137 A.D. 412 | N.Y. App. Div. | 1910
The judgment and order should be affirmed,- with costs.
The action was brought to recover damages for fraud-.in the compromise of a claim for jin juries alleged to have been caused by defendant’s negligence.
. ■ The compromise was made between the plaintiff and the claim agent of defendant, one McCormick. The fraud alleged was the ■
The questions involved are really legal in their nature. The plaintiff relied upon the cases of Gould v. Cayuga County Nat. Bank (86 N. Y. 75 and 99 id. 333). The plaintiff there was defeated in the first action, and then brought the second one, in which he succeeded.
In those cases the plaintiff sought to recover by reason of fraud in a compromise agreement, under which he received $25,000. The plaintiff did not return or tender back the money received. In the first case the action was at law upon the original claim compromised, and the court held that the action was. based on a rescission of the compromise agreement, and no recovery could be had because there had been no return or tender back of the money received before the action was commenced. In the second case the action was for damages by reason of the fraud in the compromise agreement, and it was held such action was based upon an affirmance of the agreement and could be maintained without the return or tender back of the money received on the compromise. The original .claim, the one compromised, was for breach of an agreement to return bonds loaned by Gould to the defendant bank. ■ The amount of bonds loaned does not appear in the report of either case but we may assume it was largely in excess of the $25,000 paid upon the compromise. The plaintiff had the bonds on deposit with the bank for safekeeping. He loaned them to the bank upon an agreement that the bank would return or replace them before interest became due thereon. Plaintiff thereafter applied for his bonds, and was told there were none on deposit belonging to him. He made a claim under the agreement and the bank alleged the bonds, had been returned or replaced by others and put in its vaúlt, and the loss of
First. To rescind the compromise agreement,-and seek to recover upon the original claim, in which case.he must, before action brought, return .or tender back the money received — the $25,000..
Second. To affirm the compromise agreement, retain the money received under it, and seek to recover damages for.the fraud.
Third. T.o seek in equity to rescind the compromise agreement and for equitable relief, and offer in his complaint to restore the $25,000 if he was not entitled to retain it. - He failed in his effort to enforce the first remedy, because he failed to return or tender back the money before action was brought. The second remedy was then sought. Some discussion in the opinion of the court in the later of the two cases, will serve to indicate the application of that case to the case we are- considering.
I quote as briefly as possible, referring to the report itself for a more detailed statement of the language. ■ Judge Finch said: “The $25,000 * * .obviously * * * was the agreed value of a disputed right of action, but an agreed value won out of Gould by a false'and fraudulent statement of the facts upon which such value depended. If no falsehood had been told him that value would have been greater in his judgment and so in his demand as a term of the compromise made; and that such value was fixed at $25,000, and no more was the direct product and result of the fraud. * * * Gould did not ‘ receive just what he contracted for,’ but contracting for the'fair value of his disputed claim was induced by .
These extracts show very clearly the principles of law applicable to this kind of actions, affirming a compromise agreement and seeking damages for fraud in making the same. W e see no reason why these principles are not applicable to the action here being reviewed. The plaintiff had a claim for damages on account of personal inju
I see no reason why the recovery should not be sustained. The amount recovered here is not large, but the case may very likely be important by.reason of many other cases likely to arise out of the embezzlement of this same claim .agent, McCormick.
The defendant claims no actionable fraud was shown. I think the false representation made constituted-such fraud. It was of an existing fact,- and its effect upon plaintiff in inducing the compromise can hardly be doubted.
I do not care to discuss the matter at great length; I leave it to the sound common, sense of ordinary minds. The plaintiff lost $174 by reason of the false statements of McCormick, the agent of the defendant. He has been'permitted-to recover, the amount of this loss as a direct result of the fraud. The recovery is a jiist and legal' one.
I think no reversible errors were committed by the trial court in its charge or disposition of defendants requests to charge, and-that there should be an affirmance in the case.
All concurred.
Judgment and order affirmed, with costs.