Rochester Distilling Co. v. Devendorf

This action is in replevin to recover the possession of personal property. The defense is that the goods replevined were sold by the plaintiff to Stewart L. Devendorf, the husband of the defendant; that subsequently the plaintiff brought an action against him in the supreme court and recovered judgment for the purchase price thereof; that the defendant is the owner of the goods, and that she purchased them of her husband in good faith for a valuable consideration. The action was prosecuted upon the theory that Devendorf at the time he purchased the goods falsely represented to the plaintiff that he was solvent and able to pay therefor ; that as soon as it was discovered that his representations were false the plaintiffs elected to disaffirm the sale and to puisne the property, and the evidence amply sustains the verdict in •this regard. It is contended, however, that the plaintiff cannot disaffirm after judgment; that by bringing the action and proceeding therein to judgment it elected its remedy, and the judgment becomes a bar to this action. The rule doubtless is that when a matter in controversy between parties has been submitted to a competent judicial tribunal, its decision thereon is final between the parties until it 1ms been reversed, set aside or vacated; and the rule of res adjudicata applies not only to the judgments of courts but to all judicial determinations, whether made by courts in ordinary actions, or in summary or special proceedings, or by judicial ■officers in matters properly submitted for their determination. It applies not only to judgments rendered after a litigation of the matter in controversy, but to judgments rendered upon default or confession. Brown v. Mayor, 66 N. Y., 385 -390.

But this rule does not interfere with the right of a party to rescind a contract for fraud where the election so- to rescind is exer

The plaintiff did bring an action against .Stewart L. Devendorf upon the sale and recovered a judgment for the value of the goods sold. It is claimed, however, that this was done without knowledge of the fraud. The plaintiff did have notice of the transfer of the property by Devendorf to his wife before bringing that action, and the trial court submitted to the jury the question as to whether it liad knowledge of the insolvency of Devendorf at the time the purchase was made. The jury found in favor of the plaintiff on this question. The plaintiff claims that its first information was derived through an examination of Devendorf in supplementary proceedings, and that immediately thereafter it elected to disaffirm the sale, and demanded of the defendant the return of the goods, and upon her refusal to so do this action was brought; subsequently the judgment was discharged and the proceedings pending supplementary to the execution were dismissed.

The rule as stated by us in Terry v. Munger, 49 Hun, 560 -563; 18 St. Rep., 506 , is that, where there exists an election between inconsistent remedies the party is confined to the remedy which he first prefers and adopts after knowledge of all of the facts. Applying this rule to the case under consideration, the prosecution of the action against Devetadorf was not an election of remedies unless such action was prosecuted to judgment with knowledge of the fraud. This precise question appears to have been considered in the case of Kraus v. Thompson, 30 Minn., 64 , and the conclusion reached in that case seems to be in accordance with the spirit of our own cases. Terry v. Munger, 121 N. Y., 161 ; 30 St. Rep., 746 ; Crossman v. Universal Rubber Co., 127 N. Y., 34 ; 37 St. Rep., 230 ; Morris v. Rexford, 18 N. Y., 552 ; Moller v. Tuska, 87 id., 166; Powers v. Benedict, 88 id., 605; Lloyd v. Brewster, 4 Paige Ch., 537 ._

The satisfaction of the judgment doubtless raises a presumption of the payment, but that presumption is removed by the testimony of Devendorf, in which he states that the plaintiff’s claim has not been paid.

The defendant purchased the goods from her husband, but paid-nothing therefor. The purchase price was credited upon an antecedent indebtedness. She is not, therefore, protected. Stevens v. Brennan, 79 N. Y., 254 ; Taft v. Chapman, 50 id., 445-448; Weaver v. Barden, 49 id., 286-294.

The judgment and order should be affirmed.

Dwight, P. J., and Lewis, J., concur; Bradley, J., not-sitting.