Peterson v. Johnson, 22 Wis. 21

Peterson v. Johnson

22 Wis. 21 | Wis. | 1867

DixoN, C. J.

This is not a case within the rule which excludes evidence of the verbal contemporaneous agreement of the parties to vary or contradict the terms of their written contract. If it were, and we were to examine and decide it by the authorities, it is very doubtful 'what our decision would be. There is no topic in the law more confused by the decisions than that very one. But this is a case of partial failure of the consideration of the promissory note sued upon; and the question is, whether the defendant may give evidence, of what occurred between the parties at the time the note was given, for the purpose of showing such failure. The defendant, the maker of the note, had, at the time of giving it, been served with garnishee process at the suit of a creditor of the payee. That suit had not yet been tried, and it was uncertain whether the garnishee creditor would recover, or if he should, in what amount. It was agreed that the defendant should give his note for the whole sum due the payee, and then, if judgment should be rendered against him in the garnishee suit and he be obliged to pay it, that the amount so paid should be deducted from the note. The note was given accordingly, and afterwards judgment obtained against the maker in the garnishee suit, to satisfy, which he was compelled to pay the sum of $66.18. This was a clear failure of the consideration for which the note was given, as to the sum thus paid. *26The money so paid was not the money of the payee of the note at the time the note was given, but belonged to the garnisbee creditor, wbo bad attached it in the bands of the maker of the note. For authorities showing that this was a partial failure of consideration, the following may, with profit, be consulted: Hill v. Enders, 19 Ill., 163; McHenry v. Yokum, 27 Ill., 160; Morgan v. Fullenstein, id., 32; Schuchman v. Knorbel, id., 175; Parish v. Stone, 14 Pick., 198; Harrington v. Stratton, 22 Pick., 510; Perley v. Balch, 23 Pick., 283; Day v. Nix, 9 J. B. Moore, 159 (17 E. C. L., 121); Spalding v. Vandercook, 2 Wend., 431. the same authorities also show that a partial failure of consideration is a good defense pro tanto to an action upon the note by the payee, or by an indorsee wbo has taken it under such circumstances that be can stand only on the rights of the payee. It is true that there are some decisions to the contrary on this point; but we are of opinion that to avoid circuity of action, and to prevent further litigation and expense on the same matter, the rule established by the authorities referred to is the sound one. the same rule has already virtually received the sanction 'of this court. Thomas v. Thomas, 7 Wis., 476; Stilwell v. Kellogg, 14 id., 465; Griffith v. Parry, 16 id., 218.

Partial failure of consideration being, therefore, a defense p>ro tanto, the question arises, bow can it be shown without going into parol evidence of what took place between the parties at the time the note was executed ? It is obvious that it cannot. The true consideration for a promissory note never appears on the face of it. the words “value received” are merely formal, and not conclusive. If we would know, then, what the real consideration was, and whether the whole or any part of it was wanting, we must learn it by extrinsic verbal or written evidence; and such evidence must come down to the very point of time when *27the note was executed, showing the dealings and relations of the parties, and what was then said and done by them. To hold that such a defense may be made, and yet that such evidence is inadmissible, would be, as was well observed by the court in Morgan v. Fullenstein, supra, to exclude the defense altogether.. It is for this reason that parol evidence to show a partial or -total failure of consideration is not within the rule which excludes such evidence to vary or contradict .the terms of a written contract.

Eor the reasons thus briefly stated, we are of opinion that the judgment of the circuit court should be affirmed.

By the Court. — Judgment affirmed.