Park & Tilford v. Realty Advertising & Supply Co. , 144 N.Y.S. 907 ( 1913 )

Ingraham, P. J.:

The relief demanded in the complaint is that the four contracts thereinbefore described, entered into between the plaintiff and the defendant, be set aside, rescinded and declared and adjudged to be void and fraudulent and not in any wise binding or effective upon the plaintiff.

The complaint alleges that on or about February 24, 1913, the defendant through its representative and agent represented and stated to the plaintiff that the defendant was about to erect an electric sign on the building located at Broadway, Seventh avenue and Forty-seventh street, New York city, of the character and description known as a flashlight sign, and made certain other representations to induce the plaintiff to make a contract with the defendant; that each and every of the statements and representations made by the defendant were false and known by the defendant to be false at the time they were made, and were made for the sole purpose of cheating and defrauding and inducing the plaintiff to enter into a contract with the defendant to purchase an advertising flash display upon said sign so to be erected, and induced the plaintiff to enter into a contract on said 24th day of February, 1913, under the terms of which the plaintiff agreed to pay to the defendant the sum of §1,200 annually for one flash display of its advertising- matter for a period of two years. It is then alleged that thereafter and on or about the 3d of April, 1913, and before said sign was completed, the defendant through its agent, restating and reiterating the aforesaid false and fraudulent representations, made additional representations to induce the plaintiff to enter into a further additional and subsidiary contract in writing, under which the plaintiff agreed to pay to the defendant the sum of §600 for an additional flashlight display; that thereupon and on or about the 5th of May, 1913, before said sign was completed, the defendant through its agent aforesaid, restating and reiterating the aforesaid fraudulent representations, made further false and fraudulent representations to the plaintiff and induced the plaintiff to enter into a still further contract in relation to this same advertising apparatus by which the plaintiff agreed to pay to the defendant an additional sum of $1,200 in monthly installments fox-two additional flash display advertisements upon the said sign for a pex-iod of two years, such installments to begin with the completion of the said sign; that thereupon and on or about the 9th day of May, 1913, the defendant through its agent, restating and reiterating the said false and fraudulent repi-esentations, made cex-tain additional false x-epx-esentations and induced the plaintiff thereby to enter into a further and additional subsidiary contract under which the plaintiff agreed to pay to the defendant the sum of $960 for two additional flash displays upon the said sign, such sum to be paid in installments, the payment thereof to begin upon the completion of the sign.

It is then alleged that all four of the contracts hereinbefox-e x-ecited constituted a continuing transaction and related to the same subject-matter, to wit, the right of the plaintiff to have flash display announcements of its wares upon the sign to be erected as aforesaid by the defendant; that thereafter and subsequent to May 9, 1913, the aforesaid sign began to be operated by the defendant; that the sign as operated did not comply with the representations; that the defendant has threatened to bring separate actions for the recovery of the installments on each of the said contracts; and the plaintiff asks that the four contracts be declared void.

The first question presented is, whether this complaint alleges four separate causes of action, or whether it alleges one cause of action, the determination of which in favor of the plaintiff will annul the four separate contracts set forth in the complaint and relieve the plaintiff of liability thereon.

This action is not brought to recover damages for fraud. The complaint asks no damages. The relief demanded is purely equitable in its nature — asking the court to exercise its power to annul obligations which the plaintiff has entered into with the defendant and which, if not annulled, will result in a multiplicity of actions. The contracts sought to be annulled relate to the same subject-matter, it being alleged that each of the three later contracts was subsidiary to the original contract, and that each of the four contracts was induced by the same fraudulent representations. The evidence upon which the plaintiff must rely to obtain a judgment naturally relates to the validity of each of the four contracts. It is one continuing misrepresentation of material facts upon which the defendant induced the plaintiff to execute the four contracts, and while it is alleged that they'Were additional representations made to induce the plaintiff to make the three later contracts, they are all so connected that the question as to whether or not any one of the contracts should be declared void would really require proof as to all the representations' that were made and the acts of the defendant in inducing the plaintiff to make the contracts. Suppose- the action were solely to have the fourth contract declared void. Would not all the false and fraudulent representations have to be proved involving the relations between the plaintiff and the defendant from the beginning ? In such an action I do not see how they' could be separated and each one separately tried. The judgment that the plaintiff really demands is, that the arrangement by which it was to pay considerable sums of money to the defendant for furnishing these flash advertisements should be declared void as induced by fraud; and whether that relation was represented by one contract or four contracts seems to me to be immaterial, except as to the extent of the relief to which the plaintiff will be entitled. Of course, the question would present an entirely different aspect if the contracts related to a different subject-matter or affected different premises. Here, however, all the contracts relate to the same premises; all refer to the same advertising scheme, and all the contracts subsequent to the first merely extend the amount of service that the defendant was to render to the plaintiff, and imposed upon the plaintiff the payment of additional sums of money. It seems to me, therefore, that there is substantially but a single cause of action, which cannot be properly tried if split up into four independent, causes of action, or if it is the subject of four independent actions.

The power of a court of equity to deal with a situation of this kind is not disputed. It is not confined, as a court of law is, to simply awarding a judgment for money or the possession of property, but can adapt its decree to the necessities of each particular case. In a case such as this, it could declare void such of the contracts as have been induced by fraud, but refuse to grant relief as to such of the contracts as were made in good faith. It can also impose such conditions upon the parties as may be necessary to do equity or to protect either party in any rights which they possess and which may develop on the trial. It seems to me, however, that it would be impossible to make a proper decree in relation to the four contracts involved in this case if four separate actions were commenced to enforce the respective rights of the parties as they may develop upon the trial; and if four separate actions could not be maintained to obtain this separate relief, of course it cannot be said that the complaint alleges four separate causes of action. Here, the three later contracts were in effect a modification of and extension to the original contract; and if that is void, it follows as a matter of course that the subsequent contracts are void, as they were induced by the same false and fraudulent representations. I think it perfectly proper for the plaintiff, under such circumstances, merely wishing as it does to have the contracts annulled, to allege them all in one cause of action and ask the court for a decree relieving it from responsibility thereunder. Whether or not the complaint would be subject to demurrer is not material. The court by granting this order has neccessarily assumed that four distinct causes of action are alleged in the complaint; and certainly the order could not be sustained on the ground that one or more of these causes of action were subject to. the objection that they did not state facts sufficient to constitute a cause of action.

The order appealed from also strikes out a portion of the third clause of the complaint, which in effect alleges a definition of what was known as a flash light sign. The effect of this allegation is merely to state the meaning of what is described as a flashlight sign, to show what it was that the defendant undertook to furnish, and I think it was competent and proper so to allege it. We wish again to call attention to the fact that the appellant, in preparing this record, failed to comply with rule 43 of the General Rules of Practice, as amended in 1910, which requires that the portion of a complaint to which such a motion is directed must be printed in italics, or some other method adopted to indicate it.

I think, therefore, that the order appealed from should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.

Clarke and Hotchkiss, JJ., concurred; Scott and Dowling, JJ., dissented.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.