Planters' Bank v. Union Bank - 83 U.S. 483 (1872)
U.S. Supreme Court
Planters' Bank v. Union Bank, 83 U.S. 16 Wall. 483 483 (1872)
Planters' Bank v. Union Bank
83 U.S. (16 Wall.) 483
1. A military commander commanding the department in which the City of New Orleans was situate had not the right, on the 17th of August, 1863, after the occupation of the city by General Butler and after his proclamation of May 1, 1862, announcing that "all the rights of property of whatever kind will be held inviolate, subject only to the laws of the United States," to seize private property as booty of war, or, in face of the Acts of Congress of 6th of August, 1861, and July 17th, 1862, make any order as commander confiscating it.
2. Where, after judgment for a certain sum, a remittitur is entered as to part, the remittitur does not bind the party making it if the judgment be vacated and set aside.
3. Where after judgment for a certain sum, execution is allowed, during a motion for a new trial, to issue for a part of the sum, which part is admitted to be due, this, though anomalous, is not a ground for reversal where no objection appears to have been made and where it may fairly be presumed that the defendant assented to what was done, and where, a new trial being afterwards granted, it was limited to a trial as to the excess of the claim above the amount for which the execution was issued.
4. A promise to pay in "Confederate notes" in consideration of the receipt of such notes and of drafts payable by them is neither a nudum pactum nor an illegal contract.
5. Though an illegal contract will not be enforced by courts, yet it is the doctrine of this Court that where such a contract has been executed by the parties themselves and the illegal object has been accomplished, the money or thing which was the price of it may be a legal consideration between the parties for a promise express or implied, and that the court
will not unravel the transaction to discover its origin. The doctrine applied to the case of money received for the sale of "Confederate bonds."
6. Although, where money has been deposited with a bank, or drafts &c., to be collected in money, and there has been no contract or understanding that a different rule should prevail, the bank where the deposit is made ordinarily becomes the owner of the money and consequently a debtor for the amount collected, and under obligation to pay on demand not the identical money received, but a sum equal in legal value, yet this does not apply where the thing deposited was not money, but a commodity, such as "Confederate notes," and it was agreed that the collections should be made in like notes. The fact that the collecting bank used the notes in their business does not alter the case. The case distinguished from Marine Bank v. Fulton Bank, 2 Wall. 252.
On the outbreak of the rebellion of 1861, both the States of Tennessee and Louisiana joined in that movement, and while those two states were both under the control of the rebel powers, the Planters' Bank of Tennessee (at Natchez) remitted to the Union Bank of Louisiana (at New Orleans) large sums of "Confederate Treasury notes," and also forwarded to it drafts and other claims for collection (and a few Confederate bonds for sale), it having been understood between the two banks that the drafts and claims thus forwarded for collection and the price of the bonds sent for sale were payable only in such Confederate currency, and all the collections made on account of the Planters' Bank having been made in that currency, with its knowledge and authority. In this way entirely, a large balance was made up in favor of the Planters' Bank. There was no controversy as to these facts.
About the 1st of May, 1862, New Orleans was recaptured by the government forces and passed into their control. A large balance, in the course of dealings already mentioned, was at this time due the Planters' Bank.
On entering New Orleans, General Butler, the general who took possession of it for the United States, issued a proclamation, in which he declared:
"All the rights of property of whatever kind will be held inviolate, subject only to the laws of the United States."
On the 6th of August, 1861, Congress passed "An act to confiscate property used for insurrectionary purposes," &c., and on the 17th of July, 1862, "An act to suppress insurrection, to punish treason and rebellion, and for other purposes." These acts designated certain agents for seizing the property of rebels and prescribed certain judicial proceedings for the condemnation of it in the courts of the United States, when belonging to natural persons who were rebels, to persons who aided, abetted, and gave comfort to the rebellion, or who held office under the so-called Confederate States or any state assisting to form them. But neither of the acts gave authority to military commanders to seize such property, nor did either make the property of any incorporated banks liable to such seizure.
In this state of things, an order was issued on the 17th of August, 1863, by command of Major General Banks, then in command of the department, requiring the several banks and banking associations of New Orleans to pay over without delay to the Chief Quartermaster of the army, or to such officer of his department as he might designate, all money in their possession belonging to, or standing upon their books to the credit of, any corporation, association, or pretended government in hostility to the United States, and all moneys belonging to, or standing on their books to the credit of, any person registered as an enemy of the United States or engaged in any manner in the military, naval, or civil service of the so-called Confederate States, or who should have been or who might thereafter be convicted of rendering any aid or comfort to the enemies of the United States. The order declared that such funds would be held and accounted for by the quartermaster's department, subject to the future adjudication of the government of the United States. Under this order, the Union Bank, as the evidence tended to show, on the 10th day of September, 1863, paid to the acting quartermaster the balance standing to the credit of the Planters' Bank on their books, being the
whole balance due. The payment was made in Confederate notes ($211,774) and the quartermaster accepted them in discharge of the balance.
