Griffing v. Diller — 50 N.Y. St. Rep. 435

Majority

p. 435

Jane R. Griffing, Resp't, v. William E. Diller et al., App'lts.

(Supreme Court, General Term, First Department,

Filed December 16, 1892.)

Headnote

1. Fraud—Representations as to value by vendor oe real estate.

A vendor of real estate is not liable for a false representation as to the value of property he oilers for sale; but, if the representation as to value is accompanied by other representations of material facts, it is not error in an action for fraud, where all the representations form part of the same transaction, to admit evidence of the representation as to value in connection with the other representations.

3. Same—Brokers.

An agent for the sale of real property is not liable for the falsity of a representation made by him as to its value, nor for other representations in regard thereto, although material and false, if he does not assume to make the statements on his own responsibility, but gives the sources of his information, and the facts are not such as would be peculiarly within his knowledge.

3. Same—Laches.

It is not a defense to an action for damages for fraudulent representations, which is not barred by any statute of limitations, that the plaintiff has been guilty of such ladies as might defeat the right to rescind a sale induced by the false statements.

4. Same—Conspiracy.

The gravamen of an action for conspiracy is fraud, and damages sustained thereby, and a recovery may be had therein against one of the defendants for fraud, although conspiracy is not made out.

Appeal from judgment entered on verdict and from order denying motion for new trial.

Joseph Fettretch, for app’lt,

Diller; H. Q. Atwater, for app’lt,

Condit; Denis McMahon, for resp’t.

This action was brought against the defendants to recover damages for fraud sustained by the plaintiff in_ consequence of an exchange of property brought about by the joint fraudulent misrepresentation of the defendants.

It appears that the plaintiff was the owner of certain property in New Canaan, Conn., and the defendant Diller was the owner of certain real estate in the city of New York, consisting of an

p. 436

apartment house at the southeast corner of One Hundred and Twenty-fourth street and Fourth avenue, which the defendant Condit had in his hands for sale or exchange. It was claimed upon the part of the plaintiff that her property was worth $11,000 over and above the incumbrances thereon, and that the defendants represented to her, to induce her to exchange said properties, and relying upon which representations she did so exchange, that defendant Diller’s property was worth $65,000, or $20,000 over and above the incumbrances ; and that its rental production was $1,000 per annum over and above all charges connected therewith, and that the apartment house was in good order and well rented. The evidence shows that most of the conversations with respect to this apartment house were with the defendant Condit, the broker in whose hands this house was placed for disposition; and, without stating in detail the evidence, it is sufficient for the purpose of this appeal to refer generally to the same, after considering one or two points of law which are raised upon the part of the appellants.

It is urged that the testimony with regard to the alleged value of the property and the statements in respect to such value were entirely immaterial, and could form no basis for a judgment upon the ground of fraud, because it is a well settled principle that mere false representations as to value give of themselves no cause of action. Chrysler v. Canaday, 90 N. Y., 272 .

But it is also equally well settled that when such false and fraudulent representations are accompanied by other acts, such evidence may become competent and form the basis of a claim. In the case at bar there were other representations in connection with these assertions as to value, the truth of which representations would naturally be particularly within the knowledge of the defendant Biller; and that was as to the amount of rent which these premises produced. The evidence in regard to the whole transaction, therefore, was competent, if there was anything in re-' spect to these representations as to rent which made a proper case to go to the jury. It is proper here to state that, as far as the defendant Condit is concerned, there is no evidence of any fraudulent representation whatever in respect to the value of the property or-as to the rent. Those things which he stated in this regard appear by the evidence to have been stated by him to the plaintiff as coming from the defendant Biller, and that this was the source from which he derived his knowledge. There is no evidence that he made any misrepresentation in regard to the facts which Biller had stated to him in respect to this property. Therefore, as far as the defendant Condit is concerned, if there were any false representations made, he was not responsible therefor, inasmuch as he gave the sources of his information, and the facts were not such as would be peculiarly within his knowledge.

In respect to the defendant, Biller, however, there is proof upon which the jury had a right to find that he made personal representations that these premises rented for $1,000 over and above the charges thereon; and that the net income derived therefrom would amount to this sum. This representation, it appears, is

Concurrence

p. 437

untrue. It was something peculiarly within his knowledge, and the plaintiff in this action had a right to rely thereon. She swore she did so rely, and if the jury believed that she did, and found that the representation was false, then an action might be maintained -against the defendant Diller.

It may be urged that it is apparent from the evidence that the plaintiff did not rely upon this representation, because she wrote a letter in which she stated that she had been to see the house, and that she thought it, so far as she could judge, a very nice and desirable house, but, from the rents received, she thought the income of it over and above the interest, taxes, repairs and renting expenses must be very little, etc.

But it is to be observed that it was after this letter that the representation in regard to the amount of the rents was made by the defendant, Diller. In other words, Diller represented to her that the information which she had gotten by her visit to the house was erroneous, and that, instead of the surplus being very little, if anything, it was about $1,000. This was clearly something upon which the plaintiff had a right to rely, and if she did so rely, as already stated, she would have a cause of action against the defendant, Diller.

But the question is further raised that the plaintiff waited too long before she attempted to rescind, and that, having thereby accepted the bargain, she cannot maintain this action.

Even if she had no right to rescind by reason of her loches, she was not barred by any statute of limitations from recovering the damages sustained by the fraud.

It has been settled, ever since the case of Wardell v. Fosdick, 13 Johns., 325 , that a vendee defrauded by false representations has an election of remedies : First, he may rescind ; or, secondly, he may recover damages for the fraud; and this is the nature of the action at bar. And it is equally well settled that in an action for conspiracy the gravamen of the action is fraud and damage sustained thereby, and that a recovery may be had against one defendant for the fraud, although conspiracy was not made out. Buffalo Lubricating Oil Co. v. Standard Oil Co., 42 Hun, 153 ; 3 St. Rep., 450 ; affirmed, 106 N. Y., 669 ; 8 St. Rep., 876 .

Therefore, although no case was made out as against the defendant Condit, yet a verdict may be maintained as against the defendant Diller.

Upon the whole case, however, as upon the previous trial it seems to have been inferred that there was some liability against the defendant Condit, and this may have affected the question as to the defendant Diller, we think there should be a reversal as to both defendants, and a new trial.

The judgment and order should be reversed and a new trial ordered, with costs to appellants to abide event.

O’Brien, J., concurs in the result

I concur in the opinion that the judgment should be reversed as to Condit, but think it should be affirmed as to Diller.