Case ID: ny-st-rep_11/html/0801-01.html
Source: Caselaw Access Project
Author: {"author": "Learned, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George H. Cross, Resp’t, v. John H. Devine, App’lt.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed November, 1887.)
    
    1. Sale of land—Action for damages for false representations— When maintainable.
    An action for damages occasioned by a false representation, made by the vendor of land, may b ■ maintained, whether the representation be as to title or as to matters collateral.
    2. Same—Measure of damages.
    Property covered by a mortgage is worth less than it would be free, by the amount of the mortgage and interest. The only exception to this would be where tee mortgage exceeded the actual value of the land.
    8. Same—When vendee makes prima facie case.
    Where the vendor represented the land to be unincumbered the purchaser who took title relying thereon, by proving the mortgage, would make a prima, facie case, showing his damages equalled the amount of the mortgage and interest, even though he had not paid the mortgage.
    Appeal from a judgment in favor of the plaintiff entered upon the verdict of a jury.
    
      T. A. Read, for app’lt; W. W. Smith, for resp’t.
   Learned, J.

—It seems to be settled that an action for damages occasioned by a false representation, made by the vendor of land, may be maintained, whether the representation be as to the title or as to matters collateral. So it is said in Krum v. Beach (96 N. Y., 398, at 406).

In that same case it is said that the measure of damages is full indemnity to the injured party, and that is said to be determined by the difference in the value of the thing" sold, and what it should be according to the representation;, going beyond it might be the amount of the consideration and interest. Page 407.

Property covered by a mortgage is worth less than _ it would be if free, by the amount of the mortgage and interest. The only exception to this would be the case where the mortgage exceeded the actual value of the land. But certainly without proof that the land was worth less than, the mortgage, the existence of the mortgage lessens the value of the land by the amount of the mortgage. And the damage, therefore is at once suffered by the purchaser who pays for the property what it would have been worth, if it were as represented.

In the case of Northrop v. Hill (57 N. Y., 351), representations were made not by the vendor, but by another person. Nor do I think that the court held that only nominal damages could be recovered, For at page 857 it is said to be a, case of substantial damages. The only question involved was whether the action was barred by the Statute of Limitations.

This is not a case of mere liability to loss. It is a case of actual loss. The thing sold is actually not as good as the vendor represented it to be. Just as in the case just cited, the land was less in quantity than it had been represented by the vendor. It seems to me that the principles laid down in that case show that the plaintiff has made a. prima facie case shewing that his damages equalled the amount of the mortgage and interest. Even though he had not paid the mortgage his property is worth just SO' much less than it would have been if free; and that is if it is worth the amount of the mortgage.

There was no error in the refusal to admit evidence of defendant’s business and condition. And the charge was correct as to defendant’s liability on the covenants.

Judgment affirmed, with costs.

Williams, J., concurs.