88 Kan. 279 | Kan. | 1912
The opinion of the court was delivered by
The plaintiff sued upon a promissory note and for the foreclosure of a mortgage given to secure the same. The court rendered judgment for the defendants, and the plaintiff appeals.
The petition alleged that on the 26th day of March, 1906, the Gardners executed to W. T. Finicum their promissory note for $1775, due three years after date with interest at eight per cent, payable annually; that before maturity and for a valuable consideration Finicum indorsed and delivered the note to appellant and that no part of the same had been paid, and that it was past due; that at the same time the Gardners executed another note for $925 due six months after date and delivered the same to Finicum; that both notes were secured by the same mortgage. A copy of the mortgage which contains copies of both notes was attached to the petition.
The answer was a general denial and a plea of total failure of consideration. This defense set up a contract in writing entered into between Finicum and Gardner and Shinkle, partners, twenty-six days previous to the execution of the note, by the terms of which Finicum was to convey to Gardner and Shinkle several quarter sections of land in Stevens county, Kansas, including three quarters which he was to convey by
To the answer appellant filed a demurrer, which the court overruled. The reply denied that at the time appellant purchased the note, which it alleged was long before maturity, he had any knowledge or notice of any infirmity in the note, or of any defense to the same. It was also alleged that at the time the contract was entered into Gardner well knew that Finicum’s title to the three quarters of land was defective, and that by accepting quitclaim deeds of conveyance and long afterwards executing the note sued upon he was estopped to claim a failure of consideration. The principal errors complained of are the overruling of the demurrer to the answer, the finding that appellant was not a purchaser in good faith for value before maturity, and the finding that there was a total failure of consideration.
The first question to be determined is whether the appellant occupied the position of a good-faith purchaser for value before maturity. This was denied by the answer. The mortgage was given to secure two notes; one of these, for $925, was past due When appellant purcu^oed the note sued upon. The mortgage contained a provision that “if said sum or sums of money or any part thereof or any interest thereon, is not paid when the same is due . . . then the whole of said sum or sums, and interest thereon,” shall become due and payable. It is argued by appellant that because the note for $925 was given as part payment for per
If the failure to quiet the title to the three tracts of land could have been asserted in an action on the note "by Finicum, it was available in the present action to the appellees. It appears that there were seven quarter sections of land which Finicum agreed to convey to Gardner. The agreed price for all the land was $5300. Finicum was to take as part payment a stock of merchandise amounting to $3525, and the balance was represented by the note sued upon. The fact that Gard-' ner took quitclaim deeds to part of the lands would not ■estop him from asserting the defense because of the
“Absence or failure of consideration is matter of defense as against any person not a holder in due course; and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.”
There is some conflict of authority as to whether a partial failure can be shown under a plea of a total' failure of consideration. (See 4 Encyc. Pl. & Pr. 951.) The rigid rules of the common law in respect of bills of exchange and promissory notes required the amount of the failure to be liquidated and certain, and some of the earlier cases in this country went so far as to hold that, a partial failure furnished no defense. (Walters et al. v. Armstrong, 5 Minn. 448.) In Torinus v. Buckham, 29 Minn. 128, 12 N. W. 348, the contrary was held. Technical rules as to pleadings were often enforced, as. in Bisbee v. Torinus, 26 Minn. 165, 2 N. W. 168, where partial failure was pleaded and it was held that a total failure could not be shown. Before the adoption of the uniform negotiable instruments law it was made a statutory rule in some of the states that either a want or failure of consideration, in whole or in part, may be shown. (Great Western Ins. Co. v. Rees, who sues, etc., 29 Ill. 272; Honeyman, etc., v. Jarvis, etc., 64 Ill. 366.) This court held as earty as Dodge v. Oatis, 27 Kan. 762, that as between the original parties a failure or partial failure may be shown, and in that case it
It was not necessary in order to rely upon the defense of failure of consideration that appellees should offer to rescind the contract or to restore that part of the consideration represented by the lands to which they retained title. (Russ etc. Co. v. Muscupiabe etc. Co., 120 Cal. 521, 52 Pac. 995, 65 Am. St. Rep. 186.) If the action to recover on the note had been brought by the original holder the appellees might have had the right to elect whether to affirm the contract and recover damages for the breach or to rescind and recover the consideration, but they had no election as against.the appellant except to plead a defense w-hich they might have elected to set up against the original holder. They could have paid the note without setting up any defense, and then have sued Finicum for breach of the contract. (Delaney v. Implement Co., 79 Kan. 126, 98 Pac. 781.)
Before this action was brought the final judgment had been rendered in the action to quiet title and the contract had been breached. We do not agree with the appellees that because a former judgment quieting the title was rendered in 1906 there was a breach of the contract then, for the reason that appellees purchased and took the contract after the former judgment had been set aside and understood that Finicum’s contract was to procure a favorable judgment on the final hearing. It appears that when the court rendered
If the consideration for which a note is given fails in part only the holder may recover for the part as to which the consideration has not failed. (Mader v. Cool, 14 Ind. App. 299, 42 N. E. 945, 56 Am. St. Eep. 304; Drew v. Towle, 27 N. H. 412.)
The judgment will be modified in accordance with the foregoing views and the cause is remanded for that purpose. The costs of the appeal are ordered taxed against the appellees.