American Lace Manufacturing Co. v. Levy

Shearn, J. This action is upon an account stated. The defendants pleaded as a partial defense and counterclaim a breach of warranty in the sale of certain merchandise, which upon the trial appeared to be the merchandise involved in the account stated. The defects in the material sold were such as would only become apparent, as defendants claim, after the garments manufactured therefrom had been worn. The defects were not discovered until after the account had been stated, attention being called to them by customers returning the manufactured garments. The trial court held that no evidence to establish a breach of warranty could be received in an action upon an account stated, and that the only issue was whether the account was stated. This was, of course, contrary to the well settled law. Samson v. Freedman, 102 N. Y. 699, 701; Boyce v. Walker, 130 App. Div. 305; Lockwood v. Thorne, 18 N. Y. 285. An account stated is always open to impeachment for fraud, mistake or error. It may be that the mistake was discoverable before the account was assented to and, also, that there was no mistake. However, as the court shut out all of the evidence, this cannot be now determined and, for the purposes of this appeal, should be resolved in favor of the appellants. Defendants ’ failure to except to the denial of their motion for a nonsuit was not an acquiescence in the court’s ruling out of all their [158] evidence. Without the evidence, there was nothing else for the court to do hut deny the motion. The question whether the evidence was properly rejected is of course saved by the exceptions to its exclusion. It is further contended that the counterclaim was not provable because it did not state a cause of action, as it showed a sale by sample and a failure to compare the bulk with the sample before proceeding to manufacture. Treating this as a case of implied warranty upon sale by sample, it would have been better pleading if the defendants had alleged that the defects were only discoverable by actual wear after manufacture, but it would be too harsh a rule to deny them their day in court and an opportunity to prove this essential fact in view of their allegation that they had no knowledge of the real condition of the goods until after the goods were manufactured. This is especially true in a case where the evidence was not rejected because of the alleged defect in pleading, but upon the erroneous ground that it was inadmissable because of the nature of the action. Finally, it is to be noted, the pleading alleged that there was an express warranty of the sample and an express warranty that the bulk corresponded with the sample. Bijur and Page, JJ., concur. Judgment reversed and new trial ordered, with costs to appellants to abide event.