Delbert L. McDowell, Respondent, Appellant, v. Elizabeth C. Volk, Respondent, Impleaded with Casper Volk, Appellant, Respondent

Delbert L. McDowell, Respondent, Appellant, v. Elizabeth C. Volk, Respondent, Impleaded with Casper Volk, Appellant, Respondent. Fourth Department, November 11, 1914. Fraud—action to recover damages alleged to have been caused by fraudulent representations, inducing plaintiff tó exchange property with defendants — liability of wife for fraudulent representations by husband—evidence — damages. Action against a wife and her husband to recover damages caused by alleged false and fraudulent representations by which the plaintiff was induced to part with certain property in exchange for a bond and mortgage. Evidence examined, and held, sufficient, to require the submission to the jury of the question as to whether or not the alleged false statements were made by the defendant wife before the transaction was completed. It seems, that under the circumstances the wife may be liable for misrepresentations made by her husband who was acting for her. The fact that the plaintiff subsequently bid in the mortgaged premises upon a sale under a judgment not disclosed to him, which was a lien prior to the assigned mortgage, does not necessarily entitle him to recover from the defendants the amount so bid and paid, and a judgment against the defendant husband, awarding damages on such a basis, should be reversed. 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. Appeal by the defendant, Casper Volk, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Steuben on the 11th day of January, 1909, upon the verdict of a jury, and also from an order entered in said clerk’s office on or about the same day denying the defendant Casper Volk’s motion for a new trial. Appeal by the plaintiff, Delbert L. .McDowell, from the whole of said judgment, and also from a judgment entered in said clerk’s office on the 7th day of January, 1909, upon the dismissal of the complaint as to the defendant Elizabeth C. Volk by direction of the court at the close of plaintiff’s case herein. Also an appeal by the plaintiff from an order entered in said clerk’s office on or about the 11th day of January, 1909, denying plaintiff’s motion for a new trial of this action as to both defendants. F. J. Nelson, for the plaintiff. Harry L. Allen, for the defendants. [MAJORITY — Kruse, P. J.:] Kruse, P. J.: 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 hen 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. All concurred. Judgments and order reversed and new trial granted, with costs to each of the appellants to abide event.