WHAT CONSTITUTES DUE DILIGENCE IN MAKING A DEMAND UPON THE DRAWER OF A NOTE, ETC.

The following cpinions delivered by Judge Lewis, in the Supreme Court of Pennsylvania, April, 1852, are of interest to the bar and business men. The one is in reference to the practice in pleadings, and the other relates to what con. stitutes due diligence in making a demand upon the drawer of a note.

Bennett vs. Young.-Lewis J.-In this case we are unable to perceive any error in the proceedings of the Court below. On the contrary we are gratified to find that the Court was so properly impressed, in regard to its powers and duties, and so careful of the rights of the parties as to instruct the jury distinctly that "the question of what is due diligence in making a demand upon the drawer, when the facts are undisputed, is a question of law exclusively, and that where it depends upon controverted facts, it is for the jury to determine what the facts are: and if the facts are ascertained the law settles it, whether there has been due diligence." There was no error in this instruction.

But it seems that the Notary undertook to draw to himself the cognizance of the whole question of law and fact by a sweeping certificate that he had "made diligent search and inquiry" for the drawers. The Judge admitted this certifi cate in evidence, and that threw upon the defendant the burden of disproving the facts therein stated. This was rendered exceedingly difficult by the omis sion to state in the certificate the acts of the Notary, with the material circumstances of time, place and persons, which were supposed by him to amount to "diligent search and inquiry." Where did he search? Did he go to the last place of residence of the drawers? Did he inquire of the holder himself, who is presumed to know, before he takes the note, the residence as well as the cir cumstances of the drawers? Did he even take the trouble to examine the common source of information, the Directory? The certificate is silent on all these questions. But difficult as the task was, the defendant gave ample evidence to show the dangerous nature of admitting the certificate of the notary as evidence of facts not distinctly stated, so that the party may have the means of rebutting the evidence, and the Court the means of judging, if the facts are not contested, whether they constitute due diligence or not. The act of January 2, 1815, makes the official acts, protests, and attestations of all Notaries Public acting under the authority of this Commonwealth, certified under their respective seals of office, prima facie evidence. But it has been properly said that this statute was not intended to enlarge the official duties of Notaries, but merely to furnish the means of authenticating such acts as were within their official authority be fore. Chief Justice Gibson, in delivering the opinion of the Court in Bellimere vs. Bank of the United States, 4 Whar. 113, states that "though generally if not universally employed on such occasions, the official character of a Notary extends only to the protest, and not to the hunting up of the parties." Under our present view of the value of these certificates in the form in which this was made up, and the great abuse which may be practiced by means of them, we are not surprised that the Judge below told the jury that he had "some question whether the certificate was any evidence at all." It is not necessary to decide the question at present. It is sufficient to say that this remark to the jury furnishes no ground for reversing the judgment. Judgment affirmed.

Smith et al. vs. Latour.-Where the facts set forth in a declaration or plan do not in any form in which they may be stated, constitute a good cause of action in the one case, or a valid defense in the other, the parties may, if they prefer that course, contest the facts in the first place before the jury, and afterwards call for the judgment of the Court upon them as found and set forth upon the record. But if the objections touch not the substance, but go merely to the form, in which the facts are set forth, this course cannot be pursued. He that stands upon matters of form-has a slippery footing, and if he slips at the time when the law requires him to stand, the objection is cured by his own inattention to the very matter which he charges upon his adversary. It is assuredly very late in the day to announce, in a decision of the highest Court in the State, that duplicity in a declaration and defects of form in setting forth a good cause of

action cannot be taken advantage of after verdict. The first is cause for special demurrer only, (Todd 647,) and the last is cured by the verdict, 2 Todd, 826. The second count, it is true, is informal; but we can readily perceive therein the elements from which a formal declaration, containing a good cause of action, might have been constructed.

