« ForrigeFortsett »
(2.) On the subject of the claim to a completion of the
purchase, or to the payment or return of the con471* sideration money, *in a case where the title or the
essential qualities of part of the subject fail and there is no charge of fraud, the law does not seem to be clearly and precisely settled ; and it is difficult to reconcile the cases, or make the law harmonize on this vexatious question. The rules on this branch of the law of sales are in constant discussion, and of great practical utility, and they ought to be distinctly understood. It would seem to be sound doctrine, that a substantial error between the parties concerning the subject matter of the contract, either as to the nature of the article, or as to the consideration, or as to the security intended, would destroy the consent requisite to its validity. The prin. ciples which govern the subject, as to defects in the quality or quantity of the thing sold, require a more extended examination ; and they are the same in their application to sales of lands and chattels.
In the case of a purchase of land, where the title in part fails, the court of chancery will decree a return of the purchase money, even after the purchase has been carried completely into execution, by the delivery of the deed and payment of the money, provided there had been
he may, on discovering the fraud, and on the earliest notico, rescind the contract, and recover whatever he has advanced, on offering to do whatever be in his power to restore the other party to his former condition. Masson v. Bovet, 1 Denio, 69.
• Thornton v. Kempster, 5 Taunt. Rep. 786. Several cases on the same subject, and in support of the doctrine in the text, are referred to in 1 Bell's Com. 242. 295, in notis, as having been decided in the Scotch courts. By the Civil Code of Louisiana, art. 2496—2519, a redhibitory action is provi. ded for the avoidance of a sale, on account of some vice or defect in the thing sold, which renders it either absolutely useless, or its use so inconvenient and imperfect, that it must be supposed that the buyer would not have purchased it, had he known of the vice. Where a fact in the sale of land is equally unknown to both parties, or each has equal information or the fact is doubtful from its own nature, and the parties have acted in good faith, equity will not interpose. McCobb v. Richardson, 24 Maine R. 82.
a fraudulent misrepresentation as to the title.a But if there be no ingredient of fraud, and the purchaser is not evicted, the insufficiency of the title is no ground for relief against a security given for the purchase money, or for rescinding the purchase, and claiming restitution of the money. The party is remitted to his remedies at law on his covenants to *insure the title.b In *472 Frisbie v. Hoffnagle,c the purchaser, in a suit at law upon his note given to the vendor for the purchase money was allowed to show in his defence, in avoidance of the note, a total failure of title, notwithstanding he had taken a deed with full covenants, and had not been evicted. But the authority of that case and the doctrine of it, were much impaired by the supreme court in Maine, in a subsequent case, founded on like circumstances ;d and they were afterwards in a degree restored, by the doubts thrown over the last decision by the supreme court of Massachusetts in Knapp v. Lee. The same defence
a Edwards v. M'Leary, Cooper's Eq. Rep. 308. Fenton v. Browne, 14 Ves. 144.
• Abbott v. Allen, 2 Johns. Ch. Rep. 519. Barkhamsted, v. Case, 5 Conn. Rep. 528. Banks v. Walker before Ass. V. Ch. 2 Sandford's Ch. R. 344. In Brown v. Reeves, 19 Martin's Louis. Rep. 235, it was held, that so long as the buyer is in the peaceable and undisturbed possession of the thing sold, he cannot withhold payment, on the plea of a want of title in the vendor. By the civil law, also, a purchaser in possession could not rescind the contract, nor prosecute the vendor, on the ground of no title. Code, lib. 8. tit. 45. 1.3. Pothier Traité du Contrat de Vente, art. Prelim.
• 11 Johns. Rep. 50. a Lloyd v. Jewell, 1 Greenleaf's Rep. 352. See, also, Wrinkle v. Tyler, 15 Martin's Louis. Rep. 111. In Tallmadge v. Wallis, 25 Wendell, 117, the chancellor supposed that the supreme court of New York, in Frisbie v. Hoffnagle, erred in the application of a correct principle to the case, be. cause it did not appear that there was a total failure of consideration, as there was no eviction. It was conceded by him that on a total failure of title in a conveyance of land, and when no interest or possession passed, that fact was a good plea in bar of a suit on the bond given for the pur
. 3 Pick. Rep. 452. But the case of Frisbie v. Hoffnagle, has been virtually overruled in Vibbard v. Johnson, 19 Johnson, 77, and is not now rogarded as authority. See Whitney v. Lewis, 21 Wendell, 132. 134.
was made to a promissory note in the case of Greenleaf v. Cook, and it was overruled on the ground that the title to the land, for the consideration of which the note was given had only partially failed; and it was said, that to make it a good defence in any case the failure of title must be total. This case at Washington is contrary to the defence set up and allowed, and to the principle established, in the case of Gray v. Handkinson ; b but it seems to be supported by the case of Day v. Nix,c where it was decided by the English court of C. B., that a partial failure of the consideration of a note was no defence, provid.
ed the quantum of damages arising upon the failure *473 was not susceptible of definite computation.d "The
a 2 Wheaton, 13.
