Court Opinion

ID: 5213792
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:18:30.428023+00
Date Added: 2024-06-11T08:27:24.470071
License: Public Domain

Houghton, J. (dissenting):
I dissent. The complaint simply alleges that the plaintiffs made a “mistake of fact” in paying to the defendants $24,906.25 for.the twenty-five Yankee Fuel Company bonds delivered by the defendants to them. . Ho mutual mistake is alleged, and no mistake on the part of the plaintiffs coupled with fraud on the part of the defendants is plead, and, therefore, the plaintiffs are in no position to sustain their judgment on the ground that there was mistake on their part and fraud on the part of the defendants. The plaintiffs chose their allegation and the court charged that they must recover, if 'they recovered at all, under the allegation of the complaint, and on the ground that there was a material mistake of fact on the part of the plaintiffs only. In the course of the defendants’ requests “ fraud and collusion ” was referred to . and the court replied that there was no issiie of fraud and that the action was predicated only upon a material mistake of fact on the part of plaintiffs. Such *621being tlie allegation and coui’se of trial of the action, the judgment must be tested accordingly. Valentine was in the employ of the plaintiffs as outside stockman, but his employment gave him the right, as testified to by one of the plaintiffs, to engage in outside bond business on his own account. He had formerly been in the employ of" the defendants and had sold Yankee Fuel Company bonds, the issue of which defendants were placing on the market. Under his employment by the plaintiffs, if he could make anything for himself in the sale of these or any other bonds, he had the right to retain for himself whatever compensation he might receive. He negotiated with the defendants to purchase twenty-five of the bonds at ninety and told them to bill them to the plaintiffs at ninety-eight, the defendants to pay him the difference as his commission. The defendants did, bill to the. plaintiffs twenty-five of the bonds at ninety-eight, and sent them by a messenger to the plaintiffs, with direction to collect on delivery. Valentine was present and told the plaintiffs that he had sold these- bonds to a man by the name of Spingarn, who was responsible and who would pay for them immediately. The plaintiffs hesitated about giving their check to the defendants for the bonds until they had received the check of Spingarn, but on Valentine’s assurance that it was all. right they did give their check to the defendants. Valentine- deceived the plaintiffs, and Spingarn had not agreed to purchase and would not take them. The bonds were, therefore, left on the plaintiffs’ hands, arid the defendants refused to take them back and repay the money. Valentine applied immediately to the defendants for his commissions, the difference between ninety and ninety-eight, and they paid tó him $2,400 and claimed to have passed the . balance on to the Yankee Fuel Company. Of course,"there was fraud on the part of Valentine, and possibly, under appropriate allegations, the plaintiffs might be able to show that the defendants participated in it. There is no proof and could be none under the allegations of the complaint and rulings of the court that the defendants knew of Valentine’s representations to the plaintiffs. Hor is there any proof, so far as defendants are concerned, that the plaintiffs were acting as a mere clearing house in accepting and paying for the bonds. The defendants might have thought that the plaintiffs were not buying, but there is no evidence that they knew to whom Valentine was to sell. So far *622as disclosed, all that the defendants knew was that the bonds were to be delivered to the plaintiffs, and that the money for them was to be paid on their delivery.
The only mistake the plaintiffs made' was in relying on Valentine’s representations and in paying for the bonds before they ■ received the check of, his alleged customer. Valentine was-not acting as agent for the defendants as sellers, nor for the plaintiffs as buyers. He was simply carrying on his individual bond business, which, under his employment with the plaintiffs, he had a right to do. If Spingarn had taken the bonds and repaid plaintiffs, they could not have complained because of Valentine’s commissions, for they belonged to him. The fact that they acted under a mistake in taking his word and in believing his representations that he had sold the bonds, and that the purchaser would immediately pay for them, gives theurno right to relief from such mistake as against these defendants. The plaintiffs rely on Hathaway v. County of Delaware (185 N. Y. 368) and Sharkey v. Mansfield (90 id. 227) and Lawrence v. Am. Nat. Bank (54 id. 432), and kindred cases, which hold that when one party pays money to another to which he is not entitled, he may recover it back although the mistake was not mutual and no fraud was perpetrated. It is true that an action lies for the recovery of money so paid under certain circumstances In all of the cases so holding, overpayment or a wrong payment was made through error in assuming the amount was due when it was not, and the mistake occurred in the dealings between the parties themselves, or, as in the Hathaway case, in paying in reliance upon a forged instrument which was repudiated because it was not genuine.
In the present .case the mistake was not between the plaintiffs and the defendants, but between the plaintiffs and Valentine and in taking his word. There could be no security in dealings with respect to stocks and bonds if they could be. delivered'and paid for on the supposition that a customer stood ready to repurchase, if on the customer failing to purchase the money could be recovered back on the ground of mistaken judgment. The defendants expected and had the right, to expect that their bonds would be paid for on delivery. The plaintiffs knew they were paying for them, and that they could not get delivery unless they did. There was no mistake *623between the parties themselves, for no more than was due to the defendants was paid to them, and the plaintiffs knew that fact. Under the allegations of the complaint to which the plaintiffs were held on the trial, I do not think the judgment can be sustained, and I, therefore vote for a reversal.
Scott, J., concurred.
Judgment and order affirmed, with costs.