Boiardi v. Marden, Orth & Hastings Corp.

Page, J.: The defendant is the successor to the Harden, Orth & Hastings Co., Inc., with which the transactions set forth in the complaint were had; for convenience of statement the latter will be referred to as the defendant. The complaint contains three alleged causes of action. First, that the plaintiff and defendant entered into an agreement on or about February 24, 1916, a copy of which is annexed to the complaint and made a part thereof; that on or about February 19, 1916, the plaintiff and defendant entered into an agreement, the terms, tenor or effect of which is not stated nor is a copy annexed. Nevertheless the com-' plaint states that it “is hereby referred to and made a part hereof as fully as if herein set forth in full.” The agreement of February twenty-fourth recites that the parties had entered into an agreement on February nineteenth, based oh figures furnished by the plaintiff, which did not take into consideration the payroll of $1,400 to be paid that day at the Bayard Chemical Company’s plant, and which showed cash on hand of about $2,500; and modifies the agreement of February nineteenth to the extent that the last of the four equal monthly installments of $5,000 each shall be $1,100 instead of $5,000, all the rest of the agreement to be enforced as though the agreement of the twenty-fourth had not been made. In consideration of this agreement the defendant was to pay the balance of the $7,441.54 not paid by its check of $2,500 on February nineteenth, being $4,941.54. The complaint then continues: That it was not the intention of plaintiff by said agreement of the twenty-fourth to remit to the defendant without consideration $3,900 and plaintiff entered into said' agreement under a mistake of fact, to wit, that $2,500 had not been transmitted to Bayard Chemical Company, that a payroll of about $1,400 was due by him and that he was [309] under an obligation to credit defendant with the sum of $3,900, which said mistake occurred through accident and through no fault on part of the plaintiff and solely because of representations to plaintiff by defendant that the sum of $3,900 was due from plaintiff; that upon the discovery of the mistake plaintiff promptly notified defendant and demanded payment of $3,900, no part of which has been paid, and that there is due and owing to plaintiff from defendant the sum of $3,900. The second cause of action realleges the allegations of the first cause of action with reference to the making of the two contracts, and states: That the agreement of February 24, 1916, was obtained from the plaintiff by the defendant by the fraud, deceit and misrepresentation of the defendant in that it represented that the sum of $2,500 had not been received by the Bayard Chemical Company and that a payroll of $1,400 was due and payable at the plant of the said chemical company and that the sum of $3,900 was a liability of plaintiff and that if plaintiff would sign the agreement of February 24, 1916, the defendant would duly and promptly perform the terms of the agreement of February 19, 1916; that on February 24, 1916, the books of account, records, check book and all other data concerning the aforesaid transactions were in the possession of defendant and its attorney, having been theretofore delivered to it by the plaintiff; that plaintiff was ignorant of the facts, figures and details of said transactions at the time; that plaintiff acted without legal counsel or advice and relied upon the defendant for a true and correct statement of the facts; that in reliance upon said facts plaintiff was induced to sign the agreement of February 24, 1916; that each and every one of said representations were false and were known by the defendant to be false and were made with intent to defraud, cheat and deceive plaintiff; that the sum of $2,500 had been received by the Bayard Chemical Company; that plaintiff was under no obligation whatsoever to .pay the payroll in the sum of $1,400; that the defendant failed and refused to perform the terms of the agreement of February 19, 1916, upon its part to be performed. The third cause of action alleges that the agreement of February 24, 1916, was wholly without consideration and [310] void, and that the defendant failed to perform the conditions of said agreement. Judgment is demanded (1) that the agreement of February 24, 1916, be adjudged fraudulent, of no effect, and void and be delivered up to be canceled; (2) that an accounting be had as to the transactions between the plaintiff and defendant and that on such accounting defendant be decreed to pay plaintiff the sum of $3,900 with interest from February 24, 1916; (3) for such other and further relief as to the court may seem just and proper. The complaint is framed in equity and equitable relief only is demanded; therefore, if the facts pleaded do not show that the plaintiff is entitled to equitable relief the demurrer interposed for insufficiency should be sustained, even though the court might spell out a cause of action at law. (Gosselin Corp. v. Mario Tapparelli fu