195 Iowa 208 | Iowa | 1923
The payee of the note in suit was L. L. Duffus. The maker was the defendant, Gordon. The note bore date November 8, 1919, and was for $3,000, and was and is regular upon its face. On November 10, 1919, it was transferred by indorsement, and for full value, to Spaulding and Jackson. On December 10th following, it was likewise transferred by Spaulding and Jackson to the plaintiff. The defense pleaded was that the note was given pursuant to a contract for the purchase of a certain real estate by the defendant from Duffus, whereby Duffus was to convey said real estate to the defendant on March 1, 1920, and to give good and sufficient title thereto; that, at the time of entering into said contract, Duffus was' insolvent, and knew that he could not perform said contract, and had no intention
This was the issue tendered, and trial was had thereon. The evidence is brief, and without substantial dispute. It appears therefrom that, in August, 1919, Spaulding and Jackson sold by executory contract a certain farm of 280 acres to Duffus, for an agreed consideration of $93,000. Performance of the con* tract was to be had on March 1, 1920. One of its provisions was that $2,000 should be paid by Duffus on November 1, 1919. Duffus was to take the land subject to a mortgage of $44,000, and was to execute second and third mortgages for $18,000 and $6,800 respectively. The balance was to be paid on March 1st. On November 8, 1919, Duffus sold the land by executory contract to the defendant, Gordon, for an agreed consideration of $98,000. In this contract, Gordon assumed the payment of the three purported mortgages for $44,000, $18,000, and $6,800, respectively. This contract also involved an exchange, whereby Duffus agreed to purchase the farm of Gordon at an agreed price, and subject to a certain mortgage which Duffus assumed. Under this contract, the balancing of equities of the respective parties over and above incumbrances left a margin of over $10,000 in» favor of Duffus, which sum Gordon agreed to pay. The note -in suit was given as part payment of such margin. On March 1st, Duffus failed to perform, so that the consideration for the note failed. It may be implied from the record that the reason of Duffus’s failure to perform was that he was unable to make the payment necessary to obtain a conveyance of the 280-acre farm from Spaulding and Jackson, in accordance with the first contract. On November 10th, Duffus transferred the note to Spaulding and Jackson, in satisfaction of his obligation under his contract to pay $2,000 on the first of November, and. received back from Spaulding and Jackson the difference between such amount and the amount of the note. On December 10th, Spaulding and Jackson transferred the note by indorsement to the plaintiff bank for full value, and in due course of business.
In a word, the trial court submitted to the jury two defensive theories:
(1) That, if the defendant had proved fraud in the negotiation of the note to Spaulding and Jackson, then the defendant must prevail, unless the plaintiff had proved that it had no notice of such fraud.
(2) That the defendant should prevail as a matter of law unless the plaintiff had proved that, at the time of its purchase, the note bore revenue stamps to the amount of 60 cents.
As to tbe second defense submitted by tbe instructions, tbe only issue presented was whether tbe note was irregular upon its face because of a lack of revenue stamps. No claim of such irregularity was made by any allegation of tbe answer nor was tbe regularity of tbe form of tbe note in any manner challenged though the note itself was set forth in tbe petition.
This feature of tbe record would have to be taken account of by us, if we were to pass upon tbe sufficiency of tbe exceptions to tbe instructions to raise tbe point of error involving tbe rule of the Lutton case; because the exceptions were sufficient
It follows that, under the evidence and issues, the plaintiff’s motion for a directed verdict should have been sustained. For the same reason, the motion for a new trial should have been sustained- We have no occasion, therefore, to consider the sufficiency of the exceptions as pertaining to the revenue stamps.
For the reasons here indicated, the judgment below is reversed and the cause is remanded. — Reversed and remanded.