that did not violate any rule of public decency | having himself any direct connection with the or morality, or any recognized principle of making or execution of the contract of wager public policy, were not prohibited, says: "It itself. He was, in every sense, particeps has already been shown that a contract for the criminis. sale of goods to be delivered at a future day is valid, even though the seller has not the goods, nor any other means of getting them than to go into the market and buy them." "But such a contract," he proceeds to say, "is only valid where the parties really intend and agree that the goods are to be delivered to the seller, and the price to be paid by the buyer. If, under guise of such a contract, the real intent be merely to speculate in the rise or fall of prices, and the goods are not to be delivered, but one party is to pay to the other the difference between the contract price and the market price of the goods at the date fixed for executing the contract, then the whole transaction constitutes nothing more than a wager, and is null and void under the statute." The statute referred to by the author is that of 8 and 9 Vict. chap. 109, 18, which provides "that all contracts or agreements, whether by parol or in writing, by way of gaming or wagering, shall be null and void; and that no suit shall be brought or maintained in any court of law or equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which should have been deposited in the hands of any person, to abide the event on which any wager should have been made." In Irwin v. Williar, 110 U. S. 499, 508, 510 [28: 225, 229, 230], the general subject of wagering contracts was carefully considered, and in the opinion, delivered by Mr. Justice Matthews, we expressed approval of the doctrine as announced by Mr. Benjamin, observing that generally, in this country, all such contracts are held to be illegal and void as against public policy. It was there said: "It makes no difference that a debt or wager is made to assume the form of a contract. Gambling is none the less such because it is carried on in the form or guise of legitimate trade." Referring to the decision in Rountree v. Smith, 108 U. S. 269 [27: 722], it was further said: "It is certainly true that a broker might negotiate such a contract without being privy to the illegal intent of the principal parties to it which renders it void, and in such a case, being innocent of any violation of law, and not suing to enforce an unlawful contract, has a meritorious ground for the recovery of compensation for services and advances. But we are also of the opinion that when the broker is privy to the unlawful design of the parties, and brings them together for the very purpose of entering into an illegal agreement, he is particeps criminis, and cannot recover for services rendered or losses incurred by himself on behalf of either in forwarding the transaction." In the present case, according to the averments in the plea of wager, the plaintiff was the broker who effected the purchases of future-delivery cot ton. He was privy to the unlawful design of the parties; represented one of them in all the transactions; and advanced the money necessary to carry, and for the express purpose of carrying, these cotton "futures" on account of the defendant. His position, therefore, was not that of a person merely advancing money to or for one of the parties to a wager, without In Bigelow v. Benedict, 70 N. Y. 202, 206, the Court of Appeals of New York said that "where an optional contract for the sale of property is made, and there is no intention on the one side to sell or deliver the property, or on the other to buy or take it, but merely that the difference should be paid according to the fluctuation in market values, the contract would be a wager within the statute." In Story v. Salomon, 71 N. Y. 420, 422, which was an action upon a written contract for an option to buy or sell certain shares of stock, and the defense was that it was illegal and void under the statute of New York against gaming, the court said: "If it had been shown that neither party intended to deliver or accept the shares, but merely to pay differences according to the rise or fall of the market, the contract would have been illegal." The same principle was announced in Kingsbury v. Kirwan, 77 N. Y. 612. There are many other authorities to the same effect, but in view of our decision in Irwin v. Williar, with which we are entirely satisfied, it is not necessary to cite them. The plaintiff relies upon Brown v. Speyers, 20 Gratt. 