Orth v. Kaesche , 14 Mills Surr. 213 ( 1914 )

Scott, J.:

The purpose of this action is to obtain a judgment canceling and annulling two certain instruments executed by the plaintiff Paul Orth, and by Carl Orth, the deceased father of the plaintiffs Carl B. Orth and Louisa A. Seufferheld.

The following are the facts: On or about April 9, 1905, one Alfred Orth, a resident of this State, died at Woodhaven, Queens county, leaving a last will and testament, dated on or about August 5, 1904. This will was duly admitted to probate on June 15, 1905, and the defendants Max B. Kaesche and Frank H. Wasel were duly appointed executors. The estate involved amounts to upwards of $20,000. By his will the testator bequeathed to his two brothers, Carl and Paul Orth of Heilbronn, Germany, a sum of money amounting to about $14,000 then on deposit with a certain firm. He made several specific bequests, among which was a bequest to the defendant Catharina Wasel of a mortgage on property in Brooklyn, out of which she was to pay the defendant Gertrude Miethe the sum of $1,500, which sum was bequeathed to said Gertrude. Catharina Wasel and Gertrude Miethe were the sole witnesses to the will. It was by means of their testimony that the will was proved, and without their testimony it could not have been proved. This avoided the legacies to them. (2 B. S. 65, §§ 50, 51; now Decedent Estate Law [Consol. Laws, chap. 13; Laws of 1909, chap. 18], § 27.)

After the probate of the will the said legatees, or some one acting in their interest, caused to be prepared the two instruments which are the objects of attack in this action. These instruments were identical in form except as to the name of the party of the first part thereto, and a description of the one afterwards executed by plaintiff Paul Orth will serve as a description of both.

This instrument recited that it was made on June 1, 1906, between Paul Orth, of Heilbronn, Germany, party of the first part, and Max Kaesche and Frank Wasel, as executors of the last will and testament of Alfred Orth, late of Woodhaven, etc., parties of the second part. It recited that Alfred Orth died leaving a last will and testament which had been duly proved and letters testamentary issued to said parties of the second part. It further recited the provisions of the will in favor of Carl and Paul Orth and Catharina Wasel and Gertrude Miethe; that the said beneficiaries, Mrs. 0. Wasel and Mrs. Gertrude Miethe “ signed said will as witnesses and by so doing are precluded from receiving the legacies bequeathed to them by the said Alfred Orth, and the parties of the second part [the executors] have been advised by their counsel learned in the law, that payment of said legacies cannot be made by them without consent of the next of kin and heirs at law of the said Alfred Orth.” It was further recited that the party of the first part was desirous of carrying out the wishes of said testator as expressed in said last will and testament, and of securing to the said Mrs. 0. Wasel and the said Mrs. Gertrude Miethe payment of the legacies to them bequeathed. The instrument then proceeded as follows: “ Now, therefore, I, Paul Orth, brother, and one of the next of kin and heirs at law of said Alfred Orth, deceased, do hereby in consideration of the sum of one dollar to me paid by the parties of the second part and for the purpose of rendering effective the legacies bequeathed by the said Alfred Orth to Mrs. 0. Wasel and Mrs. Gertrude Miethe * * * consent to the payment of said legacies by the said executors, the parties of the second part to the said legatees above named, and for the purpose of enabling the said parties of the second part to make such payment I hereby assign, transfer and set over to the said parties of the second part such amount of my share in said estate as will he [the] proportionate part thereof, necessary for the payment of said legacies and I for myself and my heirs, executors and administrators, do hereby release and discharge the said executors, the parties of the second part from all liability they or either of them, their successors or assigns may sustain by reason of the payment of the said legacies as directed by the provisions of said last will and testament of said Alfred Orth.”

These two documents were sent to Gerhard Luyties, who resided at Stuttgart, Germany, with a view to obtaining their execution by Paul and Carl Orth. Luyties procured such execution under circumstances hereafter referred to, and returned the documents to one Julius H. Wasel, a son of Catharina Wasel, who, in turn, delivered them to the executors. The said executors have never acted upon said documents by paying the sums therein specified to Catharina Wasel and Gertrude Miethe, but in January, 1910, in the course of an accounting proceeding before the surrogate of Queens county filed said documents in the Surrogate’s Court. The decree originally entered in said accounting proceeding provided for payment to Catharina Wasel and Gertrude Miethe, but before such payment had been made, upon application of these plaintiffs, said decree was amended by striking out the provision for payment to said Wasel and Miethe, and inserting a provision that the sum of $4,250 should be paid into the Queens County Trust Company “to await the final determination of an action to be begun in the blew York Supreme Court within thirty days after the entry of this order by Paul Orth and the legal representatives of Carl Orth against Gertrude Miethe and Catharina Wasel and others to determine the validity of the assignments and to set aside the assignments from Carl Orth and Paul Orth to Max B. Kaesche and Frank H. Wasel, as executors under the last will and testament of Alfred Orth, deceased, on the ground that they are without consideration; and on the further ground that Gertrude Miethe and Catharina Wasel are not privy to them and cannot take advantage of any provisions therein, and on the ground that the said assignments are not for the benefit of the said Catharina Wasel and Gertrude Miethe, and are not binding upon the legal representatives of Carl Orth, deceased; and on the further ground that the said assignments are invalid for fraud; and on such other grounds as may properly be advanced against the sufficiency of the said assignments.” It was further provided in said amended decree “ that the striking out of the provisions for the payment of the money herein to Gertrude Miethe and Catharina Wasel be without prejudice to their rights in the action to be begun in the Supreme Court, as well as without prejudice to the rights of Paul Orth and the legal representatives of Carl Orth in such action; it being the intention of this court to leave the entire matter with reference to the rights of said parties under said assignments to be determined in the Supreme Court as if the matter had not arisen in the Surrogate’s Court.”

