Lablache agt. Kirkpatrick et al.

costs to his adversary, and we are called upon to determine, whether the present case falls within the general rule, or some exception to it. We will consider the exceptional rules first, because, if an exceptional rule applies, the general rule does

not.

The Code allows full costs to a plaintiff, upon the rendering of a final judgment in his favor (Code, sec. 3228) in an action specified in section 2863 of the act (sec. 3228, supra, subd. 2), without regard to the amount recovered. Section 2863 refers to actions wherein justices of the peace have no jurisdiction, and subdivision 4 of that section deprives such justices of jurisdiction, "where, in a matter of account, the sum total of the accounts of both parties, proved to the satisfaction of the justice, exceeds $400," so that if the present case falls within that subdivision, the plaintiff is entitled to costs, having recovered a final judgment in her favor, and this without regard to the amount thereof.

This subdivision and the one in the former Code, from which it is taken, have already received judicial interpretation. The subdivision in question does not apply to a case where there are opposite demands, and the accounts are connected by originating in the same transaction, and the balance is the debt, because, if the plaintiff had given the proper credit instead of suing on one side of the account only, the balance due might have been sued and recovered in a justice's court (Gregory agt. McArdle, 1 How. Pr. [N. S.], 187). But where the accounts are not connected by originating in the same transaction, and the counter-claims or cross-accounts of the defendant are disconnected with the plaintiff's account and exist independently of it, it is not a case where the plaintiff is bound to know of the counter-claim in advance so as to be required to strike a balance for the purpose of bringing the suit within the jurisdiction of a justice's court.

This is particularly so in this case, for the counterclaims were probably unknown to the plaintiff when the action was commenced, and exist only by virtue of assignments which the

Lablache agt. Kirkpatrick et al.

defendants procured evidently for their protection against the claim of the plaintiff, the amount of which had previously been ascertained and fixed by proceedings in the superior court. The "sum total of the accounts of both parties, proved to the satisfaction of the court, exceeded $400" within the proper intent and meaning of subdivision 4 of section 2863 of the Code, and the plaintiff, in our judgment, became entitled to costs upon her recovery, though it was but for $5.20.

In Ex parte Mills (10 Wend., 557, note) the court held that a plaintiff recovering less than fifty dollars in a court of record is not entitled to recover costs, though his claim, as established at the trial, exceed $200, if it be reduced by payments. If reduced by set-offs, however, he is entitled to costs.

To the same effect is Lamoure agt. Caryl (4 Denio, 370). The counterclaims pleaded by the defendants were in no sense payments, but in the nature of set-offs. In Boston, Mills agt. Cull (6 Abb. [N. S.], 319) it was held that a plaintiff, who sues in a court of record, in an action arising on contract and for the recovery of money only, and who recovers judgment for less than fifty dollars in consequence of a counterclaim interposed and established by the defendant in the action, is entitled to the costs of the action, provided his claim, together with the defendant's counterclaim, exceed $400 in amount.

In Griffin agt. Brown (35 How. Pr., 372) it was held that where the plaintiffs sued to recover of the defendants $500 for the lighterage and storage of grain, and the defendants interposed a counterclaim for more than that amount for wastage and conversion of the grain, and claimed a balance in their favor, and the referee, on adjusting the claims on each side, found in favor of the plaintiffs a balance of five cents, it was held that the plaintiffs were entitled to costs.

In Hayes agt. O'Reilly (Daily Reg., July 1, 1884) the question was considered by the special term of this court, and after reviewing the cases it was held that where the defendant interposed an independent counterclaim of $1,400 to a demand of $1,700, and the counterclaim is extinguished on the trial, the

Spring agt. Quance.

plaintiff was entitled to, costs, although he recovered but six cents. The question ought, by this time, to be considered settled.

The order appealed from was properly made and must be affirmed, with costs.

HALL and HYATT, JJ., concurred.

Affirmed by common pleas, general term, January 5, 1886.

SUPREME COURT.

JACOB SPRING and JOHN H. SPRING agt. WILLIAM T. QUANCE

Promissory note - Given for a patent right, such fact not being indicated on face of note is void-Laws of 1877, chapter 65.

