Pettit v. Jennings
Pettit v. Jennings
Opinion of the Court
It is unquestionable as a general rule, that the admission of one person cannot be given in evidence against another. There are various exceptions to the rule, of which I need notice here only such as arise out of a connexion of interest between the person making the admission and him against whom it is offered. In solving a question as to the admissibility of such evidence, regard must be had to the nature of the connecting interest, and the time of making the ad-' mission. The nature of the connecting interest may be that of a joint ownership or liability, or that of a derivation of title of one several owner from or through another. - In the former case, the ownership or liability must be strictly joint, as that of joint tenants or co-partners; and there the admission of one is treated as the admission of both : a mere community of interests, as that of tenants in common, is not sufficient. Dan &c. v. Brown, 4 Cowen 483. 493. But there is this difference between a joint and a derivative interest: in the former, the joint interest to be affected must be a subsisting one at the time of the admission; in the latter, the derivative interest to be affected must be acquired subsequently to the admission.
Whether the person making the admission, and the party against whom it is offered, be connected by a joint ownership or liability, or by the transmission of a several title from the former to the latter, the interest of the former must be a subsisting one at the time of the admission. If at the time of making it he has
What I have said has reference to admissions in pais, whether verbal or written ; or in a former suit, by answer or otherwise, to which the person against whom the evidence is offered was not a party. The same
The case of Field &c. v. Holland &c. was briefly this : The plaintiffs Field Sfc. filed their bill in equity to set aside a sale of'a tract of land in Georgia, made by the sheriff under executions which issued upon judgments recovered by Holland against Cox; which tract of land, after the judgments, but before the levy of the executions, was sold by Cox to the plaintiffs. The equity in the bill was, that the judgments were discharged before the levy of the executions, by certain dealings and transactions between Holland and Cox; who, together with Milton and others, the purchasers at the sheriff’s sale, were made defendants: and the merits of the case turned upon the truth of that allegation, which the bill expressly required Holland to answer, and as to which it called upon him for a discovery. Holland answered denying the allegation ; and the question was as to the effect of his answer. The court, in its opinion delivered by chief justice Marshall, held that the answer of Holland responsive to the bill was evidence against the plaintiffs, and upon that and the other evidence in the cause dismissed the bill, not only as to Holland, but also as to Milton and others, the purchasers under the executions, who of course claimed under Holland.
The principle of this decision is not that the answer of a defendant is evidence for the plaintiff against a co-defendant, but that, when responsive to the bill, it is evidence against the plaintiff' for the responding defendant, and enures to the benefit of his codefendant claiming under him, when it destroys the foundation of the plaintiff’s claim. The language of the court is as follows : “ Neither is it to be admitted that the answer of Holland is not testimony against the plaintiffs. He is the party against whom the fact that the judgments
A plaintiff is put to no disadvantage by not being allowed to read the answer of one defendant against another, where they are not identified in interest. He is placed upon fair ground when permitted to encounter each with the appropriate pleadings and proofs. It is not his having associated them as parties that deprives him of the testimony of one against the other as a witness ; but because the one called on is incompetent or privileged by reason of his interest. If such be not the
There is nothing in the provisions or policy of the statute against gaming which can affect this question. That statute, it is true, gives a discovery against the party who has a knowledge of the material facts; but it does not make the discovery, when obtained, evidence against others, nor alter the rules of pleading and evidence‘" beyond its express enactments. It is enough that it avoids the security in the hands of an innocent assignee, when the fact is ascertained : it would be loo much to prevent him from putting the fact in issue, and requiring its proof, so far as it affects him, by legal testimony.
In the case of Dade's adm'r v. Madison, 5 Leigh 401. Madison filed his bill against Dade and Tankersley, to be relieved against a judgment on an accepted order, drawn by Dade in favour of Tankersley, and accepted by Madison. The bill alleged that the order was drawn for money won by Dade from Madison at unlawful gaming; which allegation was admitted by Dade, but put in issue by Tankersley. And the court, after full consideration,.held that the answer of the defendant Dade was not evidence against his codefendant Tankersley, to prove the unlawful consideration of Madison's acceptance. The case cannot be distinguished in principle from the one before us. Madison's acceptance was a security for a debt due from him to Dade, which debt Dade by his order assigned to Tankersley. Dade by his answer admitted the unlawful consideration of the debt, and that admission was not permitted to affect his assignee and codefendant Tankersley. In the case of Hoomes v. Smock, 1 Wash. 389. this court bad previously held that the answer of the obligee in a bond, admitting the bond to have been executed for money won at unlawful gaming, was improper evidence against his assignee and codefendant. In accordance with these decisions is the case of Bartlett v. Marshall, 2 Bibb 470.
