Litchfield v. Flint

• Decision Date: 01 March 1887
• Citation: 11 N.E. 58,104 N.Y. 543
• Parties: LITCHFIELD, Ex'r v. FLINT.
• Court: New York Court of Appeals Court of Appeals

104 N.Y. 543

11 N.E. 58

LITCHFIELD, Ex'r

v.FLINT.¹

Court of Appeals of New York.

March 1, 1887.

The complaint in this action alleges, in substance, that on or about the twenty-seventh day of May, 1873, H. Maria Litchfield departed this life in the county of Kings, leaving a last will and testament wherein the plaintiff was nominated executor; that thereafter, on the fifteenth day of October, 1873, the will was admitted to probate by the surrogate of that county, and letters testamentary were duly issued to the plaintiff as such executor on the second day of June, 1875; that on the twentieth day of April, 1878, the Kings County Central Railroad Company made and executed its promissory note in writing as follows:

‘$6,000.

‘Six months from date, for value received, the Kings County Central Railroad Company promise to pay E. B. Litchfield, executor of the estate of H. Maria Litchfield, deceased, or order, six thousand dollars, and interest, payable at the American Exchange National Bank, New York.

[Seal.]

‘KINGS COUNTY CENTRAL RAILROAD CO.

‘Per E. B. LITCHFIELD, President.

‘ Brooklyn, April, 30, 1878.’

-That before the maturity of the note it was transferred and delivered, for full value, to one Frederick W. Foote, and that there was delivered to him at the same time 12 bonds of the railroad company, as collateral security for the payment thereof; that Foote was the legal holder and owner of the note and bonds on the twenty-fourth day of September, 1878, and on that day the note constituted a debt of the railroad company to him; that on that day a written agreement was executed between the plaintiff of the first part and the defendant of the second part, wherein it was recited, among other things, that the party of the first part was chiefly the promoter of the railroad known as the ‘Kings County Central Railroad;’ that he and the railroad company were financially embarrassed, and that he was incapable of further active exertions to resuscitate the railroad company, or to manage the road so as to produce from it any profit or benefit; that the party of the second part was willing to examine into the affairs of the railroad company with a view of determining what could be profitably done with the road, and, if found feasible, to make the attempt to produce some profit to the party of the first part from his interest therein; that the party of the first part placed in the hands of the party of the second part certain stock of the railroad company, and transferred to him the interest of the party of the first part in certain bonds of the road preliminary to the agreement, upon which the party of the second part made certain advances in money to the railroad company, and for which the party of the second part had and retained a claim against the railroad company; and wherein it was agreed that the party of the first part did absolutely sell and assign to the party of the second part his interest in the bonds mentioned, and that he would assign to any person the party of the second part might designate, on demand, the stock mentioned, and that he did thereby sell and assign to the party of the second part all his right, title, and interest and claims and demands, other than stock and bonds, into and upon the railroad company; and wherein, in consideration thereof, the party of the second part agreed to pay in cash, to the party of the first part, the sum of $1,750; and further agreed that, when his interest in the road, or in any road or roads he might choose to build in connection therewith, and in the securities of the Kings County Central Railroad Company, and of such other road or roads, was closed up, he would apply the proceeds as follows, among other things: That he would pay, with the consent of the railroad company, the debt of the company owing to F. W. Foote, ‘for which he holds as collateral twelve bonds of the said the Kings County Central Railroad Company, provided said Foote will relinquish to him his title in four other bonds of said company now held by him, the said bonds to belong thereupon to said party of the second part; the said sixteen bonds to be at a price not to exceed the sum of six thousand two hundred dollars, ($6,200,) and the said reimbursement shall include the two foregoing items.’

The complaint further alleges that this agreement was entered into by the plaintiff individually, with the defendant, with the intention and purpose, among other things, of making certain provision for the payment of the promissory note mentioned, and the indebtedness of the Kings County Central Railroad Company evidenced thereby, and of indemnifying the plaintiff as executor from liability thereon; that the plaintiff has fully carried out and performed all the terms and conditions of the agreement on his part to be carried out and performed; that, after the execution of the agreement, the note above mentioned for value was transferred to and came into the possession of the plaintiff, together with the 12 bonds of the ‘Kings County Central Railroad Company so as aforesaid held by said Foote, and collateral security for the payment thereof, and at the same time the said Foote delivered to this plaintiff four other bonds of the said the Kings County Central Railroad Company, then held by him, and relinquished and transferred to this plaintiff his title in all of said bonds;’ that thereafter, and on the second day of ‘November, 1878, the day said note by the terms thereof became due and payable, said note was presented at the American Exchange Bank for payment, and payment thereof demanded and refused; whereupon said note was duly protested in manner and form required by law, and notice of the non-payment thereof was duly served upon this plaintiff.’

The complaint further alleges that the enterprise and adventure in the agreement mentioned had been closed up and finally terminated, and that the interest of the defendant in the railroad company, and in the securities thereof, had been closed up; that the defendant had received, on account of the property transferred to him by the plaintiff, and as...