Hoopes v. Strasburger

Bartol, C. J., delivered the opinion of the Court. The appellee sued the appellant in assumpsit, and declared for goods bargained and sold and on an account stated ; the narr. also contains the other common counts.The defendant pleaded; “that he never promised as alleged,” and “payment.” At the trial the plaintiff produced a promissory note, dated December 6, 1867, for $150, payable twenty days after date, to the order of Y. Strasburger, (the plaintiff,) and signed by Brewer & Hoffacber, and offered to deliver the same to the defendant, which the latter refused. The plaintiff then proved that he sold a carpet and rug to the defendant for $153.59; and gave in evidence the bill and receipt as follows: “ D. H. Hoopes, To Y. Strasburger, Dr. 1867. Dec. 6, To 67|-yds. Brussels carpeting, at $2.15 per yard....................................... 144 59 1 Rug!............................................ 9 00 $153 59 Received payment in full of the above account, by note of Brewer & Hoffaeker; I running the risk of the note being paid. V. Strasburger.” The carpeting was delivered at defendant’s dwelling. The note was not paid at maturity, and proved worth- . less; the drawers having failed several days before it became due, and left the city. Of these facts, the defendant was immediately notified, and payment of the bill demanded of him. [401] Testimony was offered on the part of the plaintiff, tending to prove that the note was worthless, that the makers were insolvent at the time the note was passed, that these facts were well known to the defendant, and that he falsely and fraudulently represented the note to be good, and that it would be paid at maturity. The defendant offered evidence contradictory of the same, and tending to prove the bona fides of the transaction on his part. If a party accept from his debtor, a note or bill of a third person, and “agree to receive it absolutely as payment, and to run the risk of its being paid,” the original debt will thereby be paid and extinguished. Glenn vs. Smith, 2 G. & J., 509; Berry vs. Griffin, et al., 10 Md., 27. It is very clear therefore, that in the absence of fraud on the part of the defendant, the receipt of the plaintiff offered in evidence, would be a bar to the present action. But the plaintiff seeks to avoid its effect, by showing that the defendant falsely and fraudulently represented that the promissory note of Brewer & Hoffacker was good and would be paid, when in fact he knew that it was worthless, and thereby induced the plaintiff to accept the note, and give the receipt. There appears to have been a conflict of testimony upon the question of fraudulent misrepresentation; but it was fairly submitted to the jury by the plaintiff’s prayer, which was granted, and was found against the defendant. We must therefore deal with the case, assuming the fraud to be established. The question for this Court to determine, is what is its legal effect upon the rights of the parties in the present suit ? And we shall consider first the several grounds of defence presented by the defendant’s prayers, and relied on by the appellant. These resolve themselves into an objection to the form of action which rests upon the theory that the bill and receipt constitute a special con [402] tract, whereby the plaintiff agreed to sell and deliver the goods, and receive in exchange or payment therefor, the note of Brewer & Hoffacker, that the legal effect of the agreement when executed by the delivery of the goods, and the receipt of the note, was to satisfy and extinguish the plaintiff’s demand for the price of the goods, and to destroy his right of action to recover the same in an action of assumpsit, for goods sold and delivered. That if he was induced to enter into the contract by the fraud or misrepresentations of the defendant, his remedy was by an action of tort, for the deceit, or he might have repudiated the contract, as soon as the fraud was discovered, and promptly returned or tendered the note to the defendant, and recovered the • goods by an action of replevin, or their value in trover. In support of this theory, a very ingenious argument was made by the appellant’s counsel, who cited Masson vs. Bovet, 1 Denio, 69; Fisher vs. Fredenhall, 21 Barb., 82; and Clements vs. Smith and others, 9 Gill, 156. We think these cases do not support the appellant’s positions to the full extent contended for. Unquestionably it would have been competent for the plaintiff, on discovery of the fraud, to have sued in tort for the deceit; or he might have repudiated the whole contract, and asserted his right to the goods; this is the extent of the decision, in 1 Denio and 9th Gill; the same doctrine was decided in Alexander vs. Dennis, 9 Porter, 174. But these authorities do not support the position, that in a case like this, a suit cannot be maintained on the original cause of action for the price of the goods. In 21 Barbour, which was a case somewhat like this, the Court held that the action by the vendor on the contract of sale, could not be maintained. But there was no fraud alleged on the part of the vendee, and the case was in other respects unlike the present. The transaction between these parties, as evidenced by the bill and receipt, was not such a special contract as [403] the appellant has construed it. It was a sale and delivery of goods by the plaintiff to the defendant, for a stipulated price; and an agreement to accept in payment therefor, a note of a third party, and run the risk of its being paid. If the agreement to accept the note as payment, was induced hy the fraudulent misrepresentations of the defendant, the effect of the fraud is to render the receipt invalid. The transaction consists of two elements, easily separable, and there is no reason why the plaintiff may not affirm the sale, and sue in assumpsit for the price. To such an action, the receipt having been obtained by fraud, could furnish no valid defence. „ In support of this position, we refer to Trisler vs. Williamson, 4 II. d? McH., 219, decided by the General Court in 1798, a case which we accept as binding authority in Maryland. It was argued by eminent counsel, and decided by learned and able judges, and although no' opinion appears to have been delivered by the Court, the point ruled, clearly appears in the report; and we think, supports the views we have expressed in the present case. The argument of th,e appellant’s counsel, that it was the duty of the appellee to return or tender the note to the appellant promptly after discovering the fraud, is answered by the cases of Glenn vs. Smith, 2 G. & J., 493, and Wyman vs. Rae, 11 G. & J., 416, which show that the production of the note and the offer to deliver it to the defendant at the time of the trial, was sufficient. The receipt being rendered void and of no effect, by the fraud of the defendant, the case stood in this respect, as if no receipt had been given. The defendant cannot be heard to complain of any prejudice suffered by him, in consequence of delay in tendering him the note; because he was promptly notified of the failure and default of the makers to pay it, and might, by paying the plaintiff’s bill, have at once entitled himself to its possession. [404] (Decided 18th February, 1873.) We have not considered the several prayers of the defendant separately, because they are comprehended in the points to which we have adverted. We think there was no error in rejecting them; and being of opinion that the instruction given to the jury in the plaintiff’s prayer was correct, and fully covered the law of the case, we affirm the judgment. Judgment ■ affirmed.