Winslow v. . Wood , 70 N.C. 429 ( 1874 )

In 1872, one Rogerson, an agent of the plaintiff, sold to the defendant a mule, and in payment for the price took defendant's note under seal for $173, payable in November, 1872.

Defendant showed that the mule was a young one, apparently in fine condition when received; that it was sent to his farm five miles from town, and the day after was put to some light work; that the mule seemed dull and indisposed to work, and after two or three hours was taken out. On the next day it was driven a few miles, with another one, and on another occasion, two days afterwards, the mule was driven with others in a wagon to town, and hauled back a load of guano. This was the only work performed by the animal, as he showed symptoms of sickness on each occasion of his being worked, and died in a week from the time he was purchased. The services rendered by the mule did not pay for his feed and attendance.

It was also in evidence, that at the time of the purchase, or immediately thereafter, a small knot was discovered under his throat; that in a few days his breast was much swollen, and the flesh in a doughy condition, readily yielding to compression and retaining the impression received; that there was a discharge from the nose, and that his hind leg became swollen and burst open, followed by suppuration; his respiration was difficult, though the appetite good to the (431) time of his death.

An expert was examined, who testified that the symptoms testified to indicated glanders or farcy, and the breaking down of the tissues, shown by the condition of the flesh as proved, was an invariable symptom of one or the other disease. That a young animal might have either disease, be apparently well and in fine condition, and have a morbid appetite, which would continue until his death.

For the plaintiff, it was shown that a number of mules from the same drove had been sold, and none had died from either disease; and that at the time of the sale of this one to the defendant, he was apparently well and in fine condition.

There was no evidence of warranty.

Defendant insisted that the plaintiff could not recover on account of the entire failure of consideration; to which his Honor replied, in the presence of the jury, "I don't think there has been any failure of consideration."

His Honor charged the jury, that if there was no warranty by the plaintiff, nor any knowledge on his part at the time of sale, of unsoundness in the animal, he was entitled to recover the full amount of the note; that the doctrine of recoupment or counter-claim could not apply to this case.

Verdict in favor of plaintiff for $175 and interest. Judgment, and appeal by defendant. I. Under the liberal system inaugurated by the change in pleading, and the blending of law and equity, in the same action, under the Code, the strict rules heretofore adopted by our Courts must give way to the more flexible practice even before this time introduced in other Courts. The right of the defendant to offer in defence, when sued on contract, a totalfailure of consideration in certain cases was well established in McEntyrev. McEntyre, 34 N.C. 299, and Hobbs v. Riddick, 50 N.C. 80.

These cases follow the principle enunciated in Farnsworth v. (432)Garrad, 1 Camp. 38; Morgan v. Richardson, Ibid. 40, and Tyev. Gwyne, 2 Camp. 346.

But the English Courts go even further in subsequent decisions, and if not directly, by inference, establish the principle claimed for defendant in this cause. Mondel v. Steel, 8 Mees Welsh, 858, and other cases.

Waterman on Recoupment, c., sec. 431, says, "As Courts, rather than drive the party to a separate action, favor recoupment, it will in general be allowed," c., and in the very full work which that author has published on the subject are given numerous decisions of other Courts sustaining the principle contended for in this case. See Dorr v. Fisher, 1 Cush. 271,Wheat v. Dobson, 7 Eng. and R. 699, and other cases to which reference is made.

II. Sec. 102, C. C. P., says, "The defendant may set forth by answer as many defenses and counter-claims as he may have," c. This statute is almost identical with the one in Tennessee 1856, ch. 71, and the decision in Ford v. Thompson, 1 Head. Tenn. 265, is applicable to our case. In that case it is true there was a warranty, but the defence was not made on that, but a total failure of consideration. In Parish v. Stone, 14 Peck. 198, "It seems that want of consideration, either total or partial, may always be shown by way of defence, and that it will bar the action or reduce the damages from the amount expressed in the bill, as it is found to be total or partial respectively."

