United States National Bank v. Home — 46 N.Y. St. Rep. 173

Majority

p. 173

The United States National Bank, Resp't, v. The Home, stead Bank, App’lt.^[1]

(New York Common Pleas, General Term,

Filed May 2, 1892.)

Headnote

1. Pleading— Sufficiency of complaint.

A complaint will not be dismissed as not stating a cause of action, although drawn in flagrant disregard of the rules of pleading, where its allegations are susceptible of a construction that may support the action.

2. Contract—Consideration—Compromise of disputed claim.

The compromise of a doubtful or disputed claim is a sufficient consideration to uphold an assumpsit, and when action is brought on such promise it is no answer to show that the claim was not a valid one.

3. Same—Power of president of corporation.

Where a corporation seeks to avoid a compromise of a disputed claim against it made by its president, on the ground of want of authority to make it, the burden is upon it to show that such action was not authorized or ratified.

p. 174

Appeal from judgment of the general term of the city court of New York, affirming judgment entered on verdict.

Action for money on a compromise of an unliquidated claim for. ser vices.

The plaintiff, a national bank, brought this action to recover from the defendant, a state bank, the balance of an amount agreed to be paid plaintiff by defendant for services in clearing for defendant for over a year and transacting its business in the New York Clearing House

The name of the defendant was originally the Ninth Avenue Bank.

When the defendant bank started business it applied to the plaintiff to secure the facilities of the New York Clearing House, and plaintiff undertook to do the business of the defendant through the Clearing House, which was to receive and pay checks which defendant deposited with plaintiff, and to redeem checks drawn on defendant, provided defendant - would keep on deposit with plaintiff $20,000 to recompense it for the trouble and work for doing this Clearing House business.

The plaintiff performed its undertaking, but defendant failed to observe its agreement and keep on deposit with plaintiff the amount agreed.

Under these circumstances the presidents of plaintiff and defendant agreed that, in view of the breach, the sum of $1,200 should be allowed by defendant to plaintiff for its services in the Clearing House, being six per cent, on $20,000 for one year.

And, accordingly, $500 was paid on account.

The balance, $700, not having been paid, this action was brought to recover the same with interest.

Charles F. MacLean, for app’lt; Howard R. Bayne arid Walter L. McCorkle, for resp’t.

Before evidence taken, the defendant moved to dismiss the complaint, on the general ground that it was insufficient in substance; and an exception to the denial of the motion presents the first question for consideration.

It is not to be denied that the complaint is drawn in flagrant disregard of the rules of pleading; ■ but, nevertheless, its allegations are susceptible of a construction that may support the action.

“It is not sufficient to sustain a demurrer that the facts are imperfectly or informally averred, or that the pleading lacks definiteness, or that the material facts are argumentatively stated.” Milliken v. W. U Telegraph Company, 110 N. Y., 403 ; 18 St. Rep., 328 . “On demurrer all reasonable intendments will be indulged in support of the pleading.” Lorillard v. Clyde, 86 N. Y., 385 . “On demurrer a complaint will be deemed to allege what can by reasonable and fair intendment be implied from the allegations.” Marie v. Garrison, 83 N. Y., 14 , 23.

On a motion at the trial for judgment cn a pleading, the rule of construction is still more liberal in its support.. Hence, an answer of possession for twenty years, not stated to be adverse, though

p. 175

bad on demurrer, will be held sufficient to allow evidence of the adverse user; the doctrine being, that a defective pleading, though the defect be one of substance, will not warrant the judge at the circuit in excluding evidence of the claim or defense thus imperfectly set up , ’ and that “ an issue is not immaterial on account of the omission of some averment in a pleading which is essential to the full legal idea of the claim or defense attempted to be set up.” White v. Spencer, N. Y., 247, 250, 251.

On the face of the complaint before us it sufficiently appears that, in compromise of an unliquidated claim for services rendered by the plaintiff, the defendant promised to pay the sum of twelve hundred dollars.

By all authorities the compromise of a doubtful or disputed claim is a sufficient consideration to uphold an assumpsit; and “ when an action is brought upon such a promise, it is no answer to show that the claim was not a valid one.” Crans v. Hunter, 28 N. Y., 389 ; White v. Hoyt, 73 id., 505 ; Dunham v. Griswold, 100 id., 224.

At the close of the plaintiff’s case the defendant moved to dismiss the complaint, on the ground “ that no cause of action had been shown on the alleged compromise.” But it was sufficiently evident that the plaintiff asserted a claim for an unliquidated amount against the defendant, and that m discharge of it the defendant’s president agreed to pay twelve hundred dollars. This version of the transaction the jury found to be true; and we have no jurisdiction to review their verdict in the light of conflicting evidence.

The defendant contends, however, that its president had no authority to make the compromise and promise the payment Indisputably, the compromise agreement was within the corporate powers of the defendant; and, “where a contract made in the name of a corporation by its president is one the corporation has power to authorize its president to make, or to ratify after it has been made, the burden is upon the corporation of showing that it was not authorized or ratified.” Patterson v. Robinson, 116 N. Y., 193 ; 26 St. Rep., 685 ; Chemical National Bank v. Kohner, 85 N. Y., 189 ; Lee v. The Pittsburgh Coal & Mining Company, 56 How., 373 ; aff’d 75 N. Y., 601 .

So far from discharging the obligation to disprove original authority in its president to make the compromise or its subsequent ratification, the defendant itself furnished evidence to warrant an inference of-such authority and ratification.

Supposing, however, insufficiency in plaintiff’s proof; still, as the particular defect of evidence was not indicated by the motion for non-suit, we are unable to say that it might not have been supplied upon challenge. On this ground the appeal would miscarry. Webb v. Odell, 49 N. Y., 583 ; Mallory v. The Travellers Ins. Company, 47 id., 52, 54; Isham v. Davidson, 52 id., 237.

We see in the record no error involving reversal of the judgment.

Judgment affirmed, with costs. -

Bookstaver and Bischoff, JJ., concur.