159 N.E. 84 | NY | 1927
The complaint, as limited by the bill of particulars served, sets forth the following state of facts: The defendant Blyn Shoes, Inc., was a corporation, and *343 the defendants Jacob Blyn and Henry Blyn were stockholders, officers and directors thereof. The defendants were engaged in the general business of selling shoes. The plaintiff was engaged in the business of manufacturing shoes. Rosenwasser Bros., Inc., a corporation controlled by the plaintiff Morris Rosenwasser, was also engaged in the manufacture of shoes. On April 23, 1924, the corporation Blyn Shoes, Inc., wrote the corporation Rosenwasser Bros., Inc., stating that it would be very pleased if the latter became a purchaser of a block of stock in the former, that the former would give to the latter representation upon its board of directors, and would be glad to favor it, under certain conditions, with its business. A letter, to be signed by Rosenwasser Bros. and returned to Blyn Shoes, Inc., was inclosed. This letter contained an offer to purchase a block of stock at a price stated and asserted the understanding of the proposed writer that it would be favored with the business of Blyn Shoes, Inc., under the conditions specified in the letter to which it was to be an answer. The letter was never signed by Rosenwasser Bros., Inc., and was not returned to Blyn Shoes, Inc. However, on April 25, 1924, the individual Morris Rosenwasser, the plaintiff herein, wrote Mr. Civic, the agent of the defendants, offering to purchase, at the price of $8 per share, 12,500 shares of the common stock of Blyn Shoes, Inc., and to make payment therefor on or about June 30, 1924. The letter contained the promise of the writer not to sell the stock to be purchased without the consent of Jacob Blyn and Henry Blyn, provided the latter would include the writer's stock in any sale made by them of the control of the corporation. It also contained the following stipulation: "It is also agreed between Messrs. Jacob and Henry Blyn that I will be accorded representation on the Board of Directors to the extent of two members, and that they will favor my company, Rosenwasser Bros., Inc., with their business, whatever merchandise we are *344 in a position to make up which will equal in style, quality, workmanship and price, that they are offered by other manufacturers, and in general, cooperate in every way possible." This stipulation was worded in substantially the same phraseology as was the proposal of Blyn Shoes, Inc., contained in its letter to Rosenwasser Bros., Inc., to favor the latter with its business. On or about July 1, 1924, Blyn Shoes, Inc., issued and delivered to the plaintiff, Morris Rosenwasser, 12,500 shares of its common stock, and Morris Rosenwasser paid Blyn Shoes, Inc., $100,000 therefor. Subsequently to the sale the individual defendants refused to comply with their promise, made to the individual plaintiff, to favor his company, Rosenwasser Bros., Inc., with their business. The plaintiff, on the sixth day of February, 1925, tendered to the defendants the certificates of stock received by him and demanded the return of the sum of $100,000 paid therefor.
The question arises whether the complaint, which sets forth these facts, sufficiently states a cause of action for the return of the purchase moneys paid.
It is well established in this jurisdiction that an action for money had and received is available to a vendee, whether of chattels or real estate, to recover the sums paid pursuant to the contract of sale, where there is a total failure on the part of the vendor to perform. (Lawrence v. Taylor, 5 Hill, 107;Murray v. Richards, 1 Wendell, 58; Gillet v. Maynard, 5 Johns. 85; Raymond v. Bearnard, 12 Johns. 274; Wheeler v.Board, 12 Johns. 363; Putnam v. Westcott, 19 Johns. 73;Chapman v. City of Brooklyn,
The cases of Hunt v. Silk (5 East, 449); De Kay v.Bliss (
In the case at bar, Blyn Shoes, Inc., sold stock to the individual Morris Rosenwasser. The money was paid and the stock was delivered. As between buyer and seller the transaction was fully executed and no promises remained to be performed. Indeed it does not appear that Blyn Shoes, Inc., made any promise whatsoever. It merely accepted the offer of the plaintiff, Morris Rosenwasser, for the purchase of its stock, by issuing the stock to him. Morris Rosenwasser demanded a promise, not from the seller Blyn Shoes, Inc., but from the individual defendants, that they would favor, not Morris Rosenwasser, but Rosenwasser Bros., Inc., a corporation *348 controlled by him, with the business of the defendants. May Morris Rosenwasser, the plaintiff herein, rescind the completed transaction, and have a return of the moneys paid for the stock, because the individual defendants have failed to perform their promise? We think not, for several reasons. 1. The plaintiff bases his claim upon a failure of consideration, not on the part of the seller of the stock, but on the part of individuals who were strangers to the sale. 2. The default complained of was in respect to a stipulation wholly collateral to the essential bargain of purchase and sale. The unperformed stipulation was "subordinate and incidental to the main purpose of the contract." By its non-performance the object of the contract was in nowise "defeated or rendered unattainable." The default did not "tend to defeat the object of the parties in making the contract." Nor was it a "breach going to the root of the contract." 3. As distinguished from the cases of Mahon v. City of Columbus andCallanan v. K., A.C. L.C.R.R. Co. (supra) a situation is presented where an action of damages for breach of contract, instituted by the beneficiary named in the contract, against the individual defendants, would afford complete indemnity for the injury done, if any. We, therefore, conclude the complaint states no cause of action.
The order of the Appellate Division and that of the Special Term should be reversed and the defendants' motion granted, with costs in all the courts. The first question certified should be answered in the negative, and the second question certified should be answered in the affirmative.
CARDOZO, Ch. J., POUND, CRANE, ANDREWS, LEHMAN and O'BRIEN, JJ., concur.
Ordered accordingly. *349