Case Name: Jonathan M. Miller, plaintiff in error, vs. Artemus Gould, defendant in error; The Georgia Railroad and Banking Company, plaintiff in error, vs. F. M. Eddleman, defendant in error
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1868-12
Citations: 38 Ga. 465
Docket Number: 
Parties: Jonathan M. Miller, plaintiff in error, vs. Artemus Gould, defendant in error. The Georgia Railroad and Banking Company, plaintiff in error, vs. F. M. Eddleman, defendant in error.
Judges: McCay, J., concurred, but wrote out no opinion.
Reporter: Georgia Reports
Volume: 38
Pages: 465–491

Head Matter:
Jonathan M. Miller, plaintiff in error, vs. Artemus Gould, defendant in error. The Georgia Railroad and Banking Company, plaintiff in error, vs. F. M. Eddleman, defendant in error.
When a contract was made between two citizens of the late Confederate States during the war, on the 12th July, 1862, payable three years dfter date, the consideration of which was Confederate Treasury notes, the only circulating currency in the country at that time, and which was recognized as lawful by the assumed authority which had the actual possession and control over the country and people at the time the contract was made:
Held, That although the issuing of such notes by the assumed Confederate authority for the purpose of .carrying on a war against the Government of the United States, may have been illegal as against that Government, and the citizens thereof, who, during the war, were under the actual protection of that Government, outside of the lines of the assumed Confederate authority; yet, such a contract made between citizens residing within the lines of the assumed Confederate authority, in their ordinary business transactions between themselves, and having no connection with the prosecution of the war against the United States, is not an illegal consideration, as between the contracting parties themselves, they having made the contract under the assumed authority which was then over them, and which assumed authority, (whether rightful or otherwise', is not now the question,) recognized the currency as legal, and valid, at the time the contract was made; therefore, as between the contracting parties themselves, the plaintiff is entitled to recover:
Meld also, That the contract in the record mentioned, is not such a contract made with the intention, and for the purpose, of aiding and encouraging the rebellion, as was contemplated, or is embraced within the provisions of the Constitution of this State.
Brown, C. J., dissenting.
Assumpsit. Confederate Currency. Tried before Judge Gibson. Eichmond Superior Court. June Term, 1868.
The facts of 3STo. 1 were these: Gould sued'Miller upon the following promissory note:
$3,000 00, Augusta, 12th July, 1862.
Three years after date, we jointly and severally promise to pay A. Gould, or order, three thousand dollar's, with interest’after one year, payable every six months, for value received.
JAMES PISH,
JOÑA. M. MILLER.
Miller plead that said note was void, because it was given for $3,000 00 in Confederate States Treasury notes, loaned to Fisher, and “ that said Confederate States, at the time of said consideration, were a league and combination of certain States of the United States of America, in rebellion against said United States, and said notes of said Confederate States were issued for the purpose of aiding and abetting said rebellion, and then and there the plaintiff had knowledge thereof.”
The plaintiff’s attorney demurred to said plea.
The demurrer was sustained, and the plaintiff had judgment for the principal and interest on his note. The error assigned is the order sustaining the demurrer.
J. T. Shewmake, W. Hope Hull, Johnson & Montgomery, for plaintiffs in error,
made the following points: There can be no recovery upon a contract, the consideration of which is illegal, whether by statute or as against public policy, citing Bk. of U. S. vs. Owens, 2 Peters, 527. Craig vs. Missouri, 4 Peters, 410. Walker vs. Johnson, 2 Cranch S. C. R., 173, 203, 208. Code of Georgia, sec. 2703. 2 Wash. C. C. R., 98. 35th Geo. R., 320, 330, 364. Armstrong vs. Toler, 11 Wheaton, 208. Hunt vs. Knickerbocker, 5 John. R., 327.
The issue of Confederate Treasury notes was illegal — Law Review for January, 1868, page 304; for July, 1868, pages 604-5. The Confederate Government was not a de facto government — Law Review for October, 1867, page 95 ; and if it were, acts done against the de jure government would be illegal — 8th Bacon’s Abr., 11. The rebellion was contrary to law, etc., — Constitution U. S., Art. Ill, Sec. Ill, and Art. I, Sec. VIII, clause 14, and the Preamble and 1st Brightly’s Dig., 440. Circulating such currency was illegal, etc., — Chitty on Con., 657. State Courts are bound by the decisions of the Federal Courts — Constitution U. S., Art. VI, clauses 2 and 3.
