
    William Dougherty, Respondent, v. Michael K. Neville, Appellant.
    
      Sale and exchange of boats — return of the boat by the vendee because of breach of warranty or fraud — effect of its acceptance by the vendor — effect of the contract of sale having been conditional — duty of the vendor where he takes back property. sold under a conditional contract — demand, when not necessary before suit.
    
    The vendor of an article of merchandise, which is returned to him by the vendee on account of a breach of warranty or because of. alleged fraud, by accepting such article rescinds the contract, and is liable to the vendee for the purchase price unless such vendor makes a specific objection to receiving the article back or qualifies the delivery to him by some proper restrictions.
    Whether or not the delivery to the vendor in such a case is an absolute one, which will operate as a legal rescission of the contract of sale, is a question for the jury.
    If the delivery be an absolute one, the fact that the article was sold under a contract of conditional sale, pursuant to which the vendor had a right to take possession of the article, will not prevent such delivery from operating as a rescission of the contract of sale.
    A vendor of personal property sold under a conditional contract of sale cannot hold both the property and the purchase price. If the vendee fails to pay the purchase price in full and the vendor for that reason takes possession of the property, it is his duty to foreclose his lien for the unpaid purchase price and sell the property, paying the surplus to the vendee.
    Where two persons who have agreed to trade'boats subsequently agree to retrade, ‘ and one of the parties, after accepting the return of the boat originally owned by him,' refuses to return the boat originally owned by the other party, the latter party is not obliged to make a demand for the return of his boat as a condition precedent to bringing an action, to recover the possession thereof or iis value.
    Smith, J., dissented.
    . Appeal by the defendant, Michael K. Neville, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Ulster on the 18th day of February, 1905, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 18th day of February, 1905, denying the defendant’s motion for a new trial made upon the minutes.
    
      La Roy S. Gove and James J. Macklin,, for the appellant.
    
      Walter N. Gill, for the respondent.
   Houghton, J.:

On the 6th of August, 1902, the plaintiff wa;s the owner of a canal boat named the Ellen M.' Rafferty, ¿nd the defendant'owned a boat called the Vulcan, and they entered into a contract whereby the plaintiff gave the defendant a bill of sale of the Rafferty in payment of $250 towards the purchase price of the Vulcan, and the defendant executed to the pdaintiff a contract agreeing to give.’ him a bill of sale of the latter boat when he had paid $350 (represented by notes), the balance of the purchase price, with interest. Payments were to be made $25 monthly, and the title of tlie boat to remain in the defendant until all payments had been made.

The plaintiff claimed that it was represented to him that the Vulcan had been recently calked and spiked and was in good condition. On the day of the contract she was at dock loaded, and her freight was not entirely removed until August ninth, at which time plaintiff discovered that she had not been recently spiked and calked and was leaking badly. In order to ascertain how. much out of repair the boat actually was, the plaintiff removed certain stanchions and took off certain straps which permitted him to discover the actual condition of her bottom, which he. claims was full of mud and ooze. Thereupon plaintiff had interviews with the defendant in which he told him that the boat was not as represented, and that he wished to rescind the sale and take back the boat Rafferty and deliver to the defendant the boat Vulcan, and that in pursuance of these negotiations the defendant agreed to retrade boats, and actually did accept delivery of the boat Vulcan, and after having obtained such possession refused to deliver to plaintiff the boat Rafferty. The plaintiff brings this action to recover possession of the boat, or its value, alleging fraud on the part of the defendant, and that the contract had been actually rescinded.

On the trial the court held that fraud had not been shown, but permitted the jury to pass upon the specific question as to whether an actual rescission and agreement to retrade boats had been made by the parties, and upon this issue the jury found in plaintiff’s favor.

The appellant urges that the complaint is too narrow to permit the trial of that issue, and that even if it be deemed sufficiently broad for that purpose there was not sufficient evidence tb-justify the verdict of the jury. :

After alleging the facts connected with the bargain and the alleged false representations, the complaint alleges tlút immediately after the plaintiff discovered the condition of the boat Vulcan he notified the defendant of the fact and returned her to him, and further notified him that he elected to rescind the agreement “ and thereupon said agreement was mutually rescinded by the parties.” We think this allegation is sufficient, especially in view of the fact that the defendant permitted the plaintiff to testify to all the facts connected with the alleged rescission of the contract and retrading of the boats, without objection that the proof was not within the issue or that the complaint did not properly allege the facts. We are of the opinion also that there was evidence from which the jury could find that the defendant actually agreed to retrade boats, and that in pursuance of such agreement he accepted delivery of the Vulcan.

The plaintiff testified that after calling upon the defendant repeatedly and making complaint about the condition of the boat, and being put off from day to day, he finally told the defendant to send a man to take charge of the Vulcan, and the defendant said that he would, and that' he thereupon did take it into his possession and said that he would give back the Rafferty to the plaintiff.

