Robertshaw v. Britton ( 1897 )

Stookdale, J.,

delivered the opinion of the court.

On November 22, 1889, James Robertshaw executed his promissory note, of that date, whereby he promised to pay to the order of R. F. Dunbar the sum of $1,500, six months after date, with ten per centum interest from maturity. R. F. Dunbar indorsed this note to the order of Britton & Koontz, who bring this suit to enforce its payment.

. James Robertshaw pleaded the general issue, also a special plea, at the May, 1895, term of said court. To the special plea a demurrer was interposed and sustained by the court, and leave granted to amend the special plea.

At the November term, 1895, defendant filed an amended plea, setting up want of consideration, alleging that prior to the time of the execution of the note sued on, defendant and his wife had executed and delivered to the said R. F. Dunbar their promissory note, payable to him, for $3,500, and Dunbar represented to them that he then held said $3,500 note, and would credit the same with the face value of the $1,500 note here sued on; but that, at the time of the execution of the note sued on, said note for $3,500 was not held nor owned by said Dunbar, but was outstanding.

To this plea a demurrer was overruled, and plaintiffs replied to it, denying the agreement set forth in the plea, and that plaintiffs were without notice of any such agreement, and that Robertshaw knew, at the time of the execution of the note sued on, that Dunbar had parted with said $3,500 note, and that he did not own nor control it.

At the December term, 1896, of said court, the parties went to trial on the issue raised by said pleas to the declaration. R. F. Dunbar testified, by deposition, that there was no agreement nor promise nor understanding that said note sued on should be credited on the $3,500 note; that the note sued on was given for money owed him by Robertshaw, and that the $3,500 note had been discounted before that, and the money paid to Robertshaw, and he had gotten the full benefit of said note.

James Robertshaw was introduced by defendant, and testified that he was the defendant and maker of the note sued on. He was then asked to state what were the facts about the allegations set forth in his special plea, filed by him as to the credit to be applied on the back of the $3,500 note. Plaintiff objected to the testimony being introduced, for the reason that the plea does not show a good defense to the action. The court sustained the objection, and defendant excepted.

The defendant then asked leave to amend his plea so as to show that the original $3,500 note was secured by a deed of trust upon land, and that the same had been foreclosed and the land sold thereunder by the trustee prior to the institution of this suit, which amendment the court refused to allow, and defendant excepted.

Mr. Robertshaw, being recalled, was asked to state to the court and jury whether the facts set forth in his special plea, filed December 3, 1896, are true, to which question the court sustained an objection, holding that the facts set up in said plea constituted no defense, and no testimony would be allowed to sustain it. Instructions having been given in line with the above recited rulings, verdict and judgment were rendered for plaintiff for $2,625. Defendant moved for a new trial for causes: (1) The court erred in sustaining demurrer to special plea; (2) the court erred in excluding testimony of Robertshaw; (3) the court erred in refusing to allow defendant to amend his plea; (4) the court erred in granting the peremptory instruction. This motion being overruled, defendant appealed.

Counsel for appellant contends that when the court overruled the demurrer to the special plea, and gave plaintiffs sixty days to reply, and they did reply, denying the allegations of said plea, the law of the case for that court was settled, and the court should not, in effect, have sustained the demurrer that had been overruled at a former term. There seems to be no answer to this contention. The plea was filed as an answer to the whole action, and the court held it to be good, as such answer, by overruling the demurrer to it, and then to refuse to allow evidence to prove it after issue had been joined, was manifestly error. Defendant had the right to prove his plea in the then state of the pleadings.

Had the defendant testified to the truth of his plea, as he offered to do, there would have been such a conflict of testimony with the testimony of plaintiff already in, as would have rendered the peremptory instruction erroneous.

The contention of counsel for appellees that plaintiffs are bona fide holders of the note sued on, cannot avail, in view of § 3503 of the code of 1892. If the defendant had a good defense, and if the special plea be true, there was not only want of consideration, but the note sued on was obtained by misrepresentation and fraud, the $3,500 having been previously transferred, making a good defense against Dunbar, which may be interposed as against plaintiffs.

The contention of appellee’s counsel that appellant cannot defend this suit unless he had immediately paid the $3,500 note, is met by the fact that he asked leave to amend his plea so as to allow him to prove that it had been paid by sale of lands, and was denied by the court.

We do not concur in the contention that the facts set up in the special plea would constitute the note sued on accommodation paper. For these reasons we think a new trial ought to have been granted.

The judgment of the coxvrtbelow is reversed, anew trial granted, ■and the cause remcmded.