Ettlinger v. Weil

• Decision Date: 06 March 1906
• Parties: ETTLINGER v. WEIL et al.
• Court: New York Court of Appeals Court of Appeals

184 N.Y. 179

77 N.E. 31

ETTLINGER

v.WEIL et al.

Court of Appeals of New York.

March 6, 1906.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Louis Ettlinger against Jonas Weil and others. From a judgment of the Appellate Division (87 N. Y. Supp. 1049,94 App. Div. 291), affirming a judgment for plaintiff, defendants appeal. Reversed.

Alton B. Parker, Abram I. Elkus, and Carlisle J. Gleason, for appellants.

Louis Marshall and Samuel Untermyer, for respondent.

VANN, J.

The case made by the complaint is as follows: In the spring of 1897 the defendant owned certain premises known as numbers 585 and 587 Broadway in the city of New York with a commercial building 12 stories in height standing thereon. In June of that year, in order to induce the plaintiff to purchase said property, the defendants ‘falsely and fraudulently stated and represented that the store in said building was at that time leased to the firm of William Carroll & Co. for the period of two years at a rental of $13,000 per annum.’ Said representation was false, as the the defendants knew, ‘in that the rental which the firm of William Carroll & Co. were at that time legally obligated to pay did not amount to more than $10,500 per annum, although the defendants had fraudulently made out a lease for $13,000 per annum in favor of William Carroll & Co. upon the private understanding and agreement with them that the rent which they were obligated to pay would not amount to more than $10,500 per annum.’ The plaintiff, relying on this representation and believing it to be true, entered into contract with the defendants ‘whereby he agreed to purchase the said property for the sum of $900,000, and agreed to pay said purchase price by the transfer of property and the payment of money, which together amounted in value to said sum.’ In reliance upon the same representation and on or about the 2d of July, 1897, the plaintiff ‘carried out the said contract and purchased the said property for $900,000 and paid the purchase price thereof aforesaid.’ The plaintiff closed his complaint by alleging that he had been damaged by the premises to the extent of $50,000, for which sum he demanded judgment.

The defendants admitted the purchase, but denied every other allegation in the complaint. The jury found a general verdict in favor of the plaintiff for $6,000 and under the rule of unanimous affirmance, which governs this appeal, the material allegations of the complaint, so far as they conform to the verdict, are conclusively presumed to be true.

While many questions are discussed in the points of counsel, only those relating to the measure of damages were orally argued before us, and owing to the conclusion reached we shall confine our review to that subject.

[184 N.Y. 182]1. The first question thus discussed was raised as follows: An expert called by the plaintiff, on his direct examination, was asked this question: ‘Will you state what, in your opinion, was the value of these premses 585 and 587 Broadway, in June, 1898, with a lease upon the store, basement, and subbasement for two years at $13,000 per year-what was the fair market value?’ This was objected to as immaterial and incompetent, but the objection was overruled, and subject to exception the witness answered: ‘$800,000.’ The witness was then asked: ‘What, in your opinion, was the fair market value of that property at that time, June, 1897, with a lease of the store, basement and subbasement for two years from February 1, 1897, at $10,500 per year?’ Subject to objection and exception the witness answered, ‘$750,000,’ and added, ‘So there would be a difference of $50,000 in the value based upon the difference in the rentals.’ This, as he subsequently explained, was upon the theory ‘of an increase of 5 per cent. upon the investment.’ Thus the witness reached the difference of $50,000 in fee value by capitalizing the rentals mentioned in the two questions.

It appeared that the rent actually paid to the plaintiff by William Carroll & Co. was at the rate of $13,000 a year during the period the lease had to run when they took possession, for the concessions and deductions by which, as the jury is presumed to have found, the rent reserved was in effect reduced to $10,500 per annum, were made in advance and the plaintiff knew nothing about them when he bought the premises. As the plaintiff lost no rent under the Carroll lease through the representation of the defendants, the damages are confined to the effect of that representation upon the fee value of the property. The measure of damages is the difference between the market value of the premises if they had been as represented and their actual market value. Both parties asent to this proposition, but th...