Robinson v. Wiley , 1854 N.Y. App. Div. LEXIS 138 ( 1854 )

By the Court,

T. R. Strong, J.

Assuming that the goods, for the price of which the notes, upon which the judgments were recovered, were given, were sold upon the faith of a false and fraudulent representation by the defendant, that he was worth $2500 to $3000, over and above his debts, it forms no sufficient ground for giving the judgments priority, in respect to the real estate mentioned in the complaint, to the exemption thereof from sale on execution, which had been secured under chapter 260 of the laws of 1850, and was in force at the time of the sale. If fraud, in regard to the defendant’s pecuniary ability generally in contracting the debt, would entitle the creditors to such a preference, I do not perceive why they would not be equally entitled to, and why the plaintiff might not have claimed, in this action, a preference over the exemptions allowed by the revised statutes, and chapter 157 of the laws of 1842, as to personal property. It was at least necessary, to a sufficient basis for the priority claimed, that it should appear the defendant, at the sale, willfully misrepresented as to the existence at that time of the exemption of the real estate from execution, and that the sellers were thereby misled. He must have procured the sale of the goods, by inducing the sellers to believe that the premises at ere not protected from seizure and-sale by execution, so that it Avouldbe inequitable, and operate as a fraud upon them, if he should be alloAved to set up this exemption. The principle which must be invoked in this case is that of an estoppel in pais ; and unless a case is made in regard to the land, to which that principle is applicable, the plaintiff cannot recover.

It is alleged in the complaint that the defendant represented at the sale, among other things, that the real estate was incumbered by mortgage only to the extent of about $300 or $400, and that no other claims or liens upon it existed; that this representation was false, and knoAvn by the defendant to be so, and was made with intent to deceive the sellers of the goods, and that the sale was made by the sellers on the faith of the representations. The falsity of this representation is alleged to consist in the fact, that the defendant had previously, in pursuance of the act of 1850, secured the exemption of the premises from execution. The evidence at the trial fully sustains the allegations in the complaint as to the representations and the reliance upon them by th<) sellers, and shoAvs that the defendant has a wife and minor children^ and resides on the premises. It also proves that a notice, signed by the defendant and his wife, such as is specified in the second section of the act of 1850 aforesaid, was filed and recorded as therein required. And the referee has found substantially the same facts, but he has not found, nor is it proved, except as it may be inferred from the facts above stated, that the defendant misrepresented as aforesaid in regard to the real estate with intent to deceive the sellers of the goods.

Is the defendant, within the doctrine of estoppels in pais, precluded by his conduct from insisting upon the exemption of the premises from execution, as to the judgments. His representation was, in substance, that there was no incumbrance, claim or lien on the premises, except a mortgage of from $300 to $400. It is not alleged that there was any other, beyond the statute exemption. Was this an incumbrance, claim or lien? It is impossible, I think, to maintain that it was. The defendant was none the less, because of that exemption, the owner of the entire estate in the premises. His power of disposition thereof, subject to the mortgage, was not thereby in any degree impaired. The statute merely protected him in the enjoyment of the same as against the executions of his creditors. Ho right to or interest in them, as against his rights, was acquired by any other person. An incumbrance on land is a charge or burden upon it in favor of some other person than the owner. A claim upon land, or a lien thereon, within the meaning of those terms in the representation, is nothing short of an incumbrance. It is an interest or right of one person attaching to an estate belonging to another.

It is insisted, on the part of the plaintiff, that if this exemption was not strictly and literally an incumbrance, it was so substantially; that it will have the effect of an incumbrance as to the judgments, if the defendant shall be permitted to avail himself of it; and that the substance of the representations as to the real estate was, and that the defendant designed by it to convey the idea, that the premises could be relied on by the sellers as a means of enforcing payment of their debt. Fraud by the defendant—an intention'by him to deceive the sellers by this representation—is an essential element of this position. If the representation is susceptible of two constructions, one of which is consistent with the truth, and the other not, the latter should not be adopted in support of the plaintiff’s claim to an estoppel, unless it appears there was a fraudulent motive. The representation, in that sense, must have been intentionally false, and designed to mislead. Fraud is not to be presumed; it must be proved. The evidence in the case will not warrant the conclusion that the defendant intended to misrepresent and mislead, by this representation. The .conversation between the defendant and the sellers was in regard to his pecuniary ability; not to the state of his property in respect to their ability to enforce payment by legal proceedings. It was in relation to the former subject that the representation was made. As to-that subject, it was both literally and substantially, in its letter and spirit, correct.

[Monroe General Term, December 4, 1854.

Johnson, Welles and T. R. Strong, Justices.]

As these, views, if sound, are decisive of the case, it is not necessary to consider any of the other questions raised.

The judgment appealed from must be reversed, with costs.