Hoyt v. Cross — 12 N.Y. St. Rep. 814

Majority

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Charles C. Hoyt, App’lt, v. Joseph Cross, Resp’t.

(Court of Appeals,

Filed January 17, 1888.)

Headnote

1. Promissory note — When gambling debt not the consideration eor.

The plaintiff paid a gambling debt, which he owed to the defendant with money obtained from discounting the latter's note. This note was drawn payable to the order of defendant’s firm, and plaintiff borrowed it for this express purpose and promised to take Care of it when it came due. After the first renewal (at plaintiff’s request), defendant gave his note,, payable on demand to off-set the aforesaid accommodation note; the note thus given is the one in suit. The accommodation note, after several renewals, was transferred before maturity to an innocent holder for value and the plaintiff was compelled to pay it. He afterward brought this suit on the defendant’s note given to off-set the accommodation note as aforesaid. Held, that the consideration upholding this note was not the gambling debt, but the money paid by the plaintiff upon the accommodation note. That after the defendant gave this note, his sole obligation to the plaintiff was to pay the accommodation note or in default of such payment to pay this note. That the note in suit was not affected by any illegality.

3. Same—Gambling debt—3 Rev. Stat. (7th bd.), 1963, § 14—When action to recover money lost at gaming may be commenced.

The gambling debt was absolutely paid by the money received from the discount of the first-mentioned note and thereafter had no existence whatever. Under 3 Rev. Stat. (7th ed.), 1963, § 14, the defendant could have sued the plaintiff at any time within three months to recover the money thus paid.

Appeal from a judgment of the general term of the city court of Brboklyn, affirming a verdict directed in favor of the defendant at the trial term.

Joseph A. Burr, Jr., for app’lt; E. W. Van Vranken, for resp’t.

This action was brought to recover on a promissory note made by the defendant, dated March 10, 1884, whereby he promised to pay the plaintiff on demand the sum of $500. The defendant alleged in his answer that the plaintiff played with him at a game of chance called cribbage for stakes upon credit, and that at such gaming he won from time to time the sum of $500; that the note-sued on was given for the money so staked and lost, and that it was void and contrary to the statute against gambling and betting.

The trial judge, after hearing all the evidence, directed a verdict in favor of the defendant and ordered the plaintiff’s exceptions to be heard in the first instance at the general term. There the exceptions were overruled and judgment ordered for the defendant.

Upon the facts as they appear in this record we think the plaintiff was entitled to recover. Shortly prior to the 7th day of August, 1883, the plaintiff and defendant played at cribbage for stakes and the defendant lost $500. On.

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that day the plaintiff called at the office of the defendant and asked him to pay the debt thus created. The defendant replied that it was not convenient to pay it then, and upon being pressed for the money proposed to the plaintiff that if he would lend his note for three months for $500 to the defendant’s firm, he would get it discounted and pay him the money and take care of the note when it came due. Accordingly plaintiff made and delivered his note for $500, dated on that day, payable three months from date to the order of Groodwin, Cross & Co., and the defendant procured it to be discounted and used the°money to pay the gambling debt. That note fell due on the 10th day of November, and on the 27th day of November the plaintiff made another note for $500 payable to the order of Groodwin, Cross & Co., at the request of the defendant, he stating that he wanted it to enable him to take care of the prior note. That note matured on the 1st of March, 1884, and the defendant again asked the plaintiff for a new note for the same amount and running for the same time.

Plaintiff objected to giving another note, for the reason that if either he or defendant died, he would have nothing to show, but that he owed the firm of Groodwin, Cross & Co. that note, and thereupon asked defendant to give him a note payable on demand to off-set the accommodation note which he. had loaned defendant’s firm, and this the defendant did; and the note thus given is the one in suit. In pursuance of this arrangement the plaintiff made an accommodation note payable to the same firm which fell due June 13,1884. On the twenty-seventh of June defendant procured from plaintiff another accommodation note, but the amount was increased to $600. That note became due October first and on October twenty-seventh defendant obtained from plaintiff another note for three months, reducing, however, the amount thereof to the original sum of $500. Before the note of October twenty-seventh matured it was transferred to an innocent holder for value, who sued the plaintiff upon it and he was compelled to pay it. He then brought this suit.

We do not perceive how this note is affected witn any illegality. The gambling debt was absolutely paid on the 7th of August, 1883, and thereafter had no existence whatever. The Revised Statutes (3 R. S. [7th ed.], 1963, § 14), provide that “ every person who shall, by playing at any game—lose at any time or sitting the sum of twenty-five dollars or upwards, and shall pay or deliver the same or any part thereof, may within three calendar months after such payment or delivery, sue for and recover the money or value of the things so lost and paid or delivered, from the winner thereof.” Under this statute the defendant

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could have sued the plaintiff at any time within three months to recover the money thus paid. It is true that the money was procured upon the credit of the plaintiff and the firm of Goodwin, Cross & Co., but it was nevertheless the money of the defendant at the time it was paid to the plaintiff, and the plaintiff thereafter simply bore the relation of accommodation maker of the note which he delivered to the defendant.

The note in suit was given to him, not for the gambling debt, but to indemnify him against the liability upon his accommodation note. The note given by the plaintiff on the 7th of August, 1883, to the defendant was discounted, not for the plaintiff’s accommodation, but for the accommodation of the defendant or his firm. Suppose there had been no law which rendered the gambling debt illegal, and the plaintiff at any time after he had received the payment made to him on the 7th of August, had sued the defendant for the debt. Could not the defendant have successfully maintained that it had been paid? Or suppose that instead of owing the plaintiff $500 for a gaming debt, he had owed him $500 for borrowed money, and had paid the $500 under precisely the same circumstances which exist in this case, would not the debt have been discharged? And could the plaintiff afterwards have maintained an action against the defendant for the $500? Clearly not. The consideration upholding this note is not the gambling debt, but the money paid by the plaintiff upon the accommodation note. After tne defendant gave this note, his sole obligation to the plaintiff was to pay the accommodation note, or in default of such payment to pay this note.

It may be said that if the plaintiff can maintain this action, he has successfully evaded the statute, which declares that “all things in action—given or executed by any person when the whole or any part of the consideration of the same shall be for any money or other valuable thing won by playing at any game whatever—shall be utterly void,” etc. 3 R. S. (7th ed.), 1963, §16. But it is frequently true that statutes enacted for the public welfare may be successfully evaded without any violation of them.

We are, therefore, of opinion that the court below; erred in directing a verdict in favor of the defendant, and in not directing a verdict in favor of the plaintiff.

The judgment should be reversed and a new trial granted, costs to abide event.

All- concur, except Danforth, J., not voting, and Peck-ham, J., dissenting.