Hyperlawhypertext legal database Rochester Distilling Co. v. Devendorf 79 N.Y. Sup. Ct. 428

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Rochester Distilling Co. v. Devendorf

79 N.Y. Sup. Ct. 428 Court N.Y. Gen. Term English

Judges Dwight, P. J., and Lewis, J., concurred; Bradley, J., not sitting.

Delivered by Haight, J.:

Contents

Majority

p. 428
Rochester Distilling Company, Respondent, v. Mary M. Devendorf, Appellant.[1]

Headnote

Res adjudieata — election of remedies — knowledge of the facts essential to — recovery of possession of goods sold, upon the discovery of fraud in the purchase., after obtaining a judgment for the price.
The doctrine of res adjudieata does not apply to a judgment recovered for the price of goods sold, so as to prevent the plaintiff’s rescinding the contract of sale on the ground of fraud, where the election so to rescind is exercised immediately upon discovery of the fraud.
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 the facts.
The bringing of an action by a vendor against the vendee for the price of goods sold, and the recovery of a judgment, without knowledge of fraud in the purchase, do not constitute an election which will prevent the vendor from rescinding the contract of sale on the ground of fraud, as soon as the fraud is discovered, and thereupon bringing an action to recover possession of the goods.
The vendor of goods sued the vendee for the price thereof and recovered judgment, and in proceedings supplementary to execution upon the judgment discovered that the vendee was insolvent, the vendor thereupon claimed to dis-affirm the sale, on the ground that at the time thereof the vendee falsely represented that he was solvent and able to pay for the goods, and brought an action of replevin to recover possession of the goods against the vendee’s wife, to whom the latter had transferred the same without present consideration. Subsequently the judgment recovered for the price of the goods was discharged and the proceedings supplementary to execution were dismissed.
Meld, on appeal from a judgment recovered by the plaintiff in the replevin action, that the prosecution of the action for the price of the goods was not an election of remedies unless such action was prosecuted to judgment with knowledge of
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tlie fraud; that the jury having found in favor of the plaintiff on that question, the action of replevin, brought immediately on the discovery of the fraud, was maintainable.
That the satisfaction of the judgment for the price of the goods doubtless raised a presumption of payment, but that presumption was removed by the testimony of the judgment debtor, that the plaintiff’s claim had not been paid;
That the wife of the vendee, the defendant in the replevin suit, was not protected by her purchase of the goods from her husband, as she paid nothing therefor, the purchase price having been credited upon an antecedent indebtedness.
Appeal by tlie defendant, Mary M. Devendorf, from a judgment of tbe Supreme Court in favor of tbe plaintiff, entered in tbe office of tbe clerk of Monroe county on tbe 9tb day of February, 1893,, upon a verdict rendered at tbe Monroe Circuit, with notice of an intention to bring up for review on sucb appeal an order made at tbe Monroe Special Term and entered in tbe office of tbe clerk of Monroe county on tbe 16tb day of February, 1893, denying tbe. defendant’s motion for a new trial made upon tbe minutes.
Walter Welch, for the appellant.
George D. Reed, for the respondent.

This action is in replevin to recover tbe possession of personal property. Tbe defense is that the goods replevined were sold by tbe plaintiff to Stewart L. Devendorf, tbe husband of tbe defendant; that subsequently tbe plaintiff brought an action against him in tbe Supreme Court and recovered judgment for tbe purchase price thereof ';, that tbe defendant is tbe owner of the goods, and that she purchased them of her husband in good faith for a valuable consideration. Tbe action was prosecuted upon tbe theory that Devendorf, at tbe time be 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 bis representations were false tbe plaintiff elected to disaffirm tbe sale and to pursue the property, and tbe evidence amply sustains tbe verdict in this regard. It is contended, however, that tbe plaintiff cannot disaffirm after judgment; that by bringing tbe action and proceeding therein to judgment it elected its remedy, and tbe judgment becomes a bar to this action. Tbe rule doubtless is that when a matter in controversy between parties has been submit

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ted to a competent judicial tribunal, its decision thereon is final between the parties until it has been reversed, set aside or vacated; and the rule of res adyudicata 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 exercised immediately upon the discovery thereof. (Strong v. Strong, 102 N. Y. 69 .)

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 had 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 exeeution were dismissed.

The rule as stated by us in Terry v. Munger ( 49 Hun, 560 -563), 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 Devendorf was not an election of remedies unless such action Avas prosecuted to judgment witli knowledge of the fraud. This precise question appears to have been considered in the case of Kraus v. Thompson ( 30 Minn. 61 ), and the conclusion reached in that case seems to be in accordance with the spirit of our own eases. (Terry

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v. Munger, 121 N. Y. 161 ; Crossman v. The Universal Rubber Co., 127 id. 34; Morris v. Rexford, 18 id. 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 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., concurred; Bradley, J., not sitting.

The judgment and order appealed -from affirmed.

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