| N.Y. App. Div. | Jul 12, 1906
Lead Opinion
The judgment should be affirmed, with costs.
The action is to rescind a contract for the sale of land and to cancel the record of the contract and an assignment thereof, on the ground of fraud. A mortgage on the land was held by the Cassidy & Son Manufacturing Company. At the sale under a foreclosure of this mortgage John C. Cassidy, then and still president of the company, purchased and took title to the land in his own name, but for the benefit of the company, whose money was used to pay the purchase price. A part of the land was thereafter sold by Cassidy to the defendant Sauer for the benefit of defendant Parce, and in making the contract for this sale fraud was committed by Parce and Sauer upon Cassidy. The contract was subsequently assigned to the defendant Becker, Mrs. Sauer joining with her husband in the assignment. These facts are alleged in the complaint, and, of course, are admitted by the demurrer.
The grounds of the demurrer, in brief, are:
First. That Cassidy is not personally a party to the action.
Thvrd. That the complaint does not state facts sufficient to constitute a cause of action.
As to the first ground, no cause of action for of against Cassidy personally is alleged. The only theory upon which it can he said he should he made a party is that he should he hound by the judgment which will adjudge that he has personally no interest in the property, to which he has the legal record title, and which he contracted to sell and dispose of. It is necessary that he should be so connected with the litigation as to be concluded by the judgment in all future actions with reference to the property. We think it must be said that Cassidy as an individual is a party to this action, inasmuch as the result of the litigation must determine that he has no individual rights in the property, but that he took and holds title to the property, and made the contract for the sale thereof solely for the benefit of the company. The mere fact that he is named as trustee in the title does not settle the question. The body of the complaint must be considered in determining what rights are being litigated, and it appears thereby that a determination of the questions involved requires a finding that Cassidy has no personal interest in the property. Such a finding would be binding upon him in any future litigation involving his rights in the property. It will he noted that he is not a defendant in - the action in any capacity. He is not brought into court by someone else. He brings the action himself, and alleges and asks the court to find that he is a trustee merely and has no personal interest in the property. It cannot be possible that he can avoid this finding so made in this action in any subsequent litigation involving his rights in the property. ¡Many text books and cases have been cited, considered and discussed by counsel, relating to this question, and it requires considerable study and effort to harmonize the views expressed by writers and judges on this subject. Wo think there is no authority which, carefully considered, runs counter to the conclusion herein-before expressed by ns. Wo do not desire to enter into an analysis of these authorities. It is said, however, that the trust alleged is void, and Cassidy is the real, actual owner of the property. If this be true, then it miist be said that the complaint taken as a
Kor do we think that there is an improper joinder of parties in making the company a party plaintiff in the action. Section 446 of the Code of Civil Procedure is authority for such joinder, and section 449 does not prohibit it. The latter section is permissive merely. The action may be by the trustee of the express trust. There is no prohibition against the real party in interest bringing it or being joined as a plaintiff. (See Hubbell v. Medbury, 53 N.Y. 98" court="NY" date_filed="1873-06-03" href="https://app.midpage.ai/document/hubbell-v--medbury-3615795?utm_source=webapp" opinion_id="3615795">53 N. Y. 98, 102, construing a like provision of section 113 of the Code of Procedure.)
The action here is not to recover upon a sealed instrument, the. contract of sale, but to set the same aside by reason of fraud. The case of Spencer v. Huntington (100 A.D. 463" court="N.Y. App. Div." date_filed="1905-01-15" href="https://app.midpage.ai/document/spencer-v-huntington-5195882?utm_source=webapp" opinion_id="5195882">100 App. Div. 463) is not, therefore, applicable. The complaint states facts sufficient to constitute a cause of action in fraud, and we think, upon a consideration of all the questions raised, that the demurrer to the complaint was properly overruled.
All concurred, except Spring and Kruse, JJ., who dissented in an opinion by Kruse, J.
Dissenting Opinion
The facts stated in the complaint do not establish a joint cause of action in favor of the plaintiffs, and I am inclined to the opinion that none is stated in favor of either ,of them in the form in which the action is brought and the capacity in which the plaintiff John C. Cassidy sues. -As I view* it, the complaint states the ordinary cause of action in favor of the plaintiff John Cassidy, individually
It is true that the complaint alleges that Cassidy was the president of his coplaintiff company; that he took the title to the land for the benefit of the company, his coplaintiff, its money being used to pay the purchase price thereof, hut it is alleged that he took the title to it in his own name, and there is no allegation that in entering into the contract that he now seeks to set aside, he assumed to act for the company, but the contract was made by him individually, in writing and under his seal. I think under such circumstances the cause of action to set aside the contract is one in his favor individually. Even if Cassidy can be regarded as suing individually, or even if the cause of action can be treated as one by him as trustee, I think he and the company are improperly joined as parties plaintiff. There is no claim that the plaintiff Cassidy is at variance with his coplaintiff company, or that the latter, who is beneficially interested, will not be fully protected by him. It is not a case where a trustee refuses to bring an action to vindicate the rights of his cestui que trust i but even in that view, the action, if maintainable, should he brought directly by-the company, making Cassidy a party defendant, alleging such failure upon the ¡Dart of the trustee. There is no more reason for joining a trustee and his cestui qioe trust as parties plaintiff upon such a cause of action- than for so joining an agent with his principal.
I think the demurrer should be sustained.
Spring, J., concurred.
Interlocutory judgment affirmed, with costs, with leave to plead over upon payment of the costs of the demurrer and of this appeal.