Baker v. Zeigler — 31 N.Y. St. Rep. 466

Majority

p. 466

James H. A. Baker et al., App’lts, v. Louis Zeigler, Resp’t.

(Supreme Court, General Term, Second Department,

Filed May 12, 1890.)

Headnote

Contract—Rescission—Fraud.

In an action to rescind a contract for the sale of a kindling wood business, stock of wood and lease of premises on the ground of false representations and for damages, the complaint contained an offer to restore the property received. The court dismissed the complaint on the ground that plaintiff had used up the stock of wood and thus put it out of his power to make restoration. Held, error.

Appeal from judgment in favor of defendant dismissing the complaint

Action to obtain the rescission of a contract for the sale of a kindling wood factory.

Walter ¡S. Poor, for app’lts; Chas. J. Patterson, for resp’t.

The merits of this action were not tried. The action was brought to rescind an agreement for fraud and for

p. 467

damages. On the 1st December, 1888, the plaintiff entered into an agreement with the defendant whereby the plaintiff purchased a kindling wood business with the stock of wood on hand and the lease of the premises with the good will of the business for $9,000. Three thousand dollars was paid in cash and notes given for $6,000 with a chattel mortgage as security.

The plaintiff avers that the defendant falsely and with intent to deceive him misrepresented the extent of the business, the amount of the profits, the quantity of bundles of kindling wood a cord would make and the capacity of drying room to dry wood. That the representation was made to defraud and did defraud the plaintiff into making an agreement. The plaintiff on the trial gave evidence tending to deny the same. As it appears that the plaintiff had used up the stock of wood on hand and continued the business down to February, 1889, the court dismissed the complaint because the plaintiff had put it out of his power to make restoration and therefore this action could not be maintained.

The appeal presents simply the question of the accuracy of this ruling. The plaintiff was entitled to recover his damages for the fraud, even if he was not entitled to rescind because it was out of his power to restore.

All the facts showing a cause of action were given, and if the facts stated in the complaint entitled the plaintiff to relief, he would be entitled to it without regard to that named in the complaint. Getty v. Devlin, 54 N. Y., 403 .

The complaint was one to rescind, and offered to reassign and deliver the property acquired, and such a complaint was upheld even where complete restoration was impossible.

The court of appeals, in Gould v. Cayuga County National Bank, 99 N. Y., 333 use this language: “ But that one guilty of a fraud obtained complete immunity because time or circumstances had made impossible a restoration of the parties to their original condition seemed such a reproach to the law that we added a statement of the settled and undoubted rule that though one situated like the plaintiff may not be able to rescind, he still has ample remedies. He may - keep what he has received and sue to recover for damages for the fraud, or he may commence an action in equity to rescind, and for equitable relief, offering in his complaint to restore in case he is not authorized to retain what he has received.”

Under this decision the plaintiff was right in his action in equity. He could not of his own act rescind, for that requires restoration, but he may offer to restore and have his complaint to rescind, when the whole controversy will be before the court. Whatever it is right that plaintiff restore, will be decreed in that action.

The judgment should therefore be reversed" and a new trial granted, with costs to abide event.

Dtkmak, J., concurs.