Thereupon the present action was begun. The executors of Alfred Orth, deceased, take no part in the controversy and make no claim under the disputed documents. The circumstances attending the execution of the documents are detailed in the depositions of Paul Orth and Gerhard Luyties, who do not disagree in any important particular.

Paul Orth, who, in June, 1913, was sixty-five years of age, was a retired magistrate. He was able to speak and write the English language, how fluently or accurately does not appear. Carl Orth, the brother, could neither speak nor read English. Gerhard Luyties, whose deposition was read in behalf of the defendants, after stating that a friendship had existed between himself and Catharina Wasel and her son, and that they had asked him to procure the execution of the documents by Paul and Carl Orth, testified in substance, that it was his belief and opinion that the will was rendered invalid by reason of the fact that Catharina Wasel, one of the witnesses thereto, was a relative of the testator, and that he so stated to the two Orths; that he explained to said Orths that according to American law it was not permitted that a relative sign a testament as witness; probably also for this reason the testament of Alfred Orth was invalid, and that, therefore, their consent was necessary to carry out the testament; that he told Paul and Carl Orth that the testament of the deceased Alfred Orth would be invalid in case they did not sign the papers Exhibit A and Exhibit B (the documents in dispute); that he told Paul Orth and Oarl Orth that the testament of the deceased Alfred Orth could not be admitted to probate if papers Exhibit A and Exhibit B were not signed by them.

Without quoting further it suffices to say that it is entirely apparent from the testimony of this witness, as well as that of Paul Orth, that the brothers Orth were induced to sign the instruments solely because they were told by Luyties and believed that under our law the will would be wholly invalid and the property distributed as in case of intestacy, if they did not execute the documents then presented for their signature. This, of course, was erroneous, and their mistake being with respect to the. law of a foreign country, was a mistake of fact. (Curtis v. Leavitt, 15 N. Y. 9, 193; Vinal v. Continental Const. Co., 53 Hun, 247.)

We have, therefore, the case of an agreement not yet acted upon, which was executed under a material mistake of fact induced by the erroneous statement as to that fact by the agent of the party to be benefited by the instrument. This is ample ground for a rescission, and it matters not whether Luyties intentionally, or innocently made the misstatements of fact. If he did so intentionally the transaction is tainted with fraud. If he did so innocently, believing that the law in this country was as he stated it, still the Orths, if they believed his statements and relied upon them, as they clearly did, were and are entitled to a rescission so long as the document remains executory, for it is well settled that a court of equity may rescind an apparent contract for the mistake of one party only, without finding fraud or inequitable conduct in the other. (Harper, Inc., v. City of Newburgh, 159 App. Div. 695; Silverman v. Minsky, 109 id. 1; Goodman v. Laborn, 11 id. 617; Crowe v. Lewin, 95 N. Y. 423.) The true rule is thus stated in Kerr on Fraud and Mistake (4th Eng. ed. p. 3): “It is important to bear in mind that an action of deceit differs essentially from one brought to obtain rescission of a contract on the ground of misrepresentation of a material fact. The principles which govern the two actions differ widely. Where rescission is claimed it is only necessary to prove that there was misrepresentation; then, however honestly it may have been made, however free from blame the person who made it, the contract, having been obtained by misrepresentation, cannot stand. In an action of deceit, on the contrary, it is not enough to establish misrepresentation alone, for without proof of fraud no action of deceit is maintainable.”

There is, therefore, ample ground for rescinding the agreements without imputing to Gerhard Luyties fraud or intentional misrepresentation.

There is still another reason why the plaintiffs are entitled to a judgment of rescission. The defendants Catharina Wasel and Gertrude Miethe were not parties to the instruments which are under seal; there is no assignment of anything to them, and no consideration flowed from them, not even a moral consideration based upon their sacrifice of their legacies by reason of their testifying to establish the will, for under the statute they could have been compelled to testify. All that we have, therefore, is a voluntary order upon the executors to pay certain sums of money to the legatees, Wasel and Miethe, with an assignment to the executors of a sufficient amount out of the shares of the two others to make the payment. This assignment, of course, carried nothing to the executors unless they make the payment, and they claim nothing under it.

If they had made the payments before the attempted revocation of the documents they would doubtless have been protected. But, until the executors acted by making payments thereunder, it remained open to the Orths, for any reason they chose, to revoke their authorization. Clearly there was no gift to the legatees Wasel and Miethe, for nothing was ever delivered to them and no agreement ever made with them. Although couched in formal phrase and embellished with seals, the documents were nothing more than orders upon the executors to make payment of the plaintiffs’ money to persons to whom the plaintiffs owed nothing. Such an order was subject to revocation at any time before it had been complied with. Upon both grounds above stated the plaintiffs were entitled to recover and the judgment against them was erroneous.

The judgment appealed from must, therefore, be reversed and judgment directed in favor of the plaintiffs, with costs in this court and the court below. A decision embracing such additional findings as are deemed necessary and a form of judgment may be presented for settlement upon notice.

. McLaughlin and Clarke, JJ., concurred; Laughlin and Hotchkiss, JJ., dissented.