Kreshover v. Berger

Lehman, J. The complaint herein alleges that the defendants, in order to induce the plaintiff to enter into a contract for the purchase of certain premises, had represented to the plaintiff: (1) That the walls of the said premises did not encroach upon the adjoining premises; (2) that the walls were properly constructed and no question as to their construction had ever arisen; (3) that the premises were leased as apartments to divers tenants on leases and no free rents were given; (4) that the Lawyers’ Title Insurance and Trust Company accepted a loan of $70,000 upon the said premises; and (5) that either the said company or the Title Guaranty and Trust Company would lend at least $70,000 on first mortgage upon the said premises. The complaint further alleges that the plaintiff, in reliance upon the truth of the said representations, entered into a contract for the purchase of the premises and had paid the sum of $2,000 upon the said contract. The plaintiff seeks to recover the said sum of $2,000, on the ground that the said representations were false, in that: (a) The easterly wall bulges and encroaches upon the adjoining premises; (b) the walls have not been properly constructed; (c) leases have been made to tenants with the understanding that for one month out of twelve during the year the tenant need pay no rent; (d) the Lawyeis’ Title Insurance and Trust Company had declined to pass a loan of $70,000 by reason of the construction of the easterly wall; (e) the Title Guaranty and Trust Company would make no loans by reason of the construction of the easterly wall without a license from the owner of the adjoining premises on the east. The trial justice refused to allow any evidence of oral misrepresentations on these points, stating that they would vary the written instrument and are cognizable only in an equity tribunal. It is unquestionably true that, in an action to recover the amount paid upon a contract rescinded on account of alleged [615] fraudulent misrepresentations, the plaintiff should he allowed to show that, by reason of such fraudulent misrepresentations, the minds of the parties have never met, even though the misrepresentations were oral; but, where the contract itself contains provisions that negative the claim that these misrepresentations were relied upon, or contains other representations upon the same subject inconsistent with the alleged oral representations, then the evidence of representations is not introduced for the purpose of showing that the minds of the parties did not meet on this contract, but only to vary the written contract, and is improper. In this case the contract contains clauses as follows: (1) “ Subject to state of facts shown on survey of Chas. A. Meyer & Son, dated Sept. 1, 1905 * * *.” (2) “ The party of the first part agrees to furnish the certificates of the tenement-house and building departments showing erection of the building on the premises hereby contracted to be conveyed, in accordance with building laws.” The clauses cover the alleged misrepresentations as to the Avails of the building, and any proof of these misrepresentations would vary the Avritten instrument. The contract further provides that the premises shall be taken subject to monthly tenancies and leases on various apartments ■ and that the rents shall be apportioned. The parties have, therefore, expressly agreed that the terms of the leases are not material. The representation that the Title Insurance and Trust Company accepted a loan of $70,000 is immaterial, because the contract provides that the defendant would take upon the premises a second mortgage of $17,000 after a first mortgage of $75,000 but in the event that plaintiff should be unable to secure a mortgage loan of $75,000, then the defendant agreed to increase the second mortgage to the extent necessary “ but in no event is said increase to be more than five thousand dollars.” Obviously, therefore, the plaintiff contemplated that he might not obtain a loan of $70,000. Moreover, the complaint does not allege that the title company had not accepted a loan, but only states that it had declined [616] to pass a loan; the oral representations may, therefore, have been true. The fifth representation is promissory in its nature, and the plaintiff had no right to rely upon the same. It would appear, therefore, that, if the evidence of these representations had been received, it would have had the effect, as the trial justice said, of reforming the contract in these particulars. The entire record shows that the plaintiff is now trying to interpolate into the contract new clauses. The judgment should, therefore, be affirmed, with costs. Gildersleeve and Seabury, JJ., concur. Judgment affirmed, with costs.