Batchelder v. Council Grove Water Co.

• Decision Date: 26 January 1892
• Citation: 29 N.E. 801,131 N.Y. 42
• Parties: BATCHELDER v. COUNCIL GROVE WATER CO.
• Court: New York Court of Appeals Court of Appeals

131 N.Y. 42

29 N.E. 801

BATCHELDER

v.COUNCIL GROVE WATER CO.

Court of Appeals of New York.

Jan. 26, 1892.

Appeal from superior court of New York city and county, general term.

Action on certain bonds by Benjamin F. Batchelder against the Council Grove Water Company. From a judgment of the general term affirming a judgment of the special term, whereby it was adjudged that plaintiff was not entitled to recover the principal of said bonds, plaintiff appeals. Affirmed.

FINCH and GRAY, JJ., dissenting. 14 N. Y. Supp. 306, affirmed.

F. T. Moissen, for appellant.

Isaac L. Miller, for respondent.

RUGER, C. J.

This action was brought in September, 1889, to recover the principal and interest of three several mortgage bonds for $1,000 each, payable July 1, 1912. It is therefore apparent that the action, except on the coupons for interest, was prematurely brought, unless there are other circumstances appearing in the case, showing that an earlier day for the payment of the bonds had been provided. It is claimed that these circumstances appear from a clause in the bond, reading as follows: ‘In case of default in the payment of any of the interest coupons attached to this bond in the manner provided in the trust-deed and mortgage hereinafter mentioned, then, and in that case, the principal sum of this bond shall become due in the manner and with the effect provided in the said trust-deed or mortgage.’ Default having been made in the payment of the coupons, the plaintiff claims that the bond became absolutely due, and entitled him to enforce its payment in any way available to any holder of a past-due obligation. This claim would, undoubtedly, be snstainable, provided the bond had stopped with the words, ‘the principal sum shall become due;’ but it did not, in fact, stop there, but continued with the following qualification of the previous sentence: ‘in the manner and with the effect provided in the said trust-deed or mortgage.’ It therefore becomes necessary to refer to the trust-deed or mortgage to determine the extent and character of the qualifications, for it cannot be disputed but that this clause made the provisions of the trust-deed an essential part of the contract between the bondholder and his obligor. The clause in the trust-deed to which the bond referred reads as follows: ‘If default be made by the said party of the first part in any half year's interest on any of said bonds, and the warrants or coupons for such interest shall have been presented and its payment demanded, and such default shall have continued for six months after such demand,...