Belden v. Davies — 2 N.Y. Super. Ct. 433

Majority

p. 433

Charles Belden and George Belden versus Rowland Davies and John M. Davies.

Headnote

The only fraud which can be pleaded, at law, to avoid a deed, is fraud in its em cutio)if such as a fraudulent reading of it, or the substitution of one instrument for another, or the obtaining, by some device, such an instrument os the party did not intend to give.

To an action of assumpsit, to recover the balance of an account, the defendants pleaded a release, under the seal of the plaintiffs. The plaintiffs replied, that the release was obtained from them, by the fraud and covin of the defendants,—on Which issue was joined. At the trial, the plaintiffs, to support this issue, offered to show fraud, on the part of the defendants, in the consideration on which the release was founded. The defendants contended, that the proof ought to be confined to fraud, in the execution of it only, and that if such fraud was not shown, the release was a flat bar at law. Held, that the position of the defendants’ counsel, was fully supported by the decisions of our own courts.

The plaintiffs, to rebut the evidence of a witness, introduced by the defendants, offered a bill in chancery, filed by him, which contained allegations contradictory to his testimony at the trial. The witness stated, that the bill had been filed by his counsel, and that he had never read it, although he believed that his counsel told him what he intended to insert in it; but the bill was neither signed nor sworn to by the witness. Held, that the evidence thus offered was not admissible.

The Judge, at the trial of the cause, without the consent of the defendants, and notwithstanding objections interposed by them, directed the jury, if they found for the plaintiffs, to find a nominal sum, sufficient to cover their demand, subject to a reference, to liquidate the accounts and ascertain the balance. Held, that the Judge had no power, without the consent of parties, to direct such a verdict, and that it must be set aside for irregularity.

Assumpsit, to recover of the defendants the balance of an account. The declaration contained the common counts for goods sold and delivered, money lent, money had and received, &c., together with the usual count upon an account stated.

The defendants pleaded, 1. The general issue. 2. Payment. 3. A release under the hands and seals of the plaintiffs, bearing date the 21st day of April, 1827, whereby the defendants were

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released and discharged from all claims and demands of the plaintiffs, and from all causes of action, in the fullest and most ample manner.

The plaintiffs answered the second plea, in the usual manner, and took issue upon it. In reply to the third, they set forth, that the release therein mentioned, “was had and obtained by the fraud “ and covin of the defendants,” and this they were ready to verify. The defendants rejoined, that “ the said deed of release was had “ and obtained fairly, and not by fraud and covin;” and of this they put themselves upon the country.

The cause was tried before Mr. Justice Hoffman; and at the trial, the counsel for the plaintiffs, upon opening their cause to the jury, stated it to be their intention, “ to_show fiaud in the con- “ sideration of the release.” The defendants’ counsel objected to this course, insisting, that, under the issue joined, fraud in the execution of the instrument was the only evidence admissible: That the release, if properly and fairly executed, was a flat bar at law, and that the remedy of the plaintiff, as to the alleged fraud, could only be found in a Court of Equity.

The presiding Judge ruled, however, that the plaintiffs had a right to go broadly into the whole matter, and show fraud in the consideration of the release; to which opinion, the defendants excepted.

The plaintiffs then called witnesses to show, that the release, set forth in the plea, was obtained by the defendants, after they had become insolvent, under false representations as to their real situation and means of payment. The defendants, it appeared, had been merchants in New-York, and there had also been a certain house in New-Orleans, transacting business there, under the firm of Cromelien, Davies & Co., in which the only ostensible partners were David Cromelien and David Davies. Both these houses failed at or about the beginning of the year 1826, and the defendants, during that year, employed themselves in making compromises with their creditors. In the course of their negotiations, it appeared that Rowland Davies, (one of the defendants,) made representations to the creditors, as to their property and means of payment, which turned out afterwards, to be essentially

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incorrect; and which were, as the plaintiffs contended, false and fraudulent. These incorrect or false representations, were all . _ made by Rowland Davies; but on one occasion they were made in the presence of John, the other defendant, who did not correct or contradict them. They principally related to a debt of 20,000 dollars, said to be due to the defendants, from Cromelien, Davies & Go., which Rowland Davies represented as almost a total loss but from which the defendants afterwards realized a considerable sum.

