Case ID: nys_46/html/0383-01.html
Source: Caselaw Access Project
Author: {"author": "VAN WYCK, O. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(20 Misc. Rep. 656.)
    ROLSTON et al. v. CENTRAL PARK, N. & E. R. R. CO.
    (City Court of New York, General Term.
    July 2, 1897.)
    Lost Interest Coupons—Action—Indemnity.
    Interest coupons of railroad bonds, payable to bearer at a specified time and place, are negotiable promises for the payment of money, and are subject to the same rules as other negotiable instruments, including the right, given by section 1917 of the Code of Civil Procedure, to recover upon the same, when lost, upon furnishing indemnity, and this rule is not affected by a provision in the mortgage securing the bonds that the interest shall be payable on presentation and surrender of the coupons.
    Appeal from trial term.
    Action by William Rolston and others against the Central Park, North & East River Railroad Company. Judgment on a verdict for plaintiff, and defendant appeals.
    Affirmed.
    Argued before VAN WYCK, C. J., and MCCARTHY and SCHUCHMAN, JJ.
    Henry A. Robinson, for appellant.
    Leopold Wallach, for respondents.
   VAN WYCK, O. J.

The plaintiffs, while the bona fide owners of one of defendant’s negotiable $1,000 bonds, with all interest coupons, not then due, attached, lost the same, and thereafter, and after two of such coupons of $35 each became due, they duly tendered to defendant a bond of indemnity to hold it harmless against the claim of anybody else, and duly demanded payment of these two due unpaid coupons, which was refused, and thereupon brought this action to recover the sum of $70. At trial, copies of these two coupons, the bond, and the deed of trust or mortgage to secure payment of the same, were marked in evidence by consent, and, as there was no disputed question of fact raised by the proof, the presiding justice directed a verdict for plaintiffs for the amount claimed, and interest thereon, and fixed the amount of the indemnity bond to be given by plaintiffs within 10 days to defendant at $250. The coupon first due reads:

"$35. June 1st, 1895. $35. “The Central Park, North and East River Railroad Co. will pay thirty-five dollars to bearer at the city of New York for six months’ interest on bond No. 994. L. T. Griffiths, Treasurer.”

The other coupon was similar, except the date of payment was December 1, 1895. The mortgage provided that the semiannual interest on the bonds was to be paid “on the presentation and delivery of the coupons or interest warrants thereto attached.” The appellant contends that presentation of the coupons was a condition precedent to the payment of the interest, .and that the coupons are not negotiable instruments for the payment of money only. There is an implied agreement in all negotiable instruments that they must be presented and delivered as a condition of payment, and, if these coupons were in plaintiffs’ possession, they would be called upon to surrender, them upon payment; but the bond with these coupons attached has been lost, and the bond is not due, but these coupons, are. The plaintiffs’' action is upon lost negotiable paper, under section 1917 of the Code of Civil Procedure, and they, before suit, tendered the indemnity required by that section, and at trial had the justice fix the amount thereof. Interest coupons to railroad bonds, payable to bearer at a specified time and place, are negotiable promises for the payment of money, and are subject to the same rules as other negotiable instruments. Evertson v. Bank, 66 N. Y. 14. The provision in the mortgage securing the payment of the bonds, that the coupons will be paid only unon their presentation and surrender, does not change their negotiable character, and such provision would not, even if expressed in the coupon itself. Frank v. Wessels, 64 N. Y. 155. In that case-the lost instrument sued upon read:

“New York, February 4, 1871. “Received from Straut Bros., for account of Mr. W. Feist, carpenter, of Grey-town, Nicaragua, $2,496.26, paper currency, which I promise to pay to said W. Feist, or to his order, on return of this receipt, with 7$ per annum interest. “$2,496.26, paper currency. G. Wessels.”

And the court of appeal there ruled that this was a lost negotiable-instrument, and that under the statute allowing action upon such instruments the plaintiff was required to give an indemnity bond, and so ordered, and further ruled that the words “on return of this receipt” did not make it payable upon a contingency, or constitute a condition precedent to any payment. The plaintiffs were entitled to a verdict for only $70, the amount of the coupons, but not to interest thereon, and the judgment is reduced by $3.81, the amount of interest, and, as. so reduced, affirmed, with costs. All concur.