Barkley, &c. vs. Glover, &c.

reading it. The courts form its sole subject matter, and every part and parcel of the section relates directly to some duty of that branch of the government.

It is worthy of remark, in this connection, that in the cases of Blair vs. Williams and Lapsley vs. Brashear, supra, in which an act similar to the Missouri act was pronounced unconstitutional, it is not even intimated by this court, in either case, that the section of the bill of rights in the constitution of 1799, which is, word for word, like that in the constitution of 1850, and now before us, was in anywise invaded by the law then considered. Certainly something would have been said in reference to that section, if it had been deemed at all involved in the cases; for, as is well known, the controversy respecting that law was one of unusual interest and magnitude.

We may add, too, that in our researches for authorities upon this question, except the case from Missouri supra, we have been unable to find even a reference to any, in point, but one, the principle of which is thus stated in the 1st vol. U. S. Dig., page 555. "The Georgia statute 'to alleviate the condition of debtors, and afford them temporary relief,' which enacted that the courts should not 'issue process in any civil case except for the trial of the right of property real and personal,' for a definite period, was held not to impair the obligation of contracts, nor take away the trial by jury." Grimball vs. Ross, Charlton, 175.

The volume of reports containing this case is not within our reach, and the reference is made not as authority, but only for the purpose of showing that the same question has been decided by the Georgia courts differently from the ruling of the Missouri case.

In regard to the constitutional right of the legislature to enact the section of the act in question, and as to its effect in impairing the obligation of contracts, it is deemed sufficient to say that both these points were fully argued and considered in the case of Johnson vs. Higgins supra, and we have seen no valid reason for departing from the conclusions therein stated.

Wherefore, the said judgments are reversed, and causes remanded for further proceedings not inconsistent herewith.

Barbaroux vs. Barker.

CASE 12-PETITION ORDINARY-JUNE 26.

Barbaroux vs. Barker.

APPEAL FROM JEFFERSON CIRCUIT COURT.

1. A reply to a counter-claim or set-off may contain any matter of avoidanco which might, under the former system of pleading, have been set forth by replication, provided it is not inconsistent with the petition.

2. When a reply contains matter inconsistent with the petition, the defendant should object to the filing of it, or move to strike out the inconsistent matter. If he fail to do so he cannot raise the objection in the court of appeals.

3. Two persons, mutually indebted to each other, executed each to the other his notes of hand for the full amounts of their respective indebtedness, with the understanding between them that the notes might be used to pay precedent debts, or for raising money by negotiation. One of the payees assigned one of the notes, and failed. In a suit by the assignee against the payor he pleaded a note of the same date executed to him by the assignor, as a set-off. Held, That the set-off cannot be allowed.

4. In such case the payor is bound, because his plea of a want or failure of consideration would be a fraud upon the holder. The principle applies to every case in which the note has been given to enable the payee to raise money or pay his debts. The fact that the payor had some additional motive for giving the note, concerning which he has beeh disappointed, cannot justify him in defrauding the holder.

PIRTLE & ROBERTS, and WALKER MORRIS, for appellant, cited Civil Code, sec. 133; 16 B. Mon., 201; 6 J. J. Mar., 129; 2 B. Mon., 299; 16 B. Mon., 201.

G. A. & I. CALDWELL, for appellee, cited 13 B. Mon., 391 ; 16 16., 575; 14 Ib., 352; 10 lb., 268; Story on Prom. Notes, sccs. 194, 195.

JUDGE BULLITT DELIVERED THE OPINION OF THE COURT:

Barker sued Barbaroux upon his note for $200, dated January 6, 1860, payable ninety-five days thereafter, to the order of E. Ho brook, and assigned by him to Durkee, Heath & Co., and by them to Barker.

Barbaroux answered, pleading as a set-off Holbrook's note to him for $504, dated January 6, 1860, and payable four months after date.

Barker filed a reply, stating that on the 6th January, 1860,

Barbourx vs. Barker.

Holbrock and Barbaroux met and stated accounts, by which it appeared that Holbrook's account against Barbaroux amounted to $2 519.43, and Barbaroux's account against Holbrook to $1,309.23; that, instead of settling the balance due to Holbrook, Barbaroux gave his notes to Holbrook, for $2,519 43, including the one sued upon, and Holbrook gave his notes to Barbaroux for $1,309.23, including the one pleaded as a setoff; that they gave said notes to each other "for the purpose of financiering and raising money thereon;" that it was expressly agreed that Holbrook might sell and use said notes in his business, to any person, or at any place, except at five banks named in the reply; and that, soon afterward, and before the note sued on matured, Holbrook assigned it to Durkec, Heath & Co., in payment of a debt he owed them, and that they received it without notice of the alleged set-off.

