Mt. Sterling Water, Light & Ice Co. v. First Nat. Bank

• Decision Date: 06 March 1912
• Citation: 147 Ky. 376,144 S.W. 370
• Parties: MT. STERLING WATER, LIGHT & ICE CO. v. FIRST NAT. BANK OF WYALUSING, PA.
• Court: Kentucky Court of Appeals

144 S.W. 370

147 Ky. 376

MT. STERLING WATER, LIGHT & ICE CO. v. FIRST NAT. BANK OF WYALUSING, PA.

Court of Appeals of Kentucky.

March 6, 1912

Appeal from Circuit Court, Montgomery County.

Action by the First National Bank of Wyalusing, Pa., against the Mt Sterling Water, Light & Ice Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Prewitt & Senff, for appellant.

Chas D. Grubbs, for appellee.

SETTLE J.

This action was instituted by appellee in the court below to recover of appellant a personal judgment upon 15 interest coupons of $25 each, past due and aggregating $375.

The petition set up appellee's ownership of three bonds of a series of 250 aggregating $250,000, issued by appellant in 1901, payable in 1921, and each containing coupons for semiannual interest accrued and to accrue on the bonds during the time they were to run; and that the 15 coupons sued on were parts of and had been detached from the 3 bonds in question. Also that the 250 bonds were secured by a mortgage upon the real estate, franchise, and other property of appellant, which mortgage was duly recorded in the office of the clerk of the Montgomery county court; but enforcement of the mortgage lien was not asked.

Appellant filed an answer containing two paragraphs, in the first of which it admitted its execution of and liability upon the coupons sued on, but pleaded want of information sufficient to form a belief as to appellee's ownership thereof. The second paragraph set up the mortgage given to secure the payment of the bonds and attached coupons, especially a clause thereof, which provides: "If default be made in the payment of any money, principal or interest due on any of the bonds hereby secured and such default shall continue for ninety days after payment shall have been demanded in writing, it shall be the duty of and it is hereby made obligatory upon the trustee, upon requisition of one-third in interest of the holders of the bonds hereby secured and then outstanding, by an instrument or concurring instruments in writing, upon reasonable indemnity to proceed forthwith to enforce the rights of the trustee and of the bondholders under the mortgage by foreclosure, or by other appropriate proceeding in any other proper court or otherwise."

It was further pleaded that the remedy given the holders of the bonds and coupons by the above clause of the mortgage is exclusive of all others; and therefore appellee cannot maintain an action to recover personal judgment for the amount of the matured and unpaid coupons held by it, but must wait until all the bonds mature, or proceed, in conjunction with other holders of the bonds, as allowed by the above provision of the mortgage.

The circuit court sustained a demurrer to each paragraph of the answer, and, appellant refusing to plead further, judgment was rendered in appellee's behalf for the amount of the coupons sued on and costs of the action. From that judgment this appeal is prosecuted.

Manifestly the want of knowledge or information sufficient to form a belief as to appellee's ownership of the coupons, pleaded in the first paragraph of the answer, did not present an issue. Section 113, subsec. 7, Civil Code, only allows denial upon want of knowledge or information sufficient to form a belief, when the facts thus attempted to be put in issue are not presumptively within the defendant's knowledge. But the holder's ownership of such coupons is...