Court Opinion

ID: 5224110
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:40:49.366949+00
Date Added: 2024-06-11T08:27:33.628281
License: Public Domain

Houghton, J. (concurring):
While it is better practice to vacate a judgment based upon contract before bringing an action to recover damages for fraud arising out of the same transaction, the existence of such judgment is not necessarily a bar to such action for the court can see to it that only one satisfaction shall be had.
As I view it. the crucial question in the present case is not whether an action can be maintained .while such judgment still exists, hut rather whether the plaintiff in his present action to recover damages for fraud has destroyed his allegations by pleading his" recovery of a judgment on contract without alleging that he obtained such judgment inadvertently and before he had knowledge of the falsity of the defendant’s representations upon which he relied.
With some hesitation I have come to the conclusion that the allegations with respect to the obtaining of such judgment are not fatal and that giving to the complaint the fair inferences to be drawn from the language used it states a good cause of action.. The known falsity of the representations, intent to deceive, belief and reliance of plaintiff thereon are sufficiently set forth. The plaintiff delivered the lumber after the defendant had given to him his written representations as to his financial responsibility. The fair inference from the allegations is that the plaintiff learned' of defendant’s insolvency for the first time on the examination in supplementary proceedings which were instituted under the judgment which he had obtained. If so he could not have known that the repre*57sentations which were made were untrue when he . obtained his judgment.- There was, therefore, no binding election to pursue his remedy against the defendant upon contract rather than upon fraud, because when he brought his action on contract he had no knowledge that the representations which had been made were false and, therefore, no reason to believe that the defendant had perpetrated any fraud upon him.
The facts are all set forth with respect to the damage suffered, and for the reasons stated I think the complaint was not demurrable and, therefore, concur in a reversal of the interlocutory judgment which was entered.
Interlocutory judgment reversed and demurrer overruled, with usual leave to plead over on payment of costs of Special Term and of this court.