54 Ind. App. 82 | Ind. | 1913
Appellant brought this action to recover on a promissory note executed by appellee. The pleadings tendering the issues passed upon by the court were appellant’s complaint and appellee’s special answer thereto and appellee’s cross-complaint and appellant’s special answer
The complaint is in a single paragraph and avers in substance, that appellee on June 11, 1907, by his promissory note, a copy of which is filed with and made part of the complaint, promised to pay one Morrow the sum of $850 one year after date, negotiable and payable at Farmers State Bank of Bunker Hill, Indiana, with six per cent interest from date, payable semiannually in advance and eight per cent after maturity. Other averments of the complaint show the several transactions of endorsement through which the note was finally transferred to appellant as owner, and also that the maker of the note executed a mortgage on certain real estate to secure the same, all of which averments are set out more in detail in said answers. These answers are so nearly identical in their averment of the facts relied on as a defense to the complaint and cross-complaint respectively, that we will set out'only the averments of appellee’s answer to tlie complaint, and then indicate wherein the averments of appellant’s answer to the cross-complaint are different.
The averments of the answer to the complaint are, in substance, as follows: On June 11, 1907, appellee was the owner of a certain lot in the town of Oxford in Benton County, Indiana, particularly described in the answer and on that day hé executed the note sued on and described in the complaint and also executed, at the same time, a mortgage on said part of said lot, to secure the payment of said note and delivered both the note and mortgage to the payee, Warren Morrow, who duly recorded the mortgage in the
The averments of the answer to the cross-complaint are almost identical with these averments both in form and substance except on the subject of appellant’s knowledge of any defense of appellee to the note in suit when he purchased the same. Upon this subject the answer to the cross-complaint alleges: “That at the time said Judy received said note as aforesaid he had no knowledge of the condition and agreement in said deed from said Warne to said Fullenweider, whereby said Fullenweider assumed and agreed to pay said note, nor did he have any such knowledge or information concerning any agreement on the part of said Fullenweider to pay said note or in any manner to become liable for its payment, nor did he, said Judy, at any time have any knowledge or information of any defense said Warne had or claimed to said note or any part thereof until long after he received the same as aforesaid.” So that the difference between the two answers seems to be in the conclusions of the respective pleaders as to the effect of the specific facts pleaded upon the subject of appellant’s knowledge of any secret equity or defense of appellee to the note
Appellee’s cross-complaint to which appellant’s said answer was directed contains averments substantially the same as those in said answers with reference to the execution of the note and the mortgage and the sale of the real estate by appellee to Fullenweider, and the condition contained in the deed conveying such real estate, and also avers that on October 14, 1907, said Morrow turned over to said Fullenweider the said note described which he, Fullenweider, had agreed to pay and which he did in fact pay, that said note has been fully paid and satisfied; that the appellant is claiming to be the owner of the note by virtue of the purchase of the same for value and has possession of the same without right; that he is not the owner nor is he entitled to the possession thereof. Appellee asked that the note be declared paid and that he have possession thereof.
The averments common to each of said answers show that appellant “gave full and valuable consideration” for the note in suit without any actual “knowledge of the condition and agreement in said deed from said Warren to said Fullenweider whereby the latter assumed and agreed to pay such note” and “without any actual knowledge or information of any defense the appellee had or claimed to have to said note or any part thereof;” the theory of appellee’s answer being, as indicated by its additional averments, that the facts pleaded, charged appellant with actual knowledge that the note was secured by mortgage, and that by reason of the provision of the deed of appellee to Fullenweider, appellant was charged with constructive knowledge that Fullenweider had assumed and agreed to pay the note.
Judgment is reversed with instructions to the court below to sustain the demurrer to appellee’s answer to the complaint and to overrule the demurrer to- appellant’s answer to the
Note.—Reported in 102 N. E. 386. See, also, under (1) 7 Cyc. 587; (2) 7 Cyc. 626; (3) 7 Cyc. 817; (4) 7 Cyc. 943; (5) 7 Cyc. 956; (7) 7 Cyc. 790. As to the effect of endorsement “without recourse,” see 87 Am. Dec. 389.