Case ID: nys_6/html/0890-01.html
Source: Caselaw Access Project
Author: {"author": "Merwin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wallace et al. v. O’Gorman et al.
    
    
      (Supreme Court, General Term, Fourth Department.
    
    July 20, 1889.)
    Sale—Disaeeikmaece—Election oe Remedies.
    The bringing of an action of replevin by the vendor to recover possession of goods sold, on the ground that they were procured by fraud, is a disaffirmance of the sale, and bars a subsequent action to enforce an agreement, made contemporaneously with the sale, to give security for the purchase price.
    Appeal from special term, Oswego county.
    Plaintiffs sought to establish and enforce an equitable mortgage upon certain real estate of Dennis Murphy, the assignor of defendant O’Gorman. Plaintiffs are wholesale dealers in boots and shoes in the city, of New York, and they allege that in June, 1887, Murphy applied to them for the purchase of goods on credit, and that it was then agreed that plaintiffs would from time to time sell and deliver to Murphy goods as he should require in the prosecution of his business at Oswego, upon a credit of 60 days, and that, to secure the payment of the purchase price of such goods, Murphy would execute and deliver to plaintiffs a mortgage on certain real estate in the city of Oswego, and described in the complaint; that plaintiffs, relying on this agreement, did, between June 20th and December 28, 1887, deliver to Murphy goods on credit, at prices' agreed on, amounting in the aggregate to $1,944.73; that none of this has been paid; that Murphy, upon demand, failed to give the mortgage, and on January 12, 1888, he made a general assignment to defendant O’Gorman. Belief was asked, that Murphy be required to execute the mortgage, that the claim of plaintiffs be declared a lien prior to the title of the assignee and of certain judgment creditors made defendants, that the premises be sold and plaintiffs, out of the proceeds, be paid their claim, $1,944.73, and interest, and that Murphy be adjudged to pay any deficiency. Defendant O’Gorman answered, admitting that plaintiffs were partners, that Murphy was engaged in business at Oswego, and made an assignment to O’Gorman on 12th January, 1888, under which O’Gorman claims title to the real estate, and denying all the other allegations of the complaint. Upon the trial, one of the attorneys for plaintiffs, being upon the stand as a witness, was asked upon cross-examination whether immediately after the assignment he commenced for plaintiffs an action in replevin against defendants Murphy and O’Gorman for the recovery of the goods then unsold in the store of Murphy which had been sold to him by plaintiffs. This was objected to by plaintiffs* counsel “as incompetent and immaterial, and on the ground that it is not the best evidence.” The objection was overruled, and plaintiff's excepted. The answer was that an action was commenced on January 14th against O’Gorman individually as holding the goods; that all the goods that plaintiffs sold that remained in the store were taken by the sheriff and delivered to plaintiffs and still retained by them; that the amount of goods alleged in the affidavit was $1,944, and the amount taken by the sheriff and delivered to plaintiffs was $613; that the action is still pending and undetermined, being defended by the assignee. After plaintiffs closed their evidence, defendant offered in evidence the affidavit and requisition in replevin, the affidavit
    
      being made by Mr. Jacobs, one of the plaintiffs, and dated January 13, 1888, and the requisition dated same day. These were objected to “on the ground that it is wholly incompetent and immaterial and irrelevant.” The objection was overruled, and plaintiffs excepted. It was stated in the affidavit that plaintiffs were the owners of the goods, and entitled to the immediate possession, schedule being attached and amount being $1,944.98, and that they were wrongfully detained from plaintiffs by the defendant therein; that Dennis Murphy, at various times between the 19th June, 1887, and the 29th December following, by means of false and fraudulent representations as to his financial responsibility and otherwise, did wrongfully take and fraudulently obtain the same from the possession of plaintiffs, and that the defendant therein claimed to hold under an assignment from Murphy. The summons in the present action is dated April 5, 1888, and the goods referred to in the complaint are the same referred to in the replevin papers. The court, at special term, dismissed the complaint on the ground that the action in replevin for the recovery of the goods was a disaffirmance of the sale and a bar to the present action. The record shows that at the same term an order was entered in the case as follows: “This cause having regularly come on for trial at the above-named special term, and having been duly and regularly tried, ordered that the defendant O’Gorman in the above-entitled action be, and he hereby is, allowed to amend his answer nunc pro tune by alleging the pendency of the action of replevin, and proceedings therein as proved upon the trial, and the same is hereby amended accordingly, and ordered filed with the judgment roll herein.” In the notice of appeal this order is not specified.
    Argued before Hardin, P. J., and Martin and Meravin, JJ.
    