Upon the trial, Holbrook, having been released from liability as endorser, proved the facts above mentioned, and also proved that when the notes were executed Barbaroux wrote and handed to him a memorandum saying: "you can use my notes anywhere (if you can,) except at Quigley, L, & Co., Shreve & Tucker's, Bank of Ky., Bank L., and Northern Bank." A few days after transferring said note Holbrook failed in business.

The law and facts having been submitted to the court, a judgment was rendered against Barbaroux for the amount of the note sued on, from which he appealed.

1. It is contended that the new matter set forth in the reply is inconsistent with the petition, and that the reply is therefore fatally defective under section 138 of the Code, which authorizes a plaintiff, in his reply, to "allege, in concise language, any new matter not inconsistent with the petition, constituting a defense to the counter claim or set-off."

In our opinion this objection cannot prevail. The matter of the reply is supplemental to the petition, and not at all inconsistent therewith. Under the old practice supplemental matter, in avoidance of a plea, was set forth in a reply, and not by amending the declaration; for example, to a plea of infancy or of the statute of limitations, a promise, after the infant

Barbaroux vs. Barker.

became of age, or during the period of limitation, was set forth by replication. Now, in such cases, the Code does not authorize a reply, but it permits a reply to a counter-claim or setoff; and the reply may contain any matter of avoidance which might formerly have been set forth by replication, provided it is not inconsistent with the petition.

Moreover, if the reply had contained matter inconsistent with the petition, the defendant should have objected to the filing of it, or have moved to strike out the inconsistent mat ter; and having failed to do so, he cannot raise the objection here.

2. As the evidence authorized the inference, that Holbrook, as between him and Barbaroux, had a right to use the notes to pay precedent debts, or for raising money by negotiation, we are not able to perceive any material distinction between this case and that of Gano vs. Finnell, 13 B. Mon., 390.

In such cases the payor is bound, because his plea of a want or failure of 'consideration would be a fraud upon the holder. The principle applies to every case in which the note has been given to enable the payor to raise money or pay his debts. The fact that the payor had some additional motive for giving the note, concerning which he has been disappointed, cannot justify him in defrauding the holder.

If the note, in Gano vs. Finnell, had been given, as contended by counsel, for the sole purpose of enabling the payee to raise money, and without any other consideration, the law would have implied a contract on the part of the payee to indemnify the payor, which would have been as binding as an express contract to pay the amount of the note to the payor in money or property. Yet it is conceded that in such cases the payor is bound to a bona fide holder, though not indemnified by the payee. But in Gano vs. Finnell the note was given, not merely to enable the payee to raise money, but under an agreement, that, before its maturity, the payee should furnish its value in whiskey to the payor, if he should elect to take the same, and if he should elect not to take the whiskey then that the payee should take up the note. The payor elected to

Metcalfe's Executrix vs. Poindexter's Executrix.

take the whiskey; the payee failed to deliver it, or to take up the note; and yet the payor was held liable to the holder.

Conceding therefore that the note sued on was given by Barbaroux to enable Holbrook to raise money or pay debts, and in consideration of Holbrook's note to him for a similar amount, our opinion is that Barbaroux cannot set-off the latter note against the former.

3. But to the extent of $1,210.23, being the balance due to Holbrook, there was a valid consideration for Barbaroux's notes. How many of the notes Holbrook negotiated does not appear by averment or proof. We cannot assume that he negotiated any except the one sued on by Barker. If he negotiated none other, or not more than amounted to $1,210.23, Barboroux has no defense to the note sued on even as against Holbrook.

The judgment is affirmed.

CASE 13-PETITION ORDINARY-JUNE 27.

Metcalfe's Executrix vs. Poindexter's Executrix.

APPEAL FROM JEFFERSON CIRCUIT COURT.

1. An instrument in writing recites that "for the satisfaction and security of J. M.” it proceeds to "re-state" a subsisting parol agreement or understanding, the substance of which is set forth in the instrument. Held, that the writing is a covenant, binding as such on the parties, and not a mere memorandum of the prior parol agree

ment.

2. All written contracts are, in a certain sense, but re-statements of a pre-existing parol agreement between the parties. And the mere fact that the written memorial contains such a recital, cannot operate so to change the character and legal effect of the instrument as to reduce it from the grade and dignity of a covenant.

Metcalfe's executrix sued Poindexter's executrix upon the folJowing instrument, as a covenant: