Case Name: George W. Adams, Hiram G. Runnells, and John Watt vs. John A. Rowan and John L. Harris
Court: Mississippi Court of Appeals
Jurisdiction: Mississippi
Decision Date: 1847-01
Citations: 8 S. & M. 624
Docket Number: 
Parties: George W. Adams, Hiram G. Runnells, and John Watt vs. John A. Rowan and John L. Harris.
Judges: 
Reporter: Mississippi Reports
Volume: 16
Pages: 624–639

Head Matter:
George W. Adams, Hiram G. Runnells, and John Watt vs. John A. Rowan and John L. Harris.
A note, the consideration of which was valid and legal between the original parties, may become void for illegality as to subsequent parties who are also parties to the illegality, and even as to a bona fide holder, if he he compellable to trace his title through the parties to the illegal consideration, and such passage of title be void by law.
If a note, given for a legal consideration and secured by mortgage, be indorsed and the mortgage assigned in consideration of a purchase of slaves introduced into this state since the first day of May, 1833, for sale or as merchandise, such indorsement and assignment are void, and pass no title to the indorsee and assignee, and he cannot therefore maintain a bill to foreclose the mortgage.
It is well settled that when an original contract is illegal, any subsequent contract which carries it into effect is also illegal.
H. introduced into this state for sale a number of slaves since the 1st day of May, 1833, and sold them to R., and received of R. in payment thereof certain bills of exchange, which were afterwards protested for non-payment, and H. sued R. upon them in the United States circuit court for the southern district of Mississippi; before the trial the suit was compromised by the return of the bills of exchange to R. and the indorsement by him to H. of certain notes made by A. in his, R’s, favor, and the assignment by R. to H. of a mortgage executed by A. to R. to secure the payment of the notes; A. failed to pay the notes at maturity, and H. filed a bill in the superior court of chancery to foreclose the mortgage; held, that the contract for the sale of the slaves was illegal and void ; that the new contract for the indorsement of the notes and assignment of the mortgage, related to the first void contract and its illegal consideration, and was therefore also void; and consequently the bill should be dismissed.-
On appeal from the superior court of chancery; Hon. Robert H. Buckner, chancellor.
John A. Rowan and John L. Harris filed their bill in the superior court of chancery, charging that on the 7th of December, 1837, George W. Adams, being indebted to Hiram G. Runnells in the sum of $26,034, made and delivered to him three several "promissory notes for $8671 33§ each, payable on the 1st day of March, 1839, 1840, and 1841; and to secure their payment executed to him a mortgage, conveying a tract of land, particularly described in the deed of mortgage and bill, which deed of mortgage was not acknowledged and recorded in the proper county, and is exhibited with the bill. Shortly after the execution of the deed of mortgage, Runnells assigned and delivered the three promissory notes to the complainants, and in formal terms invested them with the right to control the mortgage. The bill stated that the note maturing on the 1st of March, 1839, had been settled, and that complainants were the holders of the remaining two notes, and that they were wholly unpaid, and prayed a foreclosure of the mortgage and a sale of the land for their payment. Adams and Runnells were made defendants. Adams died after the bill was filed, and his unknown heirs were brought before the court on a bill of review, and the allegations of the bill were taken as confessed against them. Runnells answered and admitted the execution of the notes and deed of mortgage by Adams, and the assignment and delivery of the-notes to the complainants as alleged in the bill. He also admitted that the note maturing on the 1st of March, 1839, had been settled, and that complainants were the holders of the remaining two notes; and that the consideration upon which Adams executed the notes was the sale to him by Runnells of the same lands described in the deed of mortgage and bill, and that he conveyed the lands to Adams by regular and formal deed, which was lost or stolen before it was recorded. He protested, however, against a decree in favor of complainants, on the grounds that the only consideration upon which he assigned the notes to the complainants was the return by them to him of bills of exchange, amounting to eighteen or twenty thousand dollars, which he had previously given to the complainants for slaves imported by them into the state of Mississippi since the-1st day of May, 1833, for sale and as merchandise, in violation of the constitution and policy of the state. He insisted, therefore, that no legal consideration was given for the assignment of the notes, and that complainants could not maintain any suit thereon. He further stated that several of the slaves at the * time he purchased them were unsound, and seven of them died in two or three months after the purchase, of diseases under which they were laboring at the time of the sale. And that, although the complainants refused to warrant them sound, they falsely and fraudulently stated they believed them to be sound. He also alleged, that after the assignment of the promissory notes to the complainants he rescinded the sale to Adams, and told Adams he would no longer hold him bound on his notes. And that after the rescission of the contract with Adams he sold and conveyed the same lands described in the deed of mortgage to John Watt, or Burke, Watt & Co., which firm was composed of Glendy Burke, John Watt, and some other person whose name he did not recollect, and he received, from them full payment therefor. At the time of the sale he informed John Watt that the complainants