Sperry v. Stennick

Me.’ Justice Mooee

delivered the opinion of the court.

1. The testimony so admitted and offered tended to establish each material averment of the complaint, and, such being the case, it is maintained that an error was committed in refusing to submit the cause to the jury. The reason announced by the court for excluding the testimony offered to establish the falsity of the alleged representations was that it appeared from the averments of the complaint that, before this action was instituted, the Lemcke Company had sold to the plaintiffs all its interest in the subject-matter for a valuable consideration, and, as the corporation was thereby uninjured, it had no right of action which it could assign. The conclusion thus reached was evidently based on the decision in the case of McMillan v. Batten, 52 Or. 218 (96 Pac. 675), where it was held that the purchasers of corporate stock, when sued for the price, were not entitled by way of a counterclaim to recover the price paid for a portion of the stock because of the alleged fraudulent representations as to the condition of the corporation, where it was shown that on the next day after purchasing the shares defendants sold and transferred them to a stranger for the same amount they had paid for the stock, unaccompanied by any evidence of an obligation on their part to take back the stock, or make good what they had received therefor; they having induced the latter to indorse the stock so that they might make good their pleaded offer to return possession thereof. It was also ruled that evidence tending to prove that defendants, soon after having made the purchase which they claimed a right to rescind for the sellers’ fraud, sold the property to others for the same amount which they had paid, destroyed any inference of damages sustained by them, in the absence of an averment and proof that they were engaged in the business of buying and selling for profit, and had bought the stock for that purpose.

If the initiatory pleading herein had declared that an “adequate compensation” had been received by the corporation for a transfer of its interests in the contracts and of its estate in the premises, the conclusion might have been deduced that the Lemcke Company had sustained no injury by the transaction. When it is remembered that one of the classes of an inducement to a contract is either good or valuable and that the latter consideration is founded upon money or something convertible into or having the value of that medium of exchange, any sum thereof, however trivial, such as $1.00, satisfies asseveration of the complaint in this particular, thus showing a possible loss to the corporation of $6,799, and showing the determination reached does not legitimately follow from the premises admitted.

2. The question will be considered whether or not, under the averments of the complaint, any right of action, growing out of the- defendants’ alleged fraudulent representations, could have been assigned by the corporation to the plaintiffs. The rule is nearly universal that tortious acts of a- party causing damages to another creates a right of action which abates with the death of the person sustaining the injury and therefore cannot be transferred so as to confer upon the assignee authority to maintain a suit for the wrong inflicted. Weller v. Jersey City, etc., Street R. Co., 68 N. J. Eq. 659 (61 Atl. 459: 6 Ann. Cas. 442). If, however, the wrongful act is of such a character that the damages resulting therefrom will, upon the death of the person injured, survive to his personal representative, the right of action is assignable. A wrong committed upon a person resulting in damages by reason of assault and battery, breach of promise of marriage, false imprisonment, malicious prosecution, slander, etc., are causes which do not survive the death of the injured party, and hence they cannot be assigned so as to create a right of action in another. Dahms v. Sears, 13 Or. 47, 58 (11 Pac. 891). A tortious act causing damages to property, or an act of negligence producing an injury to a person generally, creates a cause of action that survives and is therefore assignable. 4 Cyc. 24.

3. Adverting to the division of wrongful acts referred to a text writer says:

“Actions for deceit growing out of frauds which do not properly fall in either of the classes just mentioned have, in some jurisdictions, been said to be assignable, while in others'the contrary rule has been laid down.” 4 Cyc. 25.

Thus in Zabriskie v. Smith, 13 N. Y. 322 (64 Am. Dec. 551), the New York Court of Appeals determined that an action for damages for deceit in falsely representing the credit of a person did not survive and was not assignable. It did not appear in that case that the defendant had received any pecuniary advantage from his alleged fraudulent representations, and an action for money had and received would not lie. Referring to the doctrine announced in Zabriskie v. Smith, 13 N. Y. 322 (64 Am. Dec. 551), in a note to 2 Am. & Eng. Ency. Law (2 ed.) 1024, it is said:

“The decision in this case appears to have been made without reference to the New York statutes then in force, and its authority has been somewhat' shaken by subsequent decisions in which it has been criticised and disapproved”—citing several animadverting cases from that state.

In Byxbie v. Wood, 24 N. Y. 607, 610, which was an action based on alleged fraudulent representations of the defendant whereby he received from the plaintiff’s assignor money which was undertaken to be recovered, it was ruled that the averments of the complaint did not necessarily stamp the action as. arising out of tort or show that the cause was not assignable. In deciding that case, Mr. Justice Gould, speaking for the court, observed:

“The facts, as found by the referees, are that, by false representations and the alteration of bills and vouchers, the defendant himself received from Marvine large sums of money to which he was not entitled; and they have found that the plaintiffs are entitled to recover, not for any fraud, but for the money which the defendant had so received, and which, being so received, he had no right to retain. This state of facts does not necessarily require an action to be brought for the tort, even if it allows one to be so brought. Such facts always raised, in law, the implied promise which was the contract cause of action in indebitatus assumpsit for money had and received. Having money that rightfully belongs to another creates a debt; and, wherever a debt exists without an express promise to pay, the law implies a promise; and the action always sounds in contract.” To the same effect, see Pomeroy’s Code Rem. (3 ed.), Section 570.

The legal principle last announced would authorize the maintenance of this action, which, it will be remembered, is predicated on the defendants’ implied promise to repay the money which they had received. The corporation transferred, not a claim for damages arising from, a personal injury, but a right of property for the redress of which it could have maintained an action, which right was assignable, and an action can be maintained thereon by the plaintiffs for money had and received to their use by the defendants. “It is true as a general proposition, that a distinct right of action for fraud,” says Mr. Justice Montgomery in Howd v. Breckenridge, 97 Mich. 65, 69 (56 N. W. 221, 222), is not assignable; but, where the right to enforce a claim which is in itself assignable depends upon showing fraud incidentally, the rule has no application. The assignment of the claim carries with it the right to employ any remedy which is open to the assignor.” In speaking of one of the remedies thus afforded, an author says:

“The count for money had and received is a very important one and,- in some respects, differs from all other common law actions. It is a sort of a connecting link between law and equity, and, by the use of the very convenient fiction of an implied promise, this court will lie to recover any money which the defendant has received, or in any manner obtained possession of which, in equity and in good faith and conscience he ought to pay over to the plaintiff. This covers a wide and peculiar range of causes of action. It is limited, however, to cases in which the original cause of action was for money, or something which the parties have agreed to treat as money.” Green, PI. & Pr. Under the Code, Section 658.

In the case at bar the complaint sufficiently avers that the defendants received money to which in equity and good conscience they were not entitled, and, such being the case, the pleading is adequate, and errors were committed in refusing to receive evidence of the facts so alleged and in granting the nonsuit.

The judgment is therefore reversed, and the cause remanded for such further proceedings as may be necessary not inconsistent with this opinion. Reversed.