Beninger v. Corwin

Potts, J. I concur. At common law, where the vendor of a chattel in possession sells at a fair price, a warranty of the title is implied. 2 Kent’s Com. 478; Madison v. Stoughten, 1 Ld. — 261 — Ray. 523; 1 Salk. R. 210; Adamson v. Jarvis, 12 B. Moore 241; Cross v. Gardner, Carthew R. 90; Stoughtenborough v. Haviland, 3 Green R. 266. The civil law goes further, and requires that the vendor and vendee disclose, each to the other, every circumstance within his knowledge touching the thing sold which either had an interest in knowing. Pothier de Vente, n. 233 to 241; Laidlaw v. Organ, 2 Wheat. 178; 1 Story’s Eq. Jur. § 211. But we adopt the principles of the common, and not the civil law, and hold that a sound price implies only a warranty of the title, and not of the quality of the article sold. “ In such cases,” says Mr. Justice Story, “ the maxim caveat emptor is applied; and unless there be some misrepresentation or artifice to disguise the thing sold, or some express warranty as to its character or quality, the vendee is understood to be bound by the sale, notwithstanding there may be intrinsic defects and vices in it, known to the vendor and unknown to the vendee, materially affecting its value.” 1 Story’s Eq. Jur. § 212; 1 Kent’s Com. 478. It makes no difference that a full price was paid. Holden v. Dakin, 4 Johns. R. 421; Seixas v. Woods, 2 Caines’ R. 48; Defreeze v. Trumper, 1 Johns. R. 274; Snell v. Moses, 1 Johns. R. 96; Fleming v. Slocum, 18 Johns. R. 403; Hart v. Wright, 17 Wend. 272; Moses v. Mead, 1 Denio 385; Mixer v. Coburn, 11 Metc. 562; Parkinson v. Lee, 2 East 321; Chit. on Cont. 449, (5th Am. ed.); La Neuville v. Nourse, 3 Camp. 351; Johnson v. Cope, 3 Har. & Johns. 89; Dean v. Mason, 4 Conn. R. 428; West v. Cunningham, 9 Porter’s R. 104. And upon the general doctrine of warranty, see Chandelor v. Lopus, 1 Smith’s Leading Cases 145, and notes; 2 Kent’s Com. 479, note (a.); Emerson v. Brigham, 10 Mass. R. 209, note (a.), where, among other things,the exceptions to the general rule maybe found stated. The doctrine, then, being well settled, that the fact of a sound price having been given for the horses by Corwin does not in law imply that Kearns warranted them, or either of them, as sound, is that fact evidence from which the jury — 262 — might draw the conclusion that Kearny represented them as sound ? For the same reason, and upon the same principles that a warranty cannot he implied from the premises, a false and fraudulent representation cannot be implied. In both cases the party making the allegation must prove it. Whether it be a contract of warranty, or a fraudulent misrepresentation, or a fraudulent concealment, that is relied on by the vendee, the fact must,'as a general rule, be proved, and cannot be implied or presumed from the mere circumstance that a full price was given. Fleming v. Slocum, 18 Johns. R. 403; Mixer v. Coburn, 11 Metc. 562. There are exceptions to the rule, but this is not one of them. Indeed the judge expressly told the jury that fraud must be proved, and could not be presumed, and that mere inadequacy of .consideration would not establish fraud in a contract. It is equally clear that the burthen of proof was upon the defendant to show the misrepresentation, if there was any, and not on the plaintiff. He who alleges must prove his allegation. For all that appeared upon the trial, Corwin might, at the time of the exchange, have known the condition of the unsound horse as perfectly as Kearns himself. There was error in the charge on this part of the case. Admitting that the true consideration of the note was the difference in the estimated value of the property exchanged, as fixed by the parties themselves at the time, yet as the case stood without any evidence of a warranty or any proof of misrepresentation, I think the judge was wrong in saying that if the jury believed there' was no difference in value the note was without consideration in contemplation of law. The law leaves individuals to act upon their own estimates of value in reference to property with which they choose to deal. It interferes with no man’s bargain, unless in cases of fraud. It must be so. It would open a floodgate of litigation if every 'dissatisfied vendee of personal property might appeal to a jury to say whether he gave too much or got too little for the article he bought or sold. Let the judgment below be reversed. — 263 — Ogden, J. This is an action of assumpsit, founded upon a promissory note, dated, in New York, October 9th, 1844, for the payment of #200, one day after date, given by Corwin, payable to one John Kearns, jun., or bearer, and transferred by him, a long time after its maturity, to