Case Name: Elliot vs. Threlkeld
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1855-12-07
Citations: 16 B. Mon 341
Docket Number: 
Parties: Elliot vs. Threlkeld.
Judges: 
Reporter: Kentucky Reports
Volume: 55
Pages: 341–344

Head Matter:
Elliot vs. Threlkeld.
APPEAL FROM SHELBY CIRCUIT.
1. In a suit by an assignor of a note, which the assignee has failed to recover from the obligor, it is necessary to set out the consideration of the assignment.
2. The plaintiff should also state the reason why the amount was not recovered from the obligor.
3. If the assignor be party to the suit in favor of the assignee against the obligor, he is bound by the decision, and cannot controvert it in ■ a suit by the assignee against him to recover the amount paid for the assignment.
The facts of the case are fully stated in the opinion of the court. — Rep.
Brown &■ Whitaker for appellant—
Argued — 1. That the Circuit Court erred in overruling the demurrer to the plaintiff’s petition. It is not alleged that any consideration was paid for the assignment, which is indispensible to show cause of action. The plaintiff must show a complete cause of action by the statement of such facts, as if admitted to be true shows a right of recovery, and for wbat that recovery should be had. It is a well established rule of pleading that in all cases where an implied contract is relied upon, a consideration must be alleged for the undertaking. The same rule applies to actions on parol contracts. The obligation of the assignor to refund the consideration paid by the assignee is 'an implied promise, and it is necessary to aver the consideration of the assignment. The defect in this case is not remedied by an exhibit of a copy of the assigned note, purporting to be an assignment for value received.
2. The petition does not show the exercise of proper diligence in prosecuting suit against the obligor in the assigned note.
3. The court erred in sustaining the demurrer to the answer of the appellant. The answer averred lack of diligence in bringing and prosecuting the suit on the note, and in defending the suit in chancery, and by such delay and lack of diligence appellant is injured. Bean and Mount should also have been parties to the suit in chancery. (See Code of Practice, sections 34, 35, and 40.)
4. The judgment is for too much. In no event should it have exceeded seventy-five dollars, with interest from 11th July, 1849, and the costs expended by Threlkeld in the litigation.
J. M. Sy W. C. Bullock for appellee—
The first question presented is upon the sufficiency of the petition of the appellee, to which the demurrer was overruled. The petition and exhibits filed show — I. That the note was assigned before it fell due ; that suit was brought at the first term of the court thereafter, and judgment recovered, and within ten days after judgment execution was issued, which was stayed by injunction, and in 1854 the injunction was perpetuated; that the plaintiff was compelled to pay $116 75 on the 24th February, 1855. We rely that the petition and exhibits, as parts thereof, do show a valid cause of action.
1. In a suit by an assignor of a note which the assignee has failed to recover from the obligor, it is necessary to set out the consideration of the assignment.
2. The record shows a vigilant prosecution of the claim, and no lack of dilligence on the part of appellee. If the note was given for land, as clearly appears, and the payee had no title, and there was a failure of consideration, no suit was necessary upon the note, but the assignor might have been sued forthwith, and compelled to refund the consideration. (Maupin vs. Compton, 3 Bibb, 25.) The note which was assigned to appellee was given for land to which the obligee never could make title. This fact has been legally adjudicated and established. (Scott vs. Cleveland, 3 Monroe, 62 ) The appellant was party to that suit, and cannot now re-litigate the questions there' decided, and as the answer attempted to set up such a defense it was rightly held insufficient.
December 7.

Opinion:
Judge Simpson
delivered the opinion of the Court.
The plaintiff's petition was defective, and the demurrer to it should have been sustained. The consideration of the assignment should have been set forth, as the plaintiff could not recover against his assignor unless the assignment had been made for a valuable consideration, and then he could only recover the sum actually paid by him, with interest thereon, and not the full amount of the note unless the consideration paid was equal to it. The petition merely states the assignment and refers to it, and is wholly silent as to the consideration upon which it was made. The assignment on the note purports to have been made for value received, but this cannot cure the defect in the petition, because a statement in the petition itself, that the assignment had been made for a valuable consideration, would not have been sufficient. The nature and amount of the consideration must be stated.
2. The plaintiff should also state the reason why the amount was not recovered from the obligor.
3. If the assignor be party to the suit in favor of the assignee against the obligor, he is bound by the decision, and cannot controvert in a suit by the assignee against him to recover the amount paid for the assignment.
The petition should also have stated the reason why the payment of the note by the obligor could not be enforced by the assignee, instead of merely referring to the record and proceedings of the suit, in which the obligor was relased from its payment; and if the plaintiff relied upon the judgment in that suit as conclusive upon the defendant, he should have alleged that he was a party to it.
The matters relied upon by the defendant in his answer did not constitute a good defense to this action ; as he was a party to the action which was instituted by the maker of the assigned note to be relieved from its payment, he is bound by the proceedings and judgment in that case. It was as much his duty, as that of any of the other parties to it, to defend that action. He was interested in the result, and had a right to have set up and relied upon the very matters which he now contends should have been therein insisted on. If the judgment be wrong he can prosecute an appeal, but so long as it remains in force and unreversed it is obligatory upon him, and cannot be collaterally impeached by him, either on the ground of fraud and collusion in its obtention, or because it was unauthorized by the testimony, and is therefore erroneous.
But although the defendant's answer was insufficient, yet as the petition was defective, and did not set forth a good cause of action against him, he has a right to complain of the judgment, which, for this reason, is erroneous.
Wherefore the iudgment is reversed, and cause remanded with directions to sustain the demurrer to the petition, and for further proceedings consistent with this opinion.