Taylor v. Heisinger

• Decision Date: 17 July 1963
• Citation: 242 N.Y.S.2d 281,39 Misc.2d 955
• Parties: Terrence S. TAYLOR and Barbara Taylor, Plaintiffs, v. Charles W. HEISINGER and Hazel H. Heisinger, Defendants.
• Court: New York Supreme Court

Page 281

242 N.Y.S.2d 281

39 Misc.2d 955

Terrence S. TAYLOR and Barbara Taylor, Plaintiffs, v. Charles W. HEISINGER and Hazel H. Heisinger, Defendants.

Supreme Court, Trial Term, Suffolk County, Part VI.

July 17, 1963.

McSherry & Flynn, Huntington, for plaintiffs.

Bushell & Demarest, Northport, Frederick G. Demarest, Northport, of counsel, for defendants.

HENRY TASKER, Justice.

The issues of law and fact in this action for damages by plaintiffs purchasers against defendants vendors for fraud and deceit were tried before the Court without a jury.

Plaintiff Terrence S. Taylor asserts that prior to the execution of the agreement of sale on August 7, 1961, he and his wife inspected the dwelling of defendants accompanied by a representative of Ark Associates, Inc., a real estate broker. On that date, inquiry was said to have been made of defendants concerning the existence of termites on the premises, and defendants are alleged to have stated that there were no termites on the premises and no termite work had been done.

Thereafter, and on August 17, 1961, a contract of sale containing the clause hereinafter referred to, was prepared and signed by plaintiffs purchasers and defendants sellers.

On September 14, 1961, and again on October 18, 1961, plaintiff and his wife visited and inspected the premises which were then occupied by defendants as their dwelling. On each of these occasions, plaintiffs were afforded an opportunity to and apparently did make a complete examination of the premises. Defendants allegedly reiterated their statements concerning the absence of termites, and the defendant wife is alleged to have called plaintiff to advise him that a termite inspection had been made in October of 1961.

The allegations of the plaintiffs concerning defendants' representation as to the absence of termites are vehemently denied by defendants.

Title to the premises closed uneventfully following FHA inspections for mortgage purposes and plaintiffs moved in on or about January 19, 1962.

On April 2, 1962, termites were discovered by plaintiff. An exterminator was called who inspected the premises, verified the existence of termites, and subsequently took the necessary steps to eliminate the infestations found to exist under the porch, behind the meter board and in certain portions of the sills.

Plaintiffs thereupon brought this action for damages to recover the moneys expended for termite treatment and for necessary repairs to the premises, caused by termite damage. No repairs to the premises had been made, as of the date of the trial.

Prior to disposition of the fact questions presented, the affirmative defense of estoppel raised by the contract provisions hereinafter set forth must be considered.

The contract of sale, New York Board of Title Underwriters, Form 8041, Plaintiffs' Exhibit 1, in addition to the usual printed 'merger' clause stating that all agreements are merged, that neither party is relying on statements or representations made by the other, and that the purchaser has inspected the buildings and is acquainted with their condition, contains the following clause:

'It is expressly understood and agreed by and between the parties hereto that the premises are being sold in their present condition and state of repair and without any representations, statements, or warranties, express or implied, with respect to their condition.'

A general merger clause in a contract is ineffective to exclude parol evidence of fraud in the inducement of a contract, and does not constitute a waiver of possible claims with respect to fraudulent representations, (Bridger v. Goldsmith, 143 N.Y. 424, 38 N.E. 458; Sabo v. Delman, 3 N.Y.2d 155, 164 N.Y.S.2d 714, 143 N.E.2d 906; Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 184 N.Y.S.2d 599, 157 N.E.2d 597). Similarly, a provision that purchaser has inspected the premises and is purchasing the same 'as is' will not preclude proof of fraudulent representations, nor will it bar rescission or recovery of damages by the defrauded party, (Benitez v. Martinez, 1 App.Div.2d 959, 150 N.Y.S.2d 41; Rizzi v. Sussman, 9 App.Div.2d 961, 195 N.Y.S.2d 672).

However, where a contract contains a specific disclaimer of responsibility for extraneous representations, as distinguished from a general disclaimer, the rule is different. Where a party specifically states that he is not relying upon any representations as to a specific matter, he is estopped from claiming fraud on the ground of a misrepresentation as to the specific matter, (Danann Realty Corp. v. Harris, supra; Wittenberg v. Robinov, 9 N.Y.2d 261, 213 N.Y.S.2d 430, 173 N.E.2d 868; Shohet v. Oakwood Operationg Corp., 31 Misc.2d 828, 221 N.Y.S.2d 268). In effect, the specific disclaimer negatives any claimed reliance on the alleged oral misrepresentation. A contracting party may not aver reliance on representations with respect to specific subject matter where he, in the plainest possible language, states that no such representations were ever made, (Vesey Associates, Inc. v. Regime Realty Corp., 35 Misc.2d 353, 232 N.Y.S.2d 754).

In the matter at bar, the clause above quoted, in effect more specific with respect to physical condition and state of repair of the subject premises than the clauses construed in Danann Realty Corp. v. Harris, supra, and Wittenberg v. Robinov, supra, mandates a holding that plaintiffs are estopped to claim reliance on defendants' alleged statements with respect to termites.

Similarly germane to the questions presented is that line of cases which holds that, unless the subject matter of the alleged representations are solely within the knowleged of the party making them and not discoverable by the exercise of ordinary intelligence and reasonable inquiry or investigation by the other party, if the defrauded party has not made use of the means available to discover the truth, he may not be heard to complain of misrepresentations which induced his entry into the transaction, Danann Realty Corp. v. Harris, supra; Sylvester v. Bernstein, 283 App.Div. 333, 12 N.Y.S.2d 746, aff'd 307 N.Y. 778, 121 N.E.2d 616; Irvlor Realty Corp. v. 62-114 Imlay Street Corp., Sup., 151 N.Y.S.2d 191, aff'd 7 App.Div.2d 645, 180 N.Y.S.2d 202; Jerrose Management Corp. v. Garnett, 33 Misc.2d 307, 226 N.Y.S.2d 503. A question of fact is then presented as to whether the existence of termites in defendants' dwelling were or should have been discoverable by plaintiffs...