Case ID: miss_15/html/0380-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John R. Wooten et al. vs. Daniel Miller.
    In 1837, D. M., a citizen of North Carolina, placed in the possession of W., about to move to the state of Mississippi, a negro man to be sold or hired for him ; W. brought the slave to this state and sold him here to M. on a credit, and took M.’s note, and transferred it to his father in payment of a debt due by him to his father; the note was afterwards paid; and D. M. sued W. and his father in equity to recover the money, charging them with a fraudulent combination to cheat him out of it: Held, that the complainant was not entitled to recover; the introduction of the slave into this state was in violation of the law and constitution, and any contract, growing out of, or connected with, such violation will not be enforced.
    Where a non-resident employs an agent in this state to introduce or sell slaves here for him, and the agent does so introduce and sell the slaves, the principal cannot recover from the agent the proceeds of their sale ; the non-residence of the principal not shielding him from the operation of our laws.
    If the contract of a foreigner is to be completed in, or has reference to its execution in, a foreign country, and is repugnant to the laws of that country, he is bound by them.
    In error from the vice-chancery court at Columbus • Hon. Henry Dickinson, vice-chancellor.
    Daniel Miller, a citizen of North Carolina, alleges in his bill, that in 1837 he delivered to John R. Wooten, then about to move into this state, his negro man Tony, to sell or hire here for him; that Wooten brought the slave here and sold him to one Moore for $1050, and took his note therefor, payable at a future day, and transferred the note fraudulently to Robert Wooten, his father, who was cognizant of all the facts, and bought with the note a tract of land from one Prewett, to whom Moore afterwards paid the note. That the Wootens studiously concealed these facts from him, and wrote him false and deceptive letters, and had combined to defraud him. The bill prays that the money might be decreed to be paid.
    To this bill the defendants filed a general demurrer, on the ground that the slave was introduced into the state in violation of law, and that the contract was void; and if there was any remedy it was at law.
    The vice-chancellor overruled the demurrer because the allegations of fraud were not answered.
    Whereupon the defendants answered, John R. Wooten insisting that the contract of sale was void and all the contracts that grew out of it; averred his intention to pay the money until he found that the law had been violated, which he did not know at the time of sale, nor until long after. That Robert Wooten gave full consideration for the note; he took it in payment of a debt due by John R. to him. Both answers insist on the demurrer, on the ground of the contract being illegal and void.
    The vice-chancellor decreed that the defendants should pay the amount of the note with interest; and they sued out this writ of error
    
      Adam Y. Smith, for plaintiff in error.
    1. The court erred in overruling the first demurrer. The order overruling states the cause, to wit, because there is no answer denying fraud. I am aware that fraud must be denied, &c., but that is only where the charge of fraud is based upon facts that support it. 6 How. R. 313, 314. If the facts of the bill do not therefore amount to fraud in law as between the parties, there was no necessity of denying the fraud charged.
    This court has decided in 5 How. 80, and 769, that the contract for the sale of a slave, so introduced, is absolutely void. Following up this decision, it is decided in Freeman, p. 38, that the title remains with the vendor, and if the title remains with the vendor, of course the note he takes from the vendee is a nullity, and the rvhole thing is as though it was not.
    
