Court Opinion

ID: 6572052
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:30:35.818069+00
Date Added: 2024-06-11T15:56:56.441385
License: Public Domain

The opinion of the Court was delivered by
Phelps, J.
This case turns upon the effect, which we shall give to the contract, by which the plaintiffs undertook to pay to the defendant, in goods out of their store, the sum of one hundred and fifty dollars, annually, for three years, *342as a consideration for his permitting them to use the trust-fund, which the defendant and one of the plaintiffs held as trustees.
The plaintiffs insist that this contract was void — 1st, by virtue of the statute of frauds, and 2dly, as within the statute of usury. They insist further, that, notwithstanding the delivery of the goods in question, upon the terms of the contract, they are now at liberty to repudiate the contract, and recover in this action, as for goods sold.
The particular clause of the statute of frauds, which is supposed to vitiate the contract, is not pointed out. We can, however, conceive that it may come, within the purview of that clause of the first section, which has reference to contracts not to be performed within the space of one year from the making thereof, or within the second section, as a contract executory, for the sale of goods, to the value of forty dollars and upwards.
The part of the contract relied upon here is the undertaking to deliver goods, to the amount of $ 150,00 per annum, during the said three years. So far as the first yearly payment is concerned, it is evident that the contract, if it had not extended further, would not come within the first section, as, by its terms, it was to be performed during the year, and, in order to bring a contract within this clause, it must appear affirmatively that it is not to be performed within the year. But on the other hand, it is equally clear, that the payments for the two following years, which were to be made during those years, were, by the terms of the contract, not to be performed within one year from the making thereof. So far, then, the contract is within the statute. Such being this contract, the question arises, whether it be void in toto, or good pro lanío. I understand the term performance, as used in the statute, to mean complete performance; and if, by the terms of a contract, it is to be performed, in part, within one year, and in part thereafter, the whole is void by force of the statute, if it be not in writing. See 11 East, 142. Squier v. Whipple, 1 Vt. R. 69. The reason of this, I take it, is, that with reference to this statute, the contract must stand or fall entire. This case, therefore, falls within the purview of the statute, as, by the terms of the contract, it is not to be performed fully and completely within one year, *343but the performance is, in part, deferred, by the letter of the contract, to a later period.
I apprehend that it would not be difficult to shew, that this contract was originally void also, by force of the second section of the statute, as a contract for the sale of goods. The consideration for the plaintiffs’ undertaking was forbearance on the part of the defendant, or what is the same thing, permitting the plaintiffs to retain the trust-fund in their hands. In this point of view, the contract was executory, purely, on both sides. The only light, in which this result can be avoid-* ed, is to regard the goods as a part of the interest of a loan, in which case the contract becomes obnoxious to another statute, as usurious. Perhaps, however, the subsequent part-performance may cure the defect, and exempt the case from the operation of the second section. Our decision, on this part of the case, rests on the first section of the statute, which is not affected by part-performance.
There is, however, another very satisfactory ground, upon ! which we deem the contract in question void ; at least, so far as it remains executory. A contract, which is, in itself, in violation of the law of the land, will not be enforced. The law will not aid in its own infraction, nor will it sanction and enforce that which it inhibits. Ex turpi causa non oritur actio applies to every case of intrinsic illegality.
✓ The contract in question, between Foote and Emerson, who were joint trustees, we consider as incompatible with their duty, as such trustees. In that character, however they may have been appointed, there is a personal confidence reposed, which cannot be bartered for money. Nor can either relieve himself from the trust, except under the sanction of the court of chancery ; and, while the trust subsists, it is the duty of each to preserve, not only the fund, but his control over it. This contract is an attempt, on the part of defendant, to sell out his trustee-rship — to relinquish to his co-trustee the control of the fund, for a pecuniary compensation to himself. The fund is already embarked in a. business of hazard./' Circumstances might require his prompt interference to preserve it, but, by the contract, he disables himself, puts it out of his power to interfere, and this for a consideration which benefits, not the cestui que trust, but himself. It is true, the cestui que trust may claim the benefit of what*344ever is received under this contract, but this is upon the ground, that the trustee is not permitted to speculate for his advantage upon the trust fund, and the remedy, which the law affords, would not render the proceedings the less a. breach of trust.
In this view of the transaction, as well as in conformity with the statute of frauds, we consider the contract, so far-as it remains executory, as illegal and void, and that the de? fendant is not entitled to recover the balance remaining unpaid of the sum stipulated.
Whether the plaintiffs are entitled to recover for the goods, delivered upon the terms of the contract, remains to be con? sidered.
If we consider the contract as void by force of the statute of frauds, only, it is clear that the parties are bound, so far as the contract is executed ; and if the goods were delivered in part-performance, the plaintiffs cannot recover for them. Philbrook v. Belknap, 5 Vt. R. 383.
If we treat it as void, by reason of its illegality, as involving a breach of trust, and, therefore, forbidden by the policy of the law, it falls within the general rule, that the court will neither enforce it while executory, nor relieve from it when executed. The application of this rule depends upon the question, whether the parties are in pari delicto. If so, there can be no relief to either. On this point, I need only* say, that the parties, on both sides, appear in equal fault, and we discover nothing which has the least tendency to create a distinction between them.
It is insisted, however, that the transaction is to be regard-: ed as an usurious loan, and that the plaintiffs are entitled to recover for the goods, as for usury paid. If this be the character of the transaction, it must be conceded that the plain? tiffs would be intitled to recover back the usury paid, in some form of action. But we cannot consider this a case of usury. To constitute usury, it is essential that there be a loan of money. Here was no loan. These parties were joint trustees. In equity, the money belonged to the cestui que trust, and these parties were mere agents or stake-holders. At law, they •were invested with the fund as joint tenants, and the plain-, tiff, Foote, had the same interest in the fund as the defendant. It was as much the plaiutiff’s money as the defen?. *345dant’s. They had invested it in their mercantile business, and, upon the change in the partnership, the plaintiffs were permitted to retain it, paying the interest to the cestui que trust, and giving the defendant a bonus, not for the use of his money, but for his acquiescence, in permitting his co-trustee to take the exclusive management of jhe fund. Although this may be termed, in a loose sense, a loan, yet it is not so decidedly a„nd technically of that character, as to bring the case within the operation of a penal statute.
If, therefore, the deliyery of the goods was in payment of the sum of $ 150,00, ¡secured to the defendant by the contract, the plaintiffs are not, in our opinion, entitled to recover for them.
It is argued, however, in behalf of the plaintiffs, that this is not a payment, strictly speaking, but a deliyery of goods upon account; and that the allowance claimed by the defendant was the subject of future accounting that, in fact, no application of these goods has been made, in satisfaction of the defendant’s claim ; and, therefore, that we are now to consider them as distinct and independent-claims, to be adjudicated upon according to their merits. We do not view the subject in that light. The contract being voidable merely, and the plaintiffs at liberty to perform, and bound if they did so, the deliyery of the goods, upon the terms of the contract, is a waiver of the objection to it. If the defendant received the goods, understanding the delivery to be in payment, and knowing that he would be entitled to retain them, although the contract was voidable, he cannot now be considered as having contracted a debt. If delivered under th.e contract, they were, doubtless, so received, and if ho received them as due to him, it will not now answer to say that they were received under a contract, express or implied, to pay for them.
The judgment of the county court, is, therefore, affirmed