Opinion
1892-10-31
MAYO v. KNOWLTON.
Charles N. Morgan ( Morgan & Worthington, attorneys), for appellant. John R. Tresidder ( James B. Silkman, attorney) for respondent.
FN??a1. NOTE ON REQUIRING TO ELECT BETWEEN DIFFERENT GROUNDS OF RECOVERY ON THE SAME CLAIM.The increasing stringency with which the courts are now requiring plaintiffs to adhere on the trial to the theory of his action as indicated by the complaint, whenever objection is taken to recovering on facts alleged and proved because of the theory of the action or legal foundation for liability being different from that set forth in the complaint, has justly led to a reconsideration of the former rule that plaintiff cannot state in several forms, as if different causes of action, his demand arising on a single transaction.Where such causes of action involve allegations which cannot both be true, the better practice is to frame the allegations in the alternative, as in Everitt v. Conklin, 90 N. Y. 645. Where the facts alleged are not absolutely inconsistent, and the only conflict is in the legal theories through which liability is sought to be deduced, the better practice is to allege them as separate causes of action, taking care if one sounds in tort and the other in contract to show by the details stated that both arise out of the same transaction.If there is anything unfairly embarrassing in such a joinder, the court undoubtedly have power on motion before trial to compel plaintiff to elect; but if defendant takes issue as to both causes of action and goes to trial, the better opinion is that evidence appropriate to each issue should be received, and the question of election reserved till the evidence is all in.There are doubtless cases where if the complaint makes but a single statement, and several grounds of liability, all within its allegations, are proved, plaintiff has a right to go to the jury on the whole case, and the jury may render a general verdict without indicating whether they agree on either theory. The defendant's remedy in such case, if he is prejudiced, is best had by asking to have a special question submitted as to each aspect.If, however, the plaintiff pleads as if two causes of action?? and both go to the jury, it seems that the jury might be required on defendant's request to find a separate verdict on each, so that if they could not all agree on one, the defendant would prevail.The importance of the case in the text, on this point, is that it establishes the right of plaintiff to elect, before going to the jury, if he has not been required to elect beforehand.
Appeal by plaintiff from a judgment of the General Term of the Court of Common Pleas of N. Y. City, affirming a judgment of the Trial Term of that court, entered upon a verdict in favor of defendant.
The action was brought by Sylvanus Mayo against Dielorme Knowlton. The complaint set forth two causes of action; one for the recovery of the purchase money of 4,000 shares of the Silver King Mining Co., upon rescission by plaintiff of the contract for its purchase and the tendering back of the stock to the defendant, because of defendant's fraud in selling his own stock to plaintiff while acting as the latter's agent to purchase; and the other for damages for defendant's false representations as to the value of the stock upon its sale to plaintiff.
At the trial the court charged the jury as follows: “In considering this case, you will leave out of view the fact that Mr. Knowlton is charged with having been the owner of the stock that was delivered to Mr. Mayo; Mr. Knowlton denies that such was the case; but though it had been so, it would not in view of what the evidence discloses have given Mr. Mayo a right of action.” The court then proceeded to submit to the jury the question of fraudulent representations embraced in the second cause of action. The plaintiff requested the court to charge the jury as to the first cause of action. The court refused, and plaintiff excepted to such refusal, and also to the charge that defendant's ownership of the stock delivered gave plaintiff no right of action. The jury rendered a verdict in favor of defendant.
The General Term, on appeal by plaintiff, affirmed the judgment of the trial court, on the ground that the plaintiff had no right to go to the jury upon the first cause of action, in that he had not tendered back in rescission of the contract the same stock be had received from defendant.
The plaintiff appealed to this court.
The further facts are fully stated in the opinion. Charles N. Morgan ( Morgan & Worthington, attorneys), for appellant.
I. Plaintiff was entitled to recover upon the ground that defendant sold his own stock to him while acting as his agent, irrespective of any question of intentional fraud or actual injury (citing Conkey v. Bond, 36 N. Y. 427;Dutton v. Willner, 52 Id. 312;Taussig v. Hart, 58 Id. 425;Bain v. Brown 56 Id. 285;Story's Equity Jurisdiction, §§ 315, 316).
