The law governing the situation presented is elementary. The order in question is not negotiable, being payable out of a specified fund. Brill v. Hoile, 53 Wis. 537; Bank of Iron River v. School Directors of Iron River, 91 Wis. 597. Further, the plaintiff had notice of the defenses set up. For both these reasons, he took it subject to all defenses available against the original payees. Failure of consideration in nonperformance of their contract by Woodward & Erickson would be a good defense. Randolph, Commercial Paper, § 556; Folger v. Dousman, 37 Wis. 619; Ward v. Perrigo, 33 Wis. 143. The evidence offered and rejected would have tended to prove such failure of consideration, and should have been received. Its rejection excluded defendant from a legitimate defense pleaded in his answer, and was error.
By the Court.— Judgment, reversed, and cause remanded for a new trial.