Court Opinion

ID: 6474071
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:33:26.662415+00
Date Added: 2024-06-11T15:53:54.444375
License: Public Domain

CUNNINGHAM, J.,
Specially Concurring.—Plaintiff assigns as error the order of the court denying his motion to strike the special answers, and in overruling its demurrer thereto, for the reason the answers attacked do not set forth any defense to the cause of action. Paragraph 1301, Revised Statutes of Arizona of 1901, is cited and referred to in the pleading of plaintiff as authority for the motions and demurrers. Paragraph 1301 provides: “In the case of an assignment of a thing in action, the action by the assignee shall be without prejudice to any setoff or other defense existing at the time of, or before notice of the assignment; but this section shall not apply to a negotiable promissory note or bill of exchange, transferred in good faith and upon good consideration before due.” The plaintiff contends that it is the holder as assignee of the notes which were transferred to it in good faith and upon good consideration before due, and that the notes are negotiable. It further contends that the answers set up defenses existing at the time of or before notice of the assignment, and therefore such answers are-not defenses to the action. The first defense attacks the amount of consideration received by the defendants, and alleges: “The plaintiff corporation took said promissory notes with full and actual knowledge of defects and deficiencies in the amounts of the consideration actually paid and delivered by said George Fishbaugh to defendants therefor.” Paragraph 3357, Revised Statutes of Arizona of 1901, protects the holder of negotiable instruments, who has received notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid the full amount agreed to be paid therefor, only to the extent of the amount theretofore paid by him—the holder of such instrument having such notice will be deemed a holder in due course only to that extent. The corporation by the answer is admitted to be a holder in due *123■course upon the condition that, at the time the notes were assigned to it, it had no notice of any infirmity in the instruments or defects in the titles thereto of George Fishbaugh, the person negotiating them, except that George Fishbaugh had not advanced upon the note for $1,500 a sum exceeding $970, and on the note for $1,000 he had not advanced a sum exceeding $375. Those sums were the amounts actually payable thereon, and the corporation was á holder in due course to that extent only. Par. 3355, Ariz. Rev. Stats. 1901.
With full and actual knowledge at the time plaintiff took the notes, it could not avoid the defenses set up; the facts appearing upon the trial. The court did not err in denying the motion, nor in overruling the demurrer.
The second and fourth defenses are likewise attacked by motions and demurrers. The second defense in the answer avers that George Fishbaugh, the original payee of the notes in suit, at all times therein mentioned “was the president and sole manager of the plaintiff corporation, and the said George Fishbaugh, in consideration of the payments and performances of the services and the furnishing of the materials hereinafter set out and mentioned, promised and agreed, for and on behalf of said plaintiff corporation, to credit the amounts •of said payments and the reasonable value and agreed price of the said services and materials upon said promissory notes, ■and to credit such amounts upon the amounts, if any, due thereon.” The answer then alleges that defendants paid $161 in September, 1909, and that defendant J. H. Beeler thereafter performed services and furnished material setting out the items and value, which- aggregate $2,250.92. Defendants allege that no credits were given them for the money paid, or for the services rendered and material furnished. It is then alleged “that at all times since the organization in March, 1909, of George Fishbaugh, Incorporated, •a corporation, the said George Fishbaugh has been president •and sole manager of the said corporation, and that the said •corporation has had actual notice of all things done by the ■said George Fishbaugh, and the said George Fishbaugh has had actual notice of all things done by the said corporation, ■since its organization.” The fourth defense is designated -a •setoff, and is in all material respects the same as the second defense. The motions to strike were denied, and the demur*124rers were overruled, of which orders plaintiff complains, for the reason that plaintiff claims the answer does not interpose any defense to the complaint. The answers are not models of perfection; but to give them a fair, reasonable interpretation, to which they are entitled, they clearly set forth a contract made between the plaintiff, as the holder of the notes, and the maker of the notes touching the manner and character of the payments that shall discharge the notes. No consideration is alleged to have passed for the making of this contract; but it is alleged that defendants fully performed their part of the agreement. Such performance would bind the corporation to perform its part of the contract even though before the defendants performed, the contract was not enforceable for lack of consideration in making it. I know of no rule of law that prohibits the holder of a negotiable promissory note, which has been transferred to him in due course, and the maker of such note from making a contract that provides for the payment of such note in some other manner or in some different commodity from that specified in the note. "Where such contract is made between the holder and the maker, and the maker performs that contract upon his part, he is entitled to have the note discharged, provided it has not been transferred to another holder who is protected from such defense, which is not claimed here.
The answer with reasonable certainty pleads such a contract and its performance by the defendants, and no error was committed by the court in denying the motions to strike, nor in overruling the demurrers.
The trial court upon conflicting evidence found for the defendants. That finding ought not be disturbed. No reversible error appearing, I concur in the order affirming the judgment.