The defendants below are therein charged with fraudulently obtaining goods from plaintiff below by pretending and asserting that they would pay the value, in a note against McMillan, which it is in effect asserted, they knew to be worthless. After verdict, we may understand this declaration as containing the averments that the defendants represented the note of McMillan to be good and valuable; that they knew at the time that this representation was false, that they intended by means of this falsehood to defraud the plaintiff, and that they thereby succeeded in fraudulently obtaining his goods. These facts properly set forth, constitute a good cause of action. But if this were not the case, it does not follow that the judgment should be reversed. It is the ordinary case of one entire verdict upon several counts, some of which are good and one is supposed to be bad. In that case, although the evidence may have been applicable to all the counts, the court below might have extended the verdict and judgment upon the good ones. Under the act of assembly which authorizes this court to enter the judgment which the court below ought to have entered, and upon the general principles which, now independent of the act of assembly govern the courts in administering the law according to common sense and justice, this court might now enter the verdict and judgment upon the counts admitted to be good. Having the whole evidence before us, we might do what was done in Catherwood vs. Kohn, 7 Barr, 392. But this is not necessary, as we are of opinion that the informality of the second count consists merely of the defective manner in which a good cause of action is set forth, and this, as already stated, is law by the verdict.

The court below was asked in the 14th point to instruct the jury that the first count in the declaration was defective; and it is here complained that the court refused to give this instruction, and stated that the defendants should have demurred to it or should move in arrest of judgment. This was undoubtedly correct. The jury was empanelled to try the issue of fact, not to assume the office of the court and determine the question of law arising upon the face of the declaration. What had the jury to do with the defects in the declaration? They were to ascertain whether the facts which it alleged were established by the evidence or not, and the effect of the finding was for the decision of the court afterwards. To permit a party to obtain a verdict of not guilty, upon technical objections to the form of the declaration, would be a prostration of justice. The court was perfectly correct in its view of this point of the case. Fifteen points were presented for the solution of the court below, and there are nineteen specifications of errors here. But we perceive no error in any part of the proceedings below. Judgment affirmed.

BROKERS-CONTRACT TO DELIVER STOCKS, ETC.

In the Superior Court, City of New York, February, 1852, before Judge Duer, Paine, and Bosworth. John B. Staples, vs. Charles Gould.

[Contract to deliver stock at stipulated price. Deposit by principal with broker to cover contingent loss in sale of stock on time. A contract to deliver stock on time when none is owned either by broker or principal, whether in name of broker or principal absolutely void under the statute. Money deposited with broker to secure him against loss in such transactions not recoverable.] The pleadings and evidence establish the following facts :-The plaintiff, on the 15th of January, 1851, employed the defendant, a broker, to sell for him 200 shares of Canton Company stock, at the price of $66 per share, deliverable, at the option of plaintiff, at any time within 30 days from that date, the stock to be paid for on delivery. In pursuance of such employment, the defendant, on the same day, as such broker and agent, and with the knowledge of the plaintiff, contracted to sell 100 shares to Gilbert, Cobb & Johnson, and 100 shares to Wheelock & Brothers, at $66 per share, deliverable at the option of the plaintiff,

at any time within 30 days thereafter. The contracts were made in the name of the defendant, without his disclosing to the purchasers that the plaintiff was his principal.

On the same day, the plaintiff deposited with the defendant $750 in money, "for the purpose of protecting the defendant against loss or damage in the bu siness of such agency, and with the agreement and understanding between them that the defendant should have the right to retain so much of these moneys as should be necessary fully to indemnify and save him harmless from loss or damage, by reason of such sale to be made by him, as the broker and agent of the plaintiff." And the plaintiff agreed, in consideration of the acceptance of such agency by the defendant, to indemnify and save him harmless from all loss and damage by reason of such agency, and to fulfil and perform the contracts of sale so made by the defendant as his agent and broker. The plaintiff did not own any stock when he employed the defendant to make the contract of sale, nor at the time when the contracts were made, nor at any time within thirty days thereafter. Nor did the defendant own any of the stock at the time he made the contracts. On the 20th January, 1851, 350 shares of the stock of this company were transferred to the defendant on the transfer books of the company. On the same day he transferred to each of the purchasers the 100 shares of stock contracted on the 15th, to be sold to them respectively. This stock brought on the morning of the 20th, $80, and at the close of the day $85 per share. Before and at the expiration of the thirty days it was worth less than $66 per share.

There was no evidence tending to show that the plaintiff knew of the delivery of the stock, on the 20th of January, to the purchasers, or that the defendant requested the plaintiff to furnish any stock to be delivered in satisfaction of the contracts, or that the plaintiff offered to furnish the stock to enable the defendant to perform his contracts, or as a satisfaction for the defendant's stock which had been delivered in execution of the contracts; there was no attempt to prove that the plaintiff during the thirty days next after the making of the contracts demanded a return of the $750 from the defendant, or notified him not to perform the contracts.

