66 Wis. 452 | Wis. | 1886
The respondent brought an action against the appellant upon a promissory note executed by the appellant, and payable to the order of E. B. Webb, for the sum of $1,500. The complaint alleges that said note was transferred by said Webb to the plaintiff for a valuable consideration before due. There was also a claim in the complaint for wort and labor for $100. Upon the claim for work and labor there is no controversy on this appeal.
The defendant answered, first admitting the making, execution, and delivery of the note to Webb, but he denies “ that Webb, in any way or manner, for any consideration or otherwise, ever sold or delivered said note to the plaintiff, and he denies that the plaintiff is or ever was the owner; or in his own right the holder, of the said note;” and for a further answer the defendant set up the facts below in this opinion stated. Upon the trial in the circuit court, the learned circuit judge, on the objection of the respondent, excluded all evidence concerning the origin or consideration of said note, and decided that the defendant’s answer did not state facts sufficient to constitute a defense or counterclaim on the ground of fraud in its inception or connected with the consideration for the same. To this ruling the defendant excepted, and, after hearing some evidence in the case as to the transfer of the note from Webb to the plaintiff, the learned judge directed a verdict in favor of the plaintiff for the whole amount of the note. • To this direc
We are of the opinion that the learned circuit judge was right in holding that the defendant’s answer did not state facts sufficient to constitute a defense or counterclaim on the ground of fraud in its inception.
The substance of the answer is that the note in question was given as the consideration for a transfer of the undivided half of a stock of goods by R. B. Webb to the defendant. The allegations are that R. B. Webb, at and before the transfer, held the apparent title to said goods as his individual property, but that in fact he held the undivided half of said goods in trust for one George Travis; that said Travis and B. E. Webb had theretofore been partners doing business as such, and were largely indebted, and that they conveyed the stock of goods to R. B. Webb with intent to defraud their creditors, and that said Webb held them in trust, one half for said Travis; that Travis became dissatisfied with the manner in which Webb carried on the business, and he procured said Webb to make a formal sale of one half of said goods, together-with one half of the assets and good-will of the business, to the defendant in trust for said Travis, so that Travis’ interest thereafter might be represented by the defendant in the further prosecution of the business; and that the business be prosecuted in the name of Webb & Kelley, and that the business was thereafter prosecuted in the name of Webb & Kelley.
The answer further alleges that the defendant in fact had no interest in said goods, and paid no consideration therefor, but, in order to give color thereto as a bona fide transaction, the defendant made and delivered to said Webb, as apparent consideration for such transfer, his three notes for $1,500 each, and each payable to the order of the said R. B. Webb, all of which notes the said R. B; Webb was, bjr the
“ Without recourse pay to the order of George Travis.
“ E. B. Webb.”
and then and there delivered all of said notes to the said George Travis, and'that the notes mentioned in the plaintiff’s complaint is one of said notes.
The answer further alleges that no consideration passed to the defendant for any of said notes, and that the said George Travis, with knowledge of all the facts, in order to compel the defendant to pay said notes, has procured the plaintiff in this action to take the said note and institute this action thereon in his own name, in order to defraud the defendant and compel him to pay the same; and further alleges, upon information and belief, that the plaintiff’s possession of said note is in trust for the said George Travis, and not in his own right, and that the plaintiff never paid any consideration therefor.
If it be admitted that the sale of the undivided half of the stock of goods by E. B. Webb to the defendant was a valid contract as between the contracting parties, then it is apparent that there was a sufficient consideration for making the note upon which the action is foundéd, and the claim that there was no consideration for the making of the note is contradicted by the facts set up in the answer. It seems to be equally clear that, if the whole transaction is not void as between the parties, then the other facts stated in the answer constitute no defense to the note, because it is not admissible to show a contemporaneous parol agreement between the parties to the note that it was not to be in force as between the parties. The statements in the answer are substantially
The suggestion made in the brief of the learned counsel for the appellant, that the facts set up in the answer show that there was no delivery of the note to the payee therein named, it seems to ns is wholly unsupported. The allegations are that the note was delivered to Webb, and that he .immediately indorsed it payable to Travis, and delivered it to him.
The point mainly relied upon by the learned counsel for the appellant was that the note is void -because given as a pai;t consideration for a transfer of property made to the defendant for the purpose of defrauding the creditors o£
The allegations in the answer show that there Avas a transfer to the defendant, which Avas duly executed by the persons in possession of the goods, and that since such transfer the business has been carried on in his name as a partner in- the business. ' There was therefore a good consideration for the notes given. There is nothing in the answer which shoAvs that there has been a failure of con
It is urged that sec. 4437, R. S. 1878, which provides that “ any person being a party to any . . . assignment of any interest in . . . goods or things in action, . . . made or created with intent to . . . hinder, delay, or defraud creditors or other persons, and any person, being privy to or knowing of any such assignment, . . . who shall wrongfully put the same in use as having been made in good faith, shall be punished by imprisonment in the county jail,” etc., renders the whole transaction between Webb and Travis and the defendant absolutely void as to all parties, and that the notes given by the defendant are void as to the parties to the contract and all other persons taking them with knowledge of the facts.
It is suggested that the attention of this court was not called to this provision of law, which was then in force, when the case of Clemens v. Clemens was decided, and it is urged by the learned counsel for the appellant that this section is inconsistent with the ruling in that case, and that this statute brings the case within the rule stated in Melchoir v. McCarty, 31 Wis. 252, and Clarke v. Lincoln Lumber Co. 59 Wis. 655. The rule there laid down is “ that a contract made in violation of a statute is void,' although the statute fails to provide expressly that contracts made in violation of its provisions shall not be valid.” It is also
The courts have, in the interest of morality and a sound public policy, refused to enforce contracts made in violation of law; and generally have refused to enforce them when the law simply punishes the making of certain contracts, upon a presumption that the law-making- power intended that all such illegal and punishable acts should be void when there is nothing in the law showing a contrary intent. In this case, however, the law-making power has declared that contracts of the nature in question shall be void only as to creditors, and good as between all other parties; and the act punishing the parties to the fraudulent contract ought
•There is another point made by the learned counsel for the appellant, viz.: that the learned circuit court erred in not submitting the question to the jury upon the issue made by the pleadings as to the ownership of the note. The testimony of the defendant showed such a state of facts as disproved the plaintiff’s ownership of the note. It is true, the evidence on the other side, if true, showed that the plaintiff was the owner. It was not the province of the court to determine which of the witnesses testified truly, and that question should have been submitted to the jury. Under the evidence in the case it was .material to the defendant that the action should have been brought in the
By the Court.— Eor this error the judgment of the circuit court is reversed, and the cause remanded for a new trial.