The basis of the release, (as the witness of the plaintiffs’ testified,) or the chief reason for granting it, was the alleged loss, sustained by the defendants, in the failure of Cromelien, Davies & Co. The plaintiffs claimed, at the time it was executed, a balance of seventy thousand dollars and upwards, and the defendants admitted a considerable sum due, (21,000 dollars,) but represented themselves as unable to pay more than 2,500 dollars to the plaintiffs, as a compromise. The negotiations for the release were protracted for a considerable time, the plaintiffs claiming, on their part, a release from the defendants of the same character, with that, which they were to give. This the defendants, for a considerable period, (nearly a year,) refused to give, alleging that they were fearful that the plaintiffs, by virtue of a power of attorney, which they held from the defendants, had contracted debts in their names ; but, upon receiving an affidavit from the plaintiffs, denying any such cause of danger, the parties finally arranged their difficulties, executed mutual releases in the presence of a witness, and delivered the same in pursuance of the previous arrangements.

The defendants also obtained, from others of their creditors, releases of a like tenor, with that executed by the plaintiffs, and they delivered into the hands of certain assignees, a considerable amount of property to be distributed among them, of which the plaintiffs were to receive 8,500 dollars. It appeared, however, that the property delivered to the assignees, did , not produce the amount contemplated, and the plaintiffs’ proportion falling short about two thousand dollars, they, as soon as all the facts of the case had come to their knowledge, refused to complete the arrangement, and brought this action to recover the balance of their

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account. At the trial, the plaintiffs offered in court, to cancel the release received from the defendants, if they would cancel that pleaded in bar of the action; but this the defendants refused todo.

Most of the facts, relative to the release, were proved by the testimony of one of the creditors, (John Jewett,) who had acted as an agent between the parties, and had himself given the defendants a release, founded upon the same consideration with that furnished by the plaintiffs. His testimony was objected to, at the trial, by the defendants; but the objection was overruled by the presiding Judge. After the testimony on the part of the plaintiffs was closed, the defendants moved for a nonsuit, upon the same grounds which were afterwards urged for a new trial; but the motion was overruled. Having excepted to the decision of the Judge, they opened their defence, and called witnesses to sustain it. They denied that any thing was due, upon a fair statement of the accounts, to the plaintiffs, although they admitted, that they supposed that there was a considerable balance against them, at the time the release was executed; and they introduced evidence to show, that there was, in fact, a balance due to them from the plaintiffs. The Judge remarked, that he would not go into a minute examination of the accounts, but would direct the jury, if they should find a verdict for the plaintiffs, to find a nominal sum, sufficient to cover their entire demand,, subject to such an adjustment of the accounts, as the court might afterwards direct. This course was objected to-ón the part of the defendants, when the charge was given to the jury, but all the accounts between the parties were laid before them.

The defendants also called witnesses to prove, that the plaintiffs, before the release was executed, had full access to the books and papers of Cromelien, Davies & Co., had examined their accounts, and understood their situation perfectly well. That they executed the release, with due consideration, after all the facts relative to their situation were known, and that they were in no way deceived as to the true circumstances of the case. Among others, they called David Davies, the partner in the house at New-Orleans, who testified, that the plaintiffs were general partners with Cromelien, Dames fy Co., and that they became such in the summer of 1824, although the agreement of partnership was not re

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duced to writing; and this testimony was fully supported by two other witnesses.

The plaintiffs, for the purpose of discrediting the testimony of Davies, as to the partnership, offered in evidence a bill in chancery, filed by him against Cromelien, after their failure, wherein nothing was said of the connexion between the plaintiffs and the New-Orleans’ house. This bill was neither sworn to nor signed by the witness, but had been filed by his solicitor. He testified that his counsel stated to him, in general terms, what the bill would contain, but that he did not see it, either before or after it was filed, and that he was ignorant of its particular contents.

The defendants objected to the reading of this bill; but the presiding Judge overruling the objection, allowed it to be read to the jury, and the defendants excepted to his decision.

A considerable amount of testimony was offered, by both parties, to sustain their respective allegations, which it is not necessary to detail; the defendants denying that any balance was due to the plaintiffs, and insisting that they were partners with Cromelien & Davies, of New-Orleans.

The plaintiffs on their part, offered evidence to sustain their whole demand, to prove fraud in the consideration of the release, and to contradict the defendants’ allegation, as to the partnership.

