Williams v. Mobile Sav. Bank

WOODS, Circuit Judge. There can be no doubt, it seems to me, that the bill of exchange, upon which some of the counts are based, is void, and no action can be maintained upon it. It is a part of the public history of the country, and it has been expressly held by the supreme court of .the United States (The Venice, 2 Wall. [69 U. S.] 258; The Ouachita Cotton, 6 Wall. [73 U. S.] 521), that the city of New Orleans was subjugated and brought under the control of the Federal forces on the 6th of May, 1862. It continued in the possession of the Federal army until the close of the late war of Be-bellion. At the time the bill sued on was drawn, Mobile, where the drawer — the Mobile Savings Bank — resided, was within the Confederate lines. The bill, therefore, was one drawn by a party within the Confederate lines, requesting the payment to the payee by a party within the Federal lines, of the sum of 810,000. The bill was therefore void. Griswold v. Waddington, 16 Johns. 438; Philips v. Hatch [Case No. 11,094]; Montgomery v. U. S., 15 Wall. [82 U. S.] 399; Wools. Comm. Int. Law, § 117; Britton v. Butler [Case No. 1,903]; Ouachita Cotton, 6 Wall. [73 U. S.] 521; Woods v. Wilder, 43 N. Y. 164. An attempt is made to take the case out of the rule by the averment in the second and third counts to the effect that at the time of taking the bill the plaintiff’s intestate did not know that the city of New Orleans, which was the residence of the drawee, had fallen under the control of-the Federal forces. I do not think this helps the plaintiff’s bill. The rule which makes a bill given under these circumstances void is founded on the most imperative considerations of public policy. It is to prevent any intercourse across the lines of the contending armies, or any temptation to intercourse, and it is to prevent the enemy from drawing means to carry on his war from within the territory of the state with which he is at war. It was against public policy to allow a bank within the Confederate States to withdraw its assets from within the lines of the United States. It is therefore immaterial whether or not Williams, the intestate, at the time he received the bill, knew that it was drawn upon a bank which was then within the Federal lines. The public interest demanded that such bills should not be drawn, no matter what the parties knew or did not know. The counts of the declaration, therefore, which are based upon the bill of exchange, cannot be maintained, and the demurrer to them is well taken. These are the fourth, fifth and sixth. The common money counts are of course not open to the objection that they are founded on a void paper. Nor do 1 think the sec [1382] ond and third counts are. These counts are not based, upon the bill, but upon a deposit of money made by the plaintiff’s intestate, for which he received a void bill of exchange. The second and third counts seem to me to be rather counts for money of plaintiff’s testator, had and received by defendant, for which the plaintiff’s intestate had. taken a bill of exchange, the issuing of which was against public policy, and therefore void. The second and third counts, therefore, present the question, whether, under the circumstances of public history, and the facts detailed in these counts, the plaintiff can recover back the money which he paid for the void bill.. It is a general and well settled rule of law, that where parties have been engaged in an illegal transaction, the courts will not aid either of them, but will leave them where they have placed themselves. “In pari delicto, melior conditio possidentis.” Meyers v. Meinrath, 101 Mass. 366. See 2 Rob. Prac. 478, where the cases on this subject are collected. But it seems to me that the averment made in the second and third counts that plaintiff’s testator, at the time he received the bill, had no knowledge that the city of New Orleans had fallen under Federal control, takes the case out of this rule. It is when parties are in fault that the law refuses to aid them. If the bill had been drawn before New Orleans fell, the transaction would have been a lawful one. The plaintiff avers that his intestate, when he took the bill, did not know the fact that the city of New Orleans had fallen. There was, therefore, no purpose on his part to violate any law or public policy. He ought not to be punished. He is in no fault. Why should .he lose the money which he paid over to the bank when he supposed he was doing a perfectly lawful act? It seems to me that under the circumstances stated in the second and third counts, it would be against equity to allow the bank to hold on to the money, and that there is no rule of law which forbids the plaintiff from recovering it. The distinction here drawn is taken by the adjudged cases. Thus, it has been held in an action on a promise to indemnify, that if the act directed or agreed to be done is known at the time to be against law, an express promise to indemnify would be void. But if it was not known at the time to be unlawful, the promise to indemnify is a good and valid promise. See 2 Rob. Prac. 299, 300, and numerous eases there cited. If the Mobile Savings Bank had knowledge of the fall of New Orleans, while the plaintiff’s intestate was ignorant of it, and the bank put off on him a bill which was rendered void by the fact of the fall of the city, it seems clear that the plaintiff could recover the money, for the parties would not be in pari delicto, and it would be a most unconscionable fraud to allow the bank to keep the money of the plaintiff’s intestate in such a case. But suppose neither party to the transaction had knowledge of the facts which made it illegal; then neither party is in fault, and there is no rule of law or of public policy which forbids the courts from placing the parties in statu quo. It would, under such circumstances, seem to be the ease of money paid under a mistake of fact, which might be recovered .back. In accordance with these views, the demurrers to the fourth, fifth and sixth counts are sustained, and the demurrers to the second and third are overruled.