164 N.W. 67 | S.D. | 1917
The facts material and controlling upon this appeal are as follows: On November 7,.1910, the defendant, who is appellant here, entered into a contract with the Cassill Investment Company, a corporation, under which the defendant agreed to purchase and the corporation agreed to convey certain lands in Spokane county, Wash., which agreement was subject to covenants and conditions stated in the contract; purchase price of the land was $6,000, of which $1,200 was paid when the contract was executed, and the balance of $4,800 was represented by promissory notes, as follows: $300 payable May 1, 1911, $1,125 payable May 1, 1912, $1,125 payable May' 1, 1913, $1,125 payable May 1, 1914, and $1,125 payable' May 1, 1915. Plaintiff sues as indorsee and holder of the note of $1,125, due May 1, 1915. Under said contract the Cassill Investment Company agreed to plant, cultivate, and maintain fruit trees upon said land, and to employ an expert for saidi work; and to that end wras given full control and use of the premises for four years, and was to own all profits arising therefrom during said1 time, was to cultivate said land under an irrigation process, and was to install a proper and' complete plant for that purpose, which was to be in operation by May 1, 1911, and was to pipe and deliver water within the boundaries of defendant’s tracts. The Cassill Investment Company was to cultivate the land in workmanlike manner and at the proper season, and upon the expiration of four years was to- deed- the land to the defendant free and clear of all liens and incumbrances. -The con
“This is one of a series of notes given in payment of land described in a contract this day executed.”
¡Such a recital does not render the note nonnegotiable. The rule is thus stated, in a note appended to the case of Klots Throwing Co. v. Mfgs. Commission Co., 30 L. R. A. (N. S.) 40:
“It may be stated as the general rule that whenever a bill of exchange or promissory note contains a reference to some extrinsic contract in such a way as to make the bill or note subject to the terms of that contract, as distinguished from a reference importing merely that the extrinsic agreement was the origin of the transaction, or constituted the consideration of the bill or note, the negotiability of the paper is destroyed.”
But a recital that a note is given for part of the purchase money of a tract of land does not render the note nonnegotiable.