Moller v. Tuska

J. F. Daly, J.

[After stating the facts as above.]—The commencement of this action to recover the goods was an election by plaintiffs to disaffirm the contract of sale, and having taken that step their rights were determined, and no power of election or ■ discretion remained in them. They were bound to follow the goods, and the right to claim the price was forever gone (Morris v. Rexford, 18 N. Y. 552, and cases cited).

But notwithstanding the pendency of the action which plaintiffs had elected to bring, the plaintiffs and Valk Bros., or their representatives and transferees, might, of course, afterwards agree to consider the sale valid and to settle upon that basis; and upon that principle, if plaintiffs had, after the bringing of this action, commenced another for the price, and defendant had suffered a recovery therefor, such judgment would defeat a recovery in this action (Kinney v. Kiernan, 49 N. Y. 165).

The mere bringing of an action for the price, while the action for the goods is pending, will not affect the rights of the parties as fixed by. the original election, because the second action is the act of the vendor only, who cannot change his position or his remedy, or affect the rights of the vendee without the latter’s concurrence (Same case). If the vendee suffered a recovery in the second action it would indicate his consent to a re-establishment of the sale, and be as effectual as if the parties had met and entered into an agreement to that end.

If it be conceded that the assignee in bankruptcy uf the alleged fraudulent vendee is such a representative uf the latter as to make an agreement with the vendor, or to suffer any default, or to give a consent, make a concession or admission effectual to restore the debt which the rescission of the sale has canceled, it is evident that such act, agreement, consent or concession of the assignee must be with knowledge of the facts and with the intention to produce the result indicated, in order to be effectual for any purpose.

It was on this theory, of course, that the assignee, when he discovered that the vendors had disaffirmed the sale prior to proving their claim in bankruptcy, reclaimed the dividend he had paid. He was evidently in a position to enforce repayment, for the plaintiffs had no claim whatever for debt against Talk Bros., when they assumed to prove, a debt in bankruptcy, and had no more fight to retain the dividend than to claim it.

Under these circumstances, as the assignee in bankruptcy chose to reclaim the dividend, and the plaintiffs’ proof of debt and receipt of the money was their sole act, which, under the authorities, was ineffectual to change their position (having once made the election to pursue the goods and rescind the debt), the evidence concerning the proceedings in bankruptcy constituted no defense.

The judgment should be reversed, and a new trial ordered, costs to abide event.

Charles P. Daly, Ch. J. and Larremore, J., concurred.

Judgment reversed, and new trial ordered, with costs to abide event.^*

* The order entered on this decision was affirmed, and judgment .absolute for the plaintiffs ordered by the court of appeals, December 13th, 1881.