Case Name: Wilson v. Spencer; McGuire v. Ashby; Snyder v. Dailey
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1822-04
Citations: 1 Rand. 76
Docket Number: 
Parties: *Wilson v. Spencer. McGuire v. Ashby. Snyder v. Dailey.
Judges: 
Reporter: Virginia Reports
Volume: 22
Pages: 37–46

Head Matter:
*Wilson v. Spencer. McGuire v. Ashby. Snyder v. Dailey.
April, 1822.
Unchartered Banks — Action by —Statute in. — Although the act of February 24th, 1816, (2 Rev. Co. p. 111.) respecting unchartered hanks, was suspended by the acts of November 1816, (2 Rev. Co. p. 116, 116.) yet the act of 1805, (2 Rev. Co. p. Ill, § 2,) remained in force. Therefore, no action brought by an unchartered bank, on a bond given for bank notes emitted by the said bank, can he sustained.
Chancery Practice — Prohibition of Illegal Contract. — A court of equity, as well as a court of law, will interfere to prohibit the effect of contracts, made in violation of laws enacted for the public good.
Same — In Pari Delicto — Application of Maxim. — The principle In pari delicto Sec. does not apply to cases In which the act complained of, is interdicted by positive provisions of a statute.
Same — Same—Same—Case at Bar. — The person, who merely takes the notes of an nnchartered bank in payment, may not be as culpable as the institution which issues them.
Same — Same—Same.—These principles apply, as well to contracts prohibited under penalties, as to those expressly declared void by statute.
These three cases were argued and decided together; and as they relate to the same general principles, they are presented under one view.
The case of Wilson &c. v. Spencer, was an action of debt originally brought in the court of Wood county, by Spencer against Wilson and Neale, on a note under seal. The defendants filed two special pleas stating, in substance, that the note on which the action was brought, was given to the president of an unchartered bank, established contrary to the provisions of the statutes in such case made and provided, and that it was given in consideration of bank notes, emitted by the said bank, in equal violation of those statutes.
To these pleas, the plaintiff filed a general demurrer, and the defendants joined.
The county court gave judgment for the plaintiff; which judgment, upon appeal to the superior court, was affirmed. The defendants appealed to this court.
The case of McGuire v. Ashby, was a suit in chancery. *Ashby and Stribling, merchants, being creditors of one Murray, took a deed of trust from the latter, on a tract of land, to secure themselves. Previous to this deed, Murray had conveyed to Powell as trustee for McGuire, the same land which was included in the deed to Ashby and Stribling. The land was advertised for sale under the deed to Powell. Ashby and Stribling applied to the chancellor of the Winchester district, for an injunction, to stop the sale under the deed of trust to Powell; alledging, that McGuire was not the real creditor in the deed from Murray to Powell, but that it was in fact for the benefit of the unchartered bank in Winchester. He contends, that the deed is void by. the laws of Virginia^ and that the sale under it ought to be injoined.
The chancellor awarded the injunction.
McGuire and Powell put in their answers, admitting that the deed above mentioned was for the benefit of the bank of Winchester, as stated in the bill; but they contend, that the bank had a good and legal right, under the act, of 1816, to take any security for money due them, to sue for the same, and indeed to carry on all their operations.
A motion to dissolve was overruled, and an appeal allowed to this court.
The case of Snj'der against Dailey, was an appeal from the chancery court of Winchester, on an order of that court, dissolving an injunction. The case was this:
Charles L. Snyder had become bound'in two notes under seal, with John Snyder as his surety, to James Dailey, for the sum of $2,535. James Dailey brought suit at law, and recovered judgments to that amount. John Snyder afterwards presented a bill of injunction to the chancellor of the Winchester district, all edging that those notes were not given to Dailey in his individual character, but as president of an unchartered bank, known by the style of the president and directors of the Bank of the *South Branch of Potomac; that this institution was illegal, and its acts rendered void by the laws of Virginia. There is also a detail of transactions between the several parties to the suit, going to shew, that the complainant is entitled to large discounts, even admitting the validity of the contracts; but, as these matters are not at all embraced by the arguments or the decision of the court, they are omitted.
The chancellor refused the injunction; which was awarded by a judge of this court.
James Dailey filed his answer, in which he admits that the debts in question were due to the South Branch Bank of Fotomac, as alledged in the bill. He then makes a counter-statement of the transactions between the parties, which, for the reason already assigned, is not deemed material to this report.
Depositions were taken and exhibits filed; and on motion, the injunction was dissolved; on which order an appeal was allowed to this court.
W. Hay, junr. for the appellants, Wilson and Neale.
The appellee having demurred generally to the pleas of the appellants, has thereby confessed the facts well pleaded.
It may, therefore, be assumed that the single bill upon which the action is founded, was executed to the appellee, the president of an illegal unchartered banking association, to secure the re-payment of notes emitted and issued by it, of the character, tenor and effect of bank notes, and loaned by its officers to one pf the appellants; and that the said bank was established for the purpose of making and emitting notes of that character and tenor; for such is the substance of the pleas. The case may be considered, *lst upon the act of 1805; 2nd, upon the acts of February and November, 1816. .
I. Upon the faiy construction of the act of 1805, the single bill, being founded ors a contract directly contravening the provisions of that act, is void ; and this, although the statute is penal in its enactments, and does not in terms avoid the contract or security.