The defendant does not deny that he took possession of the boat, . but insists that he took it by virtue of his right to do so, because' the title remained in him and it. had been virtually abandoned by the plaintiff. There-had been no default in plaintiff’s payment at the time, for, as provided by the contract, the first payment was not due until the tenth of September following. „ There is claim on the part of the'defendant that he did not take possession of the boat until, the third of September, and that default had'been made in the first payment which was due on the first of September; but no explanation appears in the record, of an.y change in the provisions of the contract, that the-first payment was due September 10,1902. The plaintiff’s testimony is that the boat was taken possession of by the defendant before the twenty-sixth of August Notwithstanding the claim of defendant, the jury had k right to say that the plaintiff’s testimony both as to the time and manner of delivery of the 'boat was true. ' ,.

If the defendant did in fact agree to rescind the contract and ■ take back the boat which he had sold and accepted delivery in pur- • snance thereof, he is bound by 'his agreement and the plaintiff was entitled to possession.’of the boat which .he had given in part payment. The vendor of ah article of merchandise which is returned to him by the purchaser on account of a breach of warranty or because of alleged fraud,'’by acceptance rescinds the contract and is liable for the purchase price paid, unless lie makes a specific objection to receiving it back or qualifies the delivery to him by ■Some proper restrictions. (Collins v. Brooks, 20 How. Pr. 327.) Whether ór not the delivery, is an absolute one to thus operate as a ■ ,legal rescission is. a question for the jury. (Astoria Veneer Mills v. Looschen, 91 Hun, 545.)

It does not'help the defendant that' the title to the Vulcan was in him and that he had a right to take possession of it under Ids com tract of conditional sale with the plaintiff. According to the version of tlie transaction1- given by plaintiff the taking of the boat was in pursuance -of the agreement to retrade and not by virtue of the defendant’s right as owner. Besides, the defendant has taken no ■ steps to foreclose the lien, which he had by reason of the conditional sale of his boat to the plaintiff as provided by the Lien Law (Laws of 1897, chap. 418, § 116 et sey., as amd. by Laws of 1900, chap. 762).

The plaintiff had paid nearly half the purchase price of the Yuloan by the transfer of his own boat to the defendant. A vendor, under a conditional contract of sale, cannot have both the property and the purchase price. (White v. Gray’s Sons, 96 App. Div. 154.) If the deféndant desired to retake the boat which he had sold conditionally, pursuant to the strict terms of his original . contract, it became his duty to foreclose his lien and sell it, in which case the plaintiff would be entitled to such surplus as might remain after paying the defendant what was due him.

The appellant confuses the last conversation which the plaintiff had with the defendant on the twenty-sixth of August with his narration of what had transpired in the various conversations prior to that time. This last interview of the plaintiff with the defendant seems to have been an effort to amicably adjust the matters between them. The plaintiff offered to pay certain sums which the defendant refused, demanding a larger sum than plaintiff was willing to give. If this conversation stood alone and was the only proof upon which to justify a verdict, the appellant’s contention would be correct. According to the plaintiff’s version, however, everything had' been done prior to this time except delivering his boat to him.

The appellant further insists that ho proper demand of the boat in controversy was shown. If the plaintiff’s contention was true, no demand was necessary, for the agreement to retrade had become executed, and the defendant wrongfully held the boat which he was to return to plaintiff.

, Our conclusion is that the judgment should be affirmed, with costs.-

All concurred, except Smith, J., dissenting in opinion.

. Smith, J. .(dissenting) :

This judgment can only be sustained upon a finding that the defendant agreed to trade back the boats unconditionally. If such an agreement were in any way conditioned upon the payment of any sum by the plaintiff, not having tendered such sum the plaintiff would be in no position to demand possession of his boat. I am unable to find a particle of evidence that the minds of the parties ever met to make this retrade without condition. Such a claim is to my mind conclusively negatived by the evidence of the plaintiff himself wdren he saw the defendant after the claimed agreement to retrade and asked him on what conditions, the retrade would be made. There was no claim made at that time that a retrade was to be made without condition aiid there is no pretense that they at that time or thereafter ever settled upon any conditions for a retrade. This plaintiff cannot recover under the Conditional Sales statute (Lien Law [Laws of 1897, chap. 418]," § 116 et seq., as amd. by Laws of 1900, chap. 762), because the boat was taken back in August and his action was commenced upon the twenty-second of September in the same year before any right of action could accrue under that statute. The plaintiff has made a poor bargain from which the defendant was willing to release him upon conditions with which the plaintiff would not - comply. He has brought this action to rescind the contract because of the defendant’s fraud. This.he has not proven. He has been allowed to recover, however, because of a contract of rescission which to my mind is not only without proof but is clearly disproved by the evidence.

I, therefore, dissent.

Judgment and order affirmed, with costs.  