Leggett v. Peet

Porter, J. delivered the opinion of the court. This action is brought against the defendants as drawers of a bill of exchange on J. &• ML Peet of New-York. The draft — 293 — waspayabletoR.&B, McDevitt, whoendors-i • , , • • m • • , ed it to the plaintiff 1 he petition states, that the firms of Peet So Co. in New-Orleans, and J. So M. Peet of New-Yew, were composed of the same persons, viz; of William A. Peet, James A. Peet and Munson S. Peet; and this suit is brought against them all. They are alleged to be absent debtors, and an at-tatchment was prayed for, and granted against their property. The bill of exchange was dated the 30th of March 1826; and payable sixty days after sight; acceptance was refused by the drawees, J. &. M. Peet. There is no allegation of protest, and notice; but the petition avers, that by reason of the non-acceptance, the plaintiffs have become liable to pay the amount of the draft. The attorney, appointed by the court to defend the suit, pleaded, first, that no property had been attached, and ^he court was without jurisdiction; second, the general issue; and third, that the plaintiff took the bill after he knew it had been dishonored, and with the knowledge that it was given without consideration . — 294 — From the evidence adduced in the cause, it appears that a suit was commenced, and at the time the trial was pending in which one William T. Prall was plaintiff, and Peet & Co. defendants. In that suit the plaintiff charges the sale made to the defendants by tbje payee of the note, now sued, to be false, fraudulent and collusive, and he prays for a rescission of it. The pendency of the demand, and the uncertainty of its termination, was offered as an objection against the plaintiff’s recovery in the present action; the bill of exchange, on which it is instituted, being given in payment of the property which Prall was endeavoring to recover. The verdict was in the following words: 44 We the jury, find for the plaintiff a verdict of thirty-one hundred dollars, with interest from judicial demand; but we find that William T. Prall commenced suit against Win. A. Peet and others, in this court, the 10th of July, 1827. If said suits in law prevent the recovery by the plaintiff, we find for the defendant.” On this verdict, the court below ordered as follows. “It is ordered that judgment be entered in favour of the plaintiff upon the — 295 — verdict of the jury for thirty-one hundred dollars with costs, subject to this condition, viz: that if the suits referred to in the verdict of the jury, viz: the suits of Prall vs. William A. Peet & al. and Muller vs. Peet & al. now pending, shall be determined against said Peet, then this judgment is to be considered as null and of no effect, and the plaintiff, Leg-gett, in that case, instead of Peet, is to pay the costs of the suit. The plaintiff Leggett, is not to have the benefit of this judgment before the final decision of the suits aforesaid. This judgment is considered within the equity of article 2535 of the Civil Code.” From this judgment the defendants have taken the present appeal. The plaintiff has moved to dismiss it on the ground that the defendants by their acquiescence in the judgment below, have deprived themselves of the right of appealing; but should this motion fail, he insists there is no error in the de-creeof the district court, except to his prejudice. The specification of this error is, that the Judge has made the recovery of the plaintiff conditional, on the event of the suit .pending between Prall & Peet & Co. when it should be absolute. The defendant ofTheSjudgmentin thebplaintiff °¡s cution°of Tt eXa¡ deprives the former of his appeal The acquiescence in the judgment, by which the defendants have lost the right to ap-peai5 ¡s supposed to result from their having taken out of the clerk’s office, and procured to be served on the attorney of the plaintiff, a copy of the judgment rendered in the inferior court. The 567th article of the Code of Practice provides, that the party against whom judgment has been rendered, cannot appeal “if such judgment has been confessed by him, or if he has acquiesced in the same by executing it voluntarily.” We do not think the act of the defendants in servinS a C(W of tlie judgment on the plaintiff, such an execution of it, as deprives of the right of appeal. The act should jje unequivocal, to authorize a presumption of 17 r r the abandonment of so important a right. And it is not a voluntary execution of the judgment in this case, because no such obligation was imposed on the defendants. It is different from the case of the party, in whose favour judgment is given, proceeding to execute it. The plaintiff who takes the necessary measures for issuing execution, would perhaps be considered as coming within the — 297 — article of the Code of Practice, because he can perform no other act of voluntary execution. It is proved that the plaintiff in this case took the bill from the payees for a debt they owed to him; but it is also proved that at the time the trasfer was made, they were in pri-SOH in New-York, and had applied for the benefit of the insolvent laws of that state. The plaintiff had made opposition to their demand, and charged them with fraud, upon which they proposed to assign to him the note now sued on, if he would withdraw his opposition. He did so; the note was transferred, and the endorsers were discharged. It is objected that this