Zeiley v. Palisser , 87 N.Y. Sup. Ct. 603 ( 1894 )

Order affirmed, with costs, unless appellant stipulates within twenty days to reduce the damages to 81,500, and for judgment against him for 8500, in which case the order will be reversed, without costs and judgment directed in favor of plaintiff for 8500.—

Brown, P. J.:

This action was to recover upon a promissory note of 82,000 given in payment of the purchase price of stock in the Gilbert Hardware Company. The answer was a counterclaim for damages arising from misrepresentation concerning the property owned by the company. The jury having rendered a verdict for defendant and thus assessed the damages at a sum equal to the amount of the note, the court set the verdict aside on the ground “ that the evidence affords no basis for ascertaining the damages sustained by reason that the goods manufactured by the company were not covered by any patents.” The representation which induced the purchase of the stock by the defendant and which the jury found was false was that the corporation owned and controlled patents under which it manufactured its goods. Two thousand dollars had been expended on machinery by the company and this constituted substantially all the property it had. After defendant ascertained that the corporation had no patents upon the goods it manufactured, he loaned it 81,100, and took a mortgage upon its machinery, and when the business failed the mortgage was foreclosed and defendant purchased, the property. He testified that he still owned it and that it was not worth to exceed 8500. This sum fairly represented the value of his stock, and the jury would have been warranted in assessing the damages at the difference between that sum and the amount of the note, but not at any greater sum. If the appellant stipulates within twenty days to reduce the damages to the sum of 81,500, and for judgment against him for 8500, the order will be reversed, without costs, but upon failure to file such stipulation it must be affirmed, with costs to-abide the event

Dykman and Cullen, JJ., concurred.