It is a principle of the common law, that an action cannot be supported upon a contract, or a security, the consideration of which is illegal, as being against either the positive prohibitions or the policy of the law: and courts have applied this principle to prohibitions flowing from statutes. Upon principle, there can be no distinction between the cases. The only ground upon which a difference can be supposed to exist, is, that when the legislature prohibit an act under a penalty, without- vacating the contract in terms, it may be supposed they did not intend it should be void.
But this argument, however specious, has not been allowed to prevail. It is said by lord Holt in the case of Bartlett v. Viner, “that every contract made for or about any matter or thing which is prohibited and made unlawful by any statute, is a void contract, though the statute itself doth not mention that it shall be so, but only inflicts a penalty on the offender; because, a penalty implies a prohibition, though there are no prohibitory words in the statute.” And to the same effect is Sir James Mansfield in Drury v. Defontaine. It is no objection to this principle, that penal statutes are to be construed strictly. This is true, where the penalty is claimed. But in other cases, when the statute is made for the prevention of a public mischief, it is the duty of courts to give it a liberal exposition, As contracts contravening the provisions or policy of a statute are held *to be void, by an application of the common law principle adverted to, the extent of that principle will shew how-far contracts and securities founded upon them are made void by statutory prohibitions.
By the common law, a contract or a security founded upon it, is void, not only when it directly violates its provisions; but also, when in its consequences it may have that effect, as if it have a tendency to encourage the violation in others. And so, with regard to the statute law; if the contract be, to do the thing which is prohibited under a penalty, it is void. So also, if the contract be collateral to the illegal act, but has a tendency to encourage it, and thus militates against the policy of the statute, it is void, From all these cases, (and many more might be added,) the principles which have been asserted, may be very clearly deduced, and it will appear from an examination of them, that lord Alvanley was fully warranted in saying that it is the result of all the cases, “that no person can come into court and demand its aid upon a contract made in contravention of the laws.” Such is the ease under consideration. By the second section of the act of 1805, if is made unlawful to offer in payment any note or bill, whether jiayable to bearer or other persons, which shall have been emitted by any banking company not having a charter.
The contract in this case, between the bank and the appellants, was, both directly and consequentially, a violation of the provisions of the statute, and of course the security founded upon it is void. It was «o directly; because, the very act of discounting, was a circulation of notes of the character and kind proscribed by the staiute; and also *consequentially, as it led to their circulation by the appellees and others, who might receive them.
Q. If such be the construction of the act of 1805, the case is not varied by the subsequent acts.
In the first place, the court cannot notice these acts. They were not in force when the note was executed, and the action instituted. The note is dated the 16th of March, 1816, and the action was instituted in July, 1817. The act of February, 1816, was to go into operation on the 15th of November ensuing; on which day the suspending act was passed, postponing its operation until the 31st day of August, 18.17, leaving the act of 1805 in full force and applying to the case. It is true, the act of February, 1816, was in force before the determination of the suit. But this is immaterial; the act is prospective in its operation. But if otherwise, it cannot be applied to actions pending at the time of its commencement, without a violation of the rights of the parties,
But, conceding that it is competent to the court to notice tnem, how do trey affect the case? It will be said, that by the suspending act, the legislature have agreed in relation to the unchartered institutions named in it, that they shall have further time to wind up their business, and have thus virtually conceded the capacity of suing. But this is a construction which cannot be supported. If the words of the enacting clause are unambiguous, they cannot be controlled by the preamble. To have the effect contended for, the act of November, 1816, must not only suspend the act of February, 1816, but also repeal that of 1805, because by the latter act they have no capacity to sue. This it has not done expressly, and will the court imply a repeal? The consequence of such a construction would be, that the banks must go on to emit and circulate their notes, as there would be no law in force to restrain *them. Did the legislature intend this? Surely not. They intended, as their words import, only to suspend the act of February, 1816, by which the banks and their officers obtained an exemption from the heavy penalties imposed by that act, leaving the act of 1805 in full force.
Again, it will be said that the several acts being in pari materia, the court, in deciding the case, will take all of them into consideration, and view them as mutually explanatory, and that the legislature having, by the act of February, 1816, expressly taken away the right of suing from the banks and their officers, have put a construction upon the act of 1805, different from the one relied on, and by which the courts are bound.
The first answer to be made to this argument is, that it is the province of the legislature to declare what the law' shall be, not what it is. Such a power cannot be conceded to them, without placing private rights at their mercy. If the nature and legal effect of the contract between the appellants and the appellee is, upon the construction of the act of 1805, such as has been stated, the exposition of tha! act by the legislature, admitting that they have made it, can upon no principle be obligatory, either upon the parties or the courts. And it is the duty of the courts, if the legislature have acted under a mislake of the law, to disregard their construction, and to decide pre-existing cases, by the law as it stood when they occurred. This would be no novel proceeding. Courts have often, had occasion to decide, that legislative provisions were unnecessary and merely declaratory of what the law was before their enactment. Such was the declaration of lord Mansfield, in relation to the statute concerning fraudulent conveyances; and for which there is also the sanction of this court, in the case of Fitzhugh v. Anderson,
But it' is not admitted, that the legislature have put such *a construction upon the act of 1805. That of February, 1816, is manifestly cumulative in its provisions, and may well stand with the construction put upon the act of 1805 by the appellants. This will be apparent from the slightest inspection of the act. It interdicts every species of banking, by any association of individuals, not having a charter. Such was not the effect of the act of 1805. That act did not prevent individuals from associating themselves as a bank of deposit, or even of discount, provided they did not emit their own notes. Such, however, is the effect of the last act; in addition to which, it had the further object of imposing heavier penalties and forfeitures. And the legislature may have supposed it necessary to insert the provision which has been relied on, in order to meet cases not within the purview of the act of 1805.
