Wm. R. Moore Dry Goods Co. v. Ainsworth

Potter, J., delivered the opinion of the court. The appellant, William R. Moore Dry Goods Company, a mercantile corporation of Memphis, Tenn., was plaintiff in the trial court, and filed its declaration in the circuit court of Simpson county against W. 0. Ainsworth, H. K. Ainsworth, and L. E. Robinson, appellees, upon two promissory notes, indorsed by them for one Mrs. E. J. Harrison in the sum of two hundred dollars each, dated February 26, 1912, and maturing November 1, 1912. The defense to this action, set up by the way of special plea, was that the signatures of the defendants to the notes were obtained by the fraud of the appellant, through its agents and representatives, in that E. J. Harrison, the principal in said notes, was indebted to the appellant for goods, wares, and merchandise previously bought of the appellant, and this said [710] indebtedness was past due, and that appellant’s agent, one Hudson, promised Mrs. Harrison, if she would execute notes for the indebtedness 'above mentioned-, that his principal, the William R. Moore Dry Goods Company, would extend to the firm of E. J. Harrison & Co., at a future date, on demand, further credit in the sum of five hundred dollars, and, acting on the faith of this promise, the notes were executed and the indorsers signed same; and it is alleged that about thirty days afterward appellee ordered goods from appellant to the extent of three hundred and fifty dollars or four hundred dollars, and that in violation of this agreement appellant refused to ship the goods and extend the credit above mentioned as promised, on account of the bad financial condition of the community. This is relied upon as a complete defense in bar of this action. - The appellant demurred to the above plea, and the demurrer was overruled, and thereijipon the case was tried; and although the appellant denied the agency of its representative in the matter of making the contract mentioned, and testified that the agent was a special agent, and only had conferred upon him the authority to collect this patricular account and to take notes therefor, the court below gave a peremptory instruction in favor of the defendant. It is true that the appellees in this case testified that they only signed the notes in question because of the promise to extend a new line of credit for five hundred dollars to the firm of E. J. Harrison & Co., yet it is clear that Mrs. E. J. Harrison owed the debt for which the notes were given, which indebtedness was past due at the time the notes were executed, and that she obtained a long extension of time for the payment of the indebtedness she then owed, and that the notes in question only represented this indebtedness. ' It is clear that one consideration for the execution of the notes was the. extension of the time of payment. At the most, therefore, there was only a partial failure of consideration on the part of appellant. [711] Although fraud is charged in the plea in reference to the alleged promise to extend this line of credit, yet there is no evidence to show that, at the time the appellant is said to liave made the promise, it was not acting in good faith, and there is no testimony to substantiate the plea of fraud. At the most, in this case a partial failure of consideration, in that the appellant failed to carry out his promise to extend credit to the extent of five hundred dollars to appellee Harrison, has been ■shown. Where there is a partial failure of consideration, such failure is only a defense pro tanto to the obligation. In other words,, if the defendants could show that to the extent of a certain amount in dollars and cents they had been damaged by the failure on the part of the plaintiff to carry out his alleged obligation, they would only be entitled to a set-off to this extent. This is the rule laid down in 3 Ruling Case Law, 945, and the authorities cited thereunder. In this case, however, nothing except nominal damages are shown, because of the failure of the appellant to extend the five hundred dollar line of credit alleged to have been promised by the appellant to Mrs. Harrison. If" the appellees had alleged in their pleadings that at the time the goods in question were ordered the market was lower, and afterwards Mrs. Harrison was forced to buy the same goods at a higher price, and the differences in price had been shown, the notes probably would have been entitled to a credit to the extent of the difference; but no such plea was made, and no such proof offered. There' is absolutely no showing that the appellees were in any way damaged by the failure of the appellant to extend the credit which they say was promised. The appellant, plaintiff in the court below, was entitled to the peremptory instruction requested for the face of the notes, with interest at the rate of eight per cent, per annum, and ten per cent, of the principal and interest as attorney’s fees. Therefore appellant will have [712] judgment here for each of said notes of two hundred dollars and interest thereon at the rate of eight per cent, per annum from November 1, 1912, and ten per cent, of the total amount of principal and interest as an attorney’s fee, and, in addition thereto, costs in this court and in the court below. Reversed, and judgment here for appellant as above-indicated. Reversed..