77 Md. 153 | Md. | 1893
delivered the opinion of the Court.
This action was brought by the plaintiffs, as assignees of Thomas, J. Wilson, to recover of the defendant the amount of a promissory note for $5,000, dated July 20th, 1888, and payable four months after date, with interest
This note, it appears, was handed over or passed by Whitely & Gaither to Thomas J. Wilson, the assignor of the plaintiffs, as partial security for a large pre-exist
The defence of the defendant is that the note is totally without consideration; that the note was given for a special purpose to the agents of the defendant, and that that purpose has wholly failed; and that the transfer of the note to Wilson by the brokers was in violation of good faith and in fraud of the defendant; and that such transfer by the brokers to Wilson, whether before or after maturity, was with full knowledge on the part of Wilson, for what the note was given and held by the brokers, and that there was no consideration for it. And if this be so, it is clear there can be no recovery on the note by the plaintiffs.
The Court below instructed the jury, at the instance of the plaintiffs, that there was no evidence legally sufficient to be considered by the jury in support of the defence by the defendant, and that, under the pleadings, admissions and proof, their verdict must be for the plaintiffs, for the amount of the note with interest; and the Court rejected the prayers of the defendant, founded upon the supposed facts of the failure or. want of consideration, and t.he knowledge on the part of Wil
The transaction altogether was quite a remarkable one; but we discover nothing in it that would preclude the defendant- from availing himself of the defence set up by him, if that defence be supported by evidence.
The objection to the note that there is a total want of consideration to support it, goes to the entire validity of the note and avoids it; and so where there was originally, not a want of consideration, but there has been a subsequent failure thereof. And therefore, in either case, if such defence be made out, it is fatal to the note in the hands of a party against whom such defence may be legally set up. But such defence is not available against every party who may hold the note. The general rule is that the original want or subsequent failure of consideration may be availed of as a bar to recovery as between any of the immediate or original parties to the contract; as in the case of maker against the payee, or by the payee against his immediate indorsee. And the same rule applies to any mere derivative title under them by any person, who acts merely as their agent, or has given no value for the note. It applies to all cases where the party takes the note, even for value, after it has been dishonored or is overdue; for then he takes it subject to all the equities, which properly attach thereto in the hands of the holder. Annan vs. Houck, 4 Gill, 325. And if the party taking the note has notice, at the time of the transfer to him, that the note is affected with the infirmity of the want or failure of consideration in the hands of the party from whom he obtains it, or that such party is disposing of the note in fraud of a party for whom he holds it, the party so taking the note will take it subject to all the equities and defences that could be availed of as against the party so disposing of or trans- -
We have examined the entire evidence with care, and we are all of the opinion that there is evidence that should have been submitted to the jury, and that, com sequently, there was error in directing a verdict for the plaintiffs.
There is no pretence that the defendant did in fact receive any consideration for the note placed in the hands of the brokers. Whitely, one of the brokers, testifies very explicitly that he informed Wilson, at the time of passing the note to him, for what the note was given, and t|re circumstances under which it was held, and reminded him at the same time that he, Wilson, knew all about the Manganese Company. Wilson, therefore, knew, if this witness is to be believed, that the defendant had received nothing for the note, and that the brokers had no authority to transfer the note to him, under the circumstances of the case. It would seem that Wilson himself was concerned in the company, or with the stock that was designed to be issued; for in another part of his testimony, in referring to the occasion of transferring the note to Wilson, Whitely
We think there was error in granting the prayer on behalf of the plaintiffs, and in refusing to grant the first, second and third prayers offered by the defendant. The fourth prayer of the defendant is based upon a theory that may not be sufficiently supported by the •evidence; and in our view of the case it is not material.
Judgment reversed, and cause remanded for a new trial.