Case ID: ad_160/html/0740-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lee A. Ochs, Respondent, v. Albert H. Woods, Appellant.
    First Department,
    February 20, 1914.
    Fraud and deceit — false representations inducing plaintiff to accept another as his principal — evidence.
    Where, in an action to recover damages for fraud and deceit, consisting of false representations alleged to have been made by the defendant to induce the plaintiff to accept another company instead of the defendant as his principal, under a contract of employment to obtain a tenant for a theatre, it appeared that before the plaintiff had earned his commissions from the defendant he was notified that another company was the owner; that thereupon he entered into a contract with the other company to procure a tenant, but after completing his contract, was unable to collect his commissions, and the evidence, although establishing that the defendant knowingly misrepresented the financial condition of the other company, did not show that the plaintiff relied thereon, the complaint should be dismissed.
    Appeal by the defendant, Albert H. Woods, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 22d day of May, 1913, upon the verdict of a jury for $5,073.67, and also from an order entered in said clerk’s office on the 20th day of May, 1913, denying defendant’s motion for a new trial made upon the minutes.
    
      Nathan Burhan, for the appellant.
    
      Louis Frankel [Milton M. Goldsmith with him on the brief], for the respondent.
   Laughlin, J.:

This is an action to recover damages for fraud and deceit. The alleged fraud and deceit consist in false representations .with respect to the financial condition of the Brooklyn Court Theatre Company, whereby the plaintiff was induced to accept that company instead of the defendant as his principal under an employment to obtain a tenant for a term of years for the Court Theatre.

Plaintiff alleged that on or about the 16th day of February, 1911, he was employed by the defendant to procure a tenant for the Court Theatre at a rental of $15,000 per annum, $5,000 of which was to be payable in advance, and that plaintiff was to receive as commissions for his services sixty-two and one-half per cent of any excess of rental paid by the tenant over $15,000 per annum; that he procured one Eosenquest, who was ready, able and willing to perform as a tenant at a rental of $19,000 per annum; that on the twenty-eighth day of the same month, on notifying the defendant “that he was ready, able and willing to carry out his portion of the agreement,” he was informed by defendant that the Brooklyn Court Theatre Company, which defendant knowingly, falsely and fraudulently represented was a solvent corporation and able to perform the contract for commissions which the defendant had made with the plaintiff, was the owner of the lease, and that, relying thereon, plaintiff entered into a formal contract with said company to procure for it a tenant for the theatre; that he procured Eosenquest as a tenant for the theatre company, and it duly leased the theatre to him at an annual rental of $19,000 for the period ending in the month of August, 1914; that the tenant paid the rental in accordance with the provisions of the lease and the theatre company paid the plaintiff the sum of $208.33 per month for the months of March, April, May and June, 1911, being sixty-two and one-half per cent of the excess of rental over and above $15,000 per annum as specified in plaintiff’s original employment from defendant and in the contract between him and the company; that plaintiff was obliged to bring an action against the theatre company to recover the amounts due him for the months of July and August, 1911, and that he recovered judgment therefor which remains unsatisfied; that defendant was examined in proceedings supplemental to execution on said judgment and admitted that the corporation was insolvent and without assets at and prior to the time plaintiff was induced to contract with it. Plaintiff demanded judgment for $10,000.

Upon the trial the plaintiff gave evidence tending to show his employment by the defendant as alleged; that he was not aware that the defendant was not the owner of the lease until after he had interested Eosenquest and the latter had manifested willingness to take a lease of the theatre at $19,000 per annum and otherwise according to the terms on which plaintiff was authorized to procure a tenant. His evidence, however, shows that he did not give the defendant the name of his customer and expressly refused to do so, and before that fact wag made known to the defendant or to any one connected with the theatre company plaintiff was informed that the company was the owner of the lease, and he accepted it as his employer and entered into a formal contract in writing with it by which it employed him to procure for it a tenant and prescribed the terms and conditions upon which he was to receive commissions and the extent thereof. At the interview between the plaintiff and the defendant after the former had interested Rosenquest in the project the plaintiff requested that the contract between him and the defendant be reduced to writing. It was in that connection that the plaintiff refused to disclose the name of his customer and that the defendant stated that he was not the owner of the lease. It is quite clear, therefore, that the plaintiff had not earned his commissions under his employment from the defendant, for not only had the theatre not been leased but the defendant had been deprived of' all knowledge with respect to the prospective tenant. (Gerding v. Haskin, 141 N. Y. 514.) As already observed, however, this action is not brought upon the theory of holding the defendant liable for the commissions, but with a view to holding him liable for the false representations with respect to the financial condition of the theatre company which the plaintiff accepted as his employer in place of the defendant. If the plaintiff had earned and become entitled to the commissions under his employment with the defendant a different question with respect to his right to recover substantial damages for the false representations concerning the financial condition of the theatre company would be presented. The plaintiff has recovered as his damages for the false representations the amount of the unpaid commissions. There is no basis in the evidence for the finding that the plaintiff sustained damages by the false and fraudulent representations in the amount of the commissions he was to receive from the theatre company. The most favorable view of the evidence to the plaintiff is that if it had not been for the false and fraudulent representations he would not have entered into the contract with the theatre company. But the difficulty with his case is that if he had not done so there is no evidence that the theatre would have been leased, or that he would have become entitled to commissions. For the false representations, if the plaintiff believed and relied upon them to his prejudice, he would have a cause of action, hut on the facts presented by this record he has only shown nominal damages even if he relied on the representations.

The evidence fairly warrants a finding that the defendant knowingly and falsely represented to the plaintiff the financial condition of the theatre company; but the plaintiff repeatedly testified that he had no confidence in the defendant, and wpuld not believe or rely upon anything he said, and, therefore, the verdict cannot be sustained in so far as it is predicated on the other essential fact that the plaintiff relied upon the representations. In view of his testimony, to which reference has been made, we think he was' not entitled to go to the jury for even nominal damages on the question as to whether he relied on the representations, and that the court erred in denying defendant’s motion for a dismissal of the complaint.

It follows that the judgment and order should he reversed, with costs, and the complaint dismissed, with costs.

Ingraham, P. J., McLaughlin, Clarke and Scott, JJ., concurred.

Judgment and order reversed, with costs, and judgment directed dismissing complaint, with costs. Order to he settled on notice.