The Judge charged the jury, that they must be satisfied, in the first place, that there was fraud as to the consideration of the release, on the part of the defendant, John Davies, as well as of Rowland, otherwise the action could not be sustained; and that in weighing the testimony on this subject against John, they must leave out of view the representations alleged to have been made by Rowland. He also charged them, that if they should be of opinion that there was a partnership between the plaintiffs and Cromelien, Davies & Co., that then the action could not be maintained. That the testimony, as to this point on the part of the defendants, was positive, while that on the part of the plaintiffs was chiefly of a negative character; but that they must decide upon the question of partnership as a matter of fact. That as to the release, there appeared to have been no want of deliberation in preparing and executing it. That if they should find that the plaintiffs had access to the books of Cromelien, Davies & Co.,

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containing the accounts of the defendants, and disclosing what was now said to be misrepresented, or if they should find that they had acquired the same knowledge aliunde, that then they should find for the defendants, because in such a case there could have been no false representations: that the mutual releases were not important in the case, although they presented a peculiar feature in it, having been delayed for a longtime, in consequence of the refusal on the part of the defendants to execute that which was held by the plaintiffs. That if the jury found, that in point of fact, the defendants were not indebted to the plaintiffs, then, that the verdict should be for the defendants on the issue, because there could be no fraud. He also charged them, if they found for the plaintiffs, that they might find a nominal sum, and the court would after-wards direct a liquidation of the accounts.

To the last part of this charge, the defendants objected, contending that it was the business of the plaintiffs to prove their claim precisely. That if the question of fraud was left to the jury, they ought also to find the amount due to the plaintiffs, the two questions being so connected that they ought not to be investigated and decided by different persons, and that the law did not authorize a trial of only a part of a cause by the jury.

The jury returned a verdict for one hundred thousand dollars in favor of the plaintiffs.

The defendants now moved for a new trial, and Mr. R. Sedgwick and Mr. Anthon in support of the motion contended,

that the evidence offered to prove fraud, in the release, was inadmissible, and ought to have been overruled. That the issue joined upon the third plea was purely technical, and presented a question as to the manner in which the discharge was procured, not as to the consideration upon which it was founded. That the release, if properly executed and duly delivered, presented a flat bar at law, unless the plaintiffs could show that the instrument itself was a different one from that which they intended to execute, and that it was fraudulently procured by the defendants. The validity of the deed, (they said,) when legally delivered, and there is no fraud or mistake as to its execution, cannot be tried in a court of law, but the party which sets up a want of consideration, or a fraud, which reaches beyond the execution of the instrument,

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must go into a Court of Equity, and obtain an issue there, upon which the validity of the instrument may be tried. And a Court • of Chancery does not, on all occasions, as a matter of course, declare the instrument void, but it takes care to administer justice between the parties, according to the very right of the case.

In the case now before the court, there are mutual releases, and if the efficacy of the defendant’s discharge is destroyed by the verdict of the jury, what is to prevent the plaintiffs from availing themselves of that which they hold from the defendants, whenever it may become necessary for them to use it as a defence 1 Even if there was fraud in the consideration of the discharge given to the defendants, it does not follow that there is any legal objection to that which the plaintiffs received. Now there would be manifest injustice in destroying the release of the defendants, in this collateral way, leaving that held by the plaintiffs to retain all its efficacy. The fraud set up here, is a fraud in the consideration ; but a part of the very consideration for the discharge given to the defendants, is the release obtained from them. It is in evidence, that the plaintiffs deemed the release, given by the defendants, a matter of vital importance in the compromise between them, which was delayed nearly a year in consequence of a reluctance, on the part of the defendants, to grant it. If the release held by the defendants, is destroyed, then, that held by the plaintiffs ought not to remain, and the plaintiffs cannot escape from the obvious force of this remark, by producing their offer to cancel both instruments. The effect of their offer was to anticipate the decision of the proper tribunals, and the defendants were not bound to accede to it. They had a right to rely on the protection afforded by the discharge, without resorting to a dilatory and expensive examination of all the transactions between themselves, and the plaintiffs. If the discharge was deliberately executed, (and that it was is fully proved,) if the plaintiffs put their hands and seals to the very instrument which they intended to deliver; if they understood its contents, and were aware of the effect of their own deliberate act, a court of law cannot take away from the defendants the protection afforded by the deed. The release pleaded, is a flat bar at law, and its effect cannot be evaded in this co-lateral way.

