Lorillard v. Clyde

• Decision Date: 02 December 1890
• Citation: 122 N.Y. 498,25 N.E. 917
• Parties: LORILLARD v. CLYDE et al.
• Court: New York Court of Appeals Court of Appeals

122 N.Y. 498

25 N.E. 917

LORILLARD

v.CLYDE et al.

Court of Appeals of New York, Second Division.

Dec. 2, 1890.

This is an appeal by plaintiff from a judgment of the general term, superior court of New York city, affirming a judgment entered upon a report of a referee dismissing the complaint with costs.

Richard L. Sweezy, for appellant.

Edw. C. Boardman, for respondents.

POTTER, J.

The allegations of the plaintiff's complaint are substantially that defendants are the survivors of the members of the copartnership of Wm. Clyde & Co., existing in June, 1874, and engaged in the business of the transportation of freight between New York and Philadelphia, and that they entered into an agreement with plaintiff at that time, a copy of which is annexed to and forms a part of the complaint. Of course the provisions and statements contained in the agreement are to be treated as allegations of the complaint so far as they serve to constitute a cause of action. The agreement was between plaintiff and said Wm. P. Clyde & Co., and was for the consolidation of their respective interests into the Philadelphia & New York Transportation Line; that they should form a corporation, under the laws of the state of New York, with a capital of $300,000, and to that capital they should contribute certain property, specifying it and its value, and in such manner as to make each of the contracting parties the owners of one-half of the capital stock of the proposed corporation; that the corporation was to be managed by said Clyde & Co., who were to received therefor the usual commissions upon freights, and who were to guaranty the plaintiff a dividend not less than 7 per cent. per annum for 7 years. The agreement, after providing some minor details as to the management of the business of the corporation, contained this stipulation: ‘The corporation to assume lease of Lorillard's Philadelphia wharf, and to assume leases of piers 33 and 33 1/2 East river, New York, at present rental, and to purchase Lorillard's sheds, barges, and fixtures at an appraised value.’ The complaint further, and in terms, alleges that in pursuance of said agreement a corporation was organized by the name of the Philadelphia & New York Steam Navigation Company; that said corporation, until its dissolution and the appointment of a receiver thereof, in July, 1879, was managed by the said firm of Wm. P. Clyde & Co.; that, prior to and at the time mentioned, the Lorillard Steam-Ship Company was a corporation, and that on the 18th of March, 1871, this company entered into a lease with the Philadelphia Ship Dock Company by which the latter company let its wharf to the Lorillard Steam-Ship Company for a specified rent, which the latter agreed to pay to the dock company; that the expression ‘lease of Lorillard's Philadelphia wharf,’ used in the agreement, referred to this lease, and that it was understood and intended by the parties to said agreement, (the plaintiff and the firm of which defendants are the survivors,) in respect to paying the rent, that the agreement was made for the benefit of the Lorillard Steam-Ship Company, and that the new corporation should, when organized, enter into the possession of the said wharf, and assume and pay the rent accruing under said lease to the end of its term; that, in pursuance of said agreement, the Lorillard Steam-Ship Company, in December succeeding the June of the date of the agreement, transferred and delivered possession of said wharf to said Wm. P. Clyde & Co., the managing agents of said new corporation, and that said firm entered into and used said wharf for their own, and not for the business of said new corporation, until the succeeding June; that said firm of Clyde & Co., though requested to do so, refused to have said new corporation assume said lease, or to pay the rent falling due thereafter; that said dock company, the lessor in said lease, subsequently brought an action against the Lorillard Steam-Ship Company, the lessee, for the balance of the rent, of which the defendants had notice and opportunity to defend, and recovered a judgment therefor, which was paid by the Lorillard Steam-Ship Company, and that the latter assigned to the plaintiff the cause of action set forth in said complaint. This analysis of the complaint brings me to the question involved in this appeal, and that is whether the Lorillard Steam-Ship Company had any cause of action upon which it could have maintained an action against ...