
    Wallace T. Foote, Jr., Respondent, v. Charles M. Ffoulke and Horace C. Ffoulke, Appellants.
    
      Action for money obtained by false statements that certain stock transactions had, taken place—waiver of the tort.
    
    A complaint, in an action in which the plaintiff seeks to recover damages for the breach of an implied contract on the part of the defendants to repay to the plaintiff certain sums of money which they had obtained of him as due on certain alleged stock transactions, the basis upon which the plaintiff seeks to recover such payments so obtained being that the alleged transactions had never taken place, while the defendants had secured the plaintiff’s money by charging him as if they had taken place, states a cause of action for money had and received, although the words “ conversion ” and “ misappropriation ” are used therein.
    In such a case the plaintiff is entitled to waive the tort, although the facts stated would support an action for damages for conversion.
    Van Brunt, P. J., dissented.
    Appeal by the defendants, Charles M. Ffoulke and another, ' appearing specially for such purposes only, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 10th day of September, 1900, denying the defendants’ motion, to vacate an attachment theretofore issued in the action.
    
      Julius Henry Cohen, for the appellants.
    
      Charles S. Foote, for the respondent.
   O’Brien, J. :

Upon an examination of the various objections raised as to the validity of this attachment, only one, we think, requires discussion, namely, that relating to the nature of the action.

The warrant of attachment stated that it was granted for a cause of action to recover the sum of $8,199.67 as damages for breach of contract, express or implied ; ” and it is insisted that there is a fatal variance between this statement in the warrant and the causes of action set forth in the complaint, in that the latter are directed to obtaining damages for conversion and not for breach of contract. The defendants’ construction of the complaint, as shown in the affidavit of their attorney is, that it “ charges the defendants with having failed to purchase and sell securities as required of them by the plaintiff. ”

There are some allegations, it is true, which charge the defendants with having converted the sums sued for to their own use, and these, considered by themselves, would support the theory of defendants that what the plaintiff sought was damages for conversion. It will not do, however, to take words used in one part of the complaint and, by separating them from the context and considering-them without reference to the complaint as a whole, to draw from them an inference favorable to the defendants’ theory which is opposed to the one to be deduced from a reading of the whole complaint and the one which the pleader evidently had in mind in framing it.

As said in McDonough v. Dillingham (43 Hun, 493, head note):

“ Where the allegations of the complaint are such, as, make it doubtful whether the cause of action therein alleged is on contract or in tort, every intendment is to be made in favor of construing it as being an action on contract.” Although the facts stated would support an action in tort, the plaintiff was at liberty to waive the tort (as he did) and sue upon implied contract. (Siebrecht v. Siegel-Cooper Co., 38 App. Div. 553.) Having elected so to do, his action is not for conversion but for money had and received. Another well-settled rule is that where different inferences can be drawn, the one which will support rather than one which will destroy the action, or remedy sought - should be adopted. As correctly urged by the respondent, “ the complaint herein seeks to recover damages for the breach of ¡an implied contract on the part of the defendants to repay to the plaintiff certain sums of-money which they had obtained of him as due on certain alleged stock transactions. The basis upon which he seeks. to recover these payments so obtained by them is that the alleged transactions had never taken-place, while the defend ants had secured the plaintiff’s money by charging him as if they had taken place.” If these allegations can be supported, then clearly the defendants had and received money- of the plaintiff by their own wrongful acts which, without demand, the plaintiff is entitled to recover. ( Utica Bank v. Van Gieson, 18 Johns. 485; Stacy v. Graham, 14 N. Y. 492.)

It will be noticed, in the different causes of action, that although the words conversion ” and misappropriation ” are used, what the plaintiff really seeks is not the value of the stocks converted or moneys misappropriated, but the return of his own moneys which he alleges the defendants obtained on their representations that they liad certain dealings in stock for him which resulted in an indebtedness to them, as shown by accounts rendered, which he duly paid. These transactions he now claims never occurred, but were feigned by the defendants for the purpose of wrongfully obtaining the moneys which he here seeks to recover.