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If it were conceded, that the decisions of the English courts the positions assumed by the plaintiffs, those taken by the defendants are fully supported by the repeated decisions of our own courts. From some expressions used in Starkie’s Treatise o n Evidence, and in Saunders on Pleading, it would seem that doubts exist in England, whether fraud, in the consideration of a release, may not he set up at law, to avoid its effects. But the subject in this state is not a matter of doubt,—it has been settled, and that too, upon principles perfectly satisfactory. The Judge’s decision upon this point was, therefore, erroneous, and a new trial must be granted to correct the error, and give that effect to the release which is secured to it by law. [Com. Dig. Plead. 27 R. 14 W. Saund. on P. and E. 527. Vrooman v. Phelps, 2 J. R. 177. Dorr v. Munsel, 13 J. R. 431. Franchot v. Leach, 5 Cowen’s R. 508. Jackson v. Hill, 8 Ib. 294. Champion v. White, 5 Cowen’s R. 510. 1 Hopkin’s R. 284. 4 Swanst. R. 444.]

II. The plaintiffs ought to have been nonsuited at the trial: 1st, because there was no proof of any debt due to them ; 2dly, because there were mutual releases, and because the plaintiffs refused to cancel their own, while repudiating that held by the defendants.

III. The bill in chancery was illegal evidence, and ought not to have been admitted. If it had been sworn to, it might probably have been read, as containing admissions of the witness under oath, which he could not gainsay. If he had read it even, it might have , been considered as containing statements contradictory to those made on the trial. But a bill filed by counsel has never been held to furnish evidence against the complainant. [Peake’s Ev. 54. 2 Stark. Ev. 287. 2 Sel. N. P. 712.]

IV. The Judge erred in charging the jury to find a nominal sum for the plaintiffs, in case the verdict was in their favor. The jury were bound, if the case was committed to them, to find as to the amount of the debt, as well as the fraud. If the discharge was void, then the accounts between the parties were open, and should have bgen nassed iroon bv the iurv. The Judge gave to

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theta the power of deciding, as upon a special issue out of chandlery. He had no authority for this under the statute in relation to referees, and no precedent for it can be found, either here or in England.

V. The verdict was against law and evidence, there being no sufficient proof of a debt due to the plaintiffs; and the jury should have found for the defendants, on the ground of the partnership between Cromelien, Davies & Co. and the plaintiffs, which was distinctly proved by three witnesses.

Mr. J. W. Gerard, contra, for the plaintiffs, contended,

in the first place, that there could be no doubt as to the fact of the fraud practised by the defendants on the plaintiffs, for the purpose of procuring the discharge. That the delay in the compromise was occasioned by the reluctance on the part of the plaintiffs to grant the release, and it was finally obtained by false pretences and fraudulent representations. That this fact had been found by the jury, to whom the evidence on the subject was committed, under a charge, in most respects, eminently favorable to the defendants. That the court would, therefore, consider the point as established, (as it was not attacked by the defendants’ counsel,) that the release would not have been granted to the defendants, but for their own fraudulent representations and false pretences.

The question then is, (he said,) whether the defendants can avail themselves of a discharge obtained by fraud, to defeat an action at law brought to recover a debt due from them Í Whether in any court, fraud itself can be interposed by the guilty party, as a defence to an honest demand. It is an obvious principle of law, that no man can take advantage of his own wrong; and the question is, whether this principle is to find an exception in the present case.

The principle upon which the replication rests, is to be found in the first of Chitty’s Pleadings, 553, and the precedents to support it, are to be found in the second of Chitty, pages 464 and 610. The defendants cannot narrow the issue in which they have joined; and having alleged that the release was ob

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tained “ fairly, and without fraud or covin,” they are bound to abide by the question which they have consented to try. A release obtained by fraud is void ; it is no discharge, it cannot furnish a defence; and when the jury declared by their verdict, that the release was not obtained fairly, but was procured by fraud, it ceased to be an impediment in the way of the other questions, to be considered by them.

