Akberg v. John Kress Brewing Co. — 19 N.Y.S. 956

Majority

p. 956

Akberg v. John Kress Brewing Co.

(Supreme Court. General Term, Second Department.

July 22, 1892.)

Headnote

1. Assignment of Mortgages—Warranty—Powers of Agent—Ratification.

An agent of a mortgagee negotiating a sale of the mortgage to plaintiff represented that the mortgage was good, and that if it was not plaintiff would get his money back. The mortgage was not good, and plaintiff brought an action to recover the money paid by him therefor. Held, that defendant, having received the proceeds of the sale, was bound by the representation of the agent that the mortgage was good.

2. Same—Parol " Evidence.

The paroi warranty of the mortgage by the agent was properly shown, though the written assignment was silent on that subject, the fact that the entire agreement was contained in the assignment not being apparent from the paper itself.

Appeal from circuit court, Kings county.

Action by Charles W. N. Akberg against the John Kress Brewing Company to recover the consideration paid for a worthless mortgage. From a judgment for plaintiff, defendant appeals.

Affirmed.

Argued before Barnard, P. J., and Dykman, J.

Forster, Hotaling & Klenke, (Geo. P. Hotaling, of counsel,) for appellant. J. Edward Swanstrom, for respondent.

The defendant made a loan of $600 to Carl Helsson, and took from him a chattel mortgage as security. The mortgage conveyed the leasehold interest of the Brooklyn House, at Ft. Hamilton, Kings county, and certain articles of personal property upon the premises. The mortgage was dated 28th of May, 1890, and was.due at once. On the 16th of July, 1890, the plaintiff bought the mortgage of the defendant, and paid $600 therefor. The purchase was made by plaintiff at the request of Alexander Egar, who was an employe of the defendant. Egar represented to plaintiff that the mortgage was perfectly good, and that, if it was not good, the plaintiff would get his money back. The mortgage was not good. The title to the chattels were in a person other than Nelsson, the mortgagor. The assignment of the mortgage was in writing, and did not contain this representation that the mortgage was good, and that the money would be paid back if it was not good. The proof of the authority of Egar to make the representation was sufficient. He negotiated the sale of the mortgage for the defendant, and the company received the proceeds of the sale. He had a written authorization to act for the defendant in the transaction. The proof sustains the finding of the jury that the representation as to the mortgage, and the repayment of the money in case it was not good, were made. The plaintiff so testifies, and he is thus supported by Yon Burlow.

The warranty of the mortgage to be good was properly received, although the assignment of the mortgage was silent on the subject. The fact that the entire agreement was contained in the assignment is not apparent from the

p. 957

paper itself. That only purported to transfer a title to a chattel mortgage. The agreement that the mortgage was upon goods which the mortgagor owned would be assumed. A paroi undertaking that it did so is not to be construed as a part of the contract of sale. If the sale implied title to the goods contained in the mortgage, no outside agreement was needed. If the sale did not have that effect, an agreement of warranty that the title was good was outside of the agreement of sale merely between the parties. Chapin v. Dobson, 78 N. Y. 83 ; Brigg v. Hilton, 99 N. Y. 517 , 3 N. E. Rep. 51 ; Routledge v. Worthington, 119 N. Y, 592 , 23 N. E. Rep. 1111 .

The judgment should therefore be affirmed, with costs.

Cases cited

Brigg v. Hilton 99 N. Y. 517 N.Y. 1885-10-06 p. 957