      2. Complainant below seems to rely upon the principle, “that money paid to an agent may be recovered by the principal, although the money is the fruit of an illegal transaction; ” authorities are quoted in brief in support. The principle is correct, provided the agent has had no connection with the illegal transaction. It has no application here, the Wootens were connected with the transaction, they were particeps critninis from the beginning ; and indeed they never received any money from the transaction or anything else, if the note was' a nullity. In Farmer v. Russell, 1 Bos. & Pull. 295, it was held, If A. is indebted to B. on a contract forbidden by law, and pays the money to C. for B., B. can recover it of C. Eyre said that plaintiffs demand arose simply from the circumstance that money was put in the hands of C. for his use, C. having had no connection with the illegal transaction.
    3. But it is said, that “ the rule pari delicto, &c. is not of universal application; that of two engaged in an illegal transaction, one may be more guilty than another, and that consequently chancery will relieve against him who is most guilty.” I admit this doctrine to be true, but it has no application here. Lord Mansfield, in Douglass, 696, n. and Cowp. 790, and quoted by Chief Justice Parker, in II Mass. R. 376, 377, with great approbation, lays down the true doctrine and shows its application : “ Where acts are made illegal by statute to protect the weak and unwary, there relief will be granted in favor of the oppressed, as in contemplation of law the least guilty. But in all cases where they are made unlawful by statute, because immoral or against public policy, there all are in pari delicto, and potior est conditio defendentis; the contract now under consideration belongs to the latter class, (5 How. R. 80 — 768,) and I believe all the cases in this court on the subject.
    4. Reference is made to the principle that where one is in a situation to take advantage of another, and does so by betraying trust, &c. chancery will relieve this, it is true; but those cases are where persons take advantage of weakness or confidence in making unconscionable contracts, not illegal ones. The contract is not illegal, but fraudulent, and therefore void, as the case given where a father inveigles a weak and confiding son into a contract, whereby he got his property for one quarter of its value. An attentive examination of the authorities cited by the gentlemen will show that I am correct.
    5. Counsel quote Rowan & Harris v. Adams et al. 1 S. & M. Ch. R. 45. This case merely conforms to the well-established doctrine, that the law leaves parties to an illegal contract where she finds them. 4 Peters. 184; 8 Term R. 575; 11 Mass. R. 368 — 377; 8 D. & E. 575, overruling 7 D. & E. 535. Unless he first purify himself from the taint of illegality, a borrower of money who seeks to avoid a recovery on the ground of usury, must do justice, by paying the amount due, less the usury. 1 J. 0. R. 307; 1 Wash. R. 196; 1 Story’s Eq. 300.
    6. I will forbear any remarks in relation to the attitude the plaintiffs in error occupy before this court; indeed all defendants in this class of cases, generally appear unworthy the favorable consideration of court; and to very unsophisticated individuals it may seem exceedingly strange that they obtain it. But the court do not grant favors to them on account of their merits by any means; it is pro bono publico. 16 J. R. 487.
    
      Harris and Harrison, for defendant in error.
    1. The original demurrer was properly overruled because there was no answer denying the fraud and combination charged, and the facts upon which the charge was founded. Rule 6th, sec. 1, chancery court. Niles et al. v. Anderson et al. 5 How. 364.
    A demurrer being overruled, no other demurrer shall thereafter be received, but the defendant shall proceed to answer the bill. Rule 6th, sec. 3d, chancery court.
    
      2. What connection is there between the fraud and deception practised by the defendants in concert with each other, and the original transaction 1 Even though the note had a “primal curse” upon it, that cannot sanctify the fraud of the defendants. They are not in an attitude to say “ In pari delicto potior est conditio possidentis et defendentis.”
    
    
      “ In cases where both parties are in delicto, concurring in an illegal act, it does not always follow that they stand in pari delicto”; for there may be, and often are, different degrees in their guilt. 1 Story’s Eq. 306, sect. 300. Osborne v. Williams, 18 Yesey, 379 ; Morris v. McCullough, Ambler R. 432; Goldsmith v. Brunning, 1 Brown’s Ch. R. 543 ; 2 Story’s Eq. 8, sect. 695.
    
      The rule in pari delicto, &c. is not universal in its application. 1 Story’s Eq. 302, sect. 298; 18 Vesey, 379.
    The courts often interfere in cases which arise from some confidential or fiduciary relation between the parties, “where but for such peculiar relation they would abstain from granting relief.” 1 Story’s Eql 311, sect. 307.
    
      “ Courts of equity acting on this superinduced ground, in aid of general morals, will not suffer one party, standing in a situation of which he can avail himself against the other, to derive advantage from that circumstance, for it is founded in a breach of confidence.” Ib. 312, sect. 308.
    
      “ The general principle which governs in all cases of this sort, is that, if a confidence is reposed, and that confidence is abused, courts of equity will grant relief.” 1 Story’s Eq. 312, sect. 308, Principal & Agent; Ib. 319, sect. 315. And “where a creditor receives the transfer of a note in payment of a precedent debt, he takes it, although transferred to him before maturity, subject to all equities, &c. 10 Wend. 85; 20 J. R. 637; 1 S. & M. Ch. R. 45.
    “ If money has been actually paid to an agent for the use of his principal, the legality of the transaction of which it is the fruit does not affect the right of the principal to recover it out of the agent’s hands, &c. &c.” Paley on Agency, 60, 61.
    “ For although the law would not have assisted the principal by enforcing the recovery from the party by whom it was paid,, because it is the policy of the law not to aid in the completion of an illegal contract, yet when that contract is at an end, the agent whose liability arises solely from the fact of having received the money for another’s use, can have no pretence to retain it.” Paley on Agency, 60; 1 Livermore on Agents, 469, 470, 471; Tenant v. Elliott, 1 Bos. & Pul. 3; Ib. Farmer v. Russell, 296 ; Armstrong v. Toler, 11 Wheat. 258; 6 Cond. R. 306; Rowan & Harris v. Adams, 1 S. & M. Ch. R. 45.
    4. Besides, if there was really no intention to violate the statute, will the court impute one, and say the parties were in de-licto ? Ignorance of the law is not, as a general rule, an excuse; but that principle does not apply to a case like the present, where the actual intent and unlawful design constitute the only reason why the court withholds its assistance. A party is not guilty, in the sense of the maxim in <pari delicto, unless he knowingly participates in the common unlawful design. There must be that intent which constitutes guilt in fact and in the odious sense of the term.
   Mr. Justice Clayton

