iv. Injured Tenants in Common.

TANKERSLEY v. CHILDERS ET AL.

23 ALA. 781.-1853.

PHELAN, J.-The action was assumpsit by three of the Childers to recover of the defendant their portion of the proceeds of the cotton which was sold by him as constable under an execution against David Childers, who, together with one Smyth and the plaintiffs, was a tenant in common of the cotton which he sold. The right of the plaintiffs to waive the tort, the conversion, and sue in assumpsit is not denied. But it is insisted by plaintiff, in error, that in this form of action all the parties in interest must join in action, and that they cannot sue if any number less than all join as plaintiffs. This question of the right of any one tenant in common to waive a tort and sue separately in assumpsit was considered in the case of Smyth v. Tankersley, 20 Ala. 212, when we held that such right existed. The general doctrine on this subject of non-joinder of plaintiffs, or the right to sue separately where the tort is waived, and parties sue in assumpsit, has since received a careful examination anew in the case of Smith's Ex'rs v. Wiley, 22 Ala. 396. The court in that case arrive at the conclusion, as the result of sound reason and the best authorities, that when a conversion has been committed against several, all the parties in interest waiving the tort may join, if they like, in an action of assumpsit; but, that they are under no legal compulsion to do so, for that any number less than all, or any separate one, may bring assumpsit for his or their share of the interest without joining the rest.

* * * *1

b. PARTICULAR APPLICATIONS.

i. Fraud.

CROWN CYCLE CO. v. BROWN.

39 ORE. 285.-1901.

WOLVERTON, J.-The amended complaint herein, omitting formal allegations, runs as follows: "That on or about the 1st day of March, 1896, the plaintiff, at the special instance and request of the defendant, sold and delivered to defendant certain goods, wares, and mer

1 But see Gilmore et al. v. Wilbur et al., 12 Pick. (Mass.) 120 (1831), the court saying (p. 124): “Tenants in common not only may, but must join in an action for any entire injury done to the common property. And this principle is equally applicable to an action for the tort, and to an action of assumpsit when the tort is waived."

chandise, of the reasonable value of $12,234." The answer denies that the plaintiff sold or delivered to the defendant any goods, wares, or merchandise whatever, except under a special contract of purchase and sale between them, which provided for the payment of a stipulated price at a time certain, which had not elapsed at the commencement of the action. It is further alleged that the goods, wares, and merchandise mentioned in the complaint consist of three lots of bicycles, which were purchased by the defendant from the plaintiff under a special contract as to price, terms, and time of payment; and that, in pursuance of the terms of the contract, the defendant executed and delivered to the plaintiff, as and for the whole of the purchase price of said bicycles, certain bills of exchange, which were received and accepted by plaintiff, and are still held and retained by it. The plaintiff replied that the goods were procured and said contract was induced through the fraudulent and deceitful representations of the defendant as to the condition of his credit; that the said bills of exchange were taken and accepted under those conditions, and are wholly worthless. There was a demurrer interposed to the reply, and a motion to strike out the affirmative averment, which were both overruled. The verdict and judgment being in favor of the plaintiff, the defendant appeals.

* * **

The most important question attending this controversy is whether the plaintiff can waive the tort and sue in assumpsit for goods sold on a quantum valebat. Upon this question the authorities are in hopeless conflict, and we will make no attempt to reconcile or distinguish them. The action is for the reasonable value of the bicycles, not for an agreed price, so that there is no attempt to sue upon the contract, which it is alleged was fraudulently obtained, or to adopt any of its terms as controlling in any particular or binding upon the parties to the action. Fraud having vitiated the contract, and rendered it voidable, at the election of the plaintiff, it had proceeded by an action in no wise adapted to its enforcement, and thereby it would seem to logically follow that it has proceeded in its disaffirmance. At any rate, the action which it has employed is wholly inconsistent with the existence of the specific contract, so that it cannot be said that by suing in assumpsit it has affirmed any contract that it may have had with the defendant, except the one which may be implied from the acts of the parties. In a leading case upon the subject (Roth v. Palmer, 27 Barb. 652, 656), HOGEBOOM, J., discussing the effect of the waiver of the tort, says: "Does it restore the express contract which has been repudiated for the fraud, or does it leave the parties in the same condition as if no express contract had been made, to such relations as result, by implication of law, from the delivery of the goods by the plaintiffs and their possession by the defendant? On this subject the decisions are conflicting, but I think the weight of authority, as well as the true and logical effect of the various acts of the parties, is to leave the parties to stand upon the rights and obligations resulting from a delivery and the possession of the goods." The proposition is supported by Wilson v. Foree, 6

