Where a defendant, when sued upon a note, set up, as a defense,
that the note was given for an illegal consideration, the whole
statute must be examined in order to discover whether or not the
legislature intended to prevent courts of justice from enforcing
contracts relating to the act prohibited.
Page 53 U. S. 80
Where a statute prohibits an act or annexes a penalty to its
commission, it is true that the act is made unlawful, but it does
not follow that the unlawfulness of the act was meant by the
legislature to avoid a contract made in contravention of it.
Where a statute is silent and contains nothing from which the
contrary can properly be inferred, a contract in contravention of
it is void. But the whole statute must be examined in order to
decide whether or not it does contain anything "from which the
contrary can be properly inferred."
Thus, where a statute of Mississippi declared that slaves should
not be brought into the state without a previous certificate signed
by two freeholders, with a certificate of the clerk of the county
from which they came, certifying that the signers were respectable
freeholders, and slaves were brought in without such certificate
and sold, the contract is not void, but the purchaser must pay his
note given for the purchase money.
Other parts of the statute indicate that the legislature did not
intend to declare the contract void, as, for example, a part in
which a fine is imposed upon the buyer and also upon the
seller.
The action was originally brought by Rowan & Harris upon the
following note. Rowan having died during the suit, it was
prosecuted by Harris the surviving partner. It will be perceived
that the action was by the endorsees against the endorser.
"Dollars 8,671.33 1/3."
"On or before the first day of March, eighteen hundred and
forty, I promise to pay H. G. Runnels, or order, eighty-six hundred
and seventy-one 33 1/3 dollars, negotiable and payable at the
Planters' Bank, Natchez, Miss., value received, this 7 December,
1837."
"G. W. ADAMS"
"
[Endorsed.]"
"For value received, I transfer and assign over to Rowan &
Harris the within note of $8,671.33 1/3; said note is secured by
mortgage on lands, of record in Bolivar county, Miss., and I vest
in said Rowan & Harris the right to control said mortgage."
"Given under my hand this 22d July, 1838."
"H. G. RUNNELS"
"Rowan & Harris"
Before stating the pleas of the defendant, it is proper to refer
to a statute of Mississippi passed in 1852. Howard & Hutch.
Dig. 155
Sec. 1. Describes who are slaves; such as are brought in
pursuant to law &c.
Sec. 2. Slaves may be brought in, except convicts.
Sec. 3. No person shall bring in or hold convicts.
Page 53 U. S. 81
Sec. 4. Slaves not to be brought in without a previous
certificate, signed by two respectable freeholders in the county
and state from which the slaves were brought, and signed and
acknowledged before the clerk of said county, and certified by the
clerk that the persons whose signatures were affixed thereto were
respectable freeholders of the county and neighborhood where they
resided, containing a particular description of the stature and
complexion of such slaves, together with the names, ages, and sex
of the same, and furthermore that the slaves therein mentioned and
described had not been guilty or convicted of murder, burglary, or
arson, or felony, within the knowledge or belief of such
freeholders.
Sec. 5. The seller shall register the certificate in the
Orphans' court, and swear that he believes it to be true.
Sec. 6. Seller or purchaser, contrary to this act, shall pay one
hundred dollars for every slave so sold or purchased.
To the declaration of the plaintiff, Runnels plead three pleas,
viz., the general issue of
nonassumpsit and two
special pleas. The conclusion of one of these pleas will show the
nature of both.
"And the defendant avers that the said plaintiffs had not,
previously to the importation of the slaves, sold as aforesaid to
the said defendant, and had not previously to, nor at the time when
the said slaves were sold to this defendant, obtained a certificate
signed by two respectable freeholders in the county of the State of
Virginia, from which said slaves were brought, and signed or
acknowledged before the clerk of said county, in the State of
Virginia, and certified by said clerk, that the persons whose
signatures were affixed thereto were respectable freeholders of the
county and neighborhood where they resided, containing a particular
description of the stature and complexion of such slaves, together
with the names, ages, and sex of the same; and furthermore, that
the slaves therein mentioned and described had not been guilty or
convicted of murder, burglary, or arson, or felony, within the
knowledge or belief of such freeholders, in the said State of
Virginia, and so this defendant says that the sale of said slaves
to him was illegal and void, and the transfer and endorsement made
by him of the note in the declaration was also illegal and void,
and this he is ready to verify; wherefore &c."
