Court Opinion

ID: 6122451
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:06:50.076004+00
Date Added: 2024-06-11T08:23:49.803749
License: Public Domain

LeakNbd, P. J.:
The general finding that the representations and statements made in and accompanying the written paper were substantially true is qualified by the specific findings. Passing over the real estate, on account of the fictitious value often given to that kind of property, the fact is found that the defendants stated that $525,000 bonds had been sold at par. This was not true. Twenty thousand dollars of this amount were held as collateral by banks; $150,000 of this amount had been turned out in payment for the real estate. And the amount also included bonds which had been subscribed for by parties who had refused to take them. In these' three respects, therefore, this part of the statement is found to be false.
The learned justice finds that in reply to an inquiry as to the truth of a report that Ainsworth’s property was covered up in his wife’s name, he said that- the only property his wife had in the world was the little house she lived in on Matilda street. This statement was not limited to real estate. At that time, as the learned justice finds, she held valid causes of action against Ains-worth amounting to $65,000, for which he was indebted to her. His statement, therefore, was false, and it was material. The inquiry showed a suspicion that property which he was using as his own really belonged to his wife. And substantially the suspicion was correct. A debt to his wife of $65,000, of which $25,000 was equitably a lien on real estate, would be as dangerous to his credit, if known, as if he had already secured her for that amount; as he afterwards did. The statement, therefore, that she owned nothing but a little house, when he knew that she owned a large claim against him, was untrue and deceitful.
I think that the finding of fact that Tompkins put $20,000 into the business was incorrect. The stating of such a sum without *57qualification fairly means that. amount in cash. In fact, $4,000 was a note used by the firm only as collateral; not paid, and finally taken back by him.
The learned justice, in finding that the statements in the written paper were substantially true, seems to have included the allegation that Ainsworth was worth at least $30,000 in personal property. According to the testimony, and as claimed' by the defendants’ counsel on the argument, his personal property did not exceed $50,500. If we add to that the investment in the hotel property $20,000, we have $70,500. The debts to his wife are proved to be $60,000; other debts $2,500, and the debt owing by the firm $60,000. This is exclusive of his debts secured by mortgage. The statement that he was worth $30,000 in personal property cannot then have been true, on his own showing.
None of the statements, it is to be noticed, are expressions of opinion founded on information derived from others. They are statements of matters within the defendants’ personal knowledge. (Hubbell v. Meigs, 50 N. Y., 480-489.)
Nor is this a case where the defendants are charged with making untrue representations in regard to credit of another person ; as in cases of Meyer v. Amidon (45 N. Y., 169); Marsh v. Father (40 id., 562). The representations were made in order to obtain goods for themselves. Their liability, as has been several times held, must depend on proof that they “ believed, or had reason to believe, that the statements were false at the time, and, for that reason, that they were fraudulently made.” (Oberlander v. Spiess, 45 N. Y., 178; Wakeman v. Dailey, 51 id., 35.)
In this case, as to the written statement and the accompanying representations, the defendants have severally testified that they believed them to be true, and the learned justice has so found. But when the facts which show a statement to be false are proved to have been known to the party making the statement at the time when he made it, it would be strange if he could escape liability by testifying that at the time of making the statement he believed that to be true which he knew to be false.
These defendants knew that $525,000 of bonds had not been sold for par, for they knew all the facts in regard to the bonds. And they do not testify that they believed that the words “sold for *58par ” meant “ loaned as collateral to a bank ” or “ subscribed for and not taken,” or “ paid out in purchase of land.”
The same may be said of the other untrue statements contained in the writing.
Again, as to the statement by Ainsworth that the little house was the only property his wife had in the world, there is no evidence that he believed this, and there is positive evidence that he knew it to be untrue. This case then comes within the decisions above cited. The defendants had reason to believe that their representations were false. They actually knew facts which were inconsistent with the truth of these representations. That the representations gave rise to the contracting of the other party there is no doubt.
It may be that the defendants intended to pay for the goods. That intention does not relieve them from the charge of obtaining credit by deceit and fraudulent statements.
The plaintiff was not willing to trust their intention. Hé wished to know the facts of their pecuniary condition, that he might judge for himself whether their intention would be fulfilled. Instead of stating the facts, they stated what they knew was not true and they did this to obtain the plaintiff’s goods on credit.
The judgment should be reversed and a new trial granted, costs to abide event.
Present — LeaeNed, P. J., and BoabdmaN, J. BooKes, J., not acting.
Judgment reversed and new trial granted, costs to abide event.