185 A.D. 277 | N.Y. App. Div. | 1918
This action is brought to recover of the defendant damages claimed to have been suffered by the plaintiff by reason of fraud and deceit perpetrated upon it by said defendant. At the close of the evidence upon the trial, upon motion of the defendant, the complaint was dismissed upon the ground that in the view then expressed by the presiding justice the proofs of the alleged fraudulent representations upon which plaintiff complained did not meet the strict requirements of proof in cases of this character, and that the language attributed to defendant and which plaintiff claimed constituted the false representations was too indefinite to form the basis of any verdict against defendant. We think the learned trial court erred in holding that the evidence presented upon the trial did not justify the submission of the case to the jury.
The plaintiff is a New York corporation, engaged in the erection of steel buildings. The defendant, at the time of making the alleged fraudulent representations, was the presi
“ Columbian Marble Company,
“ Rutland, Vermont, Sept. 30, 1909.
“ Berlin Construction Co.,
“ Berlin, Conn.:
“ Dear Sirs.— In regard to the contract this day signed providing for the erection of two steel buildings, it is understood that you are to refer to Herman W. Hoops, the President of the Company, as to the credit of the Company and if you find the reference unsatisfactory you are at liberty to cancel the contract providing you cancel same not later than October 3rd, 1909. COLUMBIAN MARBLE CO.
“ by Frank D. White, V. P.
“ Geo. C. Underhill,
“ as Oen. Mgr.”
Plaintiff’s treasurer was called as a witness and testified, without objection, as to his conversation with the plaintiff’s contracting engineer as testified to by the latter, and that at once, on October 1, 1909, for the purpose of confirming the report of said contracting engineer, .the said treasurer wrote the defendant as follows:
“Berlin, Conn., October 1, 1909.
“ Mr. Herman W. Hoops,
“ Rutland, Vt.:
“ Dear Sir.— Referring to the conversation of our representative, Mr. Patience, with you in connection with the contract dated September 30, between Columbian Marble Company and ourselves, as to the ability of the Columbian Marble Company to meet its payments in accordance with the contract, we understand that you are willing to guarantee the payments referred to in the above contract, and we would say that such a guarantee by you would be perfectly satisfactory to us, and we trust it will be your pleasure to write us accordingly.
“ Thanking you in advance for your reply, we are,
“ Yours very truly,
“ SEYMOUR N. ROBINSON,
“ Treasurer.”
To the treasurer’s letter to the defendant the latter replied from New York on October 4, 1909, as follows:
“ Manufacturing Confectioners.
“ New York, Oct. Mi, 1909.
“ Seymour N. Robinson, Treasurer,
“ The Berlin Construction Co.,
“ Berhn, Conn.:
“ Dear Sir.— I am in receipt of your letter dated the 1st inst., in which you refer to a conversation your representative, Mr. Patience, had with me in regard to a contract between the Columbian Marble Company and your Company.
“ I write to say that I told Mr. Patience that I could not guarantee this account, because of my partnership arrangements, but that there was no doubt that the money would be paid when it was due. This money has been arranged for, and it is for this reason that I can say this to you at this time.
“ I cannot give you any further guarantee. The only other thing that you could do would be to hold a hen on the buildings which you are going to put up until they are paid for — if such a thing should happen, but this I am very certain will not happen. ,
“ I should be pleased to hear from you by return mail as to what your decision is in regard to this matter, and until we come to an agreement in regard to this I would suggest your not beginning work on this contract. Awaiting your reply, I remain, Yours truly, “ HWH /GB. H. W. HOOPS.”
Relying upon the statement contained in the above-quoted letter from the defendant to the treasurer of the plaintiff, that the money had been arranged for to meet the contracts for plaintiff’s work and believing the same to be true, on the day following, October fifth, plaintiff’s treasurer addressed to the defendant, as president of the Columbian Marble Company, the following letter:
“ Berlin, Conn., Oct. 5, 1909.
“ Mr. H. W. Hoops, President,
“ 271 Mulberry St.,
“ New York City:
“'Dear Sir.— We acknowledge receipt of your letter of the 4th inst. and are convinced from your statement that the
“ Yours very truly,
“ SEYMOUR N. ROBINSON,
“ Treasurer.”
The quoted correspondence shows that plaintiff relied upon defendant’s representations, and so relying at once undertook the erection of the buildings, and the same have been completed according to the plans and specifications. The contract price for said buildings was $12,542.38. Therefor plaintiff has been paid $7,288.93, and after the work was completed demanded of the Columbian Marble Company and of the defendant the payment of the balance unpaid, which was refused. It is, further, a conceded fact in the case that at the time the moneys sued for in this action became due, the Columbian Marble Company was insolvent and has ever since been insolvent and did not have and has not property with which to meet its obligations.