In the cases cited for the defendants, there was no issue joined upon the question of fraud; but the opinions of the court were elicited chiefly upon the pleadings; and all their decisions go upon the ground, that a failure of consideration will not at law avoid a deed. The consideration in the case before the court has not failed, and we do not impeach the release for that cause. We say that the release is void because fraudulent, and being void, it cannot be used as a defence at all. An issue was joined upon the question of fraud, by which the fact is found, and that question being settled, the law pronounces the release void. If the issue tendered by the replication was immaterial or improper, why did not the defendants demur ? We set forth a fact, which we supposed was sufficient to avoid the deed. The defendants, instead of saying, by a demurrer, that the facts set up in the replication could not affect the release, denied their existence by a rejoinder, and challenged the proof. They are, therefore, concluded by an issue voluntarily accepted by themselves, but which they could not support. If the release be a bar to this action, then fraud itself, distinctly found upon an issue for that purpose joined, affords as good a defence at law as honesty. We consider the plea as well founded in principle, and supported by numerous decisions. [3 Stark. Ev. 1293, release. 2 Ib. 586. 3 J. R. 317. 2 Wils. R. 347. 1 Bos. and Pul. 447. 7 J. R. 421. 6 Ib. 263. 3 Chit. Comm. Law. 691. 1 Cox’s Rep. 178. 2 Saund. on P. and E. 527. 2 Bridg. In. fraud. 15 J. R. 145. 3 Bac. Ab. fraud, 320 (note.) 1 Burr’s R. 396. 2 J. Ves. Jun. 295. 2 P. Wms. 156. 220. 2 Har. and John. 487. 7 Mass. R. 118 .]

II. If the release was fraudulent and void as to one, it was void as to bothot the defendants. [3 Cowen’s R. 577.] But this is

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not material, because the jury have found that there was actual fraud on the part of the defendant, John, as well as Rowland. The former was present when the false representations of the latter were made; and as they related to a matter of mutual interest, and were not contradicted nor corrected by Mm, he became a partner in the fraud, and must abide by its consequences.

III. As to the bill in chancery, it was produced to show that the witness had made representations which were at variance with his testimony, If the bill was not sworn to, or subscribed by Mm, he must nevertheless, have known its contents, and have given them his sanction. He testifies that his counsel told him what the bill would contain: how could his counsel tell him facts to be set forth in the bill, unless they were first communicated to him by his client ? The bill was good evidence of declarations made by the witness himself, as to the partnership which he contradicted afterwards by his testimony; and if there is any unexceptionable mode of contradicting a witness out of his own mouth, this must be one. [1 Stark, Ev. 286-7.]

IV. The direction of the Judge, as to the nominal sum for which the verdict was to be rendered, was unexceptionable. In the first place, there were long accounts between the parties, embracing a great variety of items, requiring a more strict examination than a jury could give them. The cause, at its outset, could not have been sent to referees, because the issue joined upon the third plea was to be disposed of. The Judge was not bound to go through with long bills of particulars, which would be better settled by referees. The same course has been pursued on other occasions in this court, and the practice is not only unobjectionable, but very convenient and useful.

V. The verdict is fully supported by the evidence and by the law, and the defendants cannot complain of the charge ; it was highly favorable to them, and had, beyond a doubt, much weight with the jury. As the defendants placed the stakes for which

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they contended before the jury, they cannot withdraw them now, but must abide the issue.

On the trial of this cause, one David Davies was introduced as a witness, by the defendants. The plaintiils, with a view to rebut his evidence, offered a bill in chancery, filed by him, which contained allegations contradictory to his testimony on the present occasion. The witness stated, that the bill had been filed by his counsel, and that he believed his counsel had stated to him what he intended to insert in it, but that he, (the witness,) had never read it. The bill was'not signed or sworn to by the witness, but was admitted in evidence, although objected to by the defendants.

The general rule seems now to be, that a bill in chancery will not be evidence of the facts stated in it, against the party filing it, although it is evidence to show the fact, that such a bill has been filed, in order to introduce the answer, or the depositions of witnesses. [1 Phil. Evi. 263. 7 Term R. 2. Case of the Bunbury Peerage, 2 Stark. Evi. 286, in notis.] In the present case, it could have no effect, except to discredit the witness, by showing that he had made declarations and statements in conflict with his testimony on this trial. If the bill had been sworn to, or signed by him, it might have been set up as his written statement of facts; but in its present shape, it can only be considered as the suggestions of his counsel. Though his counsel may have told him what he intended to insert in the bill, there is nothing to show that it was, in fact, drawn according to the information thus given, and it might have contained many averments, of which the witness was entirely ignorant. In any view of the matter, it does not appear to me that the filing of 'the bill is shown to be so far the personal act of the witness, as to charge him with the knowledge of the statements it contained. It was, therefore, in my judgment, improperly admitted in evidence.

