American Woolen Co. of New York v. Samuelsohn

• Decision Date: 18 March 1919
• Citation: 123 N.E. 154,226 N.Y. 61
• Parties: AMERICAN WOOLEN CO. OF NEW YORK v. SAMUELSOHN et al.
• Court: New York Court of Appeals Court of Appeals

226 N.Y. 61

123 N.E. 154

AMERICAN WOOLEN CO. OF NEW YORK

v.SAMUELSOHN et al.

Court of Appeals of New York.

March 18, 1919.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by the American Woolen Company of New York against Abraham J. Samuelsohn, otherwise known as Abram J. Samuelsohn, and Henry Samuelsohn, impleaded with others. From a unanimous judgment of the Appellate Division (176 App. Div. 946,162 N. Y. Supp. 1110) on an order of that court overruling defendants' exceptions ordered to be heard in the Appellate Division in the first instance, denying their motion for new trial, and directing judgment for plaintiff for the amount of the verdict directed at the Trial Term, defendant appeal. Judgment reversed, and complaint dismissed.

This action was commenced March 29, 1915. The summons was served upon the defendants Abram J. Samuelsohn and Henry Samuelsohn, but not upon the other defendants. The complaint alleges:

‘That between the 23d day of January, 1908, and the 20th day of February, 1909, the plaintiff sold and delivered to the defendants certain goods, wares, and merchandise * * * of the agreed price and reasonable value of $15,921.80, and that the defendants agreed to pay said sum therefor.’

It further alleges a payment on account of $6,607.55. The defendants for a defense allege that the plaintiff with full knowledge of all the facts relating to the sale and delivery of the goods, wares, and merchandise set forth in the complaint, elected to rescind and did rescind said sales. The defendants also allege that the cause of action set forth in the complaint did not accrue, nor did any part thereof accrue, within six years next preceding the commencement of the action.

The record shows that purchases of goods and merchandise were made from time to time during the time mentioned in the complaint, and that they were each made on four month's credit. The defendants were adjudged bankrupts February 25, 1909. Thereafter the plaintiff, by a proceeding commenced May 26, 1909, in the United States District Court, reclaimed certain specified goods and merchandise, a part of those so purchased by the defendants of the plaintiff. The value of the goods and merchandise so reclaimed was $1,412.47.

Plaintiff in the petition in that proceeding alleged that it is the owner and lawfully entitled to the immediate possession of the goods and merchandise therein specifically described. It further alleged that on or about February 13, 1908, the defendants, ‘being then desirous of purchasing goods on credit from time to time from the American Woolen Company of New York, did thereupon make a statement in writing of the financial condition of said copartnership for the purpose of inducing the said American Woolen Company of New York to sell to the said bankrupts merchandise upon credit.’

It further alleged that, in reliance upon said statement, it ‘did thereafter from time to time sell to said bankrupts cloth upon credit including the cloth sought to be recovered in this proceedings.’

It further alleged that said statement was false, fraudulent, and deceitful in the particulars alleged, and that ‘upon the discovery of the fraud * * * which had been practiced upon it, and upon the 3d day of April, 1909, did elect to rescind the said sales made by it by reason of such fraud, and did demand possession of the said chattels' from the trustee in bankruptcy. The petition was denied by the defendants, but a decree was obtained by the plaintiff that the said goods described in the petition were its property, and that ‘title thereto never passed from the petitioners to the bankrupt, and that the said trustee has no interest therein or title thereto.’

On February 21, 1910, the plaintiff made proof in the bankruptcy proceeding of a claim against the bankrupt of $18,108.02, ‘subject to reduction for any goods that may be reclaimed, returned, or stopped in transitu, details of which are not known to this creditor at this time.’ The amount was, by stipulation, reduced by the sum of $773.75, and the value of the goods reclaimed, viz. $1,412.47, was credited thereon. The claim was thereupon duly allowed by the trustee in bankruptcy at $15,921.80. On March 31, 1911, dividends were paid on the claim in the bankruptcy proceeding amounting to $6,607.55.

On the trial of this action both parties moved for judgment. The action was commenced more than six years after the last alleged purchase and delivery of goods and merchandise mentioned in the complaint, but the court found, in substance, that goods and merchandise of the alleged value of $4,501.29 were purchased and received by the defendants of the plaintiff within six years and four months (four months being the alleged credit given on each sale) prior to the commencement of this action, and deducted therefrom all of the amount of $773.75, which by stipulation was deducted from the claim presented in the bankruptcy proceedings, and also all of the $1,412.47, the value of the goods and merchandise reclaimed, and directed judgment against defendants for $2,315.07.

From the judgment entered thereon the plaintiff did not appeal. The defendants appealed to the Appellate Division, where the judgment was unanimously affirmed.Isaac Adler, of Rochester, for appellants.

Glenn L. Buck, of Rochester, for respondent.

CHASE, J. (after stating the facts as above).

[1] An election of remedies takes place when a choice is exercised between remedies which proceed upon irreconcilable claims of right.

When an election is made between such claims, with full knowledge of all the facts, an action may not thereafter be maintained upon the inconsistent claim. George v. Texas Co., 225 N. Y. 410, 122 N. E. 238;Mills v. Parkhurst, 126 N. Y. 89, 26 N. E. 1041,13 L. R. A. 472;Droege v. Ahrens & Ott Mfg. Co., 163 N. Y. 466, 57 N. E. 747.

[2] An action to rescind a contract of sale on the ground of fraud and to recover goods alleged to have been sold in reliance upon fraudulent representations is inconsistent with an action on the contract of sale. Reed v. McConnell, 133 N. Y. 425, 435,31 N. E. 22.

After disaffirming a contract and bringing a suit in replevin for the goods sold, a party has no remedy on the contract of sale. Wallace v. O'Gorman, and cases cited; s. c. 53 Hun, 638,6 N. Y. Supp. 890, affirmed on opinion below, 126 N. Y. 638, 27 N. E. 411.

The petition of the plaintiff in the proceeding described in the record by which it sought to reclaim certain goods delivered to the trustee in bankruptcy expressly asserts that there were fraudulent representations made to induce the sales by the plaintiff to the defendants, and that, commencing on or about the 6th August, 1908, and continuously to the 6th of February, 1909, the plaintiff,...