
    Edmund W. Converse et al., Plaintiffs, v. Daniel E. Sickles, as Sheriff, Defendant.
    (Supreme Court, New York Special Term,
    May, 1896.)
    1. False representations — Statements to mercantile agency.
    A merchant who gives to a mercantile agency a statement of the financial condition of his business thereby makes' the agency a permissive agent for the imparting of the facts to whomsoever may rightfully be entitled to the information, and is liable for the falsity thereof to one to whom the same is communicated, although the communication is not made directly from the agency.
    2. Evidence — Admissions of counsel on former trial.
    On a question as to the identity of goods sold and replevifed, admissions of counsel on a former trial of the action in relation thereto are admissible and controlling.
    Action to charge the defendant, as trustee for the benefit of the plaintiffs, with the proceeds of certain merchandise alleged to have belonged to the plaintiffs, hut wrongfully detained by the defendant.
    
      Carter, Hughes & Kellogg, for plaintiffs.
    Hays & Greenbaum, for defendant.
   Beach, J.

This case has been once considered by the Court of Appeals, and plaintiffs’ right to maintain the action was firmly established. Converse v. Sickles, 146 N. Y. 200. The opinion of the learned court leaves for disposition on the new trial ordered the question whether or not the sale and delivery of the merchandise by plaintiffs to Fecheimer, Rau. & Co. between January 29 and May 1, 1890, was induced by fraudulent representations made by the purchasers to and relied upon by plaintiffs. The moneys now in the hands of defendant were paid in by plaintiffs as representing the merchandise taken by them in replevin, which suits failed, from lack of demand for return before action brought. A second question was raised on the trial relating to the identity of the., goods replevied with those sold and delivered.

It appears that one Moore, a reporter connected with the mercantile agency of R. G. Dun & Co., in May, 1889, called at the factory of Fecheimer, Rau & Co. and inquired about their financial ■ condition from a member of the firm. As a result of the interview a statement, in writing, was received at the agency, purporting to show from their books an excess of assets over liabilities of $193,-.000, as of December, 1888. In August, 1889, the witness again called upon the firm for a similar purpose, and, on exhibition, of the statement, was informed by a member thereof that since December, 1888, there had been no change in financial condition except by way of improvement. This information was undoubtedly circulated among the subscribers to the. agency.

.' The falsity of these statements appears from the testimony of witness Spencer, showing the firm to have been insolvent according to their books on November 30, 1888 and 1889.

The plaintiffs were subscribers to the mercantile agency, entitled to information therefrom. It does not appear that they ever applied to or received from the agency direct any statement made by Fecheimer, Rau & Co. Stanton, a member of .plaintiff firm, who passed upon the credit given on this sale, testifies that before doing so .he made inquiry among fellow merchants and wa,s told that from the statement made to the mercantile agency the firm of Fecheimer, Rau & Co. had a net capital of about $200,000, which accords with the fact. • The witness also states his reliance upon this information inducing, him to accept the credit and his firm to sell and deliver the merchandise.

The merchant who gives to a mercantile agency a statement of the financial condition of his business, does so with knowledge that it may be communicated to subscribers, and that it is obtained for such purpose. He thereby makes the" agency what may be called a permissive agent for the imparting of the facts to whomsoever may be rightfully entitled to the information. ■ It makes no difference, in principle, if the information be given a subscriber, who shall rely' thereon, by communication other than from the agency direct. The liability for false statement is not thereby restricted. The plaintiff firm was a subscriber to the agency, entitled to knowledge of the facts' contained in the statement, and they having been given them correctly, through sources other than the agency itself, .as furnished to the agency, their legal-rights arising from falsity and fraud are in- no wise changed or impaired. Commonwealth v. Call, 21 Pick. 523; Rice v. Manley, 66 N. Y. 82-87 ; Brackett v. Griswold, impleaded, etc., 112 id. 454, 467, 471.

With regard to the identity of the merchandise sold and replevied, I still think the admissions of counsel made during the first trial are admissible and. controlling, and if so, the question is at rest. In 1st Greenleaf on Evidence, at section 186, it is said: .“The admissions of attorneys.of record bind their clients in all matters relating to the progress and trial of the cause. But to this end they must be distinct and formal or such as are termed solemn admissions, made for the express purpose of alleviating the stringency of some rule of practice, or of dispensing with the formal proof of some fact at the trial. In such cases they are in general conclusive and may be given in evidence, even upon a new trial.” Owen v. Cawley, 36 N. Y. 600.

If this conclusion be erroneous, there still remains the testimony of the witness Cook, which-is ample for the purpose.

Decree for plaintiffs, with costs.  