An argument, similar to the one which has been combatted, was urged, but did not prevail, in the case of Langton v. Hughes. In that case, where an act of parliament, interdicting' the right of suing in certain cases, was relied on, by which the act was merely prohibited, the same effect was produced.
Upon the whole, it is not easy to conceive, upon what ground the claims of the banks can be supported. An argument, which is specious, but not solid, may perhaps be urged'; that, from the. number of these institutions and their extensive dealings, great inconveniences would result from that construction of the law, which debars them of the right of suing, and that the court, in order to prevent one public mischief, will not adopt a construction, which would, perhaps, introduce a greater.
But, if the law be clear, the court cannot omit to enforce it, from a consideration of the inconvenience it may occasion. And in fact, the greater the confederacy, the greater is the mischief, which it was the design of the law to repress; and therefore the necessity of executing the law. *Leigh, contra. These three cases all present the general question. Whether contracts made by individuals with these unchartered banks, prior to the 31st of August, 1817, (till, which time the act of assembly of February 14th, 1816, for suppressing those associations, was suspended, for the avowed purpose of giving them time to wind up their affairs,) were so contrary to the prohibition, or to the policy, of the law of the land, that neither party ought to be entertained in a court of justice, to enforce such contracts, or to adjust the rights claimed under them? In other words, whether all such contracts ought not be deemed and treated as wholly void?
It'is insisted, that as the act of January, 1805, made it unlawful for any person, to offer in payment any note or bill whether payable to bearer or any other person, emitted by any unchartered bank company, under a severe penalty for every offence; an unchartered company, formed for the purpose of emitting such notes or bills, for the very purpose of supplying materials for the perpetration of the offence, must be contrary to the policy of the statute, if not to its letter. Neither can I attempt to maintain, that these unchartered bank companies, whatever were the devices they contrived to evade the statute, were not associations contrary to its policy. I own, that, in reference to the question before the court, I can see no distinction between the evasion and the violation, of such a statute.
This being premised, it is next asserted, in the words of Lord Holt, “that every contract made for or about any matter or thing, which is prohibited and made unlawful by any statute, is void, though the statute do not expressly declare it so, but .only inflicts a penalty on the offender; because every penalty implies a prohibition, though there be no prohibitory words in the statute:” that contracts, contrary to the policy of the law, are within the same reason, and equally illegal and void: nay further, *that contracts, not directly connected with the act prohibited, but only conducive or collateral to or dependent upon the act prohibited, are also illegal and void: and, consequently, that the doors of the courts of justice are shut against all claims founded upon or growing out of such contracts.
I waive all examination of the numerous cases, cited by Mr. Hay, in support of these doctrines, though they are open to much commentary. They are all cases in which some two or three individuals, were the only offenders, or the only accessaries to the offence; in which, to shut the courts of justice against their claims, might operate as a punishment on the few offenders concerned, without inflicting punishment, much more serious mischief and even ruin, on large masses of the community. In the cases cited, the doctrine has been applied to the chastisement of individual sins. But the case of these unchartered banks was a disease of the body politic. The offenders against the act of January, 1805, were the whole people of some twelve or more of the largest counties in the commonwealth. The most respectable and intelligent men in that large tract of country, (with very few exceptions,) were members of these irregular associations. Their notes were in general circulation; and there was hardly an individual, who, did not receive, and pay them away; in other words, who did not violate the law. It is matter of history: there was a general rage through out the state, for bank capital, and bank accommodation. Quern Deus vult perdere, prius dementat. But it is not the province of man, to punish the madness of his fellow men with ruin. It was said by a very wise and great man, that he did not know how to frame an indictment against a whole people: and I do not know how to apply the principles asserted by the chancellor, and maintained by Mr. Hay, to the large and populous counties, who fell into the guilt or the folly of these bank associations. I shall shew in the sequel, that the legislature *viewed the subject in the same light: and whether it be the province of the judges to go be-j'-ond the legislature in severity, let the wisdom of this court decide.
Let us however take the broad doctrines, stated by Mr. Hay in argument, and by the chancellor in decision, for law. If ever law was administered according to the letter, without regard to its reason or its spirit, here is an instance of it. Nay more, it is demonstrable, that the law on which the chancellor founds his decrees, defeats, under his administration of it, its own acknowledged ends.
