PRESIDENT AND DIRECTORS, ETC. v. Monogram Associates, Civil Actions No. 9564

• Decision Date: 26 January 1949
• Docket Number: Civil Actions No. 9564,9565.
• Citation: 81 F. Supp. 739
• Parties: PRESIDENT AND DIRECTORS OF MANHATTAN CO. v. MONOGRAM ASSOCIATES, Inc., et al. PRESIDENT AND DIRECTORS OF MANHATTAN CO. v. WAX et al.
• Court: U.S. District Court — Eastern District of New York

81 F. Supp. 739

PRESIDENT AND DIRECTORS OF MANHATTAN CO. v. MONOGRAM ASSOCIATES, Inc., et al.

PRESIDENT AND DIRECTORS OF MANHATTAN CO. v. WAX et al.

Civil Actions Nos. 9564, 9565.

United States District Court, E. D. New York.

January 26, 1949.

Harry J. Macklis, of Jamaica, N. Y., for plaintiff.

Abraham Epstein, of New York City, for defendants.

Hawkins, Delafield & Wood, of New York City (Clarence Fried, of New York City, of counsel), for impleaded defendant.

BYERS, District Judge.

These are companion motions in two cases, which are so similar as to be indistinguishable for present purposes, to restrain further proceedings in the Supreme Court of the State of New York, in actions there pending between the same respective parties, or in the alternative to remand each cause. One opinion will suffice, since the questions raised are identical.

Removal was duly had by the third party defendant, who was vouched into the State court suit by appropriate pleading, to meet certain issues of breach of warranty.

That removal brought the entire controversy in each case, to this Court; decision is required as to whether all or part thereof should be retained.

The plaintiff bank sues the respective defendants, to recover the unpaid balance of the purchase price of certain mechanical devices; it does so as assignee of the seller.

The seller is the third party defendant in each case, on the theory that it has breached its warranty accompanying the original sale in each case.

In other words, the complication arises because the seller, instead of suing directly and thus exposing itself to a possible counterclaim for breach of warranty, has assigned the original contracts of sale, and the assignee sues in its own right. Cf. National City Bank of New York v. Prospect Syndicate, 170 Misc. 611, 10 N.Y.S.2d 759.

A provision common to both contracts of sale is the pivotal issue upon which this decision must rest.

Removal was had by the third party defendant properly enough, since it is a corporation of Delaware and hence diversity of citizenship is shown as to plaintiff, a corporation of New York, and as to the corporate defendant in the second suit. The residential status of the several individual defendants is not of import.

If the assignment in each case had been of a contract of sale which was free from conditions, it would be clear that the assignee bank would but stand in the shoes of the assignor, and its cause would be subject to all defences available against the latter. Such is not the case, however, for each contract of conditional sale, as pleaded, provides that it may be freely assigned by the seller without...