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Statenent of case.
court in which the judgment was entered, and that act makes the leave of the surrogate necessary in addition.
The court of law adjudges the legal rights of the parties, and that the creditor is legally entitled to enforce the judgment against property in possession of the parties to the proceeding.
The surrogate passes upon the right of the creditor in view of the conflicting or equal claims of others upon the estate. Whether the application to the surrogate should precede the procedure in the court of law, may be questionable. Notwithstanding the intimation in Dox v. Backenstose (12 Wend. R., 542), I incline to the opinion that it is immaterial, and that either may be first taken, or that they may proceed pari passu ; but an execution cannot issue without the order and permission of both tribunals. Wood v. Morehouse (45 N. Y., 368), Alden v. Clark (11 How. Pr. R., 209) and Frink v. Morrison (13 Abb. Pr. R., 80) presented the same question as that before us, and were decided in accordance with the views already expressed.
The order should be affirmed.
FRANK KINNEY, Appellant, v. JAMES KIERNAN et al.,
After a contract of sale has been rightfully rescinded by the vendor on account of fraud on the part of the vendee, the contract is at an end, and
no act on the part of the vendor alone can revive it. Consequently, after such a rescission, an action by the vendor against the
vendee upon the contract of sale is not maintainable. And the bringing of such an action will not (without judgment therein) revive the contract of sale so as to constitute a bar to an action for conversion previously brought by the vendor against a third party, who had received a
portion of the property from the fraudulent vendee. 80, also, the receipt by the vendor from the vendee of compensation in any
form or upon any basis for that portion of the goods which the latter has retained, will not affect the title to the residue or the action pending for
Statement of case.
the conversion thereof. A settlement, therefore, with the vendee, of the action upon the contract of sale from which is expressly excluded that portion of the goods for the conversion of which the first action was brought, will not affect that action. So long as the settlement is confined to the portion of the goods retained by the vendee, it is immaterial to the defendant in the first action whether it is in the form of a payment as on a purchase or of compensation for a conversion. Nor is it material whether upon such settlement the vendor retains the original consideration received under the contract or whether other compensation is substituted. It is not a revival of the old contract, but a new one different from and embracing only a part of the subject of the former.
(GROVER and ALLEN, JJ., dissenting.), As against a third person claiming under a fraudulent vendee, in order to
establish a rescission of the contract of sale, it is not necessary to prove a return of, or offer to return, any securities received thereon if the vendor refrains from asserting any title to those securities founded upon the original contract.
(Argued December 21, 1871; decided April 9, 1872.)
APPEAL from judgment of the General Term of the Supreme Court in the third judicial department in favor of defendants entered upon a verdict. (Reported below 2 Lans., 492.)
The action was brought for the alleged wrongful conversion of ten barrels of spirits.
In December, 1867, the plaintiff sold and delivered to P. F. Gill & Co. seventy-seven barrels of spirits, amounting to $6,313.34, and at the time received and credited on the bill, as cash, two checks on a bank in Troy, signed by Nat. Wood, and payable to the order of P. F. Gill & Co., and indorsed P. F. Gill & Co.; one check for $2,964.10, and the other for $2,835.
James Gill (of the firm of P. F. Gill & Co.) made the purchase. He represented Wood to be a wealthy man, an officer, president or director of the Central National Bank of Troy, and one of the largest stockholders of the bank. The goods were sold to Gill, by plaintiff, in reliance upon these representations.
In fact these representations were false to the knowledge of Gill.
Statement of case.
The checks were not paid. Ten barrels of the liquors sold to Gill were received by defendants.
As soon as plaintiff learned that the checks were worthless, and Gill's representations false, he telegraphed to defendants not to pay Gill for the ten barrels had by them and soon after demanded the goods of defendants, who refused to give
This action was commenced July 16, 1868.
Plaintiff in October, 1868, commenced an action in the Superior Court of the city of New York, against P. F. Gill and James Gill, to recover for the liquors delivered Gill in December, 1867, as for goods sold and delivered. An agreement was made, June 2, 1869, for settling such action by plaintiff receiving from the Gills four promissory notes of $250 each, three of which were paid when this suit was tried, the fourth not then being due.
The plaintiff proved that it was agreed that the suit pending against defendant should not be included in the settlement, and that this exception was left out of the written agreement for a settlement by mistake.
The court ruled and held, that a settlement having been made for a portion of the goods subsequent to the commencement of this action, it could not be sustained, and directed a verdict for defendants, and plaintiff excepted.
The exceptions of plaintiff were ordered to be heard at General Term in the first instance, where judgment was ordered for the defendants.