delivered the opinion of the court.

The complainant, a resident of the state of North Carolina, in the year 1837 placed in the possession of the defendant, John R. Wooten, then about to move to the state of Mississippi, a negro man named Tony, to be sold or hired by said Wooten for him. The slave was brought to this state by said Wooten, and sold to one Moore for $1050, upon a credit. Wooten took Moore’s note for the amount, and on 3d November, 1839, transferred it to his father and co-defendant, Robert Wooten, in payment of a debt due from the son to the father. The note was afterwards paid, and this bill is filed against the two Wootens, charging them with a fraudulent combination to cheat the complainant out of the value of the note, and praying for a decree for the payment of the money.

Both defendants have filed an answer and a demurrer, in which the illegality of the original transaction, and its violation of the laws and policy of this state, are insisted on by way of' defence.

The principle is established beyond controversy, that a contract in violation of law, or against public policy, cannot be enforced in the courts of the country. Brian v. Williamson, 7 How.; Armstrong v. Toler, 11 Wheat.; Craig v. Missouri, 4 Peters. It is also settled in this state that a note given for the price of a slave introduced into this state as merchandise, or for sale since 1st May, 1833, is void, because contrary to law. If, therefore, this were a proceeding by the complainant against Moore, the purchaser of the slave, to recover the price, it is very manifest, under the decisions of this court, that no recovery could be had. Is the present attitude of the case materially different ?

Perhaps the rule is nowhere stated with more clearness than in Armstrong v. Toler, 11 Wheat. 258 : “Where the contract grows immediately out of, and is connected with an illegal or immoral act, a court will not lend its- aid to enforce it. But if the promise be unconnected with the illegal act, and is founded on a new consideration, it is not tainted by the act, and a recovery may be had.” In Simpson v. Bloss, 7 Taunt. 246 (2 Eng. C. L. Rep. 89,) it is stated, that “ the test whether a demand connected with an illegal transaction, can be enforced at law, is whether the plaintiff requires any aid from the illegal transaction to establish his case.” This rule is cited and sanctioned in Roby v. West, 4 N. Hamp. 290.

Now in the case before us, the complainant sets out his contract with John R. Wooten, as the foundation of his claim. Robert Wooten received the benefit of the sale of the negro, but the complainant cannot establish any claim against Robert Wooten, without resort to the original contract with John. That contract involved a violation of the laws of Mississippi; it was invalid, and we could not decide for the complainant without giving sanction and efficacy to that contract.

There are cases which decide that where the demand is collateral to the original transaction, as where money has been loaned to pay an illegal debt, although the lender knew the illegal purpose, he may recover. Of this class are Faikney v. Regnons, 4 Burr.; Petrie v. Hannay, 3 T. R. But the principle upon which they go would not be applicable here, unless there had been some collateral undertaking of Robert Wooten to pay.

At one time it occurred to us as possible that the complainant, being a resident of another state, could not be charged with a knowledge of our laws ; thus falling within the case of Haven v. Foster, 9 Pick. R. 112. Farther investigation satisfied us, that the true principle on this head is laid down in 2 Wash. C. C. R. 104; “that if the contract of a foreigner is to be completed in, or has reference to its execution in a foreign country, and is repugnant to the laws of that country, he is bound by them.”

We have nothing to say in behalf of the morality of this transaction, nor in favor of those who make the defence, but as they interpose the law as a shield, we cannot do less than say it covers and protects them.

The decree of the vice-chancellor must be reversed, and the bill dismissed, but each party to pay his own costs in the court below.

Decree reversed.