Sparmann v. Keim — 44 N.Y. Super. Ct. 163

Majority

p. 163

GUSTAV E. SPARMANN, By Guardian, Plaintiff, v. JOHN KEIM, Defendant.

Headnote

I. Fraud.

1. False representations.

(it) What does not constitute in the law.

1. Business. A representation that a certain business would yield large profits, does not.

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II. Complaint.— Construction of, on appeal.

1, Two CAUSES OF ACTION, WHEN NOT BEG-AKDBD. AS CONTAINED IN.

(a) Where there are averments, which, taken by themselves, would constitute a cause of action based on contract, but not stated as constituting a separate cause of action, but on the contrary so intimately interwoven with other averments as to show that the whole theory of the action was based on tort, to wit, fraudu- ' lent representations ; and upon a motion being made on the trial after all the evidence was in, for a dismissal of the complaint, on the ground that an action could not be sustained on the false representation stated in the complaint, the plaintiff made no claim that the evidence sustained any part of the complaint as showing an action on contract; and the court granted the motion, tp which plaintiff excepted ; and ordered the exceptions to be heard in the first instance at the general term.

Held,

on hearing the exceptions, that the complaint must be regarded as containing but a single cause of action, viz.: one in tort, and that plaintiff could not sustain his exceptions on the ground that the evidence sustained those averments in the complaint, which, if taken separately, might be deemed to state a cause of action in contract.

Before Sedgwick and Sakeord, JJ,

Decided November 4, 1878.

. Exceptions of plaintiff, heard at general term in first instance, upon dismissal of complaint.

The complaint, alleged as follows:

“ I. That the plaintiff is an infant under the age of twenty-one years.

“II. That on the fifth day of October, A, D. 1874, at said city of New York, upon application duly made on his behalf!, the said Chas. J. Nehrbas was, by an order of this court, duly appointed the guardian of the plaintiff for the purposes of this action.

“ III. That on or about, the, first day of July, A- D. 1874, the. said defendant, by paeans of false.: representations, obtained from said plaintiff the sum of ope thou

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sand dollars, to be invested in a certain artistic decorating business which said defendant falsely represented would yield large profits, but on the contrary said business is and has been ever since said first day of July, A. D. 1874, constantly losing money, and furthermore said defendant is appropriating whatever profits may be and are realized, to his own use and benefit, to the great danger and injury of the plaintiff.

“IV. That relying upon such representations on the part of the defendant, the plaintiff did, on or about said first day of July, 1874, pay over to said defendant, at his instance and request, said sum of one thousand dollars for the purposes of said business.

“V. Plaintiff also shows that between about June 11, 1874, and about Julyl, 1874, said plaintiff at the request of the defendant lent and advanced unto such defendant, and also to and for his use by payments to other parties at his instance, divers sums of money, viz., altogether about four hundred and one dollars and ninety-five cents, upon condition that the same should be repaid upon demand, but the defendant has wholly failed to repay the same though payment thereof has been duly demanded ; and.that said amount of money, so lent and advanced and paid out, as aforesaid, was thereafter, upon the formation of such partnership, allowed by the defendant as part of such one thousand dollars contributed as herein above mentioned, and constitutes a portion of the same.

“ VI. That the plaintiff upon ascertaining the falsity of the representations made by defendant as aforesaid, and before the commencement of this action!, has demanded a return to him, plaintiff, of the aforesaid one thousand dollars by the defendant, who however utterly refused so to do, and still so refuses.”

Evidence was taken, which tended to show that plaintiff had been induced to place money in a certain business by representations of the defendant that the

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business was a good paying business, and that they would make lots of money in it, and also that before the plaintiff definitely agreed to become partner with the defendant in the business, he had lent to the defendant various sums of money, or had paid it to third parties; and that when the agreement to go into the business was made it was agreed that the former loans and advances should be deemed as part of the $1,000, which the plaintiff was to place in the business. There was a third person interested in the business.

The court dismissed the complaint on the ground that the representations complained of, even admitting them to be false, were not false representations known to the law, but the expression of opinion. Plaintiff excepted, and the exceptions were ordered to be heard in the first instance at general term.

1Vehrbas & Pitshlce, attorneys, and of counsel for plaintiff, urged :—I.

Where the infant party is manifestly entitled to something, the court should not suffer him to be deprived of existing rights, by the guardian’s mode of pleading, or other neglect, if any (Stephens v. Van Buren, 1 Paige, 479, 480; Howell v. Mills, 53 N. Y. 322 ). The justice should, therefore, have considered the “ case made out by the evidence,”—which was sufficient, in law. So, a judgment was vacated to protect infant’s rights—notwithstanding the pleading of his guardion ad lit. (Curtis v. Ballagh, 4 Edw. Ch. 635 ).

