Levy v. Larson

TYLER, P. J.

The complaint herein is based upon a promissory note in the sum of $3,066.43. The answer denies the execution of the note except under circumstances which are alleged in a special defense and which it is claimed constitute fraud and misrepresentation in the procurement of the instrument sued upon.

From the record it appears that on December 11, 1920, defendant contracted to purchase and plaintiff to sell certain grain bags and twine for a total sum of $9,030. Delivery was not to be made until June or July of the following year, the exact date of delivery to be at buyer’s option. The bags and twine were to be used by defendant in the harvesting of his crop. Thereafter and during the month of May, 1921, and before the earliest date for delivery contemplated by the contract defendant informed plaintiff that his crop had failed and that he would have no use for the bags and twine for that year, and requested that delivery he postponed until the following season of 1922. Plaintiff refused to accede to this request unless he was indemnified against a decline in the price of the articles contracted for. The defendant refused to enter into such an agreement, and

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thereafter and some time during the month of July, 1921, in lieu of accepting delivery he agreed to pay plaintiff the difference between the contract price and the then market price of the bags, the price having materially declined, this difference amounting to the sum for which the note in question was given.

As a defense to the action the defendant in his answer alleges that at the time the note was executed plaintiff represented to him that he had on hand the bags and twine contracted for, and that failure on the part of the defendant to accept delivery would result in the loss to him of the amount of the note. It is then alleged that defendant, believing and relying upon said representations and statements, executed the instrument sued upon. Then follows an allegation that at no time did the plaintiff have on hand the bags and twine, and that he had simply “shorted” the market in anticipation that the price of the articles contracted for would drop prior to the time specified for delivery. It is the claim of the defendant that under these circumstances and at the time he executed the note a fraud was committed upon him, for the reason that the plaintiff had not acquired the bags and twine, and was therefore in no position to place him in default.