Case Name: B. M. Steagall v. A. Levy & Co.
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1889-04-17
Citations: 3 Willson 568
Docket Number: No. 5976
Parties: B. M. Steagall v. A. Levy & Co.
Judges: 
Reporter: Condensed Reports of Decisions in Civil Causes in the Court of Appeals
Volume: 3
Pages: 568–570

Head Matter:
B. M. Steagall v. A. Levy & Co.
(No. 5976.)
Appeal from Tom Green County.
W. I). Cochran, counsel for appellant.
Walton, Hill & Walton, counsel for appellee.

Opinion:
Opinion by
White, P. J.
§ 468. Plea of failure of consideration held sufficient in substance; case stated. Appellees sued appellant upon a promissory note for $534, executed by appellant to Halfin & Levy, and by the latter indorsed before maturity to appellees. Appellant filed a general denial, and pleaded specially that appellees were not real owners of said note; that the indorsement thereon was simulated and fictitious, and was fraudulently made for the purpose of preventing appellant from making certain legal and just defenses he had against said note, which would defeat a recovery thereon; and that appellees were not innocent purchasers of said note for a valuable consider - ation. Appellant then proceeded to allege a partial failure of consideration of said note; that.he executed the same to Halfin & Levy in consideration of a lease of five thousand three hundred and forty acres of land for a period of one year, and that said Halfin & Levy warranted appellant the quiet and undisturbed possession of said land, but that, before the termination of said lease, said Halfin & Levy entered upon and ejected him from said land and deprived him of the use thereof for a period of eight months of said lease, claiming damages for such breach of the lease, etc. Appellee i-eplied to said plea with a general demurrer, and excepted to it specially upon the ground that it set up a claim against the original payees of said note, and that said claim for damages was not a valid defense against said note in the hands of appellees. This exception was sustained by the court, and judgment was rendered in favor of appellees for the full amount of said note and costs. Held: It was error to sustain said special exception to said plea. Said plea was in substance good. It set up a valid legal defense against said note. If the holder of a note has paid no consideration for it, or holds it in trust for the real owner, the maker is entitled to avail himself of any defense against the note that would be a valid defense were suit brought upon it by the real owner. [Barnett v. Logue, 29 Tex. 282; Frank v. Kaigler, 36 Tex. 306; R. S. art. 272.]
§ 469. Plea of failure of consideration must be sworn to; token not sworn to, defect can only be reached by special exception, etc. Appellee's plea of partial failure of consideration was not verified by affidavit of defendant; but it was not excepted to upon this ground. It is required by statute that such a plea shall be verified by affidavit. [R. S. art. 1265, subd. 10.] But the want of such verification is a defect of form and not of substance, and such defect cannot be reached by general demurrer, but to be availed of must be specially excepted to upon that ground. [Williams v. Bailes, 9 Tex. 61; Drew v. Harrison, 12 Tex. 279; Gaines v. Salmon, 16 Tex. 311; Powers v. Caldwell, 25 Tex. 352.]
April 17, 1889.
Reversed and remanded.