Denike v. De Graaf ( 1895 )

CULLEN, J.

This is an appeal from a judgment in favor of the plaintiff, entered on the verdict of the jury at circuit, and from an order denying defendant’s motion for a new trial. The action is to recover damages for deceit in the contract for the exchange of lands. The complaint alleges that one Burnham, acting for the plaintiff, entered into an agreement with the defendant under their hands and seals for the exchange of certain lands, and that the plaintiff was induced to enter into such contract and carry it out by the false representation of the defendant that the land he agreed to convey had cost him $125,000 in trade. The written agreement produced on the trial was between Burnham individually and the defendant, and was under seal.

The first question presented is whether the plaintiff can maintain this action. That he could have maintained no action on the contract is unquestionable, because, as to agreement under seals it is not permitted to show that any of the parties acted as agent for a principal not named in the’instrument. Briggs v. Partridge, 64 N. Y. 364; Schaefer v. Henkel, 75 N. Y. 378. The plaintiff concedes this proposition, but contends that the rule only applies when the action is brought directly on the sealed instrument, and that this action is not on the contract, but for fraud in inducing him to enter into the contract. We are referred to no authority in support of this claim, nor can we find any. The plaintiff was not, in law, a party to the contract. Though Burnham was his agent, the plaintiff was no wise bound in the contract, or liable for its nonperformance. In Squier v. Norris, 1 Lans. 282, the husbaiid, with the authority of his wife, made a contract under seal in his own name for a sale of the wife’s land, and she received a sum of money on account of the sale. Yet it was held that a performance of the contract by the wife could not be enforced. We cannot see how a party can be defrauded by the execution of a contract between strangers, and such in law were the parties to the contract to this plaintiff. Upon discovery of a fraud, the party defrauded has two remedies: He may disaffirm the contract, and, tendering the return of what he has received under it, may compel the other party to restore what he has obtained from it; or he may affirm the contract, stand on his bargain, and recover his damages,—the difference between the actual value of what he has received and what would have been its value had the fraudulent representations been proved. Vail v. Reynolds, 118 N. Y. 297, 23 N. E. 301. As Burnham was the only party who could .have enforced the contract, it would seem clear that he was the only person who could disaffirm it. The right to disaffirm could not well vest in one person, and a right to recover damages in another. Further, as said in Vail v. Reynolds, the action for deceit is an affirmance of the contract. The action is in fact based on the contract. Practically the representation is a warranty which the law incorporates into the contract on account of the fraud of the defendant. It is impossible to separate the title to a right of action for such damages from the title to the contract itself, except by an assignment. The judgment and order denying motion for a new trial and the complaint should be dismissed, with costs.