The plaintiff joined issue upon the first plea, and demurred to
the two special pleas. Upon the trial, the court below overruled
the demurrers, and gave judgment for the defendant. Whereupon the
plaintiff brought the case up to this Court by writ of error.
Page 53 U. S. 83
MR. JUSTICE WAYNE delivered the opinion of the Court.
It is said that the note sued upon in this case was given for an
illegal consideration.
The illegality alleged is that the plaintiff brought slaves into
the State of Mississippi as merchandise in contravention of the
statute regulating the importation of them, and sold them to the
defendant, for which the note was given in payment. It is admitted
by the plaintiff's demurrer to the defendant's special plea, that
they were so brought and sold. The court overruled the demurrer and
gave judgment for the defendant. The cause is before this Court
upon a writ of error sued out by the plaintiff. The law making
contracts, in contravention of statutes, irrecoverable by suit,
will be first stated and afterwards applied to this case.
There is no doubt that assumpsit cannot be sustained upon a
contract which has not a sufficient consideration. It must not be
illegal, of an immoral tendency, or contrary to sound policy. The
common law maxims are
ex turpi causa, non oritur actio ex dolo
malo non oritur actio. It prohibits everything which is unjust
or
contra bonos mores. The object of all law is to repress
vice and to promote the general welfare of society, and it does not
give its assistance to a person to enforce a demand, originating in
his breach or violation of its principles and enactments. Contracts
in violation of statutes are void, and they are so whether the
consideration to be performed or the act to be done be a violation
of the statute.
A statute may either expressly prohibit or enjoin an act, or it
may impliedly prohibit or enjoin it, by affixing a penalty to the
performance or omission thereof. It makes no difference whether the
prohibition be expressed or implied. In either case, a contract in
violation of its provisions is void. The rule is certain and plain.
The practice under it has been otherwise. The decisions in the
English courts have been fluctuating and counteracting. Those in
the courts of our states have followed them without much
discrimination. No one can read anyone of the recent elementary
treatises upon contracts without noticing the differences of
opinion among judges as to the operation of the rule. Showing,
however, as they do the history of these differences, they may lead
to more conformity of judicial opinion hereafter in this
respect.
The character of these differences will be seen by noticing one
of them. Others might easily be made.
Within a few years we were told, in the English Reports and
seemingly to us with a good reason, that the rule which avoids a
contract made in contravention of a statute did not apply to
statutes made for the protection of the revenue only. That the
nonobservance of excise regulations will not avoid a contract
Page 53 U. S. 84
in respect of their subject matter, if it be not accompanied
with fraud, although a penalty attaches.
Johnson v.
Hudson, 11 East 180;
Brown v. Duncan, 10 Barn. &
C. 98;
Hodgson v. Temple, 5 Taunt. 181. And that it was
always to be applied, when the statute was made for the protection
of the public from moral evils, or from those which we know from
experience that society must be guarded from by preventive
legislation. Such was received as the law by the courts in England
and in our states, and cases were ruled in both accordingly, but
afterwards, with only a few years intervening, Baron Parke, a
distinguished judge, truly said, in
Cope v. Rowland, 2
Cromp. Mee. & Ross. 157,
"Notwithstanding some dicta apparently to the contrary, if the
contract be rendered illegal, it can make no difference, in point
of law, whether the statute which has made it so has in view the
protection of the revenue or any other object."