pretended to have a claim to the land, but he had been advised that the claim they would set up under the deed of mortgage could not be sustained. He prayed that his answer should be taken as a cross bill against complainants, and that they be compelled to answer the same fully, on oath; that his assignment of the notes to them be vacated, and the notes be decreed to be re-delivered to him, and stated his willingness to do whatever might be deemed right in the premises. Complainants filed an amended bill alleging that since their original bill was filed, they had been informed that Glendy Burke, John Watt, and Louis D. Salles, partners in trade under the name and firm of Burke, Watt & Co. or John Watt, claim title to the lands described in the deed of mortgage under a purchase from Runnells. And they averred if any such sale was made, it was long after the notes had been assigned to them, and the deed of mortgage had been duly recorded, and necessarily subject thereto ; that at the time of the sale it was well known to Runnells, and Burke, Watt & Co. that the complainants were the holders of the notes, and that they were secured by mortgage as aforesaid, and they had therefore not only such legal notice as the registration of the mortgage would furnish, but they had notice in fact of the lien of complainants on the lands. Complainants therefore insisted that the sale to Watt could not affect their rights on the notes. They, also averred the loss of the deed from Runnells to Adams, and prayed that it might be supplied by proper decree. Glendy Burke, John Watt and Louis De Salles were made defendants and called on to answer both the amended and original bill. John Watt answered, and referred to and adopted the answer of Runnells, and insisted on the same defences therein relied on. He. stated that he became interested in the lands in the following manner, to wit: Runnells was indebted to the house of Burke, Watt & Co. in the sum of $24,000, and that the same had been transferred to his private account, and he was charged with it on the books of the house; that in full payment of this he received from Runnells and wife a deed in fee simple to the lands described in the mortgage. He admitted that before he purchased, Runnells informed him of a pretended claim by complainants, but assured him that the pretence of claim by them had no just foundation in fact; and that the sale to Adams had been cancelled, and Adams had been, by agreement, released from any obligation to pay the notes given for the lands; and he asserted his title under the circumstances to be good and valid in law. The complainants filed an answer to the cross bill, admitting that they sold to Runnells, with others, a large number of slaves imported into the state of Mississippi since the 1st day of May, 1833, as merchandise and for sale, and received in payment for Runnell’s portion certain accepted bills of exchange amounting to eighteen or twenty thousand dollars, which were protested for non payment at maturity, and suits instituted thereon in the circuit court of the United States for the southern district of Mississippi, and the suits were defended on the ground of pretended unsoundness of the slaves. But before the suits were tried they were compromised and settled, and the bills of exchange taken up and paid, by the assignment of the notes of Adams, which complainants were induced to accept, because they were secured by mortgage. They admitted they refused to warrant the soundness of the slaves, but denied expressly that they made any false or fraudulent representations in regard to their soundness or unsoundness, or made any representations at all, except such as were made on a list of the slaves, specifying their ages and the prices paid for them, furnished complainants by Runnells and others at the time of the sale, at the bottom of which list was a written memorandum made and signed by the purchasers at the time, in the following'words, to wit: “We have this day purchased of Rowan & Harris the foregoing bill of slaves, and agree to take them as sound if they be sound, and unsound if such be the condition of the slaves. Given under our hands,” &c. And they exhibited with their answer the original list and memorandum. They charged that John Watt was not a bona fide purchaser for a valuable consideration without notice, that he purchased with full notice both legal and in fact of their lien, and could only hold subject to it. They denied that the sale to Watt, or the rescission of the contract between Adams and Runnells, could, under the facts of the case, affect their rights under the notes and mortgage. They-averred that Runnells had sold the slaves, and was seeking a cancelment without offering to return them or pay their value or a reasonable hire for them. And they prayed that the cross-bill of Runnells be dismissed. The bill and amended bill were taken as confessed against Glendy Burke and Louis De Salles. And on final hearing the chancellor decreed that the cross-bill be dismissed, the deed of mortgage foreclosed, and the lands sold for the payment of the notes. From which decree of the chancellor the defendants, Hiram G. Runnells and John Watt prayed an appeal, and have brought the case to this court.
William Yerger, for appellants.
That the contract between Runnels and Harris for the purchase of the slaves, and the contract of indorsement by Runnells of the notes of Adams in consideration therefor, were illegal and void, has been so repeatedly adjudicated by this court, that a reference to cases is dispensed with. No action could have been maintained at law against Runnells upon that indorsement. It is believed to be equally well settled, that Harris obtained no title to the notes by that indorsement, and that Adams, in a suit at law brought by Harris, could have shown its illegality, and by this means have defeated a recovery against him.