If, how-ever, it had been fully proved, by evidence unobjectionable on the part of the defendant Terrell, that the bond of the plaintiff was given for a gaming consideration, still it is clear that he would not be entitled to the relief which he seeks against that defendant. The evidence is entirely satisfactory to prove that neither Terrell nor his agent, previous to the assignment
At law, there could be no difficulty in this question. There the assignee would recover the whole amount evidenced by the obligation, or nothing. The obligor could not plead that he was not indebted the full amount of the bond, because the assignee had paid a less sum for it to the assignor; nor could he obtain a credit, upon the plea of payment or setoff, for the discount allowed by the assignor to the assignee. How is it in a court of equity ?
The plaintiff has not presented the question, either by his bill or his proofs. He has neither charged nor proved, that the consideration for the assignment was less than that for which he bound himself in the obligation. But suppose he had done both ; and suppose further that he had set forth the whole case in his bill, staling that the bond was given for money lost at unlawful gaming; that the assignee was ignorant of the fact, but had been induced by the wilful misrepresentations of him the plaintiff as to the true nature of the consideration, to lay out his money in the purchase of it at a certain discount; that he the plaintiff had conveyed property to a trustee to secure the payment of the debt; and praying an injunction to restrain proceedings for the recovery of more than the sum paid by the assignee to the assignor for the assignment: would such a case be proper for relief in equity? Or,
The principle upon which courts of equity act in such cases is not that of compensation in damages to the party deceived and injured, nor of restoring him by retribution to the condition in which he stood previously. They proceed upon the principle that the perpetrator of the fraud shall not be permitted to deny the truth of his own statement, but shall be compelled to make good that which he had represented to be so. Take the familiar example of the owner of an estate standing by and encouraging the purchase of it by another from a third person; the doctrine in regard to which is thus briefly and comprehensively slated by judge Story: “If a man having a title to an estate which is offered for sale, and knowing his title, stands by and encourages the sale, or does not forbid it, and thereby another person is induced to purchase the estate under the supposition that the title is good, the former so standing by and being silent will be bound by the sale, and neither he nor his privies will be at liberty to dispute the validity of the purchase.” 1 Story’s Eq. 376. § 385. The learned author adds, that “ courts of law now act upon the same enlightened principles in regard to personal property; in the transfer of which no technical formalities usually intervene to prevent the application of them. Thus, where it appeared that certain goods of the plaintiff were seized on an execution against a third person (in whose possession they were) and sold to the defendant, and the plaintiff made no objection to the sale though he had
I can perceive no good reason why a gaming security should form an exception to the general rule on this subject; which rests upon principles of justice equally applicable, whether the debt be void in its inception, or be avoided by payment or release, or by any other matter ex post facto. It is true that a contract or security which is void, either by positive law or upon principles of public policy, is deemed incapable of confirmation ; but the doctrine we are considering is not based upon the idea of confirmation, which excludes the supposition of fraud, but upon the fact of fraud in the original representation or subsequent denial, which, to prevent iniquity, is made to operate as an estoppel. Admissions which have been acted upon by others are conclusive upon the party making them, in all cases between him and. the person whose conduct he has thus influenced ; and the party is estopped, on grounds of public policy and good faith, from repudiating his own representations. Greenleaf on Evid. 240. 241.
If this were not so, then the deluded assignee could recover nothing in an action upon the bond at common law', but would be driven to his action for the deceit; for he would be defeated by a plea of the unlawful consideration of the bond, unless he were permitted to reply the fraudulent conduct of the obligor. That
The same principle, a fortiori, prevails in equity; for the estoppel, if it may be there so called, is not narrow and technical, but of a liberal and beneficial nature. It works exact justice between the obligor and the assignee, between whom the debt ought to be regarded as free from all objection. In that point of view, the assignee became entitled to the subject itself, and not to the return of the money he invested in it. He has a right, both legal and equitable, to any profit made from the investment, and the obligor has no shadow of equity against him in any degree whatever.