A promissory note given and taken by plaintiffs, for a patent right, which fact was not indicated upon the face of the note as required by statute (Laws of 1877, chap. 65), which statute makes such taking a misdemeanor, cannot be enforced by plaintiffs and in their hands at least is absolutely void.

Whether plaintiffs can recover the consideration for which the note was given? (Quare.)

Special Term, December, 1885.

ACTION upon a promistory note. Defense that note was given for a patent right, which fact was not indicated upon the face of the note as required by the statute, and the note was therefore void; the facts are all conceded; the only question is whether the note is valid or void.

S L. Snyder, for plaintiffs.

A. C. & E. C. Woodruff, for defendant.

WILLIAMS, J.-The statute (chap. 65, Laws 1877) provides in substance, "Whenever any promissory note shall be given VOL. III

9

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for a patent right, the words 'given for a patent right,' shall be written or printed on the face of the note, and such a note in the hands of any purchaser or holder shall be subject to the same defenses as in the hands of the original owner or holder; and any person who shall take, sell or transfer such a note without such words on its face, knowing what the note was given for, shall be guilty of a misdemeanor."

This statute does not in express terms provide the note shall be void; it does make the taking of the note a misdemeanor, and it in effect provides the note shall not be given without these words upon the face, because it provides whenever any such note shall be given it shall have these words upon its face. It seems to me to follow, therefore, that this note was taken by plaintiffs in violation of the statute; that the statute prohibits the giving or taking of such a note. If I am right about this proposition, it is difficult to see how I am to avoid the necessary conclusion that the note is utterly void.

The case seems to be analogous to those cases decided under the statute of 1840, prohibiting banking associations from issuing or putting in circulation any bill or note unless payable on demand without interest. In Leavitt agt. Palmer (3 N. Y., 32), which was an action relating to some of these bills or notes, the court says: "I feel no difficulty in agreeing with the supreme court, that these notes are illegal and void. They were issued in direct violation of a statute which provides, 'no banking association shall issue or put into circulation any bill or note of said association unless the same shall be made payable on demand without interest, and every violation of the statute is made a misdemeanor.'

As the issuing of the notes was expressly prohibited by law, it is impossible to maintain that they are valid securities. To hold that they can be enforced, would be going very far towards defeating the end which the legislature had in view. The legal liability on account of which the notes were issued still remains, but the notes themselves are void."

In Bank Commissioners agt. Bank (7 N. Y., 515), which was

Spring agt. Quance.

an action relating to some of these notes, the court says: "The notes were made in violation of the statute (of 1840), and were therefore void. No action could have been maintained against the association upon them, in behalf of the original payees, and certainly not in behalf of the endorsee who was himself president of the association, and aided in the violation of the law." This principle is laid down, and these authorities are cited as sustaining it in Edwards on Bills, &c., vol. 1, sec. 485.

In Barton agt. Plankroad Co. (17 Barb., 404), the court says: "The contract in question was within the express prohibition of the statute. The section is only prohibitory in its terms; it does not declare in so many words that all such contracts shall be void, but that is not necessary. Every act done against a prohibitory statute is not only illegal but absolutely void; the court cannot assist an illegal transaction in any respect. It has been repeatedly decided that all contracts contrary to the provisions of statute, are void, and it is a general rule that courts will not aid either party in enforcing an illegal executory contract."

In Palmer agt. Minor (8 Hun, 346, 347), a note given under a statute of Pennsylvania, like the one now existing in this state, was assumed to be void as between the original parties and those who stood in no better position than the original parties. I must hold in this case that the note, having been given and taken by plaintiff in violation of a statute which makes such taking by plaintiff a misdemeanor, cannot be enforced by plaintiffs, and, in his hands at least, is absolutely void. Whether plaintiff can recover the consideration for which the note was given, I am not called upon here to decide. The action here is based upon the note and that alone, and, being unable to recover upon the note, the complaint must be dismissed with

costs.

I think no principle of estoppel is applicable here. Findings will be prepared in accordance with this decision, and presented for signature.