2. The Judge, without the consent of the defendants, and notwithstanding objections interposed by them, directed the jury, if they found for the plaintiffs, to find a nominal sum, sufficient to cover their demand, subject to a reference to liquidate the ao

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counts, and ascertain the balance. The defendants now object to this as irregular.

I am not aware, that either with us, or in England, the courts have claimed a right, without the consent of the parties, to direct such a verdict. It is a practice very convenient, and it is much to be desired, that the courts should possess authority to adopt it. But the right to refer a cause at all, depends upon the statute, and that clearly contemplates only references to be made before the trial. If the parties put themselves upon the jury and go to trial, each has a right to submit his whole case to them, and all that the court can do, if it becomes apparent that the trial will require the examination of long and intricate accounts, is to discontinue it, and direct an application for a reference in the usual mode. There would seem, therefore, in this respect, to have been an irregularity at the trial of this cause, and this nominal verdict cannot be .permitted to stand.

Though, for the reasons above stated, a new trial must be granted, still it will, no doubt, be useful to the parties, to dispose of the main question on which the cause must finally depend.

The declaration contains the common counts in assumpsit, to which the defendants pleaded a release under the seal of the plaintiffs. The plaintiffs replied, that the release was “had and obtained from them, by the fraud and covin of the defendants,” on which issue was joined. At the trial, the plaintiffs, to support this issue, offered to show fraud, on the part of the defendants, in the consideration on which the release was founded. The defendants contended, that the proof ought to be confined to fraud, in the execution of it only, and that if such fraud was not shown, the release was a flat bar at law. The Judge permitted the plaintiffs to go into the evidence offered, and they proceeded to prove, that the plaintiffs were creditors, to a large amount, of the defendants, that a negotiation between them was set on foot, and continued for a considerable time, for a compromise of the debt. That mutual releases were finally executed, and that in the course of the negotiation, the defendants made certain false and fraudulent representations of their situation and property, whereby the plaintiffs were deceived into a compromise of their debt, at a much

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lower rate, than they otherwise would have accepted, and much lower than the defendants were in fact able to pay, and that the release in question, was executed in consequence of such false and fraudulent representations.

The question now is, whether this evidence was admissible, under the issue joined in the cause.

It is contended on the part of the defendants, that the only fraud which can be pleaded at law, to avoid a deed, is fraud in its execution ; such as a fraudulent reading of it, or the substitution of one instrument for another, or the obtaining, by some device or fraudulent representation, such an instrument as the party did not intend to give. On looking at the cases decided by the Supreme Court, it seems to me, that the position of the defendants’ counsel is fully supported.

In Vrooman v. Phelps, [2 J. R. 177,] the action was covenant on an obligation for the payment of money: The defendant pleaded, specially, that the consideration of the covenant was the purchase of a slave, and that the plaintiff fraudulently and falsely represented the slave as honest, &c. To this plea there was a demurrer. The court held the demurrer well taken, and they lay down the principle broadly, that “parol representations as to the “quality of a thing, made antecedent to the contract, though false “ and fraudulent, and though they may have induced the defendant to “make the purchase" cannot be pleaded to avoid a specialty. In Dorr v. Munsell, [13 J. R. 430,] the defendant pleaded to an action of debt on bond, that the plaintiff fraudulently obtained it, by representing himself to be the patentee of a certain improvement in the manufacture of cloth, and that he was the original inventor, when in fact, it had been previously patented to another, and the plaintiff was not the inventor, and that the defendant was induced by such fraudulent representations to execute the bond, which was given for a right to use the said improvement, &c. To this plea there was a demurrer, which was sustained. The court recognized the authority of Vrooman v. Johnson, and again said, that, at law, the defendant cannot avoid a solemn deed, on the ground of a want of con

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sideration, and that the inquiry is precluded by the nature of the instrument.

