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FIRST DEPARTMENT, MARCH TERM, 1897. [Vol. 15. fraud are, representations of falsity, scienter, deception and injury. The complaint contains all these elements. The only question that can arise is whether the character of the representations, if proved, is of a sufficiently grave nature to entitle the plaintiff to relief. In other words, will a false and fraudulent representation, made with intent to induce a compromise, that one is poor and unable to pay his debts, when in fact he is able, justify an action for damages? Of course, if the fraud is sufficiently grave the release and assignment present no insuperable barrier to a recovery.
In Gould v. Cayugu Co. Nat. Bank (86 N. Y. 81) it is said: “If there had been no dispute as to the amount due the plaintiff, if the sole defense of the defendants had been the compromise, and if at least the $25,000 was indisputably due the plaintiff, then it would have been unnecessary for the plaintiff to tender or return to the
“In determining the sufficiency of the pleading demurred to, it must be assumed that the facts stated therein, as well as such as may by reasonable and fair intendment be implied from the allegations made, are true.” (Milliken v. Telegraph Co., 110 N. Y. 403.) “To sustain a demurrer to a complaint it is not sufficient that the facts are imperfectly or informally averred, or that it lacks definiteness and precision, or that the material facts are argumentatively averred; it will be deemed to allege what can by reasonable and fair intendment be implied from the allegations." (Marie v. Garrison, 83 N. Y. 14; Sanders v. Soutter, 126 id. 193.) While the court may not, by implication, import an absent allegation into a complaint (Clark v. Dillon, 97 N. Y. 370), still “pleadings are to be liberally construed with a view to substantial justice, or, in other words, with a view to get out the real truth of the case, when it will not involve surprise or injustice to either party." (PECKHAM, J., in Borde v. Wilkins, 105 N. Y. 322,328.)
But why have recourse to rules of construction when the complaint is explicit in the statement of every fact essential to the support of the action?
Indeed the demurrant does not challenge the right of plaintiff on the facts pleaded to some relief, but the contention is that his only remedy is an action for cancellation of the assignment and release of the judgment. But if the complaint show title to any redress in any form, it is good against the demurrer. (Johnson v. Girdwood, 7 Misc. Rep. 651; affd. by Court of Appeals, 143 N. Y. 660.)
On discovery of the fraud plaintiff had an alternative of remedies; that is, either to rescind the contract, or to affirm it and sue for damages. (Krumm v. Beach, 96 N. Y. 398, 406; Vail v. Reynolds, 118 id. 297, 302; Cooley on Torts, 503.) He adopts the latter expedient; to the pursuit of which, manifestly, the assignment and release of the judgment, instead of opposing an obstacle, are indispensable conditions. Such assignment and release, fraudulently procured, is the gravamen of the action.
Demurrer overruled, with leave to answer.
App. Div.] First DEPARTMENT, MARCH TERM, 1897. bank the money paid, because, in any view of the case, so much would have been due the plaintiff by virtue of the compromise, if that was upheld, and, if that was vacated, then in consequence of the original liability. It was in principle so held in Pierce v. Wood (3 Fost. [N. II.] 519). It was there decided that, if a person effect a compromise of his debts by fraudulent representations and procure a discharge of the same by paying a per cent thereon, and an action be brought to recover the balance on the ground of fraud, it is not necessary, as preliminary to the right of recovery, that the plaintiff repay or offer to repay the per cent received, and that the doctrine of the rescission of contracts does not apply to such a case. In that case, * * * the plaintiff was entitled to the per cent paid him, whether he succeeded in the action or not.”
While we have been unable to find an authority precisely in point upon the question whether the representations, if false, were of a sufficiently grave nature to vitiate an assignment of judgment or a compromise, we have found cases in which fraudulent representations as to solvency and as to one's assets and liabilities were held sufficient. We think the fair inference to be drawn from the statement that defendant was unable to pay his debts is that he was insolvent, and that such statement, coupled with the other facts alleged, was intended to induce the plaintiff to believe that the
assistance of a third person to furnish him the money to be paid upon the compromise. If such representations were, as alleged, false and untrue and fraudulently made, we think they are sufficient.
The appellant insists, however, that the form of the action is bad, and that, if it can be maintained, then the plaintiff would be able to succeed in recovering a judgment in addition to the one that he sold and assigned, for the same claim that was merged in the assigned judgment. As this same question was presented and disposed of in the case of Gould v. Cayuga Nat. Bank, from which we have quoted (and also in the same case subsequently reported in 99 N. Y. 338), it is unnecessary to discuss it further.
Our conclusion is that the judge below was correct in holding that the complaint was sufficient in substance and not obnoxious to demurrer, and that, therefore, the judgment should be affirmed, with costs, but with leave to the defendant to withdraw demurrer FIRST DEPARTMENT, MARCH TERM, 1897.
[Vol. 15. and answer over on payment of costs in this court and in the court below.
VAN Brunt, P. J., WILLIAMS, PATTERSON and InGRAHAM, JJ., concurred.
Judgment affirmed, with costs, but with leave to defendant to withdraw the demurrer and answer over on payment of costs in this court and in the court below.
