Akberg v. John Kress Brewing Co. — 47 N.Y. St. Rep. 373

Majority

p. 373

Charles W. N. Akberg, Resp’t, v. The John Kress Brewing Co., App’lt.

(Supreme Court, General Term, Second Department,

Filed July 22, 1892.)

Headnote

1. Principal and agent—Liability of principal for representations OF AGENT.

Where an agent, duly authorized, sells a chattel mortgage, and his principal receives the proceeds thereof, the latter is bound by the representation of the agent that the mortgage is good and his agreement to repay the money in case it was not.

3. Evidence—Assignment of chattel mortgage.

Evidence of such agreement is admissible, although the assignment of the mortgage is silent on that subject.

Appeal from, judgment in favor of plaintiff.

Action to recover money paid upon an assignment of a chattel mortgage.

Forster, Hotaling & Klamke, for app’lt; J. Edward Swanstrom, for resp’t.

—-The defendant made a loan of $600 to Carl JSTelsson and took from him a chattel mortgage as security. The mortgage conveyed the household interest of the Brooklyn House at Fort 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 Alex. Egar, who was an employee 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 Helsson, 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 defendants, 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 paper itself. That only pur-, ported 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

p. 374

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 id., 517; Routledge v. Worthington. 119 id., 592; 30 St. Rep., 195 .

The judgment should therefore be affirmed, with costs.

Dykman, J., concurs; Cullen, J., not sitting.