Case Name: Catherine Adams, Respondent, v. Alexander L. Gillig, Appellant, Impleaded with Frank C. Kempf and Nicholas Kempf Doing Business under the Firm Name and Style of George Kempf's Sons, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-03-03
Citations: 131 A.D. 494
Docket Number: 
Parties: Catherine Adams, Respondent, v. Alexander L. Gillig, Appellant, Impleaded with Frank C. Kempf and Nicholas Kempf Doing Business under the Firm Name and Style of George Kempf’s Sons, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 131
Pages: 494–503

Head Matter:
Catherine Adams, Respondent, v. Alexander L. Gillig, Appellant, Impleaded with Frank C. Kempf and Nicholas Kempf Doing Business under the Firm Name and Style of George Kempf’s Sons, Defendants.
Fourth Department,
March 3, 1909.
Beal property — fraud inducing sale—false-representation by grantee that lands are to be used for residential purposes — existing intention to build garage.
Fraud cannot be -founded solely upon a promise not performed,' even if the ' promisor never intended to fulfill the same. ' 1
But where a grantee óf lands situated1 in the residential part-of a city, while . negotiating the contract of sale, and having a present and existing intention- to erect an automobile garage, specifically represented to the grantor that he intended to use the property for dwelling houses and for no other purpose, there was a fraudulent misrepresentation as to an existing fact. The grantor on tendering the consideration and expenses incurred by the grantee, who began to erect a garage, is entitled to have the conveyance set aside.
McLennan, P. J., and Robson, J., dissented, with opinion.
Appeal by the defendant, Alexander L. Gillig, from a judgment of the Supreme Oourt in favor of the plaintiff, entered in the office of the clerk of the county of Erie on the 27th day of July, 1908, upon the report of a referee.
Riordan & Batt and Horace McGuire, for the appellant.
James W. Persons, Adelbert Moot and Helen Z. M. Rodgers,. for the respondent.

Opinion:
Williams, J.:
The judgment should be affirmed, with costs.
The action was brought to set aside a contract and deed of real property, or, in the alternative, to reform said contract and deed so as to limit the building upon the land to dwelling houses, and to procure' the issue of temporary and permanent orders restraining the building of other than dwelling houses upon the property sold. It is not contended that the plaintiff under the evidence in the case was entitled to any reformation of the contract or deed. The attention of both parties was called to the question before the contract and deed were prepared as to what use the defendant Gillig was to make of the property, hi either party asked to have any restrictive clause inserted in the papers. They knew there was no such clause therein when the papers were executed. They did not intend there should be. The referee did not' find that the plaintiff was entitled to a reformation of the contract or deed. The only relief the plaintiff was entitled to, if any, was that which the referee awarded, setting aside the contract and deed as having been procured by fraud practiced upon the plaintiff by the defendant Gillig, and the only fraud found by the referee was that the defendant Gillig represented to the plaintiff that he imtended to use the property for dwelling houses and for no other purpose, when, as a matter of fact, he had all the time a preconceived intent to construct an automobile garage thereon. It was further found that the state ment. of his then existing intent was false, was known to him to be false, was made with intent to deceive, was relied upon by plaintiff as true, she was deceived thereby and was induced to make the contract and deed, and was injured and damaged thereby. So far as these findings dealt with the facts, we see no reason why they are not sustained by the evidence or why we should hold they were contrary to the evidence. The defendant Gilligls real design was quite apparent from what he did. The contract was made May 19, 1908. The deed was given June 2, 1908. On the same day, June 2, 1908, he wrote to the motor company to secure an agency for the Cadilac motor car. On the next day, June 3, 1908, he instructed an architect to prepare plans and specifications for the garage. On June 8, 1908, the plans and specifications - were furnished him. On June.15, 1908, he made a contract for the erection of the garage on the property at an expense of $11,757, and on June 17, 1908, the construction was commencéd. In view of these established facts there could be little doubt as to his intention when he made the contract and deed. That he made the representation claimed is equally apparent. He hardly denies it. The plaintiff first learned June 19, 1908, that the construction of the garage had been commenced. Without any unnecessary delay she went to the defendant Gillig and offered to return to him the consideration paid for the property, $5,425, to pay all expenses he had incurred up to that time, and to procure him another site for his garage if he would reconvey the property he had purchased of her. He refused to do this, and this action'was soon commenced.
The contractors were joined as parties defendant with Gillig, and a temporary injunction was secured restraining the continuance of the work on the garage. Ho further work has been done thereon.
The building of a garage on the property would be a great damage to plaintiff's other property adjoining that sold. The property was in one of the best resident localities in the city of Buffalo, and the referee very properly found that the false representation was designed to and did deceive the plaintiff and induce her to make the contract and deed, and that she was injured thereby. The only question really involved in this appeal is one of law as to whether the representation was one upon which fraud could be predicated, that he intended to use the property to build dwelling houses on and for no other purpose. The claim is that the statement was not in the nature of a promise, nor an expectation merely, hut of a then present existing intent, and peculiar force is given to this claim by the very clear and satisfactory proof that Gillig then had an existing intent and purpose to construct a garage on the property and made the representation for the purpose of cheating and defrauding her and inducing her to make the contract and deed which she would not have done if she had known the real truth. It is not sought to uphold the judgment upon the theory that the statement made was a promise as to the future use to be made of the premises, and, therefore, the cases referred to by the appellant's counsel, where there was a promise merely, need not be very carefully considered. Appellant's counsel cites a line of cases apparently holding that a mere promise to do'anything in the future will not when violated be a basis for the allegation of fraud, even if there was an intention at the time the promise was made to violate the same.
Respondent's counsel cites another line of cases, however, apparently holding a contrary doctrine.
These cases are sought to be distinguished by opposing counsel upon one ground and another. We do not desire to enter upon any analysis of these cases. Our judgment is that the law in this State is that fraud cannot be founded solely upon a promise not performed, even if the promisor never intended to fulfill the same. (See Kley v. Healy, 127 N. Y. 561.)
The question here is slightly different, however. This statement was in no sense a promise. It was a statement of a present existing intent, and we see no reason why it was not as much an existing fact as any other fact that could be made the basis of a charge of fraud.
The purpose of the statement was to deceive and defraud, and it accomplished such purpose. There is no decision in this State bearing upon this precise point, but it is reasonable to hold the defendant liable for this fraud; the result in this case is in accord with justice, and we think the judgment should be affirmed.
All concurred, except McLennan, P. J., and Robson, J.,. who dissented, in an opinion by McLennan, P. J.