296, as expressing a different view of this question. But we do not so understand that case. The Supreme Court of Appeals of Virginia did not there indicate its opinion as to the validity of a contract for the purchase of "futures," the settlement in respect to which was to be upon the basis of paying simply the difference, according to the fluctuations in the market, between the contract price and the market price. It is contended that this is not an action upon the original contract, but upon the notes executed by Embrey after the business transacted for him by Moody & Jemison was closed, and with full knowledge, upon his part, of all the facts. In such a case, it is argued, the principles announced in Irwin v. Williar cannot be applied. This argument concedes, at least for the purposes of the present case, that, as the law, for the protection of the public, and in the interest of good morals, declares a wagering contract to be void, the plaintiff could not maintain an action for the moneys advanced in execution of the original contract to carry these "futures." And yet it is insisted that he ought to have judgment on the notes in suit, although it appears they have no other consideration than the moneys so advanced. A judgment upon the notes would, in effect, be one for the amount claimed by the plaintiff, under the original contract, at the time he demanded their execution by the defendant. Indeed, it has been held that a note could not of itself discharge the original cause of action, unless, by express or special agreement, it was received as payment. Sheehy v. Mandeville, 10 U. S. 6 Cranch, 253, 264 [3: 215]; Peter v. Beverly, 35 U. S. 10 Pet. 532, 568 [9: 522]; The Kimball, 70 U. S. 3 Wall. 37, 45 [18: 50, 54]. While there are authorities that seem to support the position taken by the defendant in error, we are of opinion that, upon principle, the original payee cannot maintain an action on a note the consideration of which is money advanced by him upon or in execution of a contract of wager, he being a party to that contract, or having directly participated in the making of it in the name of or on behalf of one of the parties. Winters, 7 Neb. 126; Lowry v. Dillman, 59 Assuming the averments of the plea of wager to be true, it is clear that the plaintiff could not recover upon the original agreement withIn Steers v. Lashley, 6 T. R. 61, it appeared out disclosing the fact that it was one that that the defendant was engaged in stock-job- could not be enforced or made the basis of a bing transactions with different persons, in judgment. He cannot be permitted to withwhich one Wilson was employed as his broker, draw attention from this feature of the transand had paid the "differences" for him. A action by the device of obtaining notes for the dispute having arisen as to their amount, the amount claimed under that illegal agreement; matter was referred to the plaintiff and others, for they are not founded on any new or indewho awarded a certain sum as due from the pendent consideration, but are only written defendant. For a part of that sum the broker promises to pay that which the obligor had drew a bill on the defendant, and after it had verbally agreed to pay. They do not, in any been accepted indorsed it to the plaintiff. just sense, constitute a distinct or collateral Lord Kenyon said: "If the plaintiff had lent contract based upon a valid consideration. this money to the defendant to pay the differ- Nor do they represent anything of value, in ences, and had afterwards received the bill in the hands of the defendant, which, in good question for that sum, then, according to the conscience, belongs to the plaintiff or to his firm. principle announced in Petrie v. Hannay, 3 T. Although the burden of proof is on the obligor R. 418, he might have recovered. But here to show the real consideration, the execution the bill on which the action was brought was of the notes could not obliterate the substangiven for these very differences; and therefore tive fact that they grew immediately out of, Wilson himself could not have enforced pay- and are directly connected with, a wagering ment of it. Then the security was indorsed contract. They must, therefore, be regarded over to the plaintiff, he knowing of the illegal- as tainted with the illegality of that contract, ity of the contract between Wilson and the de- the benefits of which the plaintiff seeks to fendant; for he was the arbitrator to settle obtain by this suit. That the defendant exetheir accounts; and under such circumstances cuted the notes with full knowledge of all the he cannot be permitted to recover on the bill in facts is of no moment. The defense he makes a court of law." is not allowed for his sake, but to maintain the policy of the law. Coppell v. Hall, 74 U. S. 7 Wall. 542, 558 [19: 244, 248.] In Amory v. Meryweather, 2 Barn. & C. 573, 578, which was an action of debt on bond, conditioned for the payment of money by installments, the plea in substance was that the bond was given in place of a promissory note previously executed in payment for moneys advanced by an agent of the obligor in discharge of differences arising upon contracts for buying and selling shares in the public stocks, against the form of the statute; the plaintiff having knowledge, when he received the bond, that the note had been made by the defendant on the occasion and for the purpose stated. Abbott, C. J., after observing that there was no period of time when the