Sec. 256. Acceptance Of Proceeds Test Of Liability

In Krumm v. Beach, 96 N. Y. 398 (1884), the contract of sale was made by the agent in his own name, without the knowledge of the principal, and all the fraudulent representations came from the agent and were unknown to the principal until after the conveyance. Held, the receipt and retention by the principal of the fruits and product of a fraud involves a liability on account of it, although the principal is innocent of personal participation in the wrong. The defrauded vendee may rescind the contract and recover back his consideration after an offer to reconvey and a tender of what had been received, or he may stand upon the contract and require of the vendor its complete performance or such damages as would be the equivalent of that complete performance.13 In another case where fraudulent representations by agents as to rents were relied upon as giving the vendee the right to rescind the contract, it was held that the vendor must in some way be connected with the fraud before such relief would be given.14 In this case the agents were not employed by the vendor and their statements as to rentals were not authorized by him nor known to him.

11Citing Bennett v. Judson, 21 N. Y. 238 (1860).

12 Citing Sandford v. Handy, 23 Wend. 260; Griswold v. Haven, 25 N. Y. 595; Indianapolis, etc.. B. B. Co. v. Tyne, 63 N. Y. 653.

Sec. 257. Fraud Of Agent. Pleading

Where the false representations are made through an agent and the principal is sued, it is unnecessary to allege any agency in the making of the representations. A simple allegation that they were made by the defendant is appropriate.15 Although an act is done through an agent, it should be alleged as done by the principal, leaving the method of doing it to the proof.16

13 Krnmm v. Beach, 96 N. Y. 398 (1884). 14 Rothsteln v. Isaac, 124 App. Div. 133 (N. Y. 1908).

15 Harlow v. Haines, 63 Misc. 98 (N. Y. 1909). And see 16 Ency. of Pl. & Pr., 901-904.

16 Moffett v. Jaffe, 132 App. Div. 7 (N. Y. 1909).