Opinion of the Court, by CURTIS, Ch. J. BY THE COURT.-CURTIS, Ch., J.-The defendant, S. B. Moore, a country merchant at Wilkesbarre, Penn., when applied to by the plaintiffs in January, 1874, for a statement of the pecuniary condition of his firm, which consisted of his brother Oscar C. Moore and himself, and who bought goods on credit of the plaintiffs, stated in substance that their assets were $36,028.73, and that they owed $20,066.78. This showed a capital of $15,961.95. The plaintiffs continued to sell on credit to the defendants until the latter owed them, in September, 1876, $4,069.70, part of which was for goods sold the defendants that month. In the course of that month the defendants made an insolvent assignment and claimed to be unable to pay anything. It appears that when the defendant S. B. Moore made the statement of the financial condition of his firm to the plaintiffs, he omitted to mention that they owed their father $5,500 for capital to commence business with, for which then or subsequently a judgment note was given, and also that he omitted to mention that their firm were then indorsers of the notes of the defendant Oscar C. Moore for about $19,000. As these omitted liabilities exceeded their capital, and would, if mentioned to the plaintiffs, probably have terminated the defendants' credit with them, it is desirable to consider if these omissions can be reconciled with honesty and fair dealing on the part of the defendant, S. B. Moore. It is but just to him, to say that he does not deny the fact of making the omissions, but it is difficult to be satisfied with his reasons for doing so. He states that not being asked about the indebtedness to his father, and not thinking about it, he did not speak of it, and the same reason is in substance assigned for not speaking of the firm's indorsements for Oscar C. Moore. It is the most natural thing in the world, when a Opinion of the Court, by CURTIS, Ch. J. man is seeking credit, and is asked by the person from whom he seeks it, about his pecuniary condition, that he should remember such liabilities as the defendant refers to. It is difficult to suppose that this defendant would forget at such a time about the note the defendants gave their father for capital in their business, especially as they remembered to have it put in the form of a judgment note, not certainly with a view of prejudicing him in securing himself in a race with their other creditors then or at some future day. Even conceding that the failure to embrace this debt in their statement of liabilities to plaintiffs was a mental inadvertence consequent upon the plaintiffs not asking the defendant about it, which, in view of their having no notice of it, it was not easy for them to do, still it is asking too much to require the court to believe that for these same reasons the defendant did not disclose that they were liable as indorsers for one of their firm, in a sum far exceeding the amount of the capital they claimed in their statement to plaintiffs to have, unless there is stronger evidence to support such a theory than the papers on this appeal disclose. The defendant was not obliged to answer a question, or to volunteer any statement, but having undertaken to give a statement of the affairs of his firm, in order to get a credit from the plaintiffs, common honesty required him to give a truthful statement, and under such circumstances, there is as much fraud in a suppression to disclose a part of their liabilities in order to deceive the plaintiffs, as there would have been in a false representation of the amount of their assets. It is impossible to reconcile these coincidences of alleged failures of memory on the defendant's part in respect to the liabilities of his firm, and the other circumstances appearing in the case, with what is commonly known as honesty and fair dealing among busi ness men. Statement of the Case. The defendant must have known all along that the plaintiffs were relying upon his untrue statement, and if that untruthfulness arose from a temporary failure of memory at the time he made the statement, it was his duty to have corrected it, and not to have gone on for several months, until the purchases from plaintiffs were largely increased. It is absurd to suppose he did not think of these liabilities until the firm was forced to make an assignment. At that time, the note to their father, with interest, was $7,672.50, and the indebtedness for Oscar C. Moore was $19,943.51, and their remaining debts about as much more, while their stock, their chief assets, was sold by the assignee for $8,000. The acts of the defendant are not consistent with