Sanger v. Wood — 3 Johns. Ch. 416

Majority

p. 416

Sanger and others against Wood.

June 29th, and August 24th.

Headnote

Where the plaintiffs sued the defendant on his contract at law, and a few days before the trial of the cause, discovered facts amounting to a fraudulent concealment by the defendant; but proceeded to take a verdict, for the amount claimed, on which judgment was entered up; and, they, afterwards, filed their bill, in this court, for relief against the contract, on the ground of the fraud; Held, that by going to trial, and taking judgment, the plaintiffs had made their election of their remedy at law; and the remedies at law and equity being inconsistent, they were bound by that election.

Any decisive act of the party, with knowledge of his rights, and of the fact, determines his election, in the case of inconsistent remedies.

THE bill stated, that in April, 1812, the plaintiffs and defendant, by purchase at a sheriff’s sale, were tenants in common of a moiety of a grist mill, saw mill, and carding machine, and about 40 acres of leasehold estate adjoining thereto, in lot 98, in Manlius, and the proportions of interest of each were stated in the bill, those of the plaintiffs amounting together to 2,128 dollars, and 48 cents, and that of the defendant to 1,203 dollars, and 50 cents. The defendant was owner of the other moiety, and it was agreed that he should take charge of, and demise the estate. On the 1st of October, 1812, the defendant demised the whole to Wm. Warner, for two years, at a rent of 700 dollars per annum, one year’s rent being paid in advance.

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Warner soon after absconded; and on the 30th of JVoyem her, 1814, the defendant, with the assent of the plaintiffs, sold the premises to Jonathan Jones, Jacob B. Merrick, and Charles Merrick, for 6,500 dollars, payable by instalinents in ten years, with interest, and the purchasers took possession of the premises. The bill further stated, that the defendant represented to the plaintiffs the impossibility that the purchasers would ever pay for the property, and the plaintiffs were thereby induced to sell their interest in the premises to the defendant, for 866 dollars, being less than half of the amount at which it had been valued; and the parties signed a memorandum of this sale on the 4th of September, 1815, in which it was agreed, that all rents due from Warner, or for the premises, or recoverable from Jones 8f Merricks, on rescinding the sale to them, should be divided between the parties, in the same manner as if the sale had not been made; and “if the sale to Jones 8f Merricks could be enforced, it is to be.”

That the plaintiffs have lately discovered, that before, or about the time the first instalment on the sale to Jones Sf Merricks became due, in the autumn of 1815, Jones offered to the defendant to make payment of the 6,500 dollars, in window glass, at the wholesale price, and to give good security for that amount, with interest. That W. Soulden fy Co., by letter, offered the defendant security to perform any terms of payment Jones should make, payable in window glass; and on-fiie 16th of February, 1816, the agreement was reduced to \vriting, and executed by the defendant, and W, Soulden fy Co., by which the latter covenanted to pay the defendant 6,500 dollars, and interest, then amounting to 7,000 dollars, in window glass, at the wholesale price; viz. 1,400 dollars in hand, and the like sum yearly, for four years, with interest; and to give his bond, and a mortgage on the premises, as security; and that to indemnify W. Soulden Co., it was agreed between -he defendant and Jones, (who had become solely interest