G. G. McWhorter, J. Gahahl and H. W. Hilliard, for defendants in error,
replied: “ The consideration is legal and valid by the lex-loci et lex temporis contractus, because the Confederate States were then a defacto government— Vattel, secs. 292, 293; Proclamations and Acts of neutral foreign powers; Lincoln’s Proclamations as to blockade, etc.; Acts of Congress, July, 1861, secs. 5 and 6; The Prize Cases, 2 Black U. S. S. C. R., 637, 689; The Circassia, 2 Wallace, 136 ; Mrs. Alexander’s Cotton Case, lb., 404, 423; Mouran vs. Insurance Co., 6th Wallace, 1015. The contract will then be enforced — Story C. of L., 244, 248, 372; Randon vs. Toby, 11th Howard, 493, and Armstrong vs. Toler, ante, 17th Howard, 232. Gould needs no aid from the illegal transaction, and therefore can recover — Simpson vs. Bloss, 7 Taunton, 246, 2 E. C. L., 346 ; Ingram vs. Mitchell, 30th Ga. R., 547. The case of Showbridge vs. Macon, 2 Am. L. Review is opposed to Mrs. Alexander’s Cotton Case, and overruled by Mouran vs. Insurance Co., 6th Wall. R., and consequently it and Erskine’s decisions in 35th Ga., are of no force. See Keppel vs. Petersburg R. R., by C. J. Chase, at Richmond.
case no. 2.
The Georgia Railroad and Banking Company, on the 14th of February, 1862, issued two certificates of deposit for $500 00 each, payable to the order of Eddleman. They were not paid; he sued upon them, and the main defense was that the deposits for which said certificates were issued were made in Confederate currency. He obtained a verdict for $1,000 00 and costs. The company moved for a new trial, it was refused, and the cause came up. Here it was by consent argued with the case of Miller vs. Gould above stated. The authorities cited were in the main those already stated.
Johnson & Montgomery, W. Hope Hull, for plaintiff in error.
H. W. Hilliard, for defendant in error.

Opinion:
Warner, J.
This was an action brought upon a promissory note by the plaintiff against the defendant. The note was executed on the 12th day of July, 1862, the consideration of which was the loan of three thousand dollars Confederate Treasury notes. The defence set up against the plaintiff's right to recover is, that the consideration for which the note was given, was illegal and void, for the reason, that said notes were originally issued by the assumed authority of the Confederate States, then in rebellion against the Government of the United States, for the purpose of aiding and abetting said rebellion, and that the plaintiif had knowledge thereof. It may be conceded, that the issuing of Confederate Treasury notes by the assumed authority of the Confederate Government, for the purpose of aiding and abetting the rebellion against the Government of the United States, was illegal,'as against that Government and the citizens thereof, who, during the war, were under the actual protection of that Government, outside of the military lines of the assumed Confederate authority; still, the question to be answered and decided is, whether a contract made between two citizens residing within the military lines of the assumed Confederate authority, in their ordinary business transactions, having no connection with the prosecution of the war, the consideration of which contract was Confederate Treasury notes, is to be held illega and void, as between the contracting parties themselves, in view of the facts which existed at the time the contract was made. At the time of making this contract between the plaintiff and defendant, the authority of the Government of the United States had been displaced within certain defined limits, and another government had been organized, which assumed to exercise dominion and control over the territory and people thereof. Although the Confederate Government may have been an illegal usurpation of authority, as against the Government of the United States, still, it was in fact an organization capable of making war, and maintaining its authority for a time, over the territory and people embraced within its military lines. The Government of the United States, in recognizing belligerent rights during the war, recognized the fact that a regular organized war existed, that the authority of the Government of the United States had been, for a time, displaced, by an organization of such formidable dimensions as to amount to an organized war.' During this state of things, the contract in question was made. Under the law which existed at the time and place of making the contract, Confederate Treasury notes were not illegal as between the contracting parties themselves. In fact, such notes constituted the only circulating medium in the country at that time, and the purchasing power thereof, at the time of making this contract, was but very little below that of specie. The contract was made between the parties in view of the law which then existed, and the consideration of the note was lawful, and recognized to be so by the actual governing authority then over them, whether rightful or wrongful, is not now the question; the contracting parties were bound to obey it for the time being, and the contract was made in good faith in view of the law which was prescribed for their government by the governing authority which was over them at the time, and which had the power to enforce it. Therefore, as between the contracting parties themselves, at the time and place of making the contract, the consideration of the note was not illegal.
