Twentieth St. Bank v. Jacobs

• Decision Date: 16 June 1914
• Docket Number: (No. 2300.)
• Citation: 74 W.Va. 525,82 S.E. 320
• Court: West Virginia Supreme Court
• Parties: TWENTIETH STREET BANK . v. JACOBS.

82 S.E. 320

(74 W.Va. 525)

TWENTIETH STREET BANK .

v.JACOBS.

(No. 2300.)

Supreme Court of Appeals of West Virginia.

June 16, 1914.

(Syllabus by the Court.)

Error to Circuit Court, Cabell County.

Action by the Twentieth Street Bank against J. B. Jacobs. Judgment for plaintiff, and defendant brings error. Reversed and rendered.

C. S. Welch and D. B. Daugherty, both of Huntington, for plaintiff in error.

Marcum & Shepherd, of Huntington, for defendant in error.

POFFENBARGER, J. [1, 2] Assuming section 1 of chapter 97 of the Code, declaring void every contract the consideration of which is money, property, or other thing won or bet at any game, sport, pastime, or wager, or money lent or advanced at the time of any gaming, betting, or wagering, to be used therein, to have been partially repealed by implication, by the passage of the negotiable instruments law (chapter 81, Acts 1907; chapter 98a of the Code), the circuit court of Cabell county, in an action for the recovery of the amount of two checks, on an agreed statement of facts, admitting the consideration thereof to have been money lost in gambling, rendered a judgment for the amount of the checks against the drawer and in favor of the assignee thereof, who had taken them without notice of the character of the consideration.

The provision of the Negotiable Instruments Law to which such effect is accorded by the judgment is section 57, saying:

"A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among themselves and may enforce payment of the instrument for the full amount thereof against all parties liable thereon."

In connection therewith, section 55, relating to defectiveness of the title of a person negotiating paper, section 196, making the law merchant govern in all cases not provided for by the act, and section 197, repealing section 9 of chapter 99 of the Code and all acts and parts of acts inconsistent with the new law to that extent, are relied upon. By another section a holder in due course is defined.

Section 55 makes illegality of consideration a mere defect, and section 57 says a holder in due course takes the instrument free from any defect of title of prior parties. A holder in due course is one who has taken an instrument complete and regular on its face before it was overdue, in good faith and for value without notice of its previous dishonor, and without notice of any infirmity in the instrument or defect in the title of the person negotiating it

The effect claimed for these general provisions cannot be accorded them consistently with the rules and principles of construction of statutes. The Legislature was dealing, at the time of the passage of the act and in the passage thereof, with the matter of negotiability of paper which the law allowed men to put on the market and the courts to enforce. It was not then considering the subject of gaming to which it had previously given its careful attention, nor acting upon it. The act does not mention it, nor did any provision thereof suggest it to the legislativemind. Any presumption that any member of the Legislature, while considering or acting upon the bill, had the slightest suggestion or intimation from any of its terms that it would, in any sense or to any degree, legalize gambling debts would be a most violent one. Nobody in reading the act, without having had the subject of gaming debts, fixed in his mind, at the time, by some means other than its terms, would likely discover the alleged opening for the use of paper expressly declared by law to be absolutely void in the hands of any and all persons, and appreciate at the same time the far-reaching effect of it. The partial legalization contended for would virtually destroy the previous statute, for every paper negotiable in form, taken for money lost or bet in gambling, would be made valid by the mere indorsement and delivery thereof to some person ignorant of the character of the consideration. Of course, the Legislature never saw nor intended any such result.

But, if the suggestion of such a possibility did enter the legislative mind at any time, there is a presumption in law that the lawmaking body relied" upon a well-settled rule of construction, adopted by the courts, for protection against it. That rule limits the operation of a statute to its subject-matter and...