Haycock v. Rand.

presentation, not exceeding the value of the vessel, and occasioned by sending her to sea before he knew of the falsity of the representation.

Judgment on the verdict.

JESSE HAYCOCK VS. JAMES RAND.

A promissory note, given by a purchaser of goods in settlement of an account, is not wholly avoided by proof that the prices of some of the articles charged in the account were fraudulently overcharged, and that some of the goods were inferior in quality to those bargained for; though such fraud, if duly specified in defence to an action on the note, might be given in evidence in reduction of damages.

THE plaintiff brought his action in the court of common pleas, to recover the amount of a promissory note for $371, signed by the defendant, to which the latter pleaded the general issue, and specified in defence, 1st, A want of consideration; 2d, A failure of consideration; and 3d, That the note was given for the balance of an account, in which there were erroneous charges and overcharges to the amount of the note. The defendant also filed an admission of the plaintiff's cause of action, and was allowed to open and close the case.

It appeared, on the trial, that the plaintiff was a dealer in lumber, with which he had supplied the defendant, from the 7th of May to the 22d of July, 1846, to the amount, as specified in his account, consisting of more than twenty different items, of $1051.53. Three cash payments had been made by the defendant on account, and the note in suit, which was dated September 25th, 1846, was given for the balance. The account was presented to the defendant, and payment demanded, on the 23d or 24th of September; the defendant stated that he had no time then to examine it; but he objected to certain charges for "carting," which, according to the custom of the trade, were made when the lumber purehased exceeded one thousand feet. The account was left

Haycock v. Rand.

with the defendant, and the plaintiff's clerk called upon him again in a day or two afterwards, stating that the plaintiff wished to have the bill settled by a note payable on demand, as he was about to go away, and that the note would be left in the hands of a third party, and the defendant might pay it at his convenience. A deduction of $12.90 was made by the plaintiff, for the overcharges in carting objected to by the defendant, and the account was then settled, and the note in question given for the balance. The plaintiff did not go away, as his clerk stated to the defendant he intended to do; and this suit was commenced on the note in eighteen days from its date.

It was in evidence, on the part of the defendant, by the deposition of one Foster, who was the plaintiff's clerk from the beginning of the account until the 15th of June, 1846, a period embracing the first nineteen items of charge, that the plaintiff, after selling the defendant lumber at $12 a thousand, ordered the witness to charge it at $13 a thousand, which he did; that, on one occasion, when delivering the defendant a quantity of number four boards, he was ordered by the plaintiff to put in some two or three hundred feet of scoot boards, an article entirely different from that contracted for, and of less value; that, at the same time, another lot of about three hundred feet, from a different part of the wharf, and of poorer quality, was put in by the order of the plaintiff; the whole being charged to the defendant at the price agreed on for number four boards; that the defendant was not always present, when the articles purchased were delivered to truckmen for him; that the defendant, as the witness presumed, knew what prices he was to have the articles for; but that, in a number of instances, they were charged at higher prices than were agreed upon, at the request and by the order of the plaintiff.

The defendant contended, that the note was tainted with fraud, and therefore void; that the conduct of the plaintiff, at the time the note was given, showed a design to get a note in settlement of his account, while the defendant was ignorant of the facts by which he had been defrauded; and that though

Haycock v. Rand.

fraud was not to be presumed, yet being proved in the consideration of the note, it was not to be presumed, that it was known and assented to by the defendant when he gave the

note.

The defendant neither claimed nor asked for any deduction from the amount of the note, by reason of any errors or overcharges in the account; but the sole question submitted by him to the court and jury was, whether the note was wholly void by reason of the alleged fraud.

And upon the question of fraud, the presiding judge, Merrick, J., instructed the jury, that if the note was obtained by fraud, it was wholly void, and payment of it could not be enforced; and that if the plaintiff fraudulently overcharged the price of lumber, or substituted scoots for number four boards, as testified to by Foster, and concealed or endeavored to conceal the knowledge of the same from the defendant, when the note was given, these acts were evidence tending to establish the fact, that the note was obtained by fraud; but that if the note was obtained fairly by the plaintiff and not by fraud, the defendant could not avoid it, by showing that the plaintiff, before the giving of the note, had made fraudulent charges against him; that although the fraudulent overcharges, and substitution of scoots for number four boards, if not known to the defendant, or if concealed from him by the plaintiff, when the note was given, would be sufficient to render the note void by reason of fraud; yet they would not be sufficient to produce that effect, provided the defendant voluntarily gave the note, and either knew, when he gave it, of such substitutions and overcharges; or if, no means being adopted or resorted to by the plaintiff to conceal the knowledge of the same from the defendant, he might, by common and ordinary attention to his business, have had such knowledge.