This view of the subject in no wise contravenes the spirit and policy of the statute against gaming, which was intended, so far as it avoids the security, to relieve a party guilty of an immoral act, and the public through him, from the injurious consequences of his own indis
The only case cited to prove that the innocent assignee, who has been deluded into the transaction by the misrepresentations of the obligor, is to be restricted in his recovery to the sum paid by him to the assignor, is that of Davison v. Franklin, 1 Barn. & Adolph. 142. 20 Eng. C. L. Rep. 363. There, judgment was confessed upon an obligation, under a warrant of attorney, and a motion subsequently made by the defendant to vacate it, on the ground that the obligation was for a gaming debt; which motion was resisted by the assignee, for whose benefit the judgment had been entered up in the name of the obligee, on the ground that he had been induced to take the assignment by the representations of the obligor ihat the debt was just and would be paid. And the court referred the case to a master to ascertain the facts, in order, if the allegations on both sides should turn out to be true, to a vacation of the judgment, on condition of payment by the obligor of the sum paid by the assignee to the assignor, with interest thereon. The judgment, it will be observed, was not in a regular action, but according to a practice which prevails in England of taking a warrant of attorney for confession of judgment as a security for money, and entering up the judgment without the necessity of an application to the court or the judge. Over such judgments the court exercises a controlling power, and will vacate them for fraud, or irregularity, or unlawfulness in the consideration, but upon such terms as its discretion may dictate. The decision, therefore, does not indicate what would have been the judgment of the court in a regular action, upon the proper plead
That case is moreover open to the observation, that in England bonds are not assignable, and must be sued in the name of the obligee; whereas with us the assignee may acquire the legal right, with the privilege of suing in his own name. But a more important consideration is, that, giving to the decision in that case the utmost weight due to the authority of a foreign tribunal, when directly upon a question before us, still it is contrary to the course of adjudication in Virginia. Buckner &c. v. Smith &c. 1 Wash. 296. Hoomes v. Smock, 1 Wash. 389. Davis's adm'r v. Thomas &c. 5 Leigh 1. The principle of these cases, as will be seen from an inspection of them, is to allow the deluded assignee to enforce payment against the fraudulent obligor for the whole amount of the gaming debt, whether the question arises in a court of law or in a court of equity. They cannot be shaken by the argument that the statute avoids the security in the hands of an innocent assignee for a valuable consideration without notice. So it does, where the case rests upon the original transaction, and the assignee, stepping into the shoes of the obligee, merely
This distinction is recognized by the cases last cited, and by Kent, C. J. delivering the opinion of the court in Jackson v. Henry, 10 Johns. R. 204. 205. It is also adverted to in Woodson &c. v. Barrett & Co. 2 Hen. & Munf. 88. by Tucker, J. who significantly remarks, that where any instrument is absolutely void in its creation, it cannot be made valid by any subsequent transaction immediately arising out of it; that in the cases of Buckner &c. v. Smith &c. and Hoomes v. Smock, the court relied on particular circumstances in the conduct of the defendants respectively, which distinguished those cases from the general principle; and that there were no such circumstances in the case then before the court, the naked question being, whether the mere want of notice that a bond or other security was given for money won at gaming, entitled the assignee without notice to recover in an action brought upon the bond.
The statute 16 Car. 2. ch. 7. § 3. 7 Bac. Abr. Gaming. B. is quite as comprehensive as ours in preventing the recovery of gaming debts of a certain amount. It avoids not only all securities, including bonds, bills, judgments, mortgages &c. for money won at play, but all contracts. Not long after this statute the following case arose. A man wins £ 100 of another at play. The winner owed Sharp £ 100 w’ho demanded his debt. The winner brought him to the other of whom he won the money at play, who acknowledged the debt, and gave Sharp a bond for the £ 100; who, not being privy to the matter, or knowing that it was won at play, accepted the said bond, and for default of payment puts it in suit. The obligor pleads the statute of gaming; and upon a replication of the special matter, and demurrer thereto,
My opinion therefore is, that the plaintiff has shewn no equity whatever against the defendant Terrell, and consequently that there is no error in the decree of the circuit court, in dissolving the plaintiff’s injunction and dismissing his bill as to that defendant. But I think the court erred in dismissing the bill as to the defendant Jennings.
The policy of the statute will be best subserved by treating the obligation, as between the obligor and obligee, as a mere nullity under all circumstances, and preventing the latter from deriving any benefit from it whatever, directly or indirectly. I need not go into the question whether, if the obligor makes a voluntary payment of the money, he can afterwards recover it back by an action at law or a bill in equitjq unless upon the terms and within the limitations prescribed by the statute. It is certain that, as between the original parties, a court of law will never enforce, and a court of equity will always relieve against, the unlawful security. 'When a failure of proof as to the assignee, or a supervening equity between him and the obligor, induces a court of equity to enforce the security in behalf of the assignee, or, what is in effect the same, to suffer it to be enforced ; then the court ought
In Dade's adm'r v. Madison, 5 Leigh 401. already in part stated, the plaintiff Madison having no proof, that could affect the defendant TarJcersley, of the unlawful consideration of the security, the injunction was dissolved, and Tanlcersley allowed to execute his judgment at law against Madison; but the court decreed, that upon Madison's paying the amount of the debt to Tanlcersley, the other defendant Dade should pay the same amount to Madison: and the decree was affirmed by this court. That case is an authority to prove, as a general proposition, that in an injunction suit by the obligor in a gaming security against the obligee and assignee, if the plaintiff fails to sustain his injunction against the assignee, whereby he is compelled to pay the money, he is entitled to a decree against the obligee; and that not merely for the sum paid by the assignee to the obligee for the assignment, but for the whole amount of the debt. And if there be any difficulty in the part of the case of which I am now speaking, it arises out of two considerations.
In the 6rst place, the evidence in the cause proves that the assignee was. induced to take the bond by the
In the next place, it appears from the evidence that about 600 dollars of the money received by the defendant Jennings for the assignment has passed into the hands of the plaintiff. Hence it has been urged, that there was a combination between them to defraud the defendant Terrell, which ought to repel the plaintiff' from the equitable forum. But this is mere matter of suspicion; nor is it probable that the successful gambler would not only so surrender the greater part of his gains, but at the same time incur a liability to his assignee for the whole. It is not certainly ascertained whether the 600 dollars was received by the plaintiff from Jennings without accountability, or, as is more probable, to be accounted for as a loan. In either case, Jennings, in a decree against him for the plaintiff, ought to be credited with the money thus in the plaintiff’s own hands; and in the latter, should be com
I think, therefore, that so much of the decree of the circuit court as dismisses the plaintiff’s bill as to the defendant Jennings ought to be reversed, and a reference made to a commissioner, to ascertain what amount of the money received by Jennings from Terrell came to the plaintiff’s hands, and what is the accountability, if any, of the plaintiff to Jennings therefor, and what the assurances held by the latter for the same; with leave to those parties, if requested by either, to amend their pleadings, in order that the court may be better enabled to render a final decree between them.
The evidence in the record, so far as contained in the depositions of witnesses, does not prove that the bond was given on a gaming consideration. Unless therefore the answer of Jennings can be read as evidence against his codefendant, the bond in the hands
The rule itself dates from the earliest history of chancery proceedings, is founded on the plainest principles of natural justice, and is liable to but few exceptions. In Mitchell v. Webb, Tothill 10. decided in the time of Elizabeth, it was declared that where the defendant by answer accuseth himself and fellow defendant, he is
This case does not fall within any exception which has been allowed to the general rule. There is no joint interest of the codefendants in the subject, and the admissions were made after the assignor had parted with his interest. Neither did this court, in the cases of Dade’s adm’r v. Madison and Hoomes v. Smock, consider that the gaming consideration of the note constituted any exception.
But it has been contended, with much ingenuity, that the necessity of the case should make this an exception: that here the defendant, being interested, could not be examined as a witness; and as the answer is excluded because there is no opportunity of cross examination, that where the party could never be examined as a witness, the principle on which the rule rests does not apply, and the reason ceasing, the rule should also cease.
If the principle is founded in natural justice, the converse of the proposition would seem to be more legitimate. If the right to crossexamine is so essential to the fair and equal administration of justice, then wherever it is shewn that such right cannot be exercised, the evidence should be deemed inadmissible.
