132 Ga. 601 | Ga. | 1909
A suit was brought on a promissory note. The presiding judge held that the defendant’s answer raised no issuable defense, and entered judgment against him. This judgment was. reversed. 129 Ga. 756 (59 S. E. 782). On the second trial, the defendant amended his answer and set up several pleas. A verdict was rendered against him, a new trial was refused, and the case is again here for review.
Section 12, par. b, of the bankrupt act of 1898 provides that “An application for the confirmation of a composition may be filed in the court of bankruptcy after, but not before, it has been accepted in writing by a majority in number of all creditors whose claims have been allowed, which number must represent a majority in amount of such claims, and the consideration to be paid by the bankrupt to his creditors, and the money necessary to pay all debts which have priority and the cost of the proceedings, have been deposited in such place as shall be designated by and subject to the order of the judge.” Paragraph cl provides that “The judge shall confirm a composition if satisfied that . . the offer and its acceptance are in good faith and have not been made or procured except as herein provided, or by any means, promises, or acts herein forbidden.” See also §29. This contemplates the payment of debts which have priority, and the payment to creditors not having-priority of the -amount agreed upon in writing to be accepted by the creditors and approved by the court. Creditors claiming to have securities or priorities can only prove such debts and have
In Austin v. Markham, 44 Ga. 161, it was held that "A promise to pay a debt due by an applicant to be declared a bankrupt, in consideration that the payee will withdraw1 his objections in the bankruptcy court to the discharge of the bankrupt, is illegal and void, ■and no action can be sustained on such promise.” See also Burgess v. Simpson Grocery Co., 128 Ga. 423 (57 S. E. 717); Brown & Franklin v. Everett-Ridley-Ragan Co., 111 Ga. 404 (36 S. E. 813). In Breck v. Cole, 4 Sandf. (N. Y.) 79, a promissory note secretly given to the plaintiff, in addition to the composition notes, as an inducement to sign, was held void. In Morrison v. Schlesinger, 10 Ind. App. 665 (38 N. E. 493), an assignment was made by a •debtor for the benefit of creditors, and a composition with the creditors arranged. One creditor, without the knowledge of the others who were unsecured, procured, in consideration that he should sign the composition, a guaranty securing his existing claim and providing for future credit. It was held that such a guaranty was urn ■enforeible, both as to existing and subsequent indebtedness, and that the debtor himself might set up this as a defense to an action brought thereon. In Willis v. Morris, 63 Tex. 458 (51 Am. R. 655), it was held that where a debtor had procured a composition from all his creditors, a note secretly given by him to one of them, for the balance of his debt, to induce him to join,- was void, and •could not be enforced. In Russell v. Rogers, 10 Wend. 479 (25 Am. D. 574), Nelson, J., said that "any security taken for an ■amount beyond the composition agreed upon, or even for that sum,
“If the consideration be good in part and void in part, the promise will be sustained or not, according as it is entire or severable, as hereinafter prescribed. But if the consideration be illegal in whole oí in part, the whole promise fails.” Civil Code of 1895, §3662.
If the consideration of the note was illegal, dating it as of a later date or leaving it with an agreed person, to he held and delivered after the composition and consequent discharge, would not change the result. It is therefore unnecessary to discuss the question of the time-when a promissory note takes effect — whether from the date of its signing or from the date of its delivery, or whether the doctrine of delivery in escrow and treating the final delivery as relating back to the date of the deposit applies to a note. Nor, in view of the facts of this case, is a question involved as to whether the doctrine of a bona fide purchaser of a negotiable note before due and without notice could have any application, under the stringent terms of the bankrupt act of 1898.
It was earnestly ■ urged by counsel for defendant in error that courts are not inclined to aid one who sets up illegality in his own conduct. But where a suit is brought, the law allows the defendant to set up such defense as is here made, and, if it is sustained by the evidence, to prevent a recovery, not as a matter of aiding him, but as a matter upholding the mandates of the law.
It may be doubted whether, under the evidence as it appears in this record, a recovery by the plaintiff could be allowed to stand, had the case been submitted without error in the charge. But; as it was made practically to turn on a single question, and the important issue above discussed was not submitted to the jury- or passed upon by them, we deem it best to remand the ease-for a new trial, without ruling distinctly upon the evidence.
Judgment reversed.