November 25, 1916





RECORD  AND  GUIDE





727





LEGAL    NOTES    AFFECTING    REALTY





Prepared by Committee on Real Estate Laws of
Real Estate Board, Samuel P. Goldman, Chairman





Opinion as to  Value.

THE Illinois Supreme Court holds,
Fisher v. Burke, 113 N. E. 711, that
expressions of opinion by the vendor of
land that he could turn it on a trade at
$100 per acre and that it would rent at
$4 or $S per acre were not such fraudu¬
lent misrepresentations as to avoid a
contract.

False  Representations as  to  Value.

In an action for damages for failure to
perform a written contract for the ex¬
change of properties situated in different
States, it appeared that the dc'fendant
had never seen the plaintiff's property,
and had no notice or knowledge what¬
ever of its character or value, except as
he was informed by the plaintiff, who
had visited and inspected it. Under
such circumstances, the Iowa Supreme
Court holds, Sutton v. Greener, 159 N.
W. 268, a false statement of market
value of property, upon which it is in¬
tended the purchaser shall rely and be
thereby induced to make the purchase,
becomes a material representation; and,
if believed and acted upon, it justifies the
party thus overreached in rescinding the
agreement. The doctrine that proof of
mere "trade talk" or "puffing," such as
is common to the trader or seller of
property, is not sufficient to sustain a
charge of fraud has no application to
false representations of material facts
•which are, in their nature, calculated to
deceive, and are made with intent to de¬
ceive. The rule which under ordinary
circumstances renders representations
or statements of value non-actionable,
applies only where the parties stood on
equal footing, and have equal means of
knowledge, and there is no relation of
trust or confidence between them.

Building Restrictions.

In an agreement between two owners
it was recited that: "Whereas, after land
upon a street is improved with fine
buildings for residence purposes with
the expectation that the neighboring
land will be put to the same uses, stores,
factories or nuisances are frequently
created and maintained to the detriment
and sudden depreciation of all neighbor¬
hood property." It was provided in the
agreement, which was made a part of
the deeds from the owners of the land,
that the property should be used for
residence purposes only; that it or any
part of it should not be used for fac¬
tories, manufacturing, store, mercantile
or business purposes; that no more than
one residence building should be located
upon a lot or tract of land of fifty feet
in frontage and the same depth; that
anv such residence should be built at
least forty feet from the line of the
street; and that no residence should be
built on the premises costing less than
$3,000. In an action for injunction the
Ohio Supreme Court held, Arnott v.
Williams, 113 N. E. 661, that these re¬
strictions did not prevent the erection of
a four-suite anartment house.

Delivery of Deeds.

It is a fundamental rule of conveyanc¬
ing that in order to pass a perfect title
to the grantee the delivery of the deed
to property must be voluntarily made
by the grantor, for by delivery the
grantor divests himself of his title and
invests the grantee. To constitute a
valid delivery of the deed the grantor
must relinquish or part with his right Oi
dominion over it, coupled with the in¬
tention of passing title. While posses¬
sion of the deed bv the grantee is prima
facie evidence of delivery, the intention
of the grantor is the controlling element,
as evidenced by the surrounding circum¬
stances. The mere transfer of a deed
frora the grantor's possession to that o.
the grantee without the former's con¬
sent conveys no title. Such a deed has
been said to be of no more effect than il
it   were   a   forgery.    Tiedeman,   in   his





work on Real Property,^ third edition, p.
827, says: "As long as ft remains in the
possession of the grantor, and even
where the deed has been stolen and the
property passes into the hands of an
innocent purchaser, or where the deed
falls into the possession of the grantee
in any other way than by the consent of
the grantor and with the intention to
pass title, the title is still in the grantor,"
Schulz V. Schulz, Illinois Supreme Court,
113 N. E. 638.

Assessment of Benefits.

In a condemnation proceeding by the
city of Chicago to open a street through
the defendant's lot, the defendant's wit¬
nesses testified that her property would
not be benefitted by the improvement.
The City's witnesses testified variously
that the benefit to the property wpuld
be $2,640, resulting in an assessment of
$528, that the property would be bene¬
fitted $5 per front foot, that the benefit
would be $1,800, and that all the other
property on the street would be bene¬
fitted $2,000. The Illinois Supreme
Court held, Chicago v. Matteson, 113 N.
E. 595, that a Verdict confirming a com¬
missioner's assessment of benefits at
$1,800 did not come within the range of
the testimony, and the defendant was
entitled to a new trial.

Notice from Monthly Tenant.

