I agree with the result reached in the prevailing opinion for reversal. It was clearly error for the trial judge to nonsuit the plaintiffs, and the affirmance of the judgment entered thereon by the Appellate Division cannot be sustained.
I am of the opinion, however, that we should deal with the question that induced the Appellate Division to sustain the the nonsuit. In the opinion of that learned court it is said: "Mercantile agencies do not always base their rating of a person's responsibility solely upon information obtained from the individual himself. Upon the contrary, it is well understood *Page 526 that they obtain such information from various sources, and this is especially true in cases where, as it often happens, a business man, for various reasons best known to himself, declines to furnish the public with any statement of his financial condition."
It seems to be conceded that the defendant made representations to the mercantile agency of R.G. Dun Company that were grossly false and calculated to mislead the plaintiffs, who consulted the ratings given to defendant by that agency.
The Appellate Division seems to have held that the plaintiffs were not authorized to rely upon these ratings for the reason that they were based upon the representations of the defendant and also upon information received as to defendant's commercial standing from outside sources.
The opinion of the court below further states: "It follows, therefore, that, if the rule contended for by the plaintiffs were to obtain, a trader who has made a report to a mercantile agency as to his pecuniary standing might be held liable to arrest and imprisonment for the rating, which, although based in part thereon, was nevertheless due in a much larger measure to information obtained from a business rival, a personal enemy or some other equally unreliable source."
If the fact that the commercial agencies of the country base their ratings of merchants not only upon the representations of the latter, but upon information obtained from other sources, renders such ratings unavailable to persons contemplating the giving of credit, the information obtained by these agencies would be of little value.
I am of opinion that the plaintiffs were entitled to submit to the jury the question whether the grossly false representations made by the defendant to the mercantile agency were one of the causes, if not the sole inducing cause, which led to the sale of the goods in question. (Morgan v. Skiddy, 62 N.Y. 319.)
In the case of Hubbard v. Briggs (31 N.Y. 518), which was an action to recover damages for an alleged fraud, which *Page 527 consisted in making false representations concerning the soundness and solvency of the Miller's Bank of Clyde, whereby the plaintiff was induced to subscribe fifty-three hundred dollars to the stock of that corporation and to give his bond and mortgage for the amount of his subscription, this court said (p. 532): "It was enough to have sustained the action against the defendant for the jury to have found that the plaintiff was moved by his representations so that without them he would not have subscribed for the stock, although representations made by others had also influence upon his mind. It could not be affirmed, as matter of law, upon the proof in the case that the defendant's affirmations were not the inducing cause of the plaintiff's subscription, and, if not, the question properly belonged to the jury to determine."
It is competent for a plaintiff, who has been induced to sell goods in reliance upon the ratings of a mercantile agency, to show if he can by its officer the precise character of the representations made to it by the debtor, and such information as it may have obtained from other sources; also, to follow this up by proof that these representations were one of the inducing causes that led to the sale. If this question of fact is properly submitted to the jury upon competent evidence, there will be no danger that a trader will be subjected to arrest and imprisonment for a rating resting upon the representations of a business rival, a personal enemy, or a third party, having no interest in the transaction.