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Washburn v. Franklin

35 Barb. 599 Court N.Y. Sup. Ct. Decision date 1861-09-16 English

Decision Majority — Ingraham, J. · Concurring — Leonard, J.

Contents

Majority

p. 599
_ Washburn vs. Franklin.

Headnote

A cause of action or defense, given by a statute founded on grounds of public policy, confers no vested right which cannot be taken away by a similar statute; and the repeal of the law which gave such right of action or defense will terminate all claim to such recovery or defense, although the contract was made previously.
Where a defense to an action upon a contract was given by the statute against stockjobbing, and that statute was repealed after the contract was made; Held that the repeal of the statute had taken away the defense of illegality, the same as if such statute had never existed.
APPEAL from a judgment entered at a special term, after a trial before a justice of the court without a jury. The action was brought to recover damages of the defendant for not fulfilling a contract for the purchase from the plaintiff of certain stock. The plaintiff, at the time of making the contract, was not the owner, or in possession of the stock. The agreement was made previous to the act of 1858, (Laws, chap. 134,) repealing the provisions of the revised statutes, prohibiting stockjobbing. The court held that the contract, at the time it was made, was void, under section one of the stockjobbing act; and that the subsequent repeal of that
p. 600
section could not make the contract valid. Judgment was therefore ordered, in favor of the defendant, (see 11 Abb. 93 , 8. O.;) and the plaintiff appealed.

In Key v. Goodwin, (4 Moore & Payne, 341,) it is said, “ I take the effect of a repealing statute to be, to obliterate it as completely as if it had never passed, and that it must be considered as a law that never existed, except for the purpose of those actions or suits which were commenced and concluded while it was an existing law.” (See Butler v. Palmer, 1 Hill, 334 .) A repealing clause is such an express enactment as necessarily divests all inchoate rights which have arisen under the statute which it destroys. The principle that a repeal of an act, which made a contract illegal on grounds of public policy, repealed also the consequences of the act, even as to contracts entered into while it was in force, was distinctly held in the The Central Bank v. Empire Stone Dressing Co., ( 26 Barb. 23 .)

In Curtis v. Leavitt, ( 15 N. Y. Rep. 9 , 85,) Mr. Justice Comstock says of the statute of the state which prohibits a corporation from setting up the defense of usury, “ The act must be construed as a repeal of the statute of usury as to all contracts of corporations stipulating to pay interest, thus leaving the contract in full force according to its terms; and such an act is liable to no constitutional objection.” In that case it was held that the defense of usury could be taken away after the defense was pleaded. Mr. Justice gelden says: “Usury being a mere statutory defense not founded on any common law right, either legal or equitable, it was clearly within the power of the legislature to take it away.” (Id. 254.) And Justice Brown also says: “The borrower can have no vested interest in the forfeiture which follows proof of usury.” (Id. 153.)

Ch. Justice Savage, in The People v. Livingston, ( 6 Wend. 526 ,) says: “ It cannot be denied that the legislature possess the power to take away by statute what was given by stat

Concurrence

p. 601
ute, except vested rights,” and refers to the statute against gaming; the repeal of which would take away all means of recovering hack moneys previously lost by gaming.

[New York General Term,

September 16, 1861.

The principle in all these cases is, that a cause of action or defense given by a statute founded on grounds of public policy, conferred no vested' right which could not be taken away by a similar statute, and that a repeal of a law which gave such right of action or defense, terminated all claim to such recovery or defense, although the contract was made previously.

This rule is applicable to the present case. The defense to the contract was given by the statute against stockjobbing. That statute was repealed after the contract was made. The repeal of the statute has taken away the defense of illegality, the same as if such statute never existed.

The judge at the trial held that the defense was still good, notwithstanding the repeal of the statute, and made the distinction between this case and the case in 26 Barbour’s Bep., because in that case the statute did not declare the contract void. It will be seen from the decisions before cited, in regard to the defense of usury, that this distinction does not exist.

The judge erred in this rule, and a new trial must be ordered, costs to abide the event.

I concur in the above opinion.

The case of Curtis v. Leavitt, (15 N. Y. Rep., opinions of Justices Comstock, at p. 85, Brown at pp. 152, 153, and Selden at p. 254,) is directly in point, and, in my opinion, is entirely conclusive as authority in support of the plaintiff’s action herein.

Clerke, P. J. concurred.

Hew trial granted.

Clerke, Ingraham and Leonard, Justices.]

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