      Hastings <£- Gleason, for appellants. W. A. Voucher and J. It. O'Gorman, for respondents.
   Merwin, J.

It is claimed by the plaintiffs that the order allowing the defendant O’Gorman to amend his answer Avas improperly granted. As that order is not specified in the notice of appeal (Code, § 1301) it is not here for review, (Id. § 1316.) It is suggested by the plaintiffs that the order was ex parte. That the record does not show. Assume it to have been such, it was the duty of the plaintiffs, if the order was not satisfactory to them, to have moved at special term to vacate it, and then if satisfactory relief was not obtained the matter could have been brought up on appeal. During the progress of the trial, so far as the case shows, no amendment was asked for, nor Avas the evidence above stated objected to on tile ground that it was not admissible under the answer. It is suggested by the plaintiffs that if appliea-' tian for amendment had been made on the trial the complaint in the replevin case might have been put in evidence, or that it might have been shown that part of the fraud charged was the agreement to give a mortgage and that these circumstances would have affected the question. That is not so clear. The fact would have remained that an action in replevin was pending, Avhich was necessarily based on a disaffirmance of the sale and on the proposition that by reason of fraud no title had passed, so that in effect there was no sale or purchase of the goods. We must therefore assume that the answer was properly amended. The question then is as to the effect of the pendency of the replevin suit. The authorities are very clear to the proposition that a party, after dis-affirming a contract of sale and bringing a suit in replevin for the goods, has no remedy on the contract of sale. The cases are fully discussed in the opinion of Mr. Justice Williams at special term. Morris v. Rexford, 18 N. Y. 552; Bank v. Beale, 34 N. Y. 473; Rodermund v. Clark, 46 N. Y. 354; Kinney v. Kiernan, 49 N. Y. 165; Fields v. Bland, 81 N. Y. 239; Moller v. Tuska, 87 N. Y. 166; Powers v. Benedict, 88 N. Y. 605; Bowen v. Mandeville, 95 N. Y. 237; Wile v. Brownstein, 35 Hun, 68. In Moller v. Tuska, 87 N. Y. 166, it is said very pointedly, in regard to an action in replevin, that the plaintiffs, having on discovery of the fraud an election of remedies,—that is, either to disaffirm the sale and recover the property or sue for the price,—and having manifested their election by bringing the action to recover the property itself, could not thereafter revoke it and maintain a claim under the contract of sale. So in Wile v. Brownstein, 35 Hun, 68, which was in this department, where an action in replevin had been brought and a part of the goods obtained, and then a discontinuance under section 1719 as to those not found, and a new action brought for the balance of the goods apparently upon the original sale and delivery, it was held that the action could not be maintained. It is, however, claimed by the plaintiffs that the agreement for security will survive the disaffirmance of the sale so as to permit the security to be enforced for the portion they cannot reclaim in the replevin suit. Still, the mortgage was only to secure the purchase price of the goods sold. If the plaintiffs sold no goods to Murphy under the contract, a part of which was the agreement for a mortgage, they would have no standing here for the purpose of enforcing such agreement. If, as alleged in the replevin suit, the title to the goods never passed to Murphy, then Murphy is not indebted to plaintiffs for the purchase price of any goods, and there is therefore nothing within the operation of the agreement to give a mortgage. If, by reason of the replevin suit, the plaintiffs have rescinded the former contract of sale and have no cause of action on it for the price of any of the goods, as held in the Wile Case, then there is nothing for the mortgage to secure. There is no debt existing such as was contemplated to be secured. The agreement to sell, and the agreement to give a mortgage, were part of one transaction. The plaintiffs cannot rescind a part and enforce the rest. Had a mortgage in fact been given the question would perhaps be different. But now the mortgage cannot be compelled unless there is something for it to secure, according to the terms of the agreement. The only case cited by plaintiffs on this subject is Roberts v. Ely, 9 N. Y. St. Rep. 796. That does not help their position. It was there held that when a party has grounds upon wffiich to bring different actions arising out of the same state of facts against different persons, and the maintenance of one necessitates an allegation of a fact inconsistent with the maintenance of the other, the party having brought one and proceeded to judgment is bound by his election, and cannot proceed against the others, even though the judgment obtained fails to afford relief. We see no escape from the conclusion that the plaintiffs, having by reason of the pendency of the replevin action no remedy on the contract of sale of the goods, are not in a position to call for the enforcement of the agreement for security. It follows that the judgment must be affirmed, with costs. All concur.