Court Opinion

ID: 5184841
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:46:59.774481+00
Date Added: 2024-06-11T08:26:42.318781
License: Public Domain

O’Brien, J. (dissenting):
The action was brought to recover - for goods sold and delivered.. The answer is that the goods, consisting of diamonds, were sold on ■credit, and that'the credit had not expired. The plaintiffs sought to justify the anticipation of the credit by proof that the. defendant had made false and fraudulent representations as to the value of his ■assets. There is no. dispute as to the sale, delivery or price of the goods. It appears that a statement had been furnished by the ' ■defendant to a commercial agency, which statement was signed by the defendant, representing that lie was the owner of real estate oí the value of $28,000, incumbered by -a mortgage of $16,000, which left him an equity; therefore, of $12,000. That this statement was false is not: denied. The defendant, however, ■claimed that it was inadvertently signed by him ; that it was made by his son, and that when his attention was called to it by a reporter ■of Bradstreet’s, the' defendant admitted that he did not own the property. . This was coiilmunicated ■ to the plaintiffs, and one of them, Mr. Heilbronn, went to, the defendant and reproached him with having made a false statement of his assets, and the defendant admitted that the statement was not true, and made- the same explanation that the mistake was inadvertent and unintentional. Thereupon, he says, he.went to the safe, took out the diamonds and offered to give them back to the plaintiffs.- This latter statement is disputed by Heilbronn, who says that no such conversation occurred.
At the close of the testimony, tire court left to the jury practically two questions: (1) Whether the plaintiffs had made the sale in . reliance upon, representations which were false and known to be, false, and (2) whether the defendant had offered to return the dia. monds and the plaintiffs had refused to accept them. We think these *317questions were properly in the case; and were it not for the error into which the trial judge fell in charging the jury upon the law,, the verdict, upon the disputed facts, should not be disturbed.
The trial judge held, however, and so charged the jury in effect,' that if the defendant, after the discovery of the falsity of the statement, offered to return the diamonds, and the plaintiffs refused to accept them, this, as 'a matter of law, was a waiver of the fraud ■which barred the plaintiffs thereafter from rescinding the agreement-for credit and bringing an action for the recovery of the purchase-price. In this we, think the court failed to note the distinction between the right which the plaintiffs had to rescind the sale and. their right to rescind the credit. The latter is what the plaintiffs, did, and they thereupon had a right to bring an action for the purchase price; and, upon proof that the goods were sold upon a credit, by false representations, they were entitled, without accepting back, the property, to recover the purchase price. In Wigand v. Sichel (3 Keyes, 122) it is said: “ It is not accurate to say that the plañir tiffs sought to avoid the contract of sale. It is the credit only that, is sought to be avoided. It was a sale of goods which the plaintiffs by their action affirmed. It ivas, however, a sale where the credit, was obtained by fraud, and, in law, amounted to a sale for cash. In stating it in their complaint, therefore, to be a sale, and for cash, the plaintiffs but stated the contract according to its legal effect.. They did not seek to avoid the contract of sale. They endeavored merely by proof of the act of fraud to reduce the transaction to a. cash sale.” (See, also, McGoldrick v. Willits, 52 N. Y. 620; Crossman v. Universal Rubber Co., 127 id. 38.)
It will thus be seen that, upon the authorities, the right which the.. plaintiffs had on discovering the falsity of the statement was to dis-affirm the sale and take back' the goods; or they could affirm the sale and cancel the credit. When, therefore, the defendant offered, to return the diamonds and the plaintiffs refused to receive them, this was undoubtedly an .affirmance of the sale ; but there was nothing in the case which, as matter of law, showed that they had waived their right to allow the sale to stand and to sue for the purchase price. If, instead of offering to return the diamonds, the defendant had tendered the purchase price, and this had been refused, it could have been construed into an affirmation of the-*318credit; The offer made, however, was not of cash, but of the goods ; and the unwillingness to accept them cannot be taken, as a. matter' of law, as an election, on the part of the plaintiffs to waive the right to recover the money. Undoubtedly the plaintiffs could have affirmed both the sale and the credit, hut the case was not presented to the jury upon any such theory, the position taken by the court in its charge being that if the defendant explained that there was a mistake and offered to return the diamonds upon the receipt of his notes, and the plaintiffs refused to receive them, “ it was a waiver of the fraud and the .plaintiffs cannot recover. The plaintiffs were required to rely upon the promissory ..notes' which .they had taken when this sale was. made, if at that time the fraud was waived.” '
Without discussing the other questions presented,, we think that, for the error into which the court thus inadvertently fell, the judgment should be reversed and a- new trial ordered, with costs to the appellants to abide the event.
Judgment and order affirmed, with costs.