16 Iowa 278 | Iowa | 1864
I. Appellants make the point, that the Court erred in refusing to allow them to amend their petition, after the testimony and arguments had closed, so as to have it conform, more fully, with the facts as developed by the- testimony. Upon this subject, it is sufficient to say, that the Court submitted the case to the jury, upon the theory that the proposed amendment was entirely immaterial, and that plaintiffs had the benefit of all the facts, to .the same extent as though said amendment had been allowed. Under such circumstances, there was no prejudice resulting from the refusal complained of, and hence no cause for reversal; and as the case must be reversed upon another ground, plaintiffs will have ample opportunity to make the proposed amendment, if they shall deem it neces-, sary.
II.' Among other defenses, the defendant plead usury, which plea being admitted, the Court instructed the jury,
It will be observed, that plaintiffs purchased the note prior to the alleged promise of defendant to pay, and that the doctrine of estoppel, therefore, has no application to the case. They did not take the note upon the faith of any promise or act of defendant; why, then, should not the defense of usury avail ? Barrett’s promise, under the circumstances, should not consistently be held to increase his liability beyond what it was, to Pendergast. Plaintiffs parted with nothing upon the stréngth of the promise, and should stand in no better position than the party originally holding the note. The promise must be construed'to mean that he would pay what he was legally owing, or that for which he was legally bound, and not to change the character and extent of his undertaking.
The cases referred to by plaintiffs do not sustain them, as a reference to some of them will sufficiently demonstrate. Thus in Jackson v. Henry, 10 Johns., 185, the question was, whether a bona fide purchaser, without notice, under a sale duly made, pursuant to the statute, by virtue of a power of attorney contained in a mortgage, was affected by usury in the original debt, for which the bond and mortgage were given. And it is held, very consistently, that he was not. But that is far from being this case. So in Bearce v. Barstow, 9 Mass., 45, it seems that A. owed B. a sum of money, and B. owed C. an account on which he had received usurious interest, and an agreement was made that A. should give to C. a promissory note for the sum due from B. to C., including the usurious interest; A. being discharged of so much of his debt to B. Under such circumstances, it
The case of Chadbourn v. Watts, 10 Mass., 121, was where a note was given, with an agreement to pay illegal interest. After several payments of interest, at the rate agreed, and part of the principal, a new note was given for the balance, in which lawful interest only was reserved. This second note remaining unpaid in part, was canceled, and a third note given for the balance. This latter note was indorsed, and in an action by the indorsee it was held, that the promisor could not avail himself of the defense of usury. If that case was applicable to the one now before us, its correctness under our statute, and in the light of the decisions of this court, would certainly, to say the least of it, be very doubtful. Campbell v. McHarg, 9 Iowa, 354, and cases following it. But plaintiffs are not new and innocent parties introduced into a substituted security, and as a consequence, they do not fall within the rule stated in 2 Pars., 397, and the cases there cited in note “A.,” including the case in 10 Johns., supra, and others referred to by appellant’s counsel.
But the material questions relate to the rights of plaintiffs and King, the purchaser of the note under the execution sale, and the further inquiry as to how far defendant is protected by the payment of the note to King, the holder of the same.
The right of plaintiffs to maintain the action' in their own names is recognized throughout the instructions given to the jury. The note was not in the possession of Pen
Recognizing this rule, the court below, nevertheless, held, in substance, and so charged the jury, that if. the note was levied upon under the Clancy execution, before defendant and Clancy had notice of the sale to plaintiffs, he (defendant) would not be liable in this action, though they may have had full and ample notice of such transfer before the sale under the execution, and hence before the payment to
If the levy had been made before the sale to plaintiffs, the case would be very different. But the levy could only reach' the interest of the debtor (or Pendergast) in the note. Whatever interest he had was held by it, but not the interest of another. If the note then belonged to another, "there was no leviable interest, and no rights attached by virtue of such levy. And while the levy and sale might transfer the debtor’s interest, it could not that of another, any more than it could a horse or a wagon, which had been previously sold, whether the plaintiff and officer had notice of the sale prior to the levy or not. Nor does the judicial sale change the obligation of defendant to' pay plaintiffs, who owned this note at the time of the levy, is the question. The plaintiffs, unquestionably, as between them and Pendergast, and his creditors. By their purchase they had an equity which they could enforce against any one having notice of it. And notice before the sale, though after a levy, would be sufficient. This equity was sufficient to support defendant’s promise, and after that his liability to them was complete.
Let us take another view of the case. Suppose, instead of levying upon the note, Clancy had caused defendant to be summoned as garnishee. Before he was thus summoned, plaintiffs, in good faith, and for value, purchased the note; but neither Clancy or Barrett had notice of it before the service of the writ, but did have notice before answer. Is there any question that the plaintiffs would be protected? Or, in other words, could defendant avoid his liability to plaintiff upon the grounds that he was attached as garnishee before notice of the transfer? The case of Walters v. Ins. Co., 1 Iowa, 404, is decisive of this very question, for it is there held, that if the garnishee have notice before answer, and neglects to show it in defense, he cannot resist a sub
Entertaining these views, it follows that the Court below erred in holding that defendant, having paid the note to King, was not liable, unless he had notice of the plaintiffs' rights before the levy of the execution. If the note was transferred beforehand he subsequently had notice thereof, and promised to pay it, he would be liable, and payment to the purchaser at the judicial sale will afford him no defense.
Reversed.