Henry Clay Douglass, Appellant, v. Charles S. Scott, Respondent

Henry Clay Douglass, Appellant, v. Charles S. Scott, Respondent. Third Department, January 6, 1909. Conversion — obtaining property by false representations — tender of benefit received — evidence — good faith of defendant. While a party seeking to rescinda contract for fraud must tender what he has received under it before he can maintain an action at law, that rule does not apply where the plaintiff sues for conversion alleging that the defendant obtained possession of the property by fraudulently representing that he purchased as agent for a third party. ■ One who obtains property by fraud is not entitled to a return of the amount paid by him to effectuate his fraud. It seams, moreover, that even where a party rescinding a contract must return the benefits received under it, he is not required to do sQ, when he is entitled in any eVent to what he has received and under those circumstances it is sufficient if the sum retained is allowed for in the judgment. Wrongful intent is not an essential element of conversion and, hence, it is not error to exclude evidence showing that the defendant purchased the goods in good faith. Such evidence is not made admissible by reason of the fact that the; plaintiff in order to meet the defendant’s allegation that he bought the goods for himself, “the same as he had bought of others—neighbors of plaintiff,” gave evidence of contemporaneous representations and purchases. Appeal by the plaintiff, Henry Clay Douglass, from a judgment of the County Court of Tompkins county in favor of the defendant, entered in the office of the clerk of said county on the 16th day of July, 1908, pursuant to an order entered in said clerk’s office on the 16th day of July, 1908, reversing a judgment of a justice of the peace of the town of Dry den in favor of the plaintiff. This action was commenced in Justice’s Court to recover damages for the alleged conversion of 135 bushels of buckwheat. The complaint alleges that the defendant falsely and fraudulently represented to the plaintiff that he was the agent for “ Hewitt Brothers; ” that the plaintiff relied upon the representation and was thereby induced to part with and deliver to the defendant 135 bushels of "buckwheat of the value of $110 ; that the representation was false and was then known to be false and was made by the defendant with intent -to deceive and defraud the plaintiff; that the defendant having so obtained the possession of the buckwheat from the plaintiff unlawfully converted and disposed of- it to his own use. “ Wherefore, .plaintiff demands judgment against the defendant for One hundred and ten. dollars damages for the wrongful taking and detention of said buckwheat, with interest thereon from the 15tli day of ¡November, 1907.” The answer admitted that in ¡November, 1907, the plaintiff was the owner of about 130 bushels of buckwheat of the value of $100, but denied the other allegations of the complaint. The defendant also alleged “that all buckwheat bought by him of plaintiff was bought by defendant for himself, the same as he had bought of others — neighbors of plaintiff.” The justice rendered judgment in. favor of the plaintiff for $107.74 and costs. The defendant appealed to the County Court upon questions of law, and the judgment was reversed. It appeared upon the trial that at or about the .time of the delivery of the buckwheat the defendant paid to the plaintiff $7 to apply upon the purchase price, and that it was not tendered back before the commencement of the action: J. J. McGuire, for the appellant. James L. Baker, for the respondent. [MAJORITY — Sewell, J.:] Sewell, J.: The grounds on which the learned county judge disposed of this case, as appears in the opinion rendered by him upon reversing the judgment of the justice, were that the plaintiff did not return or offer to return the seven dollars received from the defendant, prior to the commencement of the action, and that the justice erred in a ruling on the admission of evidence. The ordinary rule undoubtedly is that where a party seeks to rescind a-contract on the ground of fraud, he must tender a return of what he has received under it before he can maintain an action at law. But that is not this case. The plaintiff does not claim that he was induced by fraud to make a contract with the defendant, nor does he seek to rescind or avoid a contract obtained by fraud, but to recover the value of property obtained by fraud. The claim of the plaintiff is that he did not assent to a sale to the defendant, and that the agreement with him was a nullity. The important and material allegation of the complaint is that the defendant secured possession of the property • in question by artifice and fraud, and converted it to his own use, and we must asstime that the justice so found. This case is, therefore, not within the rule laid down in Gould v. Cayuga County Nat. Bank (86 N. Y. 75) and kindred cases, cited by the learned county judge in support of his position. It is an action for the wrongful conversion of property obtained from the owner by fraud. The wrongdoer in sucli a case is not entitled to a return of the amount paid by him to effectuate his fraud and obtain possession of the property. The law cares very little what a fraudulent party’s loss may be, and exacts nothing for his sake. (Masson v. Bovet, 1 Den. 74.) It is to be observed also that there is an exception to this rule where the party defrauded is entitled, in any event, to all that he has received. In such a case a return or offer to return is not a condition precedent to the bringing of an action. (Hay v. Hay, 13 Hun, 315 ; Remington Co. v. London Assurance Corp., 12 App. Div. 218; Pritz v. Jones, 117 id. 657; Kley v. Healy, 127 N. Y. 555.) It is sufficient if the sum retained is taken into account and allowed in the judgment. That is all .the party defrauded should do and all that honesty and fair dealing require of him. If, therefore, the plaintiff had admitted a contract with the defendant and claimed that he was induced tó make it by fraudulent representations as to the value, nature or character of the consideration received by him, he would not have been bound to return the amount received before he could proceed in disaffirmance of the contract. I am also of the opinion that no error was committed in excluding evidence tending to show.that the defendant purchased the buckwheat in good faith. The question of good faith was not involved. “ A wrongful intent is not an essential element of the conversion. . It is sufficient if the owner has been deprived of his property by the act of another assuming an unauthorized dominion and control over it.” (Laverty v. Snethen, 68 N. Y. 527; Boyce v. Brockway, 31 id. 490.) The fact that the plaintiff had given evidence of contemporaneous representation and purchases did not make the evidence offered material, for we must assume that the evidence of transaction, with “others — neighbors of plaintiff,” was offered and properly received upon the issue tendered by the allegation of the defendant “that all buckwheat bought by him of plaintiff was bought by defendant for himself, the same as he had bought of others — neighbors of plaintiff.” I am, therefore, constrained to believe that no substantial error-was committed in the Justice’s Court, and that the judgment of the County Court should be reversed, with costs in this and in the County Court, and that of the justice affirmed. All concurred. Judgment of the County Court reversed, with costs in this and in the County Court, and that of the justice affirmed.