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ed in the purchase by him and the Merricks) that the deferidants should convey the premises to W. Soulden 8{ Co,, and the defendant exonerated Jones from any claim for the purchase money", or for the use and occupation of the premises, from the time of the sale to Jones fy Merricks in 1814, to the 16th of February, 1816. That the defendant received the 1,400 dollars of W. Soulden 8f Co., on the contract. That the defendant concealed from the plaintiffs that he had obtained any security from W. Soulden fy Co., for the moneys due, on thfe sale, to Jones 8f Merricks ; and on the 29th of April, 1816, applied to the plaintiffs to carry into effect the contract of sale of the 4th of September, 1815, on the ground and pretfencethat the contract of-sale to Jones 8f Merricks had failed. That the defendant was then bound, by his situation and agency, to have made a full disclosure to the plaintiffs of the subsisting contract with W. Soulden Co. and of his agency therein ; but the plaintiffs were left in ignorance of the fact, and were led to believe from the prior representations of the defendant, that all prospect of payment from Jones fy Merricks was hopeless; and that the matter remained in ’ the same situation as on the 4th of September, 1815 ; and' the plaintiffs executed &'release, dated 29th of April, 1816, to the defendant, of all their interest in the premises, underfhe agreementof the 1st of April, 1812, upon the terms of* the agreement of sale of the 4th oí Séptentber, 1815. That continuing in ignorance of the defendant having obtained the security from IF Soulden Sf" Col, the plaintiffs sued the defendant at law, for the moneys due ' under the agreement of the 29th of April, 1816, and the cause was tried at the Madison circuit," in i 817. That a "■ few days before the" trial; the plaintiffs obtained some information of the fraud of the" defendant;' in suppressing all information of the security given to 1pm by IF Sodden Co., and the plaintiffs, at the trial, offered" to prove the facts above stated, to establish the fraud; but the

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judge before whom the cause was tried, was of opinion, that the plaintiffs’ remedy was in Chancery; and directed a verdict to be taken for the plaintiffs, for the balance of rent received by the defendant of W. Warner, being 116 dollars, and 6 cents, due the plaintiffs, and for the sum of 866 dollars, mentioned in the agreement of the 29th of April, 1816. That the plaintiffs waive all claim at law to the moneys so recovered, except for the rent, and submit their claim to the court; and'prayed, that they may be relieved froto the release made by them to the defendant, and be let in to the benefit of the security given by W, Smldenfy Co. to the defendant; and that the defendant may account for all sums received by him, or reserved on any lease of the premises, &c.

The defendant, in his answer, denied, that he was ever the agent of the plaintiffs, in relation to the premises. He admitted, that On the 30th of November, 1816, he agreed to sell the premises to J., M. 8f Jkf. for 6,500 dollars, payable to instalments, with interest^ and that the contract óotoprises the whole interest of all the parties; but he denied that he made this agreement with the assent Of the parties, of either of them; or that he made if as agent of the plaintiffs; but acted in his individual capacity, and covenanted to lease the premises for the remainder of the term which he and the plaintiffs had in the same, and that the plaintiffs should execute the lease. The defendant alleged, that the inability of J., M. fy M. to perform their contract was known to the plaintiffs; and that the plaintiff G. proposed a division and sale Of the premises, on the ground Of that inability ; and that the property was, accordingly; advertised for sale, at auction,* by all the parties; and the defendant, as the highest bidder, purchased it, at- 2,-705 dollars; and the parties, afterwards, executed the memorandum of the agreement Of the 4th of September, 1815. That he never- received- any payment of J,- M- fyM-, nof any rent'; that conceiving that

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the plaintiffs had no interest in the contract with W. S. 4' Co. he did not inform them of it; and denies any fraudulent intent or concealment, &e.

June 29th.

August 24th.

The cause came on to be heard on the bill and answer; and was argued by Wells, for the plaintiff, and Riggs, for the defendant.

If the plaintiffs had done nothing to affirm the contract of the 39th of April, 1816, after* the agreement between the defendant and W. Soulden 4* Co. had come to their knowledge, I should have been strongly inclined to relieve them from that contract. It is true, the allegation of fraud, and of any direct and authorized agency, on the part of the defendant, is denied in the answer; and we have no other proof in the case but such as the answer and the documents mentioned in the pleadings afford. But, from those documents, I am induced to think, the defendant was bound to have disclosed to the plaintiffs,'in April, 1816, his prior dealings with Soulden, as well as the new agreement with Jones, of the January preceding. The relationship between the parties arising under the original contract of 1813, and the agency which the defendant, in fact, assumed in the management and disposition of the entire interest of all the parties, imposed upon him the duty of a frank and full disclosure of the whole case, when the parties came to a final conclusion of their concern, in April, 1816. If the contract, of the 4th of September preceding, had been definitive and absolute, then the defendant Would not have been under any obligation to disclose his subsequent negotiations with Jones arid with Soulden, who came in to assist Jones. But that contract of sale was .Hot absolute, for it was expressly declared, that in case the sale to Jones 4 Merricks, could be enforced, it was to be, and the contract in that case to be .void. The plaintiffs ought to have been informed what Jones had since done, and what Soulden had since promised, so

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ihat they might have exercised their judgment on the question, whether the original agreement could have been enforced, and how far the substitution of Soulden Co. was a mere continuation (as I think it was) of the original agreement.

For these reasons, I should have been inclined to have relieved the plaintiffs. The case, however, as it appears before me, is not of a very gross kind, or one presenting claims for any extraordinary indulgence. In my opinion, the plaintiffs may justly be considered as having elected to take their remedy at law under the contract of April, 1816. The bill states that the plaintiffs sued at law un» der that last contract, and which was, of course, in aErmance of it; and that, a few days before the trial at the Madison circuit, they discovered, the fraud now set up as a ground to rescind that contract. And yet, notwithstanding that discovery, they go to trial in the suit on that contract, and take a verdict for the moneys due from the defendant under it, and, afterwards, judgment is entered up by them on that verdict; and, in April last, they even apply to this court for leave to take out execution at law on the judgment so recovered. The last motion was, indeed, made on the ground that it might not prejudice their rights in this suit, but I am induced to think they had already waived those rights by their previous proceedings. The suit at law, and the action here, are inconsistent with each other, since the one aErms, and the other seeks to disaErm, the contract in question. It is probable the amount of the judgment may have been already collected, and the plaintiffs could not, for a moment, be permitted to keep the moneys recovered under that contract, if they should succeed in their bill to have it annulled. In a case where the remedies sought are so absolutely repugnant to each other, the plaintiffs ought to have made their election at once, after they came to the knowledge of the facts. If they meant to have disannulled the contract of April.

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1810, then it was vexatious, as well as. useless, to have gone on to a trial, and judgment and execution. They had no right to try the experiment how much they could recover at law under the contract, (for the bill admits the suit at law was brought upon that agreement,) before they elected to waive it, and then retaining their .verdict and entering judgment' at law, apply to this court to. set the contract aside, This proceeding would-be giving the plaintiffs a double advantage, apd is unreasonable and inadmissible,

Any, decisive act of the party, with knowledge of his rights and. of. the fact, determines his.election in the case of conflicting and inconsistent remedies. If he take, out a commission of bankruptcy, he cannot sue the. bankrupt at law, for-, that, would be again superseding, the: commission, (Ex parte Ward, 1 Atk. 153. Ex parte Lewes, 1 Atk. 154.) So,chapging-a.party in.an execution.atlaw after a. cqn\mission issued, is an election to take-the remedy at law,-and the party must abide-by it. (Ex parte Warder, 3 Bro. 191. Ex parte Cator, 3 Bro. 216,) So* again; ifa party, seeks relief iniquity by. bill waiving a.forfeiture - at law* though,he fail in, obtaining relief, he. cannot:,after-wards insist on the- forfeiture at law. (1 Sch & Lef. 441.)

There cannot be any doubt of. the principle, that-equity. will pot-relieve a party fully apprized of his rights, and de*. liberately confirming a former act. The doctrine has been again and again declared, (3 P. Wms. 294. note, E. &c. 1 Atk. 344. 1 Ball & Beatty, 340.) And ! consider the going- to trial, ip. the action .at law, and ¡especially the entry of judgment afterwards upon the verdict, as a decided'confirmation of the. settlement in April, 1816.

I shall,, accordingly, dismiss this bill-; but .from the opipionwhichl have.formed upon the.merits.of the transact tion,.I am not willing to,charge the plaintiffs..with-costs, ,apd 1 shall, consequently,, dismiss the bill without costs.

Order accordingly.