"Strictly speaking, there can be no such thing as a failure of consideration. Either the promisor receives the consideration he bargained for, or he does not. If he does not receive the consideration, there is no contract; if he does receive the consideration, there can be no failure of consideration thereafter." 49 The term is, however, frequently used to express the situation which arises where the promisee fails wholly or partly to perform a promise which was the consideration of the promise of the promisor. Some cases usually considered under the head of failure of consideration may be mentioned here.
As we have seen, where there is a contract for the sale of goods by description it is an implied condition of the contract that the goods shall correspond to the description. By accepting the goods tendered, indeed, the buyer is ordinarily held to have waived his right to rely on the condition, and the condition, in effect, becomes a warranty.50 Where, however, a thing is sold as being an article of a specific description, and from latent defect, unknown to the buyer, it is in substance not an article of that description, but an article of no value, the buyer may rescind the sale notwithstanding acceptance, and may defend an action for the price or may recover the price if he has paid it. In such cases it is commonly said that there has been a total failure of consideration. Such a state of facts occurs where the thing sold is a bill or note or other security, and it turns out to be invalid because of forgery 51 or for other causes; 52 the instrument thus being not what it purports to be, but a mere worthless piece of paper. So in the sale of a patent, if the patent is void.68 But though the thing sold thus proves to be worthless, if the buyer assumed the risk of its validity, and consequently obtained the identical thing which he intended to buy, there is no failure of consideration.54
47 Wiley v. Inhabitants of Athol, 150 Mass. 426. 23 N. E. 311, 6 L. R. A. 342, per Field, J. Bee "Contracts," Dec. Dig. (Key-No.) § 278; Cent. Dig. §§ 1207-1215.
48 Ante, p. 558; UNITED STATES v. BEHAN, 110 U. S. 338, 4 Sup. Ct 81, 28 L. Ed. 168, Throckmorton Cas. Contracts, 409; Hinckley v. Steel Co., 121 U. S. 264, 7 Sup. Ct. 875, 30 L. Ed. 967; Hood v. Exploration Co. (C. C.) 106 Fed. 408; Mooney v. Iron Co., 82 Mich. 263, 46 N. W. 376; Caldwell v. Myers, 2 S. D. 506, 51 N. W. 210; Thompson v. Gaffey, 52 Neb. 317, 72 N. W. 314; Wellston Coal Co. v. Paper Co., 57 Ohio St 182, 48 N. E. 888; Southern Pac. Co. v. Well Works, 172 I11. 9, 49 N. E. 575; San Francisco Bridge Co. v. Improvement Co., 119 Cal. 272, 51 Pac. 335. See "Contracts,". Dec. Dig. (Key-No.) §§ 300, SOS; Cent. Dig. §§ 7374, 1424-1429.
49 Harriman, Cont § 524. See 9 Cyc. Law & Proc. 369.
50 Ante, p. 585.
Where on the sale of personal property the buyer accepts the goods, he may still bring an action for damages if the goods are inferior in quality to that warranted; or, instead of bringing an action for damages, he may wait till he is sued for the price, and then set up the breach of warranty in diminution of the price pro tanto as a defense.55 And to-day in most states such damages may be set up by way of defense in an action on a note given for the price.56 In such cases, where the article sold by reason of failure to conform to the warranty is wholly worthless, so that the breach of warranty is a complete defense, it is often said that there is an entire failure of consideration;57 and if the damages recoverable for the breach of warranty would simply reduce the amount of the recovery, it is often said that there has been a partial failure of consideration.58
51 Jones v. Ryde, 5 Taunt. 488; Gurney v. Womersley, 4 El. & Bl. 133; Terry v. Bissell, 26 Conn. 23; Aldrich v. Jackson, 5 R. I. 218; Merriam v. Wolcott, 3 Allen (Mass.) 258, 80 Am. Dec. 69. See, also, Whitney v. Bank, 45 N. Y. 303; Bell v. Dagg, 60 N. Y. 528. See "Bills and Notes," Dec. Dig. (Key-No.) § 97; Cent. Dig. §§ 166-212.
52 Burchfield v. Moore, 2 El. & Bl. 683 (material alteration); Gompertz v. Bartlett, 2 EL & Bl. 849, 23 Law J. Q. B. 65 (a bill of exchange purporting to be a foreign bill, which turned out to be a domestic bill, and invalid because unstamped); Wood v. Sheldon, 42 N. J. Law, 421, 36 Am. Rep. 523 (scrip illegally and fraudulently issued); Paul v. City of Kenosha, 22 Wis. 266, 94 Am. Dec 598; Meyer v. Richards, 163 U. S. 3S5, 16 Sup. Ct 1148, 41 L. Ed. 199 (bond stricken with nullity by constitutional provision adopted after act authorizing issue). See "Bills and Notes," Dec. Dig. (Key-No.) § 97; Cent. Dig. §§ 166-212; "Contracts," Cent. Dig. §§ 398-400.
53 Nash v. Lull, 102 Mass. 60, 3 Am. Rep. 435; Harlow v. Putnam, 124 Mass. 553; Shepherd v. Jenkins, 73 Mo. 510; Green v. Stuart, 7 Baxt (Tenn.) 418; Herzog v. Heyman, 151 N. Y. 587, 45 N. E. 1127, 56 Am. St Rep. 646. Cf. Chemical Electric Light & Power Co. v. Howard, 148 Mass. 352, 20 N. E. 92, 2 L. R. A. 168; Gloucester Isinglass & Glue Co. v. Cement Co., 154 Mass. 92, 27 N. E. 1005, 2 L. R. A. 563, 26 Am. St. Rep. 214. See "Bills and Notes," Dec. Dig. (Key-No.) § 97; Cent. Dig. §§ 166-212.
