Smith v. Busby

15 Mo. 387

Opinion

Scott, J.,

delivered the opinion of the court.

This was a petition in debt in attachment, begun by Smith, assignee of John Townsend, against Milton Busby on a note executed by Busby for $337 50 payable 15th May, 1847, and dated May 20th, 1845. Plea the general issue. On the trial, after proving the assignment, the plaintiff read the nata in evidence, after which the defendant proved that the- note sued on was given as part purchase money for two tracts of land of 160 acres each. At the time of giving the note, a certificate of pre-emption was passed to Busby for one qurter section and a bond executed by Townsend, the assignor, of the note in suit. The note sued on was of those mentioned in the bond which was identified by the witness. The bond was then read in evidence, from which it appeared that Townsend bound himself in the penalty of $1800 to Busby, conditioned to make to Busby a warranty deed to the north east quarter of section 33 in township 57, range 35, on the payment of eight hundred and seventy-five dollars, in three notes bearing even date with the bond. The bond was dated May 20, 1845. The defendant then read a patent for the above tract of land, issued by the State of Missouri to S. L. Leonard, and proved by him that the said land had been selected by the State, under the authority of the United States; that he purchased Townsend’s interest therein, who had a pre-emption thereto, and had proved up the same at sheriff’s sale on an execution against Townsend who was now insolvent.

The plaintiff then proved by an agent of Busby that he rented the land to Townsend for $100 and took his obligation therefor, which was delivered by Busby who afterwards received the rent; that when Townsend sold the land to Busby and executed the above title bond, certificates of pre-emption had not been issued. Townsend and Busby went to the office to prove Townsend’s right to pre-emption, but in consequence of some previous omission, it was not then proved, but shortly after the certificate was issued, and it, together with the bond and the obligation for rent, was placed in the agent’s hands, by whom they were delivered to Busby. The plaintiff then offered to prove that of the three notes, mentioned in the above bond, one was payable before that on which this suit was brought and that the-other was not due. This evidence was rejected. The plaintiff also offered in evidence the following agreement between- Busby and Leonard, which was also rejected: “Whereas, we, the undersigned, have severally claims to the north west quarter section 34, township 67, range 35, and the north east quarter section 33, township 57, range 35, and whereas the undersigned, Milton Busby, has actually paid out some nine hundred dollars for said north west quarter of section 34; and whereas, the undersigned, Solomon L» Leonard is satisfied that he has an indefeasible title to both said quarters, but in consideration that it would be hard for said Busby to entirely lose said $900, and also to suppress strife and bickering and to promote kind feelings, and also in further consideration of two hundred and sixty-six dollars and thirty three cents, the entrance money which said Leonard paid therefor, with interest to the present time, by said Busby to said Leonard paid, said Leonard has made a deed of conveyance of said north west quarter section 34tosaid Busby, and said Busby declares that he has no just claim for said north east quarter section 33, and that he will, in no manner molest or harrass said Leonard about said last mentioned quarter, but, on the contrary, he declares himself satisfied with the arrangement above set forth.

Witness our hands and seals this twelfth day of November, in the year of our Lord, eighteen hundred and forty-seven.,

SOLOMON L. LEONARD, [seal.]

MILTON BUSBY, [seal.]

From this state of facts, the question arises whether there was a failure of the consideration of the note sued on, or whether the plaintiff is entitled to recover. In the consideration of this question the evidence offered and rejected will be regarded as in the case and the facts it tended to prove will be taken as true.

In the court below, the plaintiff submitted to a non-suit in consequence of an instruction to the.effect, that the land having been purchased by Leonard from the State, before the commencement of this suit, and he is still holding title to the same, and Townsend being unable to make a good title to the land, and insolvent, the consideration of the note sued on has failed.

It may be conceded that a covenant to convey by a deed with general warranty, is not satisfied by the mere execution of a formal instrument with covenants of title, but implies that the covenantor will convey an indefeasible estate, and that his deed shall be operative for that purpose. It may likewise be admitted, for it is statute law, that the maker of a note sued on may make the same defence against the assignee, that he might have made against the assignor or payee.

