Case ID: ad_109/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "\n      O’Brien, P. J. : . Ingraham, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Clementine M. Silverman and Milton M. Silverman, Respondents, v. Louis Minsky, Appellant.
    First Department,
    November, 1905.
    Contract for purchase of real estate — rescission thereof—misrepresentation or fraud of vendor’s agent.
    Where a vendee,who has" entered into an executory contract to. purchase real estate and paid a deposit thereon, has been misled by the vendor’s agent and by him shown property other than that subsequently described in the contract and told that it was the property to be sold, the contract will be annulled and the vendee may recover the deposit.
    It makes no difference whether the misrepresentations by the agent were the result of accident or design, for the minds of the parties have never met, and the defendant cannot reap a profit from the misrepresentations of his agent. It is not necessary that the court find actual fraud.
    Ingraham, J., dissented, ’ as the complaint is based solely on fraud and not on mutual mistake.
    Appeal by the defendant, Louis Minsky, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 30th day of November, 1904, upon the decision of the court rendered after a trial at the New York-Special Term.
    
      Benjamin F. Feiner, for the appellant.
    
      J. Charles Weschler, for the respondents.
   O’Brien, P. J. :

■ The action is brought to annul and set aside a contract. for the purchase of real estate and to recover the amount of • the deposit paid thereon.

In December, 1903, the defendant having contracted to purchase certain real estate in the city of New York, including five houses on "West End avenue, authorized one Jacobs to act as his broker for the purpose of effecting a resale thereof. Jacobs succeeded in • interesting the plaintiff, Clementine M. Silverman, in the property, and during the last week of December he took her in a carriage to visit it. Instead, however, of showing her the houses on West End avenue he drove to houses on Amsterdam avenue bearing similar numbers and informed her that those houses were the ones which the defendant desired to sell. Mrs. Silverman inspected the Amsterdam avenue houses, which were more valuable and more favorably situated than those on West End avenue, but as.she was not-familiar with the neighborhood or the buildings themselves she did not discover that the wrong property had been shown her. On the following day Jacobs again took her to the Amsterdam avenue property for a further inspection, and again represented that the houses thus shown were the ones which the defendant desired to sell. Believing that she was contracting to purchase the houses which she had examined, she entered into a contract on January 2, 1904, to purchase the property upon West End avenue, and, she paid to the defendant $1,000 as a deposit to bind the contract.

The above facts are undisputed, and they clearly show that the plaintiff was induced to enter into the contract by reason of the false representatións of Jacobs that the Amsterdam avenue houses were the ones which were to be conveyed to, her. The evidence also establishes the fact that in his dealings with Mrs. Silverman Jacobs acted as the agent and broker of the defendant. He had upon a previous occasion been employed in the same capacity by the defendant to sell other property. When he learned that the defendant had the property here involved for sale he called and asked for particulars regarding it, which defendant gave him, and he then entered into negotiations with Mrs. Silverman for the purchase of the houses. He made reports as negotiations progressed to the defendant, and finally brought the parties together so that the contract of purchase was executed. In addition to this the defendant agreed to pay him commissions as broker in bringing about the contract of purchase, and with these facts established it cannot be successfully denied that Jacobs was the agent of the defendant, at least to the extent that the latter cannot take advantage of his false representations.

Jacobs testified that the mistake in showing Mrs. Silverman the Amsterdam avenue property was unintentional, but, in connection with this statement, it must be borne in mind that he was a broker engaged in dealing in real estate in the city of Hew York; he admits that he was pretty well acquainted ” with its streets; he was apparently familiar with the neighborhood in which the property was located, and it was shown that West End avenue between Sixty-sixth and Sixty-seventh streets, where these houses were situated, differs radically in appearance from Amsterdam avenue between the same streets. The latter avenue has stores upon both sides and is a thriving neighborhood, while the former is vacant upon one side, the unimproved plot being surrounded with a fence.

The statement, if material, that a mistake could under these circumstances be made unintentionally is open to doubt, but in our •opinion it makes no difference, so far as the plaintiff’s position -is concerned, whether the misrepresentations were the result of accident or design. Even if Jacobs did not intend actual fraud, nevertheless his misrepresentations caused Mrs. Silverman to have a mistaken idea of the property which she contemplated purchasing. The minds of the parties never met in the transaction. Though there was a contract in form, it was not a legal contract in effect, and the instrument originated, if not in fraud, at least in mistake. The plaintiffs come into court alleging that by fraud and misrepresentation as to the property to be conveyed the defendant induced them to agree to purchase it. The misrepresentation is practically, admitted, but the defendant attempts to escape the consequences of it by claiming that the agent was himself honestly mistaken in exhibiting the wrong property to Mrs. Silverman. But the defendant cannot be permitted to reap a profit from the misrepresentations of his agent, even though such misrepresentations were the result of an honest mistake, and the fact that the court has not found actual fraud does not prevent the plaintiffs from succeeding in the action to have the contract annulled. and ttie; deposit refunded.

(Crowe v, Lewin, 95 N. Y. 423; Goodman v. Laborn, 11 App. Div. 617.) A mistake was proven conclusively. What the defendant" meant to sell, the plaintiffs did not mean to buy and' what -the plaintiffs meant to buy, the defendant could not sell. It is, therefore, unimportant whether the misrepresentations which induced the execution of the contract werfe the result of design or accident, for even if no actual fraud was intended to be perpetrated, there was certainly a mistake as to the' property itself, caused by the mis-representations of defendant’s agent, by which the plaintiffs were misled and for which equity will furnish the appropriate relief. The contract was properly annulled and set aside by the court below and the plaintiffs permitted to recover the amount which they had paid under- such contract: - .

Therefore the judgment appealed from is right and must be affirmed, with costs. . i

McLaughlin and Laughlin, JJ., concurred; Patterson and Ingraham, JJ., dissented.

. Ingraham, J.

(dissenting):

I dissent. The' complaint is based solely upon fraud, alleging false representations and not a mutual mistake. To justify a recovery fraud must be proved, and no relief can be given upon a, different ground. (Cassidy v. Uhlmann,, 170 N. Y. 505.)

Judgment affirmed, with costs.