Court Opinion

ID: 6992623
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:27:39.839596+00
Date Added: 2024-06-11T16:09:39.815087
License: Public Domain

C. B. Smith, P. J. This was a bill in chancery brought by appellant against appellees to foreclose a certain trust deed, given by Henry C. Vankirk to Godfrey Schmid as trustee, to secure two notes, dated October 30, 1884, each for the sum of §1,342, due respectively in nine and eighteen months after date, with six per cent interest. The notes were payable to the order of A. C. Helmholz and by him indorsed to the International Bank of Chicago. These notes were renewals of two notes, dated May 1, 1884, one for $1,300, and one for the sum of §1,306.25, both of which were also payable to A. C. Helmholz and executed by Henry C. Vankirk. These.first notes were assigned before maturity to Michael Schweisthal for a valuable consideration and as collateral security to the bank. Hot being paid at maturity the notes first given were renewed and were executed to the same payees as the first notes, and signed by the same maker, Henry C. Vankirk, and before the maturity of these renewed notes they were assigned by Helmholz to the bank as collateral security and for a valuable consideration and without any actual notice to the bank of any defense to the notes. The mortgage now sought to be foreclosed was executed to secure these two renewed notes of §1,342 each. The original and amended bills were answered. The answer set out that the original consideration for which the two first notes were given, was for certain losses sustained by Yankirk on certain option deals in grain in Chicago, growing out of gambling contracts in grain, on the Board of Trade, and that the option deals and gambling contracts were had and carried on with A. C. Ilelmholz, and that the sum of these two notes represented the amount of loss sustained by Yankirk in his dealings with said Ilelmholz, and that the original notes and their renewals and the trust deed given to secure them were all to secure the payment of the original amount lost by Van-kirk in his option deals and gambling contracts with Ilelrnholz. In addition to the answer Yankirk also filed a cross-bill, giving a history of the transaction as set up in the original and amended bills, and the answers thereto, and charging that the consideration of said notes and the trust deed was fraudulent and void, and the consideration as stated in the answer, and alleged that the trust deed was a cloud on his title, and asked to have it canceled. Issues were joined and the cause heard by the court, and decree finding the facts to be as set up in the answer and cross-bill; and a decree that the original and amended bills be dismissed, and that the relief asked for in the cross-bill be granted, and the trust deed and notes canceled. From that decree this appeal is prosecuted. The proof below established the fact that these notes represented the losses of Yankirk, growing out of his gambling transactions on the Board of Trade with A. C. Ilelmholz. Indeed, we do not understand appellant as seriously denying that the original consideration of these notes was illegal, fraudulent and void, as being the product of gambling in grain on the Board of Trade. The contention of appellant is that conceding the notes to have been tainted originally with an illegal consideration, still the renewal of the same to the same payee, and by him immediately indorsed to the bank for a valuable consideration, and without notice of the illegal consideration, would enable the bank to hold them as an innocent purchaser free from the taint of the original consideration. We do not concur with appellant in this view of the law. We think the renewal of these notes gave them no new merit, nor in any manner whatever removed or changed the illegal consideration of the first notes. The consideration for the new notes was the same as in the old ones. Giving the trust deed to secure them did not change the illegal character of the consideration. It is a familiar rule of law that an assignee of a mortgage or trust deed takes it subject to all the equities of the mortgagor, and the assignee of the mortgagee can not occupy any better position toward the mortgaged property than the mortgagee himself. It is also well settled that there can be no innocent holders of promissory notes or mortgages, where it appears that the consideration of such notes and mortgages was the result or grew out of a gambling transaction. All such contracts are void in the hands of all persons: Pearce v. Foote, 113 Ill. 228; Chapin v. Dake, 57 Ill. 296. The Bank v. Spaids, 8 Ill. App. 493. Sections 178, 179 and 180, Chap. 38, Rev. Stat. (Starr & Curtis), declare all manner of gambling contracts, including those in grain, to be absolutely null and void. Sec. 183, Chap. 38, provides that any and all such contracts, even if reduced to judgments, may be set aside and vacated in a court of equity; and section 184 of the same act provides that no assignment of any such note, mortgage, judgment or other form of contract, shall defeat or affect the defense of any person so having executed or delivered any of said gambling contracts. It will thus be seen that under the broad and sweeping language of our statute, all manner of gambling obligations are absolutely void in the hands of everybody, aftd that such obligations can never be made valid and legal by any possible changes to which they may be subjected. The original taint of illegality follows them into the hands of all holders, and adheres to them and poisons them in whatever form they may take. The judgment of outlawry is against them in all hands and in all forms. It being clearly proven in this case, and not denied, that the original consideration of these notes was the product of gambling in grain and representing losses in option deals, it therefore becomes a matter of no importance how or when this bank became possessed of these notes and this trust deed, nor what they paid for them. We therefore think the decree of the Circuit Court was right, and the decree will be affirmed. Decree affirmed.