Court Opinion

ID: 4926338
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:57:17.201287+00
Date Added: 2024-06-11T08:14:21.249548
License: Public Domain

The opinion of the Court was at a subsequent term delivered by
Mjsluen C.
motion for a new trial, predicated on the report of the pro,siding Judge, has been placed, in the argument, by the counsel for the plaintiffs, on two grounds — viz. :
1. That by law it was not competent for the defendant to set up the defence which he was permitted to make : —•
2. That Weymouth, in support of the defence, was an inadmissible witness. The counsel contended that both objections were well founded, because the intestate and Weymouth were both parties to the fraudulent arrangement to which Weymouth testified. And the counsel for the defendant, on his part, contended that the arrangement abovementioned was not fraudulent and illegal. —■ The correctness of this position, we apprehend cannot be maintained on any sound principles; for the object in view of the parties was to secure and protect the property that was purchased of the plaintiffs, as well as of other persons, and placed in the store, from the old, that is, the then existing, creditors of Weymouth; under false appearances to deceive them, and thus to defraud them. Surely such a transaction cannot be sanctioned in a court of justice. The design of all three, according to the finding of the jury, was, in reality, that Weymouth was to be considered to all intents and purposes as the purchaser of the goods; and then they were to be placed by him, under the cover of the name of the intestate, and, to appearance, as his property. Such is the real nature of the transaction, as the jury must have found it: it thus assumes the essential character of a fraudulent sale by a debt- or, to conceal his property from his creditors ; in the formation and execution of which design all three of the parties were *76aiding and acting in concert. Nine times in ten, in similar cases, the object is to defraud existing, not future, creditors. Howe v. Ward, 4 Greenl. 195. The next inquiry is, whether the plaintiffs’ first ground of objection, above stated, is tenable. The argument is, that no man shall defend himself by alleging and proving his own turpitude. The counsel for the plaintiffs admits that where the fraud that poisons, or the illegality that destroys a contract is disclosed and proved by him who claims the benefit of it, there ■ the other party, attempted to be charged by such contract, may avail himself of such fraud or illegality to defeat it. But he contends that when a plaintiff has proved the contract on which he has declared, and which appears to be fair and legal, the defendant shall not be permitted, by way of defence, to prove that the contract was fraudulent and illegal between the plaintiff and himself, and thus avail himself of his own wrong and violation of law. Notwithstanding the emphalical manner in which the counsel contended for the above distinction, we arc not aware of its existence, except under a limitation which is not applicable to the case before the Court. That limitation we will- state. There is a marked and settled distinction between executory and executed contracts of & fraudulent or illegal character. 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. Whatever the parties have fraudulently or illegally contracted to execute, the law refuses to compel the contractor to execute or pay damages for not executing; but in both cases leaves the parties where it finds them. The object of the law in the latter case is, as far as possible, to prevent the contemplated wrong ; and in the former, to punish the wrongdoer, by leaving him to the consequences of his own folly or misconduct. The case of Doe on dem. of Roberts v. Roberts, cited from 2 Barnw. & Ald. 367, differs from the case under consideration. It is a case of an executed contract. George Roberts made a deed to the plaintiff, of the premises in question, for which ejectment was brought against the grantor’s widow, and on cross examination of a witness to the deed, it appeared that jt was made on an illegal consideration. On a question reserv*77ed, the Court disallowed the defence, on the ground that a grantor could not impeach his own deed on account of his own fraud. To make this case more plain, suppose the grantor had brought an action against the grantee to recover the land back on the ground of fraud ; it is very clear he could not recover against his own conveyance, though it was a voluntary and fraudulent one ; for it was good between the parties and unaffected by the statute of Eliz. Yet if in the case reported the Court had sustained the defence, on the ground of fraud between the grantor and grantee, the title of the latter would have been defeated and the heir of the grantor would have held the land, in direct opposition to the principle above stated, as to executed contracts of a fraudulent or illegal character. The case from Wm. Bl. 363, Montefeori v. Montefeori, was of the same nature as Doe v. Roberts. The abstract of the case of Osborne v. Moss is in harmony with the case of Doe v. Roberts : it is in these words, “ where a person makes a fraudulent convey- “ anee of his goods to another, for the purpose of defrauding “ his creditors, and dies intestate, the conveyance though void “ against creditors, is good against the intestate : and an action “ may be maintained against the administrator for the goods.” This is the case of an executed' contract also. — With respect to the supposed distinction abovementioned, we have not found it stated in any of the numerous cases we have examined, which relate to contracts of an executory kind, and which were fraudulent or illegal. In many of them there is a statement of the