Opinion
March 17, 1916.
Sumner B. Stiles, appellant.
Hugo Wintner, for the respondent.
This action was brought to recover the balance of the purchase price of a massage business, including lease, furniture, fixtures and good will, which plaintiff was conducting at No. 48 West Forty-ninth street, borough of Manhattan, New York, under the name Anglo-Danish Institute, and which she sold to the defendants on the 2d day of September, 1912. The agreed purchase price was $4,533, of which $1,000 was paid at the time of the sale and $900 subsequently. The answer contained denials with respect to the amounts paid; but after plaintiff testified it was conceded that the balance unpaid was, as claimed, $2,633, and the interest was stipulated. The defendant Poole subsequently purchased the interest of her partner, the defendant Quigg, and the latter was not served and did not appear.
The respondent Poole pleaded as a defense and counterclaim for $800 damages that the purchase was induced by false and fraudulent representations made by plaintiff to the effect that the business was, and had been for many years, a paying and profitable one, with a large number of steady customers who constantly patronized it and paid in cash, "so that the good will of said business was very valuable and so that the said business ran uninterruptedly and profitably, without any special effort or participation on plaintiff's part;" that she had paid at least $4,000 for the furniture, fixtures, tools and appliances connected with the business; that she had derived and drawn from the business over $5,000 in net profits during the last twelve months, and that for a long time prior thereto her net profits had been from that amount to $7,000. She also pleaded as a further defense that it was mutually agreed as part of the contract of sale that if plaintiff within two years thereafter engaged in the massage business in the city of New York she would thereby forfeit any amount then unpaid on the purchase price, and that plaintiff did so engage in business in January, 1913.
When the respondent rested the court dismissed her counterclaim on motion of counsel for plaintiff, to which no objection was interposed. There was no evidence that the furnishings and other personal property did not cost the amount represented by plaintiff; that there was some evidence that other representations claimed to have been made by the plaintiff were made, and that plaintiff exaggerated the extent and stability of her business, all of which, however, was controverted. There was also a question for the jury on the evidence with respect to whether it was agreed that plaintiff by engaging in business would forfeit her right to further payments. After both plaintiff and respondent had given their versions of the contract of sale, it developed that it was in writing and executed in duplicate. Neither duplicate was produced, nor was proper foundation laid for parol evidence. With respect to false representations the respondent presented a weak case, and by submitting to the dismissal of her counterclaim abandoned any claim for damages therefor. On the issue with respect to whether it was agreed that plaintiff by engaging in business again would forfeit the unpaid purchase price, the respondent testified in the affirmative, and the appellant in the negative. That issue, at least, would have been resolved by the production of the written contract, or proof of its terms. Instead of taking that course the parties merely proved the parol negotiations; and their testimony is diametrically opposed with respect to some part of the negotiations. The respondent testified to an agreement with respect to the effect of plaintiff's engaging in business substantially as alleged by her, but plaintiff denied that there was any agreement on that subject. It is undisputed that plaintiff did engage in the business in contravention of the agreement if there was an agreement relating thereto. The respondent has retained the property and business, and has only paid $1,900 of the purchase price, and has, according to her own testimony, received the benefit of $533 which plaintiff deposited with her landlady as security for the payment of rent. There is much force in the contention that the verdict is against the weight of evidence. The verdict may be accounted for by an error in the charge to which, however, no exception was taken. The court left it to the jury to determine whether any of the representations were false, and whether the parties agreed that the effect of plaintiff's engaging in the same business in the same city within two years would be as claimed. Although the only issues of fact were those relating to the defenses, the learned court — doubtless inadvertently — instructed the jury that the burden of proof to establish the truth with respect to the controverted facts was on the plaintiff. This was error ( Sperling v. Boll, 10 App. Div. 290; Spencer v. Citizens' Mut. Life Ins. Assn., 142 N.Y. 505), and manifestly it was prejudicial. Counsel for plaintiff failed to draw the attention of the court pointedly to the fact that the issues which were being submitted to the jury arose on the defenses, and to ask that the charge be corrected, or to take an exception. Where, however, a case has been submitted to a jury on an erroneous theory, and the ends of justice seem to require a new trial, this court may, even though no error is presented by exception, award a new trial. ( Gillett v. Trustees of Kinderhook, 77 Hun, 604; Gowdey v. Robbins, 3 App. Div. 353; Leach v. Williams, 12 id. 173; Goldman v. Swartwout, 117 id. 185; Spencer v. Hardin, 149 id. 667.) In view of all the circumstances to which reference has been made, we are of opinion that this is a proper case for the exercise of that discretionary power.
It follows that the judgment and order should be reversed, and a new trial granted, but without costs.
CLARKE, P.J., SCOTT, SMITH and PAGE, JJ., concurred.
Judgment and order reversed, and new trial ordered, without costs.