II. But the complaint is correct,—i. e., it is on contract, and not at all ex delicto. The first count (subd. V. of complaint) is, of course, ex contractu.; and as to the other count (i. e., the rest of complaint), the same simply avers that defendant stated to the plaintiff that by his coming in as partner with capital, &c., that certain business spoken of would yield large profits, &c., and thereby plaintiff was induced so to enter defend

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ant’s then business with money &c.,—which statements uttered by defendant were, as the thing turned out, false (Á e., untrue). Having been thus led to fructify the defendant’s then business, plaintiff sets forth the whole case, and claims his “infant’s privilege” to get back his money. 1. The justice could not dismiss this case as one ex delicto—when the complaint was all ex contractu. 2. But our complaint, apart from theory, is ex contractu by express authority of Byxbie v. Wood, 24 N. Y. 607 , 612. There, the complaint averred that plaintiff’s assignor and defendant being about to go in a joint enterprise, by defendant's “ false and fraudulent representations ” as to the value, &o., of the defendant’s then ship to be used for the enterprise, the plaintiff’s assignor was induced to pay certain moneys towards a half interest in said ship, which moneys plaintiff reclaims from defendant. On the trial, however, fraud was not proved. Held, plaintiff could recover as for money had and received. “The action, though no fraud is proven, is sustainable as merely for money,—which the law implies a promise to repay. The action sounds in contract, and the words charging a wrong should be disregarded ” (Veeder v. Cooley, 2 Hun, 74 ).

III. The first count (?’. e., subd. Y. of complaint), is a pure money demand—i. e., direct loans to and advances for defendant. The plaintiff and defendant were in law strangers to one another, up to July 1, 1874, the date they established their copartnership. And all transactions prior to that date are simple loans and advances to defendant and for his use,—to which the law adds a promise to repay. Hence, as regards this first count ($401.95), plaintiff was also entitled to the jury’s verdict, for that (Fey v. Smith, 3 Daly, 389 ). Defendant cannot urge the “ agreement” as changing the status of this $401.95 from “loans and advances ”

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to “ partnership fundsplaintiff being an infant who herein repudiates that agreement.

IV. Second count ($400.31) is, to recover back (because of plaintiff’s infancy) money passed under the agreement signed by plaintiff and defendant,—for he (defendant) being the other party to the contract, is responsible to the infant for what passed from infant under it. An adult cannot draw in the infant to experiment on such infant’s money in changing and enlarging the adult’s business without liability.

Geo. S. SedgwicTe, attorney, and with Leonard C. Curtis, of counsel, for defendant, urged:—I.

This is a case of failure of proof. The gravamen of the cause of action averred in the complaint is false representations, and no false representations have been proved. In such a case, even if the evidence should disclose a good cause of action, the complaint must be dismissed because its essential allegations have not been proven. A judgment can be rendered only secundum allegata et probata (Gasper v. Adams, 28 Barb. 441 ; Kelsey v. Western, 2 N. Y. 506 ).

II. The statement made by the defendant that the business would pay largely, was a mere expression of opinion, and was not a false representation.

It seems to me clear that, so far as the complaint shows, the plaintiff placed his right to a recovery from the defendant solely on the ground that there had been false representations made by defendant to induce him to invest money in the business. Admitting his right to proceed for money had and received upon the avoidance of any contract connected with the transaction that the plaintiff made while an infant, yet he did not elect to bring his action on that state of facts, but upon the fraud. The plaintiff pleads that on or about July 1,

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lie was, by the alleged false representations, induced to pay over to the defendant “ said sum of1 $1,000 for the purposes of said business.” The plaintiff then proceeds to state that about June 11 and about July 1, the plaintiff advanced certain moneys, upon condition that the sum should be repaid upon demand, but the defendant has wholly failed to repay the same, though payment thereof has been duly demanded, and that said amount of money “was thereafter, upon the formation of such partnership, allowed by the defendant as part of such $1,000, contributed as hereinabove mentioned, and constitutes a portion of the same.”

This part of the complaint is not made to constitute a second cause of action, as showing the right of the plaintiff to avoid, on the ground of infancy, the express contract, and to proceed for money had and received ; for in addition to the terms of this part, the complaint proceeds “ that the plaintiff upon ascertaining the falsity of the representations made by defendant as aforesaid, and upon the commencement of this action, has demanded a return to him, plaintiff, of the aforesaid $1,000 by the defendant,” who refuses, &c. If the complaint had disclosed an intention to make this a second cause of action, it would have been demurrable as joining a cause of action on contract with one for tort, although the objection would be waived if not taken before trial.

After the whole evidence was in, the motion was made to dismiss on the ground that an action for obtaining money by false representations, as stated in the complaint (the words of the objection were “ complained of”) would not lie, as they were only the expression of an opinion, and not the statement of a fact. There was no claim that the evidence sustained any part of the complaint as showing an action on contract for money had and received. If there had been such a claim, there would have been a statement of it, and the

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court would have acted on it in an appropriate manner. 1*1 o doubt the matter was tacitly considered as the complaint left it, that the plaintiff was willing to have that part of his claim, as affected by his subsequent agreement that the money first advanced should be deemed part of the $1,000 which he only claimed in consequence of the alleged false representations. It would seem that until after the plaintiff had made all the advances, lie was ignorant that his infancy affected the rights of the parties, and there is no evidence that the defendant knew of the infancy until action was brought. There was no error in the ruling made by the court as to the false representations, and from the complaint and the whole case I am of opinion that no other claim was made.

Exceptions overruled, and judgment ordered for defendant, on the dismissal of the complaint with costs.

Sanford, J., concurred.

Cases cited

Howell v. Mills 53 N. Y. 322 N.Y. 1873-09-23 p. 166
Curtis v. Ballagh 4 Edw. Ch. 635 N.Y. Ch. 1845-01-20 p. 166
Byxbie v. Wood 24 N. Y. 607 N.Y. at 612 p. 167
Gasper v. Adams 28 Barb. 441 N.Y. Sup. Ct. 1858-11-04 p. 168