Case Name: ALLEN v. THE BANK OF THE UNITED STATES
Court: New Jersey Supreme Court
Jurisdiction: New Jersey
Decision Date: 1846-04
Citations: 20 N.J.L. 620
Docket Number: 
Parties: ALLEN v. THE BANK OF THE UNITED STATES.
Judges: 
Reporter: New Jersey Law Reports
Volume: 20
Pages: 620–625

Head Matter:
ALLEN v. THE BANK OF THE UNITED STATES.
1. A purchaser of premises, sold by a master by virtue of an execution issued out of the Court of Chancery, who has signed the conditions of sale, is bound to pay a cheek given by him to the master on the day of sale in part payment of the purchase money, notwithstanding the neglect and refusal to convey to him a certain easement which the agent of the complainants had declared and promised should pass with the premises sold, but which easement formed no part thereof, was not mentioned in the conditions of sale, and to which neither the agent nor his principal had any right or title.
2. A partial failure of consideration is no defence at law to an action on a note or cheek, where the amount to be deducted on account of such failure is unliquidated.
Is error to the Circuit Court of the county of Passaic.
The action below was upon a check, dated October the 16th, 1841, drawn by Allen, the defendant below, for $265, payable to E. B. D. Ogden, Esq., or order, and by him endorsed to the defendants in error.
On the trial of the cause, the defendant Allen provea by Mr. Ogden that the check was given to secure the first payment of twenty per cent, on a sale made by him as a master of the Court of Chancery. That a mortgage given by one Wheeler to R. S. Colt, and by him assigned to the defendants in error, had been foreclosed ; and the execution for the sale of the premises, directed and delivered to him as such master. That he sold the property in lots, on the day of the date of the check ; at which sale, the defendant Allen became the purchaser of four of the lots for the sum of $1325. This witness further testified, that Mr. Colt acted in behalf of the bank, in advising and directing the manner in which the premises should be sold; and, as the witness understood, was responsible to the bank for any deficiency on the sale. The lots purchased by the defendant were re-sold on the 12th of September, 1842, to one Whiteley for $102§.
There was an alley, or gangway, leading from the lots purchased by the defendant, to the main street in Paterson ; which alley belonged to the Society for establishing useful manufactures, of which Mr. Colt was the Governor.
By the written conditions of sale produced by the witness, purchasers were required to sign the conditions acknowledging the purchase; and to pay the first instalment of the purchase money to the witness, immediately after the property should be struck off to them. In case of neglect or refusal by a purchaser to comply with the. conditions, any payment made should become absolutely forfeited; and the property so purchased would be re-sold, according to law; and such defaulting purchaser held liable'for any deficiency, and debarred from any profit that might result from the re-sale. Twenty per cent, of the purchase money was required to be paid in cash, immediately upon the sale; and the balance, with interest, on the first day of December then next, when deeds would be ready for delivery. Payments for certain of the lots, including those in question, would be received by the master in bank bills of “ the Bank of the United States,” at par value, if made within the time before mentioned, but not afterwards. On the day of the sale, the defendant Allen endorsed upon the conditions the following acknowledgment signed by him. “ I do hereby acknowledge myself to be the purchaser of lots, numbers 34, 32, 30, and part of lot number 28 to the line of the main barn, as exposed for sale to-day, for the price of thirteen hundred and twenty-five dollars, upon the foregoing conditions of sale; and I do hereby agree upon my part to be bound by and to fulfill the same, to be paid in United States Bank bills at par.”
Another witness testified that he was present at the sale to the defendant, and bid on the lots in question. Mr. Colt was present and stated that he had reserved the right of way, for the use of these lots, through the gangway; and that he bid under the idea that the lots had the right of way through the gangway. There was evidence that the gangway was of great value to the lots. That on the 18th of October, 1841, two days after the sale to the defendant, it was sold by the Society of which Mr. Colt was Governor, to another person, for $338. That, at the second sale of the lots, the defendant Allen said he would take them, if the gangway were kept open.
Mr. Ogden, being called by the plaintiff, testified that he did ■ not hear Mr. Colt make any declaration about the gangway, on the day of sale. That it was not a part of the mortgaged premises, but belonged to the Society above named. That the reason .assigned by the defendant for not fulfilling his contract was, that he was deprived of the gangway. He further testified, that the check was designed as a memorandum, and was open to any future modifications agreed upon between Mr: Colt and the defendant. It was taken as the first payment instead of cash.
