to him for $16,800, interest on said indebtedness; that he was entitled to receive mortgage bonds of the company to the amount of said indebtedness, prayed for judgment for the amount of interest claimed by him, and that-it be adjudged that the mortgage of $20,000,000 be foreclosed; that the mortgage, franchises and property of the company be sold, and that the proceeds of the sale be applied to satisfy the aforesaid indebtedness to him.

The amended complaint alleges that the action last mentioned was fraudulent and collusive; that no bonds under said mortgage were ever issued; that by the terms of the mortgage the bonds thereby authorized to be issued expressly provided that in case of non-payment of interest which should be demanded at the office of the company in New York, and which should remain unpaid for the period of six months after demand, the principal and bonds should become thereupon due and payable in the manner and with the effect provided in the mortgage or deed óf trust.

The mortgage or deed of trust provided that until default should be made in the payment of principal and interest of the said bonds, or some of them, or until default should be made in respect to something by the said mortgage required to be done by the company, the company should be suffered or permitted to possess, manage, operate, etc., the described franchises, property, railway, etc., and receive the proceeds thereof, as if the deed had not been made.

That the mortgage or deed of trust further provided that upon a default in payment of any of the coupons or quarterly instalments of interest, and such defaults shall continue for a period of six months after said coupons have become payable and payment thereof has been demanded, that the principal of all the bonds matured thereby should at the election of the trustees become immediately due and payable. But the holders of a majority of the bonds issued might instruct -the trustees to declare the principal to be due, and the trustees were thereupon to enforce the rights ‘ of the bondholders, or the said bondholders might direct the trustees not to take such action.

That there never was any default upon any of the covenants, conditions or provisions of the mortgage or deed of trust, and the trustees were never directed by any bondholder or person claiming the right, with respect to said bonds or any of them, to take any such action as above described, or to foreclose and sell the property.

That said Yandenburgh never acquired, possessed or even pretended or alleged that, under the covenants, terms and conditions of the said mortgage, he had acquired or ever possessed any right, in law or equity, to have the said mortgage of this defendant foreclosed and the property sold and the proceeds thereof applied to the payment of his debt.

p. 575

In the action of foreclosure last referred to it is claimed by the defendant, the Hew York Underground Railway Company, that the franchises or property rights of defendant were sold to said Vandenburgh and his attorney, who thereafter associated with them a number of persons, who made and filed articles of association incorporating the Hew York Underground Railway Company, and in which were set forth the franchises and property rights so purchased as aforesaid, and which articles of association were duly filed and recorded in the office of the secretary of state.

That before the action last referred to was commenced, the corporate existence and rights of the defendant, the Hew York City Central Underground Railway Company, had ceased, by the failure of' the said company to commence and proceed with the construction of its tunnel and railway.

That the franchises and property rights claimed to be sold in the foreclosure action and set forth in the articles of association of the Hew York Underground Railway Company, are not the same franchises and property rights included and described in the charter and amended charter of the Hew York City Central Underground Railway Company.

Plaintiffs allege further that the incorporation of the Hew York Underground Railway Company was not authorized by law, and the corporate rights, powers, franchises, etc., which it claims to enjoy, have been usurped by it. Further, that said last-named defendant has never assumed a performance of what it claims to be its legal business; that it has constructed no part or portion of the tunnel or railway, or commenced any legal proceedings for the condemnation of the right of way thereof.

That said last-mentioned company never controlled sufficient pecuniary means to construct its works, nor to compensate the public or private interests which would inevitably suffer in the construction and operation of said tunnel and railway.

That the last-named defendant has commenced proceedings, which are now pending for a writ of mandamus to compel the commissioner of public works to allow it to remove the pavement in the city so that it may proceed with the construction of a tunnel and railway authorized by the amended charter of the Hew York City Central Underground Railway Company.

And the complaint sets forth further that the defendant the Hew York City Central Underground Railway Company, by reason of the franchises made to it by the statutes hereinabove recited, has, or claims to have, some interest in the controversy in this action adverse to plaintiffs, and is a necessary party defendant to the complete determination of the question involved herein.

This motion seeks to make the amended complaint more definite and certain in specified particulars, and also to strike out as irrelevant and redundant certain allegations thereof.

In respect to those allegations which it is sought to strike out as irrelevant and redundant, it does not appear that the appellant is particularly interested therein, as those allegations are addressed against their co-defendant, the Hew York City Central Underground Railway Co.

p. 576

In respect to the allegations of difference in the lines of tunnel mentioned in the complaint which it sought to have made more definite and certain, it appears that the differences complained of are contained in maps and profiles filed by the defendant, the New York City Central Underground Eailway Co., the predecessor of the plaintiff, and that by a comparison between those maps and those set forth in the statutes the difference may be determined.

In so far as it is claimed that the paragraph relating to the foreclosure action is _ concerned, being collusive and fraudulent, the grounds upon which it is claimed to be collusive and fraudulent sufficiently appear in the complaint

The claim to have set forth the details of alleged want of authority of law and of usurpation of rights which were not possessed by the defendant, seems to be asking not for facts, but for conclusions of law derived from the articles of incorporation of the defendants and the procedures by which it was claimed that the appellant had obtained these rights.

After a careful examination of this complaint, and of the claims made upon this motion, there seems to be no reason for interfering with the order made in the court below.

The order should be affirmed, with costs.

Barrett and Patterson, JJ., concur.