65 N.Y.S. 709 | N.Y. App. Div. | 1900
This is an appeal from a judgment of the County Court of Westchester, entered upon a verdict directed for the full amount of the plaintiff’s claim upon a joint and several promissory note for $750,. made to his order by the defendants. Each answer admits the giving-of the note, but alleges that its execution was obtained by fraud or by duress, and contains certain counterclaims. The replies denied the allegations in counterclaim, and alleged adjustment and settlement of the claims set up in paragraph 3 of the answer by the delivery of the note.
The defendants owned almost all of the stock of a railroad corporation, and the plaintiff was its secretary. The minutes of the-directors of August 25, 1894, show this resolve: “ That the secretary be paid $50 per month until the road is in operation, and thereafter not to exceed $100 per month, said salary to begin October 1, 1894, to accumulate and be paid out of the net earnings of the company.” In 1897 the defendants were about to sell the road, and the purchasers insisted as a condition of purchase that the defendants' should furnish a release from the plaintiff of any claim for the services contemplated by said resolution. The defendants sought the release, but the plaintiff held off, demanding $1,500, while
There was no proof of fraud in the circumstances attendant upon the execution and delivery of the note. The proposed purchaser would not buy unless the plaintiff executed a release, and the plaintiff refused to give the release unless the note was made. There was neither concealment nor false representation; the plaintiff simply barred the way. Further, the plaintiff did not compel the delivery of the note ; he refused to execute the release unless the note was given, and the penalty of his refusal was but the consequent inability of the defendants to satisfy the proposed purchaser. The defendants did not stand in vinculis, nor were they terrorized or intimidated, and consequently there was no duress. (Jewelers’ League v. De Forest, 80 Hun, 379 ; affd., 151 N. Y. 654.)
The first counterclaim sets forth that between August, 1894, and July, 1897, the plaintiff was custodian of cash belonging to defendants, and at times exhibited his accounts, whereon items appeared of payments to himself; that he stated that the account showed the true amount received, and, as it was short of the amount received, he had so charged the deficits to himself, as he must have received the money, wherefore the defendants seek to recover such amounts. I think that the counterclaim is properly pleaded under the 2d subdivision of section 501 of the Code of Civil Procedure. An agent or person acting in a fiduciary capacity is not subject to an action for tort for a mere omission, but only for acts of misfeasance.
(Segelken v. Meyer, 94 N. Y. 473.) Even if the action be ex delicto, the defendants could waive the tort and sue in assumpsit. (Rothschild v. Muck, 115 N. Y. 1; Coit v. Stewart, 50 id. 17.) This they have done. But the facts adduced tend to show that such money was the property of the corporation. Thus, the defendant Montgomery testified: “ I also told him (the plaintiff) that he had received considerable money from the company, or rather helped himself to it, which he admitted.” 4-gain, the same witness testified : “ I had several conversations with Mr. Slade (the plaintiff) in reference to the accounts of the road. I asked him to show me a statement of the receipts and disbursements. * * * I looked over the books. * * * I called his attention to the difference
In 1896 the defendants needed money to maintain this railroad, and plaintiff took part in the negotiations for a loan of $55,000, to be made through Seed from Hoaglaud. The defendants testify that plaintiff told them that Seed wished a commission of five per cent, but desired that they should pay it through plaintiff in order that the commission might be concealed from Seed’s principal, Hoagland, who was also Seed’s intimate friend. Five per cent upon $55,000, the commission said to be required, was thereupon paid to plaintiff for Seed, who, it is claimed, never received it and never required it. Therefore, the defendants attempt to counterclaim said sum paid to plaintiff as Seed’s commission. But this counterclaim is not properly pleaded. The cause of action is contract based upon the promissory note given in 1897, in adjustment of any possible claim of the plaintiff for salary as secretary of the defendant corporation, in view of such services and of the resolution of the directors fixing his salary. The subject-matter of the counterclaim is his alleged deceit or fraud in obtaining commissions from the defendants in procuring a loan of $50,000 or $53,000 for defendants or for the corporation in 1896. It is not pretended that he acted as secretary in securing the loan, or that such services were incident to that office. Clearly, then, the cause of action does not arise out of the contract or transaction set out in the complaint, and is not connected Avith the subject of the action, and, therefore, is not within the purview of subdivision 1 of section 501 of the Code of Civil Procedure. And whether the 2d subdivision of section 501 applies depends upon the question Avliether the counterclaim sets out any other cause of action on contract existing at the commencement of the action, Avhile this counterclaim is founded on tort. Admitting that the defendants could have Avaived the tort, and have based their counterclaim upon assumpsit (Rothschild v. Mack, supra ; Coit v. Stewart, supra), they have not done so. Bliss on Code Pleading (§ 153) states that the rule upon which the deter
The third counterclaim is properly pleaded, for the pleader now waives the tort and claims in assumpsit. It is alleged that plaintiff
The judgment should be reversed and a new trial granted.
All concurred.
Judgment reversed and new trial granted, costs to abide the event.