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Bernhard v. McMaster

54 N.Y. Super. Ct. 104 22 Jones & S. 104 Court N.Y. Super. Ct. Decision date 1886-12-17 English

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p. 104
JOHANNA BERNHARD, Respondent, v. MARY S. McMASTER, et al., as Ex’rs., Appellants.

Headnote

False statement by vendor as to value, when no defense to obligation arising out of contract.
A mere false statement as to the value of certain property, although it may have induced a contract for the purchase, does not, by itself, constitute a defense to an obligation arising out of such contract, in a controversy between parties bearing no other relation to each other than such as arose from the contract.
Before Sedgwick, Ch. J., Freedman and Ingraham. JJ.
Decided December 17, 1886.
p. 105
Appeal from judgment entered upon the report of a referee.
The plaintiff sued upon a bond given to secure part of the purchase money of land in Virginia. The defendants set up a counter-claim of $20,000 damages for fraud.
Alexander Thain, for appellants.
— I. The referee erred in disallowing defendants’ counter-claim, because of the false and fraudulent representations made by plaintiff to McMaster as to the value of the property in Virginia. McMaster is now dead, which will account for the findings of the referee that there was no evidence that he relied solely upon plaintiff’s representation. The property was in a distant state, and his disposition to personally inquire after the value was met by the re-assurance which amounted to an artifice on the part of the plaintiff to prevent inquiry and the obtaining of knowledge by McMaster, that the property was as it had been represented (Chrysler v. Canaday, 90 N. Y. 279 ). Each party did not stand upon an equal footing in respect to knowledge. Plaintiff’s agents asserted in language indicating a claim of actual knowledge of values which could not be construed into an expression of opinion only.
The case of Simar v. Canaday ( 53 N. Y. 306 ), is directly in point. By this case it is also determined that, whether the representations are a mere expression of opinion or an affirmation of fact to be relied upon by the vendee, is not a question of law for the court, but to be determined as a question of fact. The case of Long v. Warren ( 68 N. Y. 426 ), is not in conflict with this doctrine but rather in confirmation of it. In the case of Ellis v. Andrews ( 56 N. Y. 83 ), the doctrine is reiterated, that a. false statement of value alone is insufficient upon which to predicate an action for damages, but even that case was decided by a divided court
p. 106
and by a bare majority; the reporter taking pains to call attention to the distinction between that case and that of Simar v. Canaday by a foot note.
Furman v. Titus (40 Super. Ct. 284), is put expressly on the ground that false representations as to value are not actionable where the vendee has an opportunity to examine the property, and to judge of its value. The question was not touched upon in McMillan v. Arthur, 98 N. Y. 167 . In Van Epps v. Harrison ( 5 Hill, 63 ), held that representations that land was level and required no grading, &c., were actionable where the representations were made in New York city and the property near Albany. Gordon v. Butler ( 106 U. S. 553 ), was an action brought to recover damages for alleged fraudulent representations as to value, and the court decided that the complaint should have been dismissed. The facts in that case show that from the language used, the parties intended only an expression of opinion, as that the statements made were to the best of their belief only. In commenting on that case and some others, the court of appeals in Hickey v. Morrell ( 102 N. Y. 454 ), say:— “ But in none of them is it denied that if the person making,the statement or expressing the opinion had, at the time, knowledge of its falsity, the action would lie.” In that case the court sustained the right of the plaintiff to recover damages where goods had been destroyed by fire, after representations made by the warehouseman by circular in the city of New York, to a resident of the same city, that the warehouse was fire-proof. The defendants here invoke the well established principle that he who asserts as the truth that which he does not know to be true, is equally hable with one who makes a statement which he knows to be false. But in the case at bar, defendants’ testator was indr ced to refrain from inquiries as to the value of the property he was to receive, by renewed assurances that he might rely upon thé former representations made to him.
p. 107
Roger Foster, for respondent.
I. Case for fraud will not lie unless the party to whom the statement was made was influenced solely thereby in an action resulting to his damage (Watson v. Paulson, 15 Jurist. 1111; Wing v. Woolfolk, 116 U. S. 599 ; Long v. Warren, 68 N. Y. 426 ; Chrysler v. Canaday, 90 Ib. 272).
II. The representations were in no sense fraudulent. They were merely false.
IH. An action will not lie for a fraudulent statement as to value (Ellis v. Andrews, 56 N. Y. 83 ; Atwood v. Small, 6 Clark & Finnelly, 232, 448 ; Holland’s Jurisprudence [2d Ed.] 200). “ The rhetorical phrases of the vendor are not necessarily fraudulent. ‘ Simplex commendatio non obliged’” (Sandford v. Hanby, 23 Wend. 260 ; Starr v. Bennett, 5 Hill, 503 ; Haight v. Hoyt, 19 N. Y. 464 ; Slaughter’s Adm. v. Gersen, 14 Wall. 279 ; Gordon v. Butler, 105 U. S. 553 ; Veasey v. Doton, 3 Allen [Mass.] 380 ; Graffenstein v. Epstein & Co., 23 Kans. 443 ; 2 Kent’s Comm. 486). In Simar v. Canaday ( 53 N. Y. 298 ), there were false representations as to the price for which the land in question had previously been sold. Moreover, a statement that a mortgage is valuable is equivalent to an affirmation of the solvency of the mortgagor (See the case on appeal at the Bar Association, where the facts appear more fully than in the report). Chrysler v. Canaday ( 90 N. Y. 272 ), contains a few words by Judge Miller inconsistent with this well-settled rule. When the question is again presented to the court of appeals for decision, it is not likely that its members -will make such an innovation in the law. Bnt even if the language cited by the appellants stated the law correctly, it could not aid them. That requires the use of some artifice and the entire reliance of the vendee upon the representations as to value, to make the vendor responsible. Here, the referee has found that there was no artifice, that McMaster was not induced by the state
p. 108
ments to forbear from inquiry, and that he was not induced solely thereby to purchase the land in question.

As the appellants submit no evidence, but rely solely on the findings of the referee, and the said findings affirmatively show:—

(1) that there is no proof that the plaintiff made to David McMaster, before he purchased her property in Virginia, any representation which she believed to be untrue;

(2) that there is no proof that the plaintiff made to David McMaster, before he purchased her property in • Virginia, any representations with the intent to defraud him;

(3) that there is no proof that any artifice was em-. ployed by the plaintiff before David McMaster agreed to buy the said land, to prevent inquiry by him concerning said land; and

(4) that there is no proof that David McMaster did, on account of his reliance upon any representations made by the plaintiff, forbear from inspecting the said land before he purchased the same ; the only grievance left to the appellants consists of a false statement as to the value of the land.

Such a statement has never yet been held to constitute a defense to an obligation arising out of a contract thus entered into, in a controversy between parties bearing no other relation to each other than such as arose from the contract, and as long as the controversy is between such parties it makes no difference that the false statement as to value may have induced, or did induce, the contract. So mere inadequacy of consideration of itself is never proof of fraud in such a case.

Judgment must be affirmed with costs.

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