Opinion
278 A.D. 74 103 N.Y.S.2d 437 TOWERS REALTY CORP., Appellant-Respondent, v. ABRAHAM FOX, Respondent-Appellant. Supreme Court of New York, First Department. March 27, 1951
CROSS APPEALS from those parts of an order of the Supreme Court at Special Term (DINEEN, J.), entered October 9, 1950, in New York County, which (1) granted a motion by defendant to dismiss the first cause of action set forth in the complaint, and (2) denied a motion by defendant to dismiss the second cause of action set forth in the complaint, under subdivision 5 of rule 106 of the Rules of Civil Practice. Plaintiff alleged for a first cause of action that on November 9, 1949, defendant entered into a contract with plaintiff's assignor for the sale of apartment buildings in Jackson Heights, Borough of Queens, plaintiff agreeing to pay $25,000 as a down payment upon the signing of the contract; that plaintiff took title to the premises on January 3, 1950; that on December 27, 1950, plaintiff's assignor discovered that a representation made by defendant, and upon which plaintiff's assignor had relied, that the total wages paid for operating the premises for the twelvemonth period prior to November, 1949, amounted to $13,980 was false, and that the amount paid was, in fact, $14,960. Plaintiff further alleged that the property was then worth $5,880 less than it would have been worth if the representation had been true, and that by reason thereof plaintiff had been damaged in the sum of $5,880. For a second cause of action plaintiff alleged that on January 3, 1950, defendant had agreed with plaintiff that title to the premises should be closed under the terms specified in the contract and defendant would reimburse plaintiff for its damage or otherwise adjust the matter to plaintiff's satisfaction but that defendant had refused to reimburse plaintiff for the damage sustained or discuss the amount of its damage. Plaintiff demanded judgment in the sum of $5,880.
COUNSEL
Irving Moldauer of counsel (Eli Fishbein with him on the brief; Irving Moldauer, attorney), for appellant-respondent.
Sylvan D. Freeman of counsel (Max Hauser with him on the brief; Dreyer and Traub, attorneys), for respondent-appellant.
Per Curiam.
The first cause of action contains all of the allegations essential to an action for misrepresentation and fraud in the inducement of the contract. While the measure of damages sought may have been improper, that does not invalidate the cause of action itself. (See Reno v. Bull, 226 N.Y. 546.) It is urged, however, that the misrepresentation, if any, was waived by the plaintiff when it closed title with full knowledge of the alleged fraud. This might be true if the contract were wholly executory. Where as here, however, there is partial performance under the contract, a continuance of performance thereunder may not as a matter of law be construed as a waiver of the fraud. This court, in 422 W. 15th St., Inc., v. Estate of Johnson (258 A.D. 227) held 'Where, as here, the executory contract is partly performed, we think the facts alleged sufficiently state a cause of action against defendant for fraud in the inducement of the contract * * * Affirmance of the contract is not necessarily affirmance and ratification of the fraud inducing it. Waiver of the cause of action for inducing the contract by fraud is a matter of intention, and an issue of fact to be established on trial.'
The order appealed from should be modified by reversing (on plaintiff's appeal) so much of said order as granted defendant's motion to dismiss the first cause of action for legal insufficiency, and denying said motion and, as so modified, the said order should be affirmed, with $20 costs and disbursements to the plaintiff.
GLENNON, J. P., COHN, VAN VOORHIS, SHIENTAG and HEFFERNAN, JJ., concur.
Order unanimously modified by reversing (on plaintiff's appeal) so much of said order as granted defendant's motion to dismiss the first cause of action for legal insufficiency, and denying said motion and, as so modified, said order is affirmed, with $20 costs and disbursements to the plaintiff. Settle order on notice.