III. It has been held that there cannot be a total failure of consideration of a thing in esse.

In Morgan v. Richardson, 1 Camp 40, note the action was on a bill of exchange for the price of some hams, and the defence offered was that the hams were without value, Lord ELLENBOROUGH held that a total failure of consideration would be a good defence as between the original parties. This action is between the original parties, but if it were not, the distinction as to original and third parties who (433) received the note after it became due, would not prevail in this State, under Mosteller v. Bost, 42 N.C. 39.

Waterman on Recoupment, c., pages 507 and 508, notes, citing cases, repudiates the theory that there cannot be a failure of consideration of a thing "in esse." If that theory is correct, then it is difficult to suppose a case in which entire failure of consideration may be plead.

In Morgan v. Richardson, bacon hams were sold, and as article of food they are valuable; that was the consideration, and when as article of food they were worthless, there was an entire failure of consideration.

Apply the reasoning to a counterfeit note, it was "a thing in esse," the component parts, viz: papers, engravings, c., existed, but as acirculating medium it had no value, and therefore the consideration entirely failed.

So in our case, the mule was supposed to be valuable because of capacity to perform service, and that was the particular and only purpose for which he was purchased. It died, but still it was a thing in esse. But when the capacity to perform service did not at the time of purchase, or immediately afterwards exist, then there manifestly was an "entire failure of consideration," and plaintiff ought not to recover.

IV. It is submitted that his Honor erred in making the remark in the presence of the jury. They ought to have passed on the fact whether or not there was a total failure in the animal.

For this, as well as for the ruling of his Honor as set forth in the case, the defendant is entitled to a venire de novo. The plaintiff sold to the defendants a mule and took their bonds for the price. The mule had a latent disease of which it died in a few days without having rendered any service of value. There was no warranty and no scienter on the part of the plaintiff. The action is upon the bond. (434)

The question is whether there is such a failure of consideration as to render the contract void and prevent a recovery on the bond?

At law a bond is good without a consideration. It is bad, not when there is no consideration, but only when there is an illegal consideration. At law, therefore, the defendant would have no defence. But we now administer law and equity both in the same action; so that we have to consider whether there is any defence in equity.

The rule is not, that equity will relieve against or declare void a contract because there is no consideration; but the rule is that it will not enforce the performance of a contract without a consideration. And even then it does not require an adequate or full, but only a valuable consideration unless the value is so inadequate as to prove fraud or imposition. Adams Eq. 79.

In our case fraud and imposition are negatived.

The class of cases where equity relieves against a contract for want of a consideration is where the parties supposed there was a consideration and it turns out that they were mistaken, and that the supposed consideration was non-existent. The case put by Mr. Adams is, "where the subject of sale is a remainder after an estate tail; and the estate tail without the knowledge of either party had been previously barred." Adams Eq. 188. And so in our case, if the mule had been dead at the time of sale without the knowledge of either party. But such was not the fact. There was no mistake about it. The mule was present, and was just what it appeared to be, a mule. And although it was not intrinsically as valuable as it was supposed to be, yet it was of some value, a market value to the full amount of the bond. And we have seen that mere inadequacy of consideration without fraud or imposition will be no objection even where equity is invoked to enforce specific performance, much less where it is invoked to relieve against a contract. So, counterfeit money as a payment, or as a consideration, will be treated as a nullity; but the bills of an (435) insolvent bank used without fraud as a payment or as a consideration, will be treated as a valuable although an inadequate consideration. So a bag of sand sold in fraud or by mistake for a bag of guano would be a total failure of consideration, and the contract would be null; but a bag of inferior guano would only be a partial failure of consideration, and would support the contract so as to enable the vendor to recover. And whether the vendee would have a counterclaim against the vendor, would depend upon circumstances; as, whether there was warranty or deceit. C. C. P. sec. 101.

There is no error. Judgment affirmed and entered here for plaintiff.

PER CURIAM. Judgment affirmed.

Morris v. Willard, 84 N.C. 295.