*1 Oli- Justice many expressions I embrace oí cannot rea- briefly I feel state phant’s dissent, obligated but Mei, re supra, in In I adhere the decision would why sons below. and therefore affirm judgment I-Teher, J., in result. concurring Vanderbilt, and Justices Justice For affirmance —Chief Oliphant and Wacheneeld —3. Heher, Burling, Jacobs For reversal—Justices Brennan- —4. L PLAINTIFF-RESPONDENT, ZELIFF,
DAVID CROSS-APPE SABATINO, LANT, SABATINO, v. ALFONSO FILOMENA URDANG, DEFENDANTS-APPELLANTS, AND A. ALBERT CROSS-RESPONDENTS. Argued February March 23 and March 1954 Decided 1954.
On from the appeal Court, Superior Division, Appellate whose in 27 reported N. J. Super. 13.
Mr. Harold D. Feuerslein the cause for the argued appel- lants, cross-respondents, Alfonso Sabatino and Filomena Saba- tino and (Messrs. Lipsiein Lipstein, attorneys).
Mr. I. Abraham Mayer cause for argued appellant, A. Albert cross-respondent, Mayer and Urdang (Messrs. Mayer, attorneys).
Mr. Jerome G. the cause for the Eisenberg argued respond- ent, Wiener, Mervin G. cross-appellant (Mr. attorney; counsel; Messrs. and Mr. Jerome G. Eisenbergi Spicer, and Mr. Neibarl on the Eisenberg Ralph brief).
The opinion of the court was delivered by J. This allegedly action one Oliphant, in from a written made defendants resulting by representation connection with the sale real later determined property, to be false. entered verdict in Judgment was jury in $4,200 all of the plaintiff’s favor sum against defendants. The and Appellate defendants appealed Division held that had established defendants’ been liability but “that there remanded was no damages” legal the action defend- for a new trial as to only. ants for certification and the petitioned plaintiff cross-peti- this tioned therefor. Both were court. petitions granted $71,750 Plaintiff for the paid property question he wanted him as a safe investment and to give acquire an assured He had been furnished an analysis income.
the annual one of the income expenses property, items fuel for the from expense cost of oil being period 1949 to Such February February 1950. representation as to item was in the final of sale this contained contract and the of title that “the con- representations affidavit recited tained in effective shall remain between contract parties.”
The plaintiff testified an examination of the submitted income expense disclosed figures that he would have a return of on his $71,750, investment of but that after 6.9% possession of the taking he discovered that his fuel bills were than higher had been represented. investi- Upon he discovered fuel gation oil bills for the from period *4 February 1949 to February 1950 were actually $282.74 in excess of that represented. Testimony an by was expert the effect that a return on the investment of or 6.7% 6.9% was reasonable and that a reduction of net $282.74 income of buyer $4,220 capitalized would result in loss to the of if at 6.7%.
