Goldberg v. Krayeske

• Decision Date: 06 March 1925
• Citation: 102 Conn. 137,128 A. 27
• Court: Connecticut Supreme Court
• Parties: GOLDBERG v. KRAYESKE ET AL.

128 A. 27

102 Conn. 137

GOLDBERG v. KRAYESKE ET AL.

Supreme Court of Errors of Connecticut.

March 6, 1925

Appeal from District Court of Waterbury, New Haven County; Frederick M. Peasley, Judge.

Action by Abraham Goldberg against John Krayeske and others, in which named defendant filed a cross-complaint. Judgment for named defendant on both complaint and cross-complaint, and plaintiff appeals. Error, and new trial ordered.

Action to foreclose a mortgage, brought to the district court of Waterbury, where a cross-complaint was filed seeking damages a cancellation of the mortgage, and other equitable relief and tried to the court, Peasley, J. Judgment for the defendant Krayeske upon both the complaint and cross-complaint, and appeal by the plaintiff. Error, and new trial ordered.

Walter F. Torrance and Andrew D. Dawson, both of Waterbury, for appellant.

William K. Lawlor and Earle Carey, both of Waterbury, for appellee Krayeske.

MALTBIE, J.

The defendant Krayeske was induced to purchase the property which the plaintiff is seeking to foreclose by the latter's fraudulent misrepresentations as to the rentals secured from it. He therefore had the right, within the limitations set by law, to have the transaction set aside and to be restored to his original position. Bitondi v. Sheketoff, 91 Conn. 123, 99 A. 505; Wilson v. Nichols, 72 Conn. 173, 180, 43 A. 1052. One of these limitations is that he must act promptly on discovery of the fraud, else he will be deemed to have waived his right to equitable relief (Barnes v. Starr, 64 Conn. 136, 157, 28 A. 980); and another is that the law will imply a similar waiver from such acts on his part, after the discovery of the fraud, as show an intent to let the transaction stand and look for his redress to a claim for damages at law (Water Commissioners v. Robbins, 82 Conn. 623, 642, 74 A. 938; Palmer v. Frost, 86 Conn. 100, 109, 84 A. 277; Tompkins, Inc., v. Bridgeport, 100 Conn. 147, 155, 123 A. 135).

The property was conveyed to Krayeske January 3, 1922, in consideration of a substantial cash payment made by him, the assumption of a bank mortgage, payable in semiannual installments, and the execution to the plaintiff of the mortgage now in suit, which was made payable in quarterly installments. Krayeske immediately went into possession of the property, occupied a portion himself for commercial purposes, and began to collect the rents. As soon as he found that the rentals were not as represented to him by the plaintiff, he informed the plaintiff of this, and the plaintiff replied that he (Krayeske) owned the property and could charge what he liked. Krayeske paid two quarterly installments upon the plaintiff's mortgage. When the first installment upon the bank mortgage became due, the plaintiff and Krayeske went to the bank, the plaintiff paid it, and Krayeske then executed to him a promissory note for its amount, $425, believing the instrument to be a receipt. On September 1, 1922, Krayeske transferred the property to the defendant Hagen, in exchange for a farm, taking back a mortgage on the property in the sum of $2,200. Hagen, on September 6, 1922, made an agreement with the defendant Schiller to transfer the property to him on the next day; on September 7, 1922, this agreement was duly recorded upon the land records; and on September 12, 1922, the agreement not having been carried out, Schiller brought suit against Hagen for breach of this contract, and attached the property for the sum of $5,000. No installments upon the mortgage held by the plaintiff having been paid after the two already mentioned, he brought this action to foreclose it, returnable to the first Tuesday of November, 1922. On November 24, 1922, a decree of strict foreclosure was entered; but before the time limited for redemption had expired, Krayeske, having consulted other counsel, moved to have the decree opened, which was done. He then, on January 23, 1923, filed a cross-complaint, setting up fraud in the transfer of the property to him, and claiming $10,000 damages, a cancellation of the mortgage in suit and of the note for $425 executed to him to the plaintiff, and a restoration of the parties in statu quo. Thereafter he placed on record a release of the mortgage on the property executed by Hagen, a deed of it from Hagen to his (Krayeske's) attorney, and another from the attorney to the plaintiff, and a release of the attachment made by Schiller; but none of these instruments were delivered to or accepted by the plaintiff.

The trial court finds that Krayeske was an ignorant, illiterate Pole, with but little knowledge of the English language, and that he did not know of his rights or of the action which he might take to retrieve the wrong done him until the latter part of December, 1922, and that thereafter he used diligence. But he did know that he had been defrauded immediately after he took possession of the property and did appreciate the fact that he could seek advice of counsel in case of difficulty, as appears from his having taken that step when demand was made upon him for the payment of the note for $425 which he gave to the plaintiff. In determining whether there has been a waiver of a right to equitable relief by delay in seeking it or by the conduct of the injured party, allowance must no doubt in a proper case be made for a failure to appreciate rights which results from ignorance and stupidity. Hale v. Hale, 62 W.Va. 609 59 S.E. 1056, 14 L.R.A. (N. S.) 221. But " while it is true that ignorance of one's rights will frequently serve as an excuse in a court of equity for not bringing a suit to enforce them, yet it will never have that effect where such ignorance is fairly attributable to negligence, or to a party's failure to make such inquiries with respect to his rights as, with the information at his command, he ought to have made." Wetzel v. Minnesota Railway Transfer Co., 65 F. 23, 28, 12 C.C.A. 490, 495, 496. " The interests of public order and tranquillity demand that parties shall acquaint themselves with their rights within a reasonable time, and although this time may be extended by their actual ignorance, or want of means, it is by no means illimitable." Id., 169 U.S. 237, 241, 18 S.Ct. 307, 309 (42 L.Ed. 730). ...