Opinion
06-24-1914
YOUNG v. TAYLOR et al.
Clarence Garretson and Clarence E. Case, both of Somerville, for complainant. Edward P. Johnson, Jr., of Somerville, for defendants.
Bill by Jessie Young against George J. Taylor and others. Decree advised in favor of complainant.
Clarence Garretson and Clarence E. Case, both of Somerville, for complainant. Edward P. Johnson, Jr., of Somerville, for defendants.
BACKES, V. C. This is a bill, in the common form, to foreclose a mortgage, which is resisted on the ground that the mortgage was fraudulently procured and given without consideration.
The mortgagor, Taylor, desiring to buy a small farm, called upon, and was shown the mortgaged premises by one Sammis, a real estate agent, who had them on his books for sale. Sammis told Taylor that the owner wanted $1,800, and, being asked whether they could not be bought for less, replied that he did not know. A tentative offer of $1,600 was made, and within a few days Taylor mailed to Sammis a check inclosed in a letter in which he stated that it was "for contract to purchase three and one-half acres of ground, the two-story house, barn, etc., located at Readington, New Jersey, for the sum of sixteen hundred dollars ($1,600)." Taylor had but $1,000 in cash, and Sammis agreed to obtain, or himself furnish, the difference. The owner of the place was one Van Dorn, who, living in Oregon, had by written power of attorney commissioned his brother-in-law, Van Fleet, to make sale "to such person or persons for such consideration and on such terms and conditions as he shall see fit," with power to execute a conveyance. The owner's instructions to Van Fleet were that he was to receive $1,000 net, and that sum he got. Van Fleet had apparently spoken to Sammis about selling the property, because it appears that in the event of a sale Van Fleet was to get $25 for his trouble. The price of $1,800, afterwards reduced to $1,600, offered by Sammis to Taylor, was arbitrarily fixed by Sammis, of which Van Fleet was not informed until the bargain was struck with Taylor. When Taylor's check and letter were received, Sammis promptly showed them to Van Fleet and received his approval. Van Fleet, as attorney in fact, executed a deed to Taylor, who then paid the balance of the consideration and gave the disputed mortgage of $600 to Sammis, in the belief that the owner's price was $1,600 and that Sammis was advancing the mortgage sum. The mortgage was later assigned to the complainant.
In negotiating the sale Sammis represented the owner. He was in no sense the agent of Taylor. With him he dealt at arm's length. There was not, as claimed, a fiduciary relation, which required of Sammis a full and truthful disclosure to Taylor of the transaction and of his participation in it; and consequently, in this aspect, there was no breach of duty, even though there was misrepresentation. Rogers v. Genung, 76 N. J. Eq. (6 Buch.) 306, 74 Atl. 473. The representation that the owner wanted $1,800 was untrue, but it was not material and did not influence the purchase. Cooper v. Lovering, 106 Mass. 77; Hauk v. Brownell, 120 Ill. 161, 11 N. E. 416; Uhler v. Semple, 20 N. J. Eq. (5 C. E. Gr.) 288.
Suppose that Sammis, in reply to Taylor's query as to the price, had said that it was $1,800. Would this not have conveyed the same meaning, viz., that the owner wanted that sum, and would such a statement be regarded as a material misrepresentation? Taylor saw the premises before fixing his figure of $1,600. It was his estimation of the value, and he does not now claim that the property was not worth the amount he paid. In fact, the complainant at the hearing offered to prove that it was worth what he gave for it. How then has Taylor been harmed? The representation that Sammis furnished the needed balance of the purchase price, if we should regard it as false, was merely incidental and stands on the same-footing. Candidly and frankly Sammis reported the bargain to the owner's representative Van Fleet. By its acceptance it became the contract of Van Dorn's and operated as an equitable conversion of the land into personalty—a chose in action—the belonging of Van Dorn, and subject to his disposal. $600 of it he passed to Sammis for his services and outlay. Taylor's mortgageto Sammis was given in acknowledgment of his debt to Van Dorn, and the fact that Sammis did not actually hand over, in cash, to Van Dorn the amount of the mortgage, is of no moment. He gave his services. That the compensation was disproportionate to these services is not of Taylor's concern. Wherein then was Taylor injured? A falsehood or fraud that does not result in legal injury can neither be made the foundation of an action nor the ground of a defense. Britton v. Royal Arcanum, 46 N. J. Eq. (1 Dick.) 102, 18 Atl. 675, 19 Am. St. Rep. 376. In Marsh v. Cook, 32 N. J. Eq. (5 Stew.) 262, Vice Chancellor Van Fleet said:
"I think it is safe to say that it is impossible to frame a definition of fraud which will accurately define it in all of its multitudinous forms, but I think it may be said, with equal safety, that no deception or artifice will be considered an actionable fraud, so as to be the proper subject of judicial redress, which has not been a cause of injury or prejudice to the party seeking redress. A misrepresentation or concealment, which has not been the means of producing damage or injury, is not within the cognizance of human tribunals, for they do not sit for the purpose of enforcing moral obligations or correcting unconscientious acts which are followed by no loss or damage."
I will advise a decree in favor of the complainant, with costs.