Graves v. Spier

Johnson, J. The appellant’s counsel claims that the complaint in this action is for equitable relief only—to have the contract between the defendant and the plaintiff’s assignor rescinded on account of the alleged fraud, and the property assigned and conveyed in pursuance of such fraudulent contract, restored, and the parties placed in statu quo. • But I am of the opinion that the action was properly treated by the referee, and tried, as an action at law, to recover damages for an alleged fraud. The facts stated in the complaint constitute such a cause of action, and the prayer for relief demands a judgment for damages in a specified amount. It is true that after the prayer for judgment for the amount of the bond and mortgage received from the defendant, there is also a prayer for relief in thé alternative, “ or that the defendant be adjudged to reconvey the premises,” and to account for the use, income and profits since the conveyance, or for other relief. But the prayer for relief is no part of the cause of action, and does not determine the character of the action. The nature of the action, and the cause of action, are shown by the facts stated. It is shown, by the facts stated, that the plaintiff could not have the alternative relief demanded, for it is there alleged that the defendant, long before the commencement of the action, .had conveyed — 384 — the premises, and that her grantee had divided them and conveyed them, in different parcels, to sundry other persons. And this is admitted by the answer. No cause of action, therefore, which could entitle the plaintiff to that relief, is stated in the complaint, and it must be held to be an action at law to recover the damages sustained by reason of the fraud in making the contract. There are many statements in the complaint which are wholly unnecessary to such a cause of action, but they must be regarded as mere surplusage, which works no injury after issue is taken upon the complaint, and the parties go to trial. They must try the issues made by their pleadings, if they are material. The most important question in the case, as it strikes me, is, whether such a cause of action is assignable, so that an assignee can maintain an action upon it. As the decisions in this State stand, it may, perhaps, be regarded as somewhat doubtful. In Zabriske v. Smith, (13 N. Y. 322,) it was held, expressly, that a right of action caused by a false and fraudulent representation of the solvency of a vendee of merchandise was not assignable. Such a right of action, it was there held, would not survive to the personal representatives of the party defrauded, and therefore could not be assigned inter vivos. It was conceded, however, that any right of action which would survive to the personal representatives of the party defrauded, might be assigned by such party, and an action maintained thereon by the assignee." In that case, as is seen, the fraud did not relate to any distinct and specific property, and no property was directly affected by it. It related to the credit and trustworthiness of a third person. There was, it is true, resulting damage to the plaintiff, but this was not the immediate or necessary consequence of the fraud; it was rather secondary and incidental. And the decision seems to have been placed expressly upon the ground that it — 385 — belonged to that class of injuries which consisted entirely of the personal suffering, either bodily, or mental, of the party defrauded, and which did not affect his property, and therefore the cause of action would die with him, and could not pass by assignment. In Haight v. Hayt, (19 N. Y. 464,) which was an action brought by the purchaser of a farm, against executors of the vendor, for a fraud practiced in the sale thereof, by their testator, in making false and fraudulent representations at the sale, in regard to an incumbrance thereon, it was held distinctly that such a cause of action survived against the personal representatives of the party practicing the fraud. Denio, J., who delivered the opinion in Zabriskie v. Smith, (supra,) in his opinion in the case then under consideration, says: “ The action survived against the representatives of Hayt, the original defendant. The cause of action was a ‘ wrong done,’ 1 to the rights and interests’ of the plaintiff.” And he cites 2 R. S. 447, §§ 1, 2, and then says: “The exception in section 2 shows, if there was otherwise any doubt, that the prior section was intended to embrace this case.” This is an express authority for the proposition that a cause of action for a fraud like the one in question, survives to, and against, personal representatives of a deceased party to the transaction, and is therefore assignable. Indeed, the statute would seem to place the question of the continuance of such a cause of action beyond all doubt. By section 1, the right of action is expressly given to, and against, executors and administrators “ for wrongs done to the property, rights and interests of another, for which an action might be maintained against the wrongdoer.” The action here does not fall within the exception made by section 2 of the statute. In Byxbie v. Wood, (24 N. Y. 607,) which was an action brought by an assignee, to recover back moneys fraudulently obtained from the assignor by the defendant, by — 386 — fraudulent representations to such assignor, in respect to the cost of a certain vessel, the case of Zabriskie v. Smith is commented upon, and the distinction between that case and the one then before the court pointed out, and the judge .who delivers the opinion goes further, and says: “It may be advisable to see how fully” the decisions in the cases of