This action was tried on the 9th of December, 1851, before the Chief Justice, who "reserved all the questions in the case; directed a verdict for the plaintiff, subject to the opinion of the court upon a case to be made, either party to be at liberty to turn the case into a bill of exceptions; the case to be heard at general term, without an appeal, and with liberty to the court to order a nonsuit or judgment for the defendant."

The case made, shows the facts to be as before stated.

Bosworth, Justice.-The plaintiff advanced his money to the defendant to indemnify him against any losses he might incur by reason of making, or having made contracts for the sale of 200 shares of Canton stock. The obvious purpose of the advance was to furnish moneys with which the defendant might pay the amount of any increase there might be in the value of stock, on the day for the delivery of it, above the contract price of $66 per share. The plaintiff did not own any stock at the time he authorized the contract to be made, nor at the time he was notified that the contracts had been made, nor within thirty days thereafter. The only inference is, that he employed the defendant to make a contract which is declared void by statute. If it was intended that the defendant should contract in the plaintiff's name as principal, then he employed the defendant to make a contract, falling within the express words of the statute in relation to stock-jobbing. (1 R. S. 710, § 6.)

It was probably intended that the defendant should contract in his own name without disclosing his principal. If this was not intended, the deposit of the $750, as an indemnity against the consequences of contracting, would be an idle ceremony. For if it was intended that the defendant should expressly contract as agent, in behalf of the plaintiff as principal, no indemnity would be wanted, as the defendant could not then, in any event, be subjected to liability or loss, by reason of making the contract, whether the transaction was lawful or unlawful.

A contract on time for the sale of stock, made through the medium of a broker, where the name of the principal is not disclosed, is as much within the meaning of the statute, as if made by the principal personally in his own name. (6 Paige 124, Gram. vs. Stebbins and Stebbins. 2 Hall 162, J. & W. G. Ward vs. Van Duzer.)

The defendant did not own any stock when he made the contracts; the contracts were, therefore, void, whether regarded as his contracts or those of the plaintiff. The answer and complaint severally aver that the contracts were made by the defendant on account of the plaintiff.

The money advanced was delivered to the defendant, to secure his aid in furtherance of an object repugnant to the express provisions of the statute, and to be put by the latter to an unlawful use, if such use of it should become necessary, to save him from loss or damage on his contracts. It was, therefore, advanced to be used for an illegal purpose, and as an inducement to the defendant to engage, on account of the plaintiff, in transactions contravening the policy of a statute law of this State. It is well settled, that an act malum prohibitum, or malum in se, cannot be made the foundation of a civil right which will be enforced in a court of justice. If a person lends money, or sells property, to be put to an unlawful use, and if such an unlawful use enters into the contract, and is the inducement to the loan or sale, the lender cannot recover back the money lent, nor the vendor for the property sold, though not in any other respect a party to or connected with the unlawful transaction. (5 Denio, 364, Morgan, vs. Groff; 2d Sand, S. C. R. 146, Bell, vs. Quin; 7 Wend, 276, Pennington and Kean, vs. Townsend; 4 Mees and Wels, 434, McKennell, vs. Robinson vide! Gray, vs. Hook, 4 Coms, 449.)

The plaintiff cannot recover under § 8, of the statute. That section provides that "every person who shall pay and deliver any money, etc., by way of premium or difference, in pursuance of any contract or wager in the two last sections declared void, may recover such money, etc., of and from the party receiving the same and his personal representatives."

