Case Name: ABRAHAM M. BENINGER v. WILLIAM H. CORWIN
Court: New Jersey Supreme Court
Jurisdiction: New Jersey
Decision Date: 1854-02
Citations: 24 N.J.L. 257
Docket Number: 
Parties: ABRAHAM M. BENINGER v. WILLIAM H. CORWIN.
Judges: 
Reporter: New Jersey Law Reports
Volume: 24
Pages: 257–267

Head Matter:
ABRAHAM M. BENINGER v. WILLIAM H. CORWIN.
1. A warranty of the soundness of a horse, or other goods sold, is not implied at law from the fact that the price of a sound horse or sound article is paid. The maxim caveat emptor applies to all cases where there is no warranty or representation.
2. In a sale of chattels, it is not fraud at law in the vendor not to disclose unsoundness or faults known to him in the article sold.
3. It is no defence to a note given for the difference on an exchange of horses, to show that there was no difference in their value, and that the note was therefore without consideration. The exchange in such case is a sale for a stipulated price, the horse and note of the defendant, and not for so much as the plaintiff’s liorse was worth.
This cause was brought up by a writ of error to tbe Morris county Circuit Court. In that court, Beninger sued Corwin on a promissory note given by Corwin to one Kearny. On the trial, it was shown that the note was passed to Beninger by Kearny when overdue; that it had been given by Corwin to Kearny for the difference upon the exchange of horses; that the horses of Corwin and this note were the full value of Kearny’s horses exchanged, had the same been sound; that Kearny’s horses were unsound at the exchange, and that this was known to him. It did not appear that any person was present at the exchange, nor whether there was any warranty or false representations at the sale, or any disclosure of the0 unsoundness of his horses by the defendant. It was further proved that the defendant’s horses, at the exchange, were equal in value to Kearny’s horses.
Upon these facts the court charged the jury, among other things, as follows:
It is beyond doubt that Kearny knew, when he exchanged with Corwin, that one of the horses was not sound, but that he was worth far less than appearances indicated. The horses of Corwin, together with the amount specified in the note, appears to have been a full consideration for Kearny’s horses, if sound. That fact is evidence from which a conclusion may be drawn that he represented the horses at the time to be sound. But, independent of this view, if you are not satisfied that Kearny, with his knowledge of the unsoundness, informed Corwin of it at the time of the exchange, the burthen of which proof in this case lies upon the plaintiff, the withholding of such information was a fraud practised upon Corwin sufficient to vitiate the note. Again, the difference of the estimated value, by the parties, of the two pairs of horses at the time of the exchange was the true consideration of, the note, and if you believe them to have been equal in value this note is without consideration.
To this part of the charge a bill of exceptions was taken by the plaintiff.
Argued before the Chief Justice and Justices Ogden and Potts,
by Mr. Whelpley, for the plaintiff in error, and Mr. Scofield, for the defendant.

Opinion:
The Chief Justice.
The action below was brought upon .a promissory note, given by the defendant upon an exchange of horses. Upon the trial, it appeared in evidence that one of the horses given in exchange by the payee to the maker of .the note was unsound at the time of the exchange, and that the payee knew it. There was no direct evidence of fraudulent representation or concealment.
J. The first error assigned is, that the judge charged the jury that if the vendor, upon a sale or exchange of horses, receive a sound price, it is evidence from which a conclusion may be drawn that he represented the horses at the time to be sound, and that if the vendor have knowledge of the unsoundness at the time of the exchange it is incumbent on him to prove that he informed the vendee of the unsoundness. In the absence of such proof fraud will be presumed.
Under the facts of the case, the charge of the court amounts briefly to this : that if the vendor of an unsound horse, with knowledge of the unsoundness, sell or exchange him for a sound price, the contract will be presumed to be fraudulent, unless the vendor prove affirmatively that he was neither guilty of false representation or fraudulent concealment.
The well settled rule of the common law is, that upon a sale or exchange of goods, if there be no express warranty of soundness and no actual fraud proved, the doctrine caveat emptor applies, and the goods are at the risk of the buyer. In the absence of an express warranty, the purchaser must show, in order to vitiate the contract, that fraud or deceit have been practiced with regard to the quality of the article sold. The vendor is not bound to answer, unless he expressly warranted the goods to be sound, or unless he made a false representation, or used some fraudulent concealment respecting them, which amounts to a warranty in law. 2 Kent's Com. 478; Mixer v. Coburn, 11 Metc. 562; Winsor v. Lombard, 18 Pick. 60.
A warranty cannot be inferred, at common law, from the fact that a sound price was paid, though the civil law rule is otherwise. Seixas v. Wood, 2 Caines 48 ; Holden v. Dakin, 4 J. R. 421 ; Moses v. Ward, 1 Denio 378 ; Smith's Mer. Law 308 ; 2 Kent's Com. 478.
Inadequacy of consideration will neither defeat a contract nor substantiate a charge of fraud. Even in equity inadequacy of consideration or value is in general, of itself, no ground for impeaching a contract. Chit, on Con. 684-31, (5th ed.)
The common law (says Justice Story) knows no such principle. The consideration more or less supports the contract. Common sense knows no such principle. The value of a thing is what it will produce, and it admits of no precise standard. 1 Story's Eq. § 245.
The case falls directly within the authority of Fleming v. Slocum, 18 J. R. 403.
II. The second ground of exception is, that the difference of the estimated value by the parties of the two pairs of horses at the time of the exchange was the true consideration of the note, and if the jury believe them to be equal in value the note is without consideration.
Doubtless the motive with the maker for giving the note was the estimated difference in the value of the horses. But the legal consideration for the note was the exchange upon request. The form of a declaration in an action for the recovery of money agreed to be paid upon an exchange shows clearly that such is the legal consideration. 2 Went. 222; 2 Chit. Pl. 274.
If the principle stated in the charge be the true one, then in an action for the recovery of money agreed to be paid on an exchange of goods, the plaintiff must aver in* pleading and must prove that the difference in the value of the articles ex^ changed is equivalent to the price agreed to be paid. If he fail in that proof he must fail in the action. This would annul the contract- of the parties, and reduce the action to a simple claim upon an indebitatus assumpsit or quantum meruit.
.The horses and the note of the defendant constitute but parts of one entire consideration paid by him for the horses of the other party. They cannot legally be severed, and treated as if given for different purposes or upon different considerations.
Upon both grounds, the judgment must be reversed.