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

*925We 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 After the money was paid P & F rescinded the agreement because of material misrepresentations.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.