1. Action will not lie for the price of goods sold in aid of the
Rebellion or with knowledge that they were purchased for the
Confederate states government.
2. A promissory note the consideration of which is wholly or in
part the price of such goods is void, and an action cannot be
sustained thereon by a holder who received it knowing for what it
was given.
3. Due-bills given for the price of such goods and passed into
the hands of a person knowing the fact will not be a good
consideration for a note.
4. It is contrary to public policy to give the aid of the courts
to a vendor who knew that his goods were purchased, or to a lender
who knew that his money was borrowed, for the purpose of being
employed in the commission of a criminal act injurious to society
or to any of its members.
This was an action by Doane against L. & J. Hanauer, to
recover the amount of two promissory notes dated in February, 1867.
These notes were originally given by the said L. & J. Hanauer,
under the firm of L. Hanauer & Co., to one Hunter in settlement
of an account between them and the firm of Hunter & Oakes,
which had mostly accrued in the years 1860, 1861, and 1862. A
portion of this account was for items of private and family use;
the residue was partly for supplies and commissary stores for the
Confederate army sold by Hunter & Oakes to L. Hanauer, a
recognized supply contractor of the Confederate government, and
partly for duebills issued by Hanauer, as such contractor, to
Page 79 U. S. 343
other persons in payment of army stores and supplies and taken
up by Hunter & Oakes at Hanauer's request under a promise to
redeem the same.
The question in the case was whether the notes sued on, having
been given for the consideration mentioned, were valid.
The defendants asked the court to charge thus:
"1. If the jury find that Hunter & Oakes sold to L. Hanauer
a quantity of goods and chattels knowing that the said Hanauer was
purchasing them as supplies for the rebel army to carry on the war
against the United States, and that the price of the same form a
part of the consideration of the notes sued on, then they will find
for the defendants."
"2. If they find that L. Hanauer, acting as a purchasing agent
for the Confederate states, in rebellion, gave out notes or
duebills for supplies furnished the rebel army with the knowledge
of the persons from whom such purchases were made, of the use to
which the said supplies were to be put, and that, during the time
when the said duebills were in the course of being issued, the said
Hanauer made an agreement with said Hunter & Oakes that the
latter should take up said duebills and charge them to said
Hanauer, the said Hunter & Oakes knowing the purpose for which
the same were issued, and that the price of said duebills so taken
up forms any part of the consideration of the notes sued on, then
they will find for the defendants."
The court refused so to charge, and charged as follows:
"If these duebills were taken up by Hunter & Oakes, after
they were issued to the parties to whom they were payable and upon
the promise of Hanauer that he would redeem them, then, as between
Hanauer and Hunter & Oakes, the surrender by Hunter & Oakes
to Hanauer of such duebills so taken up by them, would constitute a
good and sufficient consideration for the amount thereof. And this
is the law although you may find that the parties to whom the
duebills were payable knew at the time of making the sale of
supplies or property to L. Hanauer that he intended to turn the
same over to the rebel army, and that Hunter & Oakes had notice
of these facts. To affect the validity of the notes sued on as to
that part of the
Page 79 U. S. 344
consideration made up of these duebills, you must be satisfied
that Hunter & Oakes were interested in furnishing the supplies
to the rebel army for which the duebills were given, or that what
they did in the premises was done for the purpose or with the view
of aiding in furnishing supplies to the rebel army, otherwise
giving aid and comfort to the rebellion."
"Then, as to the other item, comprising a part of the
consideration of the notes sued, the account of Hunter & Oakes
against Hanauer as supply contractor for supplies sold to Hanauer.
It is asserted that Hunter & Oakes knew that the articles
mentioned in this account were purchased by Hanauer to be turned
over as supplies to the rebel army, and the defendant maintains
that this knowledge of the use intended to be made by Hanauer of
these goods made the sale illegal, and that the amount of these
sales having been included in the notes sued on, they are illegal
and void. This is not the law. Bare knowledge on the part of Hunter
& Oakes that Hanauer intended or expected to turn the goods and
property purchased from them over to the rebel army as supplies for
said army would not make such sale of goods and property illegal
and void. To make the sale of goods from Hunter & Oakes to
Hanauer illegal and void, it must appear that Hunter & Oakes
had some concern in furnishing the supplies to the rebel army, or
that it was part of the contract between Hunter & Oakes and
Hanauer that such goods should go to the support of the rebel army,
or that the design of Hunter & Oakes in making such sale was to
aid in furnishing supplies to the rebel army or otherwise give aid
and comfort to the rebellion. But if the goods were sold by Hunter
& Oakes in the common and ordinary course of trade, and the
only inducement to the sale of the goods on the part of Hunter
& Oakes was the price agreed to be paid by Hanauer for the
same, then the sale was a legal and valid sale, although Hunter
& Oakes knew that Hanauer intended or expected to turn such
goods over to the rebel army."
