Bradford v. Harris

Alvey, C. J., delivered the opinion of the Court. This action was brought by the plaintiffs, as assignees of Thomas, J. Wilson, to recover of the defendant the amount of a promissory note for $5,000, dated July 20th, 1888, and payable four months after date, with interest ¹⁵⁷ at six per cent., value received. The defendant was maker of the note, and it was made payable to his own order, and indorsed by him in blank. This note, at the time of the making and indorsement, was delivered by the defendant to Whitely & Gaither, bankers and brokers in the City of Baltimore, who seem to have been agents for the sale of the stock, thereafter to be issued, of a company known as the Jordan Mountain Manganese Company, then in process of organization, or which, if completely organized, had not then issued and placed on the market its stock.

The note, according to the testimony, was made and indorsed by the defendant, and placed in the hands of Whitely & Gaither, with authority to purchase lor him 100 shares of the stock of the company at 50 per cent, of the par value thereof, the par value to be $100 per share. At the time the note was passed to Whitely & Gaither, the defendant took from them a certificate which would, according to its import, have entitled him to receive the 100 shares of stock when issued, or was ready for sale. The stock, it appears, never was validly issued, and the whole enterprise fell through or collapsed, and the shares of stock were never delivered to the defendant, and he, of course, never received any consideration for his note; but, strange to say, he did not require its cancellation or delivery up to him, though he returned to Whitely & Gaither the certificate given to entitle him to receive the stock. The defendant, who testified as a witness, says, that he returned the certificate to the brokers, but he did not ask for the note.

His failure to do this, he says, “was simply due to oversight, not regarding the note, under the circumstances, as of any value. I never received any consideration whatever for the note." This note, it appears, was handed over or passed by Whitely & Gaither to Thomas J. Wilson, the assignor of the plaintiffs, as partial security for a large pre-exist ¹⁵⁸ ing indebtedness then and still due to Wilson, or his assignees; but whether this transfer was before or after the maturity of the note, is left in some doubt on the evidence. It is admitted that Wilson, on the 28th of June, 1890, executed and delivered to the plaintiffs a deed of trust of all of his property for the benefit of his .creditors, and that the note sued on came into the possession of the plaintiffs as assignees and trustees under that deed. The plaintiffs therefore can only maintain their right to recover in respect to the right that was in Wilson; for if Wilson received the note under such circumstances as would preclude him from recovery, if suit had been brought by him, it is very clear that the plaintiffs cannot recover, they standing alone on the right that was in Wilson, the assignor.

The defence of the defendant is that the note is totally without consideration; that the note was given for a special purpose to the agents of the defendant, and that that purpose has wholly failed; and that the transfer of the note to Wilson by the brokers was in violation of good faith and in fraud of the defendant; and that such transfer by the brokers to Wilson, whether before or after maturity, was with full knowledge on the part of Wilson, for what the note was given and held by the brokers, and that there was no consideration for it. And if this be so, it is clear there can be no recovery on the note by the plaintiffs. The Court below instructed the jury, at the instance of the plaintiffs, that there was no evidence legally sufficient to be considered by the jury in support of the defence by the defendant, and that, under the pleadings, admissions and proof, their verdict must be for the plaintiffs, for the amount of the note with interest; and the Court rejected the prayers of the defendant, founded upon the supposed facts of the failure or. want of consideration, and t.he knowledge on the part of Wil ¹⁵⁹ son of the special purpose for which the note was held by the brokers, and the want of consideration therefor, at the time of the transfer to him. The transaction altogether was quite a remarkable one; but we discover nothing in it that would preclude the defendant- from availing himself of the defence set up by him, if that defence be supported by evidence.

The objection to the note that there is a total want of consideration to support it, goes to the entire validity of the note and avoids it; and so where there was originally, not a want of consideration, but