Matthews v. Cady

Headnote

This action, as the complaint was interpreted by the commission, was to recover back the purchase-money paid upon a contract for the sale of certain stock by defendant to plaintiff, on the ground of fraud and a consequent rescission of the contract. The agreement was for the sale of fifty shares for $5,000. The defendant delivered twenty-five 'shares. Ho fraud was proved on the trial, and defendant moved for a non-suit. The court held that the action could not be sustained

as one of fraud, but that as it appeared that defendant had only transferred twenty-five shares, while the agreement was for fifty, plaintiff could recover damages for breach of the contract. Held, error; that the action, if one ex delicto, could not be changed to one ex contractu. ( Walter v. Bennett, 16 N. Y., 250 ; Townsend v. Hendricks, 40 How. Pr., 143 ; Boss v. Mather, 51 N. Y., 108 .)

The cases of Conaughty v. Nichols ( 42 N. Y., 83 ) and Graves v. Waite (59 id., 156 ) distinguished.

But that the better view of the case was to treat the action as one based upon the implied assumpsit to pay back the $5,000, the contract having been rescinded for fraud; that under such a complaint plaintiff could not recover for the breach of a valid, unrescinded contract; in other words, plaintiff could not enforce a contract which is alleged not to be in existence.