Palmer v. Pirson — 4 Misc. 455

Majority

p. 455

Palmer v. Pirson.

(Superior Court of Buffalo

General Term,

July, 1893.)

Headnote

In an action by a principal against her agent for false statements made to her of the value of vacant lots for which she traded a house and lot, the court charged that if the defendant by fraud or deception, led or induced the plaintiff to part with property to her damage while acting as her agent, he was liable for all damages actually sustained by her. Held, that the law was correctly stated.

In addition to the damages sustained by plaintiff, because of the false representations as to the value of the vacant lots, she was permitted to recover the commissions paid the defendant on the exchange. Held, no error.

Appeal from a judgment in plaintiff’s favor. The trial court, White, J., charged the jury as follows:

Gentlemen of the Jury : It seems that in December, 1890, the plaintiff in this action was the owner of a house and lot on Puffer street, in this city, which she claims was at that time

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worth $2,200. A gentleman by the name of Hughes, who appeared before you as a witness, seems to have been the . owner at the time, of some vacant lots in the vicinity of the park in this city. The defendant and plaintiff appear to have formed the acquaintance of each other prior to December, 1890, and to have become somewhat acquainted with the affairs of each other. The plaintiff seems to have known that the defendant was engaged in real estate business to some extent, buying, building and selling property. He seems to have learned at that time, that her tenants had refused to pay their water rates; that she had become dissatisfied, and had concluded to make a sale or disposition of her property. It is claimed by the plaintiff that at this juncture of affairs she employed the defendant to act as her agent in making a sale or disposition of this house and lot on Puffer street. She claims that after discussing the matter to some extent with the defendant as to the price, and the difficulty she experienced with her tenants, and so on, the defendant undertook to act as her agent or broker, to find a purchaser for her property. She claims while acting in that capacity he brought to her house this man Gibbs, who is produced as a witness on the trial of this case, and it appears that Gibbs was a representative or agent of the owner, Hr. Hughes, for the sale of the vacant lots I have spoken of. The plaintiff claims that when Gibbs was brought to the house he was spoken of as the proposed purchaser of this property; that the defendant, Mr. Pirson, then informed her that Mr. Hughes, or Mr. Gibbs, would trade these vacant lots for the house and lot, and asked her if she would trade. She claims she informed these gentlemen, especially Mr. Pirson, that she must see the lots before she would consider the trade, under any circumstances. She was not willing to rely upon what was said about the lots, but must see them. She then claims that it was proposed that she and Mr. Pirson should go out and see the lots, and there^ upon they did take Mr. Gibbs’ horse and cutter and drive out to see them. She claims that when they arrived there Mr. Pirson pointed out a certain territory, a certain number

p. 457

of lots to her, and told her that those were the lots it was proposed to exchange for her property. She claims in pointing out these lots Pirson told a falsehood, that he pointed out lots entirely different, and of very much greater value than the lots they proposed to exchange with her. She claims he knew and was perfectly familiar with those lots, and the location of them. I think Pirson says he was familiar with this land and the location of these lots. He claims he did not point out wrong lots, and denies that he told her her lots did not extend down into the valley as is claimed by her. Pirson claims he went to a certain point and there told her the lots she proposed to exchange for lay about there, and it was the fact. That he paced the lots off and gave her his honest opinion or judgment as to where the lots were. It is claimed he intended to deceive the plaintiff as to the location of the lots. The plaintiff further claims that she actually had no knowledge as to the location of the lots, or the location of Sidney and Lark streets; that she had no knowledge where they were, and that she informed the defendant she must rely implicitly upon him in the matter. She says further, that on the way back from inspecting the lots which they saw, that the subject of his compensation was spoken of, and both plaintiff and defendant tell substantially the same story about the compensation. He said he should have $100 for it if the trade went through, and she thought it was a little high, and wanted to know if he would take seventy-five dollars, and he said no; and she agreed to give him $100 for compensation in making this trade, and that that was agreed upon before the return to the house. She said, when they returned to the house, Mr. Gibbs was waiting (the representative of Mr. Hughes), and she says again she stated particularly to the defendant, in the presence of Mr. Gibbs, that she knew nothing of the value of the lands and she must rely upon him. In that connection Mr. Pirson says that he refused to allow her to rely upon his judgment in the premises as to the value of this land, and told her distinctly she must not do so, but preferred she should consult her husband or son, or some one besides him. So the parties are at

