Guinness v. Guaranty Trust Co. ( 1925 )

Churchill, J.:

In this case I directed a verdict for the plaintiffs and the defendant moves on the minutes for a new trial.

The action is to recover back the purchase price of a wireless transfer of German marks. Interruptions in the wireless service prevented transmission at the time, and the war, which soon followed, rendered transmission impossible. When plaintiffs learned, after the termination of the war, that the contract had not been performed, they demanded their money back. The demand was refused and this action followed.

The chief ground of defense is an alleged, change of position on the part of defendant. It is said that marks were purchased at prices prevailing when the contract was made, to offset commitments in the sale of exchange, of which the sale to plaintiffs was one. Defendant, without fault on its part, failed to effect the transfers of credit bargained for. If it must now return the purchase price paid for such transfers it will be left with large sums in worthless marks on its hands. Hence, it is said, that while plaintiffs may have a cause of action for damages for breach of contract they may not maintain an action for money had and received founded upon the total failure of consideration.

I cannot assent to this argument. Defendant contracted to effect a transfer of credit, as it might have contracted to transfer bullion or merchandise. The difficulties and the risks incident to its obligation were of no concern to plaintiffs. The fact that it may have incurred expense or suffered loss in an ineffectual effort to perform is of concern only to itself. It cannot affect plaintiffs’ rights. If it could, any defaulting contractor, who had expended moneys in commencing performance of his engagement, could resist a demand for the return of the consideration paid in advance, upon failure to complete his contract. There is no question of rescission involved, as has been shown by Mr. Justice Bijur in Bank of U. S. v. National City Bank (123 Misc. 801).

Defendant rests its contentions largely upon expressions found in the opinion in Gravenhorst v. Zimmerman (236 N. Y. 22). But it was not there decided, or even said, that such a change of position as is here relied upon would defeat recovery. The same argument was made in that case as is now pressed in this. But the court was able to answer the argument by showing that the supposed change of position had not in fact occurred. Here the evidence is different and the question of fact might be debatable. I hold that the fact would be immaterial even though established.

The motion for a new trial is, therefore, denied.