Case Name: Alexander M. Powell, Respondent, v. F. C. Linde Company, Appellant. (Actions No. 1 and No. 2.)
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1901
Citations: 58 A.D. 261
Docket Number: 
Parties: Alexander M. Powell, Respondent, v. F. C. Linde Company, Appellant. (Actions No. 1 and No. 2.)
Judges: 
Reporter: Appellate Division Reports
Volume: 58
Pages: 261–266

Head Matter:
Alexander M. Powell, Respondent, v. F. C. Linde Company, Appellant. (Actions No. 1 and No. 2.)
False representation—what must be proved in an action based thereon—a statement, in fact false, believed to be true—evidence that a pa/rty did not rely on a false representation.
Where the defendant, in an action brought to recover an installment of rent due under a lease for a term of years, interposes the defense that it was induced to execute the lease in reliance upon the false representation of the plaintiff’s agent that the previous tenant had paid the same rental, the defendant, in. order to succeed, must establish the making of the representation, its falsity, the knowledge of the falsity, the intention to deceive and the fact that the defendant relied upon the representation and had suffered damage thereby.
It seems, that where the plaintiff informed his agent that the rent was §12.000 per year and that the agent erroneously supposing that this was the amount of rent paid by the previous tenant, so informed the defendant, the plaintiff is not guilty of actionable fraud.
What evidence is sufficient to warrant a finding that the defendant in executing ■ the lease did not rely upon the representation as to the rent paid by the previous tenant.
Appeal by the defendant, the F. C. Linde Company, from two several judgments of the Supreme Court in favor of the plaintiff, each entered in the office of the clerk of the county of New York on the 11th day of October, 1900, upon the verdict of a jury, and also from two several orders, each entered in said clerk’s office on the 29th day of October, 1900, denying the defendant’s motion for a new trial made upon the minutes.
G. D. B. Masbrouok, for the appellant.
J. Edwcurd Bwamstrom, for the respondent.

Opinion:
Rumsey, J.:
Each of these actions was brought to recover an installment of rent due upon a lease. The same questions were presented in both, and it was agreed that one should abide the determination in the other. The plaintiff had a verdict, and a motion for a new trial was denied. Judgment was entered upon the verdict^ and from it and from an order denying a new trial this appeal is taken.
The lease under which the rent became due was dated the 25th of March, 1899, and by it the plaintiff leased to the defendant certain premises in the city of New York for the term of ten years and one month at an annual rental of $12,000, the rent for the month of April being payable at the end of that month and thereafter quarterly. The installments sued for in these actions are those due on the 30th of April and the "1st of July, 1899, respectively.
The defense relied upon here is that the plaintiff, to induce the defendant to make the lease at the rental of $12,000 a year, represented that the previous tenant had paid that sum; that such representations were, false and were known to the plaintiff to be false ; that the defendant relied upon them and was deceived by them, and the relief, asked for is that the lease shall be canceled and deliv-
It appears that the previous tenant had a lease which expired on the 1st of May, 1902; that the defendant had an assignment of that lease; that .at the time of the taking of the lease in suit that prior lease was surrendered, and it is asked that the surrender of that lease as well as the lease in suit shall be canceled, the result sought being that the plaintiff would be permitted to hold the premises under the assigned lease until the 1st of May, 1902, at the rent fixed therein, and be relieved from the payment of the additional rent under the lease with the plaintiff dated the 25th of March, 1899.
The first point made by the learned counsel for the defendant is that the verdict is against the weight of the evidence. To entitle the defendant to recover upon its counterclaim it was necessary for it to establish the representations made; their falsity; the knowledge of the falsity; the intention to deceive and the fact that the defendant relied upon them and that it suffered damage thereby. (Hadcock v. Osmer, 153 N. Y. 604 ; McIntyre v. Buell, 132 id. 192 ; Long v. Warren, 68 id. 426.)
That the representations were made by one Diamond, a broker, is not denied. The defendant insists that as Diamond made these representations in the course of the negotiations, which resulted in the making of the lease, the plaintiff is responsible for them and chargeable with a knowledge of their falsity to precisely the same extent as if he had made them himself. Although this is exceedingly doubtful, yet, for the purposes of this appeal, we are disposed to concede the correctness of that claim. But, admitting this, it was necessary for the defendant to prove, not only that the representations were known by Diamond to be false, but that the defendant relied upon them; and if there was evidence to enable the jury to conclude either that Diamond did not believe them to be false and did not make them to deceive the defendant, or that the defendant did not rely upon them, the verdict was correct.