Zabriskie v. Smith, (supra,) and Allen v. Addington, (7 Wend. 9,) “accord with the Revised Statutes.” The learned judge also expresses the opinion that if the tort was one of the elements that went to make up the cause of action, in the case then before the court, it was assignable. But the court did not pass upon that question, holding that the action was maintainable as for money had and received. It has long been held that a right of action for the conversion of personal chattels might be assigned, so as to enable the assignee to maintain the action. (McKee v. Judd, 12 N. Y. 622. Gillet v. Fairchild, 4 Denio, 80. Hudson v. Plets, 11 Paige, 180.) It is quité difficult to see why a cause of action growing out of a fraud, practiced by one upon another in the exchange or sale of property, by which the defrauded party loses his property, and which is a species of tort, is not also assignable. All the cases agree that it is assignable if the cause of action survives, and may be maintained by or against the personal representative of the parties to the transaction. We have seen that a cause of action like the one before us does so survive. This case is not like that of Zabriskie v. Smith in‘its facts, hut is like that of Haight v. Hayt. I conclude, therefore, that the action is maintainable by the plaintiff as assignee. There can be no question, at this day, that the defendant is liable for the fraud of her husband, who made the bargain for her as her agent, although she was wholly ignorant of the fraud so practiced, and did not authorize it. She had the fruits of the bargain. She kept the property bargained for, and sold it, and retains the proceeds. — 387 — She must be held, therefore, to have made the instrumentalities by which the property was procured her own. The law will impute the wrong to her under such circumstances, as it was done for her benefit, and she retains the advantage. (Bennett v. Judson, 21 N. Y. 238. Elwell v. Chamberlin, 31 id. 611. Smith v. Tracy, 36 id. 79.) The referee finds that the defendant’s husband and agent, at the time he made the representations, knew them to be false. That they were material is quite apparent, and it is proved, and found, that the plaintiff’s assignor relied upon the representations. Indeed it could, in the nature of things, scarcely be otherwise, in such a case. The appellant’s counsel contends that the finding of the referee is against the evidence, but the most careful examination of the case will show that the finding is entirely justified by the evidence. The appellant has no reason to complain of the rule adopted by the referee in measuring the damages. What the plaintiff was entitled to, was the difference between the value of the mortgage debt as it would have been had the mortgaged premises been free from all prior incumbrances, as represented, and its value as it turned out to be, with the mortgaged premises incumbered by two prior mortgages and a judgment, amounting in all to $4760.72, on the day the bargain was made. The two prior mortgages were foreclosed by action, and the premises sold in satisfaction thereof within less than two years after the bargain between the defendant and the plaintiff’s assignor was made. On that sale the premises were struck off to the plaintiff’s assignor, who was the highest bidder, for $6000. This, it will be seen, after satisfying the mortgage debts and costs, left a small amount to apply on the bond and mortgage of the plaintiff ’s assignor. The plaintiff" testifies that this amount was about $1100. The referee finds — 388 — that had the premises been unincumbered by any previous incumbrances, as represented, the bond and mortgage would have been worth the full face thereof, $8852.03. After this foreclosure and sale of the mortgaged premises, the plaintiff’s assignor brought an action on the bond which accompanied the mortgage, against the obligor, and obtained judgment; but the execution on the judgment was returned wholly unsatisfied. I do not see why the plaintiff, under such circumstances, was not entitled to recover the whole amount of the mortgage debt, over and above the surplus arising upon the sale, with interest on that balance, by wayrof damages. The plaintiff’s assignor realized nothing upon, or by reason of, her mortgage debt, except'this surplus. She bought the premises, it is true, at the foreclosure sale, but she took them as any other purchaser would, not because of her mortgage, or by means of it, but by a higher and hostile right. By means of her mortgage she got this surplus, and nothing more; and this was in effect a judicial determination that her mortgage, as an incumbrance, was worth no more. But the referee adopted a rule vastly more favorable to the defendant, giving her, as it would seem, the benefit of the purchase of the plaintiff’s assignor, and charging her only with the amount which the defrauded party had to pay to get a title from another, and a hostile source. Certainly the defendant ought not to complain of the amount of damages”. The assignment of the cause of action was properly admitted in evidence, and the appellant’s counsel makes no point upon it. The other assignments introduced in evidence were not void because the stamps thereon were not canceled. There is no evidence or room for pretense that they were left uncanceled for the purpose of defrauding the government. No question can arise here in regard to the mode in which the action was tried. The reference was by consent, and — 389 — it was tried without objection that it was not a referable action. [Fourth Department General Term, at Syracuse, November 14, 1870. The judgment must therefore be affirmed. Mullin, P. J., concurred.