On the 15th of the same September, 1863, the Planters' Bank drew on the Union Bank for $86,646, the sum in federal money which it conceived to be due to it. The Union Bank refused to pay, alleging the seizure by General Banks and payment over accordingly. Thereupon -- on the 11th of September, 1866 -- the Planters' Bank sued the Union Bank in the court below to recover its alleged balance, with interest from the date of the demand. The defendant set up the facts of the case as above given, and that the Confederate moneys sent to the defendant by the Planters' Bank were issued and put in circulation by the said Confederate States during the rebellion for the purpose of maintaining and prosecuting the war &c.; that the dealings of the plaintiff in the said currency were designed on its part to give, and did contribute to give circulation and credit to such unlawful issues, and that it, the defendant, was therefore not liable, on account of the receipt of such currency, to the plaintiff in manner and form as by it alleged.
The case came to trial in February, 1868, and the jury returned a verdict for the plaintiff for the amount claimed in full, with interest, $113,296.01, and a judgment was entered accordingly.
A motion for a new trial was then made, and while the same was undetermined and held under advisement, the following order was entered:
"On motion of the attorneys for plaintiff it is ordered that a remittitur of interest allowed in the judgment in this case be entered, except what is claimed as follows"
On the same day, the attorneys of the plaintiff, on the suggestion that the attorneys of defendant had, during the trial, admitted in presence of the jury that there was due to plaintiff $26,752.63, with interest from 25th November, 1863, asked that an execution be issued for this sum, and the
motion was granted "without prejudice to the plaintiff's right to recover the balance under the judgment in the case."
The motion for a new trial was ordered to be reargued, and after the reargument a new trial was granted, "excepting as regards the sum of $26,752.63, admitted by the defendant to be due to the plaintiff."
On the 24th of January, 1871, two years and ten months after this, the case was again submitted to the jury, and they being sworn to try the issues, the court, against the defendant's objection, permitted the plaintiff to withdraw his remittitur.
On this trial, THE DEFENDANT requested the court to charge the jury:
"That the generals commanding the army of the United States, engaged in military operations against the rebels in the late civil war, had the legal power to seize and take possession of the property or effects of rebels whenever in their judgment necessary or conducive to the successful prosecution of the war; that the commanding generals were the sole judges [subject alone to the control of their military superiors] of the necessity or expediency of such seizures, and that if the jury find from the evidence that the military authorities exacted payment of the balance on the books of the defendant to the credit of the Planters' Bank and its branches, then that the military authorities thus exacting payment were invested, as regards said payments, with all the rights of a creditor."
"That if the demand of the plaintiff arose from the receipt of the so-called Confederate notes, with the authority of the plaintiff, and the military authorities of the United States exacted payment of said demand [and accepted payment in Confederate Treasury notes], and if the said payment was made accordingly to the said authorities under compulsion, and a receipt in full given for the amount so paid to them, then that the said payment and receipt are a valid acquittance and discharge of the defendant from any liability to the extent of such part of the demand of the plaintiff as arose from the receipt of the so-called Confederate Treasury notes for account of the plaintiff with its authority. "
The court did so charge, with the exception that it left out the important words in [ ]. It said:
"The jury will determine what the payment ought to have been. I consider that the military authorities had no right to transact with the defendant in this case; Confederate money was then almost worthless in the discharge of the debt due by the defendant to the Planters' Bank."
The defendant also asked the court to charge further:
"That if the balance of account sued for is composed wholly or in part of direct remittances from the plaintiff to the defendant of Confederate Treasury notes to be placed to credit of the plaintiff, and of collections for their account of drafts, actually and in effect and intent, payable in Confederate Treasury notes, remitted for collections by plaintiff to defendant, and by the latter collected for account of plaintiff in Confederate Treasury notes, and that the banks were necessary instruments of the Confederate government in putting its issues of Confederate Treasury notes in circulation and forcing them upon the country, and that the plaintiff, as one of the banks, willingly lent itself as the instrument of the Confederate government to put those issues in circulation, then that the plaintiff cannot recover such amount of the balance thus composed of Treasury notes and 'collections.'"
"That no lawful or valid obligation can arise from the sale of bonds or securities of the Confederate government, and no action lies for the proceeds of such bonds."
But both these last two charges the court refused to give.
THE PLAINTIFF asked the court to charge:
"That if the jury find that the defendant received 'Confederate currency' on behalf of the plaintiff and entered the same to the credit of the plaintiff on the books of his bank, and used the same in its general business, the defendant thereby became the debtor of the plaintiff, and the measure of the indebtedness is the value of 'Confederate currency' in the lawful money of the United States, at the time the credit was entered as aforesaid and the collections were made."
But the court refused thus to charge, and charged:
"That the measure of indebtedness for receipts or collections
made by the defendant in 'Confederate currency,' and used by it in its general business, was the value of such currency at the date of demand of payment made by the plaintiff, and not at the date when such currency was received and used by defendant in its business. [Footnote 1]"
The jury found in favor of the plaintiff for $24,713, with interest from the 15th of September, 1863, and judgment was entered accordingly.
Both parties excepted:
The defendant to the refusal of the court to charge as requested, to the allowance of a withdrawal of the remittitur, and to the order of the court ordering execution for the $26,752.63, before the motion for a new trial was determined;
The plaintiff to the refusal to charge as requested and to the charge as given.
[It should be added (in order to explain a part of the argument, and of the dissenting opinion in this case), that by acts of March 3d, 1863, [Footnote 2] and the 11th of May, 1866, [Footnote 3] Congress enacted that it should be "a defense in all courts, to any action pending or to be commenced," against anyone for "a seizure" of property when it was shown that such seizure had been made under any "order . . . of any military officer of the United States holding the command of the department, district, or place in which such seizure was made."]