Majority
p. 660Henry W. T. Steinway, Resp't, v. William Steinway et al., App'lts. (Supreme Court, General Term, First Department, Filed April 14, 1893.)
Headnote
1. Pleading—Reply.A reply should not he required where the answer merely sets up evidentiary facts, as a party is not required to admit or deny evidence- set out in a pleading.
2. Same.
- . A stockholder brought suit against a corporation and an individual to compel the latter to pay the corporation certain profits arising from transactions alleged to have been received in violation of the rights of the corporation. One defense set up in the answer was that at a meeting of the corporation’s board of trustees the defendant offered to sell to the corporation, which offer was accepted unanimously in the presence of the plaintiff, who offered no objection, which action of the trustees was ratified by the stockholders, including plaintiff. Held, that a reply to such allegations should be required.
Appeal from an order denying a motion to direct a reply to new matter in the answers under § 516 of the Code.
, The complaint alleged that-while defendant Steinway 'was the president and managing agent of the defendant corporation he assisted in establishing a piano manufactory in Hamburg, Gferma'ny, which manufactured and sold pianos bearing the name of Steinway & Sons, in competition with the defendant corporation; that the German corporation were supplied with parts of pianos by the defendant corporation at a loss; that pianos manufactured in Ger many had been bought by defendant corporation at a price which gave the German concern large profits, and that thereafter defendant Steinway caused the defendant corporation to purchase the German business so as to secure large profits to himself.
Geo. W. Cotterill, for app'lts; Sullivan & Cromwell, for resp’t.
This actionwas brought, praying judgment that the defendant William Steinway be adjudged to pay over to the defendant, Stein way & Sons, certain profits which accrued to and were received by him from certain transactions set up in the complaint, which are alleged to have been received in violation of the rights of the defendant, Stein way & Sons. The answer denies many of the allegations contained in the complaint, and sets up a large amount of new matter by way of defense; and a motion was made to compel the plaintiff to reply to this new matter, which motion was denied, and from the order thereupon entered this appeal is taken.
In respect to a large part of the matter set up in the answer by way of defense, the difficulty in compelling a reply thereto is that
p. 661
it consists of the setting forth of evidentiary facts, and not the tendering of an issue of fact, or the allegation of a conclusion of fact; and, therefore, a reply should not be compelled, as a party is not required to admit or deny evidence set out in a pleading. But there is one defense set iip in the answer which does seem to tender an issue of fact, and in respect to which the defendants are entitled to know whether the issue tendered is to be admitted or denied, and, if admitted, how the plaintiff will seek to avoid the legal effect of the admission, so that the defendants shall not be surprised upon the trial; and this is the defense contained in the tenth paragraph of the answer. In that paragraph it is alleged, perhaps more in detail than is consistent with good pleading, that in December, 1889, at a meeting of the board of trustees of Steinway & Sons, at which the plaintiff was present, and all the trustees except one, who was then in Europe, the defendant, William Steinway, offered in writing to Steinway & Sons the business established in Hamburg, the German patents, trade-marks, good will, and personal property, upon certain terms therein specified; and that at said meeting the offer of said defendant was accepted unanimously in the presence of the plaintiff, who offered no opposition, and that said written offer and proceedings of the board accepting the same were duly entered upon defendant Steinway & Sons’ minutes, and that such action of the board of trustees was ratified by the then absent trustee upon his return from Europe; and that at said meeting all of the capital stock of the defendant corporation was duly represented, and all the stockholders ratified the acts of the trustees, including the plaintiff; and that, agreeably to said offer and acceptance, the said business, personal property, and good will were turned over to Steinway & Sons, who have ever since enjoyed and possessed the same. The defendants are entitled to know whether the plaintiff admits or denies these allegations in respect to the proceedings which resulted in a ratification by him of the transfer of this property to the defendant, Steinway & Sons; and, if he admits the facts, how he pro-. poses to avoid their legal effect, which matter in avoidance it may he impossible for the defendants to anticipate or be prepared for if thejr have no notice of its nature before it is produced upon the trial. I am of the opinion, therefore, that the order should be modified by requiring plaintiff to reply to the allegations contained in said tenth paragraph, and, as modified, affirmed, without costs.
O’Brien and Follett, JJ.„ concur.