Ruckman v. Bryan.

the plaintiff at the defendant's request, which the plaintiff paid to a stakeholder as a bet upon the result of a horse race. The evidence supported the conclusion that the plaintiff made a bet of $3000 on a trotting match to be run between the horses Lady Suffolk and Americus, on the Centreville course in Queens county, in which bet the defendant was interested as a party to the amount of $600, and that the plaintiff as the defendant requested, advanced that sum for him and paid it to the stakeholder. The bet was lost and the money paid over to the winning party, and the defendant afterwards promised to pay it to the plaintiff. The referee held that money loaned to be bet or staked could not be recovered, and reported in favor of the defendant, which report the plaintiff moved to set aside.

S. Stevens, for the plaintiff.

A. C. Bradley, for the defendant.

By the Court, BEARDSLEY, J. The defendant, as the evidence shows, was interested to the extent of six hundred dollars in the bet of three thousand made by the plaintiff, it having been previously agreed between them that the plaintiff should make the advance of the six hundred dollars for the purpose of this bet. Upon this arrangement the advance was made, the money being placed by the plaintiff in the hands of the stakeholder; and the question presented is, can the plaintiff recover for money so lent and advanced by him?

Perhaps the circumstance that the money was delivered by the lender to the stakeholder, and not to the borrower, might distinguish this case, in principle, from a direct loan and advance of money to the borrower personally, to enable him to make the bet. But if such a distinction could be made, I do not regard it as material to proceed upon it. I regard the case in hand, in effect, as a direct loan and advance to the defendant for the express purpose of making the bet; and if money so loaned is recoverable, this report should be set aside, and one

Ruckman v. Bryan

should be made in favor of the plaintiff to the amount of six hundred dollars and interest.

The bet was clearly illegal. "All wagers, bets or stakes made to depend upon, any race, or upon any gaming by lot or chance, or upon any lot, chance, casualty, or unknown or contingent, event: whatever, shall be unlawful. All contracts for or on account; of any money, or property, or thing in action so wagered, bet or staked, shall be void." (1 R. S. 662, § 8.) It makes no difference that the race was to go off on an authorized course, as that in, Queens county was; the bet was, notwithstanding, illegal. (Gibbons v. Gouverneur, 1 Denio, 170.)

The English statute of 9 Anne, c. 14, 1; which has been substantially re-enacted here, (1) R. S. 663, § 16,) declares that all securities for the repayment of money knowingly lent for gaming or betting on games, shall be void. (Chit. on Cont. 712.) It has been held that as this statute only avoids the security given for money so lent, the borrower is still liable on the contract to loan and borrow, and which may, therefore, be enforced by the lender in an action of assumpsit for money lent and advanced. (Barjeau v. Walmsley, 2 Stra. 1249; Robin, son v. Bland, 2 Burr. 1077; Alcinbrook v. Hall, 2 Wils. 309; Wettenhall v, Wood, 1 Esp, 18.) In a late case in this court the present chief justice remarked, that our statute "of betting and gaming" went further than the English, and that since its passage he did not see how money knowingly lent for the purpose of betting or gaming" could "be recovered from the borrower." (Peck v. Briggs, decided May term, 1846.) (a)

However this may be upon the words of the statute, it seems now to be entirely settled in the English courts that the cases I have referred to, so far as they sanction the doctrine that money knowingly loaned for an illegal purpose may be recovered by the lender, cannot be sustained. They were expressly repudiated in the case of McKinnell v. Robinson, which was decided in the court of exchequer in 1838. (3, M. & W. 434.) That was an action of assumpsit brought by the lender against the

(a) Ante, p. 107.

Ruckman v. Bryan.

borrower, to recover for money lent to game with at an illegal game. The court held that the action could not be maintained. Lord Abinger, C. B. in giving the opinion of the court, referred to the case of Cannan v. Bryce, in the king's bench, (3 B. & Ald. 179) as directly in point; and having reviewed the cases from Strange, Wilson, Burrow and Espinasse, which were cited on the argument, and to which I have already referred, closed his opinion in these words "We therefore think, that notwithstanding these authorities, the money lent cannot be recovered; for it is lent for the express purpose of a violation of the law, and enabling the borrower to do a prohibited act; and the principle is now distinctly laid down in the case above cited, and may be considered as finally settled, that money so lent cannot be recovered." Other cases are equally direct and explicit on the point, and it may be regarded as entirely at rest in the English courts. (Langton v. Hughes, 1 M. & S. 593; The Gas Light & Coke Company v. Turner, Bing. N. C. 666; De Begnis v. Armistead, 10 Bing. R. 107; Chit. on Cont: 696, 714.)

