George T. Purkett and William H. Graves, plaintiffs in error, v. John Gregory, defendant in error.
Error to Morgan.
In an action upon a promissory note by the payee against the makers, the defendants pleaded that the plaintiff sold to them all the interest and right of the plaintiff in the Illinois Land Association, and the dividends which the plaintiff was entitled to from the association, for the sale of choice of lands in said association ; and that the plaintiff covenanted and agreed with the defendants, to convey said lands to the defendants, and to pay to the association, at the date of the sale, the amount bid by said plaintiff for choice of lands in the association, and that the said defendants should receive the dividend which said plaintiff was entitled to, arising out of the payment of choice money as aforesaid. In consideration of which the defendants executed the note upon which the action was brought. They also averred that the choice money which they were to receive, amounted to $ 163, and that the plaintiff had failed to pay the amount bid by him for choice of lands, in consequence of which the defendants had not received the dividend : Held, that the plea was good as a plea of partial failure of consideration.
This was an action of debt by petition and summons, in the Morgan Circuit Court, upon a promissory note. The cause was tried at the March term, 1838, before the Hon. Jesse B. Thomas. The plea mentioned in the opinion of the Court, is as follows :
“ And the said defendants come and defend, &c., and say that as to one hundred and sixty-three dollars, part of the debt in the petition mentioned, the plaintiff actionem non ; because they say that on the 23d day of August, 1836, the plaintiff sold to these defendants certain parcels of land situated in Illinois, being all the right and interest of said plaintiff in the Illinois Land Association, and also sold the defendants the dividends which the plaintiff was entitled to from the said association from the sale of choice lands in said association ; and the plaintiff covenanted and agreed with defendants to convey said lands to defendants, and to pay to the association presently, to wit, at the date aforesaid, the amount bid by said plaintiff for choice of lands in said association, and that said defendants should receive the dividend which said plaintiff was entitled to, arisingout of the payment of choice money as aforesaid. In consideration of which sale and agreements on the *45part of the plaintiff, the defendants executed the note in the petition mentioned, and the defendants aver that the choice money to which the plaintiff was entitled from the association aforesaid, and which the said plaintiff covenanted that these defendants should receive, amounted to the sum of one hundred and sixty-three dollars. And they further aver that the said plaintiff hath not paid the amount bid by him for choice of lands in said association, in consequence of which failure of the plaintiff to pay said association the amount bid as aforesaid, the defendants have not received the dividend due said plaintiff, as said plaintiff covenanted that said defendants should receive. Wherefore the defendants say that the consideration for which said note in the petition mentioned was given, hath failed to the extent of one hundred and sixty-three dollars as aforesaid, all which they are ready to verify &c. Wherefore &c.”
Wm. Thomas, for the plaintiffs in error.
Miron Leslie, for the defendant in error.
Smith, Justice,
delivered the opinion of the Court:
It is not important to examine but one of the grounds assigned for error in this cause. That is the decision of the Court on the demurrer to the third amended plea.
This plea contained facts, which, if proven, would form, in our opinion, a clear failure of a part of the consideration on which the note must have been based. It certainly must have been one of the inducements to the making of the note, that the makers should be entitled to and receive these proportions of the dividends from the association on the sale of the lands. If the plaintiff below agreed to pay the amount bid for the choice of lands, and it was a condition that be should, by the rules of the association and of the sales of the lands, pay the amount bid before he could be entitled to a dividend from the proceeds of the sale, from the company ; then, if by such refusal or neglect to pay, by the plaintiff, the defendants were prevented from receiving their proportion thereof, the terms upon which the contract was made, were not complied with to the extent of the dividends he would otherwise have been entitled to receive, which would be a matter of proof on the trial. We are of opinion the plea was substantially good ; and that the Circuit Court ought to have overruled the demurrer to it. The judgment of the Circuit Court is reversed with costs ; and the cause is remanded with instructions to the Circuit Court to proceed in the cause in conformity to this opinion.
Judgment reversed.