Opinion
Argued November 13, 1900
Decided December 11, 1900
Horace McGuire for appellant. Frederick Collin for respondents.
This case is near the border line. If this complaint were at common law for the recovery of money, the demurrer would, no doubt, be well taken, since neither plaintiff had any pecuniary interest in the stock of the other, and has no interest in the damages sustained by the other. But the action is in equity to rescind the contract of sale which the defendant induced both plaintiffs to make of all the shares of capital stock held separately by each, by a fraud ingeniously contrived, with the design and to the end that both should be misled, and more effectually misled by operating upon the elder plaintiff than if directly upon both. Ordinarily a separate misrepresentation to one is not a misrepresentation to two; but if the situation is to the knowledge of the fraudulent actor such that a separate misrepresentation to one will reach two, and is intended to be to two, and pursuant to the intention becomes so, then the misrepresentation is to two. The deceit was single in act and utterance, but joint in operation and effect.
The complaint shows that, although these plaintiffs severally owned their quota of shares, they nevertheless acted in concert respecting them and the interests represented by them, and were by the same fraud of the defendant induced to act in concert in selling their stock to him. The defendant baited and set one trap for both, and caught both in it. The wrong of the defendant destroyed their unity of action as owners of the stock, and it is agreeable to equity that the plaintiffs should be extricated together, and under the facts they allege be permitted to act together in rescinding the sale and in reinstating themselves in their former position.
The fraud alleged is of that single character and bifold or manifold effect that in order to present its full scope both causes of action should be united; and also in order to avoid two actions, equity should take cognizance of the fraud in one and dispose of it once for all, to the relief of both parties to the action, whose like interests have been in like manner injured by it. ( Murray v. Hay, 1 Barb. Ch. 59; Wood v. Perry, 1 Barb. 114; Foot v. Bronson, 4 Lans. 47; Emery v. Erskine, 66 Barb. 9; Brinkerhoff v. Brown, 6 Johns. Ch. 139; Strobel v. Kerr Salt Co., 164 N.Y. 303; Smith v. Schulting, 14 Hun, 52; Kennedy v. City of Troy, ib. 308; Kellogg v. Siple, 11 App. Div. 458; Simar v. Canaday, 53 N.Y. 298; Shields v. Barrow, 17 How. [U.S.] 130; Williams v. Bankhead, 19 Wall. 563; Brown v. Guarantee Trust S.D. Co., 128 U.S. 403; 1 Pomeroy Eq. Juris. secs. 243 et seq.; Story Eq. Pl. sec. 76, c.; Adams Eq. [8th ed.] 314.) The provisions of the Code of Civil Procedure, sections 446, 447, 452, are not in derogation of the equity rules. ( Derham v. Lee, 87 N.Y. 599.)
Unlike the cases of Gray v. Rothschild ( 112 N.Y. 668) and Chester v. Halliard ( 36 N.J. Eq. 313), cited by the defendant, these plaintiffs were not separately deceived but because of their concert in judgment and action they were jointly deceived to their several injury not only, but to their joint injury, resulting from the severance of their joint action in the management of their interests. This joint injury may not be measurable in money, and hence can only be appreciated in equity. It touches the form of the action and remedy, rather than the amount of the relief. It inclines the court to hear the case in its entirety, and not in fragments.
The questions certified should be answered in the negative, and the interlocutory judgment affirmed, with costs.
PARKER, Ch. J., O'BRIEN, CULLEN and WERNER, JJ., concur; GRAY and HAIGHT, JJ., not voting.
Interlocutory judgment affirmed.