Allaire Works v. Guion

By the Court, Mitchell, J. When the plaintiff entered into the employment of the defendants there was a contract on their part to pay him, and on his part faithfully to discharge his duties. If this was not expressed it was implied. He sues, (as to all except $400,) on this contract, or on the notes, which have no other consideration than that contract. If the plaintiff, while in this employment, willfully destroyed the defendants’ plans and engines, he violated his part of' the contract—certainly as much so as if he destroyed them carelessly; and the defend-, ants would accordingly be entitled to a deduction from his claim, or recoupment to the extent of the actual damage done by him— unless some peculiarity in the circumstances of this case would require a different rule. It is said the giving of the notes liquidated the account, and so the defense could not be sustained. This would not apply [57] to the balance due on the 1st of November, 1843, amounting to $412,02. Besides, these damages did not enter into the account on which the notes were given. The giving of a note does not prevent an inquiry into the original consideration for it, in a suit between the same parties. In Ives v. Van Epps, (22 Wend. 155,) the plaintiff sued on a sealed agreement by which he was to complete a wall in a workmanlike manner, as soon as might be, and the defendant was to pay him $1500 in thirty days from the date of the agreement. The defendant had given his acceptance for the $1500, but it was not paid ; yet the court held that the defendant might show that the work was inferior in quality to what the contract required. In Reab v. McAllister, (8 Wend. 116,) the chancellor shows that it makes no difference whether the suit is on the note or on the original consideration; although the English cases make a difference, which was followed in Thornton v. Wynne, (12 Wheat. 183.) So also in Batterman v. Pierce, (3 Hill, 171,175,) the action was on a note, and the defense allowed. It was also said that as the destruction was malicious, the damages could not be recouped. As the damages to be allowed by way of recoupment are only such as arise from breach of the plaintiff’s contract, the deduction must be limited to such damages, and nothing could be allowed on account of the malice. (See Blanchard v. Ely, 21 Wend. 349.) The fault of the defendant’s notice therefore was that he proposed to prove more than he could prove, in this action. But that should not prevent his being allowed such deductions as he was entitled to. The allegation of malice might be struck out, and the notice be complete. (See Fuller v. Rood, 3 Hill, 258, as to the difference between a plea and a notice.) In Beecher v. Vrooman, (13 John. 302,) in an action for the price of a mare, the defendant was allowed to reduce the recovery by proving that the plaintiff represented her to be sound, when he knew that she was unsound; thus allowing fraud to be a partial defense, before the doctrine of recoupment was well established, in cases of contracts without fraud. In Spalding v. Vandercook, (2 Wend. 431,) in an action on [58] a note the defendant was allowed to show that it was given on a contract to make barrels so as to pass inspection, but that part of the barrels were made in an unskillful manner, and so as not to pass inspection. In McAllister v. Reab, (4 Wend. 488,) the distinguished counsel for the plaintiff below insisted that it was only in cases of fraud that recoupment could be allowed. And Judge Marcy, at page 490, says “ it was admitted that if there had been fraud imputable to the defendant in error, the plaintiff would not be, (as without fraud it was contended he was,) obliged to resort to his cross action, but might reduce the claim below the stipulated price by showing the stove not to be such as it was warranted to be.” He shows that the defense is admitted not on the ground of fraud merely, but to avoid circuity of action, (p. 492,) and “ on a principle which has of late years been gaining favor with courts, and extending the range of its operations.” He adds that to circumscribe the rule would limit its usefulness, (p. 493.) So Bronson, J. in Batterman v. Pierce, (3 Hill, 174,) shows that it was formerly supposed that there could be a recoupment only where fraud was imputable to the plaintiff. In Allaire v. Whitney, the ground of Allaire’s defense to an ■action for rent was that the plaintiff had fraudulently represented himself to be the owner of the whole demised premises, when he knew that he only owned a part; (1 Hill, 484, 486. 4 Denio, 554. 1 Comst. 305;) and it was allowed. If instead of that, the defense had been that the landlord willfully destroyed part of the demised premises, there would not have been much hesitation in allowing it. And this case is substantially like the one suggested; and if in such case the tenant had given his notes, without knowledge of the landlord’s misconduct, that would not aid the landlord. There is nothing in the case to show that the plaintiff’s employment had entirely ceased when these acts weie committed by him. On the contrary it is stated that they were done while he was in the employ of the defendants. The judgment should be reversed, and a new trial be had in the superior court; the costs to abide the event.