Ladd v. Moore — 3 N.Y. Super. Ct. 589

Majority

p. 589

Ladd v. Moore.

Headnote

As a general rule, a party who wishes to disaffirm a contract, is bound to return whatever he has received upon it. But this is upon the condition, that such party shall thus restore himself to his own original position.

There are cases where the omission to return may bo excusable, in point of law.

The defendant obtained from the plaintiff merchandise under fraudulent representations, paying part of the price in cash, and giving his note for the balance. At the maturity of the note, the defendant could not be found, upon inquiry, at his last place of residence. Held, that an action of trover would lie for the goods, without a tender of the money or note; and that it was sufficient if the note were produced and tendered at the trial .^[1]

Where the original taking was tortious, trover will lie without a demand and refusal.

(Before Dyer, Mason, and Campbell, J.J.)

March 15;

April 20, 1851.

Tins was an action of trover, brought to recover a quantity of silver ware, alleged to have been obtained by the defendant from the plaintiff under fraudulent statements, as to his pecuniary condition. The cause was tried before the Hon. Selah B. Strong, one of the justices of the supreme court, on the 19th day of February, 1848. Upon the trial, it appeared that the plaintiff was a dealer in jewelry in the city of New York; that in the spring of 1845, the defendant, who was keeping a hotel in the city, called upon him to purchase silver ware, consisting of table and tea spoons; and made various statements and representations as to his situation, property, and debts, which induced the plaintiff to sell him goods to the amount of $480, taking therefor two hundred dollars in cash, and his note at sixty days for the balance. It was then proved, that the statements so made were untrue, and the defendant must, have known their falsity at the time.

The note was not paid. Before it fell due the property in the hotel was sold under a mortgage. A clerk of the plaintiff, on

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the day of the maturity of the note, made inquiries for the defendant at the hotel, but was unable to learn anything of him. The defendant’» counsel mooed for a nonsuit, on the ground that there was no proof of any return of, or offer to return, the money paid, or the note given on the purchase of the property, which motion was denied.

The court charged the jury, that it was a rule of law, that a party seeking to rescind a contract, and bringing trover for the property sold, must, before commencing his suit, restore, or offer to restore, whatever he had received, if the purchaser was accessible ; that the question in this case was, whether proper exertions had been made to find the defendant, that such inquiry liad been made at the hotel, which seemed the proper place to find him, and that nothing could be learned of him ; that the delivery of process to the officer for service was a mere experiment, to ascertain whether he could find the defendant to serve process upon him, and it was unnecessary to deliver the note with such process, in order that it might be tendered.

The defendant’s counsel excepted to the refusal to nonsuit, and to the charge. He requested the court to charge that the jury must find, that the inquiries made for the defendant, were made with the intention and purpose of tendering back the money, or such inquiries could not avail as an offer to restore, which the court refused, but said, that if diligent inquiry had in fact been made for the defendant, at the instance of the plaintiff, it was all that was required.

The defendant's counsel further requested the court to charge, that the delivery of the process to the officers for service was not the commencement of a suit, which, could be commenced by actual service of process only, and that in such case it was incumbent on the plaintiff’ to accompany his process with an offer to restore the money received, which the court refused to charge, and the defendant’s counsel excepted.

The defendant’s counsel further requested the court to charge that, if the neglect to restore or tender the money was on account of the defendant’s being inaccessible, in such case it wms necessary to do so at the trial. The plaintiff’s counsel thereupon tendered the note to the counsel for the defendant.

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The jury found a verdict for the plaintiff, for $335 60.

The cause was transferred from the supreme court, and the defendant moved for a new trial.

fV. B. Blunt, for the plaintiff.

8. P. Nash, for the defendant.

By the'Cocet.

