Read v. Cummings

Mellen C. J.

delivered the opinion of the Court.

The note declared, on, and two others of the same date, were given for the price of a parcel of land; for the purchase of which the defendants contracted with Jonathan Cummings, the intestate, who gave them a bond with conditions to execute and deliver to them a good, and lawful deed of warranty of the land, upon payment of said three several notes. Cummings the obligor died insolvent, and his estate is under a commission of insolvency. The notes not having been paid, Reed, the administrator, sues this action, to enforce the payment of one of them. The defendants’ counsel contends that as they cannot by law maintain' any. cross action against the administrator on the beforeinentioned bond of the intestate, in consequence of the commission of insolvency on his estate ; and as, they would not be indemnified by a dividend of an insolvent estate, even if such action could be maintained 5 and as they cannot obtain a< deed of the land according to the condition of the bond, they ought to be permitted, in this action, to shew the foregoing facts In their defence; as they' all relate to the same contract and transaction, according to the principles of the case of Lyman, adm'r v. Estes, 1 Greenl. 182. In that case Lyman the intestate had conveyed a piece of land to Estes with the usual covenants pf seisin and freedom from incumbrances; and Estes gave his promissory note for the price. Lyman died insolvent, and in an action by his administratrix, founded on the note, it appeared that before the conveyance to Estes, Lyman had mortgaged the land; and Estes, after Lyman's death, had paid off the mortgage ; and this Court allowed and directed such payment to be deducted from the amount due upon the note declared on; considering the payment as in effect made to the administratrix, because it had gone to the benefit of the estate. But the two cases essentially differ. In the first place Esles had a perfect right of action against Lyman his grantor, in his life time, for the breach of the covenant in his deed that the land w.as free from incumbrance. This covenant was broken the moment it ivas made, and damages might have been recovered against Lyman, when living or claimed before the commissioners on his estate. In the second place Estes had removed the incumbrance, by paying the sum to the mortgagee. In the present case the defendants have not as yet acquired a right of action against any one, or laid the foundation for a claim before commissioners; and they cannot present a legal claim of any kind till the notes abovementioned have been paid. If Cummings, the obligor, were now living, no action could be maintained agains| him; for the obvious reason that the condition of his bond has not been broken. Thorpe v. Thorpe, 1 Salk. 171, 3 Leon. 219. Even if our statute had permitted a bond, to be set off against a note in an action upon the note, still, in this action, such set off could not be made'; because a set off always presupposes, and is in fact founded upon, an existing right of action upon the demand so set off; and it is a substitute for a cross action in certain cases, where a defendant inclines to .adopt that course of proceeding.

As Well might we in this action permit the defendants to defeat it by shewing that they hold a promissory note against the es= fate for a larger sum, although not payable, by the terms of it, till some future day. We therefore cannot, according to the spirit of our decision in Lyman v. Justes, admit this defence on the ground of insolvency, and for the reasons assigned for our opinion in that case. According to the case of Smith v. Sinclair, 15 Mass. 171, and Lloyd v. Jewell & al. 1 Greenl. 352, the bond constituted a good and legal consideration for the note; of course there is no defence on this ground.

But still it is contended that though (he bond did constitute a good and legal consideration for the notes, yet as the intestate had disabled himself to perform the condition of the bond, the defendants are discharged from their liability on the notes; because of the manifest injustice which would be the consequence of their being obliged to part with their money without the possibility of an equivalent; and the case of Jones v. Gardiner, 10 Johns. 266, has been cited in support of the argument. — That case has little resemblance to this. — It was an action on an agreement by which the defendant agreed to pay a certain sum to the plaintiff whenever he should receive from him “ a good and sufficient deed in law to vest him” (the defendant) “ with the title of the farm of land with the appurte- “ nances” which was the subject of the contract. — The deed tendered by the plaintiff was incorrect in the description of the boundaries, — and not containing all the farm. Besides, the wife of the plaintiff had not legally extinguished her con-, tingent right of dower in the farm. The Court decided against the action for the above reasons.

In short, whatever inclination we may feel to sustain the defence which has been urged, sve cannot find any legal principles on which it can be supported.

The defendants will probably be sufferers, and lose the sum, or a large part of it, which they are thus compelled to pay. But the law is liable to no imputation on this account. They should have guarded against loss, occasioned by the insolvency of the intestate, by insisting on his giving bond with sufficient sureties. Not having done this, they must submit to the inconveniences resulting froni their own inattention. — The defendants must be called.