Court Opinion

ID: 9664146
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:04:34.013352+00
Date Added: 2024-06-11T18:15:02.601025
License: Public Domain

Bbonson, J.
Plaintiffs commenced this action for nonpayment of a $5,000 negotiable note and to foreclose a mortgage on real property. Tbe note and mortgage were executed by tbe defendants to plaintiffs in partial payment for a home built by Behrens Construction Company. Plaintiff Jack Behrens owns 95% of said company. The house was built on a cost-plus contract. The note and mortgage were executed when plaintiffs claimed that the house cost more to construct than had been estimated originally. It appears that financing for this additional cost was unavailable through a lending institution. In their answer, defendants pled failure of consideration. At trial, Jack Behrens was the only witness. At the close of his testimony, defendants moved for a directed verdict. As the case was tried without a jury, the trial judge granted a judgment on the evidence based on a failure of consideration. He also denied plaintiffs’ motion to reopen their proofs. Plaintiffs appeal of right.
The parties agree that the note is a negotiable instrument, MCLA 440.3104(1); MSA 19.3104(1), and that plaintiffs are holders, MCLA 440.1201(20); MSA 19.1201(20), with a right to enforce the note in their own names, MCLA 440.3301; MSA 19.3301. As the signatures on the note are not in dispute, plaintiffs are entitled to recover by merely producing the note. MCLA 440.3307(2); MSA 19.3307(2). This *429plaintiffs did during the direct examination of Jack Behrens. This is all plaintiffs were required to do.
On cross-examination, defendants went beyond the note’s authenticity and introduced evidence concerning their defense of lack of consideration. This is an affirmative defense available, to the defendants on which they had the burden. MCLA 440.3306(c); MSA 19.3306(e) and MCLA 440.3408; MSA 19.3408. Following their cross-examination of plaintiff Jack Behrens, defendants moved for a directed verdict. The basis of their motion was that since Behrens Construction Company had built the house, plaintiffs themselves had given no consideration. The trial judge agreed.
On appeal, we affirm a judgment on the evidence if the trial judge’s findings of fact p,re not clearly erroneous. Miller v Department of State Highways, 30 Mich App 64 (1971). Defendants contend there is sufficient evidence to support the trial judge’s finding. They base their argument on the fact that no consideration moved between plaintiffs and defendants. This contention has no merit. That consideration moves from or to a third party is immaterial. Levitz v Capitol Savings & Loan Co, 267 Mich 92 (1934); Fisher v Lehrer, 149 Conn 106; 175 A2d 707 (1961); 1 Restatement, Contracts, §75, p 82; 1 Williston, Contracts (3d ed), § 114, p 452. The consideration for defendants’ promise to pay was the building of a house by Behrens Construction Company. By contract defendants had agreed to pay the company’s costs in building this house. The fact that defendants paid someone other than the company for the house does not mean there was no consideration for their promise.
To prove failure of consideration defendants must show the obligation cannot he enforced against them. MCLA 440.3408, Comment 1; MSA 19.3408, Com*430ment 1. Defendants contend they have paid more for the house than they had agreed to pay. The only part of Jack Behrens’ testimony which supports this is his admission that possibly defendants had reached such an agreement with his father, but he was unaware of it. To say that such an agreement was reached is speculation as defendants presented no positive evidence to that effect. It is true that plaintiffs introduced no evidence to substantiate their allegation that the house cost more than originally estimated. It was not their burden to do so until defendants established a defense.
We think it was error to grant defendants’ motion and grant a judgment on the evidence. Reversed and remanded for a new trial.
Levin, P. J., concurred.