Court Opinion

ID: 6274309
Source: CourtListenerOpinion
Date Created: 2022-02-18 15:54:49.841338+00
Date Added: 2024-06-11T09:00:00.505217
License: Public Domain

Opinion by
Beaver, J.,
There is a specific averment in the defendant’s affidavit of defense that the plaintiff is not a bona fide holder “ in due course or for value of the note upon which the suit is founded.” *631We must consider the affidavit ot’ defense, therefore, as though John W. Dixon, the payee in the note, was the real plaintiff. As between him aiid the defendant, is the affidavit sufficient ? It alleges: “ I purchased from John W. Dixon, referred to in plaintiff’s statement of claim, 5,000 shares of stock of Monitor Rock Mining, Milling & Power Company, a corporation, and, as part of the purchase price therefor, indorsed and delivered to John W. Dixon a certain promissory note of the form described in plaintiff’s statement of claim. John W. Dixon thereupon delivered to me 5,000 shares of said stock.” There was, therefore, as between Dixon and the defendant, an executed sale of stock, the transaction being complete, except that the portion of the purchase money represented in the note in suit was not paid.
The defense alleged is :
“1. That said stock had been issued by said company to the said Dixon without consideration ” and that defendant had “ notice from said company that my (his) title to said stock will be contested, of all of which the said John W. Dixon has had notice.”
“ 2. There was no consideration for my delivering said note to said Dixon who fraudulently induced me to deliver said note to him.”
Upon what grounds does the defendant allege that the stock was issued to Dixon without consideration ? Was it a gratuity ? Was it issued fraudulently? What was the transaction between Dixon and the company which is characterized as without consideration ? The facts should be set forth specifically. The allegation is vague and sets forth no facts upon which the legal mind can rest in determining whether or not the allegation of failure of consideration is substantial and sufficient to go to a jury.
As to the second allegation that there was no consideration for the delivery of the note, the affidavit itself contradicts this, inasmuch as it distinctly alleges that the note was given as part of the purchase price of stock which was actually delivered. There is added, it is true, an allegation that Dixon “ fraudulently induced defendant to deliver said note to him.” But what was the alleged fraudulent inducement? There is no hint as to what it was. It is true, of course, that fraud *632vitiates whatever it touches but fraud is based upon facts and it is not sufficient to merely allege it, without stating the facts upon which the allegation is based.
The defendant seems to retain possession of and does not intimate any intention of returning the stock, or any portion of it, which he purchased and which was delivered to him by Dixon, as a consideration for the note in suit. It is clearly his duty, if desiring to rescind the contract, to return or offer to return at least so much of the stock as is represented by the note. He cannot retain the stock purchased by him and refuse payment therefor, even if in the future his title thereto might be invalidated. The allegation that the corporation which issued the stock will contest the validity of his title does-not help his case, unless he surrenders or offers to surrender it, or at least so much of it as is represented by the note in suit.
We are clearly of the-opinion that the affidavit is not sufficient and that the rule for judgment for want of a sufficient affidavit of defense should have been made absolute.
The judgment is reversed and the record remitted to the court below, with directions to enter judgment against the defendant for such sum as to right and justice may belong, unless other legal or equitable cause be shown to the court below why such judgment should not be so entered.