Lawrence Savings Bank v. Stevens

Day, Oh. J. i. former faiÍure°umíil terposs detense. The substance of defendant’s claim in his answer is that when defendant sold his interest in the cattle and hogs to the Careys, it was agreed that plaintiff was to have the entire control and charge of said stock, and was to assume and pay off all debts of said Stevens and Careys, and to save defendant harmless from any note given by said Careys and himself, including the Harris note, upon which said judgment was founded. The testimony introduced by defendant tends to establish this averment of his answer. The testimony further shows that plaintiff, on the 16th day of August, 1873, purchased said note of Harris, and afterward obtained upon it the judgment upon which this action is brought. The defendant was personally served with summons in that action, and employed counsel, to whom he paid a retainer fee of five dollars, but he did not inform his attorney as to his defense, and he paid no further attention to the action. The position of defendant now is that he may interpose ^ , t ** 9 as a counter claim to the action on this judgment the agreement of plaintiff to hold defendant harmless upon the note on which said judgment was obtained. If plaintiff agreed to pay this note, and Harris or any third party had recovered judgment thereon, the defendant would have a right of action against plaintiff for the amount of the debt. Stout v. Folger, 34 Iowa, 71. But when plaintiff purchased the note, and took an assignment of it to itself, the note was in effect paid, if plaintiff had agreed to pay it, and hold defendant harmless therefrom. The agreement of plaintiff to pay the note, in an action upon it between jfiaintiff and defendant, would not constitute a counter claim against it, but a defense of payment. When sued upon the note the defendant should have interposed this defense. Unless he was prevented from doing so by the fraud of the plaintiff, he cannot do so now. Hackworth v. Zollars, 30 Iowa, 433; Dalter v. Laue & Guye, 13 Iowa, 538; Campbell v. Ayers, 1 Iowa, 257; Embury v. Cornner, 3 N. Y., 511 (522). Freeman on Judgments, Sec. 435, and cases cited. The court, after stating the issue, gave the following instruction: “11th. And defendant claims that said note was not paid by the plaintiff, and plaintiff claims to [433] have judgment against the defendant therefor, and he alleges that plaintiff has violated said contract, and neglected and failed to pay the same as per agreement, and hold him harmless therefrom, and alleges and claims that he is damaged to the full extent of said claim, and claims to have the same set-off against said judgment, and if you so find, and find he is damaged as claimed, then he is entitled to have the same set-off against the judgment in this case.” This instruction is erroneous. It treats the agreement of plaintiff to pay the note and hold defendant harmless therefrom, not as a defense to the note in the hands of plaintiff, which should have been pleaded in the main action, but as a set-off to the judgment to be now interposed against it. The plaintiff asked several instructions which were refused. We need not inquire as to the correctness of these instructions, as our views are fully indicated, upon the entire case, in what has been said. Reversed.