Musgrave v. Sherwood

Brady, J.

The questions presented by this appeal have been the subject of elaborate investigation and of numerous consultations between myself and associate, justice Babbett. We approached the consideration of them impressed with their importance and the results which might attend our conclusions. This deliberate and careful examination has led, however, to the conclusion that upon all of them except one, and those incidental to or necessarily connected with it, the conclusions arrived at in the special term were correct.

The learned justice who presided in the court below has expressed his views in an extended and able opinion, and we adopt them as a forcible exposition of the law in this case, with the single exception to which we shall presently refer. We do not consider it necessary, therefore, to make any further allusion to them, and proceed at once to the consideration of the question about which we think he has erred.

The evidence shows that, prior to the purchase of the premises by the plaintiff, there were interviews between her, her husband and the defendant in regard to them, in which certain statements and representations were made as to the character of the houses, of which her purchase was one, and their then present and future use. It appears from the find•ings of the learned judge that these representations were made, although denied by the defendant, and that they, in fact, influenced the plaintiff in purchasing the house bought by her.

The testimony of the plaintiff on this subject is as follows:

Q. At either of those conversations do you recollect any statements or declarations by Mr. Sherwood in regard to the occupation of his remaining buildings ? A. Perfectly.

Q. And are you able to designate at which of the conversations that occurred ? A. FTo; I can’t designate at which one, because before we had positively gone that far we had had a good many conversations; had looked through the house several times, I remember.

Q. Will you now state what those representations or statements of Mr. Sherwood, to which you allude, were? A. I remember perfectly, on one occasion — which conversation I can’t remember — we were going through the lower rooms of the house; Mr. Sherwood had a cane in his hand, and he was constantly knocking the plate glass to show the superiority of the glass, and also to examine the woodwork of the house. We came to the rear room of the house; the outlook was not very pleasant, as one of the lots on the north side was not cultivated at all or built upon, and I said to Mr. Sherwood, “ This does not look very prepossessing,” and he said, “ Well, there will be nothing upon it that will be disagreeable, because all the property around these buildings are under restrictions; nothing that is objectionable can be built; I myself am restricted from putting anything but first-class private residences on this property, and they will always be, first and last, private residences.

Q. What influence did that declaration of Mr. .Sherwood, in regard to his buildings being always, first and last, private dwellings, have upon your proposed purchase ? A. It had a great influence upon me. It was upon that that we bought, knowing that the two houses on Fifth avenue were all finished, and the one on Forty-fourth street nearly completed, which he told me would be his own private residence.

Q. Would you have made the purchase of this house without those statements and representations? A. FTo, sir; I should have seriously objected to it. I should not have bought.

And we regard the learned justice as having found this, because, in answer to the application of the defendant to make one finding involving this element, he says: “As a whole I decline to find this proposition ; ” but in reference to the contract of sale, says as follows : “ In my decision, filed herewith, I have stated, as my conclusion upon the evidence, that on one occasion, in. the earlier stages of the negotiations and anterior to the contract of the fifth of December, in an interview between the parties while inspecting the premises, the defendant, in response to a remark made by the plaintiff in regard to other property, made certain statements, which are stated in my decision, as well as the circumstances under which they were made. The statements were, however, in substance as those stated in this proposition. But I do not attach to them the character of formal representations or promises made to induce the purchase. Ho agreement of the parties was then reached. And in view of what afterwards transpired between the parties in coming to an agreement, and of the contents of the contract and deed, I do not regard these statements as material. The defendant and her husband have, however, both testified that they relied on those statements in making the purchase, and would not without them have made it. I accept their evidence as to the influence of these statements upon them, but I do not think the facts and circumstances justify such reliance, as I have stated my opinion.”

It also appears that, at the time these representations were made, four houses on Fifth avenue, including the plaintiff’s, were finished, and one in Forty-fourth street, forming a part of the defendant’s plot of land, was nearly completed ; so that the representations were made as to existing things, to facts accomplished, namely, houses completed and one in process of erection and nearly completed, and all of which were necessarily of the character named, because, as the defendant said, he was restricted from erecting other than first-class private residences on the property.

The learned justice, while accepting the evidence of the plaintiff and her husband in reference to the representations referred to, did not deem the facts and circumstances embraced in them as sufficient to justify a reliance upon them, but regarded them as having no legal vitality, substantially for the reason that they were not incorporated in the deed or in the contract of sale, and were not repeated or alluded to at the time the contract of sale and purchase was made. It appears further that, after 'the representations were uttered, and while negotiations were pending, an offer was made by the defendant to accept $120,000 for the house, which elicited an offer for it on the part of the plaintiff of $110,000, and that offer being accepted, the defendant drew the contract, he and the plaintiff’s .husband uniting their efforts to accomplish that end, and the contract thus prepared by them was copied and executed, each one taking a counterpart.