Abraham M. Beninger, the plaintiff. The jury rendered a verdict in favor of the defendant, and the case is brought before us by writ of error, with several bills of exceptions, which were sealed at the trial. It will be necessary, upon this review, to state only such of the facts that appeared in evidence as are connected with the ruling of the court below. Kearns and Corwin were both residents of this state at thé date of the note, and dealt in the purchase, exchange, and sale of horses. Each had a pair of horses in market. Those of Kearns were in Newark, those of Corwin in the city of New York. The parties met in New York, came over to Newark together, took Kearns’ horses back with them, and during that interview they effected an exchange, in which Corwin gave this note for #200 and his pair of horses for the horses of Kearns. These were horses of fine appearance, well matched, and if sound would have been worth the consideration which was given for them. The facts, however, were that one of Kearns’ horses was wind-broken to such an extent as greatly to diminish his apparent value ; that Kearns knew of his unsoundness when he purchased him to mate a horse which he had; that he left the pair with Mr. Matlack, in Newark, for sale, stating to him that they were sound; that had they been as they were represented to be by Kearns, Matlack could have sold the pair for over #400, but, upon driving them, he discovered that one of them was wind-broken, whereupon he declined offering them for sale, and told Kearns of the unsoundness. It was also proved that the one horse of Kearns was worth #200, but that the defective one was not worth more than #75, at the extent. There was proof that the horses which Corwin passed over to Kearns were worth as much as Kearns’ horses — 264 — proved to be worth, and that the amount specified in the note is an excess over the real or market value of the horses which Corwin received in exchange. No witness sworn was present at the exchange, nor was there any proof, by the admissions of the parties or otherwise, that any thing was said during the negotiation of exchange respecting the soundness of either of the pairs of horses. The defence was put upon two grounds — -fraud, on the part of Kearns sufficient to vitiate the contract, and a failure of consideration. Upon the first ground, the judge charged the jury, that .as Kearns knew his horse was not sound, and that he was worth much less than his appearance indicated, and as Corwin’s two horses, with the amount specified in the note, appeared by the evidence to be a full consideration for Kearns’ horses, as sound ones, they had evidence from which a conclusion might be drawn, that Kearns, at the time, represented his horses to be sound: and- further, if they were not satisfied that Kearns must have represented his horses to Corwin' as sound, to obtain such an advantage in the exchange, still his having knowledge of the unsoundness, and withholding it from Corwin, would be a sufficient “ suppress lo veri” to avoid the note. A bill of exceptions was prayed and sealed- to this charge, and error has been assigned upon it. It cannot be concealed that Kearns got a great advantage in the trade, and that he put off upon Corwin a defective wind-broken horse ; and that if Corwin is bound to pay the note, he will suffer a great loss by the barter: yet the question presses upon the court, whether, under the evidence, a legal defence was established. Fraud cannot be inferred. Is its perpetration legally established, either by a false representation of quality at a sale, or by the withholding information which would affect the price, by simple proof o.f a full consideration having been given for a sound article ? The case discloses no evidence upon which Corwin could recover against Kearns in assumpsit for a breach of warranty. — 265 — None appears to have been made, and none can be inferred. But a representation not amounting to a warranty may support an action for deceit or defeat a recovery upon a contract. Each party to a bargain must take care not to say or do any thing tending to impose upon the other. No serious question can be raised as to the law, upon the one part of the first ground of the defence. The defendant should have shown by some substantive proofs actual fraud through false representations. The soundness of the price, alone, was not sufficient. 18 Johns. 