Such allegations, according to the definitions of the text writers and the authorities, will support an action for money had and received. Thus in Cowen’s Treatise and Practice (Vol. 1 [5th ed.], 151,152), it is said: “ An action may be maintained in all cases where one has received money belonging to another, which in equity and upon principles of natural justice, he should pay over to him. * * * Where property has been wrongfully taken from the owner and sold by the wrongdoer, the owner may waive the tort and affirm the sale? and maintain an action against the wrongdoer for the price of it, as money received by him to the owner’s use. * * * Money is received under an implied promise to pay it to the proper owner * * when paid under mistake or through the deceit of the other party. As when two men are reckoning, if one, through mistake, overpays the other, the latter receives it to the use of him paying it; and if one falsely tell me he has paid certain money or performed certain work for me, and I pay him for it, the money so obtained from me by the deceit is received by him to my use.”

These principles may also be found in the decisions. Thus it has been held that assumpsit for money had and received is an equitable action, and as a general rule the question is as to which party the money justly belongs (Buel v. Boughton, 2 Den. 91), and that where a person has obtained the money of another by fraud, the law implies a promise to repay it, and an action will lie for money had and received. (Fagan v. Knox, 1 Abb. N. C. 246, 252.) Another early case on this subject is that of M’Neilly v. Richardson (4 Cow. 607), which stated the rule to be (see syllabus) that where one advances money to another to be employed in a particular manner and he appropriates it to a different object, it may be recovered back as money had and received to the use of him who advances it.” (See, also, Baker v. Moore, 4 App. Div. 237.) And in Putnam v. Wise (1 Hill, 234) reference is made to the “ well known right of election” to bring assumpsit instead of an action for tort, and in the foot note it is said: “ There is considerable difficulty in determining under what circumstances this right of electing between tort and assumpsit arises. Several English writers have stated the result of the decisions quite generally, thus — In many cases the law will raise a promise even from the wrongful acts of a party, and the plaintiff may waive the tort and sue in assumpsit.’ * * * 'There-are instances in which the law raises a promise from the acts of a party and will not admit of evidence of his intention to commit a tort, in disavowal of such tacit promise,’ * * * Mr. Phillipps has been rather more explicit. He says, In some cases where goods have been wrongfully taken, the plaintiff may waive the tort and sue upon an implied contract as for goods sold and delivered.’ He afterwards adds,. * * * the rule seems to be principally applicable to cases where the plaintiff has been induced by a fraud on the part of the defendant to make a contract with a nominal party, of which the defendant has derived the whole benefit.’ ”

Another interesting and more recent case is that of Ashner v. Abenheim (83 Hun, 34) where the plaintiff agreed to purchase tobacco at a certain sum per pound and to pay in addition whatever might be the duty, and the defendant represented that the duty was forty-five cents a pound, but paid only thirty-five cents, and it was held that the plaintiff could recover back the ten cents per pound above the amount actually paid by the defendant. And a ease somewhat similar to that before us is Seaman v. Low (4 Bosw. 337), in which it was held that where, by the fraud of the defendant, the plaintiff was induced to contract to purchase 250 shares of stock and made payments thereon, he could, on discovery of the fraud, rescind the contract and recover the money so paid, and that before the Code such money could be recovered by action of assumpsit under a-declaration containing only the common-law counts.

Having concluded, therefore, that the present' action is properly brought for money had and received and not for conversion, we find. no variance between the warrant and the complaint as to the cause of action stated. The order appealed from should, accordingly, be affirmed, with ten dollars costs and disbursements.

Ingraham, McLaughlin and Hatch, J J., concurred; Van Brunt, P. J., dissented.

Van Brunt, P. J. (dissenting):

I dissent. There is no evidence in the complaint of a waiver of the tort. On the contrary, an execution against the person could issue as a matter of right upon any judgment obtained under this complaint.

. Order affirmed, with ten dollars costs and disbursements.  