In Franchot v. Leach, [5 Cowen's R. 506,] the action was covenant, on an agreement by the plaintiff, to sell and convey a lot of land, for a certain sum of money, agreed to be paid by the defendant The defendant offered to prove, that he purchased the lot for the purpose of a distillery, which the plaintiff knew, and falsely represented to the defendant, that a stream of water, running through the lot, was sufficient for that purpose, knowing the contrary to be the truth. The evidence was rejected, and the court held, that it was properly rejected. They said, that the case of Dorr v. Mmsell was in point, and they state the principle to be> that the fraud, which “avoids a deed, is not a fraudulent represen» “ tation as to the consideration, but a fraud relating to the execu- “ tion of it, as a fraudulent misreading, or obtaining such an instrument as the obligee did not intend to give.”

In Jackson ex dem. Church v. Hills, [8 Cowen’s R. 290,] the plaintiff sought to recover, by virtue of a lease under seal, from the defendant. The defence was, that the lease was obtained by certain fraudulent representations, as to a part of the consideration or inducement to the making of the lease. The court held, that this defence could not prevail, and they adopt the principle, in terms, that “ if the consideration of a specialty, be unlawful or corrupt, it is “ void ab initio, and may be pleaded, but that the mere failure or “ want of consideration, is not sufficient, at law, to avoid a spe- “ ciality.” The court, in that case, revised all the preceding cases, and recognized the principles upon which they were decided, and in reference to the case then before them, Sutherland, J. who delivered the opinion, said, that the lease in question, was executed upon an adequate consideration, “ with full knowledge, on the “ part of the lessee, of what she was doing, and of its legal effect “ and operation, but under a misapprehension as to a collateral “ circumstance, occasioned by the false and fraudulent representations of the lessee. I know of no principle,” says the Judge, “ on which such a lease can be avoided at law.”

The result of all these cases seems clearly to be, that when the consideration of a deed is not illegal or corrupt, so as to render it

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void, ab initio, and when it is executed, understanding^, and with a knowledge of its legal import and effect, no plea at law can impeach it. The party is concluded by the nature of the instrument, and cannot be permitted to aver any thing against it.

In the case now before us, the release in question was executed upon an “ adequate consideration,” to wit, the money paid by the defendants, and the release given by them to the plaintiffs. It was executed deliberately, and with a full knowledge of its legal effect, but under a misapprehension as to the ability of the defendants to pay their debts, induced by the false and fraudulent representations of the defendants. The case seems in all respects, to fall within the principles laid down in Jackson ex dem. Church v. Hills, and must, in my judgment, be governed by them. I have not deemed it necessary, to enter into an examination of the numerous English cases,- cited by the plaintiffs on the argument. I consider the principles, which, must govern us, as fully established in our own courts.

The remedy of the plaintiffs, is in the Court of Chancery. That court, in the case of Irving v. Humphrey, [1 Hop. R. 284,] recognized it as a settled rule, that if a debtor, upon a compromise with his creditors, make any material false representation, as to his property, it will avoid any deed, by which the creditors may have discharged him. But in such cases, that court does not always set aside the compromise entirely, but will order the debtor to account for any property which he may appear to have concealed. Relief will be granted in that court, according to the circumstances of the case, and the rights of all the creditors will be protected. In the case we are now considering, there is one feature which shows, in a peculiar manner, the reason why it should be turned over to a Court of Equity. The release executed by the defendants to the plaintiffs, must, for any thing I can see, be valid at law, though the plaintiffs were on this occasion to succeed in avoiding the one executed by them. There was clearly no fraud of any kind^on the part of the plaintiffs in obtaining it, and the only plea, which at law the defendants could interpose against that release, if set up by the plaintiffs on some future occasion, would be a mere failure of the consideration, on which it was executed.

p. 449

This most clearly could not be done, without overturning all the cases on the subject. In the Court of Chancery, the rights and interests of all the parties can be duly guarded, and if the plaintiffs should succeed in avoiding the compromise with the defendants, they would, at the same time, be compelled to cancel the release to themselves. That they offered to do so, in the present case, cannot affect or extend their rights at law, as the offer from the nature of the proceedings at law, must be considered merely as voluntary.

New trial granted.

[J. W. Gerard, Att’y for the plffs. Wells and Bushnell, Atty's for the defts.]