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variance on that question as to whether, in fact, she did state to him and he understood she was relying upon him; or whether, as a matter of fact, she relied upon her own judgment. The defendant argues from the fact that she declined to take the statement in regard to the land, but insisted on going to see it, that she relied upon her own judgment. That is for you to say, what is the fact with. reference to that particular question. In support of the claim of the plaintiff on that proposition, she produces Mr. Gibbs as a witness, and. he testifies in substance that when the plaintiff and defendant returned from looking at these lots that she did state to Mr. Pirson, in his presence and hearing, that she was relying entirely upon him in this matter, that she knew nothing about it herself, and he tells how Mr. Pirson then made a statement that the lots were worth twenty dollars a foot, and that she could sell them in the spring for twenty-five dollars. Mr. Gibbs says that was repeated two or three times between these parties on that occasion.

Mow Mr. Gibbs further says they then and there signed a paper. The paper is not produced before you, but the terms are conceded between the parties. He tells you after he and the defendant left the house at the time of the making of the contract on their way back to the city, that they conversed further about this trade, and he remarked among other things she would have a good time in selling these lots for twenty-five dollars next spring, and he, Mr. Pirson, replied he did not say what spring she could sell them for twenty-five dollars, but “ In the spring.” That evidence is produced in. the case on the part of the plaintiff to satisfy you, or for the purpose of leading you to find that the position of Mr. Pirson in this matter was not an honest one; that even at that time he was bent upon securing the commission in the transaction at the expense of the person who was trusting to him. That is the argument upon the part of the plaintiff, that at the time he did intend, and had .previously formed in his mind the idea, to mislead this woman into making this trade; and she argues that the amount of money he was to make if

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the trade went through, was the inducement. I presume he was to get nothing if it did not go through. Several of the-witnesses have described at great length, and with much detail the location of these lands—the land which she claims she supposed she was getting, and the lands she actually got. There seems to be no substantial controversy about the topography of the land in that vicinity and its conditions and surroundings at that time. It has been described at great length before you, and you are perfectly familiar with the condition and location of the lots in question. The counsel for the plaintiff introduced evidence upon that subject to show there was a difference in the lay of the land, for the purpose of corroborating the statement of his witnesses as to the difference in the value, claiming that the lots on this declivity, which the plaintiff got, were all of less value than those on the higher-land which she supposed she was getting. The plaintiff again offers the evidence of Mr. Hughes and Mr. Gibbs, both to the effect that after the trade was consummated by the passing of the deed of conveyance, the defendant stated that Mr. Hughes ought to give them, or one of them, $500, for procuring this, trade. That evidence is introduced for the purpose of further corroborating and sustaining the plaintiff’s theory of the case, that this man intended to be, and was dishonest from the start towards his principal. It is for you to say how much truth and veracity there is in their statements, and you are to say how much credence you will give them; the value of this Puffer street property is fairly estimated by the plaintiff’s witnesses from $1,800 to $2,200. The value of the property is not agreed to, and you, gentlemen, if you come to the conclusion the plaintiff is entitled to recover in this case, are to find as a matter of fact what the value of the Puffer street property was, and that value will form one of the bases upon which your verdict will be found. It is testified by several of the witnesses, Hume, Hewbrook, Curtiss and Fordham, on the subject of the value of the vacant lots, and the estimate of the value as given by these witnesses, runs from seven dollars to twelve dollars a foot; seven dollars is the lowest and twelve

p. 460

dollars the highest value put on the vacant lots by any of the witnesses in the case. The defendant himself gives no direct testimony as to the value. ¡No attempt is made on the part of the defendant to give any evidence as to the value of the vacant lots, further than what he said he offered to do himself, and he testifies that he thinks the trade made a fair exchange, and that her offer to take this property in exchange for property he owned on a certain basis; how much weight that testimony should have in fixing the value of these lots is for you to say.

