Gibson v. Union Rolling Mill Co.

The opinion of the Court was delivered by Gibson, C. J. Parties who have treated on the basis of a fact falsified by the event, are not bound, because they acceded to the contract on a condition not performed. But did the plaintiffs treat on the basis that Page had a.title to one-third of the Cool Spring Iron-works Í That fact was exclusively for the consideration of the defendant, being a matter in which, so far as regarded his inducement to execute the notes, the plaintiffs were not concerned. They had recovered judgments against the partners carrying on the business of those works, under which the store of two of them was seized in execution and shut up; and the defendant gave the notes in question to release it from the levy, taking an assignment, in the name of Lowry, of the judgments as a security for Page’s eventual responsibility. The fact misrepresented by Page, that he had title to a third of the estate, and that the judgments bound it, constituted an inducement for the defendant to pledge his own responsibility; but it was no condition of the contract. The consideration of the [37] notes was forbearance of the debt, with an assignment of the original security ; and there is no pretence that there has been a failure of it. It was no part of the agreement, express or implied, that Page had an estate bound by the judgments. Of that matter the defendant and those concerned with him were to judge for themselves; and if their confidence in it has been abused by Page, they who confided in its representation, instead of the plaintiffs who did not, are to take the consequences. The plaintiffs did not seek the contract, and consequently had nothing to do with these representations, which were not made by them or to them, but by Page to the defendant. The defence is an attempt by a surety to extricate himself from his engagement on the ground that he was inveigled into it by the artifice of the principal. It is worse; for the property of the defendant and his partners as principals, was in the gripe of the sheriff, and he now refuses to pay the stipulated price of the rescue, made at the expense of the plaintiffs, who relinquished the security gained by their levy, because he was deceived by one of his own partners in a collateral matter. But the misconception which avoids a contract is necessarily a mutual one, and of a fact which efitered into the contemplation of both parties as a condition of their assent. If it related to a thing which was but a collateral matter, or the ultimate object or motive of the one party, it will not prejudice the other who was not influenced by it. ■ On any other principle no one could be held to a bargain induced by a mistaken expectation of gain. As to the contingent nature of the assignment, it is enough that the parties were content with the terms of it, and that the plaintiffs have held the judgments subject to it. We are unable to perceive, therefore, that the evidence was improperly excluded. Judgment affirmed.