Eli Dubois et al., Respondents, v. Jacob Hermance et al., Appellants

Eli Dubois et al., Respondents, v. Jacob Hermance et al., Appellants. (Argued April 29, 1874; decided May 26, 1874.) This was an action to recover damages for an alleged breach of contract. Plaintiffs were the owners of certain mill property, a warehouse and dock, in Ulster county, and were engaged in business in buying and selling lumber, grain, etc. Defendants purchased the property and business, and the parties entered into a written agreement, under seal, which recited the deeding of the property, and the payment of the consideration for the whole purchase, including all of plaintiffs’ contracts for the purchase and sale of lumber, and plaintiffs thereby sold and assigned all their contracts for the purchase and for the sale of lumber, and agreed not to engage directly or indirectly in the buying and selling of lumber, grain, etc. Defendants agreed to take and carry out the lumber contracts, etc. Plaintiffs alleged and proved that they had made a contract with the firm of J. C. Ward & Co., to sell them 500,000 feet of lumber, which contract defendants did not fill; that said J. C. Ward & Co brought suit against plaintiffs upon the contract; that plaintiffs notified defendants, and asked them to defend, which defendants refused to do; that plaintiffs defended, but that a judgment was obtained against them for $2,288.38 damages and costs; that plaintiffs also paid $300 attorney fees and expenses. Defendants, aside from a general denial, alleged, in their answer, that they were induced to enter into the contract upon the representations of plaintiffs that they had contracts for the purchase of lumber sufficient to fill their contracts for sale, when, in fact, they did not have any such contracts, and, by reason thereof, defendants were left without the means of carrying out the said agreement with. J. C. Ward & Co. Defendants’ evidence upon the trial tended to show that plaintiffs told them,, at the time of entering into the agreement, that they had contracts with different persons specified,. for lumber, to the amount of about 600,000 feet. Defendants offered to prove that these alleged statements were false; also that they informed plaintiff's, before the latter were sued, that on account of this they would not fill the Ward contract. This was objected to by plaintiffs’ counsel, upon the ground that no such issue was raised by the pleadings. The objection was sustained. The trial court decided that the issue of fraud or failure of consideration was not in the case, and that defendants could not go to the jury thereon. Held, that as the contract was a single- one, and the different subject-matters embraced therein, i. e., the sale of the real estate and the transfer of the business, being connected and mutually dependent upon each other, defendants could not rescind without tendei’ing back the title of the real estate received, and offering to release plaintiffs from their covenants; that the defendants could not rely upon the alleged fraud as vitiating the contract, while they remain in the possession and enjoyment of its fruits, but that thereby they adhered to and maintained the contract; that the agreement being under seal, a consideration was implied, and, therefore, the evidence was not proper under the general denial in the answer, as tending to prove a failure of consideration, as, in such case, a defendant must make proper special averment in his answer, to enable him to prove failure wholly or partially of consideration (Eldridge v. Mather, 2 N. Y., 157; Weaver v. Harden, 49 id., 286); that the other part of the answer did not set forth the facts constituting a defence, either of fraud or failure of-consideration; -that it fails to set forth the defence of fraud, as it does not state that the alleged false representations were made with intent to defraud (Lefler v. Field, 52 JST. Y., 621; Atkins v. ElweTl, 45 id., 760); that it could not be construed into an answer of failure of consideration, save by inference, as the pleader has not by any apt or usual phrase shown a purpose t<*. rest upon that defence. Springer v. Dwyer (SO N. Y., 19) distinguished. Also, held., that prima faeie, plaintiffs’ damages were the amount paid by plaintiffs to Ward & Co., upon their judgment, and that the judgment roll in that action was competent evidence {Holmes v. Weed, 19 Barb., 128; Van Schaick v. Third Ave. B. B., 38 N. Y., 346; Konistzky v. Meyer, 49 id., 571); that plaintiffs were entitled to recover the costs in that action and the expenses and disbursements in defending. {Hastie v. Be Peyster, 3 Caines, 190; N. Y. M. Ins. Co. v. Pro. Ins. Co., 1 Story, 458; Kip v. Brigham, 7 J. R, 168.) Evidence was given by defendants, that they pointed out to plaintiffs, when they refused to perform the Ward contract, how plaintiffs might fill it without loss. Reid, that this had no effect upon the question of damages; that the duty of performing primarily devolved upon defendants, they standing as principals, and plaintiffs as sureties; and that plaintiffs were not bound to resort to means to relieve defendants from loss when the latter had an equal opportunity and were previously bound. A. Schoonmaker, Jr., for the appellants. Charles A. Fowler for the respondents. [MAJORITY — Folger, J.,] Folger, J., reads for affirmance. All concur. Judgment affirmed.