Court Opinion

ID: 6505268
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:17:34.043825+00
Date Added: 2024-06-11T15:54:43.101526
License: Public Domain

GIBBONS, J.
The principles governing the questions presented in the present record, were, in our opinion, substantially settled in the case of Clements v. Loggins, 2 Ala. 514. In *384that case, Logging had purchased of one Cooper certain lands’ for which he executed his certain promissory notes, and received a bond for titles, to be made on the payment of the purchase money. The notes given out were four in number ; one for one hundred dollars, payable 1st March, 1837; and three for two hundred dollars each, payable to the said Cooper, and falling due the 25th day of December, 1837, 1838, and 1839. The first note was paid at maturity. In the summer of 1838, the plaintiff, Clements, gave the defendant, Logging, notice that he had purchased the three notes last falling due, and inquired if he had any defence against them, or either of them. To which defendant replied, that he had none, except a set-off of about one hundred dollars, and that he had said the same thing to the plaintiff a few days before, when he was inquiring of him about the notes for the purpose of purchasing them. This conversation was after another conversation, held with the said Cooper, in which he had promised to pay all the notes on his return from Mississippi, and the said Cooper then ageeed, on his doing so, to make him a title. Some time in December, 1838, the defendant offered to pay Cooper the amount due on the land, and demanded title. Cooper admitted that he could not make title; that he had never had title in himself; that the notes for the purchase money belonged to the plaintiff, and that, if he would pay him, he would endeavor to make title. Defendant then told Cooper, ho would have nothing more to do with the land. It further appeared, that the title of Cooper was a bond for title of one Collins, from whom he had purchased, and that the purchase money was unpaid to Collins ; Collins had obtained judgment for the purchase money, and could make nothing out of Cooper on execution, because he was insolvent. On this proof, the court says : “ The maker of a note, when applied to by one intending to purchase it, to know if there is any defence against it, by admitting that he has none, thereby precludes himself from afterwards setting up any defence, when sued on the note, which existed at that time within his knowledge, as it would be a fraud on the intended purchaser. But, we think, he would not be precluded from making a defence which might subsequently arise out of the original contract; such, for example, as a total failure of consideration citing Buckner v. Stublefield et al., 1 Wash. R. 386; Hoames v. *385Smock, ib. 390. “ As already remarked, to permit the maker to avail himself of any defence which existed at the time of the application to him for information, would bo to countenance a deceit; but, if tho note bo purchased on the faith of a promise by the maker to pay it, he will bo compelled to pay the assignee at all events, on the ground of a contract, of which the purchase of the note would be a sufficient consideration. So, in this case, if the contract was rescinded after the plaintiff acquired title to the notes, from the inability of the vendor to make title, the defendant being ignorant at the time he was applied to by the plaintiff for information respecting the notes of the inability of the vendor to make title, the failure of the consideration would be a valid defence against the notes in the hands of the plaintiff.”
Wo have but to apply the principle here decided to the case at bar, to show that the court erred in its charge to the jury. The doctrine of tho charge, as given to the jury, was, that after the plaintiff had bought the note, and after the defendant had said to tho plaintiff that tho note was all right, and he had no off-set to it, nothing that could subsequently transpire as between the original parties to the note could create a valid defence to the defendant as against the plaintiff. This is the precise question decided in the caso cited from 2 Ala. There the rescission of the contract for the sale of land did not take place until long after the plaintiff had acquired the notes, and after a conversation very similar to that which took placo between tho plaintiff and defendant in the case at bar; and yet the court decided, that the defence could be made, if tho defendant had acted fairly and honestly in his replies, which he had given on being applied to by the plaintiff for information in regard to the notes when about to purchase them.
The charge asked by the defendant, in our opinion, asserted a correct proposition of law, and should have been given.
.Let the judgment of the court below be reversed, and the cause remanded.