plaintiff could have maintained an action upon the note, said: "We are all of opinion that as it appears upon the plea that the bond was given as a substitute for a note which was taken by the plaintiffs subject to an infirmity of title of which they had full notice before the bond was taken, the latter instrument is void. In Fisher v. Bridges, 3 El. & Bl. 642, 649, which was an action upon a covenant in a deed to pay a certain sum, and which covenant was given as security for payment of a part of the purchase money of real estate sold by the plaintiff to the defendant, to be by the latter disposed of by lottery, as the plaintiff knew, the court said: "It is clear that the covenant was given for the payment of the purchase money. It springs from and is the creature of the illegal agreement, and as the law would not enforce the original illegal contract, so neither will it allow the parties to enforce a security for the purchase money, which, by the original bargain, was tainted with illegality." See, also, Fariera v. Gabell, 89 Pa. 89; Griffiths v. Sears, 112 Pa. 523 [3 Cent. Rep. 239]; Flagg v. Baldwin, 38 N. J. Eq. 219, 227; Cunningham v. Nat. Bank of Augusta, 71 Ga. 400; Tenney v. Foote, 95 Ill. 100; Rudolf v. 131 U. S. U. S., Book 33. We are of opinion that the special plea of wager presented a good defense to the action, and ought not to have been rejected; also, that the instruction asked by the defendant should have been given. The case presents another question which it is necessary to consider. The defendant in one of his pleas alleged that the plaintiff's cause of action did not accrue within five years next before the commencement of suit. That is the time within which, by the general Statute of Limitations of Virginia, actions like the present one must be brought. Va. Code, 1873, p. 999, § 8 and 14. To this plea the plaintiff replied, specially, that he ought not to be bound by anything therein alleged, because when the several causes of action in the declaration mentioned, and each of them, accrued to him, the defendant "had before resided in the State of Virginia," and by departing without the same obstructed him in the prosecution of his several causes of action, for several, to wit, two or more years next after the same accrued as aforesaid; that the time such obstruction continued is not to be computed as any part of the period within which his causes of action, and each of them, ought to have been prosecuted; and that, excluding such time, the plaintiff brought this action within five years next after the accruing of his several causes of action. This replication was based upon the following provision in the Virginia Statute of Limitations: "Where any such right as is mentioned in this chapter shall accrue against a person who had before resided in this State, if such person shall, by departing without the same, or by absconding or concealing himself, or by any other indirect ways or means, obstruct the prosecution of such right, 12 177 the time that such obstruction may have con- | previous enactments, made no substantial tinued shall not be computed as any part of the change in the previous statutes, one of which time within which the said right might or (that of 1819, 1 Rev. Code of Va. p. 491, § 14) ought to have been prosecuted. But this sec- provided that "if any defendant shall abscond tion shall not avail against any other person or conceal himself, or by removal out of the than him so obstructed, notwithstanding an- country or the county where he resides when other might have been jointly sued with him the cause of action accrued, or by any other inif there had been no such obstruction. And direct ways or means, defeat or obstruct the upon a contract which was made and was to plaintiff, then the defendant shall not be adbe performed in another State or country, by a mitted to plead the Statute of Limitations." person who then resided therein, no action We are of opinion that the defendant's reshall be maintained after the right of action joinder to the plaintiff's replication to the plea thereon is barred by the laws of such State or of limitations was improperly rejected. It country." Code of Va. 1873, p. 1002, chap. shows upon its face that the defendant's re146, 20. The defendant rejoined that the moval from Virginia occurred nearly twenty plaintiff ought not, by reason of anything in years before the contract in question was made, the replication alleged, to have and maintain and that when the plaintiff's cause of action his action, because by his removal from the accrued he was not a citizen or resident of VirState of Virginia and departing without the ginia, but of Louisiana. The statutory prosame, as alleged, he did not obstruct the plaintiff vision upon which the plaintiff based his repin the prosecution of his suit upon the alleged lication has no application to this case, if, as causes of action in the declaration mentioned, shown by the rejoinder, the defendant removed because such removal occurred in the year from Virginia