WEAVER ORGANIZATION v. MANETTE, 34 N.Y.2d 923 (1974)

359 N.Y.S.2d 552, 316 N.E.2d 869

WEAVER ORGANIZATION, INC. et al., Plaintiffs, v. ALFRED A. MANETTE et al., Appellants-Respondents; P F INDUSTRIES, INC., Respondent-Appellant, et al., Defendants.

Court of Appeals of the State of New York.Argued June 6, 1974
Decided July 10, 1974

Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, VINCENT A. MASSI, J.

Page 924

William G. O’Donnell and Stuart F. Gartner for appellants-respondents.

Earle K. Moore, Harold L. Fisher and William M. Guttman for respondent-appellant.

MEMORANDUM. The order of the Appellate Division, First Department, should be modified in accordance with the following memorandum and, as so modified, affirmed.

Page 925

We agree with the Appellate Division that on this record P F Industries, Inc. was entitled to rescission and complete restitution. On the cross appeal P F seeks restitution from the appellants (Alfred Manette, Sidney Manette, and Irving Levinson) of the money advanced to Stuyvesant. The Appellate Division held that P F should recover from Stuyvesant alone. On this point we disagree. The contract between P F and the appellants obligated P F to advance $150,000 to Stuyvesant as third-party beneficiary. After the money was paid P F rescinded the agreement because of material misrepresentations. Under these circumstances P F was also entitled to recover from the appellants the money paid to Stuyvesant on their behalf. (See Restatement, Restitution, § 17, Comment E.)

Accordingly the order of the Appellate Division, First Department, is modified to the extent of directing the appellants, Alfred Manette, Sidney Manette and Irving Levinson, to restore to P F the amount advanced to Stuyvesant and in all other respects the order is affirmed.

Chief Judge BREITEL and Judges JASEN, GABRIELLI, JONES, WACHTLER and RABIN concur; Judge STEVENS taking no part.

Order modified, without costs, in accordance with the memorandum herein and, as so modified, affirmed.