43 N.Y.S. 826 | N.Y. App. Div. | 1897
The question presented upon this appeal is, whether the facts .alleged in the answer, if proven, would constitute a counterclaim, set-off, or defense. It may be regarded as settled law that a demand against a decedent, which falls due after his death, is not available as a set-off or counterclaim in a suit brought by his personal representatives. (Code Civ. Proc. § 506 ; Jaeger v. Bowery Bank, 59 N. Y. St. Repr. 385 ; Jordan v. Nat. Shoe & Leather Bank, 74 N. Y. 467.) In the latter case it was held (head note): “ That the
It is insisted that, because it was alleged that the false representations were either due to a mistake' or were fraudulently made,., this allegation, being in the alternative, was insufficient. This con- , téntion we do not regard as sound, because the defendant is entitled to any relief consistent with the case made by its answer and ■embraced within the issues. Where a pleading alleges two grounds, upon which relief is claimed, one of which is good and sufficient, the pleading is not demurrable because of the insufficiency as to the ■other. The allegations as to the latter will not vitiate or detract from the effect of the allegations of the former. Whether defendant could rescind the contract on the ground of mutual mistake it is not necessary to' determine. The answer states, facts which,, if proved, are sufficient to establish and sustain a defense on the ground of fraud; and the allegation of mutual mistake does not
While the rule thus stated, by reason of the element of fraud winch enters into that case, as it does in the one at bar, is applicable, this case is much stronger, because, while in Rothschild v. Mack (supra) the money was actually parted with, here all that was done was to take notes and in form to discount them, but really to place upon the books of the bank a credit to plaintiffs’ intestate equal to the notes, less the discount.
This credit having been obtained by means of false and fraudulent representations, it gave to defendant the right at any time to cancel it, and this right, therefore, to cancel the- credit existed in favor of the defendant at -the time of the death of the plaintiffs’ intestate. His personal representatives upon his death took such rights as he had, subject to all equities, they standing in the same position to the defendant as their intestate would had he lived.
The fraud perpetrated, affecting as it did the entire transaction, conferred upon the defendant the right to rescind it; and this right related back to the time when the transaction was initiated. What
When the contract was rescinded, therefore, whether we regard the credit on the books of the bank as representing money of the plaintiffs’ intestate or the bank’s own money, Reyman became indebted to the defendant for the amount thereof. It can be legally and justly regarded as money or a credit which never, belonged to. Reyman, and in and to which his administrators have no interest or claim. As said in Andrews v. The Artisan' Bank, (26 N. Y. 300),
“ If the facts respecting the discount of Benson’s note were such as. the defendant offered to prove them, the credit which the plaintiff obtained on the defendant’s books, being the result of his fraud, was unavailing, either as a contract for the payment of the sum which was in form credited, or as evidence of money of the plaintiff in the defendant’s hands. The contract to pay the amount to the plaintiff upon his checks, in the usual course of banking business, which would have arisen if no fraud had intervened, could not. be predicated of the transaction if it ¡should appear to have been , brought about by the fraud of the party seeking to avail himself of. it. Fraud vitiates every contract and renders void as to the guilty party every transaction into which it enters.”
These views in no way conflict with the case cited by the respondents of Wise v. Grant (140 N. Y. 593). In that case one Rothschild purchased goods and procured credit therefor by means of false and fraudulent representations. After the goods had been purchased one of Rothschild’s creditors procured an attachment against his property, and seized the goods which had been obtained by fraud. The vendor who had been defrauded then brought an action to replevy the goods from the sheriff, but it was held by the Court of Appeals that replevin would not lie, because “ at the time of the seizure (under
We think, therefore, that upon the ground of fraud the answer alleged a good defense, and that it was error upon the part of the court to reject the evidence offered to prove such defense, and to direct a verdict and order judgment upon the answer. The judgment, accordingly, should be reversed and a new trial ordered, with costs to appellant to abide event.
Van Brunt, P. J., Williams, Patterson and Ingraham, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event.