Linsey v. Ferguson

Miller, P. J. The note upon which this action was brought, was deposited as an escrow, to be delivered only on the performance of certain conditions, and was obtained upon a statement made by the plaintiff, which was untrue, that he liad procured the release, and acquired the title to one-eiglith of -the land according to the contract. Under ordinary eir [199] cumstances, it would be considered that there was no valid delivery of the note; and that it was not collectable until the conditions upon which the delivery of the note depended .had been performed. The general principle for which the defendant contends, that the note is not yet due, and that the party who obtained possession of it fraudulently, can make no use of it, is a sound one, but is subject to certain qualifications which are controlling, where a party claims the benefit of a contract, to carry out which in part the instrument was executed. He cannot claim the entire benefit of the contract, and repudiate the obligation to pay over, although the condition has not been fulfilled. He must either affirm in toto, or rescind in toto. He cannot affirm so much as is in his favor, and repudiate the residue. He cannot retain the entire possession of the property, reap all the advantages, and profits to be derived from it, and refuse to pay the consideration money. The principle governing this class of cases is well settled. In Wheaton v. Barker (14 Barb., 594), it was decided, that a party who would disaffirm a fraudulent contract must act promptly, upon discovering the fraud, and he must return, or offer to return, whatever he has received upon it. He must rescind the contract in toto, and thus place the party in the position he was before the sale. In Lewis v. McMillen (41 Barb., 420), it was decided, that before a purchaser can set up as a defence to an action on a note given as collateral security for an installment of the purchase-money, the inability of the vendor to give a good title to a portion of the premises, he must surrender the possession of the premises. In this case, the vendor could not convey a perfect title to one-fifth of the premises, and the court held, that although it might afford a reason for rescinding the contract by the purchaser, yet it furnished no ground for refusing all payment without rescinding; that the purchaser would be compelled either to affirm or disaffirm, and rescind in toto ; and that it could not be pretended, that the purchaser had rescinded so long as he held possession under the con [200] tract. It was further held, that unless there was fraud in the transaction in which the note had its inception, which is hot the fact in the case at bar, .or an entire failure of consideration, which is not claimed here, a partial want or failure of consideration could not be alleged in bar; and that even if the contract is executory, the party must pay his note, and take his remedy upon the contract to recover damages. The principle established by these cases covers the present case, and the last case cited expressly decides the point here involved. I think it is controlling, and disposes of the question now raised. The defendant, by remaining in possession, and exercising acts of ownership over the property, has waived the performance of the conditions precedent, and is now estopped from insisting, that they should be enforced before the delivery of the note. (Sweetman v. Prince, 26 N. Y., 224, 227, 230; Tompkins v. Wyatt, 28 N. Y., 347; see also Masson v. Bovet, 1 Den., 69; Lamerson v. Marvin, 8 Barb., 9.) It follows, that there was no error in refusing the defendant’s motion for a nonsuit.- As the testimony, as to the release of the verdict, the quitclaim deed from Ferguson, and wife, to the plaintiff, and the warranty deed from plaintiff, and wife, to the defendants, could have no bearing upon the question involved, and could not effect the final decision of the case, there was no error in its introduction. The receipt introduced in evidence was not a technical release, which discharged the joint debtors. (See 5 Barb., 455, and cases cited.) There was no error upon the trial, and the judgment must be affirmed with costs. Jugdment affirmed.