Hutchins v. Stanley

Citations

• 88 Kan. 739
• 129 P. 1180
• 1913 Kan. LEXIS 412

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>Nonnegotiable Note — Illegal Consideration — Margins on Board of Trade. A nonnegotiable promissory note was given to cover margins in a board of trade transaction or speculation in the price of wheat, no actual sale or delivery being intended. The instrument was indorsed before maturity for full value to the appellant, who took it without notice of the consideration. At maturity the appellant was informed of the consideration, and accepted a new negotiable note for the principal, the interest being paid. In this action upon the new note, held: (1) The note was given in a gambling transaction prohibited by law (Gen. Stat. 1909, § 5169) and was void between the parties. (2) The assignee of a nonnegotiable instrument stands in the shoes of the payee. A defense available against the payee is also available against the assignee. (3) The new note taken in exchange for the old one is a renewal of the former obligation. (4) The payee of the new note is chargeable with notice of the infirmity in the original instrument because of his knowledge of the consideration, as well as from its nonnegotiable form. (5) The’ consideration of the new note is the obligation of the old one. This consideration being illegal, a recovery can not be allowed.</p>