Streit v. Waugh

The opinion of the court was delivered by

Redfield, J.

This note was given by defendant to one Edward Conklin, in payment for a patent-right. The words, “given for a patent-right,” required by the act of 1870, were not inserted in the note. The defendent sold said note while current, to Thomas Brennan, who knew at the time that the note was given for a patent-right. Brennan sold the note while current, to the plaintiff, in payment of a pre-existing account, to the full amount of the face of the note. The plaintiff’s account accrued, principally, from (he sale of intoxicating liquors in contravention of the statute of this state. The defendant claims,

I. That no action can be sustained on the note, for the reason that the words required by the statute of 1870, were not inserted therein. The statute does not declare the sale of patent-rights unlawful; nor prohibit actions founded on notes given for such sales. The purpose of the statute was, obviously, to prevent the transfer of notes given for the purchase of such property, into the hands of innocent and bona-fide purchasers. The second section requires the person talcing such note to insert therein the words, “given for a patent-right,” and declares all such obligations, if transferred, subject to all the defences to which they would be subject if owned by the original promisee. If the patent-right was good and valuable, and an adequate consideration for the note, the statute does not say that the promissor could defend against the note because these words were ommitted ; but that the transferee shall stand like the pr'omissee as to all just and legal defence. The case does not state that there was fraud in the sale of the patent-right, or any actual infirmity in the note. We think the omission of Conkling to insert in the note the words “given for a patent-right,” does not render the note void, and does not preclude the plaintiff’s recovery on the note.

*301II. It is insisted by tbe defendant, that the sale of this note by Brennan, to the plaintiff, in payment of an .account which accrued for intoxicating liquors sold in violation of law, precludes the plaintiff from recovering on the note. Some of the items of plaintiff’s account against Brennan are lawful and some are unlwful, and several general payments have been made ; and the case omits to state that the payments have extinguished the lawful charges. But, assuming that the unpaid balance of the plaintiff’s account accrued altogether from the unlawful sale of intoxicating liquor, it was a payment, and Brennan could at any time recover it back. But this defendant has no defence to the note, and has no legal or equitable claim against the plaintiff. Brennan would have the right to say that the plaintiff would hold the money when collected, “to his use.” Whether the property in the note is absolutely in the plaintiff, or .whether he sues it for the benefit of Brennan, is a matter of no concern to the defendant. .The consideration for the note has no illegal taint. It has often been held that usury, which the statute declares may be recovered back,' and that the lender holds “to the use” of the borrower, cannot be attached by trustee process. Baker v. Esty et al. 19 Vt. 131. Nor does such claim pass to the assignee in bankruptcy. Nichols et al. v. Bellows, 22 Vt. 586. The reason given is, that the right to recover back such money paid and received in violation of the statute, is a personal right which the borrower, a party paying the usury, may waive or enforce at his election. We see no reason why-the collection of this note may not be enforced in this suit..

Judgment affirmed.