That Diamond believed the statements to be true cannot be denied. When he undertook the negotiations he inquired of Mr. Powell, the plaintiff, what the rent of the premises was and was told that it was $12,000; that Powell further said to him that he would require the intending tenant to make a proposition in writing; that the term of the lease should be at least ten years and the rent $12,000 a year, and that he would consider nothing except upon those terms. It is undisputed that Diamond wanted to know what was the rent of the premises. Diamond says that he understood that $12,000 was the rent that, had been paid, and he believed that to be the truth.
To charge him with falsity and deceit with respect to that matter the defendant relies upon the principle laid down in the case of Marsh v. Falker (40 N. Y. 562), and other cases subsequently, that representations are actionable as false, .either if they are known to be false by the person making them, or if he assumed or intended to convey the .impression that he had actual knowledge of their truth, though conscious that he had no such knowledge; and in such a case the declarant is charged with the knowledge of the falsity of the representations even though he believed them to be true. Now it is quite evident in this case that Diamond was not conscious that he had no knowledge of the actual rent paid by the previous tenant. On the contrary, he supposed that he had that knowledge. He went to Powell and asked him what that rent was and was told that it was $12,000 a year, and he supposed that that was true. Therefore, the jury, although they must have found that Diamond did tell the defendant that the rent was $12,000, and that it was not true, might also have concluded that he was not conscious that it was not true; and it further appearing that he had used reasonable care to ascertain the fact, and that he believed that to be the amount of the,rent, the verdict of the jury rendered upon this basis might be sustained.
But it is clear that' upon the testimony as it stands the jury not only might have found, but were bound to find, that the defendant in making this lease did not rely upon any of the representations made to it as to what the rent had been. It appears that Gibson, the defendant's president, had been conducting negotiations with the receiver of B. J. Dean & Co.,.the former tenant, to secure an assignment of its lease of these premises which expired on the 1st day of May, 1902. He had written to the receiver a letter reciting the leases he wished to buy from him. The lease of the premises in question was mentioned in that letter, and in it the rent of these premises was stated at $10,000 a year. He also had in his hands the actual lease' and had it for several days, but he testifies that although it was stated in that lease that the rent was $10,000 he knew nothing about it.- It also appears that on the seventh of March G-ibson offered to take the building in question for the unexpired term of the Dean lease, " which we understand to be seven or eight years, at the rent of $12,000 per year, any other details of lease to be arranged." On the same day Powell answered that letter, saying that he would give a ten years' lease of the buildings referred to in the letter at the rental mentioned, the lease to commence as soon as possession of the building was obtained by him. That proposition was accepted on the next day by G-ibson in a letter saying that they would take the property on lease for ten years. In view of all these facts, which are practically undisputed, the jury would not have been justified in finding that the defendant relied upon the representation made by Diamond that the rent paid by Dean & Co. was $12,000, for not only did the president have in his possession actual information as to tiie amount of the rent paid, but he knew also that the plaintiff wornd not give him a lease for anything less than $12,000. For these reasons the claim of the learned counsel for the defendant that the verdict is'against the weight of the evidence cannot be sustained.
There remain then only the exceptions to the rulings of the trial court. An examination of the charge shows that the court stated to the. jury, in response to a request of the defendant, the true rule even more strongly than the defendant had any right to expect. The court was asked to charge that where a party represents a material fact to be true to his personal knowledge, whether true or not, and it is actually untrue, he is guilty of falsehood even if he believes it to be true, and if the statement is thus made with the intention that it should be acted upon by another, and he does so act upon it to his injury, the result is actionable fraud. This was charged by the court. He also charged that Diamond acted as the agent of the plaintiff in' the negotiations which resulted in the making of the lease. He also charged that when Diamond made the statement that the rent previously paid was $12,000 he believed it to be true. The charges in pursuance to these requests laid down fully the rule as the defendant was entitled to have it, and the jury could not have misunderstood the court as to the true rule. The rule had also been laid down in the charges of the court before these* requests were made, and a careful reading of the charge shows that the jury could not have failed to understand what was to be decided by them upon the defendant's counterclaim.
The court was also asked to charge that Diamond had stated that the rent was $12-000 a year. That the court refused to charge, and that refusal is said to be error. But it appears that the court in a previous part of the charge had stated that Diamond had repeatedly told Gibson that the rent was $12,000, and having charged it once it was not error to refuse to charge it again.
Upon a careful consideration of the whole case we think that no error was committed by the court to the prejudice of the defendant, and for these reasons the judgment and order should be affirmed, with costs.
"Van Brunt, P. J"., Patterson, Ingraham and Hatch, JJ., concurred.
Judgment and order affirmed, with costs.