Knight v. Vincennes Bridge Co.

AlleN, J. The receipt introduced by the defendant, which is in legal effect a release not under seal, is a complete defense and bar to the’cause of action of the plaintiff, if supported by a valuable consideration, and.not procured by fraud and undue influence. The burden was, in the first instance, on the defendant to prove a valuable consideration (King v. R. R., 157 N. C., 52), and this it did when it proved the execution of the receipt by the plaintiff, acknowledging the payment to him of $7 in full of his claim for damages, because, in the absence of fraud, undue influence, or oppression, parties capable of contracting have the same right to agree upon the consideration as upon any other term of the contract, and “the value of all things contracted for is measured by the appetites of the contractors.” 6 R. C. L., 678. Vhen the defendant proved the execution of the receipt, with the acknowledgment of the payment of $7, it established its defense, nothing else appearing, and the burden was then on the plaintiff to attack the receipt or release by proving fraud; and if he relied on inadequacy of consideration, gross or otherwise, as a circumstance on the issue of fraud, he assumed the burden of proving this circumstance. It follows that it was error to charge the jury that the burden was on the defendant to prove that the consideration for the release was adequate, which he did twice. Much of the confusion in regard to consideration arises from failure to note the distinction between the consideration which will support a contract, which only affects the parties, and a purchaser for value as against creditors and purchasers. The difference between the two is clearly stated by Ruffin, C. J., in Fullenwider v. Roberts, 20 N. C., 278. He says: “The opinion of his *397 Honor as to tbe effect of inadequacy of price was, probably, drawn from tbe doctrine tbat an agreement cannot be set aside as between tbe parties merely for tbat cause. Rut tbe reason of tbat is tbat if one will, without imposition, distress, or undue advantage, make a bad bargain with bis.eyes open, he must stand to it. His agreement is sufficient, because bis interests alone are affected by it. Tbe cases of bis creditors, however, or persons claiming under a previous conveyance from him, admit a very different consideration. They fall, within Lord Hardwick's fourth class of cases in Chesterfield v. Jansen — tbat of a fraud and imposition on third persons, not parties to tbe agreement. To tbe complaint of such third person it cannot be replied tbat be cannot call tbe consideration petty and inadequate, because be bad assented to it. As against creditors and prior donees, tbe price must be sufficient in itself to sustain tbe deed, without tbe aid of their acceptance; for no such acceptance exists. Then it is to be inquired, What price will put tbe statute in operation, or what inadequacy will prevent its operation? We think tbat a fair and reasonable price, according to tbe common mode of dealing between buyers and sellers, was meant by tbe Legislature; and tbat at all events no case is within tbe statute in which tbe purchaser cannot with a good conscience claim to bold tbe estate upon the ground and for tbe sake of tbe price paid, and not merely upon tbe score of tbe vendor’s agreement.” It was also error to charge tbe jury tbat if tbe consideration was “so gross tbat it would shock tbe sense of tbe ordinary man, shock bis conscience, and make him say really tbe defendant paid nothing,” tbe law would declare it a fraud. The controlling principle etablished by our authorities is tbat inadequacy of consideration is a circumstance to1 be considered on> tbe issue of fraud, and that if.it is so gross tbat it would cause one to say that nothing was paid, it would be sufficient to be submitted! to. tbe jury without other evidence; but we have not said tbat a contract could be set aside as matter of law because of gross inadequacy. In Perry v. Ins. Co., 137 N. C., 407, tbe following charge was approved: “If tbe award is so grossly and palpably inadequate, tbat is, so grossly and palpably small and out of proportion to the amount of actual damage as to shock tbe moral sense and conscience and to cause reasonable persons to say be got it for nothing, then tbe jury may consider this as evidence tending to show fraud and corruption or strong bias and partiality on tbe part of the arbitrators”; and tbe Court said in Leonard v. Power Co., 155 N. C., 36: “Tbe settled rule, which is applicable not only to awards but to other transactions, is tbat mereoinadequacy alone is not sufficient to set aside tbe award, but if tbe inadequacy be so gross and palpable as to shock tbe moral sense, it is *398 sufficient evidence to be submitted to tbe jury on tbe issue relating to fraud and corruption or partiality and bias”; and in King v. R. R., 157 N. C., 65: “When due weight is given to these matters, and there is evidence that the consideration is inadequate, it is a circumstance which, in connection with other circumstances, may be submitted to the jury, and if grossly inadequate it alone is sufficient to carry the question of fraud or undue influence to the jury”; and these cases were approved in Causey v. R. R., 166 N. C., 5. The rule amounts to this: The owner of tangible property or of a claim for damages may give it away or may sell it for less than its value, and the contract is valid in the absence of fraud, undue influence, or oppression; but if the contract is attacked as fraudulent, the inadequacy of consideration is evidence of fraud, and if gross, is alone sufficient to carry the case to the jury on the issue of fraud. This part of the charge is also objectionable as an expression of opinion that the only consideration paid by the defendant was $7 when the defendant offered evidence tending to prove that it paid the doctor’s bill of the plaintiff, amounting to $10, in addition to the $7. New trial.