This was not paid or delivered as a premium or difference. It was paid or delivered to indemnify the defendant against the losses to which his contract might subject him. It was not paid either as a premium or difference in pursuance of the contract of sale which defendant made with Gilbert, Cobb and Johnson, or with Wheelock and Brother. There was never anything paid in pursuance of either of those contracts as a premium or difference. There was a literal performance of each of those contracts, by a delivery of the stock sold. That section evidently means that, where a person sells stock on time, not then being the owner of any, at a stipulated price, and instead of delivering it, pays the excess of its market value above the contract price, or receives the excess of the contract price above that of the market price, the party so paying the premium or difference may recover back the amount thus paid. The extent of the statuary provisions is simply this: The contract of sale is made void. It cannot be inforced by either party. Neither can recover damages for the breach of it. If instead of being literally executed, either party in pursuance of such contract, has paid or delivered money by way of premium or difference, he may recover it back. In this case the defendant, in substance and effect, received the money, to be paid by him by way of premium or difference, if the market value of stock at the period for fulfilling the contracts should exceed the contract price. This, at all events, is the interpretation of the object of the advance most favorable to the plaintiff, so far as his right to recover under the eighth section is concerned. If it was, in fact, advanced or deposited merely to secure the defendant from loss by means of making the contract, without any intention that it should be actually applied in any event to pay a premium or difference, then the advance or deposit is not such a payment or delivery as is specified in the eighth section of this act; therefore it cannot be recovered back under that section. (5 Denio, 373, Morgan vs. Groff.) Neither can the plaintiff say that he repented of his intended violation of the statute, before it was violated, that he so notified the defendant, revoked the agency, and demanded a return of the money, and, there

fore he is entitled to recover it back. The plaintiff cannot recover on such grounds. Even if the law would aid him to recover back the money, on such a state of facts, it is sufficient answer to say that such are not the facts of this case. There is no proof of the revocation of the agency; on the contrary the con tracts were made for the plaintiff's benefit; he was so notified and did not dissent; no request for a return of the money was made until after the whole time allowed, by the terms of the contract, for the delivery of the stock, had elapsed; if the locus penitentie could continue beyond that period, it would continue until the plaintiff's claim should be barred by the statute of limitations; the repentance, for which the law gives opportunity to a party, is repentance of a purpose to offend against public policy, or to violate the laws, and not of having lost his money; that must be exercised while a contract is executory, or before the contingent event happens. "The happening of the event is the crisis in the contract which terminates all election, opinion or repentance." If that principle could by any possibility be applied to a case of this character, the recision of the contract and a demand of a return of the money should have been made within the thirty days fixed for the delivery of the stock.-(12 J. R., Yates rs. Foot.)

What would have been the rights of the parties, if it had appeared that the plaintiff, during the thirty days, had not notified the defendant not to perform the contracts, and had demanded a return of the money advanced, it is unnecessary to discuss, and no opinion is intended to be expressed on that point.

On the case, as now presented to the court, the verdict should be set aside, and a judgment of nonsuit entered.

C. P. Kirkland for plaintiff; J. Lerocque for defendant.

ACTION UPON A PROMISSORY NOTE.

In the Supreme Court, (city of New-York, May 17th, 1852,) before Judge Sanford. Richard A. Reading and William H. Merchant, Ex'rs, against John Bacon & Son and Westlake & Coger.

This was an action upon a promissory note for $1,620, made by J. Bacon & Son, 4th August, 1851, to the order of Westlake & Coger, and by them indorsed and negotiated to plaintiffs' testator.

It is claimed for the defense, that the note was delivered to Westlake & Coger to get it discounted for the benefit of the makers; but that they misappropriated it, and negotiated it for their own benefit; that the note was an accommodation note, without consideration between the original parties, and that it had been negotiated at a usurious rate of interest.

It appeared from the testimony of Westlake, called in behalf of his co-defendant, that he had taken the note to get it discounted for the makers, but that he diverted it from this use, and gave it to Merchant as collateral security on $1,300 borrowed from him upon their check on the Manhattan Bank; and that Merchant had charged at the rate of one per cent per week upon this loan It was also in evidence that this check, when presented at the bank, was credited to Merchant; but that, as soon as it was found that Westlake & Coger had no funds in the bank, Merchant was notified, the check protested, and charged to his ac

count.

The court charged the jury to consider this action as two different suits, one against the makers, and the other against the indorsers-their right and interests being distinct and separate. As to the indorsers, the jury must leave out the testimony of Westlake, and then the case, as against them, was free from the charge of usury; that what happened at the bank, at the presentment of the check, did not amount to a payment. The testimony of Westlake alone supported the charge of usury, on which the defendants, the makers, relied for their defense; if the jury believed this testimony, the plaintiffs were not bona fide holders of the note, as against these defendants.

Verdict for the plaintiff-$1,300, as against Bacon & Son; $1,670 51, as against Westlake & Coger.