This precise objection to the application of the rule excluding the answer of one defendant when offered as evidence against the other, was urged in the case of Morse v. Royal, 12 Ves. 355. It was argued there, as it has been here, that as the defendant whose answer the plaintiff desired to read was interested and could not be examined as a witness, his answer was neces
There being no proof, therefore, as against Terrell, that the bond was on a gaming consideration, the transaction, as far as he is concerned, stands fair, and the injunction must be dissolved for the whole amount.
This view of the case, if correct, supersedes the necessity of enquiring what is the proper measure of relief in the case of a fair assignee, where the gaming consideration is established by proof. In Hoomes v. Smock and Dade's adm'r v. Madison the question did not arise, because the gaming consideration was not made out by proof as against the assignee. In Buckner &c. v. Smith &c. 1 Wash. 296. there was proof of the consideration ; but the point was not noticed. In each of the cases in 1 Wash, a decree over, upon the principle established in Dade's adm'r v. Madison, W'ould have been proper; but it was not asked for: and the court, in Dade's adm'r v. Madison, did not consider this circumstance as an authority against such a decree. The question therefore is still an open one in Virginia. Judge Tucker, in Dade's adm'r v. Madison, remarked, that as every thing stood fair so far as Tankersley was concerned, he was entilled to recover the whole amount of the draft, w’halever he might have paid for it. What would have been his opinion if the vice in the consideration had been proved by competent evidence as against Tankersley, does not appear. I do not understand the court, in any of the cases, as affirming the proposition that a security, declared by express law to be void to all intents and purposes whatever, can be held valid in equity to any intent. In both the cases from Washington’s Reports, the particular circumstances in the conduct of the defendants rendered them responsible.
An instrument void, by express enactment, in its creation, cannot be made valid by any subsequent transaction arising out of it: Tucker, J. in Woodson &c. v. Barrett & Co. 2 Hen. & Munf. 88. And this constitutes the distinction between such an instrument and a voidable security, as of an infant, which may be confirmed ; or a security which, though in its origin neither void nor voidable, has been subsequently discharged. In such cases the subsequent confirmation or assurance given, upon the faith of which another has advanced his money, may be relied upon even at law, and in some cases as an estoppel in pais, to repel the defence, whether made by way of plea or adduced in evidence. Davis's adm'r v. Thomas &c. 5 Leigh 1. was a case of the latter description. The assignee of the promissory note had been induced to purchase by the maker’s promising to pay; and he was permitted to shew this, in order to repel the defence of payment to the payee before assignment. The maker, as against such an assignee, had waived his defence, and the instrument being valid, the assignee was entitled to recover the amount. But can this reasoning apply to the case of a security void in its origin ? The assignee stands in the position of the assignor: the instrument is equally void in the hands of both, and no subsequent agreement in relation to it can give it validity. In the case of an assignee for value without notice, but to whom no promise or assurance bad been made to induce him to purchase, even though a judgment had been confessed, the whole transaction would be avoided.
