White v. Seaver

| N.Y. Sup. Ct. | May 5, 1867

By the Court, C. L. Allen, P. J.

The complaint is for fraud, and not for breach of contract. Ho contract is set forth, and the plaintiffs did not, and do not, claim to recover for such breach, but on the ground of the fraudulent representations made by the defendant, which induced the plaintiffs to enter into the contract. The allegation is that the defendants falsely represented to the plaintiffs that he had a written contract with Ely Beecher, for the premises on which he resided, and that he had full control of the dam and water privilege, when he had no such contract and no such control. The case of Whitney v. Allaire, (1 Comst. 305,) decides that where one conveys or leases to another his right in real estate, an action will lie for a fraudulent representation as to the territorial extent of such right. It is said by the defendant’s counsel that the point involved here was not before the court; that the question was, as to the extent of the demised premises, and not as to the title. It is true that the defendant in this case did not claim to own the premises in question, but he did claim that he had a toritten contract with Beecher, which entitled him on certain conditions to a full conveyance. And he agreed to transfer to the plaintiffs his right to that conveyance, on their complying with the terms of the agreement on his part, which they engaged to do. The case therefore seems to me to come directly within that of Whitney v. Allaire, and also that of Monell v. Colden, (13 John. 402,) cited by Judge Gardner in his opinion, where the representation was that the vendor, as riparian owner, had the preemptive right to a grant of land under water in the Hudson river, and opposite the purchased premises. (See the other cases cited by Judge Gardner.)

The action is to recover damages, for fraud in the sale and purchase of real property, and is not, therefore, within subdivision 9 of section 53 of the code, defining the jurisdiction of justices of the peace. Hot being for a breach of contract, as already observed, it does not come within the 1st subdivision of that section, and it may be doubted whether, if the objection had been taken before the justice, he could have entertained jurisdiction of the action. It is now raised specifically, for the first time, here. Ho answer of title was interposed. The justice’s attention should, however, have been called to it on the trial. (Browne v. Scofield, 8 Barb. 239.) It is true that the plaintiffs agreed to purchase certain articles of personal property of the defendant, as well as the premises and water privilege; but the complaint confines the demand for damages occasioned by the inducement to purchase the real estate, and not for any personal property. Clearly, then, it was an action for fraud in relation to real estate. The parties treated it as such. The plaintiffs claimed it to be such, and they cannot change its character now. (16 Barb. 633, 642.) Indeed they now view it as an action for fraud, in their points presented to the court. But if the action should be viewed as an action for fraud in respect to the execution of the contract, it then becomes necessary to examine further whether the plaintiffs entitled themselves to recover.

If I understand aright the claim of the plaintiffs, it is grounded upon a rescission of the contract by reason of the fraud, and for damages sustained by them, by reason of the fraud. It has been repeatedly decided that where a party has been defrauded in the purchase or sale of real property, he may rescind the contract, so as to restore the parties to the same situation they were in when the contract was made, or he may affirm it, so far as it has been executed, and claim a compensation for the fraud. If he has received a conveyance, he must re-convey, or offer to re-convey, or he cannot rescind. (Bradley v. Bosley, 1 Barb. Ch. Rep. 125. Moyer v. Shoemaker, 5 Barb. 319.) And the same is true as to personal property. (4 Denio. 51, 54. 2 Hill, 288, 294. 5 id. 390. 3 Sandf. 174. 14 Barb. 594.) It is perfectly evident that the plaintiffs here did not undertake to affirm the contract. They did not return to Beecher’s on the 20th of May, the day fixed upon for the final completion of it. They never offered to perform or complete it, on their part, notwithstanding Beecher swears that he told them he would give them just such a conveyance for the water privilege, as the defendant had contracted to give. This they refused, and placed themselves on their right to rescind. It is in evidence that they used some of the lumber of the defendant, which they purchased under the contract; which they did not return, or offer to return, or make good. This objection, however, was not taken, before the justice, where it might have been obviated; and I do not think the defendant can avail himself of it here.

It is insisted by the defendant that an action cannot be maintained for misrepresentations made by a vendor, as to the character of his title, and the cases of Tallman v. Greene, (3 Sand. 437,) and Leonard v. Pitney, (5 Wend. 30,) are cited in support of the position. I have already remarked that the case of Whitney v. Allaire decides differently. Bronson, J., who dissented from the opinion of the court, in that case, cites Leonard v. Pitney, in support of his opinion, but he was overruled by a majority of the court, and the law was pronounced to be otherwise.

[Clinton General Term, May 5, 1867.

It is further insisted, that to render the defendants liable, the representations must not only be fraudulent, but of such a character that the purchaser had no means of ascertaining their falsity. That the plaintiffs were bound to exercise ordinary prudence and discretion to guard against the fraud. I think there is force in this argument, and that it is to some extent, at least, supported by authority. The means of knowledge were all perfectly within the power of the plaintiffs. The defendant did not claim to own the premises. The plaintiffs knew that their title must come from Beecher. He resided near them, and they had only to inquire of him, as to the nature and extent of the defendant’s rights which they were contemplating to purchase. They called him as a witness, on the trial. Why did they not call upon him before they executed the contract, and ascertain all the facts in relation to the premises ? It seems there was a written contract between the defendant and Beecher drawn up, but it had never been executed. It appears to me that ordinary care and prudence required of them to make these inquiries of Beecher, and that, having neglected to do so, they do not come with a very good grace to ask of the defendant to respond to them in damages. (3 Sand. 447, 440.)

The defendant moved for a nonsuit, on the ground that the plaintiffs had not made out a cause of action, and I think on this ground, the motion should have been granted.

The judgment must be reversed.

C. A. Mien, James and RoseTcrans, Justices.]