Mackay v. Holland , 45 Mass. 69 ( 1842 )

Dewey, J.

The evidence in this case shows that the note in suit was negotiated by the payee when overdue. The defendant is therefore entitled to any equitable defence which he could support against the original parties. The evidence further shows that the note was executed by the defendant without any consideration received by him, and merely for the accommodation of his brother, G. W. Holland, who was to pass it over to Houghton, the payee, as security for advances which he might make to said G. W. Holland. It further appears that, at the time when Houghton transferred the note to Yose, who transferred it to the plaintiff, Houghton was in fact indebted to G. W. Holland, and therefore had no legal claim on the note against the maker, (the defendant,) who was fully discharged from all further liability on the same.

These facts clearly show a good defence to an action at law on this note, instituted either by the payee or an indorsee — there being no legal consideration for the promise made to Cobb — unless the defendant has precluded himself, by his conduct and declarations, from availing himself of such defence as against the plaintiff; and this presents the point in issue between the parties.

The plaintiff insists, that the defendant has admitted his liability as maker of the note, and promised payment thereof, under such circumstances as should estop him from showing the facts above stated, or availing himself of them in defence of this action. If the defendant has thus made himself liable to the plaintiff, it must be upon the ground that there was such a degree of concealment, on his part, of the facts relating to his discharge from liability on the note, or such affirmative representations made by him to the plaintiff, as to his liability to pay the same, as might properly justify the plaintiff in acting upon the strength of those representations ; and that the plaintiff, bav'tig acted upon the faith of them, and materially changed his relation to other parties, will have been prejudiced by these acts and declarations, if they are not held to be binding and conclusive on the defendant.

Cases may readily be supposed, in which one party shall not be allowed, as against another, to interpose any claim or right, or to avoid any liability, at variance with his previous conduct and declarations, where that other has acted upon the faith given to such conduct and declarations, and has been thereby induced to part with his property, or to relinquish some valuable right. But, as a general rule, the admissions of a party, though evi dence against him, and, as the case may be, very strong evidence, are open to explanations, and may be controlled. He may show that they were made under misapprehension of the facts, or under some supposed liability which in truth did not exist. On the other hand, fraudulent concealment, or wilful misrepresentation to a third person, may operate to charge a party, if any damage be thereby occasioned.

That a mere naked admission, against the interest of the party making it—and which, if uncontrolled by explanatory evidence showing it to be erroneous, would be sufficient to charge him — is not conclusive against him, but may be controlled, was the doctrine of this court in Hall v. Huse, 10 Mass. 39, and Nichols v. Arnold, 8 Pick. 172. The cases of receipts given to an officer, whereby the party promises to keep, and to deliver on demand, certain articles attached as the property of a defendant in a suit, also show the application of the principle, that a party may avoid a liability which would otherwise arise from his promise, by showing that it was made under a misapprehension of the facts relating thereto. And this principle has not only been extended to third persons, but the owners of the property, thus stipulating to deliver it under such attachment, have been allowed to assert their right to it, and reclaim it, after a delivery thereof to the officer, where they have made it appear that they acted in good faith, either being ignorant of their interest in the property when it was attached and when they made their promise, or having then disclosed their claim and asserted their intention to enforce their legal rights. Johns v. Church, 12 Pick. 557. Bursley v. Hamilton, 15 Pick. 42, 43. Learned v. Bryant, 13 Mass. 224. Fisher vs. Bartlett, 8 Greenl. 122.^*

The present case shows that the defendant, at the time of making the admission of his liability to pay this note, was ignorant of the facts then existing which • would have constituted a good defence; and this removes all suggestions of fraudulent misrepresentation, or wilful suppression or concealment of the truth, on his part.

The only ground, therefore, on which to charge the defendant, is that of his laches in not making further inquiries into the facts concerning the matter, before his alleged admission and promise to the plaintiff. It is insisted by the plaintiff, that it was the duty of the defendant, when the inquiry was made of him, to have ascertained all the facts which he now relies on in defence, and to have made his reply to the plaintiff in view of such facts ; and that his omission to inquire was such negligence as should now estop him from urging such facts in his defence.

Upon this point, it is material to bear in mind the nature of the communications made to the defendant by the plaintiff, and which accompanied the inquiry which led to the admissions of the defendant. They were obviously not such as apprized the defendant that the plaintiff had under consideration the subject of taking the note, and as a thing to be done or not to be done, as the answer of the defendant might indicate whether the note was justly due or not. On the contrary, the defendant was informed that the plaintiff had already taken the note as his own property. The defendant may well have supposed that it was the inquiry of the owner of the note, made merely with a view of ascertaining its probable value, and that the answer would have no effect in inducing him to assume any new relation, or change his pecuniary interest in the same. Upon such an inquiry as was made, and in the manner in which it was made, we think the admissions of the defendant ought not to estop him from availing himself of such legal defence to the note as may then have existed. He seems to have disclosed all the facts which he then knew.

We do not perceive that the case, as it appeared before the jury, would have authorized any instructions by the court more favorable to the plaintiff than those which were given.

Judgment on the verdict.

* See Dewey v. Field, post.