The principle, on which courts of justice have refused to entertain claims founded on contracts, entered into in opposition to prohibitory laws, or in contravention of their policy, is obviously this: to discourage such unlawful contracts, and to punish the parties to them, by withholding from them the iniquitous gains they hoped to acquire by the violation or evasion of the laws, or by refusing them all retribution for losses sustained in consequence of such violation or evasion. Whenever, then, the principle is pushed to that extreme, that the chief violators of the law are permitted to retain all their unjust gains, and all the losses are thrown upon the suffering community, the principle is extended beyond its reason and spirit, and far from accomplishing the ends for which it was designed, works the direct contrary effects. Now, let us apply the chancellor’s doctrine to the case of these unchartered bank companies, and test the justness of the application, by the consequences.
The act of January, 1805, to prevent the circulation of private bank notes in any form, is (as was justly said by Mr. Hay,) to be liberally construed to suppress the mischief. Whoever receives one of those notes in payment, is as much a party to the violation of the act, as he who pays it; both join in giving circulation to the note, which is the evil the statute meant to prevent. Whoever receives one of those notes, becomes an assignee of a contract made with the private bank company; and in that character *only can he sue the company, if payment be withheld. If he sue, he is met by this rule of law: this contract which you are seeking to enforce, is contrary to the express prohibitions of the law, or at least to its policy, and therefore the courts of justice are not open to you. The consequence is, that by this application of the rule of law, the offending company, whom the rule was designed to disappoint and punish, may shut up its exchequer, pocket all its illicit gains, and rest secure in a complete absolution from its debts.
Again, let us suppose that the unchartered bank (through the obstinate inertness of the courts of justice) has accomplished this fraud on the public, and that the stockholders are pleasing themselves with the anticipation of the fruits; or let us suppose, that the company, having diligently wound up its affairs, and honestly paid all its debts, meet to divide to each shareholder his portion of the original stock: the officers of the institution (the most guilty, or at least the most certainly obnoxious to punishment) resolve to play the game which the courts of justice have taught them, against their principals, the stockholders; and in the face of day, empty the contents of the vaults into their own pockets. According to the broad doctrine, and the broader application of it, asserted in these cases, no action will be entertained against them, at law or in equity. Not only the original stockholders, but all who may have been deluded to purchase their shares; the ignorant and unwary; the widow and the orphan; these must pay the penalty; while the most guilty not only escape without punishment, but depart with affluence and safety.
Again, suppose a man had contracted to sell his property for a given price payable in these unchartered bank notes (then the principal circulating medium in that country.) If the price be paid in the stipulated notes, and though the banks be solvent, the courts of justice will not entertain his action for the contents of the notes; no more will they entertain his suit against the purchaser, either *for the property thus sold for a consideration that has utterly failed, or for the stipulated price: the purchaser, though he might have borrowed the very notes for the purpose of making the payment, and was the chief offender in putting them into circulation, reaps a clear gain; and the vendor, though no more guilty of violating the law than any other man in the community, is mulcted with the whole loss. If the price be not paid, the purchaser may securely enjoy the property without fear of retribution or reclamation; for, if his creditor appeal to justice, she turns a deaf ear to his complaints, and shuts her doors in his face.
Instances of the like kind, might be multiplied without number; instances, which would shock the moral sense of mankind, and dishonor the name of justice. Enough have been suggested, to shew, that this sweeping application. of the principle of the common law, on which the chancellor has founded his decrees, is not only a departure from its reason and spirit, but defeats its ends, and works the very mischiefs it was intended to prevent; that, whereas the principle itself was designed and established, to discourage illegal contracts, and for that end to punish the guilty parties to them, by a sort of outlawry in respect of those contracts, this application of it would encourage all such schemes,^ by giving all the gains to the most guilty, and throwing the losses on those who have least offended, or even on the innocent.
The principle in question, rests on too narrow a basis, and its aim is quite too confined, to be applied to the case of these unchartered banks. The numerous and extensive associations of-such companies, was, (I repeat,) a distemper of the state, which called for the application of a general enlarged policy, of a sound political economy, that might best eradicate the evil, and avert all the mischiefs it threatened. It can never be the policy of the commonwealth, to correct the evil of a vicious circulating medium in any district of country, by rendering it more *vicious. The direct tendency of this doctrine, which would bar these unchartered banks of all resort to the courts of justice, to collect the debts due to them, is, to withhold from them the means of taking in the condemned medium they put into circulation. It must depreciate: it may become utterly worthless. The paper emitted by these banks amounted, on a moderate calculation, to a million of dollars, if the imprudence of the execution bore any proportion to the indiscretion of the design. The debts contracted to them amounted tb. as much. Truly, the penalty which the chancellor’s doctrine would inflict, is enormous, and the objects of legal vengeance numerous beyond all example. It is little less, in effect, than a proclamation of outlawry against the good people of his two chancery districts, in respect of the greater part of their contracts, during the time these unchartered banks existed among them.
What is this doctrine, the application of which to the cases at bar I am resisting, (for 1 do not controvert the doctrine itself,) but a part of the policy of the common law? It is as competent to the legislature, to alter the policy of the common law, as any of its positive institutions. Let us see, whether the acts of the legislature have not indicated a direct contrary policy in the case of these unchartered banks.
All the statutes, being made in pari materia, are to be taken together; and taking these statutes together, I affirm, that when the legislature set about to suppress the numerous unchartered banks, which had been recently formed, by its act of February, 1816, it designedly and wisely waived all consideration of the legality or illegality of those institutions. The act was altogether prospective; and its obvious policy was, to legalize the unchartered banks, so far as to enable them bona fide to close their transactions; and, by consequence, to legalize those'transactions *themselves; for, the legislature could never have intended to give time to close illegal transactions.
