Court Opinion

ID: 4925805
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:56:35.526174+00
Date Added: 2024-06-11T08:14:19.943491
License: Public Domain

Mellen C. J.
delivered the opinion of the court, as follows:
As the note declared on was payable on demand, and was not indorsed to the plaintiff until several years had elapsed after it was given, it is perfectly clear, that it is liable to the same objections and equities in a suit by the indorsee as it would be if the executrix of the promissee were the plaintiff. We pass over the objection made as to the admissibility of the witnesses named in the report, and proceed immediately to consider that which is predicated on the want of consideration. And, here, it is proper to observe that the ground on which the objection is now placed, was not taken by the defendant’s counsel at the trial; and, amidst a mass of evidence and some confusion in the manner in which it was introduced, the point on which we now decide the cause, seems to have escaped all serious attention.
The original note, for half of which the note in question was given, was made and’ signed after Fairfield and Burnham had dissolved partnership ; and when it was given, Fairfield informed Stearns, the promissee, of that fact; Stearns, therefore, knew as well as Fairfield, that the latter had no legal authority to bind Burnham, by signing the note in the name of the firm ; it was given for a debt due from Fuirfield only ; it seems from these circumstances to have been a fraud in Fairfield to give the note and a fraud in Stearns to receive it ; the object must have been to cheat Burnham, and to a certain extent, it has had that effect, because he has paid a portion of it. But it has been contended that though the original note was given under these circumstances, still that as they were known to Burnham when he settled the action against him and Fairfield, by giving the note now in suit ; being for half the amount of the first note, and for the costs of the suit, he must be bound by it; as it was a compromise of a doubtful action and demand, made voluntarily and with a perfect knowledge of facts; and this, it is said, is a good and legal consideration. This argument would be sound and satisfactory, in a *88case not poisoned by fraud on the part of the person asserting the doubtful claim. It is not denied that a compromise of such a suit, where both parties are lawfully pursuing what they consider honestly to be their rights, constitutes a good and legal consideration ; but such a compromise has no resemblance to the one relied on as proof of the consideration of the note in question. In the case before us nothing was due to Stearns when this note was given, and Stearns knew it ; that is, that no claim existed against Burnham, except what was founded in fraud and collusion between him and Fairfield. The note was given at a time when a suit was pressing him, and Fairfield was a bankrupt : an undue advantage was taken of Burnham’s situation, although he was conusant of all the facts ; but without pursuing this idea, the fatal objection to the action is, that the the plaintiff’s claim is founded on a fraudulent transaction ; and if we should sustain and sanction it, it would render the fraud successful; whereas it is the duty of courts of justice in every instance in their power to protect the innocent by defeating the stratagems of iniquity. Under these circumstances, we are all of opinion that the verdict must be set aside and a new trial granted.