November 28, 1941.
Appeal from Supreme Court of New York County, WASSERVOGEL, J.
Spencer Pinkham of counsel [ Henry F. Holthusen and Charles E. Oberle with him on the brief; Holthusen Pinkham, attorneys], for the appellants.
William A. Marden, for the respondents John H. Teeter and Ralph J.M. Bullowa.
Louis Blau of counsel [ Edward H. Blau with him on the brief; Louis Blau, attorney], for the respondent Stephen J. Meade.
The judgment in favor of the defendants Teeter and Bullowa should be affirmed.
We think, however, the complaint as against the defendant Meade should not have been dismissed at the conclusion of the plaintiffs' case. The jury could have found that the second cause of action for fraud asserted by each of the plaintiffs was established by the evidence as against the defendant Meade.
It has been directly held that, in an action for rescission in equity, an agent who has made fraudulent representations is liable to restore the consideration even though the principal, and not the agent, has received the benefit of the sale. ( Mack v. Latta, 178 N.Y. 525; Keskal v. Modrakowski, 249 id. 406; Loud v. Clifford, 254 id. 216; Lehman-Charley v. Bartlett, 135 App. Div. 674; affd., 202 N.Y. 524.) There is no reason to hold that the same rule does not apply where the action is at law to recover the consideration. In most particulars actions at law based on a rescission have been assimilated with actions in equity seeking analogous relief. (Compare Seneca Wire Mfg. Co. v. Leach Co., 247 N.Y. 1.)
The judgment in favor of the defendants Teeter and Bullowa should be affirmed, with costs. The judgment in favor of the defendant Meade should be reversed, the action severed, and a new trial ordered, with costs to the appellants to abide the event.
GLENNON, UNTERMYER and CALLAHAN, JJ., concur; MARTIN, P.J., and DORE, J., dissent as to the defendant Bullowa and vote to reverse and order a new trial as to said defendant.
For the reasons stated in the Per Curiam opinion herein I agree that the complaint against defendant Meade should not have been dismissed, but I am also of the view that sufficient evidence was adduced in plaintiffs' prima facie case to require defendant Bullowa to come forward with proof. To that extent I dissent and vote to affirm the judgment in favor of defendant Teeter, to reverse the judgment in favor of defendants Meade and Bullowa, and to order a new trial as to said defendants.
MARTIN, P.J., concurs.
Judgment, so far as it dismissed the complaint against the defendants John H. Teeter and Ralph J.M. Bullowa, affirmed, with costs to said respondents. Judgment, so far as it dismissed the complaint as against the defendant Stephen J. Meade, unanimously reversed, the action severed and a new trial ordered of the issues as to said defendant, with costs to the appellants to abide the event.