Johns. *110, Pierce v. Drake, 15 Johns. 475, and other New York authorities, as well as by Dietz's Assignee v. Sutcliffe, So Ky. 650,a case in all particulars like the one at bar. To the same purpose, see Pom. Code Rem. (3d ed.), § 571; Bliss, Code Pl. (3d ed.), § 15. Whether the vendor may waive the tort until his artful vendee has disposed of the goods and converted them into money is another phase of the question, touching which the authorities are not agreed. There are many of great weight holding that he can. Galvin v. Milling Co., 14 Mont. 508, 37 Pac. 366; Lehmann v. Schmidt, 87 Cal. 15, 25 Pac. 161; Roberts v. Evans, 43 Cal. 380; Norden v. Jones, 33 Wis. 600; Assurance Co. v. Towle, 65 Wis. 247. 26 N. W. 104; Downs v. Finnegan, 58 Minn. 112, 59 N. W. 981; Gordan v. Bruner, 49 Mo. 570; McCombs v. Church & Co., 9 Lea 81; Terry v. Munger, 121 N. Y. 161, 24 N. E. 272; and Challiss v. Wylie, 35 Kan. 506, 11 Pac. 438. We are inclined to adopt the doctrine of the foregoing authorities as establishing the better rule, namely, that a vendor who has been induced by fraud to part with his goods to a purchaser on a time consideration may, before the same becomes due, sue in assumpsit for their reasonable value, and this before the vendee has converted the same into money. We may say that we are impelled somewhat to this conclusion by a cause of some analogy heretofore decided by this court. We refer to Gove v. Milling Co., 19 Or. 363, 24 Pac. 521, wherein it was held that "when one performs services for another on a special contract, and for any reason, except a voluntary abandonment, fails to fully comply with his contract, and the services and material have been of value to him for whom they were rendered and furnished, he may recover for such material and services their reasonable value, after deducting therefrom any damages the party for whom such materials were furnished and services were rendered has sustained by reason of such failure." The quotation is from the headnote.

There was no attempt on the part of the plaintiff, prior to the institution of the action, to formally rescind the contract, nor was there any offer to return or to surrender the acceptances received in consideration of the sale, but the plaintiff proffered to return them. in its reply and at the trial. As against the right of recovery by this method, it is urged that no action accrued to the plaintiff for the reasonable value of the goods until the specific contract was rescinded, and there was an offer to return the acceptances, and that the present action was prematurely brought, to say the least. There is ample authority, however, for proceeding by the method adopted. Ryan v. Brant, 42 Ill. 78; Nichols v. Michael, 23 N. Y. 264; Wigand v. Sichel, 33 How. Prac. 174; Claflin v. Taussig. 7 Hun 223. The authorities seem to be uniform that, where the action is for the recovery of specific property, the tender of return of such acceptances should be made as a condition precedent to the bringing of the action, as the vendee must be placed in statu quo before the vendor is entitled to take it from him, consequently he has no right of action. until the tender is made; but there is a distinction recognized by

these same authorities, that where the party proceeds in trespass, or on a quantum valebat, the rule does not apply. Doane v. Lockwood, 115 Ill. 490, 4 N. E. 500. These considerations affirm the judgment of the court below; and it is so ordered.1

SCHANK v. SCHUCHMAN.

212 N. Y. 352.-1914.

The following question was certified: "Does the amended complaint herein state a cause of action against the defendant?"