Judgment having gone for the plaintiff, the defendant, Hanauer,
brought the case here on exceptions to the charge, the question in
this Court being, of course, the same one as in the court below,
to-wit, whether the notes sued on, having been given for the
consideration mentioned, were valid.
Page 79 U. S. 345
MR. JUSTICE BRADLEY delivered the opinion of the Court.
We have already decided in the case of
Texas v. White
[
Footnote 1] that a contract
made in aid of the late rebellion or in furtherance and support
thereof is void. The same doctrine has been laid down in most of
the circuits and in many of the state courts, and must be regarded
as the settled law of the land. Any contract tinctured with the
vice of giving aid and support to the rebellion can receive no
countenance or sanction from the courts of the country. Are the
notes in suit of this kind? A portion of their consideration was
stores and supplies furnished to the army contractor of the
Confederate government, and another portion was duebills issued for
the same consideration and received by Hunter & Oakes with full
notice of their character. If either of these portions of the
consideration on which the notes were given was illegal, the notes
are void
in toto. Such is the elementary rule, for which
it is unnecessary to cite authorities.
On the trial of the cause below, the judge, in charging the
jury, instructed them that if Hunter & Oakes took up Hanauer's
duebills for value at his request and on the faith of his promise
to redeem them, made after he had given them out for supplies,
these duebills would constitute a good consideration for the notes.
We do not think that this was a correct statement of the law. If
Hanauer had borrowed money from Hunter & Oakes to redeem the
duebills himself, the transaction would have been different, and
the loan of money would have been legal, although Hunter &
Oakes had known for what purpose Hanauer wanted the money. They
would have been one degree farther removed from the unlawful
transaction. But instead of this, they became the holders of the
duebills, knowing for what purpose and on what consideration they
had been issued, and
Page 79 U. S. 346
hence their title was no better than that of the original
holders. To vitiate this title, it was not necessary, as stated by
the judge, that Hunter & Oakes should have been interested in
furnishing the supplies for which the duebills were given; nor that
what they did should have been done with the view of aiding the
rebel cause. If the duebills were invalid in the hands of the
original holders, they were invalid in the hands of Hunter &
Oakes. Whether they were invalid depends on the solution of the
question whether the sales of supplies to Hanauer, for the use of
the Confederate army, was or was not an illegal transaction. We
think it was. But on this subject it is proper to examine the views
of the judge at the trial.
With regard to that portion of the consideration of the notes
which consisted of supplies sold by Hunter & Oakes to Hanauer
for the Confederate army, the judge instructed the jury that bare
knowledge on the part of Hunter & Oakes that Hanauer intended
or expected to turn the goods over to the rebel army would not make
the sale illegal and void, but that to make it so it must appear
that Hunter & Oakes had some concern in furnishing the supplies
to the rebel army or intended to aid therein. In this instruction
we think the judge erred. With whatever impunity a man may lend
money or sell goods to another who he knows intends to devote them
to a use that is only
malum prohibitum, or of inferior
criminality, he cannot do it without turpitude when he knows or has
every reason to believe that such money or goods are to be used for
the perpetration of a heinous crime and that they were procured for
that purpose. In the words of Chief Justice Eyre in
Lightfoot
v. Tenant, [
Footnote
2]
"the man who sells arsenic to one who, he knows, intends to
poison his wife with it will not be allowed to maintain an action
on his contract. The consideration of the contract, in itself good,
is there tainted with turpitude which destroys the whole merit of
it. . . . No man ought to furnish another with the means of
transgressing the law knowing that he
Page 79 U. S. 347
intended to make that use of them."
On this declaration Judge Story remarks:
"The wholesome morality and enlarged policy of this passage make
it almost irresistible to the judgment, and indeed the reasoning
seems positively unanswerable. [
Footnote 3]"
Can a man furnish another with the means of committing murder or
any abominable crime knowing that the purchaser procures them, and
intends to use them, for that purpose, and then pretend that he is
not a participator in the guilt? Can he wrap himself up in his own
selfishness and heartless indifference and say, "What business is
that of mine? Am I the keeper of another man's conscience?" No one
can hesitate to say that such a man voluntarily aids in the
perpetration of the offense, and, morally speaking, is almost, if
not quite, as guilty as the principal offender.
