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Finney vs. Cadwallader.

Also, to establish a bank in said building, and to make defendant the business manager thereof.

Dodge & Company failed to establish the line of schooners, as promised, whereby he was damaged during the two years they did business in Brunswick, from May 23d, 1870, to May, 1872, $1,200 00. They failed, also, to comply with their undertaking as to the amount of lumber which they were to pass over his wharf and mill-shed, shipping only two million two hundred and fifty thousand feet each year, whereby he was damaged $3,500 00. They failed, also, to pay for the storage on their lumber, damaging him on that account $1,130 00. They failed to comply with their agreement to keep the wharf unobstructed with lumber when they had no vessels in port, and thus prevented him from receiving five cargoes of railroad iron which were consigned to him, the storage, wharfage and commissions upon which would have netted him $1,100 00, whereby he was damaged the amount aforesaid. They failed to comply with their agreement to establish a bank, and to make him the business manager thereof, in expectation of which he had gone to the expense of fitting up a portion of his said building for the banking business, by reason of which lie was damaged $3,000 00. From these causes he has been damaged in all $9,930 00.

He would not have borrowed the $4,000 00, secured by the mortgage aforesaid from said Dodge & Company, had it not been for these various undertakings on their part. All of the obligations assumed by him were, in good faith, executed. From the amount of the damages sustained by him, he is willing to allow the plaintiff the sum claimed.

To this plea the plaintiff demurred upon the following grounds:

1st. Because it sought to set up parol agreements to vary the terms of a valid written instrument.

2d. Because the agreements set forth by said plea were in parol, and not to be fully performed within one year, and were consequently void under the statute of frauds.

Finney vs. Cadwallader.

3d. Because recoupment was not a proper plea upon said facts.

The demurrer was sustained and defendant excepted.

The jury returned a verdict for the amount claimed. Error is assigned upon the above ground of exception.

GOODYEAR & HARRIS, by brief, for plaintiff in error.

T. E. DAVENPORT, by N. J. HAMMOND, for defendant.


1. If part of a contract only is reduced to writing (such as a note given in pursuance of a contract,) and it is manifest that the writing was not intended to speak the whole contract, then parol evidence is admissible: Code, sections 2757, 3803. The consideration of a contract is always open to inquiry as between the original parties : 28 Georgia Reports, 165; 6 Ibid., 166. Even the consideration of a deed may be inquired into when the principles of justice require it: Code, section 2690. If the consideration, apparently good or valuable, fails either wholly or in part before the promise is executed, such failure may be pleaded in defense to the promise : Code, sections 2748, 2857, 3471. Recoupment is a right of the defendant to have a deduction from the amount of the plaintiff's damages for the reason that the plaintiff has not complied with the crossobligations or independent covenants arising under the same contract : Code, section 2909. It may be pleaded in all actions ex contractu, where, from any reason, the plaintiff, under the same contract, is in good conscience liable to the defendant : Code, section 2912. See a discussion of the principle of recoupment in 7 American Law Review, 389. Recoupment looks through the whole contract, treating it as an entirety, and regarding the things done and stipulated to be done on each side as the consideration of the things done and stipulated to be done on the other; and when a plaintiff seeks redress for the breach of the stipulations in his favor, it sums up the grievances on each side, strikes a balance, and gives him a

Finney vs. Cadwallader.

judgment for only such difference as may be found in his favor: 30 Georgia Reports, 482; Ibid., 413; 45 Ibid., 474; 48 Ibid., 128. The proceeding, under the statute, for forclosure of mortgage by petition and rule nisi, is open to all defenses applicable to an ordinary action on the secured debt: 27 Georgia Reports, 248; 30 I bid., 413, supra.

Contracts required by section 1950 of the Code to be in writing, are nevertheless good by the terms of the next section, if there has been performance on one side accepted by the other, or if there has been such part performance as would render it a fraud in the party refusing to comply if the court did not compel performance. Tested by the foregoing legal principles, there is no doubt that the defense of recoupment can be entertained in the present case, and that it ought to prevail to the extent of any damages that would be recoverable by the mortagagor against the mortagees in an original action by the former against the latter for the breaches of contract alleged in the plea. According to the plea the note and mortgage were but parts of an extensive contract between the parties, embracing many particulars. The note and mortgage were created in part execution of that general contract, and represented certain of its stipulations only. Other stipulations of the same general contract were obligatory upon the mortgagees, some of which were performed and some violated, and from such violation damages are alleged to have resulter to the mortgagor. The plea alleges performance on the part of the latter of all stipulations casting any obligation upon him, except only that of paying the mortgage debt. The object of this suit is to compel him to perform that; and he urges, as a defense, his counter-claim for damages.

