Cheltenham Fire-Brick Co. v. Cook

Currier, Judge, delivered the opinion of the court. The plaintiffs sue on a written obligation or bond, which is in the following words: “This obligation witnesseth: Whereas, Theodore F. Cook has been employed as book-keeper and treasurer of the late firm of Evans & Howard, also of the Cheltenham Fire-Brick Company, and in that capacity has received and improperly appropriated to his own use moneys of said concerns to an unknown amount, for which he is still in arrears, not having accounted therefor; and whereas, said concerns are-willing and hereby consent that said Cook may have thirty days’ time within which to account for and pay over said sums of money: now, in consideration of the premises, and of the sum of one dollar by the Cheltenham Fire-Brick Company paid to said Theodore F. Cook and Isaac Cook, they each do hereby obligate themselves to pay to said Cheltenham FireBrick Company for their own use, also for the use of Evans & Howard respectively, all such sums of money as are now due said Cheltenham Fire-Brick Company and said Evans & Howard; said payments to be made, or to be secured to the satisfaction of the — 37 — Cheltenham Eire-Brick Company, within thirty days from the date thereof: provided, the said Isaac Cook shall not be held under this writing for an amount to exceed forty-five hundred dollars, to be paid in installments of one thousand dollars per year, with-per cent, interest. “ In witness whereof, said parties hereto set their hands and seals, at the city of St. Louis, the third day of August, A. D. 1867. “T. E. Cook. [Seal.] “I. Cook. [Seal.] “Witness: Chas. M. Elleard.” The petition alleges that at the time of the execution of said bond Theodore E. Cook Ayas in arrears to Evans & Howard in the sum of $8,000, and in a like sum to the plaintiffs, and to the two in a sum not less than $16,000. The answer denies these allegations, and then proceeds to set up an affirmative defense, alleging substantially that the bond is without consideration, illegal, and void — having, as the answer avers, been given in the compounding of a felony. It is alleged that R. J. Howard, acting therein as the agent of the plaintiffs and of the firm of Evans & Howard, procured the arrest of said Theodore upon a warrant issued by a justice of the peace, August 3, 1867, founded upon Howard’s affidavit charging Theodore Avith embezzling the funds of the plaintiffs and of said Evans & Howard; that the bond in suit was executed while said Theodore was under arrest, and in consideration of the agreement of said Howard to discharge him therefrom and to suppress and abandon said criminal proceedings. The plaintiffs replied, taking -issue upon these averments. At the trial, the bond sued on was read in evidence. In order to show the amounts due thereon, the plaintiffs gave in evidence the statements and admissions of Theodore E. Cook to third parties, made prior to the execution of the bond,- and not in the presence of Isaac Cook. The defendant objected to this testimony, and duly excepted to the ruling of the court admitting it. These admissions ought to have been excluded. They were not evidence against Isaac Cook. The relation of principal and surety did not exist between him and the principal of the bond at the time the admissions were made. They were not made in the pro — 38 — gress of any business intrusted to Theodore by the defendant, and formed no part of the res gestee. (1 Greenl. Ev. § 187; 22 Mo. 470.) Besides, the bond did not require Isaac Cook to pay such sum as Theodore may have said was due, but only such amount as might turn out .in fact to be due on an adjustment o£ the accounts, not exceeding $4,500. The statements made by Theodore at the time the bond was executed, in the presence of the parties and as a part of that transaction, stand on a different footing, as would any statement made by him in the .progress of the adjustment of the accounts as contemplated by the bond. The more important branch of the case, however, is covered by the instructions. The court refused all the instructions asked by the defendant, and in lieu of them, upon its own motion, gave the following: “ If Richard J. Howard, at the time of the execution of the instrument sued on, had knowledge that Theodore E. Cook, as book-keeper and treasurer of Howard & Evans and also of plaintiffs, had moneys belonging to said Howard & Evans and plaintiffs, by virtue of his employment as such book-keeper and treasurer, and converted said moneys to his use without the assent of said Howard & Evans, and without the assent of the plaintiffs, and that the instrument sued on was made by said Theodore E. Cook and the defendant Isaac Cook, upon an agreement or understanding, .express or implied, to compound or cancel said crime or to abstain from any prosecution therefor, the jury should find for the defendant, notwithstanding that they may also find that said Theodore E. Cook was,, at the time of making said instrument, indebted to said Howard & Evans and plaintiffs for the moneys so received and converted to his own use, and it was also intended that said instrument should be security for the payxnent of the whole or any part of said moneys.” This instruction assumes that it was necessary to the success of the defense that the jury should find, as a material and necessary fact, that Howard, at the time of the execution of the bond and of his supposed agreement to smother the then pending criminal proceedings, “ had knowledge ” that the crime of embezzlement imputed