It is true that no reference was made to the houses in the respect embraced in the representations made in the earlier negotiations for the purchase, and that nothing was said about them at the time the contract was prepared and executed, according to the testimony. They were neither repeated, nor withdrawn or modified, and therefore whatever impressions were formed were allowed to remain. But it appears from the evidence, and is regarded by us as having been substantially found by Mr. justice Vah" Vobst, that the representations and statements mentioned were the inducing cause of the purchase, one of which, as we have seen, and a very important one, was the restriction by which the defendant declared himself to be controlled as to the use of the land. The location of the property, the character of the houses as erected, and the price paid by the plaintiff for the one that she purchased, all have an 'important bearing not only upon the question whether or not the representations were made, but upon their influence in effecting the sale, and tend to fortify the charge that such representations were made and were an inducing cause.

It is evident from the testimony that the plaintiff was purchasing what she regarded as a first-class residence, in a desirable locality, the character of which was secured by restrictions to the extent stated, and her testimony is that it was bought as a private residence and as a permanent home. The inference justly to be drawn from the facts — namely, the locality and character of the house and its surroundings and the consideration paid for it — was that the plaintiff was paying for the special privileges arising from the fact that it was, and the defendant’s houses adjoining it were, by restrictions, stated to be private residences, in the language of the plaintiff “ always, first and last,” as declared to her by the defendant himself.

Assuming, as we must, .from the views expressed by the learned judge, that the defendant made the representations stated by the plaintiff and her husband to have been made prior to the purchase, and that those representations were the inducing cause of the purchase, we do not understand why the defendant should not in equity, on the plaintiff’s application, be restrained from altering the character of the houses which he thus declared, by restrictions in force, were to be and should be, first and last, private residences, unless she has waived her rights in this respect.

The circumstances under which the contract was prepared should not be regarded in equity otherwise than as favorable to the plaintiff, because neither of the parties framing the contract were lawyers, and they prepared it without resort to professional aid, which would probably have developed all the elements necessary for the protection of the plaintiff in reference to the representations made. The defendant in making these representations, which are in their nature promises to some extent, may have gone further in the negotiations than he designed in his zeal to sell his property. But we have nothing to do with that, inasmuch as the court below has determined the issue which we have suggested on that subject in favor of the plaintiff.

These representations having been made and the property having been purchased through the influence which they exercised upon the plaintiff, the defendant has created an obligation which imposes upon him the observance of his representations and promises, relating, as they do, not merely to acts in the future, but as already suggested to an existing state of facts — namely, the construction of houses completed — which in their character, by avowed existing restrictions, were and was to continue to be private residences, and this embraced the use of the easement connected with them. We regard this case, therefore, upon these elements, as one which is governed by the principles enunciated in the case of Tallmade agt. East River Bank (26 N. Y., 105). In that case it was held that the owner of land, as stated in the syllabus of the case, might by parol contract with the purchasers of successive parcels, in respect to the manner of its improvements and occupation, affect the remaining parcels with an equity requiring them also to be occupied in conformity to the general plan, which is. binding upon a subsequent purchaser with notice of the fact, though his legal title be absolute and unrestricted. It was said in that case by Sutherland, J.: “ From the facts found by the judge at special term, it appears that when the plaintiff, Maxwell and others, bought lots in St. Mark’s place, of Davis, they were shown the map or plan of St. Mark’s place, showing that the houses on both sides of the place were to be set back eight feet from the street, and that they bought on the assurance of Davis that that plan should be observed in building on the place; that the strips of eight feet in width on both sides of the street should not be built upon, but kept open. It is to be presumed that they would not have bought and paid their money except on this assurance. It is to be presumed that relying upon this assurance they paid a larger price for the lots than otherwise they would have paid.” This case does not stand alone., In the case of Meyers agt. Watson (1 Simon [N. S.], 523), a case in which the plaintiffs insisted that they were not bound to do anything except what was imposed upon them by the written contract, it was held that a specific performance would not be enforced for the sale of land, even in a case where no actual fraud had been perpetrated to induce the mating of the contract, but where the grantee was induced to enter into the contract in consequence of an independent engagement by which the vendor was to do something which he had failed to perform. The court said: “ Was there any engagement on the part of Potter to do anything which he had failed to do, on the faith of which being done it is reasonable to believe that the defendants entered into the contract in question?” And further, “if the court is satisfied that such an engagement was made, and that on the faith of it defendant entered into the contract now sought to be enforced, if the plaintiff fail to do that which he has undertaken to do, even though it would have been an engagement incapable of being legally enforced, the court would leave the plaintiff to such redress as he would be entitled to at law.” And further, “ when, acting on the faith of representations made as to future acts 'to be done the parties have entered into a contract, it would not be consistent with the doctrines of equity to compel them to perform these contracts at the instance of those who failed to perform engagements which they entered into, and on the faith of which the contracts were made.” And the concluding part of the opinion declares: “ On the whole I am of opinion that it is satisfactorily made out that the vendor induced the defendant to enter into this contract on the assurance that certain things material to their interests should be done by him; and that having failed in performing what he had engaged to do, his assignees are not entitled to relief in this court, so that the bill must be dismissed, with costs.”

