Washburn v. Franklin — 7 Abb. Pr. 8

Majority

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WASHBURN a. FRANKLIN.

Supreme Court, First District;

Special Term, June, 1858.

Headnote

Pleading.—Contracts regulated bt Statute.

In an action on a contract, the form or the making of which is regulated by stat ute,—e. g., a contract for the sale of stock under 1 Revised Statutes, Í10,—it is not necessary to plead the circumstances of compliance with the statute relied on to take the case out of its operation.^[1]

Whether a contract, valid at common law, but prohibited by statute, and entered into while the prohibiting statute is in force, is made valid by a repeal of that statute,—Query ?

Demurrer to complaint.

The action was brought to recover damages against the defendant for not fulfilling a contract for the purchase from plaintiff of certain stock. The time of the making of the alleged agreement was prior to the passage of the act of 1858 (Laws of 1858, 251, ch. 184), repealing the statute prohibiting stock-jobbing (1 Feo. Stats., 710). The complaint did not aver that the plaintiff was, at the time of making the agreement, the owner of the stock, or in possession of it, nor that the agreement was in writing.

The defendant demurred, and specified these as the grounds of his objections to the complaint.

— —, for the plaintiff.

Charles T. Sanford, for the defendant.

—I. Even though prior to the repeal, ownership or possession, and a written agreement, would be necessary to make the contract valid, yet it was unnecessary to aver, in pleading, such facts, relied on to take the

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case out of the statute. 1. Such was certainly the rule prior to the Code. "Cinder the statute of Frauds, the writing was matter of evidence, not of pleading. (Miller a. Drake, 1 Cai., 45 ; State of Indiana a. Woram, 6 Hill, 33 ; Elting a. Vanderlyn, 4 Johns., 237 ; Cozine a. Graham, 2 Paige, 177.) 2. As to the present rule, there is some conflict in the authorities; but the better opinion would seem to be, that no change has been wrought by the requirement of the Code, that all constitutive facts must be pleaded. The essential fact is, that the agreement was made. If void, by reason of non-compliance with an exceptional statute, it was not made, for an “ absolutely void” agreement is no agreement at all. The averment, therefore, that an agreement was made, presupposes and implies the existence of such facts and circumstances as are requisite. to its validity. These facts must be proved to sustain the averment of an agreement, and a general denial accordingly raises the issue upon their existence as distinctly as if they were specially stated and specifically denied. The Superior Court in 1853 held that they must be averred. (Thurman a. Stevens, 2 Duer, 609 ; Le Roy a. Shaw, 2 lb., 626.) The Common Pleas in 1854 held otherwise, and followed the old rule. (Stern a. Drinker, 2 E. D. Smith, 401.)

II. The repeal of the stock-jobbing act, however, renders it immaterial whether or not the vendor was in the actual possession, or was entitled in his own right, or was duly authorized to sell. (laws of 1858, 251; Central Bank a. Empire Stone Dressing Company, Sup. Ct., First Dist., Gen. T., Nov. 27, 1857; Curtis a. Leavitt, 4 Kern.) If the fact be immaterial, it is of course unnecessary to aver it.

defendant demurs to the plaintiff’s com-

—The plaint, upon the ground that it does not state facts sufficient to constitute a cause of action.

The action is upon a stock contract, and the defendant’s objection to the complaint is, that it does not aver that the plaintiff was the owner of the stock at the time of the sale, or that the contract was in writing.

■ There is no doubt the statute requires, to make the contract valid, that the party contracting to sell shall either have the certificate or be otherwise entitled to sell the same. (1 Rev. Stats., 710.)

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But it never was necessary to aver such possession in the declaration before the Code, nor do I think it necessary now. The fact on which the plaintiff relies is the making of the contract. This is admitted by the demurrer. It must be a legal contract, or it is nothing, and' issue upon the question whether a contract was made or not would involve its legality, and of course would include the requisite facts to make the contract a legal one.

These remarks apply to the objection that the complaint does not allege that the contract was in writing. I adhere to the opinion that it was unnecessary, as held in Stern a. Drinker (2 É. D. Smith, 401). The same rule would apply to cases under the statute of frauds. In such cases it is unnecessary to aver it. If any legal contract is made, it must be in writing. If not a legal contract, it is no contract. The evidence to prove the contract need not be set out, but only that a contract was made. The mode of making is matter of evidence.

The plaintiff suggested that this defence would now be unavailing, as the Legislature had repealed the stock-jobbing act. The statute only applies to contracts hereafter made, which are made valid by the 1st section. Whether the repeal of the statute, by the 2d section, could validate the contract, which was otherwise void, may well be doubted. In the case of contract void for usury, the Legislature have prohibited corporations from setting up the defence. Although the effect of such prohibition is virtually to render the contract effectual, still it does not go so far as to declare a void contract a valid one, and I should hesitate in giving such a construction to the repealing clause. It is unnecessary, however, here to pass upon the question.

Judgment for the plaintiff on demurrer, with leave to defendant to withdraw demurrer and-answer, on payment of costs.