Plaintiff, in his complaint, alleges two causes of action. In his first cause of action the plaintiff alleges that on or about March 31, 1927, the plaintiff entered into an agreement with defendants for the sale by plaintiff to defendants of the entire capital stock of the Hudson Operating Company, which was then held or owned by the Flanders Holding Corporation, and which stock was the property of the plaintiff, subject, however, to the rights of one Robert B. Adolph under certain contracts between said Adolph and said Flanders Holding Corporation, and that the defendants then and there agreed to pay for such stock to the plaintiff the gross sum of $165,000. Plaintiff alleges that no part thereof has been paid, excepting the sum of $145,000, leaving a balance due and owing from defendants to plaintiff of $20,000; that due demand for the payment of said balance had been made of the defendants, and that no part thereof had been paid, and that there was due and owing from defendants to plaintiff the said sum of $20,000, with interest from March 31, 1927.
For a second cause of action plaintiff alleges that on or about March 31, 1927, the accounts, disputes and differences between plaintiff and defendants arising out of the assignment and transfer of said stock by plaintiff to the defendants were settled, adjusted and compromised and their mutual and several accounts were stated and adjusted, and that it was then and there agreed by defendants that they were justly indebted and that there was justly due and owing by them to plaintiff the sum of $25,000; that no part thereof has been paid, except the sum of $5,000, leaving a balance plaintiff’s due of $20,000; that due demand for the payment of said balance had been made, but that no part thereof had been paid, and that a balance of $20,000, with interest thereon from March 31, 1927, was due and owing from defendants
The defendants answered separately, each denying each and every allegation of the plaintiff’s complaint. Thereupon plaintiff moved the court, pursuant to rule 113 of the Rules of Civil Practice, to strike out the answers of the defendants as sham and for judgment in plaintiff’s favor for the relief demanded in the complaint. Upon the motion of the plaintiff affidavits in support of said motion and in opposition thereto were presented by the respective parties. These affidavits convince us that the answers of the defendants raised issues of fact, and that said answers were interposed in good faith.
The controversy herein arose upon a contract entered into between the parties under date of March 23, 1927. The contract was in the form of a written offer signed by one William H. Chorosh, the present attorney for the defendant, appellant, Amron, and who then represented both of the appellants, and which letter was addressed to the respondent. The written offer was in the following form:
“ William H. Chorosh 1451 Broadway
“ Attorney at Law New York
“ Benjamin Shapiro
“ Telephone Number “ Wisconsin 9870 “ Cable Address ‘ Wilchoros ’
“March 23rd, 1927.
“ Mr. George L. Sanborn,
“ 135 West 47th Street,
“ New York City:
“ Dear Sir.— Mr. William E. Woodman handed my clients, Messrs. Jacob Amron and Sam Schwartz, a memorandum of the gross receipts of the Flanders Hotel, at 135-137 West 47th Street, for the past fourteen months, a copy of which is herewith enclosed, and based upon the correctness of these figures my clients have authorized me to make the following proposition to you.
“ They will purchase the entire capital stock of the Hudson Operating Company, now held or owned by the Flanders Holding Corporation, subject, however, to the rights of Robert E. Adolph as appear by the contracts executed between the said Adolph and the Flanders Holding Corporation on or about October 30, 1925, together with the-entire capital stock of the Flanders Holding' Corporation, for the gross sum of One hundred and sixty-five thousand ($165,000) dollars, payable as follows:
Page 619“ (a) By taking the said stock subject to an indebtedness by the Flanders Holding Corporation to Robert E. Adolph amounting to $98,214.35, which represents the unpaid amount of One hundred and twenty-five thousand ($125,000) dollars payable in seventy equal installments in the form of promissory notes each amounting to about $1,785.65, made payable monthly, with interest, and commencing January 1, 1926.
“ (b) By delivering to you upon the transfer of the stock of both corporations and the resignations of the officers of both corporations, the promissory notes of the Flanders Holding Corporation aggregating $25,000.00 which sum shall be paid at the rate of Five thousand ($5,000) dollars per annum, $2,500 semi-annually with interest, the first installment to be paid six months after the delivery of the stock of the said corporations and the remaining installments of $2,500, each every six months thereafter, until fully paid.
