Matthews v. Cady

This action, as the complaint was interpreted by the commission, was to recover back the purchase-money paid upon a contract for the sale of certain stock by defendant to plaintiff, on the ground of fraud and a consequent rescission of the contract. The agreement was for the sale of fifty shares for $5,000. The defendant delivered twenty-five 'shares. Ho fraud was proved on the trial, and defendant moved for a non-suit. The court held that the action could not be sustained as one of fraud, but that as it appeared that defendant had only transferred twenty-five shares, while the agreement was for fifty, plaintiff could recover damages for breach of the contract. Held, error; that the action, if one ex delicto, could not be changed to one ex contractu. (Walter v. Bennett, 16 N. Y., 250; Townsend v. Hendricks, 40 How. Pr., 143; Boss v. Mather, 51 N. Y., 108.) The cases of Conaughty v. Nichols (42 N. Y., 83) and Graves v. Waite (59 id., 156) distinguished. But that the better view of the case was to treat the action as one based upon the implied assumpsit to pay back the $5,000, the contract having been rescinded for fraud; that under such a complaint plaintiff could not recover for the breach of a valid, unrescinded contract; in other words, plaintiff could not enforce a contract which is alleged not to be in existence.