Such we believe to be now the rule in England, but with many
exceptions, made upon distinctions very difficult to be understood
consistently with the rule, so much so that we have concluded,
before the rule can be applied in any case of a statute prohibiting
or enjoining things to be done, with a prohibition and a penalty,
or a penalty only for doing a thing which it forbids, that the
statute must be examined as a whole, to find out whether or not the
makers of it meant that a contract in contravention of it should be
void, or that it was not to be so. In other words, whatever may be
the structure of the statute in respect to prohibition and penalty,
or penalty alone, that it is not to be taken for granted that the
legislature meant that contracts in contravention of it were to be
void, in the sense that they were not to be enforced in a court of
justice. In this way, the principle of the rule is admitted without
at all lessening its force, though its absolute and unconditional
application to every case is denied. It is true that a statute,
containing a prohibition and a penalty, makes the act which it
punishes unlawful, and the same may be implied from a penalty
without a prohibition; but it does not follow that the unlawfulness
of the act was meant by the legislature to avoid a contract made in
contravention of it. When the statute is silent, and contains
nothing from which the contrary can be properly inferred, a
contract in contravention of it is void.
It is not necessary, however, that the reverse of that should be
expressed in terms to exempt a contract from the rule. The
exemption may be inferred from those rules of interpretation, to
which, from the nature of legislation, all of it is liable when
subjected to judicial scrutiny. That legislators do not think the
rule one of universal obligation, or that, upon grounds of public
policy it should always be applied, is very certain. For in some
statutes it is said in terms that such contracts are void; in
Page 53 U. S. 85
others, that they are not so. In one statute, there is no
prohibition expressed, and only a penalty; in another, there is
prohibition and penalty, in some of which contracts in violation of
them are void or not, according to the subject matter and object of
the statute, and there are other statutes in which there are
penalties and prohibitions, in which contracts made in
contravention of them will not be void, unless one of the parties
to them practices a fraud upon the ignorance of the other. It must
be obvious, from such diversities of legislation, that statutes
forbidding or enjoining things to be done, with penalties
accordingly, should always be fully examined, before courts should
refuse to give aid to enforce contracts which are said to be in
contravention of them.
We now turn to the case on hand, to apply to it our version of
the rule and the manner of its application.
The statute relied upon by the defendant to avoid the payment of
his note is that of June, 1822, Hutch.Dig. 512. He relies upon the
fourth section, substantially recited in his special pleas, and
says the plaintiffs cannot recover upon the note, as it was given
for an illegal consideration, from the plaintiff's having failed,
before he sold the negroes, to comply with the directions in the
fourth section. The sixth section declares that both the seller and
the buyer of such slaves shall pay one hundred dollars for every
slave so sold or purchased. The two sections, considered
conjunctively, seem to us to imply that the penalty only, without
any other loss to either the seller or the buyer, was to be
inflicted. The subject matter and the sufficiency of the penalty
relatively to the value of a slave, to prevent the mischief against
which the legislature meant to guard, imply that the legislature
did not mean that such a contract should not be enforced in a court
of justice. Besides, as the act was meant to prevent convict
negroes from being brought into the state for sale, and another
penalty for that offense is to be inflicted, severer than that of
the sixth section, without a forfeiture of the slave or any
provision for his removal from the state, it cannot have been
intended that the disregard of precautionary directions, for the
importation of slaves for sale was to be visited with its penalty,
and the indirect forfeiture by the seller of the price of them, by
denying to him the aid of courts to enforce a contract of sale for
negroes who were not convicts. This statute must be interpreted as
all other statutes are liable to be. The state's policy was to
exclude all negroes tainted with crime. For aught that appears in
the pleadings, the defendant bargained for the negroes knowing that
they were brought into the state as he says they were. If, then,
there was a violation of the law by his purchase, he stands
in
pari delicto with the seller, with this difference between
Page 53 U. S. 86
them, that he is now seeking to add to his breach of the law the
injustice of retaining the negroes without paying for them. And he
might do so if the statute was such as it is represented to be in
his pleas. The law will not aid either of two parties who are
in pari delicto in the violation of a statute. Whatever
may be stated in a contract for an illegal purpose, a defendant,
against whom it is sought to be enforced, may, to prevent it, show
both the turpitude of himself and the plaintiff. Lord Mansfield
said, with a very proper sensibility of the injustice of such a
plea and of the policy which permits it to be insisted upon,
"The objection that a contract is immoral or illegal as between
plaintiff and defendant sounds at all times very ill in the mouth
of a defendant. It is not for his sake, however, that the objection
is ever allowed, but it is founded on general principles of policy
which the defendant has the advantage of, contrary to the real
justice, as between him and the plaintiff."
