Forman v. Hamilburg
| Decision Date | 30 March 1938 |
| Citation | 300 Mass. 138,14 N.E.2d 137 |
| Parties | ELIE FORMAN v. MAURICE J. HAMILBURG. SAME v. JENNIE M. HAMILBURG. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
January 4, 5, 1938.
Present: RUGG, C.
J., DONAHUE, QUA DOLAN, & COX, JJ.
Deceit. Waiver.
Evidence, Of value Opinion: expert.
The lessee of a garage could maintain an action of deceit against the lessor for knowingly making false representations as to its then capacity, volume of business, and profits, relied upon by the lessee to his damage.
That the volume of business of a garage immediately after the making of a lease was materially less than the lessor had represented it to be was evidence that the representation was false.
Proof of the falsity of a lessor's representations to a prospective lessee as to the capacity of his garage, the volume of its business and its profits warranted an inference that the lessor knew the representations to be false and intended the lessee to rely on them.
Whether an intending lessee of a garage, upon the owner's refusing him an interior inspection, relied upon his own estimate of its capacity from a casual outside inspection, or relied upon the statements of the owner, was a question of fact for the jury at the trial of an action for deceit practiced by the owner in obtaining the lease to the plaintiff.
A lessee's right of action for deceit by his lessor in the negotiation for the lease was not waived by continued occupation of the premises and payment of rent after discovery of the fraud.
In an action by a lessee of a garage for false representations by the lessor as to its capacity, volume of business and profits, expert testimony as to its fair rental value on the basis of the volume of business actually done by the plaintiff was admissible.
TWO ACTIONS OF TORT. Writs in the Superior Court dated September 11, 1933.
A verdict was ordered for the defendant in each case by M. Morton, J. The plaintiff alleged exceptions.
D. C. Sachs, for the plaintiff.
F.
L. Kozol, for the defendants.
These are two actions of tort for deceit, to recover damages for alleged fraud and misrepresentations in connection with the leasing of a garage. They were tried together to a jury, and at the close of the plaintiff's case, the judge directed a verdict for the defendant in each case. The cases come before us on the plaintiff's consolidated bill of exceptions to the exclusion of certain evidence and to the allowance of the defendants' motions for directed verdicts. It is agreed that the title to the premises involved was in the name of the defendant Jennie M. Hamilburg and that her husband, the defendant Maurice J. Hamilburg hereinafter called the defendant, had full authority to act for his wife in connection with the lease and the negotiations leading up to its execution.
There was evidence that in the fall of 1932 the plaintiff, who had been in the garage business for twelve years, was "looking around for a garage location." He was introduced to the defendant in October, 1932, through a broker, who died prior to the trial. The parties had not met before and the plaintiff knew nothing of the garage known as "Hamilburg's Garage," which was located on West Newton Street, in Boston. The plaintiff and the defendant had several conferences with relation to leasing the garage during October and the early part of November, 1932. During the negotiations the defendant told the plaintiff that the garage held three hundred "cars"; that he (the defendant) had one hundred twenty-five customers who were paying $10, $12, and $15 a month; that he had twenty-five "dead storage" customers who were paying $4 and $5 a month; and that he was taking in $125 a week from transient business, due to the Mechanics Building "bouts," and was making $10,000 a year. The plaintiff asked permission to see the garage but the defendant refused, saying that "if they did not come to terms it will damage him because the help will start to steal." The plaintiff did visit the location and "size[d] up the garage from outside."
On November 19, 1932, the defendant Jennie M. Hamilburg and the plaintiff executed an indenture of lease of the premises for a period of two and one half years beginning December 1, 1932, at a rental of $7,000 a year, payable $583.33 on the fifteenth day of each month. The plaintiff deposited with the defendant lessor $2,500 to secure the performance of his obligations under the lease at the time of the execution of the lease.
The plaintiff took possession of the garage on December 1, 1932, and discovered that the garage could not accommodate more than one hundred fifty automobiles. There were seventy or eighty-five "live storage" customers paying $8, $10 and $5 a month. Those paying $5 a month were "day storage" patrons. After the plaintiff entered into possession of the garage the receipts from transient business amounted to $25 to $30 a week. There was evidence that many of the names listed in the defendant's books of accounts represented automobiles which had been abandoned and on which no rental had ever been paid. The plaintiff spoke to the defendant about the situation but paid the rent for December, 1932, and for January, February and March, 1933. He paid $350 on account of the rent for the month of April, 1933. Following this he had some conversation with the defendant lessor who then brought an action of summary process against him. Judgment for possession was entered therein by agreement on June 15, 1933, and the plaintiff vacated the premises that day. The plaintiff testified that he relied on the statements made to him by the defendant, that he had no means of ascertaining the number of customers or how much they paid except through the defendant. The jury could have found that the plaintiff ran the business at a loss.
The representations testified to by the plaintiff as having been made by the defendant were of existing material facts. Hedden v. Griffin, 136 Mass. 229. Dawe v. Morris, 149 Mass. 188 , 191. In Powers v. Rittenberg, 270 Mass. 221, 223, 224, it was expressly held that representations as to the capacity of a garage, the number of automobiles in storage, the rents and the gross income and the profits could be found to have been material inducements to a lease of the garage. See also Boles v.
Merrill, 173 Mass 491; Lee v. Tarplin, 183 Mass. 52, 57; Thomson v. Pentecost, 210 Mass. 223; Vouros v. Pierce, 226 Mass. 175; Rudnick v. Rudnick, 281 Mass. 205 . The plaintiff is not precluded from recovery even if he relied upon the representations of the defendant and did not investigate carefully before executing the lease. Whether he did rely on the defendant's representations or on the casual investigation he made from the outside of the garage was for the jury. See Noyes v. Meharry, 213 Mass. 598, 600; Anastas v. Koliopoulos, 222 Mass. 267 , 269; Mignault v. Goldman, 234 Mass. 205 , 209; Wiley v. Simons, 259 Mass. 159 , 161; Picard v. Allan, 285 Mass. 15 , 17. This has been held even where the seller referred to the sources of his information and advised the purchaser to consult them. See Thomson v. Pentecost, 206 Mass. 505 , 511, and cases cited. The testimony of the plaintiff as to the volume of business done by him was sufficient to warrant an inference by the jury that the business done by the defendant in the conduct of the garage was not of the volume he represented it to be. This evidence presented a question for the jury. "In the usual course of events it is...
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