2. The stipulations of the respective parties may be condensed as follows: On the part of the mortgagor, to erect a building and allow the use of two rooms therein, free of rent, for two years; to withdraw from the lumber business; 10 yield the exclusive right to pass lumber over his wharf and mill-shed; to divert the good-will of his lumber business to the mortgagees; to give the note and mortgage, and to dis

Finney vs. Cadwallader.

charge them by payment. On the part of the mortgagees, to make the loan on the agreed security; to establish a line of schooners, advertise the same, and make the mortgagor sole agent thereof at Brunswick, with certain rights as to freights, commissions, wharfage fees and storage fees; to ship over his wharf and mill-shed so much lumber the first year, and so much each succeeding year, paying wharfage thereon at an agreed rate; to pay storage, at Savannah rates, on lumber stored with the mortgagor; to keep the wharf and shed unobstructed with lumber, and allow the mortgagor the use thereof when no vessels of the mortgagees were in port; to establish a bank and make this mortgagor the business man

ager thereof.

It does not appear from the plea that either the schooner line or the bank was ever established. That being so, the damages from not making the mortgagor agent for the one and manager of the other, are too remote and uncertain. Whether, if the two institutions had gone into effect, and he bad been excluded from the agency and management, his damages resulting from such exclusion would, under the contract, have been sufficiently certain and proximate, need not be discussed. Neither is it necessary to consider, on the facts as they stand, what may be, or may have been, his right in respect to rescinding the contract for failure to establish the bank and the line of schooners : 29 Georgia, 461. The other three stipulations alleged to have been broken by the mortgagees, are within the ordinary rule of damages. If lumber was stored, and the storage was to be paid for at Savannah rates, those rates are doubtless ascertainable. If there was a failure, during the first and second years, as alleged, to ship the agreed quantity of lumber over the mortgagor's wharf, at the agreed wharfage of twenty-five cents per thousand ; that item is susceptible of calculation; and if, by reason of unwarranted obstruction, the mortgagor was excluded from his wharf when he was entitled to use it, and when its use would have been of value to him, his loss admits of legal estimation, more especially as the plea specifies the number and character of

Fahn vs. Bleckley.

cargoes which, being consigned to him, he was prevented from receiving. Not only are these three items matter for recoupment under the sections of the Code above cited, but under other sections, (2900, 3261,) they are of a nature to be available as set-off, proper, if so pleaded : See Ingram vs. Jordan, decided at this term.

3. The plea, treated as a plea of ręcoupment, (which it purports to be,) though amenable to none of the objections set out in the demurrer, is not free from grave defects. It presents bad matter blended with good; and it is wanting in fullness and precision, lengthy as it is. But a part of it is good in substance; and that, despite its vagueness, should protect it against the force of a general demurrer or of a motion to dismiss, until after warning bas been given to amend. We hold that the superior court may, and ought, on simple motion, to exact the correction of great looseness and uncertainty in pleading, and that refusal by counsel to make a reasonable and proper amendment in aid of due certainty, would warrant the court in striking a plea as if standing on special demurrer: Code, section 3459.

Judgment reversed.

ELIZABETH E. Fann, plaintiff in error, vs. LOGAN E. BLECK

LEY, defendant in error.

55 81 70 483 79 481 82 799

(BLECKLEY, Judge, being a party thereto, did not preside in this case.)

1. Where a party seeks to recover in ejectment upon the perfect equity aris

ing out of a bond for titles with purchase money paid, it must be clearly proven that all the purchase money has been paid by the plaintiff, and where the element of notice is involved, possession under the bond is also

necessary, unless the notice be otherwise clearly shown. 2. Where A holds the legal title and B’s money has paid the consideration of

the deed, and C purchases from A without notice, actual or constructive,

of B's equity, C will be protected. His title is good against B’s equity. 3. So, where a father bids off property at a sale by an administrator, one

fourth of the price to be paid cash, and the balance in equal installments at one and two years, and gives his individual notes therefor and takes a

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