Opinion · New York Court of Appeals

Baldwin v. . Van Deusen

37 N.Y. 487

Type
Opinion
Court
New York Court of Appeals
Jurisdiction
New York
Date
1868-01-05
Topic
general

This case comes before this court upon an appeal by the plaintiff from an order of the Supreme Court reversing a judgment in his favor, entered upon the report of a referee and ordering a new trial. The order of the Supreme Court fails to show that it was based upon questions of fact. It must therefore be assumed in this court to have been made upon questions of law arising upon exceptions taken by the respondent upon trial, or to the report of the referee as made. The only exception that appears to have been taken by the respondent was to the conclusion of law drawn by the referee from the facts found by him, that the plaintiff was entitled to recover the amount of the note in suit. That is therefore the only question for examination in this court.

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BALDWINv. VAN DEUSEN,37 N.Y. 487(1868)
JANE BALDWIN, Executrix of W.B. Hewly, Executor of Alpheus Baldwin,
Appellant,v. NORMAN VAN DEUSEN, Respondent.
Court of Appeals of the State of New York.
January Term, 1868
John H. Reynolds,for the appellant.Chauncey Tucker,for the respondent.
GROVER, J.
This case comes before this court upon an appeal by the plaintiff from an order of the Supreme Court reversing a judgment in his favor, entered upon the report of a referee and ordering a new trial. The order of the Supreme Court fails to show that it was based upon questions of fact. It must therefore be assumed in this court to have been made upon questions of law arising upon exceptions taken by the respondent upon trial, or to the report of the referee as made. The only exception that appears to have been taken by the respondent was to the conclusion of law drawn by the referee from the facts found by him, that the plaintiff was entitled to recover the amount of the note in suit. That is therefore the only question for examination in this court. The referee found, in substance, that on thePage 48820th day of September, 1856, one Douglass Onley made his note for $155, payable one year after date, of which the plaintiff was the owner and holder on the 28th day of March, 1857. That on that day the plaintiff sold said note to the defendant, at auction, for the sum of eighty-five dollars, he being the highest bidder, for which latter sum the defendant gave the plaintiff the note in suit, the purchase of the Onley note being the only consideration therefor. That after the Onley note became due, which was September 23, 1857, the defendant demanded payment thereof of Onley, who refused to pay the same, on the ground that he, Onley, was a minor, and that Onley was in fact a minor under the age of twenty-one years at the time of making such note, and also at the time of demanding payment by the plaintiff. That at the time of the sale of the Onley note, the plaintiff agreed with the defendant that the note was the genuine note of Onley, and not further or otherwise. That at about the time of the commencement of this action, which was the forepart of June, 1858, and not before, the defendant offered to rescind the contract of sale of the Onley note, and return the same to the plaintiff, on the ground that Onley was an infant, and demanded the note in suit of the plaintiff. That no part of the note in suit had been paid. The sale by the plaintiff to the defendant of the Onley note constituted a good consideration for the note in suit. Although Onley was an infant, that did not make his note void. He had the right to ratify it upon coming of age, and thus render it entirely valid. (Roofv.Stafford,7 Cowen, 169, and cases cited.) This ratification required no new consideration.

The Onley note was not entirely without value, and unless this appeared the consideration of the note in suit was valid. The question whether, upon the sale of a note, the law implies a warranty by the vendor that the note is a valid, subsisting note, upon which a judgment can be obtained against the makers and indorsers, if any, does not arise in this case. That question is precluded by the finding of the referee. That finding upon this point is, that the plaintiff,Page 489upon the sale, agreed that the Onley note was his genuine note, and not further or otherwise. This finding shows that the parties agreed upon the sale of the note that the plaintiff should warrant the genuineness of the signature, but that there should be no further warranty in respect to the note. This as clearly negatives an implied as an express warranty. But, were we at liberty to strike the words, "not further or otherwise," from the finding, the result would, I think, be the same. It would then appear that the plaintiff, upon the sale, expressly warranted the genuineness of the note. This would repel the idea of any implied warranty as to the note in other respects. It would show that the plaintiff assumed the risks as to the genuineness of the note, and the defendant other risks, if any. The maxim that the expression of one excludes the other, applies. Had the note been void, the action would have been defended upon the ground that there was no consideration for the note in suit. There was no fraud practiced by the plaintiff upon the sale. The referee finds that he, as well as the defendant, was ignorant of the infancy of Onley. The remaining question is, whether the defendant had the right to rescind the contract at the time he offered to return the Onley note to the plaintiff, and demanded of him the one in suit. It appears from the facts found, that both parties, at the time of the sale of the Onley note, were ignorant of his infancy. This fact materially affected the value of the note. It was not a valid note, available as such against Onley at the time. No recovery thereon could be had against him unless he ratified it after becoming of age. The contract, therefore, was made under a mutual mistake of a fact materially affecting the interests of the parties, and one which if known would have prevented the parties from entering into it. This gave the right of rescission to the defendant, upon the discovery of the mistake. But this is a right that must be promptly exercised upon discovery of the facts. Any unreasonable delay after such discovery will waive the right and preclude the party from its exercise. The finding does not fix the precise time of the discovery, but the inference therefrom is that it wasPage 490as early as October, 1857. No attempt at rescission was made until June thereafter. There was a delay of eight months. That this delay was a waiver of the right, is too clear for argument. A perusal of the evidence, as set out in the case, tends strongly to show that the referee erred in not finding as a fact that the plaintiff warranted the note to be valid upon the sale, and a breach of such warranty. But this court, under the exception, can give no relief upon this ground. (Bergenv.Wemple,30 N.Y. 319. ) There was no request to the referee to find this fact, nor any exception to his refusal so to find. But it is sufficient that this court has no power to interfere with the findings of fact by the referee. From these facts my conclusion is, that the plaintiff was entitled to recover. The order appealed from must be reversed, and judgment upon the referee's report affirmed.
WOODRUFF, J.
I think it quite clear, upon the proofs, that the representation made by the plaintiff at the time of the sale of the note, amounted to a warranty that the note was free from any such defect as the infancy of the maker.

