Opinion
January 19, 1942.
Plaintiff in its first cause of action seeks to recover damages for fraud on the part of defendants in inducing plaintiff to enter into a certain compromise agreement. Respondents, in their answer, so far as material, allege as a third defense to this cause of action that by the compromise agreement plaintiff released these defendants from the alleged claim set forth in such cause of action. Resettled order modified on the law by striking from the second decretal paragraph the word "denied" and inserting in place thereof the word "granted." As thus modified, the order, in so far as appealed from, is affirmed, with ten dollars costs and disbursements to the appellant. Obviously the setting up of the compromise agreement as a bar to the first cause of action does not avoid plaintiff's right to recover, since plaintiff's claim is for damages sustained by reason of defendants' fraud in inducing plaintiff to execute the compromise agreement and necessarily is predicated upon the fact that the compromise agreement and all its provisions are valid and binding. As stated in Talbot v. Cruger (72 Hun, 30, 32): "This release does not purport to release the cause of action averred in the complaint. On the contrary, it constitutes a part of the very foundation of the cause of action alleged." Lazansky, P.J., Carswell, Johnston, Taylor and Close, JJ., concur.