Folger v. Dousman

LyoN, J. The note in suit was transferred by the payee after maturity, and of course is subject to the same defenses in the hands of the plaintiff, which might have been made to it had the payee retained it and brought an action upon it. There is some conflict in the testimony concerning the agreement which the circuit court found was made between the defendant and the payee at the time the note was given; but we think the finding in that behalf is supported by a clear preponderance of evidence. That agreement was proved for the purpose of showing a failure of the consideration for which the note was given ; and, although made contemporaneously with the note and not reduced to writing, it is a valid agreement within the doctrine of many decisions of this court. Jones v. Keyes, 16 Wis., 562; Peterson v. Johnson, 22 id., 21; Hubbard v. Galusha, 23 id., 398; Smith v. Carter, 25 id., 283. The payee of the note, Robert Patten, agreed that he would “seek to. make the judgment out of the railroad company,” and, if successful, that he would surrender the note to defendant. If he collected his judgment, or, without the consent of the defendant, voluntarily put it out of his power to do so, the defendant is thereby discharged from liability on the note. This is too clear for argument. The transfer of the judgment to Ludlow Patten, although made for the consideration and in the manner stated in the findings, was in fact made in trust for the judgment debtor — the railroad company. This is satisfactorily proved. The [624] transaction is equivalent, therefore, to a release or discharge of the judgment, and doubtless would be so adjudged were an action brought for that purpose by a party interested to have the judgment discharged of record. There is no sufficient proof that the defendant consented to the transfer or discharge of the judgment, in any sense which leaves him liable on the note since Patten, the payee, has put it out of his power to collect any further sum on the judgment. True, the defendant knew that negotiations were pending which resulted in the assignment of the judgment; also, that Patten was about to settle the judgment, or assign it, for less than the amount due upon it; and the defendant (using his own language) ‘‘helped the trade along as well as he could; ” but it does not appear that the defendant consented to or advised a sale or settlement for less than the sum due on the judgment, or that he was ever consulted on the subject. Instead of doing any act which would continue his liability on the note, it is perfectly apparent that his whole object and purpose was to get rid of such liability. Indeed, under the circumstances of this case, there is room for grave doubt whether anything short of an express agreement by the defendant to remain liable on the note, notwithstanding the assignment or discharge of the judgment, would continue such liability. It seems to us that the defendant has made out his defense to the note, and that judgment should have been rendered in his favor. By the Court. — The judgment of the circuit court is reversed, and the cause remanded with directions to that court to dismiss the complaint.