Court Opinion

ID: 5259490
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:38:23.633671+00
Date Added: 2024-06-11T08:28:03.555145
License: Public Domain

Dowling, J. (dissenting):
The complaint herein sets forth three causes of action. The defendant has demurred upon the ground that it appears upon the face of the complaint that it does not state facts sufficient to constitute a cause of action.
The allegations contained in all three causes of action set forth that defendant is a domestic corporation, which on August 18, 1917, succeeded to all the rights and assumed for value all the liabilities of a prior foreign corporation and at the same time defendant promised to pay all the debts of said prior corporation; and that in February, 1916, Mountford S. Orth was president of the defendant’s predecessor and as such conducted the negotiations with plaintiff; that on February 19, 1916, plaintiff and defendant’s predecessor *313entered into an agreement, “ which is hereby referred to and made a part hereof as fully as if herein set forth in full,” but which forms no part of this record. It is further alleged that on February 24,1916, plaintiff and defendant’s predecessor entered into an agreement, a copy of which is annexed to the complaint. This agreement bears date February 24, 1916, and is made between plaintiff and defendant’s predecessor. It recites that:
“ Whereas an Agreement entered into by the parties hereto on the 19th day of February, 1916, was based on some figures furnished by the party of the first part, which did not take into consideration the payroll of about Fourteen" Hundred Dollars ($1,400.00) to be paid this day at the Bayard Chemical Company’s plant at Woodbridge, N. J., and which showed cash on hand of about Twenty Five Hundred Dollars ($2,500.00), Now, therefore, it is agreed:
“ That the Agreement of February 19th, 1916, above referred to, is modified to the extent that the last payment of four equal monthly installments of Five Thousand Dollars ($5,000.00) each, shall be for Eleven Hundred Dollars ($1,100.00) instead of Five Thousand Dollars ($5,000.00). All the rest of the Agreement to be enforced as though this present Agreement had not been made.
“ In consideration of this Agreement by the party of the first part, the party of the second part is paying herewith the balance of the Seven Thousand Four Hundred and Forty-one Dollars and Fifty-four cents ($7,441.54) not paid by its check of Twenty Five Hundred Dollars ($2500.00) on February 19th, being Four Thousand Nine Hundred Forty-one Dollars and Fifty-four cents ($4,941.54).
“ In witness whereof the party of the first part has hereunto set his hand and seal and the party of the second part has caused these presents to be signed in its corporate name by M. S. Orth, its president, duly authorized so to do by its Board of Directors, this day and year first above written.
“ Witnessed “ by P. Fridenberg.
“ JOHN P. BOIARDI. HARDEN, ORTH & HASTINGS CO. “ H. S. Orth, “ President”
*314The first cause of action further sets forth:
“ Fifth. That it was not the intention of plaintiff by said agreement of February 24th, 1916, to remit to said Harden, Orth & Hastings Co. Inc., without consideration $3,900, and plaintiff entered into said agreement under a mistake of fact, to wit, that $2,500 had not been transmitted to Bayard Chemical Company, that a payroll of about $1,400 was due by him and that he was under an obligation to credit Harden, Orth & Hastings Co. Inc., with the sum of $3,900, which said mistake of fact occurred through accident and through no fault on the part of plaintiff and solely because of representations to plaintiff by said Harden, Orth & Hastings Co. Inc., that the said sum of $3,900 was due from plaintiff.
“ Sixth. That upon the discovery of the mistake aforesaid, plaintiff promptly notified Harden, 'Orth & Hastings Co. Inc. thereof and demanded said sum of thirty-nine hundred ($3900) dollars, but no part thereof has been paid, and there is now due and owing to plaintiff from said Harden, Orth & Hastings Co. Inc. the said sum of thirty-nine hundred ($3900) dollars.” The prayer for relief follows the statement of the three causes of action and is as follows:
“ (1) That said agreement of February 24th, 1916, be adjudged fraudulent, of no effect and void and that it be delivered up to be cancelled.
“ (2) That an accounting be had as to the transactions between plaintiff and defendant and that on such accounting defendant be decreed to pay to plaintiff the sum of thirty-nine hundred ($3900) dollars with interest thereon from February 24th, 1916.
“ (3) That plaintiff have such other and further relief as to the court may seem just and proper, together with the costs and expenses of this action.”
I am of opinion that although this cause of action is very unsatisfactorily stated, yet by a liberal construction of the pleading, it may be upheld. This is upon the theory that it is intended to state a cause of action in equity, arising from mistake of fact upon the part of plaintiff, and misrepresentation of fact innocently made upon the part of defendant’s predecessor, constituting legal fraud. The first element is sufficiently pleaded, that plaintiff entered into the agreement *315under a mistake of fact. The second element, I think, maybe held to be the fair meaning of the allegation that the mistake occurred through accident, through no fault upon the part of plaintiff and solely because of representations made to plaintiff by defendant’s predecessor. This excludes any theory of actual fraud since it is not charged that the false representations were made with intent to deceive, of that defendant’s predecessor knew them to be false. I think this cause of action, therefore, should be held good, as one cognizable solely in equity and from which no relief could be had at law. (Leary v. Geller, 224 N. Y. 56; Bloomquist v. Farson, 222 id. 375; Canadian Agency, Ltd., v. Assets Realization Co., No. 1, 165 App. Div. 96.)
The second cause of action contains further allegations that the .agreement of February 24, 1916, was' obtained from plaintiff by defendant’s predecessor by fraud, deceit and misrepresentation, setting forth the specified misrepresentations; that all data concerning the transactions as to which the misrepresentations were made were in the possession of defendant’s predecessor upon which plaintiff relied and so relying executed said agreement; that the representations were all false and were known to be false when made by defendant’s predecessor which made them with intent to defraud, cheat and deceive plaintiff, and that the instrument was obtained through fraud and deceit.
It may well be that the allegations of the complaint set forth two good causes of action at law, each to recover the sum of $3,900. The recitals of the agreement of February twenty-fourth sufficiently show that a last payment of $5,000 required to be made by the agreement of February nineteenth had been mistakenly reduced to $1,100 by reason of defendant’s acts, thus showing the damage claimed. Yet even if the averments do set forth two distinct causes of action at law, they also set forth causes of action in equity to procure the cancellation of an instrument under seal, which on its face constitutes a bar to plaintiff’s right to recover the full amount due him under the agreement of February 19,. 1916, and he should not be relegated to his right to interpose a defense to the agreement of modification when pleaded as an answer to his complaint based on the original agreement. (Ritzwoller v. *316Lurie, 225 N. Y. 464.) Nor does the fact that plaintiff demands a judgment to which he -is not entitled (for an accounting as to which no sufficient facts are pleaded) destroy his right' to the judgment which he. also demands and for the cancellation of the second agreement.
The third cause of action sets forth that the agreement in question was without consideration, and that defendant’s predecessor breached it and failed to perform its part thereof. I am of opinion that no cause of action is therein' stated.
As, however, the demurrer is to the complaint as an entirety and in my opinion the first and second causes of action are good and proof against demurrer, the order appealed from should be affirmed, with ten dollars costs and disbursements.
Order reverséd, with ten dollars costs and disbursements, motion denied, "demurrer sustained and complaint dismissed, with ten dollars costs and costs before notice of trial.