129 Wis. 84 | Wis. | 1906
1. At tbe close of tbe testimony tbe plaintiffs moved tbe court to direct a verdict in their favor and against tbe defendants for tbe full amount of principal and interest mentioned in tbe three notes, but subsequently asked leave to withdraw such motion and to withdraw tbe sec
Counsel on both sides refer to adjudications which they claim to be in support of their respective contentions. The case presented is clearly distinguishable from those where the stipulation for accelerating the maturity of the note or notes
“An indorsee of several notes of the same maker, secured by one mortgage bearing the same date, and payable to the order of the same person at different periods, is not chargeable with notice of any equitable defense of the maker against such of the notes as were not due at the time of the indorsement, by reason of the fact that one of the notes was then overdue. Nor is he chargeable with such notice by reason of the fact that the notes bore interest payable annually, and that one year’s interest on all of them was due and unpaid at the time of the indorsement.” Boss v. Hewitt, 15 Wis. 260. To the same effect: Kelley v. Whitney, 45 Wis. 110, 115—111; Patterson v. Wright, 64 Wis. 289, 292, 25 N. W. 10.
These cases do not go to the extent of supporting the contention of the plaintiffs. So the. case presented is distinguishable from those where the stipulation for accelerating the maturity of the note or notes contained therein is made optional with the payee or mortgagee or his representatives or assigns. Schoonmaker v. Taylor, 14 Wis. 313, 316; Thorp v. Mindeman, 123 Wis. 149, 101 N. W. 417. There is nothing in any of the stipulations or notes here involved to warrant the suggestion that the payees or transferees of any one of them wnre thereby given such optional right to declare
In the absence of such express stipulation, and notwithstanding the rulings in the cases cited, it was held by this court several years ago, that “one who takes a promissory-note, which shows that interest on the principal sum therein named is past due and unpaid, takes it subject to all equities between the original parties.” Hart v. Stickney, 41 Wis. 630. That case followed Newell v. Gregg, 51 Barb. 263. To the same effect, First Nat. Bark v. Forsyth, 61 Minn. 251, 69 N. W. 909. Such ruling, however, was out of harmony with the decisions of this court already cited, and goes-beyond what is necessary to sustain the contention of the defendants in this case, based on such express stipulation. In a much later case bearing upon that question this court held:
“The fact that a note bearing interest payable semi-annually was dated, executed, and delivered on a certain day fixes-the date for the payment of instalments of interest at the end of every six months thereafter, and no demand was necessary to create a default.” Zautcke v. North Mil. T. Co. 95 Wis. 21, 69 N. W. 978.
It seems to be pretty well settled that:
“If the principal of the paper is payable in instalments,, the paper is considered as dishonored by the failure to pay any one instalment when it fell due, whether the entire debt became due on such a failure to pay or not, and a subsequent*91 transferee takes it subject to all tbe equities.” Tiedeman, Com. Paper, § 297; Vinton v. King, 4 Allen, 562; Field v. Tibbetts, 57 Me. 358; 2 Rand. Com. Paper (2d ed.) § 1047.
But it is said by tbe same author:
“It is doubtful whether tbe same rule applies to tbe failure to pay an instalment of interest, unless tbe parties bave stipulated tbat tbe entire debt shall become due on tbe failure to-pay tbe interest. Although it has been held tbat the failure to pay the interest will destroy the negotiability of tbe paper, with or without this stipulation, tbe better opinion is that, in tbe absence of such a stipulation, the failure to pay an instalment of interest does not affect tbe future negotiability of tbe note or bill.” Id.
It was held in Massachusetts more than one hundred years-ago:
“Upon a note payable in eight years with interest payable annually, an action lies for tbe interest before tbe principal is payable.” Greenleaf v. Kellogg, 2 Mass. 568. To the same effect: Cooley v. Rose, 3 Mass. 221; Walker v. Kimball, 22 Ill. 537; Morgenstern v. Klees, 30 Ill. 422; Failing v. Clemmer, 49 Iowa, 104; Mitts v. Jefferson, 20 Wis. 50.
It is said by Mr. Randolph:
“A municipal bond, like a bill or note, may be conditioned on default in tbe payment of interest, and will, in such case, mature accordingly, although by its terms the principal was not otherwise to become payable for many years. A provision of this sort — e. g. tbat a note drawing interest annually shall become due on failure to pay tbe interest — may be contained in a collateral deed of trust or other instrument.” 2 Rand. Com. Paper (2d ed.) § 1048.
So it is said by Mr. Daniel:
“Where it is provided in tbe bonds themselves tbat, if default be made as to any interest coupon, tbe bonds shall be due and payable, they so become on default of payment of any coupon.” 2 Daniel, Neg. Inst. (5th ed.) § 1506a.
Thus it has been held in-Georgia:
“Municipal bonds, having on their face many years to run, but issued and put in circulation-with an indorsement upon each of them to the effect tbat, in case default be made in pay*92 ing any of tbe interest coupons at maturity, then, as a part of the contract, the bond itself shall become due and payable, are legally due, as to the whole of the principal, whenever a default in paying interest according to any of the coupons occurs. Time is of the essence of the contract.” Mayor v. City Bank, 58 Ga. 584, following, and to the same effect, Sneed v. Wiggins, 3 Ga. 94; Ottawa N. P. R. Co. v. Murray, 15 Ill. 336; Ferris v. Ferris, 28 Barb. 29. See, also, Lybrand v. Fuller, 30 Tex. Civ. App. 116, 69 S. W. 1005; First Nat. Bank v. Peck, 8 Kan. 660.
But there are adjudications the other way, notably one particularly relied upon by counsel for the plaintiffs. Chicago R. E. Co. v. Merchants’ Bank, 136 U. S. 268, 284 286, 10 Sup. Ct. 999, affirming 25 Fed. 809. We must hold that, by the express terms of the stipulation and the default in paying the annual interest which became due and payable April 15, 1904, the whole of each note “immediately became due and collectible.” It follows from what has been said that the plaintiffs took the notes after they became due and payable and subject to the equities between the original parties.
2. But we are constrained to hold that it was error to direct a verdict in favor of the defendants. We find no defense established by undisputed evidence. The defense of. duress seems to be without foundation so far as the record before us is concerned. What constitutes duress has frequently been stated by this court. City Nat. Bank v. Kusworm, 91 Wis. 166, 173, 64 N. W. 843; Wolff v. Bluhm, 95 Wis. 257, 259, 70 N. W. 73; Mack v. Prang, 104 Wis. 1, 6, 79 N. W. 770; Galusha v. Sherman, 105 Wis. 263, 280, 281, 81 N. W. 495; Rochester M. T. Works v. Weiss, 108 Wis. 545, 84 N. W. 866; Anderson v. Anderson, 122 Wis. 480, 485, 486, 100 N. W. 829. All the authorities agree that duress exists where one party, by the unlawful act of another party, has been induced to make a contract or perform some other act under circumstances which deprived him of the exercise of free will. Id. In case of duress the volition of the victim is usually
By the Court. — The judgment of the circuit court is reversed, and the cause is remanded for a new trial.