In Powers agt. Woodward (6 Pick., 206) it was held also that on the purchase of land parol evidence was admissible to show that the principal inducement to the plaintiff to purchase was a succession to the business which had been carried on in the premises by the grantor, and with which the latter undertook to interfere (See, also, Grenawald agt. Meyer, 38 Penn., 369). It might well be presumed from the evidence that this plaintiff would not have bought the house which she purchased from the defendant and paid the consideration she gave for it, had it not been for the representations made in reference to the houses of which it was one, if it were necessary to provoke any such element; but it is not, because the fact is found that she was induced by them to make the purchase. It is to be presumed, also, that relying upon this assurance the plaintiff paid a larger sum for the property than she would otherwise have paid.

The learned justice, in commenting upon the case of Tallmadge agt. The East River Bank (supra), observes, in his opinion in regard to it, that there is entirely absent from the plaintiff’s claim what was a special feature in Tallmadge’s case, namely, the reciprocal and mutual easement, and, further, that the plaintiff here was placed under no obligation to use her house as a private residence. If, however, the doctrine declared in the case just mentioned is to prevail, and we assume that it is, notice to her of the character of' the defendant’s houses, and the terms upon which they were sold, would be equally controlling upon her as upon Davis in the case (supra), and upon the subsequent purchasers as declared in that case. Indeed, it seems to be quite clear that if the plaintiff had attempted to appropriate her house to purposes inconsistent with the design of the defendant in constructing it and the other houses, she could be prevented, on her statement, by a just application of the rule of law now invoked for her benefit. It must not be forgotten, in the consideration of the question involved, however, that the jdaintiff’s house was built with an easement — a party-wall — and which, consequently, existed at the time of the negotiations for, and the sale of it to the plaintiff, and which was referred to in the conveyance to her. Therefore, as already suggested, it is the use of the existing easement for purposes antagonistical to the expressed design of the defendant in building the houses, made patent by his statements and representations, which is complained of, and by which the house adjoining the plaintiff’s, to the prejudice of her property, as shown by the evidence, was enlarged, not as a private residence, but for business purposes, namely, as part of a family hotel. We do not wish to he understood, however, as declaring it to be our judgment that the defendant would have no right to build upon the party-wall," if the object were to enlarge his house as a private residence. We think the case of Brooks agt. Curtis (50 N. Y., 639) is decisive of that question in. his favor. Such a use might be in perfect harmony with the original design in the structure of the houses and the representation and restriction to which reference has been made. The enlargement of the houses adjoining the plaintiff’s premises was not contemplated with any such intention or- for any such purpose, according to the findings of the learned judge who presided at the trial, but, as already suggested, was for the purpose of affording accommodation for a larger number of guests in the hotel to which the defendant’s houses adjoining had been appropriated.

We do not wish to be understood either as declaring that the defendant is under obligation to reform the character of the houses, other than the one adjoining the plaintiff, because we think that the changes which were made prior to the commencement of this action in the other houses must be regarded as having been assented to or acquiesced in by the plaintiff, because she allowed them to be thus changed without objection, and in equity must bear the consequences of the alterations so made.

Our judgment is, therefore, it appearing that plaintiff did not assent to the use of the party-wall between her and the adjoining premises for the erection of the additional stories which were made for business purposes, her right to protection from such a use by the defendant exists, and in equity and good conscience should be enforced; and that the learned judge at the special term erred in his conclusion of law upon that subject. This view renders the defendant liable to the consequences of his statements and representations discussed, which, as we have seen, induced the plaintiff to purchase.

Note.— The question involved in the foregoing case seems to he a very close and interesting one, and has been closely and sharply contested. The case having gone back for a new trial, and there having been such a diversity of reasoning and comment upon the cases cited, we have given more space than is our custom to the arguments of counsel, believing that in doing so we were conferring a benefit upon the profession.—[Rep.

It follows, therefore, that there must be a new trial, which is ordered, with costs to abide the event.

Barbett, J., concurs.