Court Opinion

ID: 3583768
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:34:18.571055+00
Date Added: 2024-06-11T07:41:38.788078
License: Public Domain

I vote to reverse the order and interlocutory judgment so far as they sustain the defense of laches. Doubtless, laches may be a bar to certain actions in equity where the award of equitable *Page 132 
relief is discretionary or where the denial of such relief does not destroy the plaintiff's cause of action. Thus, specific performance of a contract may be refused for laches, for the award of that relief is discretionary and there remains to the plaintiff his right of action at law for damages. So, also, where a plaintiff appeals to equity to avoid a transaction that is merely voidable, the party must make his election to avoid within a reasonable time. In such cases the Statute of Limitations is not controlling. In the present case, however, the plaintiff does not seek to avoid the sale of the company's stock, but to recover damages for the wrongful acts of the individual defendants in disposing of it, and laches is expressly pleaded in the answer as a defense to the claim for damages. The claim for damages can be barred only by the same Statute of Limitations which would bar an action by the company for the same relief. (The question of what statute applies is not before us.) That proposition was decided by this court in Galway v. Metropolitan Elevated RailwayCompany (128 N.Y. 132), where it was held that laches as a defense to an action in equity was limited to actions of an equitable nature exclusively or to cases where the legal right had expired, and that as long as the legal right exists the party is entitled to maintain his action in equity. In this case the legal right is that of the corporation against the alleged wrongdoers, and the plaintiff's cause of action is derivative — not to enforce his individual right but that of the corporation.
I vote for also reversing the orders below so far as they sustain the defense of acquiescence. As a defense, acquiescence, pure and simple, is limited to that class of equitable actions in which the defense of laches is available. (See opinion of RUGER, Ch. J., in Galway v. Met. El. Ry. Co., supra, at p. 150.) Of course, acquiescence may be an element of and with other elements constitute ratification or estoppel. So, also, acquiescence at or *Page 133 
before the commission of the acts complained of might alone constitute an estoppel. But what is pleaded in the answer is subsequent acquiescence. For that to operate as an estoppel there must have been a duty to speak. The attendant circumstances set forth in the answer might estop the plaintiff from having the sale of the stock set aside, relief which he does not seek, but not from the recovery of damages for the benefit of the corporation, which he does seek. A defense which a party is permitted to plead in his answer must be a defense to the cause of action for which the plaintiff sues, not to a different cause of action, on which he does not sue.
HAIGHT, HISCOCK and CHASE, JJ., concur with COLLIN, J.; VANN and WILLARD BARTLETT, JJ., concur with CULLEN, Ch. J.
Order modified, etc.