Frank Zagarino and James Lapenna, Respondents, v. Max Kurzrok, Appellant

Frank Zagarino and James Lapenna, Respondents, v. Max Kurzrok, Appellant. Second Department, December 10, 1909 Misrepresentation—fraud — landlord and tenant—false statement as to Ownership — intent. Mere misrepresentation as to ownership will not sustain an action for deceit in the absence of an intent to deceive. Plaintiffs, who leased a store from the defendant, thinking that he was the owner, and, after fitting it up as a café and stocking it.at considerable expense, were unable to obtain a liquor license owing to,the real owner's refusal to sign the consent, cannot recover the amount of expense incurred by them in the absence1 of fraud. The fact that the defendant, in answer to an introductory inquiry at their first meeting, told the plaintiffs that he was the owner, when in fact he was only the lessee under a twenty-one-year lease, does not make out fraud, as the defendant’s statement was in a sense true, and so related t,o the'negotiations as to be consistent with an honest intent. Appeal by the defendant, Max Kxirzrok, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Kings on the 1st day of Jxxly, 1909, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 28th day of June, 1909, denying the defendant’s, motion for a new trial made upon the minutes. Alonzo G. McLaughlin [Leo O.' Stern with him on the brief], for the appellant. Edmund F. D?'iggs, for the respondents. [MAJORITY — Thomas, J.:] Thomas, J.: The complaint charges that the defendant, knowing that he was not such,, represented to tlie plaintiffs that he was the owner of. a store, and that, relying thereon, plaintiffs took, a lease thereof for a café, fitted the premises therefor, were Unable to obtain a license on account of such misrepresentation, to their damage in' the loss arising from such outlay. The plaintiffs’ evidence, denied by defendant, is that to their introductory inquiry whether the defendant owned the store the latter answered, “ Yes,'what, can I do for you?” ¡Negotiations extended through some days resulted in a lease for a café for ten years. Admittedly, defendant questioned plaintiffs’ ability to get a license, but, as they say, limited Ins doubts by a reference to possible objections from residents, which the bonding company later investigated and reported favorably to the plaintiffs. Tlie plaintiffs took no further steps fdr procuring the license until they had fitted, stocked and manned, tlie café, when they asked the defendant, as owner, to sign a consent for a license, and thereupon lie advised them that he would sign, not as owner, but as - lessee, which he was for a term of twenty-one years. As the owner would not sign, tlie plaintiffs’ enterprise failed. The defendant’s statement that he was the owner is not characterized as fraudulent in the complaint, nor was the .question of fraud submitted to.the jury. Proof of. mere' misrepresentation as to ownership may demand rescission of a contract, but will not sustain an action for deceit, in the absence of allegation, sufficient evidence and finding of intent to deceive. (Wakeman v. Dalley, 51 N. Y. 27; McIntyre v. Buell, 132 id. 192.) The defendant, the owner of a long term of years, might in reply to an initial inquiry state that he was the' owner, and so he woiild be for all usual purposes, including that of leasing the premises. He had the title for leasing with all beneficial covenants. At the instant of such statement the object of the inquiry was not stated, nor was defendant’s answer directed to the question of leasing or the negotiations that preceded it, and much less did it refer to the subject of obtaining a license or consent therefor. The statement. was the answer of a busy man, charged with large interests, to a. preliminary inquiry from strangers entering his place of business and accosting him, and if upon it the plaintiffs predicated a cause of action for fraud, they should have presented that issue to the trial court and evidence to sustain it. I thinkj however, that the evidence would not have justified submission of that question, or any question, to. the jury. The. defendant’s statement was in such a sense true, and was so related to the negotiations for the lease as to be consistent- with an honest intent, and in such case guilt cannot be found. (McIntyre v. Buell, supra, 198.) -Moreover, the plaintiffs were, not justified in relying upon it and fitting the store* The defendant did not promise to sign the consent for a license. The inference from his letting the store for a café was that he would consent, but he was not legally bound to supplement the lease by signing the consent. In any case it was the duty of the plaintiffs to procure their license before fitting the premises, and as a step thereto to secure or to attempt to secure ’ the defendant’s consent, if they relied upon his ownership. It does not appear that a.license would have been granted them irrespective of the owner’s action. They blindly made an extravagant expenditure without even seeking to procure the consent to a license by defendant in the represented capacity. Their orderless and rash act should not place the loss upon the defendant. • The judgment and order should be reversed and a new trial granted, costs to abide the event. Hirsohberg, P. J., Woodward, Jenks and Miller, JJ., concurred. Judgment and order reversed and new trial granted, costs to abide the event.