The counsel for the defendant asks the court to charge, first, that a mere assertion of the defendant as to the value of the property, although untrue and known by him to be so, would not render the defendant liable for damages to the plaintiff.

In that connection it is proper to say that if the defendant, by fraud or deception, led this plaintiff, or induced her to part with the property to her damage, while he was acting as her agent or broker, he is liable at law for the damage which she actually sustained by reason thereof, providing she relied upon him — as a matter of fact relied upon his conduct, his actions, his statements and his representations in the matter, and they were false and fraudulent. Her recovery of damages, if she is entitled to recover at all, is in no ways affected by the amount of money she paid him, except that amount of money would be included in such damages. That is the only effect ■the payment of the money would have.

It is true that the relation of principal and agent is in law construed as a sacred relation. When a man undertakes to act as agent or broker for another, whether he is to be paid therefor or not, he is bound to exercise the best of faith. The policy of the law is that he shall be held in his conduct between himself and his principal to a high degree of fidelity and good faith. That is the law in this action, provided you find the relation of principal and agent existed.

If Mr. Pirson undertook to act as her agent in this business and she relied upon him and he knew she relied upon him for

p. 461

the transaction of this business, he was bound to the utmost good faith in the matter. If he failed in the exercise of good faith, such as is required under the circumstances, and she suffered damage by it, she would be entitled to recover damages by reason of the bad faith or fraud that he practiced upon her.

You are to ascertain in a calm, deliberate and honest way, whether this relation of principal and agent did exist between the plaintiff and defendant with reference to his exchange of the property. If you find that relation did exist, and that this woman was relying upon the defendant’s statement and representations with reference to the value of this property, and he knew that she was so relying upon him, and he had the intent in his mind to mislead, to cheat and defraud her in the premises, then he is responsible to her for any damage he may have caused by that misconduct. The basis of the trade, as claimed by the plaintiff, is that the vacant lots were valued at twenty dollars a foot, and that the Puffer street property was valued at $2,200, and she claims that she took a conveyance of the lots, subject to a mortgage of $1,100 and that the $300 in money, which she received at the time, would correspond to her claim. In other words, she’ received vacant land worth $3,000 and she received $300 in money, that made $3,300 in money and property she actually received, but she received it subject to an incumbrance of $1,100, and that taken out of the $3,300 would leave what she claims was the value of the house in the transaction. You are not bound in this case by the evidence or claim of the plaintiff to allow the sum of $2,200 for the Puffer street property, unless you find that was its actual value. All the plaintiff can recover now is the actual damage she has sustained, if any. If the Puffer street property was worth $1,800, instead of $2,200, her claim would be lessened by $400. If it was $2,000, instead of $2,200, then her claim would be lessened by some $200. These figures you will carry in your minds. It is simply a matter of addition and subtraction to find out how much she is entitled to recover, if entitled to recover at all. If you

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agree as to the value of the Puffer street property, and the value of the vacant lots, then the process of arriving at and measuring the damages is very simple. She is entitled to recover for the difference between the value of the properties and the commission she paid. Whether she is entitled to recover at all; whether she relied upon the defendant as her •agent; whether she believed his representations and his statements as to the value of the property, and took the property upon the faith of these representations; whether he knew his statements were false and untrue at the time, are questions you .are to decide, because in order that the plaintiff may recover, she must prove that he knew his representations were false and made them with the intent to defraud her, and that they ■actually had that effect. And if you find the statements and representations were made with the intent to defraud her, and .she relied upon them, and he knew it, your verdict should be for the plaintiff for an amount which will indemnify her for the loss she has sustained

Mr. Hickman.— I desire „o except to that portion of your Honor’s charge, wherein you say: “ The value of the Puffer •street property is important.”