The 1st section of the act of February, 1816, makes it unlawful, for any unchartered company then formed or to be formed, to' commence and continue bank operations, from and after the commencement of the act only.
The remainder of the 1st, and the 2nd section, impose heavy penalties and forfeitures, for the violation of that particular act only.
The 3rd section vacates all such contracts between unchartered banks and dealers with them, entered into for the benefit of the banks, as should be made contrary to the provisions of that act, but none others; not contracts previously made, or which should be made before the commencement of the act, in furtherance of the end of closing their transactions.
The 4th section subjects any person who should, after the commencement of the act, as president, manager or cashier, sign, counter-sign or endorse any note of any such unchartered bank, to summary motion and judgment at the suit of the commonwealth, for thre'e fold the amount of the note; no penalty is inflicted for notes previously emitted.
The 5th section vacates all such contracts for forming such unchartered bank companies, as should be made after the passing of the act, and none other.
The 6th section provides, that, if any unchartered bank issue any notes contrary to the provisions of the 1st section, the holder or owner of such notes, should have summary remedy by motion, for the amount of such notes, and fifteen per cent, damages, against all or any of the members; but, is silent as to all notes issued not in contravention of the 1st section.
The 7th section shuts the courts of justice against all claims and suits on behalf of the unchartered banks, for 'debts originating out of any dealing or trading, contrary to the provisions of that act. Expressio unius est exclusio *alterius. The courts of justice were left open to them, as to all contracts not made in contravention of that particular statute.
And the last section postponed the operation and commencement of the act to the 15th November, 1816.
The two acts of November, 1816, reciting that fifteen of the unchartered banks by name, (the institutions intended to be suppressed by the act of the preceding session,) had proceeded with a bona fide intention of closing the transactions of those institutions, in conformity of the provisions of the act of February, 1816, but found it necessary to ask more time for the same; therefore, these acts farther suspended the act of February, 1S16, till the 31st August, 1817. These acts declare, that the intention of the act of the preceding session, was, to give the unchartered banks time to close their transactions; and that not having given enough, these give more. To give them time to close their transactions, were vain and illusory, if they were meanwhile interdicted by law from coercing payment of, or securing, the debts due to them; that is, from closing their transactions.
Surety, the policy of these laws was, to give the unchartered banks every opportunity of securing and collecting the debts due to them, in order to pay those they owed; and even to stimulate them to the utmost activity. Surely, the policy of these laws is wholly irreconcileable with that policy of the common law, now brought to bear on these associations, or rather with the forced application of the principle, which would in effect outlaw them.
The policy < of the statutes must prevail. As to the proposition, that it was not competent to the legislature, to legalize the transactions of these unchartered banks in that partial degree, necessary to cure the evils which had grown out of them, at the same time that the cause of disease and mischief was eradicated; I do not mean to *discuss it, and in truth know not how. If the legislature had given all these companies a charter, confirming their articles of association, and legalizing their transactions from the beginning to the full extent and term of their original protection, I could not have heard without surprise, a denial, or the least doubt, of its competency to make such enactments, and to bind the citizens, and the courts of the commonwealth, to respect and enforce them.
If I am right, the judgment in the case of Wilson and Neale v. Spencer, must be affirmed. The decree in Snyder v. Dailey, must be reversed, and the cause remanded to be matured for a hearing on its merits; for, it is agreed on all hands, that it is not ripe for a decision on its merits now. And the decree in McGuire v. Ashby and al. must be reversed, and the injunction dissolved.
Tucker, in reply.
In these cases I maintain no inconsistent propositions. I contend that contracts made with the unchartered banks wrere void; and that therefore Ashby’s deed of trust, which was no bank transaction, takes preference of McGuire’s, which was one. I contend also, that Snyder is entitled to relief on principles of public policy, and that his contract with the bank is not only void, but that a court of equity will declare it so. In both cases, therefore, I seek to avoid the bank contract.
That the unchartered banks were illegal associations, is admitted by Mr. Leigh. He could not have done otherwise. The act of 1805 had prohibited the circulation of private bank notes. If to put one'note in circulation, was illegal, to associate for the circulation of thousands, must have been so. The banks were therefore unlawful institutions. But, it is of some importance to dwell on the character of their infraction of the law. It was an usurpation of one of the most valuable prerogatives of the sovereign power; the power of regulating the circulating medium. The history of the last ten years has proved the importance of guarding this power with jealous circumspeclion; *and if the courts can throw before it the shield of the judiciary, it is wise and politic to do so. The difficulty of suppressing associations of this description, furnishes additional motives for firmness in the exercise of those judicial functions, which may cripple and destroy them. The consideration that many very honourable and upright men may have been concerned in them furnishes no reason for relaxing the rules of law. Of all illegal establishments, large monied institutions of this kind, are most dangerous. Operating upon the purse, their influence is all powerful. Lending their paper to the needy, the needy become their instruments in forcing into circulation, a currency which is reprobated by the laws. Soon, every man within their sphere, becomes in some way or other, an accomplice. Every man in the ordinary transaction of business, has been compelled to receive and to pay away the illegal paper which has driven all other from circulation. Thus no grand jury can be found to prevent; no attorney to prosecute; no jury to convict of an offence, of which all are equally guilty. The influence acquired, is moreover dangerous and alarming. Public opinion is affected, and in its turn, affects the legislative body. The general assembly is besieged by the advocates of the banks, and but for the exemption from similar influence in other parts of the state, we should have had an act legalising all these institutions. In fine, defeat in these efforts has been, by many, believed to have originated a plan for altering the constitution. It may well be said, therefore, that such establishments are illegal and dangerous, and if the evil be a disease of the body politic, it requires so much the more vigorous treatment for its cure.
