Opinion ID: 426248
Heading Depth: 1
Heading Rank: 9

Heading: Royal's Claim

Text: 68 Royal argues that it was entitled to judgment in its favor on the promissory notes as a matter of law. The trial judge instructed the jury that all the notes were due subject to XSC's defenses of fraud in the inducement and failure of consideration. Sufficient evidence supported the trial judge's instructions on the defense of fraud. 69 The trial judge erred in his instruction to the jury regarding failure of consideration as a defense to Royal's claim. The record contains sufficient evidence from which the jury could conclude that Royal was not a holder in due course. See Fla.Stat.Ann. Sec. 673.302(1). Royal was therefore subject to the defense of want or failure of consideration. 9 Fla.Stat.Ann. Sec. 673.408 provides that 70 [w]ant of failure of consideration is a defense as against any person not having the rights of a holder in due course .... Partial failure of consideration is a defense pro tanto whether or not the failure is in an ascertained or liquidated amount. 71 The parties dispute whether the statute creates a defense of failure of consideration even if XSC derived some beneficial use from the RBC-I's. A close reading of the statute indicates that a total failure of consideration is necessary for a complete defense against Royal's claim on the promissory notes. A partial failure of consideration discharges only as much of the claim as corresponds to the failure itself. See Hart Industrial Supply Co. v. Craig, 405 P.2d 93, 96 (Okl.1965). The trial judge instructed the jury that: 72 a failure of consideration can occur ... when the value of goods, as measured by the essential purpose to be served by the buyer's purchase of the goods in the first place, is substantially impaired to the buyer by reason of defects in the goods. 73 Transcript at 5880. The evidence is uncontroverted that XSC received in excess of $714,000 in revenues from renting and selling RBC-I's. XSC, therefore, could not plead total failure of consideration. The trial judge's instruction was clearly erroneous. We, therefore, remand the determination of liability on Royal's claim for a new trial.