before he made any contract 1859, a long time before any of the alleged with the plaintiff. We cannot suppose that his causes of action existed or accrued, and that, removal from that State, nineteen years before when said causes of action accrued to the that contract was made, can be regarded, under plaintiff, the defendant was, and still considers the statute of Virginia, as an obstruction to the himself, a citizen of the State of Louisiana. plaintiff's prosecution of his action. The statute, so far as it relates to obstructions caused by a defendant having departed from the State, means that, being a resident of Virginia when the cause of action accrues against him, and being then suable in that State, the defendant shall not, in computing the time in which he must be sued, have the benefit of any absence caused by his departure after such right of action accrued, and before the expiration of the period limited for the bringing of suit. The plaintiff was at liberty to sue the defendant wherever he could find him. Having elected to sue him in Virginia, the courts sitting there must give effect to the limitation prescribed by her law, without any saving in favor of the plaintiff on account of the defendant's removal prior to the making of any contract whatever with the plaintiff. The judgment is reversed, with directions to grant a new trial, and for further proceedings in conformity with this opinion. Upon plaintiff's motion, the rejoinder of the defendant was rejected upon the ground that the above section excepted from the general Act of limitation a case in which the cause of action accrued against a person previously, no matter how long before, residing in Virginia, although he may have left the State before the contract sued upon was made, and, therefore, before any cause of action thereon accrued. This construction of the statute was supposed to be required by the decision in Ficklin v. Carrington, 31 Gratt. 219. We are satisfied, upon a careful examination of that case, that it was misinterpreted by the learned District Judge who presided at the trial below. That was an action of assumpsit to recover the amount of a note dated April 1, 1865. The defendant Carrington pleaded the Statute of Limitations. The plaintiff replied that he ought not to be bound by reason of anything in that plea alleged, because “on the first day of April, 1865, when the said several promises and undertakings in the plaintiff's declaration mentioned were made and entered into, and previous thereto, the defendant was and had been WILLIAM S. MELLEN, Trustee, ET AL., a resident of the State of Virginia, and that afterwards, to wit, on or before the 15th day of November, 1866, the said defendant departed without the State, and thereafter resided in the State of Maryland, and thereby the said defendant obstructed the said B. F. Ficklin, deceased, in his lifetime, and the plaintiff since his death, in the prosecution of his suit upon the said several promises and undertakings, until the 13th day of June, 1874, when this suit was instituted." The defendant replied, specially, that by his removal he had not obstructed, etc. The court held that the removal of the defendant, as stated in the replication, did, within the meaning of the stat-1. When a corporation becomes insolvent, it is so ute, obstruct the bringing of the suit, and, consequently, the time subsequent to such removal was not to be counted in his favor. It also held that the above statute, although somewhat different in its phraseology and structure from Appts., v. THE MOLINE MALLEABLE IRON · (See S. C. Reporter's ed. 352–371.) Insolvent corporation-property a trust fund— Act of March 3, 1875-action to subject property to debts and to remove a lien-decree not collaterally assailed—immediate sale-irregularity-notice to appear and plead—purchaser pendente lite. far civilly dead that its property may be administered as a trust fund for the benefit of its stockholders and creditors. 2. A court of equity, at the instance of the proper parties, will then make those funds trust funds, which, in other circumstances, are as much the | the promise to protect the same by a lien on absolute property of the corporation as any man's property is his. 3, 1875. 3. A suit against an insolvent corporation to sub- ordered and made before a defendant was direct 8. The proceedings conformed to the Act of March Argued April 16, 1889. Decided May 13, 1889. those premises; and that George H. Hill, of Ohio, and the J. S. Keator Lumber Company had been induced by it to guarantee, in the same way, other of its commercial paper, the former to the extent of $20,000, and the latter to the extent of $1,000. It also recites that the grantor had agreed with each of the guarantors to meet said paper as it fell due, so that neither of them should be subjected to any liability, loss, cost, damage, or expense by reason of having severally made such guaranties or indorsements. The conveyance to Hemenway was in trust to secure and protect said guarantors, respectively, against