good faith, and to sustain them as such, would be at variance with the settled principles on which mercantile transactions and commercial credit rest, and must in the nature of things be governed. The order of the special term vacating the order of arrest, should be reversed, and the order of arrest re-in-stated. SPEIR, J., concurred, SEDGWICK, J. not voting. BENJAMIN P. FAIRCHILD, PLAINTIFF AND AP-PELLANT, . THERESA LYNCH, DEFENDANT AND RESPONDENT. I. AGENCY FOR THE RECEPTION OF A DEED. (a.) Conveyance of the property by the alleged principal and admissions by him in an answer in apother action, is. 1. F and C entered into a contract whereby F agreed to convey to C certain premises. C directed F to make the deed to L. In pursuance of such direction F executed a. deed conveying the premises to L and delivered it to C Statement of the Case. for L. This deed conveyed the premises "subject to a certain mortgage made by F which said mortgage the party hereto of the first part assumes and agrees to pay as part of the consideration hereinbefore expressed." L subsequently conveyed the premises. to B by a deed in which her grantee agreed to pay said mortgage as part of the purchase money. In an action subsequently brought against F, L, B, and others, to foreclose this mortgage, the complaint alleged that F sold and conveyed the premises to L by a deed in which "the said L assumed said mortgage as part of the consideration on such purchase and agreed to pay the same." L, by her verified answer to this complaint, admitted that F sold and conveyed to her, and further alleged "and this defendant received the said deed and this defendant admits that this defendant received said land subject to said mortgage," but she therein denied that she had ever agreed to pay the mortgage, and denied that under the deed to her she was bound to pay it. In that action judgment of foreclosure and sale was rendered on consent of her attorney which did not charge her with personal liability for any deficiency. HELD, prima facie evidence that C was L's agent for the purpose of accepting the deed from F to her, and that by his acceptance L became bound to perform any agreement on her part contained in it. 1. ASSUMPTION OF MORTGAGE.-Also held that if, on a proper construction of the deed it contained a clause whereby the property was conveyed "subject to a mortgage which the party of the second part assumed and agreed to pay," L was bound to perform such agreement, and to save F harmless from any liability on the mortgage. II. DEED-CONSTRUCTION OF.-CHANGE OF WORDS. 1. MORTGAGE ASSUMPTION CLAUSE. (a.) The word "first" turned in “second." 1. A deed contained the following clause "subject neverthe- III. MAXIM. Statement of the Case. Verba intentioni et non e contra debent inservire, ut res magis valeat quam pereat-applied. IV. EQUITY ACTION. 1. CAUSE OF ACTION AT LAW MAY BE RECOVERED IN IT. (a.) If a plaintiff brings an action for equitable relief, and on the trial establishes a cause of action at law, he may, although he fails to establish any right to equitable relief, recover judg ment on such cause of action at law, the defendant not having demanded a trial by jury or raised any objection.* Before SEDGWICK and SANDFORD, JJ. Decided May 8, 1877. Appeal from a judgment in favor of defendants, for costs, entered on dismissal of complaint after a trial at special term by the court without a jury. The complaint averred the making of a contract between the plaintiff and one Leonard, for the sale and conveyance to the latter of a house and lot of land on the northerly side of Twenty-seventh street, in the city of New York, for the price or sum of $21,500, to be paid partly in cash, partly by a conveyance of other premises to the plaintiff, and partly by the purchaser's assuming the payment of a mortgage for $15,000, then on the premises, and subject to which the plaintiff's conveyance thereof was to be made; that Leonard assigned the said agreement to the defendant who afterward completed the purchase, accepting from the plaintiff a warranty deed of said premises, in which it was stated that said premises were conveyed subject to the mortgage, the same forming part of the consideration money of such conveyance; that it was thereupon intended, both by the said plaintiff and said defendant, that the said deed should further state that the defend *NOTE. Of course, if the facts constituting the legal cause of action are not averred in the complaint and the defendant raises the point that although the facts proven constitute a legal cause of action, yet such cause of action is not complained upon, no recovery can be had thereon. |