Court Opinion

ID: 7038213
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:47:39.411874+00
Date Added: 2024-06-11T16:11:14.390208
License: Public Domain

Elliott, J.
The first and second paragraphs of the an■swer are pleaded to the whole complaint, and I fully concur in the opinion by Frazer, J., that neither of said paragraphs amounts to a good defense to the second paragraph of the complaint. The note was a valid cause of action in the hands of the plaintiff as assignee; it was regular on its face, and imported, prima facie, a sufficient consideration to support it. It was not void, though liable to be impeached for fraud or for the want or failure of consideration; and, if, upon its maturity, the defendant had refused to pay it, because of the matters of defense set up in the first and second paragraphs of the answer, the defense, if true, would have been available, under the statute, against the assignee.
But it is alleged in the second paragraph of the complaint, that after the maturity of the note, the defendant, in consideration that the plaintiff would forbear to sue upon it until the first day of September, 1866, promised to pay it to the plaintiff at that time. If the defendant had refused to pay the note at its maturity, and had notified the plaintiff of his defense, the latter would have been at liberty to prosecute an action, immediately, against the defendant and controvert the alleged defense, or he might have proceeded at once against the assignor, and taken upon himself the burden of showing that a suit against the defendant would have been unavailing. By the defendant’s promise to pay the note on the 1st of September, 1866, and the agreement of forbearance in consideration of that promise, the plaintiff' was delayed in bringing suit, either against the defendant or the assignor, until the expiration of that time. This delay was, of itself, a detriment to the plaintiffj but in addition thereto, he was subject to the risk that the assignor, as well as the maker, might in the meantime become insolvent ; and this detriment, inconvenience, and risk, constitu*41ted a sufficient consideration to support the defendant’s promise to pay the note at the-time agreed upon.
In argument, much stress is laid on the statute, which, in reference to notes of this class, declares that whatever defense or set-off the maker had, before notice of the assignment, against an assignor, or against the original payee, he shall also have against their assignees; but it must be remembered that here tbe second paragraph of tbe complaint is based on a promise made by tbe maker to tbe assignee, wbicb is supported by a sufficient consideration, and to this promise tbe matters set up in tbe first and second paragraphs of tbe answer present no defense.
JBut I cannot concur with my brother judges in tbe conclusion reached by them, that the matters alleged in tbe second paragraph of tbe reply do not constitute a valid estoppel. It is alleged in that paragraph, that tbe defendant at tbe time of tbe execution of tbe note, and for tbe purpose of assisting tbe payee in tbe negotiation or sale thereof, and to induce its purchase, executed and delivered to the payee the following statement in writing:
“ Bearcreek Tp., Ind. Eeb. 28th, 1865.
“ This is to show that tbe note given by me this day to James S. Antisdale for $75 is all right and will be paid when it comes due. (Signed) J. C. Montgomery.”
It is further averred that said statement accompanied said note at the time tbe plaintiff purchased it of tbe payee, and that, relying on said statement, tbe plaintiff was induced to make tbe purchase in tbe belief that tbe note was given for a valuable consideration, that tbe defendant bad no de-, fense thereto, and would pay it at maturity. It is conceded to be a familiar doctrine, that where tbe maker of a note represents to any one who be knows is about negotiating for it, that be has no defense to it, and upon tbe faith of such assurance tbe paper is purchased, be will be estopped from making defense. It is, to my mind, extremely difficult to draw any well founded distinction, in principle, between such a case and tbe one under consideration.
*42The prevention of fraud is the peculiar characteristic of the doctrine of estoppels in pais. And hence, when one party by words or acts knowingly induces another, who relies thereon, to act in a material matter of interest, the pei’son inducing such action is estopped from denying the truth of his words or acts, even by the assertion of the truth, when to do so would work a fraud or injury to the other.
Here, it is averred that the writing set forth in the reply was given to the payee of the note to enable him to negotiate it, by inducing some one to become the purchaser. True, it was not addx’essed to the plaintiff by name, but that fact, it seems to me, does not affect the case.
It was not addressed by name to any other person, by which its application might be limited. It was general in its terms, and should be considered, as it was evidently intended, as being addressed to any one who was willing to purchase the note. It is like a general letter of credit addressed to any one who might deal with the person to whom the credit is given. It was given to ixxduce some one to buy the note, and upon the faith of it the plaintiff became the purchaser. It accomplished the purpose for which it was given, and it would be a fraud upon the plaintiff to permit the defendant now to deny its truth.
It is claimed, howevex-, that as the statement was executed at the same time as the note, which, prima facie, imported a valuable consideration, they must be taken together as one instrument, and, in that view, that the written statement amounts to nothing more than the note alone impox’ts. This position does not seem to rest on any solid foundation. No ixnportance can be attached to the fact that the instrument set up in the reply and the note were given at the same time. Suppose the plaintiff had been present at the execution of the note, and had then informed the defendant that he was about to purchase it, axxd had asked if there was any defense to it, and the defendant in xuply thereto had made the statement contained in the writing^ *43and the plaintiffj relying thereon, had then purcíiased the note, would it be contended that the defendant would not have been estopped from impeaching its validity? The statement was sent forth with the note to be shown to any one who might be willing to become the purchaser, and whether it was negotiated on the day of its date or at a subsequent time, the defendant, by the writing, said to the purchaser, the note is all right, and will be paid at maturity.
Nor can it be maintained that the writing contains nothing more than the note imports. The note contains a promise to pay the sum named at the time stipulated, and, prima fade, it imports in law, that it was given upon a sufficient consideration to support the promise. In other words, under the law, the plaintiff* was not required to allege in the complaint, and prove on the trial, the consideration for which the note was given, because, in the absence of a showing to the contrary, the law infers a consideration; but still the defendant would be at liberty to show that it was given without consideration, or set up any other valid defense he might have to it, as to which nothing is implied by the note. But the writing goes much further; in legal effect, it not only admits a valuable consideration, but asserts that the defendant had no defense, whatever, to the note..
It seems to me clear that the reply shows a valid estoppel against the defense set up in the first and second paragraphs of the answer.