Hale v. Huston, Sims & Co. , 44 Ala. 134 ( 1870 )

B. F. SAFFOLD, J.

The question is directly presented whether a loan of Confederate States treasury-notes is such a consideration as will support, in whole or in part, a promise to pay a like sum in lawful money of the United States. We know judicially that the Confederate States was an organization hostile to the United States, and seeking to overthrow its supremacy over the territory and the people of the States comprising the Confederation; that its treasury-notes were issued and used in pursuance, and in aid of, that unlawful and revolutionary purpose. No one will deny that contracts made for the use of this currency in aid of the rebellion would be contrary to public policy, and consequently illegal and void. Whether the use of it by the citizens of the States in rebellion, in the transaction of their ordinary business, and without any illegal or criminal intent, was legitimate and such as ought to sustain a promissory note or other obligation given in consideration of a loan of it, we will further inquire.

In the first place, the time when the note sued on was made, and the consideration given for it, preclude the supt position that the defendants promised to pay the amounexpressed on its face in lawful money. To do justice between the parties, we must at once depart from the terms of the written contract. By what principle of law or equity shall we test their respective right and obligation ? A promise to pay a stipulated sum of money in some specified commodity, is discharged by a payment of the value of the property at the maturity of the obligation. — Jolly v. Walker’s Adm’rs, 26 Ala. 690; Williams v. Sims, 22 Ala. 512; Young v. Scott, 5 Ala. 475. But the article which is to be valued must be something either established or recognized by law as property, before a court can inquire of its value.

If it be said, that the plaintiff ought to recover the value of the Confederate money at the date of the contract, what authority have we for this ? The same objection meets us as in the other case. A quantum valéhat count can not be sustained, because the thing loaned is without the protection and recognition of law. Besides, it was not the agreement of the parties, nor is it the rule where payment is to be made in specific property.

The second section of ordinance 38 of the State convention of 1867, “ concerning the value of contracts where the. consideration was Confederate bonds or currency, and for the purchase of slaves,” ordains “that all bills, bonds, notes, or evidences of debt, outstanding and unpaid, given for or in consideration of bonds or treasury-notes of the so-called Confederate States, or notes or bonds of this State paid and redeemable in the bonds or notes of the Confederate States, are hereby declared null and void, and no action shall be maintained thereon in the courts of this State.”

If it be said that this law is void, because it would impair the obligation of contracts, how can it be shown that Confederate money, the creation of an insurrection, is recognized, as the valid basis of a contract, by the constitution of the United States, which the purpose of its use was to destroy. Could a person be indicted and convicted for stealing Confederate money now ? Could he be so dealt with for having stolen it during the war? Why is it now valueless? — the resources of the States which put it in circulation are not exhausted. It has been decided by this court and the supreme court of the United States that the Confederate government was not a de-facto government.— Chisholm, v. Coleman, January term, 1869; Texas v. White, S. C. R. 1869. We, therefore, can obtain no aid from the principle of lex loci. The contract was not one of another State which we might enforce on the basis of comity, or refuse to execute because opposed to national policy.— Story on Conflict of Laws, § 244. It is one entered into under the domination of the laws of our own country, to which our courts must see that it conforms.

This note was given for a consideration against public policy. The circulation of these notes, in the ordinary business transactions of the citizens residing in the States in rebellion, was necessary to their use by the Confederate government in aid of the war. Without this circulation the attempt to use them would have been a failure, and with the failure would have come the end of the rebellion. I do not mean to say that their circulation by the citizens was a crime to be punished, but it was efficient and indispensable aid to the rebellion, though involuntary. To hold that such a currency is a consideration for a contract, the obligation of which the Federal consitution may be invoked to sustain, is to invite and encourage insurrection, to which the people are always averse, and into which they are almost invariably forced by a comparatively few revolutionists.

It was given for bills of credit which no State, nor collection of States, can legally issue. To constitute a bill of credit, within the constitution, it must be issued by a State, on the faith of a State, and designed to circulate as money. It must be a paper which circulates on the credit of the State, and is so received and used in the ordinary business of life. The individual or committee who issue it must have the power to bind the State. They must act as agents, and of course not incur any personal responsibility, nor impart, as individuals, any credit to the paper. — Briscoe v. The Bank of Kentucky, 11 Peters, 257. Every ingredient of this too liberal definition, in favor of the rights of the States, entered into the composition of the Confederate States treasury-notes. That they were emitted by a combination or confederation of States, can not alter their character. Indeed, the combination itself was a violation of the constitution. — Const, art. 1, § 10, ¶ 3.

Assuming that they were bills of credit, is the contract between these parties on that account void ? It is a sufficient answer to the question, to say that the supreme court of the United States has so decided. — Craig v. Missouri, 4 Peters, 443; see, also, Linn v. State Bk. of Illinois, 1 Scam. (Ill.) R. 87. A simple consideration will convince us that it must be so. The evil intended to be suppressed was extensively practiced by the colonies before and during the revolution of 1776. The effects were ruinous to society. Property was in confusion, business was prostrated, or carried on with distrust and suspicion, and every incentive to energy and enterprise was destroyed. Results so disastrous must be prevented. How can the prohibition be made effectual, if the circulation of such bills by the citizens of a State be lawful, or, being illegal, they are nevertheless the valid consideration of a binding obligation ? What more effective agent for their entire suppression can be employed, than to declare that the contracts of which they are the consideration are absolutely void ?

The consideration of this note was something not recognized by any law of the Union or of this State as property. It was adverse to public policy, having been created for purposes hostile to the Union. It was bills of credit emitted by an illegal combination of States, in violation of the Federal constitution. A law of the State forbids the courts to enforce such contracts. Tbe note is, therefore, void.

The judgment is affirmed.

Peters, J., concurs.