Ager v. Duncan

Promissory Note.—If A. and B. enter into partnership, and B. is to furnish, one thousand dollars as his part of the capital, and B. hands the money to C. to deliver to A., and A. when he receives it gives C. his promissory note for it, the note is given without consideration. Enpoecinq Fraudulent Contract.—If an action is commenced on a note given and received with an intent to defraud creditors, as soon as the fraud is made to appear, the court will refuse to enforce payment, and will leave the parties as they were, no matter which party first exposes the fraud. Courts will not Aid a Fraud.—A court will not enforce an executory contract founded on the mutual turpitude of the parties, and if the contract has been executed, it will not aid either party to escape its consequences.

Appeal from the District Court, Nineteenth Judicial District, City and County of San Francisco. Action on the following promissory note: “One day after date, for value received, I promise to pay to Mark Ager or order, the sum of six hundred and fifty dollars in U. S. gold coin, to bear interest at one per cent, per month, until paid. Í C E. L. Duncan. “San Francisco, December3, 1873.” The court below found the following facts: “3. That the money for which said note was given was not the money or property of plaintiff, but of one B. C. Quigley, by wtiom it was given to plaintiff for the purpose of paying it over to defendant, which plaintiff did on the same day he received it. “4. That defendant and said Quigley were co-partners in business, and the said sum of money for which said note was given was a part of one thousand dollars which Quigley agreed to furnish towards the capital stock of said co-partnership business, as his, Quigley’s, share thereto, and was used in said business. “5. That defendant was induced to give said note by and upon the representations of said Quigley, that he, Quigley, was in debt, and was fearful his creditors would annoy him and break up and ruin said partnership business if they knew he, Quigley, was interested and had capital invested therein; and that it was verbally agreed by and between defendant and said Quigley, at the time of signing said note, that said note was never to be paid, of which representations and agreement plaintiff had full knowledge at the time said note was given. “6. That said note was given without any consideration whatever, other than as above stated. “7. That a short time before said promissory note was given, said Quigley had made an assignment of all his property to his creditors, and it does not appear from the evidence, or otherwise, that there were any legal claims against him at the time said note was given.” The court rendered judgment for the plaintiff, and the defendant appealed.