d It seems to be now settled in the New York decisions, that on a partial failure of consideration on a sale, the defendant may recoupe his damages, on a breach of the plaintiff's contract of warranty. Reab v. McAllister, 8 Wen 109. Still v. Hall, 20 Id. 51. Batterman v. Pierce, 3 Hill, 171. The recoupment is not as a set-off, but allowed to avoid circuity of action, and it is founded on the plainest principles of justice. Goodwin v. Morse, 9 Metcalf, 279. Under the N. Y. R. S. vol. 2. 406, sec. 77, the defendant may recoupe in an action upon a sealed, as well as upon an unsealed instrument. He may avail himself by way of recoupment in case of fraud by misrepresentation on the part of the vendor. Van Eppes v. Harrison, 5 Hill N. Y. R. 63. The equitable doctrine of recou pment is of recent origin, and is well calculated to give litigation. It is a question whether evidence by way of recoupment can be received under the general issue without notice with the plea. The majority of the court held that it could not in Barber v. Rose, 5 Hill, N. Y. Rep. 76. In Sedgwick on the Measure of Damages, ch. 17, the more modern and liberal doctrine of set-off or recoupment of damages in reduction of the plaintiff's claim, is considered quite at large, and the numerous cases are ably reviewed and criticised. The doctrine of set-off, or the compensation of one debt for another came from the courts of equity, who were in possession of the doctrine long before the courts of law interfered, and it was first introduced with the statute of 5 Geo. II. The doctrine was borrowed from the doctrine of conpensation in the civil law, Dig. 16. 2, de compensationibus. The set off was confined at law to mutual debts but the statutes of bankrupts embraced mutual credits and which ex vi termine imported unliquidated damages, and this more liberal practice was adopted in chancery. Grove v. Dubois,
cases are in opposition to each other, and they leave the question how far and to what extent, a failure of title will be a good defence, as between the original parties to an action for the consideration money on a contract of sale, in a state of painful uncertainty.a I apprehend that in sales of land the technical rule remits the party back to his covenants in his deed ; and if there be no ingredient of fraud in the case, and the party has not had the precaution to secure himself by covenants, he has no remedy for his money even on a failure of title. This is the strict English rule, both at law and in equity; and it applies equally to chattels, when the vendor sells without any averment of title, and without possession.b In sales of chattels, the purchaser cannot resist payment in cases free from fraud, while the contract continues open, and he has possession. But in this country the rule has received very considerable relaxation. In respect to lands, the same rule has been considered to be the law in NewYork ;c while, on the other hand, in South Carolina, their courts of equity will allow a party suffering by the failure of title, in a case without warranty, to recover back
1 Term, 112. Ex parte Deeze, 1 Atk. 228. James v. Kynnier, 5 Vesey, 108. Duncan v. Lyon, 3 Johnson's Ch. Rep. 351. T. C. & D. Rail-Road Co. v. Rhodes, Alabama R. N. S. vol. 8. 206. In the case of Whitbeck v. Skinner, 7 Hill N. Y. R. 53, the defendant was admitted to set up by way of recoupment, an adverse claim under the same agreement to save needless suits.
• The general rule in the English law is, that the partial failure of performance by one party to a contract, for which there may be a compensation in damages, does not authorize the other party to put an end to it. Franklin v. Miller, 4 Adolp. of Ellis, 599.
Tanfield, Ch. Baron, in Roswell v. Vaughan, Cro. Jac. 196. Medina v. Stoughton, 1 Salk. Rep. 211. Bree v. Holbech, Doug. Rep. 654. Lord Alvanley, in Johnson v. Johnson, 3 Bos. f. Pull. 170. Urmston v. Pate, cited in Sugden's Law of Vendors, 3d ed., 346, 347, and in 4 Cruise's Dig. 90, and in Cooper's Eq. Rep. 311. 1 Fonb. 366, n.
c Frost v. Raymond, 2 Caines' Rep. 188. Abbot v. Allen, 2 Johns. Ch. Rep. 523. Gouverneur v. Elmendorf, 5 Johns. Ch. Rep. 84.
the purchase money, in the sale of real as well as of personal estates, a
In cases where the consideration had totally failed the English courts have admitted that fact to constitute a good defence between the original parties to a bill of exchange; though a partial failure of the consideration
is no defence.b But with us a partial as well as *474 total failure of the *consideration, may be given in
evidence by the maker of a note, to defeat or miti. gate, as the case may be, a recovery.c In Indiana, by statute, 1831, in actions upon specialty or other contract, excepting conveyances of real estate and paper, negotiable by the law merchant, the defendant, may allege the want or failure of consideration, in whole or in part. He may allege fraud or breach of warranty, and if he shows that the article was of no value, or had been returned or tendered, he destroys the action.d In North Carolina, a total failure of consideration may be given in evidence in a suit on a promissory note, though a partial failure cannot, and the relief is by a distinct suit. In equity, as well as at law, the defendant, for the purpose of preventing circuity of action, may show,
« Tucker v. Gordon, 4 Eq. Rep. S. C. 53. 58.
Morgan v. Richardson, 1 Camp. N. P. Rep. 40. n. Tye v. Gwynne, 2 Ibid. 346. Mann v. Lent, 10 Barnw. g Cress. 877.
• Hills v. Bannister, 8 Cowen's Rep. 31. Sill v. Rood, 15 Johnson, 230. Payne v. Cutler, 13 Wendell, 605. Cock v. Mix, 11 Conn. Rep. 432. Revised Statutes of Illinois, edit. 1833, p. 484. See Sup. p. 472–3, n. The cases from 8 and 20 Wendell, and 3 Hill. In Johnson v. Titus, 2 Hill's Rep. 606, mere inadequacy of consideration, without warranty or fraud, is no defence to a promissory note; but entire want of consideration is a defence to any executory contract. But again, in Scudder v. Andrews, 2 McLean's C. C. Rep. 464, it was held, upon what was deemed the weight of authority, that a total failure of consideration was a good defence to a promissory note between the original parties, though a partial failure would not be a defence.
Wynn v. Hiday, 2 Blackf. Ind. Rep. 123. In Georgia, by statute, 1836, partial failure of consideration in any contract, may be given in evi. dence.
• Washburn v. Picot, 3 Dev. Rep. 390. See supra, p. 472–3, note.