all liability arising from such indorsements, with power in the trustee, upon the request of either guarantor, or of his legal representatives-if, at the time of such request, there existed any liability upon the part of the person so requesting- to foreclose the deed and sell and convey the property and, out of the proceeds, after paying the expenses of foreclosure and sale and reasonable solicitors' fees, to pay the guarantors all costs, damages and expenses to which they may have been subjected; it being the intention that the to be for and shall stand for security to each of property conveyed hereby shall be understood the parties_aforesaid, viz.: Wheelock, Carson, Hill, and Keator Lumber Company, alike in proportion to the ultimate liability to which each may be subjected; and that they shall receive the benefit and protection pro rata, according to the extent of their liability and in proportion thereto." As part of the same transaction, the Moline Malleable Iron Works executed its chattel mortgage, which was duly acknowledged and retrusts and conditions, certain personal property corded, conveying to Hemenway, upon like in Illinois, consisting, iron, manufactured and in process of manufacin part, of malleable ture by the grantor. The Moline Malleable Iron Works made default in the payment of the notes, and in the APPEAL from a decree of the Circuit Court performance of its obligations as set forth in the trust deed and chattel mortgage. sold and conveyed his entire interest in the trust On the 12th of April, 1884, George H. Hill deed and chattel mortgage, and in the said indebtedness of $20,000, to the appellant Mellen, trust for the sole use and benefit of the appellant Sophia H. Boyd. of the United States for the Northern District of Illinois, sustaining a plea in bar to a suit brought by the appellants and dismissing their bill of complaint for want of equity, the suit being brought for the foreclosure of a trust deed and chattel mortgage, the sale of the prop-in erty, and the disposition of the proceeds according to the rights of the parties in interest. Affirmed. Statement by Mr. Justice Harlan: This is an appeal from a final decree sustaining a plea in bar to a suit brought by the appellants, and dismissing their bill of complaint for want of equity. On the 23d of June, 1883, the Moline Malleable Iron Works, an Illinois corporation doing business at Moline, in that State, executed a deed, which was duly acknowledged and recorded, conveying to Charles F. Hemenway several lots or parcels of land in that city. The deed recites that S. W. Wheelock and A. L. Carson had been induced by the grantor, which was in need of money to carry on its business, to guarantee, by indorsing, its commercial paper to the extent of $49,000 (of which $48,500 was then outstanding and unpaid), by 131 U.S. The present suit was commenced by an original bill exhibited, May 5, 1884, by said Mellén and Boyd, citizens of Ohio, against the Moline Malleable Iron Works, Hemenway, Wheelock, Stephen T. Walker, Carson, and Jeremiah S. Keator and Ben. C. Keator, late partners as J. S. Keator & Son, all citizens of Illinois. The bill shows that Hill was compelled to pay and did pay off the debt of $20,000, with the interest accruing on the several notes aggregating that sum. It states that in a suit in equity, instituted in the Circuit Court of the United States for the Northern District of Illinois, on the 2d day of July, 1883, by the National Furnace Company, a corporation of Wisconsin, in behalf of itself and other general, unsecured creditors of the Moline Malleable Iron Works against the last named corporation, George H. Hill, and others, the said trust deed and chattel mortgage were assailed as null and void, as against the general creditors of the Moline Malleable Iron Works, upon the following grounds: "First. Because they constitute a partial assignment for the benefit of creditors by which said corporation seeks to prefer the indorsers therein named in preference to the other creditors of the corporation, which said attempt your orator is advised and believes is fraudulent and unlawful under the statutes of the State of Illinois. The relief sought in the present suit, by original bill, was the foreclosure of said trust deed and chattel mortgage, the sale of the property, and the disposition of the proceeds according to the rights of the parties for whose protection those instruments were executed; and final decree in the suit of National Furnace and this, without reference to the proceedings Company v. Moline Malleable Iron Works, 18 Fed. Rep. 863. The defendants Stillman W. Wheelock, A. tor, and Ben. C. Keator filed a plea in bar of L. Carson, Charles F. Hemenway, J. S. Keathis suit. As the correctness of the decree below depends entirely upon the sufficiency of that plea, it is here given in full: Second. Because the said assignment does not purport to put the said assignee in possession of said property, and the said assignee has not actually taken possession