transaction was null and void by the laws ofNew-York, and that no right could be acquired under it. The plaintiff insists that it is a matter entirely between him and the endorsers*, that the maker of the note has nothing to do with it. Of this opinion was the Judge of the court of the first instance, and so charged the jury. The defendants excepted. If the act of withdrawing the accusation of fraud, in consequence of receiving the note now sued on, was a relative nullity, the Judge — 298 — belowdid not err; but if itwas anabsolutenullity, he did err. Because the plaintiff must make out his title to the instrument sued on, and if the contract by which he acquired it was null and void, it can produce no effect whatever. The plaintff must make out his title to the instrument sued on ■and if the contract by which he acquired it was null and void it can produce no effect whatever.. From an examination of the adjudged cases in the State of New-York, where the transaction took place, it appears, that the courts of that state, consider all agreements, such as that proved in this instance, void ah initio. In the case of Wiggins vs. Bush, the note had passed into the hands of a third person; but the defence was sustained, and the case did not require a positive opinion whether the obligation was void or voidable. The reasoning of the court on the subject matter, and in reference to previous decisions, leaves no doubt in our minds of the legal character of the transaction there. Were we, however, to admit, that the laws or jurisprudenc of New-York have not been sufficiently shown to enable us to pronounce positively on the question, the case of the plaintiff would not be strengthened. We should then be obliged to have recourse to our own laws, and in this state there can be no doubt such a contract — 299 — Is void. The 1887th article of our Code de-dares, that an obligation with an unlawful cause, can have no effect. The 1889th article says, the cause is illicit when it is forbidden by law, or contra bonos mores. We have already expressed our opinion of agreements, such as this, in the case of Perry vs* FriloL In England and our sister states, the protection afforded by the law merchant to the innocent endorsees of negotiable paper, does not extend to instruments which are null and void. But this case is free from any consideration of this kind. The note was endorsed long after it came due. The obligation of the holder to prove that the rights of the transfer are vested in him, is totally in-dependant of the commercial law. Uuntil he does so, he establishes no right in himselfj and he cannot do so by a void contract; because such a contract produces no effect. 2, John. Reports, 386, 4 Ibid 410, 9 Ibid, 295, 12 Ib. 306. La. Code 1887, 1889, 6 Mart, n. s. 217, 3 Ib. 205. In the state of New-York, there are two statutes in regard to persons unable or unwilling to pay their debts; one is entitled ’“an-act for ¿the relief of debtors, with respect — 300 — to the imprisonment of their persons;” the . . other, “an act for giving relief in cases of insolvency.” The counsel for the plaintiff has referre(i us t0 several sections of the former law, and argued from them, that as the cession made by the debtor in confinement, was only for the benefit of the creditors who had charged him in execution, there was nothing immoral nor contrary to the policy of the law, in any creditor entering into terms with the person whom he had caused to be imprisoned. It is not necessary for us to say, whether the construction which the counsel has given to the statute be or be not correct. For the evidence shows that the endorsers of the note had applied for the benefit of the act for insolvents. And in looking into it, we find it contains the provisions which are common to laws of this description, and that any stipulation of a creditor to withdraw a charge of fraud against the debtor, would be a violation of its policy, fraudulent, and void. The ninth section of this act, provides for the case of persons in custody, and points out the manner a cession of their estate shall be made. Laws of New York, vol 1,348,460. Objections have been made to the enquiry into the consideration of the endorsement, — 301 — because it was not specially pleaded; and it , i ¶ , , , ,, , was also urged, that the record should have been produced of the application of the endorsers, for the benefit of the insolvent law. The contract under which the plaintiff claims may perhaps be shown to be void, under the general issue, and the corrupt agreement in this case being matter en pais, it is questionable whether it was necessary to produce the record to which it referred. The deposition of a witness, who proved the facts, was taken some time before the trial, and subject to all legal exceptions. But when the case was before the jury, no objection was made to the testimony by which the same matters were established. The ease therefore must be decided on the legal effect of the evidence given. Where no objection is made below to the admissibility of the evidence, the supreme court considers its effect only. We think the contract, under which the plaintiff claims to stand in the right of the payees of the note, void, and that he cannot maintain an action on it. It is therefore ordered, , adjudged and decreed, that the judgment of the district court be annulled, avoided and reversed, and that there be judgment for defendants with costs in both courts.