Anderson v. Rubin

Lummus, J. The plaintiffs took a lease for five years of a bowling alley and pool room, “together with the exclusive right to use all articles such as pool tables, alleys, balls, cues, and all other things used for the purpose of running said pool-room etc. now on said premises.” The plaintiffs agreed to repair the place and its equipment to the extent of $1,000. During the negotiations the defendant, who was attorney for the lessor, assured the plaintiffs that the title to the property leased was good in the lessor, except for three mortgages on the real estate. The defendant falsely and fraudulently concealed from the plaintiffs the fact that there was an encumbrance on the pool and billiard tables included in the lease, consisting of a Federal tax lien for $58.34, which the plaintiffs had to pay; and also the fact that he himself, as the assignee of the vendor in a conditional sale, held the title to said tables. About four months after the lease was given, the defendant made claim to the- tables, and about two months later removed them, together with all the rest of the equipment, to which he had no title. From that time the plaintiffs ceased to do business, and to pay rent to the first mortgagee in possession. Shortly after-wards the first mortgage was foreclosed by sale, and the leasehold was gone. In this action for deceit, an auditor was appointed with a provision that his “report should be final,” and made findings herein summarized. Although the amount secured by the conditional sale was only $300 and the tax lien was only $58.34, the auditor found that the falsity of — 363 — the representation caused the lease to be worth $558.34 less than it would have been worth had the representation been true. He gave no consideration to the profits or prospective profits of the business, or to the fact that the plaintiffs expended for repairs $1,000 as required by the lease, and $1,784.59 more. The trial judge, upon the auditor’s report, "found” for the plaintiffs for $558.34 and interest, amounting together to $705.61, subject to the exceptions of the plaintiffs, who contended that the amounts spent for repairs and the prospective profits of the business should have been included. The rule of damages adopted by the auditor and the judge is the one ordinarily applied. Kerr v. Shurtleff, 218 Mass. 167, 173. Reis v. Szubzda, 273 Mass. 184. McNulty v. Whitney, 273 Mass. 494, 504, 505. Roche v. Gryzmish, 277 Mass. 575, 580. Prospective profits cannot be considered, except so far as the profitable uses to which the leasehold might be put are reflected in its value. Parker v. Levin, 285 Mass. 125. Though some of us, including the writer, think otherwise, a majority of the court are of opinion that the principle upon which damages were awarded was adequate for the case, and that even the amount expended for repairs under the requirement of the lease was properly excluded from consideration. Exceptions overruled.