Court Opinion

ID: 5256920
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:30:48.496773+00
Date Added: 2024-06-11T08:28:01.411768
License: Public Domain

Smith, J. (dissenting):
In Bowen v. Mandeville (95 N. Y. 237) the defendant sold to the plaintiff a bond and mortgage, the payment of which he guaranteed. The mortgagor made default in payment of two installments, and the plaintiff sued him upon his guaranty and recovered judgment upon those two installments. Thereafter the plaintiff commenced an action to recover damages for fraud in the sale of the bond and mortgage, in misrepresenting the value of the property upon which the mortgage was a lien. The trial judge nonsuited the plaintiff upon the ground that the action was barred by the recovery in the suit upon the guaranty. The General Term of the Fourth Department reversed the order and granted a new trial. (29 Hun, 42.) The defendant then appealed to the Court of Appeals, where the order of the General Term was affirmed, the Court of Appeals holding that the two causes of action were not inconsistent. Of course, if they had been, then the plaintiff would have been put to his election and, having brought his suit for two installments upon the guaranty, he would have elected to look to the guaranty rather than to his right to recover damages for fraud. Holding, however, that the remedies were not inconsistent, the Court of Appeals held that he might still recover for the fraud after having recovered from the defendant two installments upon his guaranty.
The prevailing opinion here holds that the causes of action here stated are inconsistent upon the ground that the action for fraud can only be sustained by proof of the plaintiff’s reliance upon the representations of the defendant, and that proof of a provision in the contract as alleged, stipulating for certain damages in case of delay, would disprove the allegation in the cause of action for fraud that plaintiff relied upon the defendant’s representations.
The case of Bowen v. Mandeville is, as I read it, a complete answer to this proposition. In that case the assignee exacted the guaranty from the assignor of the bond and mortgage; nevertheless, the Court of Appeals held that the assignee might recover for the fraud of the assignor in making false representations as to the value of the property. If the exaction of the guaranty in the case cited did not disprove the reliance of the assignee upon the false representations of the assignor, *110the fact that provision for damages in case of delay was exacted in the contract here sued upon would not disprove the reliance of the plaintiff upon the defendant’s false representation in the case at bar. In the case cited, as in the case at bar, the pivotal question is whether the causes of action are inconsistent, and I agree with the opinion of the Third Department in the case of Taft v. Bronson (180 App. Div. 154), to the effect that a cause of action for fraud not based upon a rescission of the contract is not inconsistent with a cause of action upon the contract itself. I recommend, therefore, an affirmance of the order.
Order reversed, with ten dollars costs and disbursements, and demurrer sustained, with ten dollars costs, with leave to plaintiff to serve an amended complaint on payment of said costs.