Case Name: Mabel Cohen, Appellant, v. John F. Kohler, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-10-03
Citations: 158 A.D. 435
Docket Number: 
Parties: Mabel Cohen, Appellant, v. John F. Kohler, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 158
Pages: 435–437

Head Matter:
Mabel Cohen, Appellant, v. John F. Kohler, Respondent.
Second Department,
October 3, 1913.
Pleading — action for fraud inducing sale of stock — damages.
Where in an action to recover damages on account of fraudulent representations alleged to -have been made by the defendant to the plaintifl in the purchase from her of certain shares of stock, the only representation of fact which is alleged to have been false is that the corporation was not, at the date of the sale, a “ paying proposition,” and it does not appear from the complaint what the stock was actually worth, a judgment dismissing the complaint should be affirmed.
Where damages do not necessarily and naturally flow from a false representation, additional facts showing damage must be pleaded.
Appeal by the plaintiff, Mabel Cohen, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Queens on the 11th day of February, 1913, upon a dismissal of the complaint by the court at the opening upon a trial before the court and jury at the Queens Comity Trial Term.
H. Irwin Keenan, for the appellant.
John Burlinson Coleman, for the respondent.

Opinion:
Burr, J.:
The only representation of a fact which is alleged to be false is that the New York Pie Baking Company was not, at the date of the sale of plaintiff's stock, a " paying proposition." This is exceedingly general, but for purposes of a demurrer, within the authorities cited, it may be sufficient. If any damage necessarily and naturally flowed from this, it would be unnecessary to plead facts showing the damage. Thus in Colrick v. Swinburne (105 N. Y. 503) the injury complained of was the diversion of water. The law would presume some damage naturally and necessarily to flow from this, and the fact that the complaint did not demand the precise damages to which plaintiff was entitled, or that he mistook the true rule of damages, would not make it demurrable. The general rule is that where some damages do not necessarily and naturally flow from a false representation, additional facts showing damage must be pleaded. (Kountze v. Kennedy, 147 N. Y. 124; Aron v. De Castro, 36 N. Y. St. Repr. 716; affd., 131 N. Y. 648; Tregner v. Hazen, 116 App. Div. 829.) Notwithstanding that the New York Pie Baking Company was a paying proposition, and notwithstanding that defendant falsely stated and represented to plaintiff that it was not, and notwithstanding that plaintiff believed such representation and sold her stock on account thereof, if as matter of fact she received for it all that it was actually worth, no damage has resulted to her. It does not appear from the complaint what the stock was worth. For anything that appears therein she may have received for it more than it was worth if the pie baking company had been a paying concern. The answer, to which of course we cannot refer for the purpose of testing the sufficiency of the complaint, shows that she received 150. for her stock. We may refer to this by way of argument and illustration as showing the necessity of alleging that the stock was actually worth more than she was paid for it. Isman v. Loring (130 App. Div. 845) is not an authority to the contrary. The real gravamen of that action as set up in the complaint was that plaintiff was induced to enter into a contract with defendant to purchase certain land for $5,000 in excess of the bid or offer made to defendant by a certain railroad company, and that defendant falsely represented that said company had offered $70,000 for the land, whereas as matter of fact it had offered but $55,000, and that plaintiff, relying upon that representation, paid $75,000 for the land, and was damaged to the extent of $15,000. The question in that case was not what the land was actually worth, but what the plaintiff was induced to pay for it by the false representation of defendant. There may be in the opinion in that case some statements in general language as to the necessity of pleading facts showing damage, but the language must be controlled by the facts in the case. As Presiding Justice Patterson says at the close of his opinion: "It sufficiently appears by necessary inference from this complaint that the defendant agreed to sell the property upon the basis stated in the complaint, viz., $5,000 over and above an amount actually offered by the railroad company." Defendant did not keep this agreement. By falsely representing the amount which the railroad company had offered to pay he induced plaintiff to pay him an additional $15,000.
The judgment must be affirmed, with costs.
Jenks, P. J., Thomas, Oarr and Stapleton, JJ., concurred.
Judgment affirmed, with costs.