CARDOZO, J.-The plaintiffs bought of the defendant wagons and parts of wagons, and also employed him to make repairs. Their dealings continued for nearly four years. In that period, the plaintiffs paid for repairs $39,626.66, and for new wagons or fittings $6,027.48, a total of $45,654.14. During all that time, two men, in the plaintiffs' service, were charged with the duty of inspecting purchases and repairs, and payment was not made till they had furnished their certificate of approval. It is charged in the complaint that they received from the defendant a bonus or commission of ten per cent. of the bills which they approved. It is charged that the payment was made to them "with intent to influence their action in relation to the business of the plaintiffs." When these wrongs came to the plaintiffs' knowledge, they could no longer restore to the defendant the benefits received from him. The work could not be restored: it had been incorporated into the wagons which had since then been worn out or destroyed. The wagons and parts of wagons could not be restored: they also were worn out and useless. The plaintiffs say that in this predicament every dollar paid by them to the defendant during the years of their dealings must be repaid without deduction or condition. They ask that all the transactions be set aside; that the contracts under which the payments were made, be declared to be

Accord, Limited Invest. Assoc. v. Glendale Assoc., ante, p. 587. Contra, Kellogg v. Turpie, 93 Ill. 265 (1879), and Bedier v. Fuller, 106 Mich. 342 (1895), the court in the latter case saying (p. 348): “We think the case is ruled by Galloway v. Holmes, 1 Doug. (Mich.) 330, and Emerson v. Spring Co., 100 Mich. 127, 58 N. W. 659. One who has been induced by the fraudulent representations of another to enter into a contract may affirm or disaffirm it. If he disaffirm, and assert the fraud, he cannot, in the same action, turn it into an action of assumpsit, and recover as for an implied promise. As was said in Emerson v. Spring Co., supra: 'It is suggested that, as a fraud was perpetrated upon the creditor, he would have the right to waive the tort and sue in assumpsit; but we are aware of no case which authorizes a party to first turn a contract into a tort, and then shift. it back into the form of a new contract, other than the original one.' The cases above cited are so squarely in point that we deem further discussion of the question unnecessary. The judgment below must be affirmed." In 1897 an act was passed permitting fraud to be waived and assumpsit to be brought for damages. Howell's Mich. Statutes, (1915), § 13954.

void; and that the defendant be required to repay all moneys which he has received, with interest from the dates of payment. This action is not the first in which the plaintiffs have sought redress from the defendant for the wrongs stated in their complaint. [The court then rehearses the previous course of the litigation.]

The present action, like the earlier one, is, therefore, in reality, for money had and received. That is always the legal remedy available where a defrauded purchaser, waiving the tort, elects to rescind and to reclaim his payments. Rothschild v. Mack, 115 N. Y. 1, 8. The action for money had and received is based, however, upon equitable principles. The plaintiffs must show that it is against good conscience for the defendant to keep the money. Moses v. Macferlan, 2 Burr, 1005. They do not show this, where they have consumed what they have received, unless the money exceeds the fair value of that which the defendant gave them. If the defendant's work and wares were paid for at fair prices, the plaintiffs have had a just return for every dollar they have parted with, and the defendant, therefore, can keep the money with good conscience. An apt instance of the application of these principles is found in the case of Western Assurance Co. v. Towle, 65 Wis. 247. There the plaintiff had paid to the defendants $1,000 upon a policy of insurance against fire. The payment was procured by false representations and false swearing as to the extent of the loss, which, if seasonably discovered, would have worked a forfeiture of the policy. The court held that in an action for money had and received, the plaintiff could recover "so much only as the amount paid exceeded the actual loss sustained by the insured. The action for money had and received is in some sense an equitable action, and the insurance company having voluntarily paid the money on an alleged loss claimed by the defendants, they can only recover back so much as in equity and good conscience they ought not to have paid."

The plaintiffs argue that the defendant was guilty of the crime denounced by section 439' of the Penal Law, and that if he were now suing for the price, the court would refuse to help him. Sirkin v. Fourteenth Street Store, 124 App. Div. 384. That question is not here and we do not attempt to pass upon it. * *

*

The plaintiffs invoke the authority of a line of cases in which it has been held that a victim of a fraud, who is unable, because of changed circumstances, to make restoration to the wrongdoer of benefits received, may still, under certain conditions, recover what he has paid. Masson v. Bovet, 1 Denio 69; Hammond v. Pennock, 61 N. Y. 145; Butler v. Prentiss, 158 N. Y. 49, 64; Heckscher v. Edenborn, 203 N. Y. 210, 228. In none of these cases, however, was it held that a plaintiff is absolved from the duty of making allowance for benefits received, where his inability to restore them arises from the fact that he has himself had the complete enjoyment of them, and in so enjoying has consumed them. In all such cases it

'Anti-tipping statute.