Pietro, Inc., 191 App. Div. 580, 584; affd., 229 N. Y. 596.) The facts stated do not show any grounds for equitable relief by way of an accounting. If under the agreement of February 19, 1916, .the defendant was hable for the payment of $3,900, and the agreement of February 24,1916, so modified the agreement that the defendant was, to that extent, relieved of liability, annulling the agreement of February twenty-fourth would merely have the effect of restoring the obligations of the agreement of February nineteenth, and the defendant would be hable to pay $3,900 as damages for breach of that contract. There was no fiduciary relation between the parties, nor any other fact alleged, giving a court of equity jurisdiction. It is well settled that a claim for damages for breach of a contract cannot sustain a suit in equity for an accounting. The court could not give judgment in this action for the-$3,900, for the reason that the facts with respect to the agreement of February 19, 1916, are not stated. The mere reference to a contract in a pleading does not make the contract a part .of the pleading unless a copy thereof is annexed. The court is not informed in any way as to the subject-matter, terms or conditions of the contract. All that is disclosed by the pleadings is that a contract was made upon that date between these parties, based upon some figures furnished by the plaintiff which the defendant claimed were erroneous because they [311] showed certain cash on hand which defendant claimed was not on hand, and did not take into consideration a payroll which became due on February twenty-fourth, for which defendant claimed plaintiff was liable; and by reason of these alleged errors the agreement of February 19, 1916, was “ modified to the extent that the last payment of four equal monthly installments of Five Thousand Dollars ($5,000.00) each, shall be for Eleven Hundred Dollars ($1,100.00) instead of Five Thousand Dollars ($5,000.00).” Other than these statements the complaint is barren of any facts with respect to the agreement of February nineteenth. Therefore, it does not appear that the last payment is due; nor that the plaintiff performed the conditions on his part, so that if due, the plaintiff is in position to demand payment. The only relief that could be granted, therefore, under the allegations of the complaint, if we concede, which we do not determine, .that the complaint states facts sufficient for such relief, would be a cancellation of the agreement of February twenty-fourth, the effect of which would be to restore the agreement of February nineteenth to its original form. Defendant’s liability would then have to be determined in an action at law for a breach of the latter agreement. However it may be in other jurisdictions, in this State such an action in equity cannot be maintained. As was said in McHenry v. Hazard (45 N. Y. 580, 587): “ It was a prominent motive, in constituting a single court having jurisdiction in law and equity, to remedy the inconvenience which existed when legal and equitable remedies were administered by separate tribunals, of obliging parties to resort to two courts to determine rights connected with a single transaction. The provisions of the Code allowing causes of action, legal and equitable, growing out of the same transaction, to be united in a single suit, and legal and equitable defenses to be interposed in the same answer, and authorizing affirmative relief to be granted to a defendant, were designed to prevent unnecessary litigation, and to enable parties to bring into one suit all the elements of the controversy for the purpose of a complete and final adjudication.” The plaintiff’s remedy must be eventually to recover the payment alleged to be due as the final payment under the agreement of February 19, 1916. In that action [312] if the defendant sets up the contract of February 24, 1916, as a release from the claim of $3,900, that issue can be determined in that one action. If a reply is ordered and motion made therefor the issues as to mistake and fraud alleged can be separately tried, or the entire issue can be submitted to the jury. (Gordon v. Maas, 115 App. Div. 377; affd., 190 N. Y. 539; Dixon v. Brooklyn City & Newtown R. R. Co., 100 id. 170, 179.) On the other hand, if this is a compléted transaction, and by reason of the defendant’s fraud and deceit the plaintiff sustained damages, he has an adequate remedy at law. In the case under consideration the most plaintiff could accomplish would be to set aside the modification of the contract of February 19, 1916. Under the facts pleaded he could not recover judgment for $3,900, but would still have to resort to his action at law on the original contract. The demurrer to the complaint should have been sustained. The order will, therefore, be reversed, with ten dollars costs and disbursements to the appellant, and the demurrer sustained and complaint dismissed, with ten dollars costs and costs before notice of trial. (Taishoff v. Elkema, 171 App. Div. 288, 295.) Clarke, P. J., Laughlin and Smith, JJ., concur; Dowling, J., dissents.