Baker v. . Brem

Smith, C. J. (after stating the case). We again call attention to the form of the instructions and their inappropriateness to the issues before the jury. The inquiry before- *78 them was as to the quality of the separator and its fitness for the purpose of cleansing small grain from the straw, for which it was bought, and whether it was, as represented, a first-class article, and if not, the compensatory damages due to the plaintiffs; and to either inquiry of fact, the instruction was wholly impertinent. The jury were not to pass upon the plaintiffs’ right of action, but toaccertain the facts, and then upon the whole case it became a question of law, to be determined by the Court in rendering judgment. The proper mode of raising the question as to the right of recovery was to demur to the sufficiency of the evidence adduced, assuming the facts to be as the jury would be warranted in finding them for the plaintiffs, to authorize judgment for them. The practice, in the case of such demurrer, not unlike a motion for a nonsuit at the close of the plaintiff’s evidence, is explained in the writer’s dissenting opinion in McCanless v. Flinchum, 98 N. C., 358. There would be no error, then, in declining to tell .the jury that, taking all the evidence together, the plaintiffs could not recover — that is, could not have judgment, for with the results of their finding they had nothing to do, but only to respond to the inquiries submitted. The present practice undertakes, so far as it is practicable — unlike that of which it takes the place — to separate the facts from the law, the jury finding the one, when in dispute, the Court determining the law upon the facts ascertained by the jury and those admitted. But the point intended is reached in the instructions given and the exceptions taken to them. If these are correct in law, and the jury not misled, the verdict must stand with the judgment authorized by it. In our opinion, the law was properly expounded, and no •error is found in the directions under which the jury were led in arriving a.t their verdict. If the separator was returned to the defendants as unfit, for its intended uses, under their instructions, it was a rescission pro tanto of the *79 Contract, as much so as if it had not been included therein, and the obligation to return the purchase money, if it had been paid, or to enter a corresponding credit upon the note, which would have extinguished the debt, if it had not been, would he the result. But the defendants, not retaining possession of the note, transferred it., by endorsement before maturity, to an innocent holder, unaware of any infirmity, and thus put it out of their power to make the credit themselves and the power of the plaintiffs to be relieved, as, notwithstanding resistance to the judgment, was determined in the action of the endorsee bank. They cannot find relief from the judgment recovered by the bank, which discounted the note before it became due, and their only recourse is to the payees, who have converted the security to their own use and subjected the plaintiffs, to whom the money ought to be refunded, to the necessity of meeting the judgment against them. As a transaction between the parties to the contract, the return of the purchase money assumed a legal obligation, created by the very act of the surrender and receiving back of the instrument. The contention of the defendants, based largely on the case of Osborne v. Gants, 60 N. Y., 540, is not supported by the ruling in that case, which simply decides, that in an agreement concerning stipulations, interdependent and mutual, one cannot recover without performance of his contract, or an offer to do it, and that a warranty of quality is an incident only of an executed contract of sale, passing title to the thing sold. The instruction applies, and such the verdict shows was the understanding of the jury in rendering it, to the case of an instrument, not such as represented and guaranteed, returned, by their direction, to the guarantors, and by them received — in legal effect a rescission of the contract so far as it refers to the defective article — restoring it to the defendants and binding them to restore the sum to be paid for it to the plaintiffs. *80 We do not appreciate the force of the objection based upon the fact that, as endorsers, the defendants became liable as sureties to the holder to the plaintiffs’ whole cause of action. If the distinction prevailed, as formerly, between suits at law and suits in equity, it is obvious this, in an action at law, was indispensable in order to show a breach of contract and the damages consequent on it; and then, if the present plaintiffs were insolvent, the defendants’ equity would be to restrain the enforcement of the judgment until the sureties were exonerated from their liability as such. In such case the defendants would be allowed to retain their indebtedness as an indemnity against loss by reason of their suretyship. The principle which regards the surety as a principal in such case is declared in Williams v. Washington, 1 Dev. Eq., 137; Williams v. Helme, ibid., 151; Walker v. Dicks, 80 N. C., 263; Scott v. Timberlake, 83 N. C., 382. It does not appear that as endorsers the defendants have been sued, and the judgment for the amount due on the note, against the plaintiffs, seems to have had the additional security furnished by the supersedeas appeal undertaking. But whatever may be the hazard existing, and voluntarily assumed, without the plaintiffs’ privity and for the defendants’sole benefit, in effecting the discount, the issuing óf the execution is restrained, as would a court of equity interfere by an injunction in case of threatened loss, until the defendants are releived of their liability upon the note. At least, the appellants have no just cause of complaint, in that they are fully protected against contingent loss by the stay of execution. This is another instance shown of the full protection afforded litigants, in the double exercise of legal and equitable functions, in a single suit, which formerly required two. No error. Affirmed.