Case Name: OBED WHEELER and ALFRED H. PETERS v. JAMES FRENCHE
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1871-02-04
Citations: 1 Jones & S. 63
Docket Number: 
Parties: OBED WHEELER and ALFRED H. PETERS v. JAMES FRENCHE.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 33
Pages: 63–66

Head Matter:
OBED WHEELER and ALFRED H. PETERS v. JAMES FRENCHE.
I. Arrest. Order of, when not granted.
1. Hot granted in an action commenced by summons for a money demand on contract, on affidavits showing a balance remaining due on an indebtedness, or an obligation, of the defendant to the plaintiff after the sale by plaintiff of collateral securities belonging to defendant, that plaintiff was induced to delay the sale of the securities by fraudulent representations of the defendant; and that by reason of the delay the deficiency was caused.
Before Monell, Jones and Spencer, JJ.
Decided February 4, 1871.
This is an appeal from an order denying a .motion to vacate an order of arrest.
The action was commenced by the service of a summons for a money demand on contract issued under subdivision 1 of section 129 of the Code. Ho complaint was served with the summons, nor has one yet been served.
The order of arrest was granted on an affidavit made by Alfred H. Peters, one of the plaintiffs, and one made by one Adolph Obrig. . °
The affidavit of Peters set forth that defendant was introduced to the plaintiffs by said Obrig, for the purpose of buying and selling stocks through these plaintiffs as brokers ; that Obrig was plaintiffs’ agent in their business of stock brokers.
It then proceeds in the following language:
“That it was the duty of said Obrig as such agent to inquire and ascertain the responsibility and solvency of the customers procured by him for them, the said plaintiffs.
“That on June 8, 1869, these plaintiffs had ex pended a large amount of money, and performed work, labor and services for and on account of and at the request of the defendant, for which these plaintiffs held certain railway and mining shares of stock of the defendant, more fully described in Schedule “A,” hereto annexed, as collateral security for such money expended, and labor, work and services performed as aforesaid.
“ That certain of said stock so held as collateral security, to wit, the three hundred shares of stock known as the common stock of the Mariposa Mining Company, and one hundred shares of stock known as the preferred stock of the Mariposa Mining Company, began to depreciate on said day, thereby endangering and impairing the security for the indebtedness to these plaintiffs.
“That the said plaintiffs, being unwilling to give credit to the. said defendant, unless fully protected by collateral security, on June 8, 1869, caused notice to be given to the said defendant to advance money or give additional security to these plaintiffs to secure them against any and all losses which might be sustained by reason of the depreciation of the security held by them.”
It then sets forth that defendant made certain representations to said Obrig as to his means and the property owned by him.
It then proceeds as follows :
“That the said Obrig immediately and on said day informed these plaintiffs of the representations of said defendant, and that then these plaintiffs, relying -upon the truth of the said representations made to the agent of these plaintiffs that he was solvent and owned real estate, and had cash, did not sell out the said stocks of said defendant held as aforesaid until there was a difference of three thousand five hundred and thirty-three dollars and nineteen cents between the in debtedness owing these plaintiffs by the said defendant and the value of the said stocks, which said sum is now due and owing these plaintiffs. That said difference was caused by the depreciation of certain of the said stocks of the defendant.
“That but for the statements and representations of the defendant as aforesaid, that these plaintiffs could have protected themselves and would have suffered no loss.”
It then sets forth that the said representations made to said Obrig were each and every of them false and untrue* in every particular, “and were made for the express purpose of inducing plaintiffs to give credit to the defendant, and were made, as deponent believes, with intent to cheat and defraud the plaintiffs.”
The affidavit of Obrig, after setting forth that he was plaintiffs’ agent, and introduced defendant to them, then sets forth that defendant, on June 8, made to him the representations averred in the affidavit of said Peters, and that he on the same day communicated the same to plaintiffs, “as he was in duty bound to do.”
A motion to vacate the order of arrest was made on the papers whereon it was granted. The motion was denied, and from the order of denial the present appeal is taken.
Anderson & Ellis, for appellant.
G. W. Van Slyck, for respondent.

Opinion:
By the Court.—Jones, J.
From the plaintiffs' affidavit it appears that the debt or obligation upon which there remains a balance due was wholly incurred prior to the making of the representations which are alleged to be false and fraudulent. That indebtedness consequently was not contracted or incurred through those fraudulent representations.
Unless, therefore, an action ex delicto for deceit will lie to recover as damages the difference between the plaintiffs' advances and the proceeds produced by the sale of the collateral security, on the ground that such deficiency was caused by the delay to sell through plaintiffs' reliance upon the alleged false representations of the defendant; and unless this is such an action, this order cannot be sustained (Smith v. Corbiere, 3 Bosw., 634, decided April 23, 1859 ; Code, § 179, as amended in 1863). It is unnecessary to determine whether an action for deceit will lie to recover this difference, for the present action cannot oh this motion be regarded as such.
The summons is for money demand on contract. jSTo complaint has yet been served. The summons will not authorize a complaint as for an action ex delicto. We must, therefore, assume that the complaint when served will be for a cause of action ex contractu, counting on the debt which was contracted before the making of the representations. If the complaint should happen to be for a cause ex delicto, counting on the decéit, it would on motion be set aside as being a departure from the summons.
Order appealed from reversed, and order of arrest vacated, with ten dollars costs.
Note.—Since the decision of Smith v. Corbiere, section 179 has been amended by the act of 1863 (Laws of 1863, p. 658).
Since that amendment, a defendant can be arrested in an action to recover damages for fraud or deceit, without showing either that he is a nonresident of the State, or is about to remove therefrom.