Stacy v. Brothers

• Decision Date: 31 July 1919
• Citation: Stacy v. Brothers, 93 Conn. 690, 107 A. 613 (Conn. 1919)
• Court: Connecticut Supreme Court
• Parties: STACY v. BROTHERS.

107 A. 613

93 Conn. 690

STACY v. BROTHERS.

Supreme Court of Errors of Connecticut.

July 31, 1919

Appeal from District Court of Waterbury; John F. McGrath, Acting Judge.

Action by Avery W. Stacy against Frank H. Brothers. From judgment for plaintiff, defendant appeals. No error.

The action is to obtain the cancellation of a written contract for the purchase and sale of a liquor business owned and conducted by the defendant, alleged to have been secured by his fraudulent representations, also for a return of the plaintiff's promissory note given therefor, and for damages. The action was tried to a jury, with verdict and judgment for plaintiff for $8,000 with interest from October 6, 1916, and in addition thereto an adjudication requiring the cancellation of the contract and the return of the plaintiff's promissory note.

This is an action to recover damages and to obtain other relief on account of fraudulent representations alleged to have been made by the defendant in the sale of a retail liquor business, liquors, license, and fixtures located in the defendant's store upon Main street in the city of Waterbury. the defendant in his answer denied the material allegations of the plaintiff's complaint, and made, as a part of his special defense and of a counterclaim filed with the answer, the following averments: the defendant entered into an agreement as alleged in paragraph 1 of the complaint which agreement was partly in writing and partly oral. By the oral part of this agreement it was provided that the defendant should retain the license in his own name until the plaintiff had fully complied with the terms of the written agreement, or had paid the balance due for the transfer, and thereupon the license should be transferred to the plaintiff's name. It was also agreed that the defendant should furnish the plaintiff with a written lease of his premises on Main street in Waterbury. The plaintiff executed this agreement and also the lease and entered into possession of the premises under this lease, and of the fixtures, stock, and control of the business, and continued to conduct the liquor business in this place for about one year and to make the payments agreed upon.

The plaintiff demurred to the special defense and counterclaim because " the matters and agreement stated therein are based upon the illegal sale of spirituous and intoxicating liquors and contrary to the provisions of section 2727 of the General Statutes."

The court below overruled the demurrer to the special defense upon the ground that its allegations, if proven, would be a good defense to the plaintiff's case. That to the counterclaim was sustained for the reasons therein stated. The plaintiff then filed a denial of the allegations of the special defense. Upon these pleadings the case was submitted to the jury upon the issues involved in the claim for damages by reason of the alleged fraud and deceit.

Wheeler J., dissenting.

In such case what constituted a reasonable time for rescission by plaintiff after discovering any fraud held for the jury.

Francis P. Guilfoile, of Waterbury, and Edward W. Broder, of Hartford, for appellant.

Edward B. Reiley, of Waterbury, for appellee.

RORABACK, J.

There was no error in the ruling of the trial court as to the demurrers. The averments of the special defense and counterclaim both show that there was an agreement between the plaintiff and the defendant to the effect that the plaintiff for himself should conduct the saloon for the sale of intoxicating liquors, when, as it appears, the defendant was to retain the license in his own name to sell liquors therein. The special defense and counterclaim show that the privilege to sell liquors in this place was personal to the defendant, and could only be exercised by him as the licensee. Such being the terms of the agreement between the parties, both the plaintiff and defendant were in pari delicto in making a contract which could not form the basis of a recovery by the plaintiff upon the cause of action set forth in his complaint. The general rule as to executed contracts is that, if the parties be in pari delicto, they will be left where they have placed themselves. Funk v. Gallivan, 49 Conn. 124, 44 Am.Rep. 210. For the same reason it follows that the defendant's counterclaim, which was predicated upon this alleged illegal contract, was properly held insufficient by the court below. Connecticut Breweries Co. v. Murphy, 81 Conn. 145, 148, 70 A. 450.

