Haight v. Joyce

Justice Murray delivered the opinion of the Court. The question presented for our consideration in this case is, whether payment of a negotiable note, in the hands of an innocent indorsee, can be avoided on the ground that it was given for money lost or won at play. It is contended by the appellants, that gaming contracts are void at common law; and that a note given for such consideration, being void between the original parties, is void in the hands of an innocent holder. The case of Bryant v. Mead, decided by this court, is relied upon as authority to sustain the position, that these contracts were void by common law. That was a suit between the original parties: and the fact that the money was lost at a public gaming house, the amount, and all the circumstances, were taken into consideration. The correctness of that decision has since been doubted; and if the subject were now open for consideration, I should be inclined to question it. But granting these contracts were void at common law, let us inquire how far this principle affects the present case.

Although want or illegality of consideration may be inquired into in a suit upon a bill or note between the original parties, by the general mercantile law, where these securities have passed into the hands of third persons without notice, the maker is estopped from setting up such defence. This peculiar system of credit is favoured by the law; and a rule requiring the indorsee of every bill or note to inquire into the consideration would retard commercial transactions, and in the language of Lord Kenyon, “shake paper credit to its foundation.” In the case of Boyer v. Brampton, it was held that the innocent indorsee of a gaming note could not recover in an action against the drawer. This decision was based on the statute of 9 Anne, which declares such notes void to all intents and purposes whatever. It was considered that the words “all intents and purposes whatever” made the statute apply to notes in the hands of third persons ; and it was said if the lender was allowed to indorse it, it would be mak[67]ing it of some use to him. This decision was subsequently questioned by the bar; and Lord Mansfield, in the case of Peacock v. Rhodes, said that it was well settled, “ that the holder of a promissory note coming fairly by it, has nothing to do with the original contract between the parties, except in the single case, (which is a hard one, but which has been settled,) of a note for money won at play.” Although money contracts were void at common law for illegality, &c., of consideration, it is impossible to find a single case in which a note given for an illegal consideration has been held void in the hands of third persons, except by operation of statute. In the case of Yallette v. Parker, 6 Wendell, the court lay down the rule, that the want or illegallity of consideration of a note transferred before due cannot be shown, in an action by a bona fide holder, except where the note is declared void by statute.