facts on which the questions of law arose, without an intimation by which party the proof of them was introduced. In some cases of special contract, the fraud or illegality appeared on the face of it. In others, as cases for money had and received, the facts are necessarily disclosed in'the opening of the cause. In others, a fair contract and ground of action is displayed in the opening, and it must, from the nature of the case, have been the testimony on the part of the defendant that disclosed the fraud or illegality to the Court. In numerous other cases it appears distinctly that the evidence, destructive of the plaintiff’s right to recover, was introduced by the defendant, though he was a party to the fraud or illegality. The following *78cases support the last position. Cockshot v. Bennett, 2 T. R. 763 ; Lightfoot & al. v. Tenant, 1 Bos. Pul. 55. It was an action on bond, and the defendant pleaded the facts which disclosed the poison and defeated the action. Clugar v. Panaluna, 4 T.R. 466, — a smuggling transaction — proved by the defendant. Waymell v. Reed & al. 5 T. R. 599, a case of the same kind; and the smuggling arrangement between the parties proved in the same manner. Howard v. Hodges, 1 Bos. & Pul. 341, note; 1 Selw. N. P. 79; Bowry v. Bennel, 1 Camp. 348; Girardy v. Richardson, 1 Esp. Cas. 13; Bayley & al. v. Taber, 5 Mass. 286. In Holman v. Johnson, Cowp. 341, Lord Mansfield says, “ The objection that a contract is im- “ moral or illegal as between plaintiff and defendant, sounds at “ all times very ill in the mouth of the defendant. It is not for “ his sake, however, that the objection is ever allowed ; but it “ is founded on general principles of policy, which the defen- “ dant has the advantage of, contrary to the real justice, as be- “ tween him and the plaintiff, by accident, if I may so say. “ The principle of public policy is this, ex dolo et malo non ori- “ tur actio. No Court will ever lend its aid to a man who founds “ his cause of action upon an immoral or illegal act. If from “ the plaintiff’s own showing or otherwise, the cause of action “ appears to arise ex turpi causa, or the transgression of a pos- “ itive law of this country, the Court says he has no right to be “ assisted. Where both are equally in the wrong, potior est “ conditio defendentis.” Starkie, vol. 2, page 86, says, “ Where the illegal consideration is set forth upon the record, “ the objection may be taken either by demurrer, or in arrest of “ judgment. But where it does not appear on the record, the “ defendant may shew that the claim is in reality founded upon “ an illegal and noxious agreement.” In the case of the Inhabitants of Worcester v. Eaton, 11 Mass. 368, Parker C. J. in delivering the opinion of the Court, says, “ It appears to be “ the settled law in England, and we are satisfied it is also the “ law here, that where two persons agree in violating the laws “ of the land, the Court will not entertain the claim of either “ party against the other, for the fruits of such am unlawful bar- “ gain. If one holds the obligation or promise of the other, to *79“ pay him money, or do any other valuable act, on account of “ such illegal transaction, the party defendant may expose ike “ nature of the transaction to the Court” — and thus defeat the action.
We apprehend that the authorities we have collected and stated in this opinion, are sufficient to shew that there is no such legal distinction as the counsel for the plaintiffs has endeavoured to establish, as to the source from which the evidence of covin or illegality is to be derived, in actions on executory contracts. We may, however, add to the list, the familiar defence of usury in actions on contracts: in all such cases, the evidence of the usury is always introduced by the defendant to prove the illegality of the contract. The defence which destroys a gaming note is always sustained by proof adduced by the defendant, though he is guilty of a violation of law, and relieves himself from his obligation by such violation in concert with the plaintiff. For the reasons thus given, we are of opinion that it was competent for the defendant to set up the defence which he was permitted to make.
As to the second ground of objection, namely, the alleged incompetency of Weymouth to testify in support of the defence, there seems to be no room for hesitation. In Mill v. Pay son, 3 Mass. 559, it was decided that the grantee of a deed was a good witness to prove the deed without consideration and void against creditors. In Loker v. Haines, 11 Mass. 498, it was decided that the grantor in a deed, if not interested, was a good witness for a similar purpose. The same principle was decided in the above cited case of Inhabitants of Worcester v. Eaton. So also in Bean v. Bean, cited in the argument. It would seem to be a sound principle, that the same reasons and policy which render it proper and salutary to permit, a partner in the fraud or illegality in the contract, when sued upon it, to disclose and prove such fraud or illegality by way of defence to the action, render it proper for any other partner, except the plaintiff, to be a good witness in support of the defence. On the whole, we are all of opinion that the ruling of the Judge was correct, and that the motion for a new trial cannot be sustained for any reasons appearing on the report of the Judge.
*80The only remaining question is, whether the verdict ought to be set aside, as being against evidence, as stated in the motion on file. On this point, we need say no more than that the testimony was contradictory, and therefore, peculiarly proper for the exclusive consideration of the jury. We see no ground for disturbing the verdict on account of the conclusion to which they arrived.

Judgment on the verdict.