It amounted, according to its fair interpretation, to an undertaking that it was a binding obligation; and, therefore, I think the Supreme Court properly granted the new trial, and might have placed their decision on the ground that the referee erred in his finding of facts.

But the order of reversal does not state that the judgment was reversed upon the facts, and without that this court has jurisdiction to consider only whether, upon the pleadings and facts found, the judgment was erroneous.

The answer of the defendant sets up, as a defense — a denial that he made and delivered the note in suit; that the consideration of the note was the note of Onley, an infant, sold to the defendant by the plaintiff; that Onley refuses to pay it, on the ground of infancy; that plaintiff, at the time of the sale, represented the note of Onley to be good.

That the defendant was ignorant of the infancy of Onley, and thatplaintiff knewandfraudulentlyconcealed the fact of Onley's infancy, and represented the note to be good, forPage 491the purpose of inducing the defendant to purchase it without further inquiry.

1. Here is no allegation of mutual mistake, and claim to rescind upon that ground. The answer by alleging knowledge and fraudulent concealment by plaintiff, expressly denies any claim or pretense of mutual mistake. Without an amendment the referee could not have sustained such a defense, even if the failure of the defendant toallegea rescission, and offer to return, could have been obviated.

2. The utmost that the answer amounts to, the making of the note sued upon being proved, is:

First, that there was no sufficient consideration for defendant's note, or that the consideration has failed.

Second, that by a false and fraudulent representation the plaintiff made the sale and procured the defendant's note, or, possibly,

Third, that the representation amounted to a warranty.

1. As to thefirst,the note of the infant was a sufficient consideration (in the absence of fraud or warranty) to uphold the promise of the defendant. If the transaction was in all respects fair, the purchaser may, if he will, take upon himself the hazard or chance that the infant will pay the note which he has signed, and if he chooses to pay, or promises to pay, therefor, he will be bound. (See cases cited,Roofv.Stafford,7 Cow. 181; and see alsoSlocumv.Hooker,13 Barb. 536.)

2. The finding of the referee expressly denies and excludes the defense of fraud. He finds that neither of the parties, at the time of the sale, had any knowledge of the infancy of Onley.

3. If the answer can, by a very liberal extension of its most obvious intent and meaning, be held to warrant proof of a warranty, then,

First, it is only a special warranty that "the note is good" that is alleged, and the finding of the referee does not sustain this allegation.

Second, if the sale alleged in the answer would,ex vitermini,import a warranty that the maker was legally boundPage 492to pay the note (which I cannot concede), still the finding of the referee that "the defendant agreed that the note of Onley was agenuinenote and not otherwise," forbids any implication of any other warranty.

If the finding that he warranted the note to be a genuine note would not (as I think it would) alone prevent an implication that he also warranted its validity as a binding objection, the finding of the referee that he did not agree further or otherwise, does forbid such implication. As already remarked, the question whether the finding of the referee is sustained by the proof is not before us. We may therefore, for illustration, suppose, in support of the finding, that on the trial it was proved that at the time of the sale, the plaintiff expressly stated that he warranted the note to be the genuine note of Onley, but that it must be distinctly understood that he made no other agreement or undertaking in respect to it.

This is in harmony with the finding of the referee, and surely here would be no room for any implication of any other warranty than the warranty that the note was genuine. And this is the legal effect of the finding.

Third, it only remains to consider whether, under an answer which alleges as a defense a fraudulent sale of a note with a representation that it is good, the defense is established where no fraud is proved, and the representation is found to be a warranty that the note is the "genuine" note of Onley, it being also found that the note was made by Onley, and the defect therein arises from his infancy.

Waiving any discussion of the question whether, under these pleadings, a mere breach of such a warranty can be insisted upon as a defense, I think the conclusion of the referee that proof of Onley's infancy did not show a breach of that warranty was correct.

The term "genuine" imported nothing in regard to the collectibility or in regard to its legal effect or operation, other than according to its usual and ordinary meaning, viz., that the note wasnot false, fictitious, simulated, spurious,Page 493counterfeit,or, in short, that the apparent maker did make and deliver the note offered for sale.

In reference to bank-bills, bills of exchange, promissory notes and securities for money, the natural and general, if not the universal, antithesis or opposite of genuine, is "counterfeit." Hence we say of a bank-bill, it is agenuine bill — i.e.,not a counterfeit bill — we represent nothing in regard to the legal validity of the bill in any other respect, or of the ability of a holder to collect any thing thereon.

I regret to say, that, upon the finding of the referee on the facts, the conclusion of law, that the plaintiff is entitled to recover, was correct. I say it with regret, because I think it was a proper case for a reversal upon the evidence; but if the party seeking to sustain the order does not see to it that the whole question is brought before us in a form that enables us to look into the proof, though we may regret it, we are powerless to relieve him from the consequences.

The order granting a new trial must, for these reasons, be reversed.

All the judges concurring,

Order reversed, and judgment upon the referee's report affirmed.Page 494