Engelhardt v. Lehrenkrauss

Plaintiffs sue the appellants, both individually and as partners doing business under the firm name of J. Lehrenkrauss & Sons. The complaint contains two causes of action. In the first plaintiffs allege they were induced to buy a $10,000 mortgage participation certificate issued by J. Lehrenkrauss & Sons, through fraud and deceit practiced by J. Lehrenkrauss & Sons. In the second cause of action plaintiffs sue upon a guaranty contained in the certificate. Appellants, Richter and Kaiser, for a first defense allege that the claims set forth in the complaint were released by general releases executed and delivered to them by the trustees in bankruptcy of J. Lehrenkrauss & Sons. Upon plaintiffs’ motion this defense was struck out and Richter and Kaiser appeal. Order, in so far as appealed from, modified so as to provide that the motion to strike out the “ First ” defense be granted as to the first cause of action only, and, as so modified, affirmed, without costs. While the defendants are sued individually as well as partners, the only liability alleged in the second cause of action, which is for breach of contract, is that arising out of defendants’ membership in the firm. Therefore, the general releases are a bar to this claim. (Nichols v. Emerson, 210 App. Div. 281; affd., 241 N. T. 531.) Lazansky, P. J., Hagarty, Carswell, Johnston and Taylor, JJ., concur.