Goodrich v. Houghton

Merwin, J. The defendant Byron D. Houghton, on the 30th March, 1887, received from the United States Express Company at Oswego the sum of $25,020, and paid expenses thereon to the amount of $150. This money was consigned to Houghton from Hew Orleans, La. The evidence on the part of the plaintiff showed that this money was sent as money drawn upon lottery tickets in the Louisiana State Lottery, purchased about a month before, by Byron D„ in pursuance of an agreement between him and the plaintiff. The plaintiff, in substance, testifies that she and Byron D. agreed to purchase $50 worth of such lottery tickets,—plaintiff to advance $25, and Byron D. the rest, and each share equally in the results; that she did advance her part, and Byron sent the whole to Hew Orleans, and obtained the tickets, upon some of which the money was drawn that was sent to Byron. The claim of the plaintiff is that, inasmuch as .the tickets were purchased in Hew Orleans, the agreement between plaintiff and Byron was legal, and he can be compelled to account for the profits. It was not shown what the law of Louisiana was on the subject. Thatcher v. Morris, 11 N. Y. 437. Assume that the business was legal there. Does that make legal the agreement made here between plaintiff and Byron D. ? By the Penal Code, § 324, a lottery is declared to be unlawful, and a public nuisance. This applies to lotteries drawn out of the state, whether authorized by such state or not. Pen. Code, § 334; People v. Noelke, 94 N. Y. 137. Any person who in any way furnishes to another a share or interest in a lottery, to be drawn within or without the state, is guilty of a' misdemeanor. Pen. Code, § 326. In Grover v. Morris, 73 N. Y. 476, it is said that lotteries authorized by the laws of other states are unlawful here. The subject-matter, therefore, of the agreement between plaintiff and Byron D. Houghton was unlawful, under our law. That being so, the agreement cannot here be enforced. It is, however, urged by the plaintiff that a case was made out for recovery without reference to the original agreement between the parties, and by reason of what occurred after the drawing of the prizes. The money was consigned to Byron D. Houghton. Presumptively, it belonged to him. The burden was on the plaintiff to show her title. It was shown that the drawing was on the 15th March, and that afterwards, and before the money was received, the plaintiff saw Houghton, and he said to her, “We have drawn $25,-000;” that there was then talk between them as to how the money should be sent for, and that it was understood that it should be sent by express; that Houghton said “he would send the tickets back by express, and the money was to come by express to us;” that afterwards he talked with plaintiff about the claim of the defendant Claude, and plaintiff then said to him, “Half is mine, and half is yours,” and be replied, “I know it,” and he afterwards told plaintiff: “When the money comes, I will bring it here. We will count it, and divide it. ” After the money came, Houghton declined to pay plaintiff the half, but paid her a quarter. Afterwards, as the evidence tended to show, the defendants converted the balance to their own use. In Woodworth v. Bennett, 43 N. Y. 273, it was held that when an illegal contract has been fully executed, and money paid thereunder remains in the hands of a mere depositary, who holds it for the use of one of the parties to the contract, an action to recover the money so held will be sustained; but when the recovery of the money requires the enforcement by the court of any of the unexecuted provisions of the illegal contract, no action can be maintained. In that case the money was in the hands of the plaintiff, who was one of the parties to the original contract, and the question was whether it could be allowed to the defendant as a counter-claim. The plaintiff, after receiving the money, had 216 promised to pay the defendant, and apply it on their deal. It was said by Church, C. J.: “The express promise does not aid the defendant, because the promise was only to carry out the unexecuted provision of the contract of partnership to divide the money.” In Barton v. Plank-Road Co., 17 Barb. 397, it is said that every new agreement entered into for the purpose of carrying into effect any of the unexecuted provisions of a previous illegal contract is void. In Colton v. Simmons, 6 N. Y. St. Rep. 608, it is said that the court will not lend its process or jurisdiction in aid of a controversy in which a party seeks to recover profits resulting from an illegal business, although that business, carried on in this state, relates to lotteries that are authorized by other states. In Merritt v. Millard, *43 N. Y. 208, cited by plaintiff, the money was in the hands of a third party for the use of the plaintiff. In Planters’ Bank v. Union Bank, 16 Wall. 483, the money had been received by the defendant, and credited to the plaintiff, so that the plaintiff did not need the aid of the illegal transaction to establish its case. The same rule was applied in Cook v. Sherman, 20 Fed. Rep. 167. In Brooks v. Martin, 2 Wall. 70, it was held that after a partnership contract, confessedly against public policy, has been carried out, and money contributed by one of the parties has passed into other forms, the results of the contemplated operation completed, a partner in whose hands the profits are cannot refuse to account for and divide them on the ground of the illegal character of the original contract. In that case there were then in the hands of the defendant lands, money, notes, and mortgages, the results of the partnership business, the original capital for which the plaintiff had advanced; and the defendant had, by fraudulent means, obtained possession and control of all the funds. These cases, and many others, somewhat similar, that are cited, are not antagonistic to the rule laid down in the Woodworth Case. The conversations between plaintiff and Byron D. Houghton after the drawing of the prizes, and before the receipt of the money, all had reference to the original bargain, and the promise was no stronger than it was in the Woodworth Case. It was to carry out the unexecuted provision of the venture. Under the rule in that case, it is difficult to see how the plaintiff can stand. It is suggested that the plaintiff had a constructive possession of the money. The possession must be actual in order to maintain trover without going into the original contract. Clements v. Yturria, 81 N. Y. 285. In the Brooks Case there was an actual possession that had been overcome by fraud. Here nothing occurred after the money was received by which the plaintiff can show any title. It must, I think, be held that the parties were engaged in an illegal business, and that no basis for a recovery was shown, except as connected with or involving the illegal transaction. The nonsuit was therefore properly granted. Judgment affirmed, with costs. All concur.