Selden v. Anglo-India Co. , 228 A.D. 660 ( 1929 )

Judgment unanimously affirmed, with costs. The defendant corporation was bound to show affirmatively that it had no surplus out of which to pay the contract obligation. The burden was on it, for the contract was not illegal per se, but to it attached only the limitations upon its enforeibility, whether it had a surplus or not when the time came to discharge its obligation. (Richards v. Wiener Co., 207 N. Y. 59.) The findings, made at the request of the defendant, to the effect that the payments made on account exceeded the surplus and that a further impairment of capital would be incurred by the payment of the balance of the obligation, were based upon the balance sheet of February 28,- 1927. The contract made in April thereafter is not shown to be affected by any lack of surplus with which to pay it, nor is there any evidence to show that, apart from the initial payment under the contract, which, undisputedly, was made out of surplus, there was no surplus from which subsequent payments could be made. We, therefore, reverse defendant’s proposed findings 12 and 13. Present — Lazansky, P. J., Young, Kapper, Hagarty and Carswell, JJ.