The jury returned a verdict for the plaintiff for the amount of the note, and the defendant excepted.

J. C. Park, for the defendant, cited Bliss v. Thompson, 4 Mass. 488; 1 Comyn, Cont. 37; Fuller v. Crittenden, 9 Conn. 401, 406.

Haycock v. Rand.

W. Sohier, for the plaintiff, referred to Archer v. Bamford, 3 Stark. R. 175; Solomon v. Turner, 1 Stark. R. 51; Hazard v. Irwin, 18 Pick. 95, 102.

DEWEY, J. Assuming the facts to be, as they purport to have occurred in the recital in this bill of exceptions, it was competent for the defendant to have asked a deduction from the note, to the amount of all such overcharges in price for boards delivered, and also a deduction for all charges for boards that did not correspond in quality with the lumber bargained for. Under our liberal practice in this respect, the defendant might, by way of recoupment, have had the benefit of a deduction from the amount of the note, to the full extent of all such overcharges and fraudulent sales. Harrington v. Stratton, 22 Pick. 510. To the extent of such claim well sustained by proof, it would appear, that the consideration of the note had failed, and to that extent a deduction should be made from it. The defendant, however, upon the trial, asked for no deduction on account of such errors and overcharges; but insisted that the note was wholly void, by reason of the plaintiff's fraudulently overcharging the prices in certain items of the bill rendered, and fraudulently substituting, to a small extent, boards inferior in quality to those bargained for.

That a note may be wholly avoided by reason of fraud in obtaining the same, or when the consideration is illegal, is doubtless true; but as it seems to us, in the case stated in the bill of exceptions, the fraud was in the account rendered. This account consisted of more than twenty different items, a very large proportion of which was correctly charged, and the payment for them conceded to be due to the plaintiff; a bill with all the items, and prices charged, was placed in the hands of the defendant to examine, who thereupon gave the note for the amount of the whole bill rendered, after making some few deductions for charges for removing the lumber.

Upon this state of the case, and upon the specifications of defence filed by the defendant, the instructions given by the presiding judge were quite as favorable to the defendant as the rules of law would admit. The jury were instructed,

"That if the note was obtained by fraud, it was wholly void and could not be enforced; and if the plaintiff concealed or endeavored to conceal from the defendant the knowledge of such overcharge or substitution of an inferior article, this would be evidence, tending to establish fraud in the obtaining of the note; but if the note was not obtained by the plaintiff by fraud, but was obtained fairly by him of the defendant, the defendant could not avoid it by showing that the plaintiff had, before giving up the note, made fraudulent charges against him, &c." These and the more extended instructions were, we think, sufficiently favorable for the defendant. His duty was to have objected to the charges as exhibited on the bill rendered, having the opportunity to do so, and not voluntarily to have given his promissory note for the same. If he had contested the original account thus rendered, he could successfully have resisted payment only as to those items which were overcharged, and as to those portions of the charges where inferior lumber was substituted. Why should the defendant be placed on better ground by reason of his having, after the bill was rendered, given in payment therefor his promissory note? Under the old legal doctrine, that you could not mitigate the damages by showing that the consideration had failed in part, or that the note was given for an article, in reference to the value or quality of which there had been false representations by the vendor, it would have been a more reasonable and perhaps necessary result, that if part of the consideration had failed through the fraud of the plaintiff, the plaintiff should not recover at all upon the note. But under the decisions of this court, it being competent, in all cases, for the injured party to avail himself, in reduction of damages, of any such partial failure of consideration, there seems to be no necessity or any sound principle, which requires us to hold the entire note void upon proof of a partial failure of consideration, when the note itself was not obtained by fraud.

Exceptions overruled.