Rovner v. Atl. Realty Serv. Inc.

• Decision Date: 10 May 1945
• Docket Number: No. 209.,209.
• Citation: 42 A.2d 386
• Parties: ROVNER v. ATLANTIC REALTY SERVICE, Inc.
• Court: New Jersey Supreme Court

42 A.2d 386

ROVNER

v.ATLANTIC REALTY SERVICE, Inc.

No. 209.

Court of Errors and Appeals of New Jersey.

May 10, 1945.

Appeal from Court of Chancery.

Action by Louis Rovner against the Atlantic Realty Service, Inc., for specific performance of contract to purchase certain realty. From a judgment for plaintiff, defendant appeals.

Reversed with directions to dismiss the bill.

1. Where the signature to a contract is procured by fraud or imposition, practiced upon the signer with intent to deceive him as to the purport of the paper which he signs, he has a right to set up such fraud or imposition as a defence to an action brought against him by the other party to the contract for a breach of the provisions contained therein.

2. A principal, even though innocent, cannot assert any rights or retain any benefit upon a contract procured by the fraud of his agent.

DONGES, Justice, and WELLS and RAFFERTY, Judges, dissenting.

Charles A. Cohen, of Camden, for appellant.

Walter S. Keown, of Camden, for respondent.

PARKER, Justice.

This is defendant's appeal from a decree of the Court of Chancery requiring specific performance of a written contract to purchase a piece of real estate. The defence, which the trial court overruled, was and is that by the fraud of the respondent seller's broker, named Moffett, in representing the writing as merely an option, appellant's president, named Adamucci, was induced to sign it and make an initial payment of $100 as the price of the option, to be credited on the purchase price if sale were consummated. The story told by Adamucci, which is not substantially impugned, is that one afternoon as he reached his home he found Moffett waiting for him. Defendant corporation was engaged in building small dwelling houses for sale, subject apparently to supervision of the federal housing administration, and of this Moffett was cognizant. Moffett proposed that defendant purchase the land described in the paper: Adamucci replied in substance that he was not in the market unless he could build on the land and for this he needed the consent of the FHA. According to his testimony, it was then arranged, after discussion, that he take an option to purchase, and pay $100 which would be forfeited if he failed to complete the purchase. But no written option agreement was ever made. Moffett, after obtaining approval of the selling price from complainant and Mr. Brown his counsel, took a printed form of what is called in the vernacular a ‘contract for property’ which contained no language appropriate to a buyer's option, and with a typewriter erased certain words in a paragraph numbered 3. The printed sentence read originally thus: ‘3. In the event of the Buyer not making settlement in accordance with the terms hereof the payment or payments made on account shall, at the Seller's option, be forfeited as liquidated damages for the failure of the Buyer to settle; or be applied on account of the purchase price.’ Moffett erased the words ‘at the Seller's option’ and the final clause ‘or be applied on account of the purchase price’, so that the clause read: ‘In...