What then are the remedies which the law has provided for such a state of things? What are its provisions for its own vindication? Penalties for violation, and the vacating illegal contracts. The first are evaded. The latter remedy alone remains. Shall this, too, be laid aside, and *these dangerous inroads upon the law passed by without notice? By no means. The more extensive the mischief, the more necessity for vigour. Neither reason nor authority, justifies Mr. Leigh’s distinction, that what will be punished as a sin in a few individuals, will be overlooked because it is committed by thousands. Indeed for this “disease of the body politic,” as it is called, there is no more appropriate remedy, than the refusal to hear the offender in the courts of justice. Nothing brings home to our bosoms the necessity of law, more than the inconvenience of being denied its assistance. The operation of =uch a penalty is also silent, though effectual. Heavy penalties to be inflicted by criminal prosecutions, either are not enforced, or produce heart-burnings and discontent, and sometimes revolution or revolt. But he, who has disregarded the law, cannot complain, that the law will not help him.
In consonance with these principles, we find that suits cannot be maintained on a contract against the policy of law. Is it reasonable, that a court organized to execute the law should assist in breaking it? If a party commence a suit on an illegal contract, will the court assist him if that appears by his declaration? Or if it ap pears^ by the plea, is it not the same in principle? Or if the wrongdoer has obtained the advantage in a court of law, by hiding the real character of the transaction under a trustee’s name, shall even a court of equity refuse its aid in vacating the contract and vindicating the law? By no means. Authority concurs with the reason of the thing in supporting the negative. Thus, a court of law will no.t aid the plaintiff who seeks to enforce an illegal contract whether in restraint of trade or marriage, or in cases of smuggling, &c, &c; and the rule in a court of law is laic! down explicitly to that effect, A court of equity too will lend its aid. And the objection of particeps *criminis never prevails, For, relief is given not to the party, but to the public through him. These cases in equity are decisive that Snyder should have been relieved. The order of dissolution in that case must therefore be reversed; for Snyder was not pari delicto, He was entitled to credit at least,
But it will be objected, that it is iniquitous that he who has borrowed the money should not return it. The law abounds with such instances. Such are usury cases; money lent to game with, the proceeds of sales of Tottery tickets, goods sold to be smuggled, and various others in none of which can the wrong-doer recover even what in justice may seem his due.
If the contracts made with the bank are illegal, it follows from the authorities cited, that they may be avoided by plea or relieved against in equity.
But thejf were illegal, for the contract was in effect that the dealer should give his note and the bank their notes. His part of the contract is void, if the transaction is illegal. Now, the illegality is clear in itself and is established by Holt’s opinion, “that every contract made about any matter or thing which is prohibited is void.”
But Mr. Teigh depicts in strong colours, the general ruin which would be produced by the application of these doctrines to so extensive “a disease of the body politic.” These evils would not result from the principles for which I contend. They would flow indeed from the chancellor’s doctrine of refusing relief against these contracts, and denying to parties even their just credits in their transactions with the banks. But, if dealers with the bank are permitted to enforce their just credits and even to get relief against their whole debts, the few individuals concerned in the banks alone would suffer, and they could not *justly complain. Thus too, the loss would fall upon the proper person. This system of measures would not be liable to the objection justly imputed to the chancellor’s opinion in the case of Snyder and Dailey, in which the rule laid down would place unchartered banks in a better situation than others, and enable them to practice frauds by refusing credits.
Here, however, we shall doubtless meet again with the objection, that it is unequal to permit the banks to be sued, but not to sue. But, the diversity is, that we permit suits to vacate the contract, and only reject those which would enforce them. Thus far, the supposed inequality is sustained throughout all the cases cited. We are told, too, that the tendency of the doctrine is to render the vicious circulation more vicious. That danger is not now to be apprehended, for that circulation has entirely disappeared. And as to the future, it never can arise; for, if the court pursues this policy, (so long the policy of the common law,) there never can be another unchartered bank. Men will not be mad enough to lend out money which they cannot recover; and even if such should be found, they could not force their paper into circulation, when every one must see their inevitable bankruptcy in prospect. Had these principles been familiarly known, those banks would never have been created.
Considering that the banks have been composed, in a great degree, of innocent persons, it is indeed matter of consolation to reflect, that the adherence to the principles of the law will produce no extensive ill. They have, with but few exceptions, honorably wound up their concerns.
