Opinion
October 25, 1943.
Action by plaintiff to recover on a promissory note. Defendants Wittner and Rosen counterclaimed against the plaintiff and the impleaded defendant Jaymel Food Products Co., Inc., for breach of warranty and for fraud, and sought affirmative judgment against them in the sum of $10,000. Defendants Wittner and Rosen appeal from a judgment in favor of plaintiff and dismissing their counterclaim, and from an order amending said judgment. The plaintiff and defendant Jaymel Food Products Co., Inc., cross appeal from the order. Judgment and order reversed on the law and a new trial granted, with costs to appellants Wittner and Rosen to abide the event. The cross appeals by the plaintiff and defendant Jaymel Food Products Co., Inc., from the order are dismissed, without costs. Defendant Wittner entered into an agreement to purchase machinery, plant and fixtures from the impleaded defendant Jaymel Food Products Co., Inc. Payment therefor was by check and promissory notes. Installments of payments were to be held in escrow by plaintiff. This action is upon one of the notes. Concededly, the note is negotiable, payable "to the order of Charles E. Bernstein, as attorney," and plaintiff is the holder thereof. As such he may sue thereon in his own name. (Negotiable Instruments Law, § 90.) Gunby v. Hayden ( 181 Mo. App. 449) is inapplicable. There is nothing in the contract here involved restricting plaintiff's right to recover the proceeds of the note. On the contrary, the agreement is instinct with an obligation to recover the moneys. The court erroneously held that the resale by defendant Wittner of the property sold to him barred him from any recovery for the alleged fraud or breach of warranty. The consideration for such sale by Wittner does not appear in the record. Notwithstanding the transfer, the counterclaim for damages for fraud is maintainable, although an advantageous disposal of the property may be shown for the purpose of lessening the damages. If by such disposition a person defrauded has reduced his loss, the actual pecuniary loss is all that he can claim. ( Majestic Export Co. v. Katz Greenfield, Inc., 248 App. Div. 205; 37 C.J.S., Fraud, § 143, p. 485.) Likewise, recovery may be had on the theory of a breach of warranty, even though the goods have been sold. ( Muller v. Eno, 14 N.Y. 597.) Moreover, certain testimony as to alleged defects in the plant was improperly excluded. The witness was qualified, and the questions came within the scope of the original bill of particulars. Hagarty, Carswell, Johnston, Taylor and Lewis, JJ., concur.