The plaintiff, upon the trial, introduced the evidence of the defendant -taken before trial. The defendant testified that he was at the time of the alleged representation the president of the Columbian Marble Company, and that Underhill and White had 'charge of the finances at Rutland, Vt. It is conceded that they had authority to execute the. contracts in question. Defendant further testifies that he advanced most of the money to finance the corporation himself, and that at the time of the talk between plaintiff’s contracting engineer and himself with reference to the responsibility of the Columbian Marble Company, all arrangements with reference to said company’s meeting said contract obligations were made by himself personally, and that said arrangements consisted of his, defendant’s, having the money in the bank to meet said contracts, but that at that time the money was his and it was in the bank in his own name, and that it was his practice, as money was needed, to forward it to Rutland, Vt., .for the purpose of paying the company’s obligations; that the bank account was standing
It appears from the evidence that the defendant, who was president of the Columbian Marble Company, constituted in reality its entire financial strength. So far as the evidence discloses the defendant financed the company and furnished substantially all of the money to carry on its operations. The representation which he made to the plaintiff and its officers at the time the latter entered into the contract and before performing the same, that it need not hesitate to proceed with the contract as all of the money had been arranged for to pay for the erection of said buildings, was concerning a matter about which the defendant was in a position to know.' These statements on his part were false as shown by his evidence upon the trial wherein he admits that at the time they were made no actual arrangements had been made for meeting the contracts in question, aside from his professed willingness to himself personally meet such contract obligations. Such an “ arrangement ” was of no substance whatever so far as affording plaintiff any protection. It was all subject to the caprice of the defendant, who might change his mind at any moment by withdrawing his financial support, whereupon the payment of plaintiff’s moneys would at once cease to be “ arranged for.” The jury might well have found from this evidence that the defendant knew that such representations so made to the plaintiff and upon which it relied, were absolutely false, and that they were made for the purpose of inducing the plaintiff to execute and perform the contracts in question. His representation in response to plaintiff’s particular inqury into the financial responsibility of the Columbian Marble Company, that the contracts would fully be paid as they fell due, and that all of the money had been arranged for to meet the same, was more than the expression of a mere opinion or belief on his part, and amounted to representation of a fact, to wit, that said moneys were in hand and under the control of the Columbian Marble Company at the time said contracts were executed. That the plaintiff fully believed in and relied on said representations is evidenced
Furthermore, I think we should hold defendant to be estopped, by his subsequent act in refusing to furnish the necessary funds to meet these contracts, from denying the materiality of such representations, and that he is also estopped from now claiming that the money was ever “ arranged for.”
The evidence leaves no room for doubt as to defendant’s intimate knowledge of the affairs of the contracting company of which he was the head. He knew the company was insolvent except as he backed it, and that there was very substantial ground for plaintiff’s uneasiness. He soothed the suspicions of plaintiff’s agents and induced them to refrain from canceling the contracts and to undertake then- performance by making representations by which he intended to convince plaintiff’s representatives that their pay was good. In this defendant succeeded. He must have appreciated that had plaintiff understood the true conditipns it never would have continued the contracts. The position assumed by defendant in the transaction is not such as to entitle him to undue consideration.
The damages suffered by plaintiff are conceded, and it seems to me that every element necessary to be established by plaintiff to make out a prima facie case against the defendant was established by the evidence presented upon the trial.
The trial court having dismissed the complaint, the appellant is entitled to the most favorable inference on all questions of fact, and upon the question of fraud and deceit the plaintiff was entitled to go to the jury. The law is elementary that one who makes a statement of fact which he knows to be false for the purpose or apparent purpose of inducing another to act is liable for damage resulting from such false representation. At the time the defendant represented that the money had been arranged for to meet plaintiff’s contracts, he knew that the Columbian Marble Company was entirely without funds, and he admits that up to that time no effort had been made to provide funds for the specific purpose of
It was stated in Hadcock v. Osmer (153 N. Y. 604): “ But while there must be a furtive intent, it may exist when one asserts a thing to be true which he does not know to be true, as it is a fraud to affirm positive knowledge of that which one does not positively know. Where a party represents a material fact to be true to his personal knowledge, as distinguished from belief or opinion, when he does not know whether it is true or not and it is actually untrue, he is guilty of falsehood, even if he believes it to be true, and if the statement is thus made with the intention that it shall be acted upon by another, who does so act upon it to his injury, the result is actionable fraud. (Kountze v. Kennedy, 147 N. Y. 124, 130.) ”
Judge Peckham said, in Rothschild v. Mack (supra): “ The member [of the firm] who made the representations * * * either knew or he did not know of the financial condition of the makers of the note. If he did know it, then he knew that the note, as to both makers and indorsers, was without value. If he did not know its condition, he yet assumed to have actual knowledge of the truth of his statement * * *. He certainly meant to convey the impression of actual knowledge of the truth of the representations he made, * * * and he either knew such representations were false, or else he was conscious that he had no actual knowledge while assuming to have it and intending to convey such impression. If damage ensue, this makes an actionable fraudulent representation.” (Marsh v. Falker, 40 N. Y. 562; Meyer v. Amidon, 45 id. 169.)
The law on this point is too well settled to require further citation of authorities.
The evidence of Hoops as to his having made payments to the Columbian Marble Company with which to meet its obligations long subsequent to the representations as to the money having been arranged for, affords no excuse for the false representations which he made at the time the contracts
The judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide event.
Dowling and Page, JJ., concurred; Clarke, P. J., and Laughlin, J., dissented.
Judgment reversed and a new trial ordered, with costs to appellant to abide event.