At common law, a failure of the consideration of a bond, whether partial or total, was no defence to an action on the instrument. A partial or a total failure of the consideration of a note might be used as a defence to an action upon it. Our statute has now abolished all distinctions between bonds and notes in this respect, and a failure of consideration, in whole or in part, may be given in evidence to defeat or diminish the recovery in an action on those instruments: Code 1845, page 832. Notwithstanding this provision, we are still left to general principles, to ascertain what is a failure of consideration. Where a party has promised another to pay him money on a given day, in consideration of an act to be performed subsequently to that day, the insolvency of him who is to perform the subsequent act, is no bar to a recovery of the money promised in an action at law. How far such a con gideration would influence courts of equity, it is not necessar now to determine. Nor would the inability of a party to'do an act ptesently, Which was to be performed in furure, prevent his recovery of the consideration which had been promised to be paid for the act, before the arrival of the period for the performance of the thing stipulated to be done. Though a party may be unable to do an act to-dáy, it does not follow that he may not be able to do it six months hence. That lands have been sold taa third person which a party has promised to convey to another in future, does not necessarily preclude the idea that the party promising will not be able to perform his undertaking. It is a settled principle, that if a day be appointed for the payment of money, or part of it, or for doing any other act, and the day is to happen, may happen, before the thing which is the consideration of the money, or other act is to be performed, an action may be brought for the money, or for not doing such other act before performance; for it appears that the party relied on his remedy, and did not intend to make the performance a condition precedent : 1 San. 320. In 11 Wend. 48, Johnson vs. Wyzant, it was held that on a contract for the sale of lands, by a vendor against a vendee, in which the consideration money is to be paid in instalments and the conveyance to be made upon payment, if suit is delayed until all the instalments are due, the covenants then become dependent- In this, however, the action was on a covenant, and the breach assigned was the non-payment of all the instalments, So it appears the whole sum was due by a single instrument. A difficulty may arise in the application. of the principle of the above case to those circumstanced as the one now under consideration, where separate securities are given and separate suits become necessary. If the securities should be assigned to different persons, in case of a partial failure of consideration, how would it be apportioned among the different holders, would the maker uge the defence against which of them he pleased, would the last assignee be first resorted to; or would the contribution be in proportion to the respective amounts of the notes? But one assignee being before, the court, how would the date of the assignments be ascertained? 5 John C. R. 235

But this case steers clear of this difficulty as it appears that ope o1 the notes was not due.

The defence to this action is an entire failure of consideration, but viewing the subject in the most liberal manner for the defendant, Busby, we do not see how it can be supported. He was put in possesions of the land; he received rent for it. He had the very thing he contracted for. It is unjust to take possession of fand, under a contract of sale, fetaia it and yet refuse to pay the purchase money. The vendor should have his money or his land, and if the vendee intends to rescind tb® contract, he should relinquish his claim to the vendor and abandon th® possession. The defence set up can only be maintained on the ground that Busby has a right to rescind the contract. Can h$ now do this? Has he not placed himself in a situation by which he is restrained from stích a course? By his contract with Leonard, he has disposed of tb® very land, the price of which, in part, is the subject of this controversy. The caution with which he has worded his agreement will not avail him. In it he recites that he had a claim to this very land, and although there is a subsequent disclaimer of title, and a total omission of all words of conveyance, yet the transaction would seem to amount to a release in effect. Fer a valuable consideration, he has precluded himSelf from an inquiry into the legality of the proceedings on the part of Leonard. It is impossible to read the agreement between Leonard arid Busby, and say it was not an assumption of the power on the part of Busby to dispose of the land whose value is the subject of this suit. If Busby should now rescind his contract with Townsend and put him upon Leonard, what consideration will Leonard have received for his conveyance of N. W. quarter section to Busby. If Busby intends to rely upon a rescisión of the contract, he should have taken no step by which his right to do so could be compromised.

The other judges concuring, the judgment will be reversed fcnd the cause remanded.