120 N.Y.S. 628 | N.Y. App. Div. | 1909
The action is brought to recover damages caused, by the false representation of one of the officers" -of defendant company, which induced the purchase by the plaintiff of. ten certain bonds of the
■ On November 24, 1905, the Metropolitan Beal Estate Improvement Company executed and delivered to this defendant a trust mortgage covering a large tract of land in the city of Yonkers, to secure the payment of a series of bonds to be issued by said improvement company. The total issue contemplated was two thousand bonds, of the par value of $500 each. The mortgage itself, recited the existence of prior liens upon the premises covered thereby to the extent of $263,400, and contained this provision : “Whereas, there are now existing mortgages which are lien upon the property or a portion thereof hereinbefore described' and upon which this mortgage is given and intended to become a lien before the maturity of the said existing mortgages which said mortgages are as follows: A mortgage held by the Metropolitan Life Insurance Company for $120,000. A mortgage held by the Valley Farms Company for $55,000. A mortgage held by the Valley Farms Company for $8,400. Two mortgages held by the Connecticut Building and Loan Association for $30,000 and $50,000 respectively, all of which mortgages amount in the aggregate to the sum of $263,400. Whereas it is desired and intended to pay off the said mortgages and each of them out of the proceeds of the sale of the bonds herein described now therefore it is hereby agreed by the said Company that dúring the third year of the life of this trust mortgage it will pay to the Guardian Trust Company as trustee the sum of $60,000 and during the fourth year of the life of this mortgage the sum of $100,000 and such further sum or sums as may be necessary to pay the principal and interest due on the said mortgage and to procure the discharge and satisfaction thereof and the said Guardian Trust Company as trustee hereby agrees to apply such payments when so made to the payment and satisfaction of the said mortgages, that it will make such application of" such payments pro rata unless the order of such application
Prior to the purchasé-of these bonds the plaintiff, together with, one Bussell, who was selling the same either for himself or the Metropolitan Beal Estate Improvement Company, went to the defendant’s offices in Hew York city, and in.response to an inquiry by plaintiff, was there informed by Charles L. Bo.binson, the defendant’s vice-president, that the mortgage securing said bonds was a first lien upon the property covered thereby. Bobinson was the officer who executed the mortgage on defendant’s behalf and his name appears upon the bond as having signed the name of defendant to a notice of registration thereof. Upon the trial the defendant offered no evidence',, but rested after the plaintiff had finished his case.- The jury has found that the representations, were made as 'sworn to by the plaintiff; that.they were fraudulently made, and has assessed the plaintiff’s damages. ...
Other objections are made to .this judgment. It seems that the bonds were purchased with moneys belonging jointly to Davidge and his. partner Smith. The answer was' amended upon the trial without objection, to allege a defect of parties plaintiff, in the failure to join the partner Smith with the plaintiff. - But the bonds were registered in the name of Davidge: He thereby became as to Smith’s interest a trustee of an express trust, and as such was authorized to bring this action. (Code Civ. Proc. § 449.) "
Another and more serious objection made by the defendant is as to the rule of damages held by the trial court. Of these 2,000 bonds 1,016 only were issued. The property is shown by the plaintiff’s witnesses to have been worth $219,000. The representation was that this was a first mortgage. These 1,016 bonds were of the face' value of $508,000. If the property had been as represented, without prior lien, the plaintiff’s bonds would have been worth five five-hundred-eighths of $219,000 or $2,155.51. This sum with interest is the amount in which the plaintiff has been damaged by the false, representation of the defendant.
The judgment should be so modified, and as modified affirmed, without costs to either party.
All concurred.
judgment and order • modified as per opinion, and as modified affirmed, without costs' to either party.