Bach v. Tuch — 7 N.Y.S. 611

Majority

p. 611

Bach et al. v. Tuch.

(Supreme Court, General Term, First Department.

November 7, 1889.)

Headnote

Sale—Rescission oe Contract—Replevin. .

In an action for the price of goods sold, an attachment was issued on an affidavit which alleged that the sale was made in reliance on defendant’s representations as to his financial condition; which representations were false, and must have been known by defendant to be false when he made them. The attachment was issued on the ground that defendant had made an assignment in fraud of his creditors. Plaintiffs afterwards discontinued this action, and brought replevin for the goods. Held, that plaintiffs’ right to maintain replevin depended solely on whether they knew, when they sued for the price of the goods, that defendant had purchased the same with a fraudulent intent; and an instruction which went beyond this, and made plaintiffs’ right to depend partly on their knowledge of their legal right to rescind the sale, and partly on the fact whether plaintiffs were aware of their remedy by replevin, was erroneous.

Motion for new trial on exceptions.

Replevin by Elias Bach and another, survivors, against Simon Tuch, for a quantity of merchandise alleged to have been purchased by defendant’s assignor by fraudulent representations. Defendant moves for a new trial, on exceptions ordered to be first heard at the general term.

Argued before Van Brunt, P. J., and Brady and Daniels, JJ.

B. F. Einstein, for plaintiff. Alfred P. W. Seman and Edmond E, Wise, for defendants.

This action was before this court, upon an appeal by the plaintiffs, in 1888, and the judgment which had then dismissed the complaint was reversed, and a new trial ordered. Bach v. Tuch, 47 Hun, 536 . It was then considered that the right of the plaintiffs to maintain the action depended upon a question of fact, to be submitted to the jury. It was brought to recover the possession of 21 cases of leaf tobacco, which had been sold by the plaintiffs’ firm to Rudolph Moeller, the assignor of the defendant, Tuch; and 17 of these cases had been replevied in the suit. To maintain the action, evidence was given tending to show that the assignor had misrepresented his financial circumstances at the time when he applied to the plaintiffs’ firm for the purchase of the tobacco, and that, instead of being a man of responsibility, lie was at the time insolvent. The defense in the action consisted of the fact that the plaintiffs’ firm commenced an action in December, 1885, for the purchase price of thé tobacco, and issued an attachment in that action against the property of the purchaser. In the affidavit upon which the attachment was issued, it was stated by one of the firm that the purchaser had represented that he was worth the sum of $12,000, over and above his debts and liabilities, and was perfectly solvent; and that the sale was made in reliance upon the truth of that representation. It was then added “that said statement and

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representation, so male as aforesaid, were false and untrue in every particular; and this defendant must have known that the same were untrue when lie made the same to deponent.” The attachment was not issued on this ground,' but it was issued upon the charge that the debtor had made a fraudulent assignment to cover up his property and remove it beyond the reach of his creditors, and for the protection of himself and his wife, who was preferred to the extent of $10,000; and that he had thereby removed and disposed of his property with the intent to cheat and defraud his creditors. The action in which the attachment was issued continued to be pending until the 20th of February, 1886, and then it was discontinued; and after that this action was brought for the recovery of the possession of the tobacco.

By these proceedings it has been contended, as it previously was, that the plaintiffs’ firm had elected to recover the price of the tobacco, and by such election had deprived themselves of the power afterwards to rescind the sale and recover the property; and no doubt has at anytime been entertained but that this was the legal result, if the firm had become aware of the fact, when the action for the debt was commenced, that the purchase had been fraudulently made by the assignor. Foundry Co. v. Hersee, 103 N. Y. 25 , 9 N. E. Rep. 487 ; Hays v. Midas, 104 N. Y. 602 , 11 N. E. Rep. 141 . But, while the affidavit upon which the attachment was issued stated that the representations were false in every particular, and must have been known to be so by the purchaser when he made the purchase, it was nowhere stated that there was any intention whatever on his part to deceive, or thereby defraud, the firm. That, it is true, could well be inferred from the fact that the representations were untrue, and were known to have been so by the purchaser of the tobacco. But that inference was neither ascertained nor stated by the member of the firm who made the affidavit upon which the attachment was issued; and it therefore did not appear that he, or his firm, had discovered, or in any manner come to the knowledge of, the fact that this fraudulent intent existed on the part of the purchaser; and that was essential, to conclude the firm by the action brought for the recovery of the debt. Without that discovery, and without that being the fact, the firm could not maintain an action to recover the possession of the tobacco; and it may be inferred not to have been made by the firm until the action in which the attachment had been obtained was discontinued. And, if that had not been previously discovered by the firm, or either of its members, it was not concluded, by the action for the debt, from taking proceedings upon its discontinuance for the disaffirmance of the sale. And whether the fact had come to the knowledge of, or been discovered in any form by, the plaintiffs that the purchaser was actuated by an intent to deceive and defraud them in the purchase of the tobacco, was the sole •question required to be submitted to the jury for the disposition of this part of the plaintiffs’ action. In its submission to the jury the direction extended beyond this. And the right of the plaintiffs to maintain the action was in part made dependent upon their knowledge of their legal ability or right to disaffirm the contract. In that direction the court proceeded further than the plaintiffs were entitled to have the jury instructed. It was also added, in answer to an inquiry made by the jury, that it was a question of fact whether or not the plaintiffs were aware of their remedy by replevin, when they brought their action by attachment. To these propositions submitted to the jury the defendant excepted; and these exceptions were well taken, for the ability of the plaintiffs to maintain the action to recover the possession of the tobacco was in no respect dependent upon the absence of their knowledge of the legal remedy which might be instituted and pursued for the recovery of the possession of the property. What was in the case, and all that was in it, on this part of the controversy, was the simple question whether this was a fraudulent purchase of the tobacco by the assignor, and whether the firm, or either of its members, had discovered the fraud at the time when the action for the

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recovery oí the debt was brought and the attachment was issued, or, after that discovery, proceeded with its prosecution. It is upon this inquiry, as a matter of fact, that the right of the firm to maintain the action has become dependent. Whether it was known to either of its members what the particular remedy would be through which the possession of the tobacco might be obtained, was not of the slightest consequence; and, as their knowledge of the existence of the remedy was in this manner brought into the case, and the verdict probably proceeded upon it, the verdict should be set aside, and a new trial ordered, with costs to the defendant, to abide the event.

Van Brunt, P. J. T concur in the. result. I am of the opinion that the averments of the affidavit in the attachment suit show that the plaintiffs knew of the fraud at the time that action was commenced, and hence, having sued for the purchase price with knowledge of the fraud, cannot now be permitted to rescind the sale.

Brady, J., concurs.

Cases cited

Equitable Co-operative Foundry Co. v. Hersee 103 N. Y. 25 N.Y. 1886-10-05 p. 612
Hays v. Midas 104 N. Y. 602 N.Y. 1887-03-01 p. 612