Patterson v. . Fuller

Brodgen, J. The evidence established the fact that the notes in controversy were executed and delivered by the Fullers in consideration of the purchase price of certain land conveyed to them by the Pattersons, *791 and further, that by reason of outstanding deeds of trust upon tlie property securing notes for more than $1,000,000, and the subsequent foreclosure that there was a total failure of consideration for the purchase money notes given by the Fullers to the'Pattersons. However, the Pat-tersons assert that the Fullers are not in a position to plead the failure of consideration for the reason that H. Walter Fuller, president of Laurel Park Estates, Incorporated, executed on behalf of the corporation the deed to the Pattersons for the identical land; in which said deed it was ‘ covenanted that the land was free from encumbrance. They further contend that the encumbrance was known to Fuller as president of the corporation when the deed was executed, and that hence Fuller is now estopped thereby. Plaintiffs -rely upon Bank v. Bank, 138 N. C., 468, 50 S. E., 848. The controlling proposition in that case was that a person holding a lien upon land could not lawfully conceal the fact and knowingly suffer another to purchase the property, to go in possession thereof under a claim of ownership and occupy it for more than seven years, and then undertake to enforce his claim. The Court said: “It is familiar learning that'where one knowingly suffers another in his presence to purchase property in which he has a claim or title which he wilfully conceals, he will be deemed under such circumstances to have waived his claim, and will not afterwards be permitted to assert it against a purchaser.” See, also, Hallyburton v. Slagle, 132 N. C., 947, 44 S. E., 655; 64 A. L. R., 1550 and note; Trust Co. v. Collins, 194 N. C., 363, 139 S. E., 593. The defendants claim no interest in the land, but merely assert as a defense the failure of consideration of the notes. Consequently the salutary principle applied in the Bank case, supra, is not controlling. The plaintiffs in the brief also contend that failure of consideration is not a valid defense to a note under seal by reason of the fact that the seal imports consideration, and rely upon the case of Burriss v. Starr, 165 N. C., 657, 81 S. E., 929. C. S., 3008 recognizes and sanctions in proper cases the defense of failure of consideration. The presumption arising from a seal upon a negotiable instrument is rebuttable. This was determined in Farrington v. McNeill, 174 N. C., 420, 93 S. E., 957, in which the Court said: “It is true, the note in this case is under seal, which purports a consideration, but such presumption is rebuttable as between the parties thereto.” Taft v. Covington, 199 N. C., 51, 153 S. E., 597; Chemical Co. v. Griffin, 202 N. C., 812, 164 S. E., 577. While the jury found against the defendants on the issue of conditional delivery of the notes, the verdict establishing the failure of consideration warranted the judgment rendered. No error.