Case Name: FIRST NATIONAL BANK OF WATERTOWN, Respondent, v. SOMERS, Appellant
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1916-12-20
Citations: 38 S.D. 96
Docket Number: File No. 4015
Parties: FIRST NATIONAL BANK OF WATERTOWN, Respondent, v. SOMERS, Appellant.
Judges: 
Reporter: South Dakota Reports
Volume: 38
Pages: 96–98

Head Matter:
FIRST NATIONAL BANK OF WATERTOWN, Respondent, v. SOMERS, Appellant.
(160 N. W. 523.)
(File No. 4015.
Opinion filed December 20, 1916.
Rehearing denied February 7, 1917.)
Negotiable Instruments — Defenses—Failure of Consideration — Counter-claim Under Warranty — Bank Payee, Defenses as Against.
A vendee of plows gave a -promissory note for tbe amount of the purchase price to a bank, the amount being credited on account of the vendor. The -plows were warranted hy vendor, -and the fact that the warranty was broken was known to the maker of the note prior to- execution thereof; vendor having agreed with vendee to make certain repairs to remedy the defects covered by the warranty, etc.; the bank, at time of ' taking the note, being advised of said agreements, but -being-unaware of the warranty. Held, that the- note is not subject to said defenses urga-ble against vendor, and the vendee, .maker of -the note, is liable thereon to plaintiff payee-, notwithstanding the 'breach of warranty and of said agreement to- repair; the bank would not be subject to such defenses unless it guaranteed performance- of the agreement to repair, or acted as agent for vendor.
Appeal from 'Circuit Court, Codington Ooiunty. Hon. Cart, :G. Sherwood, Judge.
Action 'by t'he first National Bank of Watertown, 'against W. J. Somers; to recover upon a promissory note. From a judgment far plaintiff, and from an order 'denying a new -trial, defendant appeals.
Affirmed.
Hcmten & Hmten, anid Perrett P. Gault, for Appellant. ■
Irvin H. Myers, for Respondent.
Appellant cited. McCormick Harvesting Machine Company v. Taylor, (N. D.) 63 N. W. 890.

Opinion:
WHITING, J.
An 'action on a promissory noté given by . defendant to plaintiff. Defendant pleaded" 'that said note was given in settlement of the .purchase price of á set of plows bought of one A., and that there was a partilcal failure in the consideration for said note, owing ito defects in said plows. Defendant also pleaded, as. a counterclaim, damages which- he-claimed to have suffered owing to a breach of warranty, which he alleged was given by both A. and plaintiff, and which warranted the qualities of said plow and its appliances. Verdict and judgment were for -plaintiff. This appeal is from such judgment an-d an order denying a new trial.
It is plaintiff's contention that it took this- note from defendant and credited A: and -his son with the amount .thereof — that the transaction was exactly the same .as though -defendant had borrowed the money, represented by said1 note, from the plaintiff bank, and -then had- paid the money into- the hank to be credited to A. While the evidence would tend to- sho-w that-said -plows were warranted by A. and that such warranty was broken, it also shows that, at the time the note in question, was given, defendant had full knowledge that the plows- did not -come up to the warranty, an-cl -that, prior to the giving of such n-o-te, defendant and A. had entered into an .agreement whereby A. agreed to repair such plows in -certain respects — and thus remedy the defects covered- by the warranty — and agreed- to- furnish a man to- assist in running such- plows until the same were repaired. The evidence shows that plaintiff, at the. time it took the note, wa-s advised of the said agreements, but there is absolutely n-o evidence that plaintiff was ever advised of any warranty given upon the sale of such plows.- The only theory, therefore, upon- which plaintiff could be ho-l-den would seem to -be that it had guaranteed that A. would make the 'repairs and furnish the help as agreed, upon by A., or that plaintiff was acting as the agent of A. in the taking of said! note, and'therefore held the said note subject to all 'the defenses it would ibe subject to if given 'directly to A. and sued upon by A. We think there was no sufficient evidence to establish a guaranty, 'and1 certainly no evidence to establish an enforceable guaranty as the guaranty, if any, was oral. The instructions of the trial court fairly submitted this case to the jury upon the question of whether the plaintiff was A.'s agent in talcing the note; moreover, defendant, in hjs brief, rejects the agency theory.
Defendant contends that plaintiff took the note'subject to all defenses that he would have' had if the note had been taken- by A. in plaintiff's name and turned over to' plaintiff by A.; and defendant cites the decision of the count of our sister state in McCormick H. M. Co. v. Taylor, 5 N. D. 53, 63 N. W. 890, 57 Am. St. Rep. 538, to the effect that, if the note had been so taken by A. in 'plaintiff's name and accepted by plaintiff, then such note would have been subject to any defense that could' have been interposed -against it, if -running ¡to A. as payee and sued upon- by him, and this .regardless oif whether plaintiff 'had -any notice of the facts upon which -such -defenses .were based. • If A. bad taken- this note in .payment for the plows, and bad taken same in plaintiff's name, plaintiff by accepting such note would have ratified the acts of A. in .faking such note, and therefore would be bound by any warranties -given by A. as 'a 'Consideration for such note, and this regardless of any actual knowledge be may have had of such warranties. There is no- analogy between sudh a situation and. the situation with which we are confronted. Here the plaintiff is ;n no manner -chargeable with' knowledge of any facts, except those brought to its notice. It is therefore not chargeable with notice of the warranty, and, for the reasons hereinbefore stated, is not holden -on the alleged' guaranty.
The judgment and order appealed from are affirmed.