It does not appear that either of the contracting parties had any agency whatever in the issuing of the Confederate Treasury notes; they only dealt with "them as the common currency of the country after the same had been issued and put into circulation by the organized authority which assumed to govern them, and which in fact did govern them at the time when the contract was made, which assumed authority they did not have the power to control or resist. This question came before the Supreme Court of North Carolina at its June Term, 1867, in the case of Phillips vs. Hooker, North Carolina Rep., 194. Chief Justice Pearson, in delivering the opinion of the Court in that case, says: " In 1862 the contest had assumed the magnitude and proportions of Avar, each party in its territorial limits had the boundaries of a mighty nation, and each party counted its people by millions. The Confederate States Avas recognized by the nations, and by the United States itself, as a belligerent power, entitled to the rights of Avar, and, in the exercise of its powers, it had issued paper as the representative of money, which excluded all other currency and constituted the only circulating medium of the country. The Government of the United States was unable to protect the people, and there was no currency but Confederate Treasury notes. In- this condition of things, was every man to stay his ordinary avocations and starve, or else be tainted with treason, and be deemed guilty of an illegal act if he received a Confederate Treasury note ? Was a judge to cease to do those duties required by the interests of humanity, the performance of which can never be considered as criminal, or was he to perform the duties and starve rather than commit an illegal act by receiving his salary in Confederate Treasury notes? Was the merchant to close his store? the blacksmith and shoemaker to quit work, and the farmer to let his tobacco and surplus grain rot on his hands, and allow his family to suffer for clothing and the other necessaries of life, or do an illegal act by receiving Confederate notes ? Really, unless the receiving of such notes can be connected wdth a criminal intent to aid the rebellion, the question seems to me too plain to admit of argument. A naked statement exposes the absurdity of the proposition. The Courts must act on the presumption that Confederate notes were received in ordinary dealing, hot for the purpose of aiding the rebellion, but because there was no other currency. It cannot be held that the mere receiving a Confederate note was illegal and base without involving in the imputation of baseness every man and woman in the State. The ministers of the Gospel, the judge who received his salary,-the physician, the merchant, the mechanic, the farmer, who carried on his ordinary business, the poor seamstress who, at the end of the day, received her hard earned wages, were all guilty of an act so base that the doors of the courts of justice must be shut against them. The proposition is monstrous!!"
But it was insisted on the argument of this case that dealing in Confederate Treasury notes gave them credit and circulation, and thus aided and encouraged the rebellion. As well might it be said that the dealing in smuggled goods by a merchant or tradesman would aid and encourage smuggling. It is not pretended that either of the contracting parties now before the Court had anything to do with the original act of issuing and putting into circulation Confederate Treasury notes by the assumed Confederate Government. After the Confederate Treasury notes had been issued and put into circulation as currency by the assumed Confederate authorities, the parties dealt with it as they found it, the same being the only circulating medium in the country as the representative of money. Their contract was a new and independent transaction, after- the illegal act of issuing the currency by the assumed Confederate authorities for the purpose of aiding and promoting the rebellion against the United States had been done. The distinction between the original illegal act and & new, independent contract is thus stated by Story in his Treatise on the Conflict of Laws, " If the new contract is wholly unconnected with the illegal act, and is founded on a new consideration, and is not a part of the original scheme, it is not tainted by the illegal act, although it may be known to the party with whom the contract is made. Thus, if after the illegal act is accomplished, a new contract (not being unlawful in itself) is made by the importer for a sale of goods to a retail merchant, and the merchant afterwards sells the same to a tailor, or to a customer who had no participation whatsoever in the original illegal scheme, such new contract will be valid, although the illegality of the original importation is known to each of the venders at the time when he entered into the new contract." Story's Conflict of Laws, 375, section 248. Armstrong vs. Toler, 11th Wheaton's Rep., 258. Orchard vs. Hughes, 1st Wallace's Rep., 73. Rawdon vs. Toby, 11th Howard's Rep., 493. In the case last cited, the payment of a note was resisted on the ground that it was given in Texas for the purchase of negroes illegally imported from Africa some years before and sold into slavery. The Court said in that case: " If the defendant should be sued for his tailor's bill, and come into Court with the clothes made for him on his back, and plead that he was not bound to pay for them because the importer had smuggled the cloth, he would present a case of equal merit." So here the defendant borrowed the Confederate Treasury notes of the plaintiff the purchasing power of which, at the time he received them, was nearly equal to specie, and who no doubt used them profitably in trade or otherwise, and now pleads that he ought not to pay the note, because the currency which he received from the plaintiff, and which he has profitably used was illegally issued by the assumed Confederate Government, which, in point of fact, exercised dominion and control over both of them at the time the contract was made, and recognized the validity of the currency for which the note was given. The contract was made in view of the state of facts which existed at the time it was made, and not having any connection whatever with the prosecution of the war against the United States, it was a legal and valid contract as between the parties themselves.
