Case ID: ny_93/html/0642-03.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William H. Garner, Respondent, v. Darius R. Mangam et al., Appellants.
    (Argued June 25,1883 ;
    decided October 2, 1883.)
    This was an action to recover damages for alleged fraud. The defendants owned the stock of a joint-stock association, each of them owning about one-third thereof. Plaintiff alleged and the jury found, on evidence held here to be sufficient, that defendants, by means of false representations, induced plaintiff to purchase one hundred and twenty shares of said stock which was utterly worthless. Each of the defendants contributed forty shares, and all were parties to the fraud. By the judgments defendants were held jointly liable for the whole damages. It was claimed that this was error; that each was only liable for the damage as to the forty shares of stock transferred by him. Held untenable.
    The court say:
    “ It was not a sale of forty shares by each defendant separately, but a sale of one hundred and twenty shares as one parcel, made up by a contribution of forty shares by each defendant. Each, therefore, became the agent of the others in making the sale, and each became responsible for the representations made by the others. Pratt could not receive the fruits of the bargain without being responsible for the fraud through which it was effected. (1 Benj. on Sales [Corbin’s ed.], 608 et seq.; Sandford v. Handy, 23 Wend. 260; Bennett v. Judson, 21 N. Y. 238; Griswold v. Haven, 25 id. 595; Elwell v. Chamberlin, 31 id. 611; Davis v. Bemis, 40 id. 453.)”
    It was part of the agreement, that plaintiff should be vice-president of the association at a salary of $3,000 per annum. Plaintiff acted in that capacity for about six weeks when, having discovered the fraud, he resigned his position, tendered back the stock, and demanded the money paid. Plaintiff received the proportion of the salary for the time he performed the duties of the office. Held, that he was not bound to tender back the amount received, that having earned the salary he was entitled to it, and did not ratify the fraudulent contract by taking it, even if "he had full knowledge of the fraud when he received it.
    
      Ritchard H. Huntley for appellants.
    
      Alex Thain for respondent.
    Earl, J., reads for affirmance.
   All concur, except Sapallo, J., not voting, and Andbews, J., absent.

Judgment affirmed.