Clow v. Sweeney

Bronson, J. The plaintiffs sued the defendants, the appellants herein, upon an order which reads as follows: Merricourt, N. D., Jan. 2, 1917. Sweeney & Hyde, Merricourt, N. D. Please pay Clow and Hendricks three hundred and thirty dollars $330 upon your collecting that certain note and mortgage held by you against Christ Biederstedt for $2,000 due 11-15-17, a lien on S.W.-j- and N.E.¿ 32 and S.W.¿ 33 — 132—64, Dickey County, N. D., The Webb-Stout Company, By George T. Webb, Y. P. George T. Webb;. We accept above order. Sweeney & Hyde. The defendants in their answer set up lack of consideration for, and fraudulent representation in the securing of, such order. In the district court upon a trial of the action, a verdict was directed for the plaintiffs, and, from the judgment rendered thereupon, the defendants appealed. Among the specifications of error, the appellants principally challenge the ruling of the trial court in so directing the verdict, upon the ground that the question of the lack of consideration was for the [196] jury. The order in question plainly was a non-negotiable instrument, practically a chose in action subject to the principles of law concerning assignments. The rights of the plaintiffs herein to recover depend •upon their rights, as assignees, or upon their rights under the original promise of acceptance made by the appellants. In the record there is evidence tending to show that the assignors at one time owned a promissory note made by the defendants; that this note was sold to a bank by the assignors prior to the order herein; that the assignors, representing to the defendants that the note was lost and that they were about to go into the hands of a receiver, procured the consent of the defendants to accept the order herein given to the plaintiffs; that at the time the plaintiffs received such order, the assignors were not indebted to plaintiffs, received nothing for such order, but on the contrary the plaintiffs were indebted to assignors for some insurance; the trial court directed a verdict upon the theory that defendants had failed to establish any fraudulent representations, wholly ignoring the defense of want of any consideration between the assignors .and assignees, and between the debtors, the defendants, and the assignors, as plead by the defendants. As assignees, it is well settled that the plaintiffs possessed no greater rights against the debtor than the assignors had. 5 C. J. 961; Comp. Laws 1913, § 7396; Emerson-Brantingham Co. v. Brennan, 35 N. D. 94, 159 N. W. 710; 2 R. C. L. 630, 631. Although the assignment itself furnished, prima facie, a consideration sufficient to support an action upon the original promise of acceptance by the debtor, and although ofttimes the question of the consideration paid by the assignee is immaterial in an action upon assignment, yet the. want of the consideration is a defense in an action upon an accepted order, where it is shown that there existed at the time of making such order and acceptance an entire want of consideration both as between the assignors and the assignees, and as between the debtors and the assignors. 5 C. J. 840, 938, 963; 4 Century Dig. 1291, 1311; Palmer v. Palmer, 112 Me. 149, 91 Atl. 281; Bank of Harlem v. Bayonne, 48 N. J. Eq. 246, 21 Atl. 480; Comp. Laws 1913, § 7396. The trial court therefore erred in directing a verdict. It is unneces [197] sary to consider other specifications of error. The judgment is reversed and a new trial ordered, with costs to appellants. Ci-iristianson, Ch. J. I concur in a reversal.