In the late work by Judge Story on promissory notes, he uses the following remarks: — “In respect to cases of illegality also, this further distinction may become important. The illegality may not only occur between the original parties to the note, but where the note was originally given for a legal and valid consideration, there may be illegality in the subsequent indorsement or transfer of it. In the latter case, the illegality will displace the title of the parties thereto; ” that is to such illegal contract. Story on Promissory Notes, 213.
Even a bona fide holder of the paper, who had to trace title through the illegal indorsement, cannot recover because the illegal indorsement being void, no title has ever passed to him. Story on Promissory Notes, 213.
But when the party to the illegal contract comes into court, as in this instance, to enforce collection of the bona fide claim, there is no conflict of authorities as to his inability to sue. Ibid. 213.
In the case of Harrison v. Hammond, 5 Taunt. 780, the court say, “If a man lends $1000 on an usurious interest, and gets from a third person a collateral security for $800 only, without usurious'interest, this last is void, not because it is given for securing usurious interest, but because it is given for enforcing a contract for usurious interest.”
The same doctrine has been held by the supreme court of the United States. 1 Peters R. 43; 4 Ibid. 228.
In no case has it ever been ruled that the holder of a bona fide obligation, but claiming title through an illegal transfer, and being cognizant of and participating in such illegality, could sue and recover upon it. The only question of doubt has been, whether a bona fide holder, ignorant of such illegal transfer, but obliged to claim title through it, could maintain an action; and as to him, it has been held, if the contract be void he cannot. Story on Promissory Notes, 213, and cases cited.
That Harris can obtain no relief in a court of equity in a case like this, would seem to be so clear, that a citation of authorities would not be made, had not the chancellor come to a different conclusion. One of the fundamental maxims of a court of equity is, that a party who seeks its aid must come with clean hands, or it will be denied to him. That is, a court of equity will never lend its aid to assist in enforcement of a contract, illegal or immoral, and in the making of which the party asking its aid violated the law of the land. In this case, Harris claims title to the notes of Adams, and the consequent right to foreclose the mortgage given to secure them, by virtue of a contract made with Runnells, illegal in itself, contrary to the policy and against the constitution of the state of Mississippi. To permit a recovery under such circumstances, would be to encourage parties to violate the law, and make the judicial tribunals of the country handmaids to their illegal and iniquitous deeds. For it has been well remarked, “ that the good of the public requires contracts of this character to be put an end to; otherwise it would be an unequivocal declaration of law, that the party shall have all the benefit of the contract, for the law approves what it refuses to rescind,” a fortiori would it amount to an approval, should a court of equity lend its aid to enforce such a contract. 2 Swanst. R. 165, note (6). See 3 Yerg. 124.
Again. Another maxim of equity intervenes, the application of which to the case at bar will equally defeat the right of Harris to recover. It is this : “ In pari delicto melior est 'conditio possedentis aut defendentis.” Thus, in illegal contracts, or where one party has placed property in the hands of another for illegal purposes, as for smuggling, if the latter refuse to account for the proceeds, and fraudulently and unjustly withholds them, the former must abide by his loss. Story’s Eq. PL 70; Cowp. R. 341; 11 Wheat. 258 ; 3 Cranch, 242.
Again. The court of equity will never assist a wrong-doer in effecting his wrongful intents — and upon a bill filed by him a defendant may show the illegality of the contract, and thus procure the dismissal of the bill, without any offer upon his part to perform equity, although had such defendant filed an original bill for relief, it would only have been granted to him upon terras of his doing full equity to the party who violated the law. 1 Story Eq. 77; 4 Bro. Ch. Cas. 435 ; 1 Fonbl. Eq. B. 1, ch. 1, § 3, n. (A.)
Smedes and Marshall, for appellees.
We do not contend that a mortgage, executed to secure the payment of a note given for negroes introduced into this state as merchandise, or for sale since the first day of May, 1833, could be foreclosed in a court of equity, or a suit maintained on such a note in a court of law. The notes in the case at bar, however, are admitted to have been originally given for a , lawful and valuable consideration. Adams received a value for them, and neither he nor his heirs make any resistance to the collection of them; they are willing the mortgage should be foreclosed and the land sold, but Runnells, who is a mere formal party, against whom no decree is sought, who had parted with all his interest in both land and notes, as we believe, resists a decree of foreclosure because he transferred the notes to Rowan and Harris for an illegal consideration. Admit the consideration of the transfer was illegal, what then is the attitude of Runnells ? He appears as a party to an illegal transaction, seeking to recover back choses in action paid by him for an unlawful consideration, and he asks a court of equity to aid him in his unconscientious endeavor, without even offering to return the negroes or pay their reasonable hire; he alleges his own turpitude to enable him to recover back that, which, in pursuance of a forbidden contract, he had delivered to the appellees. It is a wholesome maxim, that he who asks equity, must do equity. There can be no doubt, therefore, we think, that if a court of equity would take cognizance of this forbidden contract, at all, it would require as a condition precedent, a return of the negroes and the payment of their reasonable hire by Runnells, before he could recover back the notes he paid for them. Here the contract was executed — the consideration actually paid over — and we apprehend the same reason which would prevent Rowan and Harris recovering in an action on the indorsement of the notes against Runnells, will prevent Runnells re covering back the notes. The contract was unlawful, and the courts of the country will lend no aid to either party. To such cases the maxim, in pari delicto portior est conditio defendentis, et possidentis, applies. Adams’s heirs, the only parties who could object, if indeed they could, offer no resistance to the decree of foreclosure, and we insist that the court finding Rowan and Harris in the possession of the notes, having received them from Runnells as money, should leave them to pursue their equitable remedies against the maker or his heirs, even though the transaction between Runnells and themselves were in violation of law. John Watt is clearly not a purchaser for a valuable consideration without notice, in any view we can take of the case. He parted with neither money or property, nor relinquished any security for the land, but received it for a preexisting debt. See Harney v. Pack & Clifton, 4 S. & M. 229.