An anonymous case reported in 2 Mod. 279. and referred to in Buckner &c. v. Smith &c. 1 Wash. 300. would indeed seem to have decided that a promise to pay could be replied. There the winner owed a debt to a third person, and the loser executed to this third person his bond. To a plea of gaming, the plaintiff was permitted to reply that the debt was fairly due to him, and that he was not privy to the gaming. This case arose under the statute of 16 Car. 2. ch. 7. § 3. The statute of 9 Anne, ch. 14. though not so broad as ours, since it omits the word contracts, avoids all securities given for a gaming consideration. Under this statute it is settled that all securities given for money won at play are absolutely void, even in the hands of third persons, though they have paid a valuable consideration for them, and had no notice of their being won at play. Bowyer v. Bampton, 2 Strange 1155. Lowe v. Waller, Dougl. 736. Robinson v. Bland, 2 Burr. 1077. Woodson &c. v. Barrett & Co. 2 Hen. & Munf. 80. In principle what difference is there between those cases and the question under discussion? Is not the loser’s promise, under his hand and seal, to pay a fair debt to a third person who has no notice of the gaming, equivalent to his promise in pais made to the assignee? In the one case the third person discharges his immediate debtor in consideration of the bond, or pays his money for a negotiable security:, in the other, the assignee parts with his money upon the faith of the promise. In the first case the bond or negotiable instrument is to be held void: in the second it is treated as valid: for
It seems to me that at law the defence of gaming could not be met by a replication of a promise to pay. The court must declare the instrument void ; and the remedy of the party would be on the promise, in which the measure of damages would be the sum paid upon the faith of it. Where the case occurs in equity, it must be disposed of in conformity with the established rules of that forum. He who asks equity must do it. If another has been induced to part with his money by a false and fraudulent representation, it will reinstate him in the position he occupied before he purchased. This is done by the repayment of what he has advanced, with interest. I think, therefore, that the rule is correctly laid down in the case of Davison v. Franklin, 1 Barn. & Adolph. 142. 20 Eng. C. L. Rep. 363. Though the case was decided in a court of law', it was an application to set aside a judgment confessed under a warrant of attorney, and was addressed to the sound discretion of the court; a discretion to be exercised on equitable principles, so as best to effectuate the ends of justice. Governed by those principles, the court directed the bond and judgment to be given up on repayment of the sum really paid, with interest.
As to the liability of Jennings, the case of Dade's adm'r v. Madison is decisive, and Pettit should have had a decree over against him for the whole amount which he shall be compelled to pay, and shall actually pay, to Terrell in consequence of the assignment. Whether Pettit received a portion of the sum raised by the sale of his bond, or merely borrowed it and executed a new bond for the amount, is left uncertain by the testimony; and an enquiry should have been directed to ascertain how this matter stood.
Concurring Opinion
I concur with judge Baldwin in dismissing the bill as to Terrell; and I go farther; I think the bill ought to be dismissed as to Jennings also. I am satisfied by the evidence in the record that Pettit combined with Jennings in misrepresenting to Overton the agent of Terrell the consideration of the bond. I think both joined in representing the bond as for valuable consideration, and that Pettit is entitled to no relief against Jennings in a court of equity, but that if, after paying the amount of the debt to Terrell or his representatives, he has any redress against Jennings, it must be in a court of law, under the third section of the act against gaming. He prays for no relief against Jennings in his bill; nor is the case like that of Dade's adm'r v. Madison, 5 Leigh 401. in which the court decreed in favour of the loser against the winner. There was no combination in that case between the winner and loser to impose the note on Tankersley as a valid note. In the cases of Buckner &c. v. Smith &c. 1 Wash. 296. and Hoomes v. Smock, 1 Wash. 389. no such relief was given. As to the question whether Terrell is to recover no more money than his agent Overton paid for the bond, in none of the cases referred to was such a proposition hinted. There is no evidence in the record of what was given for the bond, nor do the pleadings make any such issue. The presumption, until the contrary appears, is that Terrell gave full value for it.
The decree of the court of appeals was entered in the following terms :
The court is of opinion that the appellant has shewn no equity against the defendant Terrell, and consequently that there is no error in so much of the decree of the circuit court as dissolves his injunction and dismisses his bill as to that defendant. It is therefore ordered and decreed that so much of said decree as aforesaid be and thfe same is hereby affirmed, and that the appellant do pay to the appellee Terrell his costs by him expended in the defence of the appeal aforesaid here. But the court is further of opinion that said decree is erroneous in dismissing the appellant’s bill as to the defendant Jennings, instead of retaining the sam'e until payment by the appellant to the defendant Terrell of the principal money and interest in the proceedings mentioned, in order to the rendition then of a decree therefor in favour of the appellant against the defendant Jennings, subject to a credit for such amount of the consideration paid by Terrell to Jennings for the assignment of the appellant’s bond, as has come to the hands of the appellant; and that, with a view to such a decree, there ought to have been a reference to a commissioner, to ascertain what amount of the money received by Jennings from Terrell for the assignment did come to the hands of the appellant, and whether it came to his hands as a loan from Jennings, or without accountability therefor, and in the former case what are the assurances held by Jennings for such loan ; and that if it should appear to be a loan, Jennings should be compelled to surrender his claim and assurances therefor. It is therefore further ordered and decreed, that so much of said decree of the circuit court as conflicts with the opinion above declared be and the same is
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