Hoyt v. McNally

THOMPSON, J. It is ixrged that the evidence offered and excluded shows a total failure of consideration for the note in suit, and that the plaintiff took it after its maturity, with full knowledge of the defence sought to be made by the evidence excluded. If the offer shows a total failure of consideration, such failure was a complete defence to the suit, and there was error below. The argument of the defendant in support of this contention is based upon the assumption that the farm would have been worth more than the amount of the mortgage on it, had it been at the time of the sale in the condition represented by E. F. Hoyt. The defendant by his offer did not propose to show that had the farm been as represented its value would have equalled or exceeded the amount of incumbrance upon it. All the facts included in defendant’s offer may be admited to be true, and yet so far as appears from them, the value of the farm at the time of the conveyance have been less than the amount of the mortgage. E. F. Hoyt conveyed the farm to the defendant and Dewey by his deed with the usual covenants of warranty and seizin. If the consideration of the note is assumed to be the conveyance of the title with the covenants and the fraudulent representations of E. F.% Hoyt, yet it cannot be said that there was a total want or failure of consideration, for the conveyance of the title, and the covenants of warranty and seizin have not failed, but they are still held by the defendant. It does not appear that there has been any offer of rescission by him. [42] If Ray held possession of the premises under a valid lease to him from E. F. Hoyt, executed and delivered prior to the conveyance to the defendant and Dewey, they have their remedy against E. F. Hoyt by an action on his covenants for all damages they have sustained by the retention of the premises by Ray under such a lease. It is apparent that if there is any failure of consideration disclosed, at most it is only partial. Thrall v. Horton, 44 Vt. 386; Blaney v. Pelton, 60 Vt. 275. It is insisted that R. L. s. 911, gives the defendant the right to make the defence of a partial failure of consideration, in this action. Prior to the St. 1867, now embodied in R. L. s. 911, partial failure of consideration was not available as a defence to an action on a promissory note, even between the original parties thereto, unless there was fraud upon the defendant in procuring the note, an offer by him to rescind, and the amount to be deducted could be ascertained by computation. Walker v. Smith, 2 Vt. 539; Stone v. Peake, 16 Vt. 213; Burton v. Shermerhorn, 21 Vt. 289; Richardson v. Sanborn, 33 Vt. 75; Harrington v, Lee, 33 Vt. 249; Briggs v. Boyd, 37 Vt. 534; Farrar v, Freeman, 44 Vt. 63; Thrall v. Horton, 44 Vt. 386. We are aware that some of the remarks of Peck, J., in his opinion in Kelley v. Pember, 35 Vt. 183, are at variance with the doctrine as we have stated it, and as laid down in the cases cited, but that case is not in conflict with these cases, for there it distinctly appeared that there had been an offer by the defendant to rescind. The later case of Briggs v. Boyd, sufra, repudiates the idea that Kelley v. Pember was decided upon grounds in»conflict with the rule above stated. R. L. s. 911 varies this rule so far as to permit partial failure of consideration to be set up as a defence fro tanto in an action to recover upon a note, bill of exchange or other writing, where the action is between the original parties to such instrument. The language of the statute [43] is clear and explicit, and we hold that under it this defence can only be made in actions between the original parties to the instrument upon which recovery is sought, as appears by the instrument itself. Where the instrument is a promissory note as in this case, the statute only applies to an action between the maker and payee of the note as shown by the note itself. The plaintiff is not an original party to the note in suit, and for that reason the defendant cannot avail himself of the statute to interpose the defense of partial failure of consideration. The court below, therefore, properly excluded the evidence offered, and directed a verdict for the plaintiff.' Judgment affirmed.