“ Interest on unpaid balances to be adjusted semi-annually.
“ (c) By paying the difference between the purchase price and the aggregate amount of the above mentioned notes, to wit, the sum of Forty-one thousand seven hundred eighty-five and 65/100 ($41,785.65) dollars, in cash or by certified check upon delivery of the stock and said resignations; and on account of the cash consideration, we herewith attach payment on account, aggregating $5,000 and represented by two checks, dated March 22, 1927, made by Amron Realty Corporation, in the sum of $2,500 each, and made payable respectively to my clients, and endorsed by them to your order.
“ (d) The delivery of the stock shall take place on April 1st, 1927, at my office, at 2 p. m., at which time adjustments of land taxes, water rates, insurance premiums, rents, securities, etc., shall be made and allowed, either by paying to or deducting from the cash consideration then to be paid.
“ It is a condition of this offer that the said Corporations own the leasehold, all furniture, fixtures and supplies now used in conducting the Hotel Flanders at the above premises, excepting the contents in the rooms occupied by Mr. Harris and Mr. Tennis and Dr. Mendrachia and Lena Brier, and your own personal belongings in the room occupied by you, and that there are no violations of any kind against the said building in any of the Departments of the City or State of New York, and that all income taxes and other taxes that are either due or accrued and to be paid by the Corporation up to April 1st, shall be paid by you, and furthermore that the Flanders Holding Corporation will be free and clear of any debts or obligations of any kind excepting those specified inPage 620this offer, and that whatever debts are due or owing by either of the said corporations up to the time of the transfer of the stock, to wit, April 1st, 1927, shall be paid by you, and you shall keep the Corporation indemnified against any claim except as herein mentioned, up to that time.
“ The sum of Twenty-five thousand ($25,000) dollars to be paid by the Flanders Holding Corporation, above referred to, shall be secured by transfer to you as collateral security, fifty percent of the stock of the Flanders Holding Corporation, but that said stock given as collateral security shall be held in escrow by me until the payment of the said Twenty-five thousand ($25,000) dollars.
“ This offer is made with the understanding and upon condition that the acceptance thereof be signified by your signature appended herewith, and to be returned to me on or before Saturday, March 26th, 1927, at twelve o’clock noon, otherwise this proposition shall be deemed to be withdrawn and you are to return the Five thousand ($5,000) dollars herewith inclosed.
“ Accepted:
“ Geo. L. Sanborn.”
“ Yours very truly,
“WM. H. CHOROSE.
As above indicated, the offer thus made by Chorosh in behalf of the defendants, appellants, to purchase the entire capital stock of the Hudson Operating Company and of the Flanders Holding Corporation for the purposes and upon the express terms in said offer stated was accepted in writing by plaintiff. It appears by this contract that the gross purchase price of $165,000 was to be paid, first, by taking the stock subject to the indebtedness owing by the Flanders Holding Corporation to said Robert E. Adolph, amounting to $98,214.35, being an unpaid balance of $125,000 payable in seventy equal installments in the form of promissory notes of $1,785.65 each, payable monthly, with interest, commencing January 1, 1926; second, by delivering to the seller, Sanborn, upon the transfer of the stock of both corporations and the resignations of the officers of said corporations, promissory notes of the Flanders Holding Corporation aggregating $25,000, payable at the rate of $5,000 per year in $2,500 semi-annual payments with interest, the first installment to be paid six months after the delivery of the stock and the remaining installments of $2,500 each to be paid every six months thereafter until fully paid, with interest adjustments semi-annually; third, by paying the difference between the purchase price subject to the Adolph claim, and the aggregate
The answers and the ■ supporting affidavits of the defendants
The order and judgment appealed from should, therefore, be reversed, with costs, and plaintiff’s motion denied, with ten dollars costs.
Dowling, P. J., Martin, O’Malley and Proskatjer, JJ., concur.
Judgment and order reversed, with costs, and motion denied, with ten dollars costs.