I come next to the acts of 1816. They may be considered together; for, the last is a mere suspension of the first, and passed on the very day the first had at first been intended to commence. The first act, made with a view to put down the banks, contains superadded penalties and superadded prohibitions also. And this is all it does contain. But, as the penalties were very heavy, and *if they attached at all, would forfeit to the commonwealth all the bank funds; the act itself was suspended in its operation, first until November, 1816, and then till August, 1817. There is not a word of the repeal or suspension of the act of 1805. Can this, then, be supposed to be suspended by the mere suspension of the superadded penalties and prohibitions? It would be against every principle of fair construction. If, indeed, there had been a clause suspending the act of 1805, that clause would itself have been suspended, as the act was not to commence until August, 1817. Thus it could not possibly have had the operation contended for, of suspending the act of 1805, from February, 1816, till August, 1817. But suppose it had. Then during that time there would have been no law against emitting private bank notes; or, if the act was to be considered as suspended only as to these banks, then they might lawfully have issued as many as they pleased in the interval. Could the legislature, in passing the act “more effectually to prevent the circulation of private bank notes,” have intended this? Impossible!
The act of 1805 was then in full force between the passage of the act of Febru ary, 1816, and the month of August, 1817; and if so, the consequences of contracts against its policy must follow.
The preamble of- the latter acts is referred to, to shew that the legislature intended to give time. But it has long been settled, that it is not proper to grope amid the darkness <pf an obscure preamble, for the interpretation of an act plain in itself. The question, indeed, is not about the meaning of the act, which is perfectly plain, but about its effect in suspending the operation of a former law. This question is one of judicial principle, not one of interpretation which can be illustrated by the preamble of an act in no wise doubtful.
If I am right, then, in these principles, the case of McGuire and Ashby should be affirmed, and that of Snyder *and Dailey reversed in toto, with directions to perpetuate the injunction for the whole sum; or, if the court will not go thus far, we must at least have our credits allowed in that case.
Unchartered Banks. — See monographic note on “Banks and Banking” appended to Bank v. Marshall, 25 Gratt. 378.
See principal case cited in Kee v. Kee, 2 Gratt. 127.
Chancery Practice — Prohibition of illegal Contracts. —As deciding that a court of equity will interfere to prohibit the effects of contracts made in violation of laws enacted for the public good, the principal case is cited in McPherrin v. King, 1 Rand. 192.
Contracts — Founded on Act Prohibited by Law-Legality. — It is a settled principle of the common law that all contracts which are founded on an act prohibited by a statute under a penalty are void although not expressly declared to be so. Raines v. Watson, 2 W. Va. 393, citing principal case.
Same — Connection with Illegal Act — Enforcement.— It is well settled that where a contract grows immediately out of and is connected with an illegal or immoral act, a court of justice will not lend its aid to enforce it. Dodson v. Swan, 2 W. Va. 517, citing principal case. To the same effect, the principal case is cited in Brown v. Wylie, 2 W. Va. 508.
The principal case is also cited in Calfee v. Burgess, 3 W. Va. 278, and distinguished in Banks v. Poitiaux, 3 Rand. 142.
Although Mr. Hay was only counsel In one of the suits, yet his argument is equally applicable to them all. — Note in Original Edition.
2 Rev. Code of 1819, p. 111.
lb. p. Ill & 115.
Carthew, 252.
1 Taunton, 136.
Lav v. Law, Cas. Temp. Talbot, 144.
1 Powell on contracts. 196 to 199.
Biggs v. Lawrence, 3 Term. Rep. 454; Clugas v. Penaluna, 4 T. Rep. 456; Weymel v. Read, 5 Term. Rep. 599: Nerot v. Wallace, 3 T. Rep. 17; Lightfoot v. Tenant. 1 Bos. and Pull. 552; Gallini v. Laborie, 5 T. Rep. 242; Ribbons v. Cricket, 1 Bos. and Pull. 264; Parkin v. Dick, 11 East 501; Hunt v. Knickerbocker, 5 Johnson's Rep. 320.
Marck v. Abel, 3 Bos. and Pull. 38.
Couch v. Jefferies, 4 Burrow, 2462.
Crespigny v. Wittenoom, 4 T. Rep. 793.
2 H. & M. p. 289.
1 Maule and Selwyn, 593, Langton v. Hughes.
2 Bev. Code, c. 207, § 2, p. 111.
Eev. Code, c. 208, p. 111.
2 Eev. Code, c. 209, 210, p. 115, 116.
3 T. R. 17, 454; 4 T. R. 466; 5 T. R. 599.
3 Bos. and Pull. Lord Alvanley, page 34.
3 P. Wms. 391; Talbot, 140.
Ambler, 432.
1 Brown, 125; 9 Vez. 298; 11 Vez. 536.
1 Hen. and Mun.. Austin and Winston.
3 Vez. jr. 612.
Cartbew, 252; Approved, 1 Taunton, 135.

Opinion:
JUDGE ROANE,
delivered the opinion of the court:
Wilson v. Spencer.
This is an action of debt, brought in the county court, by the appellee, upon a single bill. The defendants pleaded two pleas, stating, in substance, that that bill was given to the president of an unchartered bank, established contrary to the provisions of the statutes in such case made and provided, and that it was given in consideration of bank notes, emitted by the said bank, in equal violation of those statutes. These pleas were demurred to, and the facts therein stated, are consequently admitted. The county court gave judgment for the plaintiff, on the demurrer, and that judgment was affirmed by the superior court: from which judgment of affirmance, an appeal was taken to this court.
