Dubois v. Hermance

Boardman, J. Upon the trial defendants offered to prove false representations made by plaintiffs as to their contracts for the purchase of lumber. 1. As affecting the defendants’ relations with one Tuthill (to whom the defendants transferred the Ward contract), and by reason of which Tuthill refused to perform it. 2. As a substantial defense to the action. The evidence was not admissible for either purpose. The defendants’ contract with Tuthill was not involved in the issue. It is difficult to see how the defendants could be benefited by any position which Tuthill might have taken. They are defending against their own alleged breach of contract. Concede that Tuthill took the Ward contract off defendants’ hands upon the same representations by plaintiffs that induced the defendants to take it. He is not here defending. He is not a party to the action. His failure to perform the contract, and thus relieve the defendants from responsibility, is in no possible way a defense to the action. His misconduct may be available to defendants in an action by them, but it cannot be substituted and insisted upon as an excuse for defendants. Besides, no such defense is set up in the answer. ISTor can such evidence be interposed as a defense to the action. The Ward contract was but a small part of the entire consideration upon which the agreement between these parties was founded. The acceptance of that contract by defendants imposed an obligation upon them for which it may be assumed they were adequately paid by other portions of the agreement. It will not be permitted that a party shall take all that is valuable under an agreement, and at the same time resist those parts of the agreement which impose burdens on him, upon charges of fraud. If the agreement is to be rescinded upon the ground of fraud, the party rescinding must surrender all advantages which he may have acquired thereby. This principle is conceded by defendants. They endeavor to escape its effects by claiming that this contract was separate from every thing else agreed upon, and hence subject to such defense. But there is nothing in the evidence warranting such conclusion. The agreement between the parties repels such suggestion. The contract in all its parts was made at one time. There was but one consideration named for the whole $10,500, of which this contract is spoken of, as part of the contract of purchase and part [296] of the consideration for which snch purchase-money was paid. It seems impossible to separate the Ward contract from the remainder of the agreement, or to treat the transfer of it as a separate contract. As a consequence, fraud, as a defense to this action, cannot Jbe sustained, and the rulings of the court are correct. If the defendants had set up the fraud by way of counter-claim, and sought to recoup the damages against plaintiffs’ claim, a different question would have been presented. It. is sufficient that the pleadings do not present that possible view of the case. . The defendants further took exceptions to the admission in evidence of the judgment against the plaintiffs in favor of Ward & Son, and to the exclusion of evidence offered by the defendants, that they in due season notified plaintiffs that defendants would not perform the contract with Ward & Son, and that plaintiffs could have filled it elsewhere without loss. These exceptions present for consideration the rule of damages applicable to this case. The fulfillment of Ward & Son’s contract, after the agreement of February 3, 1869, became the duty of the defendants. They became the principals in that matter and the plaintiffs merely sureties. Holmes v. Weed, 19 Barb. 128; Vanschaich v. Third Av. R. R. Co., 38 N.Y. 346. Such being their relations the law implies a contract on the part of the principal to indemnify the surety. Vartie v. Underwood, 18 Barb. 561; Konitzky v. Meyer, 49 N.Y. 571. Perhaps the express contract of defendants “ to cari’y out the same,” referring to said lumber contracts, would be enough to avoid the necessity of relying upon such principle. If these principles be correct the defendants imposed no duty upon the plaintiffs by giving notice that they^ (the defendants) should not fulfill this contract, and such evidence was, therefore, inadmissible. The same reasoning applies to the offer to prove that plaintiffs could have filled the Ward contract elsewhere without loss. If plaintiffs could have filled the contract, the defendants, according to the offer, knéw how it could be done, and could have equally filled it. Plaintiffs, by their sale, had divested themselves of the means of performing such a contract. Ward & Son were entitled to their actual damages for the breach of contract. The wrong and neglect of defendants cannot be imjrated by them to plaintiffs. [297] Each is liable lor the actual damages suffered by Ward & Son. Plaintiffs to Ward & Son and defendants to plaintiffs. The judgment of Ward & Son, recovered against plaintiffs after notice to defendants, who refused to defend, is evidence against the defendants. They are in privity with plaintiffs in this contract. Mayor, etc., of Troy v. Troy & Lans. R. R. Co., 3 Lans. 270; Sedg. on Damages, 371; Holmes v. Weed, 19 Barb. 128. So far as the damages are concerned the judgment is conclusive in the absence of fraud or collusion. The cases cited by defendants are not in point. They are all actions directly for breach of contract and for damages resulting therefrom. That was the'case between Ward & Son and the plaintiffs. The eases cited would have been authority there. But here, where the time for defending on such legal principles is past, a different rule prevails, and that is, that the principal must answer to his.surety for whatever damages such surety has been» compelled to pay by reason of the principal’s default: The defendants, by their brief and points, do not object to or allege as error the costs included in Ward & Son’s judgment, or those costs paid by plaintiffs in defending that action. Under the practice of the court pointsmot raised or urged will not be considered in deciding the case. It is believed that the court committed no error to the prejudice of the defendants upon the trial of this action, and the defendant’s motion for a new trial is, therefore, denied, with costs and judgment ordered for the plaintiffs upon their verdict, with costs. Parker and J. Potter, JJ., concurred. Judgment accordingly.