November 11, 1914.
F.J. Nelson, for the plaintiff.
Harry L. Allen, for the defendants.
The judgment entered upon the directed verdict in favor of the defendant Elizabeth C. Volk should be reversed for the reason that the evidence supports a finding that the sale to her and the transfer and assignment of the bond and mortgage by her were not consummated until after the inventory covered by the bill of sale was made. If false statements of material facts were made by her, as the evidence tends to show, before the transaction was completed, with the intent to cheat and defraud the plaintiff, and relied upon by him in making the sale and taking the assignment of the bond and mortgage, such statements constitute actionable fraud. The evidence was sufficient to require the submission of these questions to the jury, and it was error to hold as a matter of law that the statements were made after the sale had been consummated and to direct a verdict upon that theory in her favor.
Furthermore, the evidence also tends to show that the husband, her codefendant, was acting for her and that she had the avails of the transaction. She made the assignment of the bond and mortgage and the bill of sale by the plaintiff was made to her, and under the facts here disclosed I think she may be made liable for misrepresentations made by her husband. ( Krumm v. Beach, 96 N.Y. 398; Downey v. Finucane, 146 App. Div. 209; 205 N.Y. 251, 259; Green v. Des Garets, 210 id. 79; Kingman v. Dunspaugh, 19 App. Div. 545, 550.)
2. The judgment against the defendant Casper Volk entered upon the verdict found against him should also be reversed upon questions relating to the damages. While the evidence showed that the mortgaged premises were incumbered beyond what was stated to the plaintiff by the defendants, it does not appear that the premises were not an adequate security for the mortgage debt or that the obligor named in the bond accompanying the mortgage was financially irresponsible. The mere fact that the plaintiff bid in the premises upon a sale under a judgment not disclosed to him which was a prior lien to the assigned mortgage, does not entitle plaintiff to recover from the defendants the amount so bid and paid, which seems to form the principal basis for the damages awarded by the verdict. The usual rule of damages in such a case is the difference between the value of the article sold as it was represented to be and as it actually was. ( Hubbell v. Meigs, 50 N.Y. 480; Krumm v. Beach, 96 id. 398, 406, 407; Spotten v. De Freest, 140 App. Div. 792.) In determining that question the financial responsibility of the obligor and mortgagor and the value of the premises are necessarily important facts.
Both judgments should, therefore, be reversed and a new trial ordered, with costs to each of the successful appellants to abide the event.
Judgments and order reversed and new trial granted, with costs to each of the appellants to abide event.