to said Theodore had actually been committed by him. — 39 — In other words, it directed the jury that unless they found a fact not alleged in the answer, the defense must fail; for the answer does not aver that Howard “ had knowledge ” that Theodore E. Cook had committed any criminal offense whatever. If the instruction contains a correct exposition of the law, then the affirmative defense alleged in the answer was insufficient and might have been stricken out on motion. To a considerable extent the instruction is in the language of the statute (Gen. Stat. 1865, p. 801, § 15), and appears to have been framed upon the theory that an agreement to suppress a pending prosecution, in order to be of a character to vitiate the consideration of an obligation founded upon it, must have been an agreement made criminal by that enactment, subjecting the party taking the obligation so induced to the particular penalties therein provided. If the theory were a correct one, the instruction would still be bad for its misleading character, since it could hardly fail to convey to the minds of the jury the idea that the “ knowledge” it speaks of must have been of a direct and personal character — as that Howard witnessed the commission of the offense, or that he had other equivalent knowledge that the alleged offense had been committed. But it is apprehended that the statute has no application to the case. It makes certain acts offenses, and provides the mode and measure of punishment for the wrong-doer; but it was not intended to'legalize contracts which were void at common law, as against public policy, and of an immoral tendency and character. 'Whether the obligation sued on is tainted with an illegal, consideration, and void for that reason, is a question to be determined by the common law, and not by the statute. The answer unquestionably states'a good defense. It alleges that the plaintiffs’ agent had initiated a criminal prosecution against Theodore E. Cook; that a warrant issued thereupon, and that by virtue of it Cook was taken into the custody of an officer, and that while thus under arrest the bond in question was executed, upon the consideration that Cook should be discharged, the prosecution suppressed, and no further prosecution instituted against him ; that Howard agreed to all this, and that, upon the execution of the bond so founded upon such agreement, Howard, — 40 — in fulfillment of his promise to do so, discharged Cook and dismissed the prosecution. These facts, if established in proof, destroyed the bond, and the jury should have been so instructed. Whether the prosecution was originated as an appliance to collect a debt, or was founded in the truth, it was not material to inquire. It was pending, and the public have an interest that such prosecution should be carried on to conviction or acquittal. It was not necessary that the answer should allege, and it does not allege, that any crime had been committed. And it could not therefore be necessary either to allege or prove, or for the jury to find, that Howard “had knowledge” that a crime had in fact been committed. (Steuben County Bank v. Mattchewson, 5 Hill, 249; Himsbougk v. Sumner et al., 9 Vt. 23 ; Clark v. Ricker et al., 14 N. H. 44; Raguet v. Roll, 7 Ohio, 74; Howden v. Haigh et al., 11 Ad. & El. 1036.) But when no prosecution has been instituted, the rule is different. In such cases it is necessary to allege the fact that a crime has been committed, and that the party taking an obligation in consideration of forbearance to initiate a prosecution “had knowledge” of the existence of the supposed crime. (5 Hill, 249.) ’ If the bond, however, was given to secure the amount of money due from Theodore E. Cook to the plaintiffs and Evans & Howard, and in consideration of that indebtedness and of the agreement on the part of the creditors to give an extension of time in which to make payments as therein expressed, unaffected by any agreement or understanding with the plaintiffs’ agent that' the pending prosecution should, in consequence, be abandoned, and no other commenced, then there is no objection to it so far as the consideration is concerned. Nor was the suit prematurely brought. The fair construction of the instrument is that the balances against Theodore Cook should be ascertained and satisfactorily secured in the course of the thirty days following its execution, and that, upon this being effected, in accordance with the terms of the agreement Isaac Cook should be required to pay no more than ¡§1,000 yearly of the amount assumed by him. But satisfactory security was to be given before he could demand this additional time.. — 41 — Nor is there any objection to the suit being brought in the name of the plaintiffs, in their own behalf and as trustees of the express trust stated in the bond. (Gen. Stat. 1865, p. 651, § 3 ; Miles v. Dayis, 19 Mo. 408 ; Sto. Eq. Pl. § 150.) The arrangement was to pay directly to the plaintiffs an aggregate amount, composed of the balances due by Theodore E. Cook to the two establishments ; Howard, of the firm of Evans & Howard, assenting thereto. Besides, as the arrangement was beneficial to Evans & Howard, the law presumes their assent to it. A payment to the plaintiffs; in accordance with the bond, of any balance due Evans & Howard, would be a satisfaction of the demand, and the obligors in the bond could not be called upon to account again. The other judges concurring, the judgment of the court below is reversed, and the cause remanded for trial in accordance with this opinion.