Albert v. Title Guarantee & Trust Co.

• Decision Date: 12 April 1938
• Citation: 277 N.Y. 421,14 N.E.2d 625
• Parties: ALBERT v. TITLE GUARANTEE & TRUST CO.
• Court: New York Court of Appeals Court of Appeals

277 N.Y. 421

14 N.E.2d 625

ALBERT

v.TITLE GUARANTEE & TRUST CO.

Court of Appeals of New York.

April 12, 1938.

Action by Hannah Albert against the Title Guarantee & Trust Company to recover purchase price paid for mortgage participation certificates. From a judgment of the Appellate Division of the Supreme Court in the First Judicial Department, entered June 19, 1937, 251 App.Div. 803, 298 N.Y.S. 180, unanimously affirming a judgment on a verdict for defendant, plaintiff appeals by permission; motion for leave to appeal having been denied in 251 App. Div. 884, 298 N.Y.S. 506.

Reversed, and new trial granted. Appeal from Supreme Court, Appellate Division, First department.

Bernard I. Kamen, of New York City, for appellant.

Flynn L. Andrew, of New York City, for respondent.

LOUGHRAN, Judge.

Plaintiff bought from the defendant Title Guarantee & Trust Company four mortgage participation certificates guaranteed by Bond & Mortgage Guarantee Company. This action was brought to recover back the purchase price as upon a rescission of the transaction. The mortgaged premises were vacant lots. Plaintiff's case was that she had been induced to buy the certificates by defendant's statement that the mortgage covered only improved and income-producing properties. The jury found for the defendant. Plaintiff appeals from an affirmance of the judgment entered on the verdict. We think there must be a new trial.

Each of the certificates recited that it was an assignment of part of a mortgage ‘covering 388 parcels at Jackson Heights, Queens County.’ The trial court ruled that this recital was in itself evidence sufficient to warrant a finding of notice to the plaintiff of the true state of the mortgaged premises. Accordingly, it was left to the jury to say whether ‘the description of the land as being in ‘parcels' put a reasonable person on inquiry or knowledge that they were not improved by buildings or income-producing property.’ This was error. It is no excuse for a culpable misrepresentation that means of probing it were at hand. Dobell v. Stevens, 3 B. & C. 623; Mead v. Bunn, 32 N.Y. 275;Baker v. Lever, 67 N.Y. 304, 23 Am.Rep. 117.

Though there was no claim that the value of the mortgaged premises had been misrepresented, the defendant was allowed to show the value thereof. Proof was then taken of restrictions that were imposed upon Bond & Mortgage Guarantee Company in rehabilitation proceedings instituted two years after plaintiff's purchase of the...