Court Opinion

ID: 5513208
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:25:59.481591+00
Date Added: 2024-06-11T08:34:12.929199
License: Public Domain

By the Court,

Marcy, J.
The defendants contend that there was a total want of consideration for the note, by reason of the fraud practiced in the sale, and that therefore they were entitled to a verdict. The general position that all contracts infected with fraud are void both at law and in equity, is too well settled to be controverted, and too plain to require reference to authorities to support it; and it is not less certain that securities given on such contracts are also void as between the contracting parties. But a party to a fraudulent contract may, however, so conduct himself in relation to it, as to forfeit his right to treat it as void.
Where a bill is given for the price of goods fraudulently sold under a warranty, the breach of the warranty is a bar to the action on the bill, as between the parties to the sale, if the defendant immediately, on discovering the fraud, repudiate the contract by tendering back the goods. (Saund. on Pl. & Ev. 303, 4.) The case of Lewis v. Cosgrave, (2 Taunt. 2,) is very similar to the one before us, with this important additional feature, that there the defendant offered to return the horse, but the plaintiff refused to receive him; he was however left in his stable without his knowledge. In that case the fraud in the sale rendered the check given for the horse invalid. In Leggett v. Cooper, (2 Stark. N. P. 93,) the action was for hops sold by sample for a stipulated price. The plaintiff put into the sacks hops of a quality inferior to the sample. The defendant paid into court a portion of the sum claimed by the plaintiff, and resisted his recovery beyond that amount, on the ground that the hops were of an inferior quality to the sample. Lord Ellenbo-. rough said the defence went to the whole action, and the defendant could not interpose such a defence after paying money into court. He observed that the defendant “ had lost the ground of defence upon which perhaps he might otherwise have insisted, by neglecting to make the objection at the proper time, and return the goods. In the case of Fisher v. Samuda, (1 Camb. 190,) the same judge stated it to be *239the duty of the purchaser of any commodity, immediately upon discovering that it was not according to order and unfit for the purpose for which it was intended, to return it to the vendor, or give him notice to take it back.”
If the rule of law laid down in the two last cases is applicable to this, the defendants could not treat the sale as void after retaining the property received under it. Had they intended to treat the contract as void on the ground of fraud, it was their duty, when they discovered the mare was not such as the plaintiff had represented her to be, to have returned her to the plaintiff. - When prosecuted on the note, and the cause brought to trial, it was too late to repudiate the contract. Saunders applies this rule to a fraudulent sale of goods under a warranty, and there is no reason why it should not be applied to a fraudulent sale where there is no express warranty. Besides, I do not think that in principle -a distinction can be made between this case and the cases last cited. On what ground is it insisted that the sale in this ease is void ? Is it not because the horse delivered by the plaintiff was not such a horse as was represented to the defendants, and as they contracted for? The same remark applies to the hops in the case of Leggett v. Cooper, and to the beer in the case of Fisher v. Samuda. Not having taken their stand at the proper time, the defendants cannot, at the trial, say that the contract was void so long as they are not able to say that the horse was valueless.
It seems to be well settled, that if the action had been brought for the consideration of the horse, the defendants might have shewn, in mitigation of damages, if they had given notice thereof, that the horse was not such as the plaintiff had represented, and that the representation was fraudulent. There are cases which shew that where the action is on the security the rule is different; but this court, seeing no reason for the distinction, have not regarded it. It has been decided here that the partial failure of the consideration of a note may be given in evidence in a suit on a note between the parties, to it, under a notice to reduce the amount of damages, (2 Wendell, 431.)
New trial denied.