Court Opinion

ID: 6410992
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:40.808212+00
Date Added: 2024-06-11T15:51:22.477730
License: Public Domain

Merrick, J.
The only parties before the court, who have any substantial interest in the questions arising upon the bill and answers, are the plaintiff and the Western Bank. The defendants Rice, Beach and Chapman are mere trustees. They do not pretend to have any personal right to the estate which is the subject of controversy. They hold it only in trust under a deed from the plaintiff; and they submit the question of their duty in relation to it entirely to the decision of the court.
It is agreed that, at the time when this suit was commenced, there were no outstanding liabilities of the plaintiff, to which the avails of the real estate, if it should be sold, could be applied, unless he was legally holden to the payment of the notes which he had given in the place of and as a substitute for those of Dean, Packard & Mills, upon which he had been an indorser. And as to those notes of Dean, Packard & Mills, it is conceded that they were made in pursuance of such an unlawful arrangement and agreement that the payees are precluded from maintaining *464any action, and from recovering the amount nominally due thereon, from either the principal or indorser.
But it is urged, in the argument of the counsel for the bank, that these substituted notes of the plaintiff are now held by the bank by an unimpeachable title; that they were made upon a legal and sufficient consideration, and consequently that a claim of payment cannot be successfully resisted. This is the renewal of an argument upon a question which has been already deliberately considered and determined. An action was brought by the bank against the plaintiff upon one of these notes, and the circumstances and consideration under and upon which they were made being disclosed, it was held that the action could not be maintained, and judgment was rendered for the defendant. Western Bank v. Mills, 7 Cush. 539. We see no cause for disturbing or modifying that decision. It is reasonable in itself, because, by attaching the consequences of an illegal agreement to all the subsequent transactions of the parties, connected with or dependent upon such a stipulation, it tends to maintain the law and prevent its violation ; and it is, moreover, fully justified by authority. The principle upon which it rests was briefly, but satisfactorily, stated by Bayley, J. in the case of Amory v. Meryweather, 4 D. & R. 92. “ The expedient resorted to, of changing the security, will make no difference if the original consideration is void.”
It has been suggested that this principle is not applicable to the present case, where the notes of the plaintiff were taken in exchange for those of Dean, Packard & Mills; because the latter were not absolutely void. But we think this distinction is unimportant and immaterial. The notes of Dean, Packard & Mills were given in consummation of an unlawful contract, and for that cause they were, in the hands of the payee, utterly worthless ; for the statute expressly declares, that every loan or discount made contrary to its provisions shall be so far void, that “the bank shall not be enabled to recover the amount thereof from the borrower, or from any other person ; ” and, in addition to this disability, “ shall forfeit the sum of five hundred dollars.” Rev. Sts. c. 36, § 58. Notes, thus invalid on account of the *465unlawful agreement in which they originate, can afford no good and legal consideration for any subsequent promise or contract for which they may be exchanged.
But it is further contended, that the plaintiff is not entitled to the aid of a court of equity in the recovery of his estate, even if the notes given by him stand upon the same footing as those of Dean, Packard & Mills, upon which he had been an indorser; because in the original transaction he was, jointly with the lender of the money, a violator of the law, and equally with him in fault. If this action were directly between the parties to that transaction, and the plaintiff were seeking a remedy upon or through the contract into which they had mutually entered, the principle of par delictum would undoubtedly apply. They would then be left in the condition in which they had respectively and voluntarily placed themselves. The payment of the notes could not be enforced on the one side, against the will of the maker; but if they had been paid, no action could be maintained on the other to recover back the money. For a similar reason, if lands are conveyed in conformity with, or in satisfaction of an illegal contract, the title of the grantee cannot be defeated or disturbed. Thomson v. Thomson, 7 Ves. 473. Tenant v. Elliott, 1 Bos. & Pul. 3. Sharp v. Taylor, 2 Phil. Ch. 818. Worcester v. Eaton, 11 Mass. 368.
But this is altogether a different case. No payment has been made, and no lands have been conveyed- by the plaintiff to the bank, in satisfaction of the notes he has given. The plaintiff institutes no proceedings against the bank, makes no demand upon them, nor attempts to reclaim any thing to which they have acquired a title. He makes his demand only upon the trustees ; and he calls upon them to restore to him his estate, simply upon the ground that he is entitled to its restoration, according to the provisions and stipulations in the deed under which their title to it is holden. By the terms of that deed, they are bound to re-convey it to him whenever he is fully relieved from all his designated liabilities. He shows them that the conditions in the deed have been fully complied with, and that he is no longer subject to any of ffie liabilities mentioned in it No action can *466be maintained against him, and nothing can be recovered of him. It is thus made apparent that the trust, in relation to all the obligations which devolved upon them, has been fully accomplished. And therefore, as the trustees make no personal claim, and assert no right to the estate in themselves, there is no reason why they should not surrender and release it to the plaintiff, unless some valid objection can be interposed by the Western Bank.
It may be considered certain that no such objection can come from that quarter. It is sufficient to say, in the first place, that it has been judicially determined, and for reasons which, upon reexamination, appear to be perfectly satisfactory, that the bank has no claims upon the plaintiff, which can be enforced; and that therefore it is in no situation to move in this matter at all. But if it were an open question, it would not be possible, upon the facts disclosed, to come to any other result. The trustees, though they have been furnished by the bank with a bond of indemnity, the adequacy of which, to protect them against loss, has not been brought into question, have refused to yield to its request, that they should sell the estate, or otherwise go forward in the execution of the trust for its benefit, unless they shall first be permitted or required to do so under some order or decree of this court. In this condition of things, it is certain, whatever the course it may pursue, that nothing can be obtained by the bank. If it acquiesces in this refusal of the trustees to act in its behalf, this is virtually, and by an unavoidable implication, a surrender and relinquishment of its claim. Or if, instead of this, it should resort to the only alternative that is left, and seek to enforce, by the prosecution of some legal or equitable suit, the disposal of the property for and to its use, it would be sure to be defeated. The estate cannot be disposed of by the trustees, except for the sole purpose of realizing means for the payment and discharge of liabilities of the plaintiff. And no such liability can be shown or established by the bank; for it asserts no other than what is supposed to arise tinder an agreement made in violation of an express provision of law. This is conclusive against it; for a party can never successfully prosecute *467a suit or maintain an action, if his own illegal act, or an illegal contract in which he has participated, must be shown as a part of his case, or be given in evidence in support of the claim which he prefers. See to this point the cases referred to in the opinion of the court in Gregg v. Wyman, 4 Cush. 327 And because it is thus impossible for the bank to establish any legal liability against the plaintiff, it can never reach his land, or acquire any interest in it, or in the proceeds of its sale. It can therefore have no right to place itself between him and his trustees ; to both of whom it is, under the circumstances shown, no other than a stranger; and prevent them from admitting him to have the possession of the estate to which they admit him to be justly entitled.
Decree for the reconveyance frayed for.