But it is contended that the Constitution of 1868 declares this contract to be illegal and void. If the Constitution of 1868 had declared that the issuing of Confederate Treasury notes by the assumed Confederate Government, or that the notes which have been so issued, was illegal and void, then the contract now sued on would be a mere nudum pactum. The Constitution of 1868, however, does not declare that the issuing of Confederate Treasury notes, or that the Treasury notes issued by the assumed authority of the Confederate Government, shall be illegal and void, but on the contrary, impliedly at least, recognizes that currency, in the sixth section of the tenth article thereof, when it declares that judgments rendered during the war shall be subject to be explained " as to the meaning of the word dollars as used in the same," that is to say, whether the word dollars meant gold or silver dollars or Confederate Treasury note dollars. The bald, naked assumption is, that the Constitution of 1868 "not only declares this contract to have been, and to be illegal, when the Confederate Government, in aid of the rebellion, issued these evidences of debt to a citizen or subject of that Government, but it also declares the evidences of debt so issued or used to be null and void. The assumption is, it will be perceived, that the Constitution of 1868 declares this contract now sued on to have been, and to be, illegal, when the Confederate Government, in aid of the rebellion, issued these evidences of debt, (to-wit,) Confederate Treasury notes to a citizen of that Government; that is the first assumption to maintain the illegality of this contract. The second assumption is, that the Constitution declares the evidences of debt so issued or used, (to-wit,) Confederate Treasury notes, to be null and void. Now let us examine the Constitution of 1868, and see whether "the evidences of debt" mentioned therein embraces, or was intended to embrace, Confederate Treasury notes issued by that assumed Government. The consideration of the contract now sued on is Confederate Treasury notes. The evidence of the debt now sued on is the promissory note made by the defendant. The Constitution of 1868 declares that "All contracts made and not executed during the late rebellion, with the intention and for the purpose of aiding and encouraging said rebellion, or where it was the purpose and intention of any one of the parties to such contract to aid or encourage such rebellion, and that fact was known to the other party, •whether said contract was made by any person or corporation with the State or Confederate States, or by a corporation with a natural person, or between two or more natural persons, are hereby declared to have been, and to be illegal, and. all bonds, deeds, promissory notes, bills, or other evidences of debt, made or executed by the parties to such contract, or either of them, in connection with such illegal contract, or as the consideration therefor, or in furtherance thereof, are hereby declared null and void, and shall be so held in all Courts of this State when attempt shall be made to enforce any such contract, or give validity to any such obligation or evidence of debt." It is not pretended that the contract between the parties now before the Court was made with the intention, or for the purpose, of aiding or encouraging the rebellion, but on the contrary, it was a contract made between two citizens in the ordinary course of business, having no connection whatever with the rebellion, and the promissory note now sued on is not such an evidence of debt as is declared'to be illegal and void by the Constitution. The contracts declared illegal by the Constitution are such as were made with the intention,' and for the purpose, of aiding apd encouraging the rebellion — contracts for the purchase of artillery or cavalry horses, contracts for the employment of substitutes in the army, or contracts for the purchase of munitions of war, and other contracts of like character, and not contracts made between two citizens for the loan of Confederate Treasury notes, the common currency of the country, which had no connection whatever with the rebellion, and the contracting parties had no intention or purpose to aid or encourage the same. The fatal error in the argument to sustain the illegality of this contract is in assuming that the Constitution declares that the issuing of Confederate Treasury notes by that assumed Government is illegal, and that somebody has made a contract with that Government for the issuing such notes, and that such notes being the consideration of the note now sued on, therefore, the contract between the parties in this case is null and void, a mere nudum pactum. There being no evidence in the record going to show that the contract between the parties in this case is embraced, or was intended to be embraced within the provisions of the Constitution, declaring void all contracts made with the intention, and for the purpose of aiding and encouraging the rebellion, it is the judgment of a majority of the Court that the judgment of the Court below be affirmed.
Judgment affirmed.
Warner, J.
— The case of the Georgia Railroad and Banking Company vs. F. M. Eddleman, involved the same question as that in Miller vs. Gould, both cases were argued together, and the judgment of the Court in that case controls this. Judgment affirmed.
McCay, J., concurred, but wrote out no opinion.