Gillespie v. Torrance , 17 Bosw. 36 ( 1858 )

By the Court.—Woodruff, J.

—There is no dispute upon the question, whether the plaintiff was entitled to recover upon the note in suit, unless the defendant established a defence. If, therefore, there was no error committed in excluding the evidence offered by the defendant, it was clearly proper to direct the jury to find a verdict for the plaintiff for the amount of the note, with interest from the maturity thereof.

The evidence on the part of the defendant, so far as it was received, established the fact of the sale of the timber mentioned in the answer—the delivery thereof to Van Pelt—that it was paid for by notes made by J. J. Van Pelt and indorsed by the defendant, of which the note in suit was one, and the others are paid—that memorandum books, containing an inspector’s certificate of the quantity and quality of the timber, were delivered with the bill of the timber—and that the timber, when purchased, was hound together in a raft and lying afloat in the Nerth River. at or near Hoboken, in Brown’s Basin. .

The rulings of the court to which exceptions were taken will be considered quite as favorably for the defendant as he can ask, if we treat them as they would be treated if the amendment of the answer, which the defendant moved for, had been allowed by inserting therein an allegation of an express warranty of the timber. There is some show of reason, at least, in so considering them, because the court refused the amendment on the ground that the evidence already given by the defendant was not any evidence of an express warranty. And the evidence which was thereafter rejected was offered, first, to show that, by the usage of the trade on a sale of timber, the inspector’s book and certificate are delivered as evidence of quantity and quality, and the seller is deemed to warrant that the timber sold corresponds therewith; and, second, that the warranty was broken in this— that a portion of the timber, which on the sale in question was described in the bill of parcels, and in the inspection books and certificates, as “ first-quality oak,” was in fact ascertained, after the delivery thereof, to be second quality, or “refuse” oak.

. It will, however, be seen, that the reasons hereinafter assigned fully- sustain the ruling of the court in denying the leave to amend, whether the specific reason then given for such denial was sufficient or not.

Two questions, therefore, and, we think, only two questions, are raised by the exceptions taken at the trial:

First. Can an accommodation indorser, who, without consideration, becomes by indorsement a surety for the payment of the price of goods sold to the maker of a note, allege and prove as a defence, or by way of counter-claim, that the goods were warranted to the vendee, and that the warranty was broken, and, by proving the damages sustained by the vendee, abate from or extinguish the plaintiff’s (the vendor’s) claim against him upon his indorsement ?

Second. Was the evidence which the court rejected competent to prove—or, if in its nature competent, would it have tended to prove—any warranty of the quality of the timber by the plaintiffs, on the sale of the timber to Yan Pelt, to whom, as alleged in the answer, the sale was made, and for whose accommodation the defendant became indorser, as surety that he should pay the price ?

1. The first of these questions is not an open question in this. court. In La Large a. Halsey (1 Bosworths R., 171; S. C., 4 Abbotts' Pr. R., 397), this court, in general term, held, that in an action against sureties for the payment, by the tenant, of the rent reserved in a lease, the sureties could not set up, as a counter-claim, damages sustained by the tenant, by reason of a' breach by the landlord of an agreement made by him with such tenant—although the tenant, if sued for the rent, might have made such counter-claim.

In the present case, if a warranty of the quality of the timber was given to Van Pelt, and it was broken, there is in him a cause of action against the plaintiff: but even Van Pelt, if he used that claim as a defence to the note, would use it upon the principles governing the doctrine of recoupment; he would not be bound to set it up as a defence to the note—he might bring his own separate action for his damages.

If Van Pelt either brought his action, and now, under the Code, if he set up the claim as a counter-claim to the note, he might recover the whole damages sustained by him.

The defendant here has no control of that cause of action. Van Pelt may enforce it, or may assign it, or .may release it. He may not choose to permit the defendant to have the benefit of it. The defendant could not, under any view of the subject, make it available to effect more than an extinguishment of the plaintiff’s claim. He is not at liberty to so limit the rights of the vendee, and possibly preclude his obtaining full compensation for his damages; for obviously the plaintiff cannot be required to litigate the matter twice. The establishment of this cause of action by the present defendant, and its allowance in his favor, would not preclude an action by Van Pelt for his . damages; and nothing done or proved in this action by this defendant could be permitted to defeat his recovery.These considerations all show that an indorser, in virtue of his relation to the parties as surety for the maker, cannot protect himself by any such counter-claim.

And the definition of a counter-claim in the Code is further-conclusive on the same point:—A counter-claim is another cause of action existing in fa/oor of the defendant, as well as against the plaintiff (§ 150). This is not such a claim. , Whether circumstances might not be suggested which would create such equitable rights in the indorser, in case of the insolvency of the maker, as would entitle him to protection, we do not now inquire—none such appear in this case.