Such is the law, and the defendant would have the advantage if
he had not mistaken the statute under which it is claimed.
It is a rule, if effects and consequences shall result from an
interpretation of a statute contrary and in opposition to the
policy which it discloses, or substantially avoiding the infliction
of a penalty upon the transgressor, that such an interpretation
must he rejected. In this case, the interpretation contended for in
behalf of the defendant does both. One of them has already been
stated. It is that it would lead to the infliction of a severer
penalty for the disregard of the directions for buying slaves for
sale who are not convicts, than the statute imposes upon those who
shall bring convict slaves into the state.
Further, the penalty in the sixth section, upon such as do not
comply with the directions in the fourth, is to be equally
inflicted upon the buyer and the seller.
Make, then, this contract void, by the application of the rule
pari delicto potior conditio est defendentis et
possidentis, and the defendant, in the event of his conviction
for transgressing the statute, would be substantially released from
the penalty as to all the objects for which punishment is ever
inflicted; because, having the power to retain the negroes, he
would pay the fine from their labor, or would get them for only so
much less than he bargained to give for them. In other words, the
seller, if convicted too, would pay his own and the buyer's fine.
Again, as the rule is not allowed for the benefit of either party
to an illegal contract, but altogether upon grounds of public
policy, we do not think that public policy calls for the
application of it in this case, as the defendant might keep the
slaves which he bought from the plaintiff within the State of
Mississippi, contrary to the law which forbade the sale of
them.
Page 53 U. S. 87
Such decided advantages, to one of two who have violated a
statute by a contract, could not have been meant by the Legislature
of Mississippi.
It is gratifying to us, that the conclusion at which we have
arrived is sustained by the subsequent legislation of Mississippi.
In 1837, Hutch.Dig. 535, an act was passed repealing the act
permitting slaves to be brought into the state for sale. In
addition to the penalty, it is declared in terms that all contracts
in contravention of it shall be void. There could not be, from
statutes
in pari materia, especially in one repealing
another and substituting new conditions and penalties upon the same
subject matter of both, a stronger circumstance to show that under
the first statute in order, contracts in violation of it were not
meant to be irrecoverable by suit. Our judgment in this case is
that the contract is not void, and that the defendant can take
nothing by his pleas.
We are aware that decisions have been made in the courts of
Mississippi seemingly in conflict with this, but they are only so
in appearance. None of them was made until after the Constitution
of Mississippi of 1817 had been superseded by that of 1832. We have
said more than once and now say again that the clause in the
Constitution of 1832 prohibiting the introduction of slaves into
the state as merchandise was inoperative to prevent it until the
legislature acted upon it. We have read all that has been
officially written in opposition to that conclusion without having
our confidence in its correctness at all shaken.
We shall direct the
Reversal of the judgment in this case.
MR. JUSTICE McLEAN and MR. JUSTICE CURTIS dissented.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the Southern
District of Mississippi and was argued by counsel. On consideration
whereof, it is now here ordered and adjudged by this Court that the
judgment of the said circuit court in this cause be and the same is
hereby reversed with costs, and that this cause be and the same is
hereby remanded to the said circuit court with directions for
further proceedings to be had therein in conformity to the opinion
of this Court.
