Couch v. Hutchinson

• Decision Date: 19 December 1911
• Citation: 2 Ala.App. 444,57 So. 75
• Parties: COUCH v. HUTCHINSON ET AL.
• Court: Alabama Court of Appeals

57 So. 75

2 Ala.App. 444

COUCH v. HUTCHINSON ET AL.

Court of Appeals of Alabama

December 19, 1911

Appeal from Circuit Court, Marshall County; W. W. Haralson, Judge.

Action by M. P. Couch against J. D. Hutchinson and others upon the bond executed by the defendants to A. J. Mason of a certain date, and due and payable on the 10th of December, 1908. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

The complaint alleges the facts set out above, and also that the note was made payable to Mason, who transferred and indorsed said note to plaintiff, and waived presentment for payment protest, and notice of nonpayment. It also claims attorney's fees. Plea 3 is as follows: "Defendant says that the only consideration for the execution of notes sued on was the execution and delivery to the defendant of a written contract, a copy of which is hereto attached, marked 'Exhibit A,' and prayed to be taken as a part thereof. And defendant says that the execution of said contract was in pursuance of a scheme, and constituted part of a scheme, to defraud the public, in that the natural and inevitable result of said contract was to cause each person who purchased a fourth agency, a half agency, a whole agency a special agency, or a patentee agency to sell like agencies to such persons as he might induce to purchase the same, and so on down in an endless chain, whereby in the end the great bulk of the people would be defrauded, and would receive nothing for cash paid, or the notes executed by them; and said contract was entered into and constituted a part of an illegal and unlawful conspiracy to induce the public to purchase, one after another, in an endless chain, similar contracts which conveyed to the purchasers no substantial or valuable right or property, and to encourage each purchaser to involve another in order to extricate himself."

Street & Isbell, for appellant.

Goodhue Brindley & White, for appellees.

WALKER, P.J.

To the complaint in this case counting on a bond or promissory note executed by the defendants (the appellees here) a special plea, numbered 3, was filed, which set up that the only consideration for the note sued on was the execution and delivery to the defendants of a written contract purporting to confer on them certain patent rights, a copy of which was made an exhibit to the plea, which questioned the validity of that consideration on a ground stated. As the plea does not aver the existence of any fact collateral to the execution of the contract mentioned which was claimed to affect its validity, and does not aver as a fact that there was an absence of value in the consideration referred to, it is understood that the expressed conclusions of the pleader that "the execution of that contract was in pursuance of a scheme and constituted a part of a scheme to defraud the public," and "constituted a part of an unlawful conspiracy to induce the public to purchase, one after another, in an endless chain, similar contracts which conveyed to the purchasers no substantial or valuable right or property, and to encourage each purchaser to involve another in order to extricate himself," have for their only support the deduction of the pleader from the terms of the contract itself "that the natural and inevitable result of said contract was to cause each person who purchased a fourth agency, a half agency, a whole agency, a special agency, or a patentee agency to sell like agencies to such persons as he might induce to purchase the same, and so on down in an endless chain, whereby in the end the great bulk of the people would be defrauded and would receive nothing for cash paid or the notes executed by them." In other words, that plea attacked the patent right contract which constituted the consideration of the instrument sued on on the ground that on its face it is legally invalid; and the action of the trial court in overruling the demurrer interposed to that plea is sought to be sustained here on the ground that the contract is void as being against public policy and directly tending to defraud the public generally.

When the validity of a contract is attacked on the ground that it is violative of public policy, or that it is against the public interest to enforce it, the court may well bear in mind that it is wholly outside of its function to be influenced by some considerations of policy which might properly have weight with the Legislature if it had occasion to deal with the question of permitting or prohibiting such a contract, or with a business man who was called on to pass upon the question of the wisdom or folly of entering into such an engagement; that the public policy with which it is concerned is that evidenced by the Constitution, the statutes, or definite principles of customary law which have been recognized and developed by the course of judicial decisions; and that it may well look with suspicion upon an invitation to pronounce a questioned transaction invalid as being against public policy when there is a failure to make it plain how its recognition or enforcement would contravene any established rule of law. It behooves a court to move with caution when it takes up a line of inquiry by which it may unwittingly be led beyond the domain of established law within which judicial investigations should be confined, and find itself dealing with questions of policy which the law...