The Court.— Only important in case they find the plaintiff is entitled to recover.

Mr. Hickman.— I also desire to except to „ne refusal of the court to charge as requested, and to all that portion relating to the opinion of the value, and all that part of the charge relating to agencies in exchange of property, and to the rule laid down as a basis for recovery.

The jury found a verdict for the plaintiff for the sum of .$850.

Henry B. lovelcmd, for plaintiff (respondent).

Arthur W. Hiehman, for defendant (appellant).

The defendant appeals from a judgment on •the verdict of a jury in favor of the plaintiff for a cause of .action resting in fraud. The plaintiff employed the defend

p. 463

ant to assist her in the sale of her house and lot. For the service she agreed to pay him $100. He did aid her in trading her house and lot for certain vacant lands on Lark street in this city. After the trade was consummated, she paid him the $100 agreed upon. She now seeks to charge him with damages for .false and fraudulent representations made to her of the value and location of the land which she received in exchange for her house and lot, and also to recover the $100 ■commissions paid.

The facts are disputed, but we think there was evidence enough to submit the questions in the case to the jury.

If it were necessary to the disposition of the questions raised by this appeal to look for evidence of fraudulent conduct by the defendant in negotiating the trade of this property, it would require but a slight examination of the testimony to satisfy the inquirer that the evidence abundantly warranted the submission of the case to the jury, on the theory that some proof aside from the mere statement of the value of the property fraudulently made, would be necessary to enable the plaintiff to recover, but we do not think that such additional proof is required.

This is an action by a principal against her agent for false statements made to her of the value of property. In Ellis v. Andrews, 56 N. Y. 83 ; 15 Am. Rep. 379 , it was held that as between vendor and vendee, the fraudulent statement by the vendor of the value of the property, unaccompanied with a statement of extrinsic facts, was not sufficient evidence •of fraud to warrant a recovery .by the vendee, the court holding that such statements became mere matters of opinion when made by a vendor. He is at liberty to fix such a value upon his property as he likes, and to have" and to express an •opinion of its value, even though he knows it is not true. The duty of the vendee is to use his faculties and the means within his power to protect himself against the expression of •such an opinion, and if he relies upon the vendor’s statement •of the value, he is without remedy.

But this rule has never been applied to a case where the

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relation, of vendor and vendee does not exist. Here the defendant is the agent of the plaintiff under her employment and pay, and the utmost good faith is required of him in dealing with her by virtue of the relation of the parties. She had a right to rely upon his judgment as to the value of the land, because she paid him for his supposed superior knowledge of the value of the property, and it would be a singular rule which would permit him to take advantage of the confidence reposed in him by her, although as between vendor and vendee he would not be liable.

We think the charge of the court upon that subject correctly stated the law, that if the defendant by fraud or deception led or induced the plaintiff to part with property to her damage, while acting as her agent, he is liable for the damages actually sustained by her.

In addition to the recovery of the defendant in the value of the land) the plaintiff was permitted to recover the commissions paid to the defendant. We do not think- error was committed by the court in allowing such recovery. If the defendant was guilty of fraudulent practice upon the plaintiff, he could not maintain an action to recover the contract price for his services or of the value of them, and when she paid him in ignorance of his fraud, she could recover the sum paid when she discovered the fraud. The defendant, in view of his fraudulent conduct, earned no compensation, and was not entitled to be paid, and no rule is better settled than that if money is paid under a mistake of the facts, or under fraudulent representations, it may be recovered on discovery of the true state of facts.

Ho error is discoverable in the record affecting the case, and we do not think the judgment should be disturbed. The order must, therefore, be an affirmance of the judgment, with costs.

Judgment affirmed.

Cases cited

Ellis v. Andrews 56 N. Y. 83 N.Y. 1874-02-24 p. 463