The solicitor for the bank testified, that after the defendant failed to comply with the conditions of sale, he, at the instance of Mr. Colt, called on the defendant, and told him he had a person ready to take the lots at his bid; and requested him either to fulfil his contract, or give it up. To this proposition the defendant made no answer, but simply asked what the person would give him.
Upon this evidence the defendant insisted that no recovery could be had upon the check, because there was a failure of consideration. That if he were liable in any amount, it was only to the value of bills of the Bank of the United States. That he was noi however bound to pay anything, as he purchased under a distinct promise that the gangway was reserved for the use of the lots; and that it was immediately thereafter sold to another person. The Circuit Court charged-the jury against the defendant, and instructed them that the plaintiffs were entitled to recover the whole amount of the check. To this charge the defendant excepted, and his bill of exceptions was sealed accordingly
W. Pennington, Lor the plaintiff in error.
P. J). Vroom, for the defendant.

Opinion:
The opinion of the court was delivered by
Whitehead, J.
The question before us is, whether the Circuit judge was right in his instructions to the jury.
The sale at which the defendant purchased, was made under written conditions. The lots, bought by him were part of the mortgaged premises, the property of Wheeler. Neither Wheeler nor the bank had any interest whatever in the gangway. The contract was between the master, Mr. Ogden, and the defendant. It was reduced to writing, and there is in it no provision for the use of the gangway. Nor could there be, for the master had nothing to do with it. It was not a part of the mortgaged premises he was commanded to sell. The defendant, by his agreement, undertook to pay for the lots according to the conditions of the sale. It was optional with him to pay in bills of the Bank at par value, provided he made such payment by the first day of December then next, but nor afterwards. It would appear from the terms of his written acknowledgment, that he then intended to pay in bills of the. bank, for his language is, " I do hereby agree upon my part to be bound by and to fulfil the conditions, to be paid in United States Bank bills at par." By neglecting to pay in bills of the bank, within the time limited by the conditions of sale, he has lost the privilege and by the terms of his contract, he must now pay in current money.
It is insisted however, that Allen is not liable to pay the check or any part of it, because of the subsequent sale by Mr. Colt of the gangway. Admitting that Mr. Colt made the declarations, testified to by one of the witnesses, that he had reserved the right of way for the use of these lots through the gangway, by which I suppose the witness understood the purchaser would have the benefit of it to get to his lots; does it constitute a legal defence to an action upon the check ? I think not. It was the mere declaration of a third person standing by, who was not himself the owner of the gangway. Assuming however, that he was the agent of the bank in reference to the master's sale, there is no pretence that it constituted a part of the mortgaged premises, or that the bank had any interest in it. The contract upon which the check was given, was between Allen and the officer of the law; and the rights or liabilities of the parties cannot be affected by the unauthorized declarations of this person, present at the sale. If Allen had honestly supposed that this easement was to pass with the lots, and intended to insist upon it as a right, he should have incorporated it into his agreement with the master.
Again, the counsel for the plaintiff in error insisted, that the bank could not in law recover, because the evidence showed a failure of consideration; upon the supposition that the declarations of Mr. Colt on the day of. sale amounted to an agreement, that the gangway was to go with the lots, and as a consequence of the sale of it to a third .person, the lots are less valuable. Under this view of the case there is not a total, but a partial, failure of consideration. Now it is well settled, that the partial failure of consideration is not a good defence at law, if the amount to be deducted on that account be unliquidated. Greenleaf v. Cook 2d Wheaton Rep. 13; 11 Johnson Rep. 50; and cases cited in notes to Chitty on Bills, 88, 89.
If Allen really believed that Mr. Colt had practiced a fraud upon him, as is now pretended, his proper course would have been to have given notice to the master, that he would not take the property; and asked that the agreement be rescinded, and his check delivered to him. So far was he from pursuing this course, that when called upon by the solicitor of the bank, after failure on his part to perform the conditions of sale, and requested either to fulfil his contract or give it up, as a person was ready to take the lots at his bid, he declined doing either, but coolly asked what the person would give him.
I find no error in the instructions of the judge to the jury; and the evidence does not show a case of hardship upon the defendant. He had a proposition distinctly made to him, by which he could be relieved from all this pretended difficulty. Having inclined it, and sought to make money out of the person who was willing to take his place, he must bear the consequences of his own conduct.
Judgment affirmed.
Uevitjs and Carpenter J. J. did not hear the argument and expressed no opinion.
Cited in Bouker v. Randles, 5 Vr. 341; Wyckoff v. Runyon, 4 Vr. 108.