Case Name: NOVOTNY v. KOSLOFF
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-12-05
Citations: 144 N.Y.S. 652
Docket Number: 
Parties: NOVOTNY v. KOSLOFF.
Judges: 
Reporter: West's New York Supplement
Volume: 144
Pages: 652–655

Head Matter:
(159 App. Div. 478.)
NOVOTNY v. KOSLOFF.
(Supreme Court, Appellate Division, First Department.
December 5, 1913.)
Arrest (§ 15 )—Grounds—Fraud in Incurring Liability.
Under Code Civ. Proc. § 549, subd. 4, providing that defendant may be arrested in a civil action, upon contract, where it is alleged in the complaint that defendant was guilty of fraud in contracting or incurring the liability, but that where such allegation is made plaintiff cannot recover unless he proves the fraud on the trial of the action, and that a judgment for defendant is not a bar to a new action to recover upon the contract only, the liability referred to is that flowing from a breach of the contract upon which the action is based and not a liability for deceit in inducing the contract, since there could hardly be a right of action upon contract after a judgment for defendant if plaintiff must rescind the contract and sue for damages for the fraud in order to hold the defendant liable for the fraud in contracting or incurring the liability.
[Ed. Note.—For other cases, see Arrest, Cent. Dig. §§ 40-43; Dec. Dig. § 15.*]
Ingraham, P. J., and Scott, J., dissenting.
Appeal from Trial Term, New York County.
Action by Vlasta Novotny, an infant, by Marie Novotny, her guardian ad litem, against Theodore "Kosloif. From a judgment for plaintiff and an order denying a new trial, defendant appeals.
Affirmed.
Argued before INGRAHAM, P. J., and CLARKE, SCOTT, DOWLING, and HOTCHKISS, JJ.
Jacob Manheim, of New York City, for appellant.
Roger Foster, of New York City, for respondent.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
HOTCHKISS, J.
I think the result the learned Presiding Justice has reached overlooks the language and intent of subdivision 4 of section 549, which reads:
"In an action upon contract, express or implied, where it is alleged in the complaint that the defendant was guilty of a fraud in contracting or incurring the liability."
It seems to me that the "liability" thus referred to is that flowing from a breach of the contract upon which the action is based and is not a liability for deceit in inducing the contract. The situation is somewhat anomalous, but as shown by the notes to section 549, Bliss (6th Ed.) the so-called Throop Code, enacted in 1876, separated the cases where the right to arrest depended exclusively on the nature of the action from those where such right depended on extrinsic facts, placing the former .in section 549 and the latter in 550, and expressly provided in cases of the latter class for excluding allegations of such extrinsic facts from the complaint. In 1879 the section was amended by requiring the allegations of fraud to be inserted in the complaint in all actions of the class described in subdivision 4. The reason for this change is not difficult to understand. It arose from the abuse of orders' of arrest, which were secured and upheld upon affidavits merely; the amendment gave the defendant the benefit of a jury trial upon what was usually the question of greatest practical importance in such cases, namely, whether a body execution should or should not issue. And, in order to protect the plaintiff in the ultimate recovery of his debt, it was further provided by the same subdivision that "a judgment for the defendant is not a bar to a new action to recover' upon the contract only."
In the light of the foregoing, I do not see how it is possible for one to have his action "upon contract," if, in order to hold_ the' defendant "guilty of a fraud in contracting or incurring the liability,"- he must rescind the contract and bring his action for damages.
The judgment and order should be affirmed, with costs.
CLARKE and DOWLING, JJ., concur.