The defendant’s answer places his defence upon the ground of a sale and delivery to Van Pelt—his own indorsement, without consideration, received by himself, and as surety for Van Pelt. The defendant is not in a condition to set up a distinct cause of action—a breach of warranty on such a sale, whether the warranty be expressed in words, or otherwise inferrible from all the circumstances—as a counter-claim, nor as a defence to the action.

It was ingeniously urged on the argument, that insomuch as, by reason of the inferiority of some of the timber sold, such portion thereof was reduced to what is called second-quality oak, or refuse oak, the defendant was at liberty to treat the case as a deficiency in quantity. And so he insists that -there was a partial failure of the consideration of the sale, resulting in an over-payment by the vendee, Van Pelt, which leaves the note now in suit without any subsisting consideration; which view of the subject, if correct, would show, not a set-off or counterclaim, but a .defence to the note itself, which will avail as well for the benefit of an accommodation indorser as for the benefit of the maker.

The plausibility which gives color to the argument arises from the casual coincidence that there were two qualities of oak sold, and not from any soundness in the view suggested. Had the sale described the oak as being a given number of sticks or feet of “ first-quality oak timber,” and the whole was delivered and accepted, and it was shown that a part of the timber was of an inferior quality, and yet the whole was retained and used by the purchaser, the defect could never be called a deficiency in quantity.

Heither can the defect be so considered with any more accuracy when, besides such a sale, there was at the same time, and as part of the same transaction, a sale of other oak in terms described as second quality, or refuse. The vendee has received the timber he bargained for—the very sticks which were contained in the raft. They may not be so good as was represented, but they are the sticks of timber which, in fact, he purchased.

Where the property is received and retained, a defect in quality cannot be regarded as a failure of consideration. The maxim, cameai em/ptor applies to the quality of the goods sold, unless there is fraud or warranty ; and if there be a warranty, and it be broken, the breach creates a right of action in the vendee,.not a defence (strictly so called) to the note given for the purchase-money. Indeed, the goods and the warranty, taken together, constitute a full consideration for the note, although the quality be of less value than it is warranted to be.

As, for example, on a sale of a horse which is warranted sound, and which is shown to have some defect, not obvious to mere inspection—the consideration of a note given for the purchase-money has not failed : the warranty itself (in so far as the defect impaired the value of the horse) makes up the consideration of the note, and, except upon the principle of recoupment or counter-claim, the vendee is without defence to the note. »

It may be, on a sale, such as it is claimed was made in the present case—where the property was out of the State, in a condition not readily accessible, and where the sale was made in reliance upon the accuracy of the certificates of inspection—■ that the purchaser would have had a right to refuse to accept the timber if, when delivery was offered, it was found not to correspond with the certificates ; but he cannot accept the delivery, retain and use the timber, and, if there be no warranty, refuse tp pay the consideration. If there, be a warranty, then the breach of it vests in the vendee himself a right of action, which he may use as a counter-claim if he elect so to do, but which is not vested in the surety, and, as already stated, cannot be used by him.

2. The answer to the first question above proposed is sufficient to dispose of the case upon this appeal. The proof offered and rejected was not admissible, because, if a warranty had been proved, it would not have established, nor tended to establish, any defence, nor any counter-claim, in the defendant’s favor.

It is, therefore, wholly unnecessary to consider the other question. TSTo determination of that inquiry could affect the result. Whether the evidence was, in its nature, competent proof of a warranty, or whether, if competent, it would have tended to establish a warranty, the proof could be of no service to the defendant. The warranty would avail him in no manner for his protection.

It would seem, by the case, that the reason assigned at the ■ time for rejecting a portion of the evidence was, that there was not sufficient evidence of a warranty. The grounds upon which the offers to prove a warranty were rejected are not stated. -But these considerations are wholly immaterial. On exception to a ruling, the ruling must be sustained, if in point of law it was right, whether the appellate tribunal concur in the reasons given therefor or not. Where the true ground of the inadmissibility of material evidence offered is an objection which, had it been suggested, might have been obviated, and its rejection is placed so distinctly upon another and erroneous ground as to mislead the party offering the proof, that consideration might affect the propriety of granting a new trial, on a motion addressed, as such motions are in some degree, to the discretion of the court.

But this case is before us on appeal from the judgment, and on the exceptions only. If otherwise, no such case is presented as above supposed. The objection to the evidence could not be obviated; and had everything been proved which the defendant offered to prove, the plaintiff would still, as matter of law, .have been entitled to a verdict for the amount of the note, and interest.

By this we do not design to intimate an opinion that the ruling was erroneous upon the grounds then stated; it is sufficient to say, that we find an established principle which disposes of the case without further discussion.

The judgment must be affirmed.