Smith & Wimsatt v. Chilton

Lewis, P., delivered the opinion of the court. The whole contention of the appellants in this case is, that effect was not given to an alleged compromise agreement entered into between themselves and Lloyd T. Smith, the'assignor of the appellee, on the 13th of December, 1878. It is contended that by that agreement, which is in writing, the said Lloyd T. Smith agreed to take in satisfaction of all claims whatsoever held by him against Smith & Wimsatt and Boyd M. Smith the sum of $1,000; and that this agreement having-been made before notice of the assignment to the appellee, is unaffected by that assignment. The principle is admitted that the assignee of any bond, note or writing not negotiable, takes subject to all the equities of the debtor against the assignor until notice of the assignment. [842] But that is not the question here. The agreement itself is without, binding force or effect even as against the said Lloyd T. Smith, and cannot therefore affect the rights of his assignee for value, who is entitled to stand in his shoes. In the first place, the claims agreed to be surrendered or compromised were not unliquidated, but were certain and liquidated, as appears from the addendum to the agreement, which is exhibited in the record; and the agreement was simply a private accord of the immediate parties, and not one common to them and other creditors. The case is, therefore, within the principle, recognized in Seymour v. Goodrich, 80 Va., 303, that an agreement of a creditor to accept less from his debtor than his just demand is not binding, because nudum pactum. The rule and its qualifications are adverted to in the case just mentioned, and in the elaborate notes to the case of Cumber v. Wane, 1 Smith’s Lead. Cas. Marg. p. 439, where the cases are collected. (See also 5 Bob. Pr., 899.) But apart from this, the debtors (the appellants) were not parties to the agreement, and there is no promise on their part to pay a thousand dollars, or any other sum, for the larger sum to be surrendered, and which at the time was due and payable. The paper, which is signed by Lloyd T. Smith only, purports to be a simple “ promise to claim from Smith & "Wimsatt and Boyd M. Smith only the sum of $1,000,” which, as set forth in the addendum to the paper, was a much less sum than was actually due “ as shown by the books and accounts ” of the parties. We are also satisfied from the record, although the evidence upon this point is conflicting, that the agreement relied on was intended to embrace the claim of the said Lloyd T. Smith for salary against Smith & Wimsatt, and his claim for advances made to Boyd M. Smith, and nothing else. The testimony of Lloyd T. Smith, corroborated by the addendum to the paper above mentioned, proves this, notwithstanding the denials of [843] Boyd M. Smith and Wimsatt, who testified in the case. We lay out of view the testimony of the witness, Uhler, because it is apparent he knows nothing very definite about the matter. But, in any aspect, the case, so far as the appellants are concerned, is without merit, for the record shows that after the 13th of December, 1878, and before the decrees of the 29th of April, 1879, were entered in favor of the appellee for the full amount of the assigned claims, they had notice of the assignment, and permitted the decrees to be entered without objection. Indeed, the proofs now in the case show that only two days before the decrees were entered, Boyd M. Smith was in Northumberland county, and expressly assented to the entry of the decrees; the object being to prevent other creditors of the said Boyd M. Smith and of Smith and Wimsatt from suing out attachments. In othér words, the object was to defraud their creditors by confessing judgment, as it were, for the full amount of the claims in suit, and afterwards, as against the appellee, to fall hack on the alleged compromise with his assignor. Of this, however, it is proper to say, the appellee was ignorant-The appellants are, therefore, not entitled to relief, independently of what has been already said; for having attempted to-practice a fraud, they must he left to the consequences of their own iniquity. “ Whatever the parties to an action have executed for fraudulent or illegal purposes, the law refuses to lend its aid to enable either party to disturb.” (5 Rob. Pr., 543; 1 Pom. Eq., sec. 401; Hensley v. Fultz, 76 Va., 671; Barnett v. Barnett, 83 Va., 554.) The case is too plain to require further-discussion. Decree aeeirmed.