Calfee v. Burgess

Brown, President. This is an action of debt on a note under seal, the consideration of which is stated on its face to be borrowed money. The defence was, by special plea, sworn to, that the consideration was Confederate treasury notes, illegally issued by the so-called Confederacy for the purpose of carrying on, aiding and abetting in the late rebellion against- the United States. The replication was that the obligor in said note says “that the consideration thereof was loaned money, and that the defendant is estopped from asserting any other consideration.” To this replication the plaintiff demurred and the defendant joined in the demurrer, and upon consideration thereof, [278] the court overruled the demurrer and gave judgment for the plaintiff for the debt. Two questions arise for determination, viz : first, whether Confederate treasury notes (so-called) were a valid consideration? And second, whether, if bad, the obligor was es-topped from setting it up by the terms of the note stating the consideration to be “loaned money.” In the case of Brown vs. Wiley, 2 W. Va., it was held that a note payable in the so-called Confederate paper was illegal and void, as being the life blood of the rebellion and an unlawful means to an unlawful end. In the case of Hale vs. Sharp, 4 Cald. ,275, it was held that contracts founded upon or in consideration of Confederate treasury notes are not only illegal because mala in se, but because against public policy, and therefore void. The same doctrine held in the cases of Fain vs. Hedrick, 4 Cald., 327; Walker vs. Walker, 4 Cald., 300; Peltz vs. Long, 40 Mo., 532; Hunly vs. Scott, 19 La., 161; Windham vs. Cerf, 19 La., 498. This rebel currency is also condemned by the 14th amendment to the constitution of the United States, as against public policy. Upon principle and authority then, I am of opinion that Confederate treasury notes, so-called, were illegal, and a contract based on such consideration was void. In regard to the question whether the obligor was estop-ped from pleading and proving that such was the consideration of the note sued on, instead of the consideration stated in the note, the case of Wilson vs. Spencer, 1 Rand., 76, furnishes an example in point. That was an action of debt on a note under seal. The defence was, by special plea, that the note was given to the president of an unehartered bank, established contrary to law, and that the consideration of the note was bank notes emitted by said bank in violation of law. The plaintiff demurred to the plea and the defendant joined in the demurrer. The county court gave judgment for the plaintiff, which judgment, upon appeal to the superior court, was affirmed. [279] But upon the appeal to tbe court of appeals, the judgment was reversed and judgment entered-for the plaintiff, by the unanimous opinion of the court. The defence in the case at bar, then, was of matter which might certainly have been set up to an action on simple contract, aud under the provision of the statute might be pleaded in this case to a sealed instrument as within the equity of the act. By the common law if the consideration be repugnant to •justice or morality, or is contrary to the policy of the com-' mon law, it will fail to support a contract. Addison on Contracts, 23; Smith & Smith’s Com.; 3 Leon. 88; Norris vs. Norris, 9 Dana, 318. On principle and authority, therefore, it would seem proper that a court should not lend itself to enforce a contract-made in violation of law, nor allow a guilty party to effectuate his ends by pleading an estoppel to the truth of the case where the policy of the law forbids the transaction. "Where parties are in pari delido neither is entitled to the aid of the court; but a distinction has been taken in the case of usury, and the debtor relieved against his usurious contract upon the ground that the borrower is slave to. the lender, and not, therefore, in pari delido, as well as upon the ground of public policy. Both principles equally apply in this case, because the consideration is money borrowed, whether that be in lawful money or Confederate treasury notes. I think, therefore, that the plea in this case was a good defence to the action; that the replication to it was of matter immaterial and therefore bad, and the demurrer to the replication ought to have been sustained and judgment rendered for the defendant. I am of opinion, therefore, to reverse the judgment of the court below and enter judgment for the defendant, with costs in both courts. The remaining judges concurred. Judgment reversed.