On April 7th, 1871, the defendants agreed with the plaintiff, under the name and style of the American Book Company, to sell and deliver to him certain books or publications, to the amount of $2,975 50, in such manner and at such times as required by plaintiff, and for the prices in said contract provided. In payment therefor the plaintiff" tendered the note of a third party, representing the same to be good, and that he would guarantee it would he paid at maturity, which note was received and accepted by the defendants. Prior to the maturity of the note some of the goods ordered by the plaintiff, in pursuance of said contract, were delivered by the defendants according to the terms thereof. The note was not paid when due, and defendants then discovered that the maker thereof was insolvent at the time of its delivery to them. They thereupon refused to deliver any more books under said contract; and for the alleged breach thereof this *511action was brought, and from the judgment rendered therein against them this appeal was taken.
There is one point in this case which, in my judgment, summarily disposes of this appeal.
The contract between the parties called for the sale and delivery of books or publications when ordered. They had not been selected and separated as a distinct lot, but were to be published by or of the publications of the defendants, and issued in various styles of binding, &c., as ordered and indicated by the plaintiff.
It must be inferred from the evidence that both parties believed said note to be good; but the referee, in his report, finds, as a question of fact, that it was not good, nor was the maker thereof responsible at the time of its delivery to the defendants.
It is difficult to distinguish this case in principle from Benedict v. Field (16 N. Y. 595) and Roberts v. Fisher (43 N. Y. 159), and cases there cited.
The contract, though executed as to the goods already delivered, was executory as to the goods thereafter to be ordered. The consideration of said contract had entirely failed, and the defendants, already at a loss on this account, had a right to protect themselves against any further damage.
I incline to a liberal construction of the theory laid down by the Court of Appeals, in Roberts v. Fisher, that “ upon broad principles of justice, it would seem that a man should not be allowed to pay a debt with worthless paper, though both parties supposed it to be good.”
The judgment appealed from should be reversed, and a new trial ordered, with costs to abide event.
Daly, Ch. J., and Robinson, J., concurred.
Ordered accordingly.