It was unlawful in this case to make the bet, and not less so to furnish the money for that purpose. No cause of action can arise in favor of a party to an illegal transaction, nor will the law lend its aid to enforce a contract which is in conflict with the terms or the policy of statute. The referee decided correctly on this point, and the motion to set aside the report must be denied.

Motion denied.

Kast v. Kathern.

KAST US. KATHERN and DOOLITTLE.

Where a suit is brought on a contract not negotiable, by an assignee in the name of the original creditor, and the defendant has a larger demand against the assignor which is of a character to entitle it to be set off against the demand sued on, such set-off, can only be made to the amount of the plaintiff's debt, and no judgment for a balance can be rendered against the plaintiff.

Where a justice of the peace renders judgment in favor of a defendant, for a sum adjudged to be due him from the plaintiff and for costs, in a case where the judgment should have been generally for the defendant with costs, the common pleas should reverse the erroneous part, and affirm the judgment as to the residue. And where, in such a case, the common pleas on certiorari rendered a general judgment of reversal, that judgment was reversed and this court rendered such a judgment as the common pleas ought to have given, denying costs to either party in the common pleas.

Kathern and Doolittle sued

ERROR to the Herkimer C. P. Kast before a justice of the peace to recover the amount of an account which accrued in 1843 and 1844, amounting to $32,81, which was proved on the trial. The defendant offered to set off the amount of a note made by the plaintiffs in February, 1844, payable to A. Hill or bearer, for $37, with interest. On the part of the plaintiffs it was shown that they failed in business in January, 1845, and made a general assignment in trust for their creditors, and that this suit was prosecuted by the assignee, and also that the defendant purchased the note of the payee after the assignment was executed; and some slight evidence was given that when he so purchased it he had notice of the assignment. The justice gave judgment for the defendant for $8,13, being the balance of the note after deducting the account, together with the costs of suit. The common pleas reversed this judgment on certiorari, and the defendant brought error.

C. Gray, for the plaintiff in error.

V. Owen, for the defendants in error.

Kast v. Kathern.

By the Court, JEWETT, J. The defendant's right to make the set-off depended upon the question whether he purchased the note without notice or a knowledge of the assignment. No direct evidence of notice was given; and if it be admitted that the justice might have arrived at the conclusion that he had notice, from the evidence, still the point was left so doubtful that a judgment either way could not with propriety have been disturbed by the court of review. It follows that the common pleas were not warranted in reversing the judgment.

But the justice not only allowed the set-off to the amount of the plaintiffs' demand, but gave judgment for the defendant for the balance of the note. I do not see how this can be sustained under the statute relating to set-offs. The statute provides that in suits upon contracts, other than negotiable paper, which have been assigned by the plaintiff, a demand against the plaintiff belonging to the defendant before notice of the assignment may be set off" to the amount of the plaintiff's debt." (2 R. S. 234, § 50, sub. 8.) A subsequent section declares that no judgment shall be rendered against the plaintiff for a balance," when the contract which is the subject of the suit shall have been assigned before the commencement of such suit, nor for any balance due from any other person than the plaintiff in the action." (Id. p. 235, 52.)

The demand having been assigned before the commencement of the suit, although there was a balance due from the plaintiffs to the defendant for the amount for which judgment was rendered in his favor, yet the justice was not authorized by the provisions of the statute to render a judgment against the plaintiffs for the amount. He should have rendered a judgment generally for the defendant for his costs of defence. What remedy a defendant has under such circumstances to recover the balance due to him over the plaintiff's debt is not very apparent. None is provided by statute.

But I think the common pleas erred in reversing the entire judgment. It should have been affirmed as to the costs. Although erroneous as to the amount of debt adjudged to the defendant, it consisted of distinct parts, and was, thereVOL. III.*

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