54 Lambert v. Heath, 15 Mees. & W. 487; Bryant v. Pember, 45 Vt. 487; Blattenberger v. Holman, 103 Pa. 555; Neidefer v. Chastain, 71 Ind. 363, 36 Am. Rep. 198; Wheat v. Cross, 31 Md. 99, 1 Am. Rep. 28; Hunting v. Downer, 151 Mass. 275, 23 N. E. 832. On this principle, it has been held that where bonds are sold which are invalid because the corporation has not power to issue them, or failed to comply with the law in their issuance, the purchaser is liable on his promise to pay. Otis v. Cullum, 92 D. S. 447, 23 L. Ed. 496; Harvey v. Dale, 96 Cal. 1G0, 31 Pac. 14; Sutro v. Rhodes, 92 Cal. 117, 28 Pac. 98. But see Hurd v. Hall, 12 Wis. 112. See "Bills and Notes," Dec. Dig. (Key-No.) § 97; Cent. Dig. §§ 166-212.
55 Mondel v. Steel, 8 Mees. & W. 858; Lyon v. Bertram, 20 How. 149, 154, 15 L. Ed. 847; Bradley v. Rea, 14 Allen (Mass.) 20; Dailey v. Green, 15 Pa.
Again, upon a sale of personal property, the seller impliedly warrants his title to the goods sold, unless the circumstances are such as to show that the seller is transferring only such property as he had in the goods.59 Where the circumstances are such that a warranty of title is to be implied, if it turns out that the seller was not in fact the owner, it is said that the consideration fails, and in such case the buyer can defend an action for the price, or recover it if he has paid it.60
Where the subject-matter of the sale is land, and it turns out that the vendor had no title, the purchaser may interpose the failure of title as a defense in an action for the price or upon notes given therefor.81 In the case of the sale of land with covenants by the vendor, questions have arisen as to whether the failure of the title amounts to a total failure of consideration. In a Massachusetts case a note had been given in consideration of a conveyance of land by deed, with the usual covenants of seisin and warranty, and the title to the land failed entirely. The question raised was whether that want of title was an entire want of consideration for the note, so as to render it nudum pactum, or whether the covenants in the deed were of themselves a sufficient consideration. It was held, contrary to a decision in Maine,62 that the total failure of title was a total failure of consideration, and that the note was therefore void. "The promise is not made for a promise," it was said, "but for the land. The moving cause is the estate, and, if that fails to pass, the promise is a mere nudum pactum." 63
118, 126; Dayton v. Hooglund, 39 Ohio St. 671; Underwood v. Wolf, 131 I11. 425, 23 N. E. 598, 19 Am. St. Rep. 40; Morehouse v. Comstock, 42 Wis. 626; Polhemus v. Helman, 45 Cal. 573; Breen v. Moran, 51 Minn. 525, 53 N. W. 755; Central Trust Co. v. Manufacturing Co., 77 Md. 202, 26 Atl. 493. See "Sales," Deo. Dig. (Key-No.) §§ 425, 428; Cent. Dig. §§ 1207, 1208, 1214,-1223.
56 Withers v. Greene, 9 How. 213, 13 L. Ed. 109; Ruff v. Jarrett, 94 I11. 475; Wentworth v. Dows, 117 Mass. 14, per Colt, J.; Wright v. Davenport, 44 Tex. 164; Bayview Brewing Co. v. Techlenberg, 19 Wash. 469, 53 Pac 724. See "Sales," Dec. Dig. (Key-No.) § 21; Cent. Dig. §§ 83-88.
57 Thompson v. Manufacturing Co., 29 Kan. 476; Toledo Sav. Bank v. Rathmann, 78 Iowa, 288, 43 N. W. 193; Aultman & Taylor Co. v. Trainer, 80 Iowa, 451, 45 N. W. 757; Brown v. Weldon, 99 Mo. 564, 13 S. W. 342. See "Sales," Dec. Dig. (Key-No.) § 21; Cent. Dig. §§ 33-38.
58 Stevens v. Johnson, 28 Minn. 172, 9 N. W. 677; Nichols & Shepard Co. v. Soderquist, 77 Minn. 509, 80 N. W. 630; Russ Lumber & Mill Co. v. Water Co., 120 Cal. 521, 52 Pac. 995, 65 Am. St. Rep. 186. See "Sales," Dec. Dig. (Key-No.) § 21; Cent. Dig. §§ 83-38.
59Benj. Sales (6th Am. Ed.) § 639; Tiffany, Sales, 165.
60Eichholz v. Bannister, 17 C. B. (N. S.) 708; Chenault v. Bush, 84 Ky. 528, 2 S. W. 160; Flandrow v. Hammond, 148 N. Y. 129, 42 N. E. 511. And see Gould v. Bourgeois, 51 N. J. Law, 361, 18 Atl. 64. See "Sales," Dec. Dig. (Key-No.) § 268; Cent. Dig. §§ 746-151, 163.
61 Murphy v. Jones, 7 In 529; Anderson v. Armstead, 69 I11. 452; Ferguson v. Teel, 82 Va. 690; Curtis v. Clark, 133 Mass. 509; Baird v. Laevison, 91 Ky. 204, 15 S. W. 252; Redding v. Lamb, 81 Mich. 318, 45 N. W. 997; Hall v. McArthur, 82 Ga. 572, 9 S. E. 534. See "Vendor and Purchaser" Dec. Dig. (Key-No.) § 15; Cent. Dig. § 16.