Falk v. MacMasters

197 A.D. 357 | N.Y. App. Div. | 1921

Jaycox, J.:

The court at Special Term granted a motion made by the plaintiff for judgment on the pleadings. The pleadings consist of the complaint, an answer and a demurrer to the answer.

The action is brought to recover moneys deposited by the plaintiff with the defendants to margin certain stock transactions conducted by the defendants, as brokers for the plaintiff, upon the ground that at the time of the deposit and of the transactions the plaintiff was and still is an infant.

The answer denies knowledge or information .sufficient to form a belief as to the allegations of the plaintiff’s infancy and the appointment of his guardian ad litem. For a further answer the defendants allege that they were induced to' act as brokers for the plaintiff and to accept his deposit and disburse it under his directions by false and fraudulent representations made by the plaintiff that he was more than twenty-one years of age. The answer further alleges as a separate and distinct defense that the complaint does not state facts sufficient to constitute a cause of action. It also alleges for a second separate and distinct defense and for a setoff and counterclaim that the plaintiff falsely and fraudulently represented himself to be more than twenty-one years of age and deposited various moneys with the defendants as margin to apply to stock purtihases made by the defendants under his direction and that, acting under his direction, the defendants expended and paid out $570.89 over and above the amount deposited by the plaintiff with them and prays for judgment for this amount.

The plaintiff demurred to the so-called further answer and to the first separate and distinct defense on the ground that they are insufficient in law on the face thereof. The plaintiff also demurred to the defendants’ so-called separate and distinct defense and setoff and counterclaim on the ground that the facts stated are not sufficient to constitute a counterclaim and as insufficient in law on the face thereof. The plaintiff did not bring his demurrer on as a motion and thus test the sufficiency of it as applied to any portion of the defendants’ answer. On the contrary, his motion was for judgment and, if any portion of the defendants’' answer was sufficient, the motion should have been denied.

The denial of the plaintiff’s infancy and of the appointment of a guardian are both sufficient to withstand an attack by demurrer. The Code of Civil Procedure, section 500, expressly authorizes a denial of any knowledge or information sufficient to form a belief as to any material allegation of the complaint. The plaintiff seeks to avoid this provision of the Code of Civil Procedure as to the denial of the plaintiff’s infancy upon the ground that the defendants state in their further answer and also in their counterclaim that the plaintiff falsely and fraudulently represented that he was more than twenty-one years of age, the contention of the plaintiff being that this is an admission that the plaintiff was under twenty-one years of age at the time of these transactions. I think the answer cannot be thus construed. My attention has been called to no case holding that where a fact is sufficiently denied in one division of the answer to put the plaintiff to his proof, he can treat the denial as waived or proof dispensed with by reason of even an express admission of the fact contained in a separate defense introducing an avoidance. In fact, I think the authorities are to the contrary, and the defendants’ denial is unaffected by a subsequent admission contained in a defense containing an avoidance. (Troy & Rutland R. R. Co. v. Kerr, 17 Barb. 581.) It was held in Goodwin v. Wertheimer (99 N. Y. 149) that a defendant may put his defense upon distinct and even inconsistent grounds.

The plaintiff says that the denial of information sufficient to form a belief as to the appointment of the guardian ad litem of the plaintiff is frivolous. In that he may be correct, but the trouble with that assertion at this time is that he did not move to strike out that denial as frivolous. The plaintiff should have moved to strike out the frivolous defense and then the party moved against would have had an opportunity to prove that the defense presumptively frivolous was, in fact, true. The plaintiff has, therefore, mistaken his remedy in demurring to these denials, and the motion for judgment, so far as based upon them, was improperly granted. (Harley v. Plant, 210 N. Y. 405, 411.)

The plaintiff further claims that the allegations of false' and fraudulent representations as to the plaintiff’s age constitute no defense to the plaintiff’s cause of action. The cases, however, cited by the plaintiff do not sustain this contention. In all of the cases cited by the plaintiff the party alleging the 'false representation as to age has been seeking to recover from the infant defendant on a contract, and it has been held that if an infant were liable under such conditions the entire defense of infancy would be emasculated. It is also held in these and other cases that infancy cannot be used both as a sword and shield — that an infant is hable for his torts. In this case the defense is based upon a claim that the plaintiff, by his false and fraudulent representations, induced the defendants to accept and disburse his moneys and after his moneys had been disbursed in accordance with his direction, upon a plea of infancy he seeks to recover the sum from the persons whom he deceived. I find nothing in the cases cited to support a claim that such a defense cannot be introduced.

New York Building Loan Company v. Fisher (23 App. Div. 363) was an action to foreclose a mortgage made by an infant. The action being to enforce a contract by the infant, the infant’s false representations as to age were held to give no validity to the contract. Studwell v. Shapter (54 N. Y. 249) and International Text Book Co. v. Connelly (206 id. 188) are also actions brought upon a contract against an infant defendant wherein it is alleged that the defendant made false representations as to his age to induce the plaintiff to enter into the contract. Mordecai v. Pearl (63 Hun, 553) holds that an infant who deposited money with stockbrokers as a margin, upon the credit of which he engaged in stock speculations which resulted in a loss, may recover his deposit in full. There is, however, in this case no claim of any false representations by the plaintiff. In Heath v. Mahoney (7 Hun, 100) the plaintiff’s stockbrokers sought to recover damages which they claimed to have suffered by reason of false and fraudulent representations made by the infant defendant. The infant defendant deposited with them $500 in cash and two United States bonds of $500 each. The defendant’s representations consisted of stating that the defendant was the owner of these bonds, although registered in the name of his mother, who subsequently reclaimed them. The trial court permitted the plaintiffs to recover the total amount of their losses by reason of the transactions had with the defendant. Upon appeal the court held that the only damages the plaintiffs were entitled to recover was the amount suffered by reason of the false representations made by the defendant as to the ownership of the two United States bonds. The judgment of the court below was, therefore, reversed and a new trial ordered. This seems to be a distinct holding that an infant is liable for losses arising by reason of his false representations. A number of other cases may be cited holding practically the same thing. (Shenkein v. Fuhrman, 80 Misc. Rep. 179; Lown v. Spoon, 158 App. Div. 900; Gaunt v. Taylor, 15 N. Y. Supp. 589; Bergman v. Neidhardt, 37 Misc. Rep. 804; Hewitt v. Warren, 10 Hun, 560.) In the last case cited it is said: “If a party has been induced to purchase property from an infant, by the infant’s fraud and misrepresentation, it would seem that he might, on discovering the fraud, disaffirm the contract, return, or offer to return the property, and thus put the infant in the position of a mere wrong-doer, unjustly keeping what he had fraudulently obtained. And it would seem that the infant would then be liable in damages for tort.” In this case there is nothing to return. The plaintiff seeks to recover upon a contract which the defendants say was procured by fraud and misrepresentation. There is no reason either in law or good conscience why this defense should not be interposed and, if established, why it should not prevent the plaintiff’s recovery.

The defense that the complaint does not state facts sufficient to constitute a cause of action cannot be taken by answer. If the complaint is deficient in its allegations, that defect appears on the face of the complaint and should be taken by demurrer. (See Code Civ. Proc. §§ 488, 498, 499.) This, however, did not benefit the plaintiff upon this motion, as the answer raised issues necessitating the trial. The plaintiff’s motion, therefore, should have been denied.

The order appealed from should be reversed, with ten dollars costs and disbursements, and the motion for judgment denied, with ten dollars costs.

Blackmar, P. J., 'Mills, Rich and Putnam, JJ., concur.

Order reversed, with ten dollars costs and disbursements, and motion for judgment denied,, with ten dollars costs.