Kinard v. Bank of Lenox

Felton, J. The Bank of Lenox sued D. W. Kinard on a promissory note to which 'a plea of want of consideration was filed. The evidence showed that Kinard owed the Bank of Lenox approximately $1200; that the Bank of Lenox signed a Federal Land Bank form S-231, an agreement whereby it agreed with Kinard and the Federal Land Bank to accept $1000 in full settlement and satisfaction of the $1200 note, which by the terms of the agreement was to be transferred to the Federal Land Bank upon performance of the agreement; that the $1000 was paid to the Bank of Lenox, and was accepted by it according to the terms of the [820] agreement. Later, Einard gave his note to the Bank of Lenox to cover the difference between the $1300 note and the $1000 paid in settlement. There was no new consideration for the note. Either a prior legal obligation or a strong moral obligation would be a prerequisite consideration to the validity of the note sued on in the absence of any other good and valuable consideration. There was no legal obligation because the original obligation had been completely discharged by the making and performance of the agreement to settle for a less amount. Whether there was such a strong moral obligation as would form the basis for a valid promise need not be considered for the reason that the original note was transferred to the. Federal Land Bank under the agreement, so that if there was a moral or legal obligation to pay any one the difference represented by the note sued on it was owed to the Federal Land Bank, the new unconditional owner of the original obligation. There was neither a good nor a valuable consideration for the note sued on, and it was error for the court to overrule the motion for new trial. Judgment reversed. Stephens, P. J., and Sutton, J., concur.