Washburn v. Franklin

Ingraham, J.

defendant demurs to the plaintiff’s com-

—The plaint, upon the ground that it does not state facts sufficient to constitute a cause of action.

The action is upon a stock contract, and the defendant’s objection to the complaint is, that it does not aver that the plaintiff was the owner of the stock at the time of the sale, or that the contract was in writing.

■ There is no doubt the statute requires, to make the contract valid, that the party contracting to sell shall either have the certificate or be otherwise entitled to sell the same. (1 Rev. Stats., 710.)

*10But it never was necessary to aver such possession in the declaration before the Code, nor do I think it necessary now. The fact on which the plaintiff relies is the making of the contract. This is admitted by the demurrer. It must be a legal contract, or it is nothing, and' issue upon the question whether a contract was made or not would involve its legality, and of course would include the requisite facts to make the contract a legal one.

These remarks apply to the objection that the complaint does not allege that the contract was in writing. I adhere to the opinion that it was unnecessary, as held in Stern a. Drinker (2 É. D. Smith, 401). The same rule would apply to cases under the statute of frauds. In such cases it is unnecessary to aver it. If any legal contract is made, it must be in writing. If not a legal contract, it is no contract. The evidence to prove the contract need not be set out, but only that a contract was made. The mode of making is matter of evidence.

The plaintiff suggested that this defence would now be unavailing, as the Legislature had repealed the stock-jobbing act. The statute only applies to contracts hereafter made, which are made valid by the 1st section. Whether the repeal of the statute, by the 2d section, could validate the contract, which was otherwise void, may well be doubted. In the case of contract void for usury, the Legislature have prohibited corporations from setting up the defence. Although the effect of such prohibition is virtually to render the contract effectual, still it does not go so far as to declare a void contract a valid one, and I should hesitate in giving such a construction to the repealing clause. It is unnecessary, however, here to pass upon the question.

Judgment for the plaintiff on demurrer, with leave to defendant to withdraw demurrer and-answer, on payment of costs.