Summary
In Moller v. Tuska, 87 N.Y. 166, the plaintiffs brought an action in replevin to recover property procured by fraud in the sale.
Summary of this case from Blum Building Co. v. IngersollOpinion
Argued October 26, 1881
Decided December 13, 1881
Samuel Hand for appellant. A.J. Vanderpoel for respondents.
It was not denied that the sugar in question at one time belonged to the plaintiffs, and that they, on or about the 8th of December, 1868, sold and delivered it to the firm of Valk Bros., who transferred it to the defendant, Tuska. Valk Bros. were insolvent, and on the 15th of December, 1868, went into voluntary bankruptcy. This action was commenced December 19, 1868, to regain possession of the property upon the ground that the sale was induced by the fraud of Valk Bros., and the defendant received the goods with notice of that fraud, and in participation with it.
The answer of the defendant was a general denial, setting up ownership by the defendant and a claim for a return of the property. On the 27th of October, 1873, while this action was pending, the plaintiffs proved a claim in bankruptcy against Valk Bros. as for goods sold, including those embraced in this action, and on the 17th of December, 1873, received from the assignee a dividend thereon of $133.83. In May, 1878, by order of the register in bankruptcy, the claim was expunged from the record, and the assignee demanded repayment of the dividend upon the ground that this action was a disaffirmance by the plaintiffs of the sale, and they were, therefore, not entitled to the dividend. His demand was complied with; but this case coming on for trial, the complaint was dismissed upon motion of the defendant on the ground that by proving the claim as a debt in bankruptcy, and taking a dividend, the plaintiffs affirmed the sale and had no longer any right to the goods. Upon appeal to the General Term, that court was of a different opinion; and with their conclusion we agree. The plaintiffs, upon discovery of the fraud, had a choice of remedies — an action against Valk Brothers for the price according to the terms of sale or replevin of the property, upon the ground that by reason of the fraud the contract of sale was avoided. No right of the defendant intervened, for he was not an innocent party, and had no better case than Valk Brothers. The plaintiffs manifested their election by bringing this action. After that, the other way of redress was not open to them; for, according to Comyn (Dig. Elect. C., 2), if a man once determines his election it shall be determined forever. Hence, they could never successfully assert a claim against the purchaser under the contract, for the election to disaffirm it had been manifested, and to revoke it was not in their power. ( Quod semel placuit in electionibus amplius displicere non potest, Co. Litt. 146 a; Clough v. London N.W. Ry. Co., L.R., 7 Ex. 26; Orme v. Broughton, 10 Bing. 533; Morris v. Rexford, 18 N.Y. 552.) It would seem to follow that the subsequent transaction with the assignee in bankruptcy could have no bearing upon the question, first, because the plaintiffs were bound by their election; and second, because the assignee was a mere assignee in law, clothed with certain statutory duties, with no power to waive any advantage which had accrued to the bankrupt's estate, or create a debt when none before existed ( In re Crawford, 3 B. Reg. 698); and having no power to represent him except for the purposes of the Bankruptcy Act. How, then, could be participate in the rescission of the election by the plaintiffs, which had in effect discharged the bankrupt and his estate from any claim under the contract of sale? He did not represent the bankrupt for that purpose. The contract was at an end, and no act on the part of the plaintiffs alone could revive it ( Kinney v. Kernan, 49 N.Y. 164.) It is claimed, however, by the appellant that proof of claim by the plaintiffs, and its allowance, was an adjudication having the force of a judgment as upon contract; and so an answer to the present action. The authorities cited by him do not sustain the position; nor do the provisions of the bankrupt law under which these decisions were made. A creditor may, if he elect, withdraw his proof. ( In re Brand, 3 B. Reg. 324.) The claim itself may be canceled when founded on fraud, illegality or mistake (Bankrupt Law, § 22), and what the court would do on application of the assignor may be done by him when the assent of the creditor is given to facts showing the mistake. In this case no claim in fact existed, and it was properly expunged. It is needless to pursue this inquiry further, for upon the ground stated we are of opinion that by the election made to disaffirm the contract of sale and resume their property, the rights of the plaintiffs to maintain this action became fixed, and could only be extinguished by release or actual payment, or the making of a new engagement. Neither of these occurred.
The judgment of the Special Term was, therefore, properly reversed; and the order of the General Term should be affirmed, and judgment absolute ordered for the plaintiffs according to the stipulation of the defendant.
All concur.
Order affirmed; judgment accordingly.