Consol. Electric Storage Co. v. Atlantic Trust Co.

Citation161 N.Y. 605,56 N.E. 145
PartiesCONSOLIDATED ELECTRIC STORAGE CO. v. ATLANTIC TRUST CO.
Decision Date16 February 1900
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Appeal from supreme court, appellate division, First department.

Action by the Consolidated Electric Storage Company against the Atlantic Trust Company. From a judgment of the supreme court (53 N. Y. Supp. 1102) reversing a judgment for defendant, defendant appeals. Affirmed.

John E. Parsons and Henry L. Stimson, for appellant.

Wm. B. Hornblower and Howard A. Taylor, for respondent.

GRAY, J.

The plaintiff's demand against the defendant relates to two written agreements, one of which was made between it and the Brush Electric Company, and the other of which was made between the plaintiff, the Brush Electric Company, and the defendant, the Atlantic Trust Company. The first of these agreements granted a license to the plaintiff to use certain improvements in secondary batteries, of which the Brush Company was the patentee, for a term of six years from April 1, 1890, with an option to the licensee for an additional term. It provided for the payment of annual royalties, which should not be less than $25,000 in each year, and that in the first year there should be paid at certain times, in cash, in addition to the royalties, the sum of $65,000. It was also provided therein that the licensee should, simultaneously with the execution of the agreement, give to the Brush Company satisfactory security that the terms of the agreement would be carried out. The second of the above-mentioned agreements was executed, as it recites, in order that the plaintiff should perform its covenant in the license agreement to furnish satisfactory security to the Brush Company that its terms should be carried out by it. Thereby the plaintiff assigned to the defendant, the Atlantic Trust Company, and the latter acknowledged the receipt of, the sum of $215,000. The defendant agreed to hold these moneys in trust, as security for the punctual and faithful fulfillment by the plaintiff of the terms of the license agreement. It was mutually agreed that the defendant should apply $65,000 of the trust fund to the payments which were required by the license agreement to be made to the Brush Company in the first year, and that the installments of royalties, if not paid punctually, should be paid by the defendant. If the Brush Company should have been paid the royalties due in any year under the license agreement, then, upon its certificate to that effect, the defendant was to pay the $25,000 to the plaintiff. It was further provided that, whenever the terms of the license agreement shall have been fully complied with by the plaintiff, the Brush Company was to ‘file with the party of the third part [being the defendant] a written certificate of such full compliance, and thereupon, and upon receiving such certificate, so much of said trust fund as may remain, with all accumulations of interest thereon, if any, shall, subject to the compensation of the trustee, be repaid to the party of the first part.’ It was alleged in the complaint that in November, 1895, there remained in the hands of the defendant, of the amount received by it under the tripartite agreement, the sum of upwards of $35,000, and that the Brush Company had waived, in writing, any claim to said balance, and had authorized the defendant to pay the same to the plaintiff. It was for the recovery of these moneys that the plaintiff demanded judgment against the defendant. The answer conceded the making of the agreement referred to in the complaint, but denied the receipt by the defendant from the plaintiff, or from any one on its behalf, of the sum of $215,000, or that there remained in its hands in November, 1895, of any amount paid to it by the plaintiff, or by any one on its behalf, any sum whatever, or that it was indebted to the plaintiff. The answer further alleged various facts with respect to the making of the tripartite agreement, and claimed that its execution was induced by the mistake and misapprehension of its president; and a reformation thereof was demanded, in so far as it required the payment by the defendant to the plaintiff of any sums of money. The defendant also counterclaimed for moneys paid by it to the Brush Company which were due from the plaintiff, and which it claimed to have paid under a ‘guaranty,’ and for moneys alleged to be due it for dividends declared upon capital stock of the plaintiff, of which it was a holder. The plaintiff, in its reply, denied the indebtedness set up in the counterclaim. It alleged that the $215,000 mentioned in the tripartite agreement was received by the defendant from a corporation known as the United Electric Traction Company, and that that sum ‘was placed by the defendant, according to the order of the traction company, to the credit of the plaintiff.’ The plaintiff alleged that it believed that the sum was ‘obtained by the traction company from the defendant as a loan, but that at that time the plaintiff had no knowledge of the source from which the money came.’

Without further reference to the pleadings, it is apparent therefrom that the principal issue between the parties was with respect to the alleged liability of the defendant, under the tripartite agreement, to pay to the plaintiff the unexpended portion of the $215,000 which remained in the defendant's hands after all rights thereto on the part of the Brush Company had been waived, and the payment thereof to the plaintiff authorized, in November, 1895. The $215,000 which were admitted to have been received and held in trust by the defendant for the security of the Brush Company, with respect to the fulfillment by the plaintiff of the terms of the license agreement, represented the $65,000 which were to be paid in the first year, and the aggregate of the payments of $25,000 to be paid in each of the six years of the term of the license. It is perfectly clear that, by the terms of the tripartite agreement,the trust funds held by the defendant were applicable, in the first place, to the discharge of the plaintiff's liabilities to the Brush Company, and, in the...

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3 cases
  • City of Niagara Falls v. New York Cent. & H.R.R. Co.
    • United States
    • New York Court of Appeals
    • October 4, 1901
    ...v. Lord, 161 N. Y. 90, 94, 95,55 N. E. 397;Hilton v. Ernst, 161 N. Y. 226, 228,55 N. E. 1056;Consolidated Electric Storage Co. v. Atlantic Trust Co., 161 N. Y. 605, 610, 611,56 N. E. 145;Lewis v. Railroad Co., 162 N. Y. 52, 56 N. E. 548;Kleiner v. Railroad Co., 162 N. Y. 193, 56 N. E. 497;L......
  • Hutton v. Smith
    • United States
    • New York Court of Appeals
    • June 9, 1903
    ...a short decision is the same as of a judgment entered on a general verdict, and the same presumptions apply. Cons. El. Storage Co. v. Atlantic Trust Co., 161 N. Y. 605, 56 N. E. 145;Marden v. Dorthy, 160 N. Y. 39, 54 N. E. 726,46 L. R. A. 694;Amherst College v. Ritch, 151 N. Y. 282, 45 N. E......
  • Consolidated Ice Co. v. Mayor, Etc., of City of New York
    • United States
    • New York Court of Appeals
    • February 26, 1901
    ...the record to inquire whether or not such was the fact. Reed v. McCord, 160 N. Y. 330, 54 N. E. 737;Consolidated Electric Storage Co. v. Atlantic Trust Co., 161 N. Y. 605, 56 N. E. 145. Whether evidence bearing upon that question was improperly received or rejected may be considered if pres......

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