403, Fleming v. Slocum. But again, was Kearns bound in law to inform Corwin of the defect of his horse ? and, if so, was there sufficient proof, from which a conclusion could lawfully be drawn that he did suppress the truth? The suppression of the truth in a fact material to a contract, and which a party is bound to disclose, is equivalent to the assertion of a falsehood, and should have a like vitiating influence upon the transaction. By the civil law, the parties to a contract were bound to communicate to each other all circumstances and facts which they would have an interest in knowing, whether intrinsic in the contract, and constituting a part of its essence, and of the value of the subject of the contract ; or extrinsic, which, though forming no part of the subject of sale, yet so bearing upon it, that they may create an inducement to enter into or abstain from the negotiation, or affect the value of the thing sold. It required entire good faith in all contracts involving mutual interests. It demanded of a vendor to discover all defects in the article sold which the vendee would be interested in knowing. The common law, however, has not in cases of sales of chattels, as distinguished from trusts and special confidences, adopted a rule so clearly consonant with the dictates of sound morals. The maxim of “ caveat emptor’’ has prevailed to a greater extent; and from the authorities, both English and American, the doctrine seems to be firmly established, that in cases of sales, if there be no warranty as to quality, or wilful misre — 266 — presentation, or artful device to disguise the character or conceal the defects of the thing sold, the vendee should be bound by the contract. The wrong which this rule sometimes works has subjected it to reproachful comments ; and it is not remarkable that in the hurry of a trial at a circuit, and without an opportunity of consulting authorities, a judge should be led, by the equity of a case, to incline to a ruling less severe and apparently more just. The conveniences of commerce require that one rule or the other should prevail. A purchaser may always demand a warranty or a representation of the quality of the article bought; and if he fails so to do, he acts upon his own judgment. If he omits to take proper care of his rights, it would lead to much litigation if the law should interpose to protect him from the consequence of his own neglect or inattention. The rule of “ caveat emptor” will not, however, save a seller from the defence of fraud, when set up in an action for the price. But what is the character of the fraud which will avoid a contract of sale ? It is not to be found in every deviation from moral rectitude which enters into the details of a sale. The seller may know of defects in his goods; and yet if he makes no false representations, employs no artifice to concoal them, is guilty of no positive deceit, and leaves the buyer to exercise his own judgment, skill, and experience upon the qualities of the subject of sale, whatever ought to be the effect upon the transaction, on moral grounds, of such silence, he is not, according to the cases, guilty of legal active fraud. In the language of C. J. Parsons, in his work on contracts, “The seller may let the buyer cheat himself ad libitum, but he must not actively assist him in cheating himself.” Whatever might have been said or done by Kearns during che negotiation of the exchange, the defendant has not been able to produce substantive proof that he misrepresented the qualities of the unsound horse, or that he used any means or device to hide the defects, or divert the attention of the de — 267 — fendant from a discovery of it, or that he -withheld information as to the defect; and a good sound price cannot supply the want of some such testimony. The judge of the Circuit Court erred in his charge, and the judgment should be reversed on that ground. He further instructed the jury, that the true consideration of the note was the difference in the estimated value made by the parties of the two pairs of horses at the time of the exchange ; and if, from the evidence, they believed that the horses of Corwin were equal in value to those of Kearns, the note stood without consideration, and the second ground of the defence was maintained. Error is also assigned upon this part of the charge. Upon a more deliberate examination of the whole case, I am of opinion that the contract was an entirety, and that the separation of the note from the rest of the transaction was erroneous. A partial failure of consideration cannot prevail as a defence to an action upon a note in the courts of this state. This error is also well assigned. A third assignment of error is, that the judge refused to instruct the jury that the presumption of law was, that Corwin had solicited of Kearns the exchange of their horses. The judge did not err in such refusal, as there was nothing shown by the case to support such a presumption. The judgment below is reversed.