23 N.M. 198 | N.M. | 1917
Lead Opinion
OPINION OF THE COURT.
Plaintiff in error bought 388 acres of land from the Ten Lakes Land Compaq, a. corporation, paying for the same $3,500 in cash and: his note, dated August 2, 1913, for $4,260, payable on or before 12 months after date. The vendor in the deed of conveyance reserved a vendor’s lien for the amount of tbe note, the unpaid portion of the purchase price. The note contains the words, “Balance purchase money for 388 acres of irrigable lands with water rights therefor as per deed of this date between parties hereto.” Plaintiff in error went to the defendant in error in behalf of the vendor and of one J. D. Hand, and requested a loan for them, and represented that the company was all right, the said Hand was all right, and that his note (the note in question) was all right. Defendant in error relied upon the representation and made a loan to the company, taking its note with Hand as joint maker, and taking the said note of defendant in error as collateral security. The note of the company and Hand was renewed at maturity, six months from date, the renewal note to mature at the maturity of the note oE plaintiff in error. At this time, neither note being paid, a second renewal of the note of the company and Hand was made, j>ayable on demand, and each renewal note was likewise secured by the note of the plaintiff in error as collateral. Defendant in error brought suit upon the last renewal note of the company and Hand, and upon the note of the plaintiff in error, so held as collateral, and for subrogation to the rights of the vendor under its vendor’s lien, and for foreclosure of the same and sale of the property. Hand had left the jurisdiction and was not served with .process, and the company defaulted, and judgment was rendered against it as prayed. Plaintiff in error answered, and averred that defendant in error was not a holder in due course of his note to the company, and set up two defenses to the note, viz.: Complete failure of consideration for the note; and the fact that, with knowledge of defendant in error, the company note was given to secure funds to pay the individual note of the said Hand, one of its officers, to the extent of $3,000 and interest, and he claimed a defense pro tanto.
The court held that defendant in error took the note of plaintiff in error in due course and awarded judgment on the same and subrogated _ defendant in error to the rights of the company under its vendor’s lien, and ordered foreclosure of the lien and sale of property.
The trial was concluded on December 10, 1915, and the case taken under advisement until January 20, 1916, when final decree was rendered. On January 24-, 1916, plaintiff in error filed his motion and supplemental motion for a new trial, which were overruled. These motions pointed out alleged errors in the findings and conclusions and alleged errors occurring at the trial.
It may be said, in passing, that since the decisions above referred to, it has been thought best by the court and bar to have the jurisdiction retained by the district court over judgments for a time after rendition, so that errors and injustice may be avoided; and the Legislature, at the instance of the bar association, has provided by chapter 15, Laws 1917, that district courts shall retain jurisdiction for 30 days after rendition of judgment.
Many other propositions are presented in the briefs, most of which cannot be considered by reason of the doctrine applied in paragraph 1, above set out, and none of the others seems to have merit.
For the reasons stated the judgment of the district court should be affirmed, and it is so ordered.
Rehearing
ON MOTION FOR REHEARING.
A motion for rehearing lias been filed, based entirely upon a misconception of what was said in paragraph 2 of the opinion heretofore filed. It is assumed in the motion that we placed the decision upon the ground of estoppel as applied to ordinary nonnegotiable undertakings. In this plaintiff in error is confused and in error. Plaintiff in error offered, and was not permitted, to show that a part of the consideration for his note was, to the knowledge of the bank, an executory contract, which had not been performed at the time of the trial, and that consequently the consideration for his note had failed. He did not offer to show that the consideration for the note had failed when it was negotiated to the plaintiff bank, or that either he or the bank had notice or any reason to believe that it would fail. This clearly appears from the offer of proof made by plaintiff in error. What we held, upon that state of facts, was that the showing, had it been allowed, furnished no defense to the note. We did not found the holding upon the ground of estoppel, as applied to nonnegotiable undertakings, but upon the law of commercial paper, which precludes defenses of this kind under these circumstances. That knowledge of an indorsee' that a part or all of the consideration for a note is an executory contract of a third person does not deprive him of the character of a bona fide holder unless he further knows that the consideration has already failed; and that such failure of consideration, under such circumstances, D no defense to the maker, see Flood v. National Bank of the Pacific, 165 Cal. 309, 132 Pac. 256, 46 L. R. A. (N. S.) 861, and note collecting the cases.
For the reasons stated, the rehearing is denied.