Stryker v. Vanderbilt

The Chief Justice. The demurrer to the second plea raises the long agitated question, whether fraud in the consideration of a deed is a good defence at law. The question is not whether a court of common law has jurisdiction over questions of fraud, or power to relieve against it. That is conceded. The difficulty grows out of the familiar principle, that a seal imports a consideration ; and where the contract is in itself leffal, the amount or value ^of the consideration cannot be inquired into in a court of law: and inasmuch as an averment of fraud in the consideration of the contract necessarily involves an inquiry into the consideration upon which the deed is founded, that defence cannot be set up without a violation of well settled principle. “ In contracts under seal,” says Chancellor Kent, “ a consideration is necessarily implied in the solemnity of the instrument, and fraud in relation to the consideration is held to be no defence at law, though fraud in relation to the execution of the - specialty, and going to render it void, is a good defence.” 2 Kent's Com. 464. [493] In Armstrong v. Hall, Coxe 181, Mr. Justice Clietwood, after stating that the reason given for admitting the plea in Collins v. Blanturn, (2 Wills, 347) was that the bond was void ab initio, adds, “ But where the obligation lias been executed upon a contract, which the parties might legally enter into, but it afterwards appears that they were induced by deceit or fraudulent misrepresentation, that the bond is void of itself, or that the party shall he permitted to set up a parol agreement dehors the bond, and thus go into the consideration of the instrument in a court of common law, is a doctrine which, I think, is not warranted by any legal authority; and if it had been correct and agreeable to law, I cannot believe that the books would not have contained a case to support it. The proper remedy for the defendant in this case appears to me to be, to apply to a court of chancery, or the more easy and less expensive remedy, by an action on the case in the nature of a deceit.” In New York it has been uniformly held, in a long succession of eases, that fraud in the consideration of a sealed instrument, the contract itself being one which the parties might legally enter into, cannot he inquired into in a court of law. Vrooman v. Phelps, 2 Johns R. 177; Dorr v. Munsell, 13 Johns. R. 430; Franchot v. Leach, 5 Cow. 506; Champion v. White, 5 Cow. 509; Dale v. Roosevelt, 9 Cow. 307; Belden v. Davies, 2 Hall’s S. C. Rep. 433. The statement of Mr. Justice Chet wood, that no ancient case can he found, where the consideration of a sealed instrument has been inquired into in a court of law, on the ground of fraud in the consideration, seems to ho well founded ; yet there are certainly modern authorities which maintain that doctrine. Many of the cases will he found cited in 3 Cowen's Ph. on Ev. 1448, note 969. Mr. Justice Cowen, after citing authorities in South Carolina, which hold the defence admissible at law, adds, “ This doctrine, however, seems [494] entirely anomolous. With respect to other states, it may be laid down as a general rule, and we believe will be found sustained by all the cases, that, independent of any statutory provision, no fraud whatever can be set up in a court of law to affect the operation of a sealed instrument, save such as relates to the execution.” In this state, some of the earlier cases hold the defence to be admissible. In Barrow v. Bispham, 6 Halst. 117, Mr. Justice Ford rested the practice adopted in that case upon the equitable control of the court over its judgments ; and in Pennsylvania, though the defence is admitted at law, it is considered as a mere equitable defence, permitted to prevent a failure of justice, there being no court of equity in that state. Stubb’s Adm'r v. King, 14 Serg, & R. 208. In Rogers v. Colt, 1 Zab. 19, this court held that executed contracts under seal, where the party has received the benefit of his agreement, cannot be disaffirmed at law on the ground of fraudulent misrepresentations. This ease was affirmed in the Court of Appeals, on the broad ground, that in. an action on a sealed instrument, no fraud can be set up in a court of common law as a defence to the action, except such as relates to the execution of the instrument. And in the susbsequent case of Staats v. Freemum, the defence was overruled at the circuit, and the party compelled to resort to equity for relief.' No great principle is involved in the question. The •controversy relates merely to the tribunal in which the party defrauded shall have relief. The principle, that fraud vitiates a contract, is admitted. But in attempting to administer relief in, a court of law, another well settled principle is encountered, vis. that a seal imports a consideration, which cannot be gainsaid at law. The only inquiry is, whether the latter principle shall be abandoned, or the party complaining be required to go. into equity for relief, it is important that the question should be at rest. I [495] apprehend no evil result from adhering to the rule adopted by the Court of Appeals, and am accordingly of opinion that the plea should be overruled. The fourth and fifth pleas are bad for duplicity. They severally set up two distinct matters, each of which requires a separate answer, and each of which, if it constitute any defence whatever, would bar the action. 1 Chit. Pl. 564. The sixth plea is, that the time for the performance of the covenant was enlarged by parol' agreement of the parties, and that the defendant was ready, and offered to perform the covenant on his part, at the time thus designated for performance. In Chit. on Con. (9th ed.) 105, the rule is stated • to be, that in the case of a specialty, a subsequent agreement not under seal, dispensing with or varying the time or mode of performing an act covenanted to be done, cannot be pleaded in bar to an action on the specialty for nonperformance of the act in the manner prescribed.” This statement is in accordance with the ancient maxim fi: the law, “ unum quodque ligamen dissoluitur eo ligamine uo ligatur.” Rogers v. Payne, 2 Wils. 376 ; West v. Blakeway 2 Man. & Gr. 729. The weight of authority, however is, that a parol agreement, enlarging the time for performing a contract under seal, may avail as an excuse for nonperformance at the day specified in the original agreement. Fleming v. Gilbert, 3 Johns. R. 528 ; Longworthy v. Smith, 2 Wend. 587; Mead v. Degolyer, 16 Wend. 632 ; 3 Cowen's Ph. on Ev. 1479, note 987. In Cox v. Bennet, 1 Green 165, it was held, that the time fixed for the payment of money due on bond might be extended by an agreement not under seal. And the Chief. Justice, in delivering the opinion of the court, said, “ the party to whom a condition or covenant is to be performed may, by acts as well as words, enlarge the time of [496] performance.” There was no pretence that the bonds were avoided by the parol agreement. It was suggested by counsel, upon the argument, with much apparent force, that this construction will entirely defeat the plaintiff’s right of recovery. For the covenant being altered by subsequent parol agreement, no action of covenant will lie upon the written contract, but the plaintiff can maintain assumpsit only upon the parol agreement, and the parol agreement, being for the sale of land, will be void under the statute of frauds. The answer to the objection is, that a subsequent parol agreement, not contradicting the terms of the original contract, but merely enlarging the time of execution, is good, even in the case of a contract required by the statute of frauds to be in writing. Cuff v. Penn, 1 Maule & Sel. 21; Chit. on Con. (1st Am. ed.) 27, (9th Am. ed.) 125, note ; Cummings v. Arnold. 3 Metc. 486. A different doctrine is held in Blood v. Goodrich, 9 Wend. 68. But, however this may be, it must be regarded as set tied, that the time for the performance of a contract either by deed or by parol, may be enlarged by parol. The demurrer to the sixth plea is overruled. Justices Potts and Haines concurred.