Where, upon a contract of sale, the consideration was money paid and a negotiable note transferred with warranty, and the vendee has failed to make good his warranty, the vendor may rescind the contract by returning the note without a tender of the money.
In such case it is immaterial whether the warrantor was ignorant of the fact of the invalidity of the note, or fraudulently concealed his knowledge of that fact.
If a promissory note, void because made and dated on Sunday, came into the hands of an innocent third party for value, the doctrine of caveat emptor will not apply if such party uses ordinary care to inform himself in regard to its validity.
FOSTER, J.
The reception of the money and the note by the plaintiff was not an entire and inseparable transaction. The negotiations concerning the note constituted an independent agreement. It does not appear that the defendant was induced to purchase the plaintiff's property by her agreement to receive the note in part payment, instead of such an amount of money as the note represented. Where the agreements of parties relate to the whole of the consideration on both sides, the promises are dependent, and one of them is a condition precedent to the other; but if the agreements refer to a part only of the consideration on both sides, and a breach may be paid for in damages, the promises may be regarded as independent. 2 Pars. Con. 676; Benj. Sales (2 Am. ed.), s. 426; Luey v. Bundy, 9 N.H. 298, 303.
The sale and transfer of this note being an independent contract, or an essential part of an entire contract which the defendant has failed to perform, or concerning which he has defrauded the plaintiff, the ordinary principles relating to rescission apply, and we find no error in the instructions of the court upon this point.
The note in question having been made and delivered on Sunday, in payment for goods sold on that day, in the presence and to the disturbance of a third person, was a void and worthless note. Allen v. Deming, 14 N.H. 133; Varney v. French, 19 N.H. 233; Smith v. Foster, 41 N.H. 215; Gen. St., c. 255, s. 3.
Whether the defendant knew "that it made any difference about the validity of the note" was immaterial; his knowledge or belief could not alter the fact; and the questions proposed to him upon this subject were properly excluded. So, also, whether the defendant fraudulently concealed the fact that the note was made on Sunday was immaterial, because, the note being worthless, the defendant warranted it to be "as good as gold;" and the proposition is elementary, that when the consideration appears to be valuable and sufficient, but turns out to be wholly false, or a mere nullity, a party paying money or delivering property on the faith of a good consideration may recover the money paid or the value of the property of which he has been thus deprived. 1 Pars. Con. 462.
The defendant's warranty, however, would not extend to a defect in the instrument apparent on simple inspection, requiring no skill to discover it; and it is contended, that although the defendant knew the fact that this note was made on Sunday, and was consequently void, and so was guilty of fraudulent concealment of his knowledge of the defect, still, the defect being patent upon mere inspection of the note and reference to the calendar, the doctrine of caveat emptor applies. But was it a defect so apparent upon inspection as to suggest a reference to the calendar? Would a person naturally suspect that a note may be dated on Sunday, contrary to the presumption that all things are rightly done, especially when inquiry is diverted by the warranty that the paper is "as good as gold"? Probably not. But the whole matter presented a question for the jury, under appropriate instructions; and the charge in this respect was sufficiently favorable to the defendant.
Judgment on the verdict.
SMITH, J., did not sit: the others concurred.