Court Opinion

ID: 5496588
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:53:11.39931+00
Date Added: 2024-06-11T08:33:49.740562
License: Public Domain

Beady, J.
This action was brought upon a contract by which the defendants agreed to purchase the property of Stransky, Reiman & Aarons at a price named. It appears that the firm mentioned failed in the month of March, and the merchandise owned by them was sold under execution. Before the sale Reiman and the defendants agreed to go into business together, and to purchase the stock of the firm; the defendants agreeing that, in case they should buy the stock for less than 90 per cent, at the auction, they would nevertheless pay that sum for it. They purchased the stock at less than 90 per cent., but refused to carry out the contract which induced this action; the plaintiff claiming, as receiver of the firm, that he was entitled to the difference between the price paid at the auction sale and the price agreed upon, which was something like 50 per cent. The complaint charges upon the defendants, in connection with the contract, fraudulent conduct. For example, it is alleged in paragraph seventh of the complaint that under the agreement, to which reference has been made, the defendants, unlawfully conspiring to cheat and defraud the said firm of Stransky, Reiman & Aarons, attended the sheriff’s sale, and purchased the merchandise there sold; and that, still conspiring to the same fraudulent ends, the defendants were guilty of certain conduct, and that by reason of the matters and things charged the firm named were damaged to the extent of $30,000, which the plaintiff, as receiver, claimed the right to recover.
The cases of Harway v. Mayor, 4 Thomp. & C. 167, and Sheahan v. Shanahan, 5 Hun, 461, cited on behalf of the plaintiff, do not sustain the proposition that in such a case as this the allegations of fraud are necessary, or are to be tolerated; and for the reason that, assuming the facts in regard to the contract as alleged to be true, it is not necessary, in order to establish the plaintiff’s claim, to show in addition fraudulent devices of any kind whatever. The averments amount to a contract made and broken, and the right to maintain the action depends upon these elements, and these elements alone. The cases mentioned do not present any of these characteristics. In Sheahan v. Shanahan, for example, the defendant claimed that the judgment was erroneously recovered, because the complaint was for a wrongful conversion of property, while the cause of action established by the evidence was on contract. The general term held that the foundation of the claim made by the plaintiff was an express contract, and, although the breach of it was alleged in terms characterizing the defendants’ failure to perform as wrongful, it was still no more than a non-performance of the agreement alleged to have been made, and that these allegations of wrong did not change the action from one on contract to one in tort. This case is really an authority for the proposition that the allegations of fraud were unnecessary for the plaintiff’s recovery. It may be said, perhaps, with propriety, that a deliberate refusal to carry out a contract necessarily involves the element of fraud; the refusal being prima facie unjustifiable, and therefore in violation of law. For these reasons it is thought that the order in the court below should be reversed, and an order entered directing the allegations of fraud to be stricken from the complaint as redundant. This disposition of that part of the appeal disposes also of the attempt to compel the plaintiff to elect whether he will proceed upon the contract alone or upon the alleged fraud.
The attempt to obtain an order directing the plaintiff to elect whether he will rely upon the cause of action herein for damages to Alexander Reiman individually, or for damages to the firm of which he was a member, must fail. The receiver seems to be invested with all the property of the firm, and this action is broad enough to embrace all the damages that may be urged by either of them, growing out of the cause of action alleged. Order appealed from should be reversed, without costs. All concur.