Arthur McMullen and JULES BREUCHAUD, Respondents, v.
Isaac A. HOPPER, Appellant.
Contract — construction of a clause as to reserved precentages — construction given
by the ucts of the parties - acceptance of work by a chief engineer — when stone agreed to be furnished should be cut fit for use.
A city contract for the construction of a bridge provided for monthly payments of eighty-five per cent as the work progressed, and a reservation of fifteen per cent which was to be paid on or before thirty days after the entire work had been certified by its chief engineer to have been completely performed. A part of the work, which was to be done under water, was sublet by the contractor under a contract which provided for monthly payments “at the times and in accordance with the provisions” of the city contract, except that “the payment of percentage reserved shall be made on or before thirty days after the work embraced in this contract shall have been accepted by the chief
engineer in charge of the said city contract.” In an action brought by the sub-contractors against the contractor to recover an
amount claimed to be due under the sub-contract it was Held, that the sub-contractors were not bound to wait until thirty days after the
entire work covered by the city contract had been accepted by the chief engineer before becoming entitled to recover the “percentage reserved" of the contract price of the work done by them, as the payment of such percent. age reserved was by the terms of the sub-contract expressly excepted from the operation of the city contract, iind was stipulated to be made on or before thirty days after the work done under the sub-contract had been accepted by
the chief engineer. After the plaintiff's sub-contract had been performed, the city's engineer measured up the work done thereunder, and issued to the contractor a certificate covering such work, and the chief engineer, in response to the inquiry of the sub-contractors, stated that their work was satisfactory and that he would accept the same, and thereafter the contractor wrote to the sub-contractors, asking for a statement of their account, saying “I would like to clean up with you this time if I can."
Held, that a practical construction was thus given to the sub.contract which
removed any doubt as to its proper construction. INGRAHAM and PATTERSON, JJ., dissented. By the terms of the sub-contract the contractor was to furnish “at his own cost
and expense all the pier stone used and required under this contract over and above the old abutment stone which may be found on the premises suitable
for said use." Held, that the contractor was bound to furnish stone suitable for use under the
contract; not mere blocks of stone which required cutting before they could be used.
APPEAL by the defendant, Isaac A. Hopper, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 21st day of August, 1896, upon the report of a referee.
The facts of this case are stated in the dissenting opinion.
Charles W. Dayton for the appellant.
L. Laflin Kellogg and Alfred C. Petté, for the respondents.
The plaintiffs sued upon four causes of action, one of which was admitted, and under the other three they were allowed to recover. The single question arising upon the referee's rulings, which requires discussion, relates to his holding that the plaintiff's were entitled to recover $37,079.97, included in their undivided first cause of action, which was fifteen per cent reserve on plaintiffs' entire work. It is not disputed that the work has been done to the satisfaction of the chief engineer, and that the plaintiffs will ultimately be entitled to recover the amount in question. It is insisted, however, that the action was prematurely brought, the defendant claiming that at the time of the commencement thereof the plaintiffs' work had not been accepted by the chief engineer in charge of the work under the city contract, and that the plaintiffs were not entitled to the fifteen per cent reserve until thirty days after the completion of the entire city work; and that, conceding the plaintiffs to be entitled to the percentage within thirty days after acceptance of their particular work, they failed to show an acceptance thirty days prior to the bringing of this action. The plaintiffs, on the other hand, claim that by the terms of their contract they were not obliged to wait until the First DEPARTMENT, March TERM, 1897. [Vol. 15. defendant received the fifteen per cent reserve from the city, but that they were entitled to this “ on or before thirty days after” the city's engineer had accepted their work; and that the latter had accepted it more than thirty days prior to the commencement of this action. If the defendant's construction of the contract is right, that the percentage reserved was not payable until thirty days after the completion of the entire city work, as this was not completed when the action was commenced, then the action was prematurely brought. The determination of this question necessarily involves the construction of the contract between the parties; and as this was subsidiary to the main one between the defendant and the city, the latter contract may be referred to for the purpose of making certain what the parties meant by the language used in the contract between them.
Upon the question of payment it was provided in the contract between the defendant and the city as follows: “ The engineer shall, from time to time, as the work progresses, but not oftener than once a month, make an estimate of the amount of work done under this contract since the last preceding estimate was made, and of the value thereof, according to the terms of this contract. Upon such estimate being made eighty-five per cent of such estimated value shall be paid to the said party of the second part. And whenever, in the opinion of the said engineer, the party of the second part shall have completely performed this contract on his part, the said engineer shall certify the same in writing, to the commissioner of public works, together with his estimate of the whole amount of materials furnished and work done in such performance by said party of the second part, and of the value of such work and materials under and according to the terms of this contract. Thereupon the parties of the first part will, on or before the expiration of thirty days after such completion and the delivery of said certificate, pay * * * to the said party of the second part, in cash, the whole amount of money accruing to the said party of the second part under this contract. * * * »
The contract between these parties recites the fact that a contract had been entered into between the defendant and the city; that the plaintiffs offer to do a portion of the work, and that said bid has been accepted. Then follows the agreement of the plaintiffs to per