In an action for a month's rent 6f
premises, it is held, O'Brien y. Clement,
160 N. Y. Supp. 975, that, assuming that
a tenant, by notice to the landlord that
the lease was void, became a tenant
from month to month, he then was re¬
quired to g:ive a month's notice of inten¬
tion to quit. A tenant from month to
month could not, after giving notice of
intention to quit on one date, occupy
for several months thereafter and claim
the notice valid on his then quitting the
premises, nor by such notice escape lia¬
bility for rent. Although the landlord
was not disclosed in the lease, where the
tenant later wrote him, declaring the
lease void, and giving notice of inten¬
tion to quit, but then paid several
months' rent to him before quitting
without further notice, the tenant was
liable for a month's rent, on the ground
that he had attorned to the landlord.
Taxes on Rent.
A lease required the lessee to pay "all
taxes and assessments except better¬
ment taxes which' may be levied for or
in respect of the premises or upon or in
respect of the rent payable, however."
The Federal Income Tax Law of 1913 re¬
quires the lessee to deduct and withhold
from rent due such sum as will be suffi¬
cient to pay the normal income tax im¬
posed on the rent. The Massachusetts
Supreme Court holds, Suter y. Jordan
Marsh Co., 113 N. E, 589, that this tax
was a "tax upon or in respect of the rent
payable," and that the lessee was liable
therefor and could not deduct it from
the rent payable to the lessor.





COAL INQUIRY.

Federal Trade Commission Make Thor¬
ough Investigation of Conditions.

T^HE investigation into the anthracite
A coal situation now being made by
the Federal Trade Commission at the re¬
quest of the Coal Shortage Committee
(the Real Estate Board of New York
and the New York Building Managers'
Association) is to be a thorough one, ac¬
cording to tlie secretary of the Commis-.
sion.

Last spring, when it became evident
that conditions in the anthracite coal
market were pointing to higher prices,
the Real Estate Board decided to take
this matter up with the authorities at
Washington, A committee was appoint¬
ed and the Building Managers' Associa¬
tion was asked to form a similar com¬
mittee. These committees organized the
Coal    Shortage    Committee.      President





Wilson and the Federal Trade Commis¬
sion were communicated with and an in¬
vestigation was asked. The authorities
replied that they would make such an
investigation if it were shown that there
was sufficient demand for it. The Coal
Shortage Committee secured more than
a thousand petitions and forwarded them
to the Commission on June 30. The pe¬
titioners included consumers of coal in
the five boroughs of Greater New York
1" otlier parts of New York State, iii
New Jersey, in Minnesota and in Michi¬
gan.

In view of the recent sharp rise in the
price of coal, inquiry was made of the
l^ederal Trade Commission a few days
ago as to the progress being made on the
promised investigation. Under date of
November 15, the Board received, from
Secretary Bracken of the Commission,
the following answer:

Your letter of November 6th, ad¬
dressed to Commissioner Davies, has
been received. The Commission
wishes to advise you that it has un¬
dertaken an anthracite coal investi¬
gation and that the investigation is
proceeding as rapidly as possible.
You will understand that the Com¬
mission has no power in this mat¬
ter other than to ascertain facts and
to make recommendations thereon
to Congress. In order that the rec¬
ommendations it may make may have
permanent rather than merely tem¬
porary value, the Commission is go¬
ing thoroughly into the subject.
Wholesale prices are now being se¬
cured and tabulated, and prepara¬
tions are being made for ascertain¬
ing the cost of production of the dif¬
ferent companies on a comparative
basis.                                                       ;





Courthouse Site.

Reopening of the courthouse matter
with the development of the basic facts
of civic housing is urged by the Insti¬
tute for Public Service which warns
against the acquiescence of the public
in the layout as now adopted by the
Board of Estimate.

The public has been led to think that
the city is so far in the hole on this
proposal that the only way out is to
proceed with the present plan. "This
may only be 'pulling in the hole' after
them," says William H. Allen, director
of  the  Institute.

"An intelligent procedure for the de¬
velopment of a civic center would have
had as its basis all the facts concerning
the housing of public departments, and
not merely a certain amount of informa¬
tion about the courts.

"As a first step, and one which re¬
quires immediate and united organiza¬
tion on the part of New York City's in¬
terests, it is suggested that the proper
site for a State office buildin.g be deter¬
mined and that the State purchase from
the city this site. It is recalled that the
Court House Board was created by the
State as a mandatory board. It indi¬
cated in its project a State buildin.g. In
justice to the city and to develop a civic
center gathering the scattered State of¬
fices in a central location, and further to
stabilize and develop real estate condi¬
tions in the surrounding territory, New
York City should receive from the State
the purchase price of the most suitable
site around  the civic center.

"It was the intention also to have a
Federal court building around the civic
center and a site was proposed by the
Court House Board in Colnmbus Park
and adjacent areas. Study will show
that a much more suitable location is
immediately across Centre street from
the Tombs, which would make possible
not only a better developed civic center,
l)ut the layout of more valuable re¬
mainders on the south and east sides of
the courthouse site.

"Citizens and particularly real estate
men are ur.ged to study the prolilem witli
all the facts before them and not to
acquiesce in present inadequate and too
costly plans. A little study will con¬
vince them of the necessity first for or¬
ganizing and securing the State and Fed¬
eral appropriations to insure participa¬
tion of these bodies and to permit a
proper planning of the whole project."