67 A.D. 595 | N.Y. App. Div. | 1902
The action is brought in equity for the rescission of a contract for the sale by the defendant of stock of the Traders’ Fire Insurance Company and for the recovery of the purchase price of such stock, The action is properly brought and has authority for its support. (Bosley v. N. M. Co., 123 N. Y. 550.) The ground of demurrer is that two causes of action have been improperly united, one being based upon alleged fraud on the part of the defendant and the other upon the mutual mistake of the parties. We think the defendant incorrect in his construction of the pleading, Whether such pleading be subject to criticism or not, but one cause of action is, stated, viz., to rescind a contract and recover money. All of the averments lead to this one result, and the prayer for relief is limited to these two objects. The only criticism that can be offered is that the plaintiff, to obtain the result which his action seeks, has stated two definite grounds for relief, one in fraud and the other in mutual mistake. It may be that such averments are inconsistent,: arid,
Assuming, however, that we are incorrect in this conclusion, it is-evident that criticism of this pleading by way of demurrer is not available, bio fraud is averred. The averment which it is claimed is based upon fraud is found in the 17th paragraph of the complaint, and is as follows: “ That the aforesaid statements made by the said directors as to the assets and liabilities of the said Traders’ Fire Insurance Company were made to the plaintiff, not as expressions of belief or opinion, but as true to the knowledge of the parties making them on behalf of the defendant; and with the intent that the plaintiff should act upon them; that the plaintiff relied on the same and would not .have purchased the said shares if the true assets and liabilities of the said insurance company had been known to it. That by reason of the falsity of such statements, the said contract for the purchase of the said shares by this plaintiff from the defendant is fraudulent and void, and the plaintiff is entitled to recover the consideration paid therefor.”
In order to constitute a good allegation of fraud, “ the representation upon which it is based must be' shown not only to have been false and material, but that the defendant when he made it knew that it was false; or, not knowing whether it was true or false and not caring what the fact might be, made it recklessly, paying no heed to the injury which might ensue.” (Kountze v. Kennedy, 147 N. Y. 124.) There is no averment in this pleading showing that when the defendant made the representation he knew that it was
The interlocutory judgment should be affirmed, with costs, with leave to the defendant to withdraw the demurrer and answer within twenty days, upon payment of costs in this court and-in the court •below.
Van Brunt, P. J., Ingraham and Laughlin, JJ., concurred; Patterson, J., concurred in result.
Judgment affirmed, with costs, with leave to defendant to withdraw demurrer and answer within twenty days, on payment of costs in this court and in the court below.