Hanauer v. Doane - 79 U.S. 342 (1870)
U.S. Supreme Court
Hanauer v. Doane, 79 U.S. 12 Wall. 342 342 (1870)
Hanauer v. Doane
79 U.S. (12 Wall.) 342
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
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
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.