The defendant, in April, 1845, purchased from the plaintiff, silver ware to the amount of four hundred and eighty dollars, paying in cash two hundred dollars, and giving his note at sixty days for the remaining two hundred and eighty dollars. The plaintiff, subsequent to the sale-, learned that the defendant had procured the goods upon fraudulent misrepresentations ; that, at the time of the purchase, he stated that he was not in debt, and was in a good business, whereas he was greatly embarrassed, and his property covered by chattel mortgages. and subject to heavy judgments, lie commenced this action in trover. The testimony showed, that before the commencement of the suit, search was made for the defendant, but he could not be found. On the trial of the cause, the plaintiff produced and tendered the note, but did not offer to return the two hundred dollars received in cash. The judge instructed the jury, that the plaintiff had done all that was required of him in seeking for the defendant, and the jury found a verdict for the plaintiff, for $335 60, being the balance of the original bill and interest, after deducting the two hundred dollars.

It is insisted by the defendant, that the plaintiff should have tendered the two hundred dollars, if not before suit brought, then such tender should have been made at the trial. In this case, it was not necessary to make demand of the property. “ Trover will lie without demand and refusal, because the original taking was tortious.” ( 22 Pick. 18 , Thurston v. Blanchard.) The defendant acquired no title to the articles. The sale being effected by fraud, worked no change of property. The proof of the fraud, was the proof of the conversion. (See Cary v. Hotaling, 1 Hill 311 , and cases cited in opinion of Justice Cowen.)

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A demand, in this case, would have been an idle ceremony; but the plaintiff sought the defendant, and could not find him. Doubtless, the plaintiff would have been entirely willing to have returned the money and the note of the defendant, if he could thereby have procured a return of his property. But it is very evident the defendant would not have made such a return. The evidence given on the trial shows that in a few days after the goods were procured of the plaintiff, the defendant executed bonds and warrants of attorney upon which judgments were entered up for several thousands of dollars; and that he gave a chattel mortgage also upon Ids personal property, and on the lease of the hotel which he occupied; and also that a judgment existed and suits were proceeding against him to judgment, at the time that he obtained the goods, and defendant’s property was sold under the chattel mortgage. He liad, in the just language of the supreme court in Masson v. Boset, ( 1 Denio 69 ,) “ so entangled himself in the meshes of his knavish, plot, that the party defrauded could not unloose him; the fault was his own.”

It is undoubtedly true, as a general rule, that a party who would disaffirm a contract, must return whatever he has received upon it. But surely this must be upon the condition, that the party returning shall thus restore himself to his own original position ; else in case of fraud, the party committing the fraud might, as in this case, place himself in a situation that he could not restore, and yet the injured party shall have no redress, through a proceeding to arrest the person of the defendant, unless he restores all that he has received, and obtains nothing in return but a judgment, which, in a majority of instances, proves worthless. Most of the cases in which the rule is laid down, relate to executory sales, and where on the ground of failure to fulfil, the other party seeks to rescind. Few case relate to transactions which are fraudulent and void. (See Voorhees v. Earl, 2 Hill 288 , opinion of Cowen, J., and cases cited.)

Suppose, in this case, the plaintiff, before suit brought, had found the defendant, and had tendered to him the note and the two hundred dollars, and demanded a return of his property, and which had been refused, he certainly would not have been

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obliged to leave the note and money with the defendant, before he could proceed in trover against him. Upon the trial the plaintiff was not certainly obliged to do more than he would have been before commencement of suit, except as to the note. On the trial, lie must tender the note, because that is merged in the judgment, and being transferred, might otherwise have been held by bona fide holders, and the defendant thus lie made twice liable. Rut on the trial, there was no pretence that the defendant had the silver ware in court to return to the plaintiff, on receiving his note and the two hundred dollars. If he had been solicitous on this subject, he might, have brought in the property and tendered it, and if the plaintiff did not voluntarily consent to receive it, and return the note and money, the court would most probably have made an order, by which judgment would not have passed against him. (See Selwyn’s Nisi Prius, 1303, 4; and 7 Term Reports 53.) But says Cowen, J., in Voorhees v. Earl, speaking of the rule where a party desires to rescind, he must do so in toto ; “ even in a case of a fair sale, the rule is not universal.” We do not think it can be or ought to be applied in this case. We think the charge of the judge was correct, and we see no reason for disturbing the verdict,.

Motion for new trial denied.

Cases cited

Masson v. Bovet 1 Denio 69 N.Y. p. 592