No crime is greater than treason. He who, being bound by his
allegiance to a government, sells goods to the agent of an armed
combination to overthrow that government, knowing that the
purchaser buys them for that treasonable purpose, is himself guilty
of treason or a misprision thereof. He voluntarily aids the
treason. He cannot be permitted to stand on the nice metaphysical
distinction that, although he knows that the purchaser buys the
goods for the purpose of aiding the rebellion, he does not sell
them for that purpose. The consequences of his acts are too serious
and enormous to admit of such a plea. He must be taken to intend
the consequences of his own voluntary act.
The decision of Chief Justice Eyre in the case above referred to
has been followed in several other English cases. It was followed
by Lord Ellenborough in
Langton v. Hughes, [
Footnote 4] where a druggist sold drugs of a
noxious and unwholesome nature to a brewer knowing that they were
to be used in his brewery contrary to law, and it was held that he
could not recover the price. It was also followed by Chief Justice
Abbott in
Cannan v. Bryce, [
Footnote 5] where it was held that money
Page 79 U. S. 348
lent to a man to enable him to settle his losses on an illegal
stockjobbing transaction, could not be recovered back. Said the
Chief Justice:
"If it be unlawful in one man to pay, how can it be lawful for
another to furnish him with the means of payment? . . . The means
were furnished with a full knowledge of the object to which they
were to be applied, and for the express purpose of accomplishing
that object."
In that case, the lender had no interest whatever in the
unlawful transaction, and was only connected with it, as Hunter
& Oakes were in this case, by knowing the object for which the
money was borrowed. These cases were followed by the Court of
Errors of New York, in the case of
De Groot v. Van Duzer.
[
Footnote 6] Chancellor
Walworth, in that case, observes that,
"those cases in which an independent contract has been held void
from a mere knowledge of the fact of the illegal end in view,
proceed upon the ground that the party having such knowledge
intended to aid the illegal object at the time he made the
contract."
There are cases to the contrary, but they are either cases where
the unlawful act contemplated to be done was merely
malum
prohibitum or of inferior criminality or cases in which the
unlawful act was already committed, and the loan was an independent
contract, made not to enable the borrower to commit the act, but to
pay obligations which he had already incurred in committing it. Of
the latter class was the case of
Armstrong v. Toler;
[
Footnote 7] of the former,
those of
Hodgson v. Temple, [
Footnote 8] and others cited in the argument. In
Hodgson v. Temple, where a buyer of spirituous liquors was
known to be carrying on a rectifying distillery and a retail liquor
shop at the same time, contrary to law, the vendor of the spirits
was held entitled to recover the price. Sir James Mansfield
said:
"The merely selling goods knowing that the buyer will make an
illegal use of them is not sufficient to deprive the vendor of his
just right of payment, but to effect that it is necessary that the
vendor should be a sharer in the illegal transaction. "
Page 79 U. S. 349
This seems to have been the view taken by the judge who tried
this cause below, and which he applied to this case. In our
judgment, it is altogether too narrow a view of the responsibility
of a vendor in such a case as the present. Where to draw the
precise line between the cases in which the vendor's knowledge of
the purchaser's intent to make an unlawful use of the goods will
vitiate the contract and those in which it will not may be
difficult. Perhaps it cannot be done by exact definitions. The
whole doctrine of avoiding contracts for illegality and immorality
is founded on public policy. It is certainly contrary to public
policy to give the aid of the courts to a vendor who knew that his
goods were purchased, or to a lender who knew that his money was
borrowed, for the purpose of being employed in the commission of a
criminal act injurious to society or to any of its members. This is
all that we mean to decide in this case.
Judgment reversed and a new trial ordered.
[See the <|79 U.S. 349|>349 next case.]
[
Footnote 1]
<|7 Wall. 700|>7 Wall. 700.
[
Footnote 2]
1 Bosanquet & Puller 551, 556.
[
Footnote 3]
Story's Conflict of Laws § 253.
[
Footnote 4]
1 Maule & Selwyn 593.
[
Footnote 5]
3 Barnewall & Alderson 179.
[
Footnote 6]
20 Wendell 390.
[
Footnote 7]
<|11 Wheat. 258|>11 Wheat. 258.
[
Footnote 8]
5 Taunton 181.
