Welch v. Seligman — 55 N.Y. St. Rep. 477

Majority

p. 477

Peter A. Welch et al., App’lts, v. Solomon Seligman, Resp’t.

(Supreme Court, General Term, First Department,

Filed October 13, 1893.)

Headnote

1. Fbaud—Dismissal of complaint.

In an action for the recovery of damages for obtaining goods through false pretenses, and with the preconceived design not to pay for them, plaintiff’s evidence showed that defendant, in order to obtain the goods,

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misrepresented the amount of Ms assets and liabilities, the condition of his, business, and the use he intended to make of the goods. Held, error to dismiss the complaint at the close of plaintiff’s evidence.

2. Same—Replevin.

Such an action is a disaffirmance of the sale, and not inconsistent with a replevin suit previously brought by plaintiff to recover the goods.

Appeal from a judgment in favor of the defendant, entered upon a dismissal of the complaint at the close of the plaintiffs case, and from an order denying a motion for a new trial.

Artemus B. Smith, for app’lts; David Leventritt, for resp’t.

This action is for the recovery of damages for obtaining goods through false pretenses, and with the preconceived design not to pay for them. In May, 1891, the plaintiffs were partners under the name of Welch, Holme & Co., and in that month they sold and delivered to the defendant, at the city of of New York, sixty casks of alkali, at the agreed price of $1,-921.59, payable June 1, 1891, no part of which has been paid. Fifteen of the casks were delivered May 4th ; fifteen, May 12th; eight, May 18th ; and twenty-two, about the 26th of May. One of the plaintiffs testified that the defendant was introduced to him in February, 1891, by Mr. Kuschowsky, and that on that occasion the following conversation was had:

“ I then asked him, defendant, in regard to his means, and he said that he had brought out Kuschowsky, and paid him $1,500 in cash. Furthermore, I asked him, 1 Are all your fixtures and apparatus clear?’ He said they were; and there was no incumbrances on them whatsoever, and 11 want to make arrangements with you to furnish me with alkali.’ I said we would be glad to sell to him if we could make satisfactory arrangements. 1 How do you propose to pay?’ He said, ‘I will pay you on the first of every month, and I will want deliveries of alkali at different times.’ I told him this was a cash article. He said: ‘I will pay you the first of every month any purchases previous to the first. You can rely on getting your money on the first of the month, and the statements I make to you are strictly true. I am an honest man, and I have property in the west, about $2,000 worth of property.’ ”

In February the defendant purchased of the plaintiff six casks of alkali, which he paid for March 1st. In March he purchased thirty casks, which he paid for April 1st In April he bought thirty-four casks, which he paid for May 1st. In May he purchased the sixty casks, for which he failed to pay. At the time he ordered the sixty casks the following conversation occurred: “I (one of the plaintiffs) said: 1 That is a large quantity. Your business must be increasing very rapidly.’ He said it had, and he wanted that quantity, and would have to have it, because he had orders to fill for sal soda that would require that quantity of alkali during the month. He said, further, 11 will do as I agreed, and pay you the first of every month.’ ”

The defendant took sixteen of the casks which were delivered on the 26th of May to a warehouse on the same day, and received

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a negotiable warehouse receipt in the name of E. L. Goldnsor, representing to the person from whom he received the receipt that that was his name. He represented at the time of taking the receipt that he had a surplus of alkali, and wanted to raise some money on it, and gave that as a reason for getting the warehouse receipt. Shortly afterwards he tried to sell the receipt to one Green, requesting him at the time not to tell the plaintiffs’ firm about his offer to sell. It was proved beyond dispute that the defendant agreed to pay but $800 for the plant, instead of $1,500, which he purchased pf Kuschowsky, and that he paid in cash $200, and gave his notes for the remainder, which have never been paid. On April 28, 1891, defendant gave his promissory note to Harris J. Bramson for $620, due in twenty days, which was. not paid at maturity; and May 25, 1891, an action was brought thereon in the city court of Hew York, and June 2, 1891, a judgment recovered thereon against defendant, on which an execution was immediately issued, under which the sheriff levied on the defendant’s property, and took possession of his place of business. Immediately after the levy one of the plaintiffs called on the defendant, and had the following conversation: “ I asked him at an interview at my office what had become of the property he represented himself possessed of to me. He said he didn’t know. He had to pay little debts here and there, current expenses, and other little things, and he couldn’t say. He said that the Bramson judgment that the sheriff had got into his place on was entirely unexpected to him. I asked him what had become of our alkali that had been delivered to him in May, or any part of it. He said a few casks were in the place, but the others had been used up, and he didn’t know. Things were in a kind of mixed-up shape, and he didn’t know what had become of anything. He couldn’t give an account of anything. He gave me no satisfaction concerning the remaining casks. I asked him if he had stored away any of it. He said, 11 decline to answer.’ ”

In another interview with one of the plaintiffs the defendant said, if forced to sell, he could not pay more than two or three hundred dollars; that he might pay twenty-five per cent of his indebtedness. The person of whom defendant purchased the factory testified that not more than thirty casks of alkali could be used in the factory in any one month ; that it had not capacity to use more. The evidence was sufficient to have justified the jury in finding that the defendant misrepresented (1) the amount of Ifis property; (2) the amount of his liabilities; (3) the condition of his business; (4) the use which he intended to make of the sixty casks of alkali purchased in May. These propositions, being found in favor of the plaintiffs, would have sustained a verdict that the goods were acquired by false representations, and with the preconceived design not to pay for them. This is not an action on the contract to recover the agreed price, but an action in disaffirmance to recover damages for the fraud alleged to have been practiced, and there is nothing in the point that this action is inconsistent with the replevin action previously brought, as the learned trial judge correctly held. The judgment should

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be reversed, and a new trial granted, with costs to the appellants to abide the event.

O’Brien and Parker, JJ., concur.