Samuel Hand for appellant. If a vendor, who is entitled to rescind sale and retake possession of goods delivered, actually elects to do so, he disaffirms the sale, and cannot afterward sue for the price. (Morris v. Rexford, 18 N. Y., 552, 557.). The bringing of a suit subsequently to recover the price of the goods, could not affect the rights of the parties to his action. (Morris v. Rexford, supra; King v. Phillips, 8 Bosw., 603, 611.)
The settlement of that case is no bar to this action.
Opinion of the Court, per RAPALLO, J.
Perhaps if the whole value of all the goods obtained had been paid, the plaintiff, having received all he was in any event entitled to, would be precluded from recovery here. But he received notes for only $1,000, while the amount of his purchase was $6,315.
A surrender of Wood's checks was not necessary to a valid rescission. (Pease v. Pettis, 47 Barb., 276; Austin v. Stevens, 1 Met., 557.)
Amasa J. Parker for the respondents. The commencement of this action merely without tendering back the unpaid checks or following the balance of the property was not a rescission. (Vorhees v. Earl, 2 Hill, 288; Wheaton v. Baker, 14 Barb., 594; Goeth v. White, 35 id., 16; Abbott v. Draper, + Den., 51; Stevens v. Hyde, 32 Barb., 171; Matteawan Co. v. Bentley, 13 id., 641; Masson v. Bovet, 1 Den., 69; Morse v. Brackett, 98 Mass., 205, 207, 210; Perley v. Balch, 23 Pick., 283; Sanborn v. Osgood, 16 N. H., 112; Love v. Oldham, 22 Ind., 51; Christy v. Cummins, 3 M’Lean, 386; Henckley v. Henderson, 5 id., 170.) A vendor cannot rescind in part and affirm as to the residue. (Matteawan Co. v. Bentley, 13 Barb., 641.) The commencement of the suit to recover for the goods sold, followed by the settlement, was an abandonment of the claim for a tortious taking. (Sanger v. Wood, 3 J. Ch., 416; McElroy v. Mancius, 13 J., 121; Butler v. Miller, 1 Com., 496; Morris v. Rexford, 18 N. Y.,552,557; Colburn v. Woodworth, 31 Barb., 381; 1 Wait, 511; Lloyd v. Brewster, 4 Paige, 537; Bank of Beloit v. Beale, 7 Bosw., 611; 34 N. Y., 473.) A demand cannot be split up so as to maintain two different actions. (Fish v. Folley, 6 Hill, 54; Bendernagle v. Cocks, 19 Wend., 207.) It is not material that the action in affirmance of the contract was commenced last. (Morris v. Rexford, 18 N. Y., 558.)
RAPALLO, J. Concurring in the conclusion of my learned associates, that at the time of the commencement of this action there had been a valid rescission of the contract of sale
Opinion of the Court, per RAPALLO, J.
to Gill & Co., and that the right of action of the plaintiff against the defendants for the conversion of the goods received by them from Gill & Co. was then perfect, I cannot concur in the further conclusion that the subsequent suit and settlement between the plaintiff and Gill & Co. necessarily constituted a bar to this action. So long as the contract of sale between the plaintiff and Gill & Co. remained voidable merely, it was capable of ratification by any act of the plaintiff evincing a clear intention to affirm it. And at that stage the bringing of an action by the plaintiff against Gill & Co., founded upon the contract, the plaintiff having acquired full knowledge of the fraud, would have been an unequivocal affirmation of the sale, binding upon the plaintiff, and effectual to preclude him from setting up his title to the goods against Gill & Co. or any of their vendees. But after the plaintiff had made a valid election to avoid the sale, and had asserted his title to the goods by bringing this action, the contract of sale was at an end. The fraud being established, neither Gill & Co. nor their vendees (other than bona fide purchasers) could claim any title under the sale, and the right of action of the plaintiff against Gill & Co. upon the contract was gone. No subsequent act of the plaintiff alone could revive the contract or the right of action thereon, which had thus been destroyed. (Morris v. Rexford, 18 N. Y., 552.) The rights of all the parties had become fixed, and were the same as though there never had been any contract of sale, but the goods had been tortiously obtained by Gill & Co. (5 T. R., 214; 1 Stra., 165.) The mere bringing of an action upon the original contract against Gill & Co., after such an avoidance of the sale, did not affect the rights of the defendants. Gill & Co. had a perfect defence to the action on the contract. (Morris v. Rexford, supra.) A recovery in that action against Gill & Co. might have had the effect of changing the title to the goods, as would a recovery in trover; but the simple institution of the action would not. It could not operate as an election which would debar the plaintiff from prosecuting his action for conver