Brief Fact Summary.
Catherine Adams owned several lots of land in Buffalo near a residential neighborhood. She sold part of one of the lots to Alexander Gillig because she believed him when he stated his intentions were to purchase and use the land for residential purposes. If not used for residential purposes she was concerned the value of her remaining land would be harmed. Gillig’s statements were fraudulent and he intended to deceive Adams so that she would sell him the land so that he could build a public garage on it instead of residential homes.
Synopsis of Rule of Law.
An individual who knowingly makes a false statement as to an existing material fact with the intention of and success in inducing the other individual to enter into a contract constitutes fraud. Contracts induced by fraud as to material facts, which are not promissory in nature, are voidable. Contracts must be in writing to be binding and enforceable. Promises that are part of the terms of a contract to do/not to do something in the future must also be in writing in the contract to be enforceable.
Any contract induced by fraud as to a matter material to the party defrauded is voidable.View Full Point of Law
Catherine Adams (Plaintiff) owned several lots of land in Buffalo. The neighborhood near her lots are exclusively residential. Alexander L. Gillig (Defendant) wanted to purchase part of the vacant lot on Elmwood Avenue. Defendant stated to Plaintiff his intention was to purchase the land for residential purposes. Defendant re-stated this same intention of building dwellings (single or double homes) on the land to Plaintiff’s agents and agent representatives. Plaintiff believed Defendant’s statements were true and relied upon them. Plaintiff executed and delivered the deed to Defendant in exchange for $5,525 in consideration. Defendant’s representations were made falsely and fraudulently and he intended to deceive Plaintiff. His true intentions were to build a public auto garage on the land. Just one day after receiving the deed, Defendant asked his architect to begin the plans for the garage and less than two weeks after that Defendant entered into a contract with defendant contractors Frank C. Kempf and Nicolas Kempf (George Kempf Sons). Plaintiff tried to get her property back from Defendant. He refused. Plaintiff’s additional lots of land would decrease in value if the garage was built. Plaintiff sued Defendant(s). Referee ordered the land be re-conveyed to Plaintiff and the Appellate Division affirmed. Defendants appealed.
Whether Defendant’s alleged intention of using the lot purchased from Plaintiff for residential purposes constitutes a material fact that upon finding fraud would permit the court to void the deed.
Defendant’s false statements of intent to use the land for residential purposes were held to be statements of existing material fact and the court could therefore void the deed to â€œprevent the consummation of a fraud.â€ Judgement affirmed, with costs.
Cullen, C. J., and Gray, Vann, Werner, Willard Bartlett, and Hiscock, JJ., concur.
The enforceability of promises is governed by the rules of contract law. Restrictive covenants are sometimes included in writing in a deed for the sale of land and sometimes are not, but rather the seller is relying on â€œthe good faith of express, unqualified assurances of the present intentionâ€ of the buyer. The element of intent functions here as an existing material fact because had Plaintiff not believed and relied upon the fact (Defendant’s stated intentions), she would not have sold him the land, and it seemed as though Defendant stated his intentions falsely and fraudulently and specifically to induce this sale of land.