II. It was not necessary that defendant should offer to return the identical shares received (citing Champion v. Joslyn, 44 N.Y. 653;Horton v. Morgan, 19 Id. 170;Cobb v. Hatfield, 46 Id. 533; Stewart v. Drake, Id. 449; Burrell v. Bushwick Ry. Co., 75 Id. 211; Barclay v. Culver, 30 Hun, 1; Nourse v. Prime, 4 Johns. Ch. 490; Hubbel v. Drexel, 21 Am. L. Reg. N. S. 452; Neblett v. Macfarland, 92 U. S. 101;Bigelow on Fraud, 409, et seq.; Hayden v. Demets, 53 N. Y. 426;McNeil v. Tenth Nat'l Bk., 46 Id. 325;Jermain v. Lake Shore & Mich. S. Ry. Co., 91 Id. 483;Commercial Bk. of Buffalo v. Kortright, 22 Wend. 348). John R. Tresidder ( James B. Silkman, attorney) for respondent.
I. The rule requiring tender is not dispensed with by evidence that the injured party disposed in whole or in part of what he had received before having become aware of the misrepresentation (citing Bigelow's Law of Fraud, 423; McCrillis v. Carlton, 37 Vt. 139;Masson v Bovet, 1 Denio, 69).
II. The shares defendant offered to return were not a good and sufficient tender in rescission of the contract (citing Cobb v. Hatfield, 46 N. Y. 533;Gould v. Cayuga County Nat. Bk., 86 Id. 75;99 Id. 333). The principle that one share is precisely equal in value to every other share of the same stock, is applicable only in certain equitable actions, or in cases in which there has been no delivery to the vendee (citing Horton v. Morgan, 19 N. Y. 170;Champion v. Joslyn, 44 Id. 653). HAIGHT, J.
The complaint alleges two causes of action. The first allegation is, in substance, that at variious times between the 1st day of June and the 1st day of September, 1882, the defendant agreed to purchase for the plaintiff, as his agent, 4,000 shares of the stock of the Silver King Mining Company; that in pretended fulfillment of such agreement, and with the intent to deceive and defraud the plaintiff, the defendant caused to be transferred to the plaintiff stock of the company belonging to himself, and received and retained to his own use the money paid therefor; that in the month of June, 1886, the plaintiff first became informed of the facts, and thereupon tendered to the defendant the stock received from him, and demanded the return of the money paid.
The second cause of action, in substance, alleges that the plaintiff purchased of the defendant the stock in question, and that, in order to induce such purchase, the defendant falsely and fraudulently represented the stock to be of a value largely in excess of the sum paid per share, and that a dividend of ten per cent. had been declared thereon; and demanded the damages sustained by reason of such false and fraudulent representations.
Upon the trial, evidence was given in support of both causes of action. At the conclusion of the evidence the court submitted to the jury the question of fraudulent representations embraced in the second cause of action alleged in the complaint, after which the plaintiff asked to have the first cause of action alleged submitted to the jury, and upon the refusal of the court, took an exception thereto. The jury found for the defendant, and the judgment entered upon such verdict has been affirmed by the General Term upon the ground that the evidence did not establish a rescission of the contract by the plaintiff by reason of his failure to tender to the defendant the stock received from him.
The first cause of action alleged in the complaint is based upon a rescission of the contract by reason of the fraudulent performance thereof, and is to recover the purchase price of the stock; while the second cause of action is based upon an affirmance of the contract by a retention of the stock, and is to recover the damages sustained by the plaintiff by reason of the false representations made by the defendant in reference to its value, etc. The two claims are based upon conflicting or inconsistent theories, and the plaintiff was not entitled to recover upon both. Six of the jurors might find in his favor upon the first, and against him on the latter, while the other six jurors might find in his favor upon the first, and against him upon the former.