The action is in fraud. The complaint alleges that the defendant, the president of Security Associates, Inc., a domestic, corporation, represented to the plaintiff that one Ephraim Samuels, then vice-president of a Mount Vernon bank, was endeavoring to acquire control of Security Associates, Inc., by the acquisition of its common stock; that the defendant did not wish Samuels to succeed in that endeavor, desiring the stock to be acquired by his friends, including the plaintiff, who would retain
The answer is a general denial. In assailing the legal sufficiency of the complaint the defendant urges, in substance, that there were no misrepresentations of a material fact and that no damage is alleged or shown. It may be that the plaintiff has no actionable grievance for having purchased the stock as a part of the defendant’s plan to prevent Samuels from gaining control, but the complaint also charges that plaintiff would not have made the purchase had the defendant not represented to her that Samuels so highly regarded the value of the stock that he sought to acquire control.
The complaint clearly charges that the plaintiff was induced to purchase the stock because the defendant falsely represented to her that one in whose business judgment she had confidence was attempting to acquire the stock for his own gain. The concern here is with allegation, not proof. Nothing is alleged or shown to lift this case from the general rule that materiality is ordinarily a question of fact. Whether or not the plaintiff was induced to purchase the stock by reason of the defendant’s representation that Samuels sought acquisition is not a question of law. (Hawley v. Wicker, 117 App. Div. 638.)
The defendant’s argument concerning the factor of damages seems to me to proceed upon the erroneous theory that the .measure of damages in cases of this character is the difference between what the plaintiff paid for the stock and its value had the inducing representation been true. Stated otherwise, the defendant maintains that even if Samuels had been seeking to acquire control of Security Associates, Inc., such fact would not, in the least, have appreciated
“ The purpose of an action for deceit is to indemnify the party injured * * *. The true measure of damage is indemnity for the actual pecuniary loss sustained as the direct result of the wrong. * * * The plaintiff paid $5,000 for the stock purchased by him. If he were entitled to recover at all, it was the difference between that amount and the value of the stock which he received with interest from that time.” (Reno v. Bull, 226 N. Y. 546, 553.) “ The damages awarded must represent the loss which the plaintiff sustained through the purchase and continued ownership of the bond. In return for the bond he gave up the sum of $980. He bought for investment, not speculation. * * * The seller’s fraud is ordinarily complete and its effect exhausted at the time of the sale and transfer of the chattel. * * * The rule is general that actual pecuniary loss sustained as a direct result of the wrong is the measure to be applied in fixing damages.” (Hotaling v. Leach & Co., 247 N. Y. 84, 87, 88.) The inquiry was tersely put in Urts v. N. Y. C. & H. R. R. R. Co. (202 N. Y. 170, 175) thus: “ The question is what was the value of that with which plaintiff parted and what was the value of that which she received? ”
Applying the settled rule to the present case, my conclusion is that the complaint sufficiently reveals actionable damages. Accordingly the motion is denied.