Peltz v. Long

Wagner, Judge, delivered the opinion of the court. This was an action commenced in the court below on a promissory note made in New Orleans on the 20 th of March, 1862, by Long to the firm of Austin, Goodwyn & Go., for the sum of $2,323.03, and by them assigned to Peltz, the respondent. It is admitted that the note was assigned after maturity and merely for collection, and that Austin, Goodwyn & Co. are the real parties in interest, and no question arises in regard to the rights of the endorsee. The defence set up is that part of the consideration given [537] for the note was Confederate money issued by authority of the States lately in rebellion, and that the balance was for articles purchased by Long of Austin, Goodwyn & Go. at a price about three times their value in legal currency, and which were to be paid for in Confederate scrip; and also that the members composing the firm of Austin, Goodwyn & Co. were rebels engaged in resistance to the lawful authority of the Government. Upon a trial before the court without a jury, judgment was rendered for the respondent. The evidence abundantly proves that Goodwyn was an officer in the rebel service ; that he left the camp and went to New Orleans to make a settlement with Long before the United States forces took possession of that city, and that the note given was the result of the settlement; that he gave to Long five or six hundred dollars in Confederate money, which was included in the note; and that the remainder was for articles sold at Confederate prices, and for which Confederate money was to be received in payment. That all contracts which are immoral in their nature, or contrary to public policy, or contravene any established interest of society, are void and incapable of enforcement, must be considered as settled propositions of law. It is not necessary that the contract should be expressly illegal; but whenever it is opposed to public policy, or founded on an immoral consideration, no action can spring out of it, the maxim being ex turpi causa non oritur actio. In such cases the law will not intervene in behalf of parties who present themselves in the attitude of wrongdoers; it will not listen to their prayers for relief, but will leave them just where their conduct has placed them. Therefore Ld. Mansfield, in Smith v. Bromley, Doug. 695, says: “If the act is immoral in itself, a violation of the general laws of public policy, then the party paying shall not have his action (to recover back the money) ; for where both parties are equally criminal against such general laws, the rule is potior est conditis defendentis.” Chancellor Kent, in Griswold v. Waddington, [538] 16 Johns, 486, in one of the ablest opinions that ever emanated from his luminous mind, remarks: “The plaintiff must recover upon his own merits, and if he has none, or if he discloses a case founded upon illegal dealing and founded on an intercourse prohibited bylaw, he ought not to be heard whatever the demerits of the defendant may be. There is to my mind something monstrous in the proposition that a court of law ought to carry into effect a contract founded upon a breach of law. It is encouraging disobedience and giving to disloyalty its unhallowed fruits. There is no such mischievous doctrine to be deduced from the books.” Ld. Alvanley, in Monk v. Abel, 3 Bos. & P. 35, declares that “ the princiciple to be extracted from the cases on this subject is, that no man can come into a British court of justice to seek the assistance of the law, who founds his claims upon a contravention of the British laws.” Such contracts have a tendency to familiarize the mind with fraud, to weaken and destroy the force of just and lawful restraint, and induce a defiance of legal obligations, and ought therefore to be rejected. They are, in the expressive and characteristic language of Ld. Oh. Justice Wilmot, contracts “to do that which is injurious to the community ; and the reason why the common law says says that such contracts are void, is the public good. You shall not stipulate for iniquity.” Obligations arising out of contracts made during the time of the rebellion, and where Confederate money was agreed to be taken, or constituted the consideration passing between the parties, have been on several occasions the subjects of litigation. In the case of Schmidt v. Barker, 17 La. Ann. 261, the plaintiff claimed from the defendant, who was a banker in New Orleans, the sum of four hundred dollars, being the balance which he averred was due to him on moneys deposited by him in defendant’s bank between the 17th day of January and the 1st day of April, 1862. The amount was claimed to be due in legal tender notes of the United States; but the defendant set up in his defence a special contract, by which it appeared that the' deposits were received in his bank [539] at the period stated, only on the condition that the amount was to be drawn for in Confederate currency. It appears from the report that the deposits were made by the plaintiff in the same kind of currency. The court held'that the transaction was totally illegal and void, that no cause of action would spring out of it, and gave judgment for the defendant. The case of Laughlin v. Dean, 1 Duv. (Ky.) 20, was a suit upon a note. The answer alleged and the defence showed that the consideration for the note was the purchase of Confederate notes. It was decided that the action could not be maintained, and that the policy of the State forbade its courts from aiding either of the parties to a contract for the sale or purchase of Confederate notes. In a very recent case in Mississippi (Avera v. Robertson), Mr. Justice Clayton decided that the issuance of treasury notes by the Congress of the Confederate States was done by virtue of the war power in the constitution, and was the exercise of a belligerent right; that the abolition of the rebel debt by the superior power, the extinction of the government which created it, and the annulment of the laws which gave it vitality, made it impossible to recover on the notes themselves, and that the condemnation adhered to them even in a secondary transaction. Nor is there any force in the suggestion, that although the plaintiff may be debarred from re-' covering so much as is shown to have been paid in Confederate notes, yet that only goes partially to the consideration, and that the balance is good, and judgment should be rendered for it. This is not the case where the law allows a distinction to be taken where the consideration is illegal in part, and there are separate promises founded on partly legal and partly illegal considerations. It is an entire promise, and if any part of the consideration is illegal, the whole consideration is void ; public policy will not permit a party to enforce a promise which he has obtained by an illegal act or an illegal promise, although he may have connected with this act or promise another which is legal—1 Pars, on Cont. (5th ed.) 457. [540] In what light can this court, recognizing as it does in the fullest and broadest extent the Constitution of the United States and the laws passed by the Federal Congress as supreme and paramount, view the claims of a party when he comes here and asks indemnity for an act which was calculated and intended to disrupt and dismember the general government and destroy the national fabric. To say that his acts and contracts were against public policy is indeed a very mild characterization. Money was indispensable; it was the very sinew necessary to enable the Confederates to carry on their bloody strife and prosecute their purpose of dissolving the Union, and whoever gave credit to their currency must be adjudged to be a particeps criminis. The parties sold their merchandise for Confederate money, thus giving it credit, countenance and circulation ; and, in addition, one of them at least was in open and armed rebellion, giving material and physical aid to sustain its character, and ultimately provide for its redemption, as it was made payable after a treaty of separation between the Confederate and the United States. Each part of the transaction adheres to the other and makes the whole entirely void ; no relief can be obtained in a court of justice, and the parties must remain where they have placed themselves by their own conduct. With the concurrence of the other judges, the judgment is reversed. •