Chapin v. Dake

Mr. Justice Sheldon delivered the opinion of the Court: This was a bill in chancery, filed by Moses W. Dake , to have two certain drafts for $1000 each, drawn by the Fifth National Bank of Chicago, upon the Ninth National Bank of New York, payable to the order of said Dake, at sight, by him indorsed and in the hands of Chapin & Gore, delivered to said Dake and the indorsements cancelled, and to enjoin the payment of the same to Chapin & Gore, on the alleged ground that the drafts were' lost by Dake at gaming, and subsequently came into the hands of Chapin & Gore as indorsees. It appears that Dake staked one of said drafts, after first indorsing it, and lost it, playing faro, and that it was delivered to one Donaldson, who was in some way concerned in receiving the proceeds of the faro bank. That Dake then staked the other draft, lost $500, delivered the draft, indorsed by him, in payment of his loss, and received from the dealer $500 in currency in change. The first section of the gaming act declares, that all promises, notes, bills, contracts or other securities made etc., upon any gambling consideration, shall be void and of no effect. The second section enables the loser to recover, by action at law, from the winner, any money or valuable thing, or its value, lost at play, amounting to the sum of $10. The third section provides, that all notes, bills, promises, agreements, and other acts, etc., executed contrary to the provisions of the act may be set aside by any court of equity, etc.; and the fourth section ju’ovidcs that no assignment of any bill, note, agreement or other security, etc.., as aforesaid, shall in any manner affect the defense of the person entering into or executing the same, or the remedies of any person interested therein. Under the broad language of the statute, and within its true meaning, we think the indorsement of these drafts was void; that Chapin & Gore, although bona fide holders, acquired no title thereby in the drafts, and that the property in them still remains in Dake. The indorsement of the drafts was a contract or agreement between the parties—it is said, that a transfer by indorsement is equivalent in its effect to the drawing of a bill; the indorsement was clearly void as between the parties to the transaction, and, we think, under the statute, the legal consequence must be the same of such an indorsement in the hands of a bona fide holder,—that no more effect is to be given to it than to a forged indorsement. Such a construction is necessary to effectuate the intention of the statute, and prevent its being avoided by making use of antecedent securities and transferring them to innocent parties. Under the English statute of Queen Anne, substantially like ours, a bill of exchange or promissory note given for a gambling debt is held void in the hands of a bona fide holder. Chitty on Bills, 111 a, ed.of 1836. And it is so in those cases in which the legislature has declared that the illegality of the contract or consideration shall make the security,whether bill or note, void. Id. 115. This act of indorsement was contrary to the provisions of the statute, and the third section provides that acts contrary to the provisions of the statute, may be vacated by a court of equity; and, under section four, no assignment of any bill, note, agreement, etc., shall in any manner affect the defense of the person executing the same, or the remedies of any person interested therein. The appellee’s loss was only $1500; he has now in his hands $500, which he received by way of change, in paying a loss of $500 with a $1000 draft. He can not hold that $500, and recover the two drafts in full. He would thereby reap a profit of'$500 out of this gaming transaction; this he should not bo suffered to do, by the aid of a court of equity. To entitle himself to the relief he claims, he must do equity by refunding to Chapin & Gore this $500. On the cross bill of the Fifth National Bank, it should not have been allowed $100 solicitor’s fees, but only its costs. It should have paid an additional $100 into court. There should not have been any allowance to the appellee of interest on the drafts. All the statute enables him to recover, is the money or things lost, with costs. The costs of the original suit, but not of the cross bill, would have been properly adjudged against Donaldson. The decree of the court below must be reversed, and the cause remanded for further proceedings consistent with this opinion. Decree reversed.