It is not easy for this court to perceive on what grounds this judgment can be justified: although the act of February 34th, 1816, was not in force, when this bill was given, the act of 1805 was, and the bill was given for a consideration utterly prohibited by that act It was given for a consideration, prohibited under severe penalties: and the cases cited for the appellant, incontestibly prove, that any contract founded on an act forbidden by a statute, under a penalty, is void, although it be not expressly declared to be so; and that no action lies"to enforce it. Whatever might be said, in relation to an action *brought to recover the amount of the bank notes, given as the consideration of this bill, in favor of the holder against the bank; in favor, as might be argued, of an innocent endorsee, or holder of the said notes; it is clear, that no action will lie, on a bond given to secure the payment thereof, in favor of the bank, the party more emphatically offending against the policy of the act. It is this last mentioned party, who is now asking the court to give its aid to violate the provisions of an act of great public policy and utility. There can be no ground for such a pretension, unless we consider the act of 1805, as repealed at the time, and as having no binding force or authority. In relation to a law of this importance and character, and of such long-standing in our code, we ought not lightly to imply such a repeal. It should be shewn to be repealed, either expressly, or by a strong and necessary implication. The only ground, on which that inference is attempted to be supported, in this case, arises from the suspension of the act of February 34th, 1816. That act was additional to that of 1805, and created further penalties and forfeitures for its infraction: but it left_ the act of 1805, in full force.
In making a further declaration, in the act of 1816, that notes, bills &c. issued contrary to its provisions, should be null and void, it cannot be inferred, that those made contrary to the act of 1805, are valid. The suspension of the former act does not necessarily carry with it, the repeal or suspension of the latter: nor did a particular provision of the act of 1816, § 7, specially prohibiting suits, by the banks therein contemplated, interfere with similar prohibitions, resulting on general principles of _ law, from the inhibitions contained in the act of 1805. A suspension of the act of 1816, therefore, did not suspend, repeal, or interfere with, the provisions of the act of 1805: nor does a recognition contained in the suspending act, of a right in the banks, therein-mentioned, to close their transactions, in conformity with the provisions *of the act of 1816, annul or apply to the prohibitions contained in the act of 1805. That suspension left the banks aforesaid, on the ground they occupied, before the passage of the act suspended; but did not place them in a better situation; and, far less, as was argued, did it legalize and charter those associations. It left those banks free to arrange their matters, if they could, without suit: and unaffected by the severe and additional restraints and penalties, of the act of 1816. It did not mean to interfere with the original act, when it only purported to suspend in part another act, more effectually to suppress the circulation of notes, emitted by unchartered banks. The suspension only operated up to the point, embraced by the last act, and did not go beyond it.
_ Under the admission, that the prohibition in the act of 1805 is not repealed, the counsel for the appellee concedes, that in regard to individual cases, the law would be decided against him: but he claims an exemption for his clients, on the ground' of the extent of this confederacy to infringe the laws, and of what he is pleased to call, a disease of the body-pofitic. There may be cases, in which the still voice of the law may not be heard, nor the power of the civil officer be competent to execute its judgments. That, however,. is an extreme case, partakes of the nature of a revolution, and, in point of magnitude, is not shewn to exist in the case before us. But where would gentlemen draw the line in such cases? We know of no such boundary in the case before us. All that we know, is, that certain associations of individuals have set themselves up, in open violation of the laws, to exercise a high function of sovereignty, at most only confided to the power of the legislature.
We are, therefore, unanimously of opinion, that the judgment, in this case, is erroneous, and that it should be reversed, and entered for the appellants.
*McGuire v. Ashby.
On the general grounds of our decision, in the case of Wilson v. Spencer, we are of opinion to affirm the decree. There is, in principle, no difference between the two cases; except that, in the present, the interposition is by a court of equity. That court, as well as a court of law, will interfere to prohibit the effect of contracts, made in violation of laws, enacted for the public good._ The cases cited fully support this position, and are entirely satisfactory. The decree is to be affirmed.
Snyder v. Dailey.
The dissolution of the injunction in this case, gives full effect, on the part of a court of equity, to a contract entered into, in open violation of the law. It could only be pretended to be right, to repel the plaintiff from that forum, on the ground that he is equally guilty with the defendant. That principle is not, however, admitted to apply to cases in which the act complained of, is interdicted by the positive provisions of a statute; and in which the commonwealth, whose policy is thus violated, may be considered as the real party. Besides; there may not be par delictum, in this case. The person who merely takes the notes of an unchartered bank in payment, may not be considered so highly culpable, as the institution which issues them; and besides, his necessities may have occluded his freedom of will. If this objection does not lie in relation to contracts expressly declared void by statute, neither does it, as to such as are conclusively held to be so, by being prohibited under penalties. The cases, referred to in the argument, shew that the contracts are void in the last case, as well as in the first.
We are of opinion to reverse the decree, and perpetuate the injunction.
Tlie counsel moved for a re-bearing- of these causes, and the court, after having had the motion some time under consideration, expressed themselves satisfied with the decision. — Note in Original Edition.
2 Rev. Code, p. 111.
3 Rev. Code, p. Ill, ch. 207, § 2.