There was no error in the action of the trial court in refusing to set aside the verdict as against evidence. The jury must have found, as the plaintiff offered evidence to prove, that on October 6, 1916, the plaintiff and defendant entered into an agreement by the terms of which the defendant agreed to sell to the plaintiff his retail liquor business, liquors, license, stock, and fixtures for the agreed price of $16,000. This property was purchased by the plaintiff for the sole purpose of conducting a retail liquor store in his own name, which the defendant well knew. the defendant, as a part of this agreement, falsely and fraudulently represented to the plaintiff that the liquor license and liquor business would be transferred to the plaintiff, and thereby induced the plaintiff to pay him the sum of $16,000 for the liquor business and license. The payment was to be made $8,000 in cash and $8,000 by way of a promissory note. The cash payment was made and the note given. Upon this note $3,888 was subsequently paid, together with $1,750 rent. the defendant refused to transfer the license and the business to the plaintiff as he had agreed to do, and ultimately, after the plaintiff had refused to pay further rent by reason of the defendant's conduct, evicted the plaintiff and sold the saloon and license to another purchaser. There was evidence offered from which these conclusions could have been reached by the jury as reasonable men.

It cannot be said as a matter of law that it appears from the evidence that the plaintiff by his conduct evinced his intention to and did waive his right to recover of the defendant. This, under the facts presented, was a question of fact which under proper instruction was submitted to the jury. This may also be said of the defendant's claim that the evidence shows that the plaintiff was attempting to avoid the contract which he had entered into with the defendant without offering to return what he had received from the defendant. Upon this subject the jury were instructed as follows:

" If you find that the plaintiff is entitled to a verdict, then he is entitled to be replaced so far as it is possible to the position which he was in prior to the signing of this agreement with the defendant at the time of the purchase. In other words, he is entitled to be reinstated to that position which he would have been in had he not been induced by these false representations, if you find them to be false, to enter into it. In other words, he is entitled to a return of the consideration with which he parted, which is represented by $8,000 in cash and whatever sum you find he has paid by way of monthly installments. He is also entitled to interest from the date when the various amounts making up this sum were paid. As against this he is bound to return to the defendant, in so far as it is possible for him to do so, the consideration which he, the plaintiff, received from the defendant-that is, the saloon property. In other words, he is bound to return to the defendant the saloon and liquor business which he purchased, together with any profits made therein during the period of his occupancy."

These instructions are not criticized by the defendant, and the record does not disclose that the jury mistook or misapplied them in reaching their verdict.

One assignment of error relates to the action of the trial court in reviewing and commenting upon the evidence. The part of the charge then referred to was immediately followed by a statement of the trial court that, if you find these facts proven by the evidence, the plaintiff would be entitled to recover. It has been established by repeated decisions of this court that the trial judge may comment upon the evidence bearing upon any point in issue in the case if he does not direct the jury how to decide the matter. This portion of the charge was well within the rule just stated.

Another assignment of error relates to the instructions of the court as to the plaintiff's duty to exercise diligence in finding out that the license in question had not been transferred to him by the defendant.

The plaintiff offered evidence to prove, and claimed to have proven, that owing to the misrepresentations made by the defendant and the deceit practiced by him, he did not ascertain that the license had not benen transferred until about one year after the agreement to sell had been made.

Upon this branch of the case the jury were instructed, among other things, that-

" It was the duty of the plaintiff, if he would rescind the alleged fraudulent contract, to rescind it within a reasonable time after discovering the fraud, if any existed, and what in the circumstances of this case was a reasonable time, I charge you, is a question of fact for you to consider and determine. The burden of proving that the plaintiff acted within a reasonable time is on the plaintiff."

In view of the special circumstances here disclosed, this was not error. Fox v. Tabel, 66 Conn. 397, 34 A. 101; McLaughlin v. Thomas, 86 Conn. 258, 85 A. 370. It appears that upon this branch of the case the evidence was conflicting, and what constituted reasonable time under the special circumstances surrounding this transaction was a question of fact properly submitted to the jury.

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