Kirschbaum v. Eschmann

• Citation: 205 N.Y. 127,98 N.E. 328
• Parties: KIRSCHBAUM et al. v. ESCHMANN.
• Decision Date: 02 April 1912
• Court: New York Court of Appeals Court of Appeals

205 N.Y. 127

98 N.E. 328

KIRSCHBAUM et al.

v.ESCHMANN.

Court of Appeals of New York.

April 2, 1912

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Simon Kirschbaum and others, Moses May's executors, against Frederick W. R. Eschmann. From a judgment of the Second Appellate Division (142 App. Div. 906,126 N. Y. Supp. 1134), affirming a judgment for plaintiffs, defendant appeals. Reversed, and new trial granted.

H. Aplington, for appellant.

Ira Leo Bamberger, for respondents.

WERNER, J.

The question presented on this appeal is whether the defendant's answer raises any issues which the defendant has the right to have submitted to the jury. At Trial Term the plaintiffs moved for judgment upon the pleadings, and their motion was granted. The defendant asked to go to the jury upon the issues which he claimed were raised by his answer, and this motion was denied. Upon the exceptions taken to these rulings, the defendant took an appeal to the Appellate Division, where the decision of the Trial Term was affirmed. Concretely stated, the question is whether the answer, either in its denials or affirmative allegations, raises any issues or presents any defenses to the plaintiffs' complaint. As the sufficiency of the answer is challenged upon several grounds which cannot be understood without some statement of the allegations of the complaint, we will briefly outline them.

In May, 1905, the defendant and others executed an underwriting agreement in which the defendant subscribed for 1,500 shares of the preferred stock of a corporation which, when formed, was to be known as the United Educational Company. This subscription entitled him to a certain amount of the common stock. The corporation was organized and a resolution adopted authorizing it to borrow from the Broadway Trust Company the sum of $15,000 upon the security of the underwriting agreement. Later in the same month the defendant and the other underwriters executed a second agreement with the United Educational Company, which had then been organized, confirming the earlier agreement, renewing the several subscriptions for stock upon the terms previously stated, reciting the resolution authorizing the corporation to borrow the sum of $15,000 from the Broadway Trust Company, and further declaring that: ‘This underwriting agreement on the part of said underwriters shall be negotiable, and may be assigned * * * by said corporation to Broadway Trust Company to secure the loan of fifteen thousand ($15,000) dollars to be made by said Broadway Trust Company to said corporation.’ Upon its promissory note for that amount, and the assignment of the underwriting agreement as collateral, the United Educational Company obtained the loan from the Broadway Trust Company. The note and agreement were afterwards assigned to Moses May, whose executors instituted this action to recover the balance which was due to the Broadway Trust Company when it made the assignment to May.

The defendant's answer is far from being a model pleading, and we shall not attempt to decide whether its most obvious defects are the result of design or accident. The practical question to be determined is whether all of its allegations are so frivolous, false, or defective in form as to justify the judgment which was rendered upon the pleadings.

[1] The plaintiffs' first criticism of the answer is based upon its opening declaration. It begins as follows: ‘The defendant * * * for an answer to the amended complaint herein states: (1) That the defendant herein denies that he has any knowledge or information sufficient to form a belief as to the allegations contained in paragraph 1 of the amended complaint herein.’ The point of the criticism is that the defendant, instead of denying, ‘states that he denies,’ and it is argued that this form of pleading is not authorized. Every paragraph in the answer begins in the same way, and if the plaintiff is right in the contention that a pleader does not deny when ‘he states that he denies,’ the whole answer is insufficient. The question is not new, and it was formerly the subject of much controversy; but the practice was finally settled by this court in Jones v. Ludlum, 74 N. Y. 61. In that case it was held that in a reply to a counterclaim the plaintiff's allegation ‘he says he denies,’ etc., was the equivalent of an allegation that ‘he denies.’ There is no distinction between that case and the case at bar. There the pleader ‘says he denies,’ and here he ‘states that he denies.’ It may be stretching even the liberal construction enjoined by the Code to hold that either form represents good pleading; but the question is decided, and further discussion would be profitless.

[2] The second objection to the answer is based on the form of the denials ‘of knowledge or information sufficient to form a belief.’ There are 18 paragraphs in the answer, and 11 of them are in this form. It is to be observed that these denials of knowledge, etc., are not addressed to any specific allegation of any of the paragraphs of the complaint, nor to each and every allegation thereof, but ‘to the allegations contained’ in such and such a paragraph. None of these paragraphs in the complaint has less than 2 allegations of fact, and one contains as many as 10. Some of these allegations in the complaint relate to matters of which the defendant must have such personal knowledge that he could not honestly deny knowledge or information sufficient to form a belief. Others refer to matters of which he may be presumed to have knowledge, and then there may be others as to which he can truthfully plead ignorance. This answer ignores all these distinctions. We think this is not good pleading. The Code of Civil Procedure (section 500) prescribes that an answer must contain a general or specific denial of each material allegation of the complaint controverted by the defendant, or of any knowledge or information thereof sufficient to form a belief.' Just as the explicit denials of an answer should be either general or specific, so all denials of knowledge or information sufficient to form a belief should refer...