Court Opinion

ID: 7994885
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:35:38.736089+00
Date Added: 2024-06-11T16:35:30.561949
License: Public Domain

Anderson, J.,
delivered the opinion of the court.
Appellant, Sam Dayhood, sued appellees,' Dick Neely and E. P. Shofner, to recover the principal and interest of a certain promissory note for six hundred ninety-five dollars, executed by appellee Neely and indorsed by appellee Shofner, of which promissory note appellant was the owner and holder in due course at the time he brought this suit. Appellee Neely pleaded in addition to the general issue that the note in question was void because the consideration thereof was a gambling debt. Appellant replied, admitting that the consideration of the note was a gambling debt, but asserted that he became the owner and holder of said note in due course before maturity without notice that such was the consideration, and that before he purchased said note he approached *18appellee Neely and asked him if the note was valid and if he would pay it, to'which appellee Neely replied that it was and he would pay the note at maturity, and that, upon the faith of this statement, appellant purchased said note, paying value therefor. Appellant’s replication was demurred to by appellees, and appellant declining to plead further,' final judgment was entered against him for the principal and interest of said note, from which he prosecutes this appeal.
The case presented by the pleadings is as follows: Appellee Shofner was engaged in the purchase and sale of automobiles. He approached one Dribbens to sell him a car. The negotiations reached the point where the price of the car was agreed upon on condition that appellee Schofner would take in part payment of the purchase money of the car a debt due him by appellee Neely of six hundred ninety-five dollars evidenced by account. Before appellee Shofner would agree to accept said debt in part payment for said car he approached appellee Neely and asked him if he owed that amount to Dribbens and would pay it, informing appellee Neely of his purpose in reference thereto, to which question appellee Neely informed appellee Shofner that he owed the debt and would pay it, but would have to have further time in which to make payment. Appellee Shofner agreed to delay payment provided appellee Neely would give his promissory note for the amount, which appellee Neely agreed to do and did do, executing the note sued on in this cause, which was then and there accepted by appellee Shofner as part payment for said car. Thereafter for a valuable consideration appellee Shofner sold and assigned said note to appellant, Dayhood, and before appellant accepted said note and parted with the consideration therefor he approached appellee Neely to know about its validity and payment, who, on being questioned, stated that he owed the note and would pay it when due. Upon the faith of the truth of that statement appellant purchased the note and paid for it.
*19Appellees contend that the note sued on is void even in the hands of a purchaser situated as appellant was who parted with the consideration therefor on the representation of the maker, appellee Neely, that it was valid and would he paid.
On the other hand, appellant contends that appellee Neely is estopped to set up the illegality of the consideration of said note. That by virtue of having induced appellant to purchase said note and pay the consideration therefor, relying upon his representation that it was valid and he would pay it at maturity, appellee will not now be heard to say otherwise. Appellant contends that to permit appellee Neely now to defeat the collection of said note upon the ground of the illegality of its consideration would be to permit him to profit by his own fraud and deceit in representing said note to be valid, and that he would pay it.
The principle involved is stated thus in 21 C. J., section 146, pp. 1143 and 1144:
“Where a person liable on,a bill, note, bond, letter of credit, certificate of deposit, stocks, or other security promises a prospective purchaser or assignee to pay the same, or represents to him that- the obligation is valid and that there is no defense to it, he is estopped to resist payment in an action by such person, who has taken the paper in reliance on his representation, and will be precluded from setting up a defense which would have been good as between the original parties.”
The principle applies, even though the consideration of the note is illegal. The maker will not'be heard to claim its illegality in the face of his conduct by which the holder was induced to purchase it and pay value therefor. Henderson v. Hartman, 65 Miss. 466, 4 So. 549; Hamer v. Johnston, Smedes & M. c. 563.

Reversed and remanded.