thereof and has not given bond to the County Court of Rock Island County, as provided by law in the case of assignments for the benefit of creditors, and "That long prior to the time when said it is not intended to file such bond or distribute George H. Hill sold and conveyed to said comthe said assigned property under the provisions fit of said Sophia H. Boyd, his interest in said plainant Mellen, in trust for the use and beneof the statutes in such cases made and pro-trust deed and chattel mortgage, as alleged in vided. "Third. That the two assignments consti- said bill of complaint, to wit, on the 2d day of tute a part of the same transaction, and that July, 1883, the said National Furnace Compathe chattel mortgage upon the personal proper-ny, in its own behalf and on behalf of all the ty therein described is void as against the creditors of the said corporation, because the said corporation has been and still is allowed by the said assignee to manage, control, and use the property therein described in the usual and ordinary course of business to the same extent and in the same manner as the same were used by the said corporation before the execution of the said chattel mortgage. "Fourth. Because the said documents operate, and were designed to operate, to hinder and delay the creditors of the said Moline Malleable Iron Works in the collection of their debts. "Fifth. Because, as against the fair and honest creditors of the said corporation, the preference sought to be given to the said Hill and the said Carson, two of the directors of the said corporation, is null and void. "Sixth. For divers other reasons your orator has been advised that all of the aforesaid acts and doings of the said Moline Malleable Iron works, as against your orator and the other bona fide creditors of said corporation, are null and void." The object of that suit, as the bill in the pres ent case avers, was to obtain a decree dissolving the Moline Malleable Iron Works as a corporation, closing up its business, ascertaining the amount, as well of its assets applicable to the payment of debts, as the extent to which its directors and officers were liable to creditors, and adjudging that the said conveyances executed by that corporation were fraudulent and void as to the National Furnace Company and other creditors. It is further alleged that the debt of the last named corporation was not, nor was any part❘ of it, due when it brought said suit, and was not secured by any attachment or other process against the property of the debtor corporation; that it had not exhausted its legal remedies for the collection of its debt, and had no lien or claim to the property covered by said trust deed or mortgage; and, consequently, that the court could not and did not acquire jurisdiction to make any valid decree affecting the interest of said Hill. creditors of the Moline Malleable Iron Works, exhibited its original bill of complaint in this thereto said Moline Malleable Iron Works, honorable court and made parties defendant Stillman W. Wheelock, George H. Hill, Amaziah L. Carson, Charles F. Hemenway, Henry H. Hill, Stephen T. Walker, Walter J. Entri ken, and the J. S. Keator Lumber Company, thereby stating, among other things, that said National Furnace Company was a creditor of said Moline Malleable Iron Works, and that at the time when the said Moline Malleable Iron Works executed the said trust deed and chattel mortgage it was insolvent and its indebtedness was largely in excess of its capital stock, and that its officers and directors had assented to the creation of its indebtedness, and that the said conveyances were fraudulent and void as Works, and therein and thereby prayed, among against creditors of said Moline Malleable Iron other things, that a receiver might be appointed to take charge of and manage the property court, and that the said trust deed and chattel of the said corpopation under the orders of this mortgage might be held and adjudged fraudulent and void as against said National Furnace Company and creditors of said Moline Malleable Iron Works; to which said bill these defendants put in their several answers, and said Moline Malleable Iron Works, Henry H. Hill, and Stephen T. Walker interpose their several demurrers; that after exhibiting said bill of complaint, to wit, on the first day of August, 1883, upon the application of said National Furnace Company, for the preservation of the property of the said corporation pending the said suit, and for the benefit of all parties interested therein and in the proceeds thereof, this honorable court entered an order in said cause, as appears of record in this court, appointing one Robert E. Jenkins receiver of the said Moline Malleable Iron Works, and of its property, and directing him to take and hold possession thereof under the orders of this honorable court, and directing the said Moline Malleable Iron Works to transfer and convey to said receiver its entire property, both real and personal, and to deliver up to said receiver the |