Adams v. Gillig

• Decision Date: 11 October 1910
• Citation: 199 N.Y. 314,92 N.E. 670
• Parties: ADAMS v. GILLIG et al.
• Court: New York Court of Appeals Court of Appeals

199 N.Y. 314

92 N.E. 670

ADAMS

v.GILLIG et al.

Court of Appeals of New York.

Oct. 11, 1910.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Catherine Adams against Alexander L. Gillig and others, doing business under the firm name and style of George Kempf's Sons. From a judgment of the Appellate Division (131 App. Div. 494,115 N. Y. Supp. 999), affirming a judgment for plaintiff, defendants appeal. Affirmed.

The defendant Gillig is the person to whom the deed hereinafter mentioned was given. The defendants Frank C. Kempf and Nicholas Kempf are contractors, who at the time of the commencement of this action were under contract with the defendant Giling to do certain work upon the real property described in said deed. When the defendant is hereinafter referred to, the defendant Gillig is intended.

On and prior to June 2, 1908, the plaintiff was the owner in fee simple of a lot of land 100 feet front and about 160 feet in depth, situated on the east side of Elmwood avenue in the city of Buffalo, and also of two other lots of land fronting on Highland avenue in said city, and which run back to and adjoin the first-mentioned lot. The lots fronting on Highland avenue had houses on them, and the lot fronting on Elmwood avenue was vacant. The immediate neighborhood of said lots, so far as the same have been built upon, is devoted exclusively to residences. The defendant sought to purchase a portion of the plaintiff's lot fronting on Elmwood avenue, and stated that he desired to purchase the same for residence purposes. The negotiations were carried on with the plaintiff's agents, and the defendant stated to the representative of the plaintiff's agents, and also to the agents themselves, that he intended to build dwellings upon the lot if purchased. The plaintiff's agents communicated to her the statement of the defendant and his offers, and she asked her agents if they were sure the sale would not affect the value of the remaining vacant lot, and she was told by her agents that the defendant would build either single or double houses upon the lot so to be purchased. The representations of the defendant that he intended to build dwellings on the lot to be purchased by him were false and fraudulent and made with the intent to deceive the plaintiff. The plaintiff relied upon the representations of the defendant that he intended to build dwellings upon the lot when purchased, and, believing such statements to be true, executed and delivered to him a deed of 65 feet front and 160 feet in depth in consideration of $5,525. During all the time that the defendant was negotiating for the purchase of the lot in question, he intended to build a public automobile garage thereon, which fact was unknown to the plaintiff, and which the defendant fraudulently concealed from her. On the day following the purchase of said lot, the defendant instructed his architect to prepare plans for a garage to be built thereon to cover substantially the entire lot, and in less than two weeks thereafter he entered into a contract for the erection of such garage.

The plaintiff without delay communicated with the defendant and offered to procure another site for his garage, pay all the expenses he had incurred up to that time, and restore the consideration he had paid for the property if he would reconvey the property to her. This the defendant refused to do. The plaintiff was deceived by said misrepresentations of the defendant, and the construction of the proposed garage will greatly damage the remaining property belonging to the plaintiff. It will decrease the value of the remaining vacant lot on Elmwood avenue about one-half, and the value of her lots, with houses fronting on Highland avenue, about one-fourth. The referee found in favor of the plaintiff, and directed a reconveyance of the property. From the judgment entered upon the report of the referee an appeal was taken to the Appellate Division of the Supreme Court, where it was affirmed by a divided court.Horace McGuire, for appellants.

Adelbert Moot, for respondent.

CHASE, J. (after stating the facts as above).

Any contract induced by fraud as to a matter material to the party defrauded is voidable. There are many rules as to what constitutes an inducement by fraud, and also affecting the general statement that any contract will be set aside for fraud, that have been established as necessary to protect the rights of all the parties to a contract, which need not be stated in this discussion, except so far as they affect the particular transaction under consideration. It may be assumed that promises of future action that are a part of the contract between the parties, to be binding upon them, must be stated in the contract. An oral restrictive covenant, or any oral promise to do or refrain from doing something affecting the property about which a written contract is made and executed between the parties, will not be enforced, not because the parties should not fulfill their promises and their legal and moral obligations, but because the covenants and agreements being promissory and contractual in their nature and a part of, or collateral to, a principal contract, the entire agreement between the parties must be deemed to have been merged in the writing. The value of a writing would be very seriously impaired if the rule mentioned in regard to including the entire agreement in such writing is not enforced.

A strict enforcement of such rule tends to greater security and safety in business transactions, and leaves less opportunity for dishonesty and false swearing, induced, perhaps, by a change of purpose or a failure to obtain the result that was anticipated when the transaction was originally consummated and reduced to writing. Such rule makes it necessary for the parties to a written contract to include everything therein pertaining to the subject-matter of the principal contract, and, if by mistake or otherwise an oral agreement a part of the transaction is omitted from the writing, it can only be made effective and enforceable by a reformation of the writing, so that the same shall include therein the entire agreement between the parties. The rule is quite universal that statements promissory in their nature and relating to future actions must be enforced if at all by an action upon the contract. It is unnecessary to decide or discuss the question whether under some possible circumstances the courts will not in equity lay hold of false statements that are contractual in their nature to prevent the consummation of a fraud.

It is not claimed on this appeal that the defendant made promises which became a part of the contract, or that the deed could be reformed by including therein restrictive covenants. The rule in regard to including the entire agreement between the parties in the writing does not take away or detract from the general rule by which a contract can always be set aside for fraud affecting the transaction as to a material fact that is not promissory in its nature. Any statement of an existing fact material to the person to whom it is made that is false and known by the person making it to be false and which is made to induce the execution of a...