| N.Y. Sup. Ct. | May 18, 1888
This action was brought to rescind a contract made between the plaintiff and the defendant for the exchange of certain yachts, and for damages. The plaintiff was the owner of a schooner yacht called the
There seems to be no room for controversy in this case as to what the understanding was in this respect, because it appears from the defendant’s own evidence that he claims to have given Mr. Bliven, his agent, $100 for the purpose of supplying ballast to go with the boat; and although the referee finds that this money was accepted for that purpose, and the ballast was made and paid for, and ready for delivery to the boat, there is no evidence whatever to sustain such finding. It is true that Bliven swears that he gave the order for the ballast, and that it had been east at some foundry in Raymond street. He
There is another view of this ease, which seems to be established beyond all question; and that is that Bliven made false representations in regard to the value of the boat. The plaintiff swears that Bliven represented the boat to be worth from $2,000 to $2,500, and that the plaintiff would be able to sell her in a short period of time for more than the contract price, which was $2,000. Bliven’s only reply to this testimony was, “I will not swear that I did not tell him that he would be able to sell her for more than the price fixed in the contract,”—a denial which, of course, cannot overcome the positive testimony of the plaintiff, which is supported by all the circumstances attending the making of the contract. That this representation was false, is manifest from the fact that at this very time the defendant was offering the yacht for sale, with ballast, for $1,400. We find that on the 17th of May, 1886, the defendant wrote to Manning’s Yacht Agency, authorizing them to sell the yacht in question, delivered ready for cruising, with ballast and everything complete, for $1,400. Now, it is claimed that the defendant is not responsible for any of the representations which were untrue, made by Bliven in the course of the negotiations for this contract. And it seems to have been the theory of the referee that not only was the defendant not liable for such representations, but that no liability could arise, because there is no evidence to show that Bliven made these representations fraudulently. The rule has long been settled in this state that a vendor is responsible for material representations made by his agent without express authority, and in the absence of any actual knowledge by either the agent or principal whether the representations were true or false; and that one who, without knowledge of its truth or falsity, makes a material representation, is guilty of fraud, as much as if he knew it to be untrue. Bennett v. Judson, 21 N.Y. 238" court="NY" date_filed="1860-03-05" href="https://app.midpage.ai/document/bennett-v--judson-3612859?utm_source=webapp" opinion_id="3612859">21 N. Y. 238. And in the case of Elwell v. Chamberlin, 31 N. Y. 619, the principle is laid down that, if an agent defrauds a person with whom he is dealing, the principal, not having authorized or participated in the wrong, may, indeed, rescind when he discovers the fraud, on the terms of making complete restitution; but so long as he retains the benefit of the dealing he cannot claim immunity on the ground that the fraud was committed by his agent, and not by himself. Therefore, if the defendant desires to escape from responsibility because of the false representations of his agent, he must retire from the contract, and return all that he has received. He cannot claim that the agent was not authorized to make the representations, while he was still enjoying the fruits of the contract.
It is claimed that Bliven was the agent of both parties; but it appears from the evidence in this case that Bliven signed the contract for the defendant, that he evidently was working for him, and that he made the representations in question for the purpose of inducing the plaintiff to enter into this contract, and that he certainly misrepresented the condition of this boat and its value. It is true that the findings of fact by the court or referee will not be disturbed upon appeal, unless entirely unsupported by evidence, or very clearly against the weight of evidence, and that every presumption is in favor of the correctness of the judgment, and of the findings upon which it has been recovered. But in the case at bar the application of this rule does not relieve the conclusions of the referee from review. Some of the facts which have been found by him seem to be utterly unsupported by the evi
The referee seems to have proceeded upon the theory, to some extent, that the rule of caveat emptor applied. But it is apparent from the facts of this case that this rule has no application to the circumstances under which this contract was made. It appears to be the custom, in the buying and selling of yachts, that purchasers should rely upon the representations which are made as to their condition and completeness of equipment, and not to make a personal examination unless it is perfectly convenient. At the time of these negotiations this yacht was represented to be at some little distance from the city of Hew York, and the plaintiff never knew that she was in port and accessible until the very day that the- contract was signed. It was known that he relied upon the representations contained in the contract as to her condition, and that he did not intend to make ally personal examination; and where parties make representations in regard to the condition of merchandise, knowing that the purchaser relies upon those representations, and not upon his own judgment, they are responsible for the verity of those representations. Under all the circumstances of the case, it would appear that the learned referee disposed of the issues involved upon an erroneous theory, and that the judgment must be reversed, and a new trial ordered, with-costs to appellant, to abide the event.
Bartlett and Brady, JJ., concur.