Court Opinion

ID: 5345140
Source: CourtListenerOpinion
Date Created: 2022-01-08 06:14:39.963931+00
Date Added: 2024-06-11T08:29:38.604318
License: Public Domain

Crosby, J. (dissenting).
Plaintiffs have recovered a judgment against the defendant for the purchase price of a truck, the carrying capacity of which they claim was misrepresented to them by defendant’s agent. Although the plaintiffs discovered the lack of the truck’s capacity soon after they acquired it, they continued to use it for months before they rescinded the purchase and returned the truck to defendant’s agent. However, in view of the verdict, we must assume that the delay of plaintiffs in rescinding the sale was justified by the efforts of defendant’s agent to persuade plaintiffs that the truck could be made to do the work the agent said it would do.
In view of the verdict we must assume, too, that defendant’s agent falsely represented to plaintiffs that the truck was a ten- or twelve-ton truck. In its contract of employment of its agent the defendant expressly withheld from its agent any authority to make representations concerning the capacity of the truck. Even so, I concede that defendant cannot escape responsibility for its agent’s representations, made within the apparent scope of his authority. (Wen Kroy Realty Co. v. Public Nat. Bank & Trust Co., 260 N. Y. *43684, 91; Bickford v. Menier, 107 id. 490, 494; Walsh v. Hartford Fire Ins. Co., 73 id. 5, 10.)
And in an action for rescission, or in an action to recover the purchase price, based upon rescission, I concede that the purchaser may succeed by showing that he relied upon false representations made by the seller’s agent although such representations were made even beyond the apparent scope of the agent’s authority. (Bloomquist v. Farson, 222 N. Y. 375; Taylor v. Commercial Bank, 174 id. 181.)
This is on the theory that one who accepts the benefit of a contract must also accept responsibility for the means by which such contract was procured.
And it is doubtless true that the making of statements concerning the quality of an article of personal property is within the apparent scope of the authority of an agent intrusted with the duty of working up sales. (Mayer v. Dean, 115 N. Y. 556, 561.)
The reason I cannot agree with the majority of the court is that the record makes it perfectly plain that, as a matter of law, the plaintiffs cannot say that the false statements of the defendant’s agent were relied upon by plaintiffs in making the purchase of the truck. The contract of purchase took the form of an offer in writing by plaintiffs and an acceptance by defendant. The offer was one to purchase an eight-ton truck, and in it were these words: “It is further understood and agreed that this order is given subject to the conditions printed on the reverse side hereof; * * * that no promises or representations have been made to the undersigned by you or your agents in respect to said property and that there are no agreements, covenants or obligations between you or any agent of yours and the undersigned, nor any warranties or guaranties, express or implied,” etc.
True, this offer was made upon a form furnished to plaintiffs by defendant’s agent. But the words, above quoted, were not hidden away, as has sometimes been done, in an obscure corner of the paper, where they would be likely to escape attention, but were printed in conspicuous letters just above the signatures of plaintiffs. Furthermore, it did not happen here, as it sometimes does, that the agent procured the plaintiffs’ signatures without giving them an opportunity to read the offer which they signed. They were given a copy of it to keep, they took it away with them and at all times retained it. It is undisputed that they could read. It was their duty to read the offer which they signed. (Pimpinello v. Swift & Co., 253 N. Y. 159, 162, 163; Metzger v. Ætna Ins. Co., 227 id. 411, 415, 416.)
*437I do not place my dissent upon the ground that the plaintiffs were guilty of negligence in not being more vigilant to avoid the consequences of the agent’s fraud. Contributory negligence is not a defense in a fraud action, as it is in a personal injury action. (Albany City Savings Institution v. Burdick, 87 N. Y. 40.)
Rather I say that plaintiffs, if allowed to succeed, are committing a fraud upon defendant in saying to defendant that they do not rely on any representatations of its agent, and afterward saying they did so rely. The agent’s fraud induced negotiations but it did not induce a sale. Plaintiffs’ own misrepresentation induced the sale.
Look at the position in which defendant is placed. It must employ agents to work up sales. It limits their authority by express contract. But, mindful of the fact that agents may still involve them in the consequences of fraud, while acting beyond their actual authority and within the apparent scope of their authority, defendant puts out a form of offer for purchasers to sign. And that form says, as plainly as words can say: “At this point I want to know whether my agent has exceeded his express authority; you know, you tell me.” By telling defendant that they relied upon no statements of its agent, plaintiffs should be estopped from repudiating the solemn assurance so given to defendant. Otherwise a manufacturer doing a business widely scattered all over the world is helpless to protect itself from the frauds of its agents, or indeed the joint fraud of dishonest agents and dishonest purchasers conniving together, the one anxious to derive a sales commission, the other to acquire a season’s use of a truck for nothing.
There is not a particle of proof or a suggestion that defendant’s agent misrepresented to plaintiffs the contents of the order which they signed, or concealed or diverted their attention from the statement therein that no reliance was placed upon any representations of the agent. In making the offer directly to defendant, plaintiffs knew that the agent was not assuming to make the contract. Their dealings with him were over. They owed to defendant the duty to tell it the truth. Had defendant, upon receiving the order, written to plaintiffs to ask them if they were relying upon any statements of the agent, and had plaintiffs responded that they were not, and that the agent had, in fact, made no warranties, I doubt if any one would say that they could go back on their word. The situation here is not greatly different.
I think I shall have to concede that if this were an action against the agent himself (assuming he had been the seller of the truck) the plaintiffs could succeed against him, even though the contract *438of sale contained an admission by plaintiffs that no representations had been made to them, if in fact there had been. (Arnold v. National Aniline & Chemical Co., 20 F. [2d] 364; Bridger v. Goldsmith, 143 N. Y. 424.)
And why is this so? And why should it not be so in the instant case? The answer is obvious, as will appear from the opinion in the last-cited case. The court said (in speaking of the statement, in the contract, that the seller had made no representations or warranties): “ The question now is whether it can be given the effect claimed for it by the learned counsel for the defendant, to preclude the plaintiff from alleging fraud in the sale and pursuing in the courts the remedies which the law gives in such cases. It cannot operate by way of estoppel for the obvious reason that the statements were false to the defendant’s knowledge.” (Italics mine.)
It is unnecessary to quote further from that opinion, but the balance of it is enlightening. The point to the whole matter is that in the Goldsmith case the purchaser and seller were dealing with each other directly. Each knew what the other knew. Each knew that representations had been made by the seller to the purchaser. Each' knew they were stating an untruth when they said, in their contract, that no representations had been made. The seller knew that his representations were false, and the defendant was not injured or influenced, in the making of the contract, by the inclusion in it of the statement that no representations had been made.
But in our case, one in which plaintiffs seek equitable relief, defendant had no direct dealings with plaintiffs until it received from plaintiffs an offer which deliberately misled defendant in regard to a matter as to which it had no means of finding out except by relying on the solemn assurance of the-plaintiffs themselves. Defendant could not find out from its agent. He would not tell defendant the truth, if he had deceived plaintiffs. How is the defendant to learn the truth? What measures could it take to protect itself, if it is not permitted to rely on the word of plaintiffs? I am at a loss to know. I dissent and vote for a reversal of the judgment and a dismissal of the complaint.
Lewis, J., concurs.
Judgment and order affirmed, with costs.