71 N.J. Eq. 531 | New York Court of Chancery | 1906
These two causes now heard together are—first, a suit by Isaiah Smith against Gottfried 0. Krueger, and second, a suit on a bill filed by Krueger against Smith and John L. Armitage as co-defendants.
By stipulation, filed at the hearing of these two causes, the evidence taken in a previous cause brought by Krueger against Armitage alone, is to be read and considered, so far as applicable, as if taken at this hearing. Smith’s bill is filed to foreclose a mortgage on lands in Middlesex county, bearing date January 6th, 1894-, given by Krueger to Smith to secure the payment of $4,000 in one year, with interest payable semi-annually, on which
The mortgage now in question, although given by Krueger directly to Smith, was given in carrying out a contract made by Krueger, not with Smith, but either with Armitage or a mining company, called the International Asbestos Company, for the purchase of five hundred shares of the stock of that company. The mortgage to Smith was accepted by the company as payment of so much cash to it by Krueger, on account of shares of its stock issued to Krueger. The company owed Armitage on a contract with him for the transfer of his stock to the company, to carry out its contract for stock with Krueger, and Armitage on his part owed Smith, under circumstances to be hereafter stated, for the purchase price of the mine, which had been conveyed by Smith to Armitage and by Armitage to the company. The mortgage made directly by Krueger to Smith was accepted by the company as Krueger’s payment for $4,000 on account of the stock to be issued to him, and this amount was charged by the company to
Hpon the whole evidence I conclude that Krueger has failed to show satisfactorily either that Smith made to him the representations claimed, or that such representations, if made as claimed by Krueger, induced the purchase of the stock. The conclusion which I reach is that Krueger, before any conversation with Smith, had completed the agreement for purchase of the five hundred shares of stock with Armitage, and had, together with the other directors, considered and acted on the matter of the correctness of Woltereck’s report, and that Smith’s general statement, if made under the circumstances stated by Krueger, cannot be considered as inducing Krueger’s contract of purchase or the execution of the mortgage carrying out this purchase.
As to the second claim on which the defence to the mortgage of Smith and the bill against him is based, viz., that the mortgage was given for the purchase of Smith’s stock, and was pro
Defendant Armitage, in addition to a general denial of the charges and allegations against him made in,the cross-bill, sets up two special defences in his answer. First, that he has no interest in the bond and mortgage given to Smith, as was charged in the cross-bill, and that, independent of such interest, Krueger is not entitled to any relief in this court against him by way of damages. As to any such relief the benefit of a demurrer was claimed. The general rule is that jurisdiction in equity in cases of fraud is concurrent with that of the courts of law, and the question of its exercise depends on the whole aspect of the case on the pleadings and proofs. The concurrent jurisdiction is asserted, and the exclusive jurisdiction of courts of law for recovery of damages caused by fraud is denied in Eggers v. Anderson, 63 N. J. Eq. (18 Dick.) 264 (Qourt of Errors and Appeals, 1901). In this case the equitable jurisdiction was exercised
The second special defence set up by Armitage is the statute of limitations, and, in my judgment, this must be allowed. The first bill against Armitage was dismissed on October 5th, 1899, expressly without prejudice to an action at law. No appeal was taken from this decree and no action at law was brought. The last payment made by Krueger for the stock was on March 8th, 1894, and the right of action at law expired on March 8th, 1900. The bill to foreclose his mortgage was filed by Smith on February 20th, 1895, and Krueger’s answer and cross-bill against Smith alone, for cancellation of the mortgage, was filed April 4th, 1895. Proceedings in this suit were delayed pending the hearing and decision of the suit of Krueger v. Armitage, in which, as above stated, Krueger claimed against Armitage for the whole amount invested, including the $4,000 mortgage given to Smith. On November 29th, 1901, the present bill against Smith and Armitage was filed. So far as relates to Smith, the equitable remedy for a cancellation of the mortgage is not affected by the statute of limitations, but so far as relates to the recovery of damages in addition, either against him or Armitage, the statute is a bar. The settled rule is that where the jurisdiction in equity is concurrent with that at law, the suit, if barred at law, is barred in equity. Conover v. Conover, 1 N. J. Eq. (Sax.) 403 (1831); Marsh v. Oliver, 14 N. J. Eq. (1 McCart.) 259 (Chancellor Green, 1862), cited by me in Condit v. Bigalow, 64 N. J. Eq. (19 Dick.) 514 (1903). If the time of the discovery of the
The bill by Krueger must therefore be dismissed as against both defendants. Smith is entitled to, a decree for the amount due on his mortgage and to a dismissal of the cross-bill filed against him.