We with the agree Division that “A Appellate review of the record there shows is evidence ample to support the verdict insofar as defendants’ is concerned” liability but with that court in its disagree that this holding State is 74 dam- rule as to “out-of-pocket” the committed
definitely “there and that in fraud or deceit action in an grounded ages of damages.” was legal proof no is not that this State the are We rather as to the rule “out-of-pocket” wedded to inexorably so rule benefit-of-the-bargain” “the that of damages measure v. Bin Crater See justice requires. where applied cannot be Baldwin, v. Martin 1869); & A. L. N. J. 513 (E. 33 ninger, Rothman, v. In Schwartz & A. 1917). 241 90 J. L. (E. N. Justice question deciding 206 while 1 N. J. (1948), that court, at intimated least this Wachenfeld, for speaking in saying: in this State fast rule hard and there was no “* * * alleged an to the encounter conflict of decisions as we Recovery price paid principle. correct for difference between the commonly acquired, property and known actual value Binninger, ‘out-of-pocket’ approved N. was in Cratér v. 33 J. L. rule ; McKenna, 1869) Duffy (Sup. (E. L. & A. v. 82 N. J. 62 Ct. ; ; Bassett, (E. 1924) 1912) N. L. 110 & A. CurtissWarner Mitchell v. J. Eq. 1927). rp. Thirkettle, (E. & A. 101 N. J. Co McBride, (E. hand, L. & A. On other in Batura v. N. J. price paid 1907), recovery and the difference between for repi'esentations property This been true. the value had commonly ‘benefit-of-the-bargain’ designated is rule.” as the
As some cases what is called the “out-of-pocket” rule furnish may just adequate compensation; others the so-called may rule be the more “benefit-of-the-bargain” just accurate. The just method determining damages necessarily case, varies with the facts particular in a this, case such as which deals with damages an over in the payment as the result purchase price a fraudulent misrepresentation, are to be assessed in the amount of the loss occasioned misrepresentation. No rule of capable of in all precise cases application can laid be down and followed. If a of fraud is sus charge tained, all are the proximate result of the should be awarded. whether the out- wrong “Regardless of of-pocket rule or the benefit-of-the rule bargain is the correct * * * one, the fundamental rule universally employed” “The victims of fraud are entitled to compensation
75 which was every the natural and wrong proximate result of the If or to, fraud.” one the rule is adhered other inflexibly while would be achieved it would in certainty many instances be at the of Selman or expense justice. 582, Shirley, 384, 2d P. P. 2d 124 A. R.L. Ct. Sup. (Or. 1939). is, believe,
The correct we as stated in 24 principle Jur., Deceit, Am. Fraud and 54: p. § governing damages rule the “The measurement of in fraud actions flexible, principles applied be and the in a should flexible manner. technique developed benefit-of-the-bargain A should be where both the out-of-pocket-loss formulas, rule and the rule shall be available as may so that one or the other be used the as circumstances of the may difficulty application demand. No case from the results principle flexibility, uncertainty. of it does create A formula principle proximity which principle the of combines fundamental with the flexibility (1) party is follows: If as the defrauded is recovery only actually lost, with content the the amount that he rule; (2) his representation will be measured under that if the fraudulent recovery may warranty, also amounts to a be had for bargain by accompanied promise loss of the a fraiid because a broken wrongdoer alone; (3) should cost the much as as the latter where by proof vague the circumstances disclosed the are so as to cast virtually light property no value of had it conformed only representations, damages equal to the will the court award sustained; (4) the loss where the under the benefit-of- the-bargain proved certainty, rule with rule will be are sufficient that employed.” The essential in factor this plaintiffs purchase return, was net well which defendants knew. loss, therefore, which, resultant is that sum when subtracted from the the sum which would purchase price produces paid, yield the same net anticipated by return when plaintiff he made his That sum be would purchase. computed words, of reduction in net In other capitalization income. the sum required fairly compensate plaintiff suffered, loss the natural result fraud proximate would be amount of the annual yield capital required return, differential at rate of income the anticipated pro vided, course, rate establish proofs return was in the reasonable. Such record. *6 “* * * The
The trial correctly, court charged, difference be- is entitled reimbursed for the to be plaintiff in the diminution tween what he for the paid of its value the false statement of cost from stemming fuel oil.” verdict
There was evidence to sustain the competent legal reverse as rendered with and we therefore respect damages it directs Division insofar as of judgment Appellate to the a new trial as to and remand cause only damages Court, with direction Division, Law Essex Superior County, that the therein be reinstated. entered judgment
Burling I J. am in with (dissenting). accord the con clusion of that this State is not majority inexorably so wedded to the rule “out-of-pocket-loss” as to the measure of damages rule be “benefit-of-the-bargain” ap cannot where The plied justice rule requires. appropriate general as in New Jersey was in Patco Prod damages expressed ucts, Inc., Wilson, 543, v. 5 J. 547 N. as “such as (1950), in reasonably supposed be to be contemplation ma}^ they at the time made the parties contract.” Potential where based on sound fact and not mere profits evidence without factual have been as support recognized measure of if of estimated proper damages “capable being with a v. degree certainty.” Rempfer reasonable Deerfield Schlesinger 135, N. J. 144 Louis Packing 4 Corp., (1950). Cf. Rice, 169, 4 N. J. 179 In tort cases (1950). o. v. C remote, are are or uncertain neither profits speculative an evidence of Woschenko damages. element of nor Sons, 269, 278-279 & 2 N. J. (1949). C. Schmidt form
In the case the evidence present adequate speculation. than a for mere or conjecture more basis an is that there is absence reason for this situation principal by acquired plain value of the property to the proof Whether it for the action. is worth tiff which forms the basis it is not revealed. than the for plaintiff paid more or less declared in expressly law was Lams v. This principle Fish, & wherein the 1914), A. (E. J. L. N. former Court of Errors and Appeals affirmed a judgment nonsuit in this type action. This law settled was reiterated by the former Court of Errors and in Appeals Bingham v. Fish, 89 N. J. L. & A. And it (E. 1916). in
inferentially Turon v. J. recognized L. Construction Co., 8 N. J. wherein this (1952), court held: jurisdictions “The rule in obtains some that while nominal trespass are allowable in actions in tort for strict in vindication of right, merely e., damages actually an action in case sus- —i. damage.” tained —is not maintainable without actual The principle above adverted to has been expressed *7 following language: “Since the modern action of deceit is a descendant of the older case, requirement action plaintiff on the it carries over the that damage
must have suffered substantial before can cause action deceit, arise. Nominal are not awarded in can there recovery plaintiff misrepre- be no sentation, if the is none off the worse for the * * *” flagrant may however it have been. Prosser (1941), 90, p. on Torts sec. 768. “* * * jjj £jje cage contrary wrongs, 0f to other intended damage ‘presumed,’ is, no covery is that there can be no a action for re damages. plaintiff of nominal Unless the can show an actual pecuniary loss, nothing. he can recover Fraud without actual dam * *” * age Harper (1933), 226, on is actionable. Torts sec. p. 649.
One of the elements of deceit is that the action for plain- tiff suffered from the action he was induced take. damage on Torts Cooley 1932), 348; ed. sec. on (4th Prosser Torts 85, 705; (1941), sec. on Torts p. Harper (1933), sec. 444-445; Bigelow 73-74; on Torts
pp. (1907), Kerr on pp. Fraud and 324-325. (1872), Mistake pp.
In present the evidence a supports case finding item than expense one The effort greater represented. is to measure his however plaintiff capitali- a zation this item. would seem proper This measure had value there that the actual of the been were he than the paid to or less therefor. If the equal price prop- more, for conjectural then matter is eity worth perhaps value over what he would reduce or paid excess in v. In Batura entirety capitalized out the loss. wipe alleged McBride, & unusual circum- 1907), 75 N. J. L. 480 A. (E. is not from this norm which stances variance permitted under the facts adduced available the plaintiff matter. present trial court should have granted
Eor these reasons the Therefore of dismissal. judgment defendants’ motions for appeal on T am this determination Division, to Court, Appellate the Superior it devolved upon enter the law and to imposes declare the judgment v. Bd. Miller Chosen for defendants. judgment Cf. Freeholders, County, Hudson N. J. (1952); Co., N. J. Jersey, J New Railroad aroszewski Central Court, Appellate of the Superior 236 (1952). judgment trial, the matter for new should remanded Division, which entry should be remanded for and the matter be reversed defendants. for judgment Vandebbilt, and Justices Justice
For reversal —Chief Oiapiiant, and Bbennan —4. Jacobs Filomena Sabatino For concurrence Alfonso Heiibb, —1. dang Albert Ur as to dismissal A. —Justice *8 Bub- complaint and dismissal For reversal —Justice ling —1.