Court Opinion

ID: 5267332
Source: CourtListenerOpinion
Date Created: 2022-01-06 19:03:02.814248+00
Date Added: 2024-06-11T08:28:10.171196
License: Public Domain

Van Kirk, J. (dissenting):
The sole question presented is the sufficiency of the complaint. The gravamen of the action intended to be stated is fraud and resulting damage. Such an action involves: (1) A false statement known to be false and made to influence the act of another; (2) reliance *322upon such false statement and action thereupon in good faith; (3) loss suffered directly because of the fraud. (Arthur v. Griswold, 55 N. Y. 400; Brackett v. Griswold, 112 id. 454.) Each one of these essential elements is alleged in the complaint.
But it is said that there is in the complaint no misrepresentation of a material fact; there was merely representation of an expectation; that the plaintiff could not have been induced to believe by any representation made by the defendant that it had a contract with Cluett, Peabody & Co., Inc., for the manufacture and sale of its shirts; but it could have believed only that Cluett, Peabody & Co., Inc., had determined to accept its offer and at the moment of the representation intended to contract with the. plaintiff. In other words, that the defendant’s only representation was that Cluett, Peabody & Co., Inc., were sending an acceptance in writing, which' plaintiff would later receive.
I think the complaint is susceptible of a different construction and. is entitled to such construction upon this appeal. For several years before plaintiff had manufactured shirts for Cluett, Peabody & Co., Inc., during all which time this defendant was its agent, representing it in its dealings with the plaintiff. The plaintiff in August notified Cluett, Peabody & Co., Inc., that it intended to discontinue manufacturing shirts for it. Thereupon this defendant came to plaintiff’s office and requested plaintiff to continue manufacturing' shirts for Cluett, Peabody & Co., Inc., Plaintiff agreed to continue, provided a satisfactory arrangement could be made, and, pursuant to the conversation with defendant, wrote to Cluett, Peabody & Co., Inc., that it would manufacture shirts as requested (through defendant), stating: We “ have completed arrangements whereby we will be able to do your work here for the next two years in accordance with our conversation and understanding with your Mr. Dean. We are writing you with reference to the agreement we reached and which, when acknowledged by you, will constitute our working agreement for the next two years.” No reply by letter was received from Cluett, Peabody & Co., Ine.> but the defendant came to plaintiff’s office in Glens - Falls, and, with intent to deceive and defraud the plaintiff, falsely and fraudulently represented to the plaintiff that the offer of the plaintiff, as set forth in its letter of September 20, 1919, had been accepted by Cluett, Peabody & Co., Inc. Had the complaint stopped there, the plaintiff certainly could have proved, had defendant’s statement been true, that Cluett, Peabody & Co., Inc.', had acknowledged and accepted the proposition stated in the plaintiff’s letter of September, twentieth. ' The allegation continues, however,- “ and stated that-said Cluett, Peabody & Co., Inc., had written to the plaintiff *323accepting the offer according to its terms, and that the letter was in the possession of the defendant, but that, through an oversight, he had left it on a desk in his office at Troy, N. Y., instead of bringing it to Glens Falls for delivery to plaintiff.” It appears to me this latter expression may be construed as a statement made by Dean to fortify his word that Cluett, Peabody & Co., Inc., had accepted the proposition; and the subsequent acts of the parties, which will be later referred to, indicate that such was the construction placed upon the representation by this plaintiff. Had Cluett, Peabody & Co., Inc., authorized Dean to orally accept the plaintiff’s proposition, such oral acceptance would have made a valid contract at common law, enforcible in the courts, unless the bar of the Statute of Frauds.was invoked by demurrer or answer. (Crane v. Powell, 139 N. Y. 379, 384; Matthews v. Matthews, 154 id. 288.) Plaintiff did not have a valid contract simply because Dean’s statement was false. Also in equity an oral contract condemned by the Statute of Frauds, but relying upon which a party has done some act in part performance, which by breach of the contract would be very injurious to him, will be enforced. The offending party will not be allowed shelter under the statute. (Miller v. Ball, 64 N. Y. 286, 291.) The Statute of Frauds is a shield which a party may or may not use at his election, as he may or may not use the Statute of Limitations. (Crane v. Powell, supra, 388.)
It is true that in Dung v. Parker (52 N. Y. 494) it is held that an agent who falsely represents his authority to make a contract on behalf of another is not liable in contract or in tort unless the principal would have been bound by the contract made if the agent had such authority; that a contract void by the Statute of Frauds cannot be enforced directly or indirectly and confers no right and creates no obligation as between the parties to it or as against third persons. The above cited cases (Crane v. Powell and Matthews v. Matthews) have established a different rule as to contracts which come within the Statute of Frauds.
The plaintiff was justified in believing that the acceptance of its proposition, delivered orally by Dean, made a valid contract and the subsequent acts of the parties fortify this belief. For a whole year Cluett, Peabody & Co., Inc., dealt with the plaintiff and plaintiff during that period manufactured shirts for Cluett, Peabody & Co., Inc. This business relation was carried on after Cluett, Peabody & Co., Inc., had received word that this plaintiff would not longer manufacture for it, after its agent had solicited continuance, and after it had received the letter which plaintiff had written to it, stating the terms on which plaintiff would con*324tinue. Evidence would be admissible under this complaint that settlements for the work done by plaintiff were made during this year by Cluett, Peabody & Co., Inc., and that those settlements were made upon the terms proposed in the plaintiff’s letter of September twentieth. The plaintiff would not have continued to manufacture for Cluett, Peabody & Co., Inc., except that it believed that Cluett, Peabody & Co., Inc., had acknowledged and accepted its proposition and so made a valid contract. That supposed contract was partly performed. The agent Dean’s statement was not a promise or an expression of an opinion or of an expectation; it was a statement of a material fact. It was false, was made to induce plaintiff to act and plaintiff did act upon it; the plaintiff suffered damages thereby; the fraud is actionable. (Hadcock v. Osmer, 153 N. Y. 604.) A man who has perpetrated a deliberate fraud to the injury of another should not escape the consequences of his act because that other did not know of, or did not know the meaning of, the Statute of Frauds.
The order should be affirmed.
Kiley, J., concurs.
Order reversed on the law, with ten dollars costs and disbursements, and complaint dismissed, with ten dollars costs, with leave to plaintiff to serve amended complaint within twenty days on payment of such costs.