Case ID: ny-st-rep_7/html/0372-01.html
Source: Caselaw Access Project
Author: {"author": "Peckham, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Loftus Wood, App’lt, v. Peter B. Armory, Resp’t.
    
      (Court of Appeals,
    
    
      Filed April 19, 1887.)
    
    1. Mistake in judgment—Not fraud to conceal from other party.
    Plaintiff was defendant in an action in which a referee gave judgment against him, October, 1860, for nearly $30,000, which was affirmed in this court, January 3, 1873. Previous to the entry of judgment defendant became the owner of the claim on which it was founded, and was substituted as plaintiff prior to the affirmation in this court Plaintiff, in May, 1872, was advised that the referee had made a mistake of $10,600, and now asks that that sum be repaid to him, on the ground that the original plaintiff and Armory colluded and conspired, in that knowing of the mistake, they did not inform this plaintiff. On demurrer, the complaint was stricken out. Held, no error.
    2. Same—Conspiracy.
    An agreement between two persons to be silent, where each has the right so to be, is not made illegal by alleging that it was done pursuant to conspiracy and collusion between the parties, without going further, and showing that the concealment was but one step in carrying out a conspiracy which was unlawful.
    Appeal from general term of the supreme court, first department.
    
      Sami. J. Crooks, for app’lt; George E. Horne, for resp’t.
   Peckham, J.

The questions herein arise upon a demurrer to the plaintiff’s complaint. The plaintiff in his complaint alleged that prior to October 1, 1860, one Austin Packard commenced an action against him, which was duly referred, and on that date the referee reported in favor of Packard, and judgment was entered in favor of the latter for nearly $30,000. On appeal by the defendant therein, the judgment was modified by the general term, and so affirmed, and the defendant then, and about December 8, 1864, appealed to the court of appeals, and the judgment was affirmed in the commission of appeals in January, 1873; that Amory, this defendant, previous to the entry of the first judgment, became the owner of the claim which Packard had been prosecuting against this plaintiff up to that time, and succeeded to the interest of Packard, and prior to the judgment of the commission of appeals he had been made the party plaintiff" in such action; that such judgment was entered on or about January 3, 1873; that the judgments have all been paid, through executions duly issued to enforce the same; that in or about the month of May, 1872, this plaintiff first was advised of the existence of the mistake hereinafter spoken of, and of the means of verifying the same, and that such mistake did not appear from any of the records in that action, and could only be shown by evidence aliunde; that the action was brought to compel an accounting by this plaintiff with Packard, and on the trial, and in making up his report, the referee made two mistakes of fact, which increased the judgment against this plaintiff by the amount of more than $10,600 at the date of the report, in August, 1860, and these errors of fact became a part of and entered into the judgment above spoken of, and remained forever uncorrected, and the amount thereof was fully paid to the defendant herein, with interest from date of the report, that these errors of fact were wholly attributable to the inadvertence of the referee, that, at the time of the filing of the report, Packard knew of these mistakes of fact made by the referee, and concealed his knowledge from the referee, and from the plaintiff herein, with intent to deceive and defraud the plaintiff; that this error was so concealed by Packard until May, 1872, when Packard, having quarreled with his assignee, Amory, made an affidavit in proceedings in that action, and therein disclosed the mistakes spoken of; that at the time of the transfer of the claim by Packard to Amory, and at the time when the latter was substituted as a party plaintiff, he well knew these mistakes of fact had been made by the referee, and, for the purpose of defraud - ing this plaintiff, he has at ail times concealed the same from this plaintiff, and that Packard and Amory colluded and conspired together so to do for the purpose of defrauding the said plaintiff, to the extent of these errors, to the end that they might profit thereby. The plaintiff then demanded, as relief, that the judgment, as affirmed by the commission of appeals, should be modified so that the sum of ten thousand and some odd dollars, with interest from August 16, 1860, etc., might be adjudged to have been in-eluded in said judgment by a mistake of fact, and such judgment should be declared to be erroneous to that extent; also that this plaintiff might recover from the defendant the sum above named, etc., besides costs; and for such other or further relief as might be just.

The defendant demurred to this complaint on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer has been sustained at the special and general terms, and from the judgment of affirmance the plaintiff has appealed to this court.

The allegations of fraud made against Packard and defendant simply assert a failure on the part of either to inform the plaintiff of the existence of the mistake. There is no allegation that either resorted to any misrepresentations, or had recourse to any artifice, to prevent the disclosure to the plaintiff, or that either did anything whatever towards concealment, beyond the bald and naked failure to give this information to him. If this failure were not in and of itself a fraud, it is not made so by alleging that it was induced by a desire to deceive and defraud the plaintiff. Van Weel v. Winston, 115 U. S. 228, 6 Sup. Ct. Rep., 22. It was not a fraud, unless there was some legal duty resting upon the defendant to make the disclosure. It may be that in foro conscientice, the disclosure should have been made, but, unless a party has the right to this information, not only in that forum, but juris et de jure, the withholding of it cannot be classed as a legal fraud. 1 Story Eq. sec. 207 et seg. I can see no such right here. There must be some relation of trust and confidence existing between the parties upon which to build the duty to disclose, before the right to a disclosure can be enforced by the courts. As has been said, it is not always easy to define when this relation of trust and confidence exists, but there is no difficulty in denying its existence here. If there ever were a case where no such trust could be supposed, it is that of adverse parties to a contested lawsuit.

No additional strength is given to the allegation of fraud by stating that Packard and defendant colluded and conspired together to conceal the fact, for the purpose of defrauding the plaintiff. If there were no duty resting on either to disclose the fact, each had the right to agree to be silent. The agreement to be silent, where each has the - right so to be, is not made illegal by alleging that it was done pursuant to conspiracy and collusion between the parties, without going further, and showing that the concealment was but one step in carrying out a conspiracy which was unlawful; and it must be shown that it was unlawful, and how, and what the steps were which were illegal or fraudulent. Mere general allegations of fraud or conspiracy are of no value, as stating a case of action. Van Weel v. Winston, supra; Cohn v. Goldman, 76 N. Y., 284; Knapp v City of Brooklyn, 97 id., 520. The idea of a mutual mistake existing between the parties, it seems to us, is equally idle upon the allegations in this complaint. The mistake was wholly that of the referee, unaided and uninfluenced by either party. That there may not be relief given in some form when such a mistake exists, we are far from saying, but not upon the principles applicable to transactions between persons who in the course of the business make a mutual mistake of facts upon which their transaction is based, and it is clear that a mere mistake of a referee or court in its decision could not be remedied in such an action as this. Assuming, however, that a case of fraud or mistake or both were made on this complaint, yet it is shown therein that the plaintiff had full knowledge of all the facts about the time the case was argued in the commission of appeals, and months before the decision of the case by that court; and yet, from the time when he acquired such knowledge up to the time of the commencement of this action, in 1876, so far as appears from the complaint, he took no step, made no protest, or claimed in any way the existence of a mistake or fraud, and in the most perfect silence he paid the executions (some time in 1873) issued upon the judgments, and he gives no excuse for such silence, or for the payment of the judgments with this knowledge, and without the least effort made to correct the mistake, or to expose the fraud, and escape from the payment of the money based upon its successful accomplishment. Under these circumstances, we cannot see but that this payment was substantially a voluntary payment, after knowledge of all the facts, and no cause of action could survive such a payment.

The judgment should be affirmed, with costs.

All concur.