He had the constructive notice which the proper registration of the mortgage gave him, and notice in fact, as both he and Runnells admit. Being a purchaser therefore, with full notice, constructive as well as actual, Watt occupies no better condition than Runnells.
But we think the opinion of the chancellor may be affirmed, even admitting the doctrine contended for by appellants, that a party claiming through a vicious indorsement cannot be heard.
The notes indorsed by Runnells to Rowan and Harris, were given in settlement and compromise of certain bills of exchange, on which a suit was then pending, and to which Runnells had plead a failure of consideration. It was in compromise of the suit that the notes were given ; this is expressly stated and relied on, in the answer of Rowan and Harris to the cross-bill of Runnells; is responsive to that cross-bill, and is thus evidence.
That the compromise of a suit is a good consideration to uphold a promise to pay a certain sum of money, or the indorsement of a promissory note. See Okeson v. Barclay, 2 Pennsyl. 531 ; Chit, on Con. 37 -39.
It is immaterial how slight the consideration; how inadequate. Any inequality of consideration upon entering into an agreement, for the compromise or abandonment of a doubtful right, will not defeat the contract. Chitty on Contracts, 26, 27, and cases cited'.
It is true the cases say there must be doubt about the point of law involved in the case to make the consideration a good one. Admit that to be true, was there not doubt about the ultimate decision of the question as to the constitutionality of these contracts for the sale of negroes introduced into this state, at the time when the compromise of the suits on these bills of exchange was effected 1 It was prior to any decision of this court, or in this state on the subject. And although now no one doubts about it, yet not until the opinion of Brien v. Williamson, 7 How. 14, which Chancellor Kent considers so “masterly,” was the question entirely put at rest. The case of Groves v. ¡Slaughter, 15 Peters S. C. Rep. 449, in which a majority of the supreme court of the United States differed from this court, at least made the question a sufficiently doubtful one to uphold a compromise of a suit. Where the supreme court of the United States is arrayed on the other side, we think even the most confident may doubt of the correctness of the decision of either court. It made the chief justice hesitate and carefully review his former ground, and must surely then be a sufficient justification for a mere litigant to feel that the ultimate decision was doubtful.
There is nothing in the plea of Runnells which commends it to the consideration of the court; it is in morals odious in the extreme; and nothing but the iron rules of law will bind the court to its allowance.
The courts of this state have gone very far in sustaining this unconscientious defence; and they ought not, it seems to us, to extend its baleful and demoralizing protection any further than they are compelled by positive law.
In this case it clearly appears, that bills of exchange were originally given for the slaves thus illegally introduced, that those bills of exchange were sued on at law, were defended at law, and hi compromise of that suit the notes in controversy indorsed to Rowan and Harris. Here is a totally new consideration, valuable in its character intervening, and the court will not go back to the bills of exchange to inquire into their consideration.
This conclusion, while it is sanctioned by law, commends itself by its intrinsic equity and justice to the approbation of everybody. The fair contract of the parties is carried out; fraud or injustice perpetrated on no one; and no violation of the constitution occasioned. The conclusion to which we think the court may come on this point, we think sanctioned by the decision of Thomas v. Phillips, 4 S. & M. 358; where, after judgment on one of these contracts, the court refuses to lend its aid or grant relief. It will not look behind the judgment at the violated constitution, which in this case Runnells is so much concerned for; so here it will not look behind the compromise of the lawsuit, and the surrender of the bills of exchange, to see what, if any, illegal or other contracts and considerations were merged in that compromise.
E. W. F. Sloan, in reply.
1. No action can be sustained, either at law or in equity, upon a contract fraudulent or illegal when shown to be so. Nor can the form of the contract change or modify the rule. A promissory note may be valid as between the maker and payee, yet void in the hands of a fraudulent assignee, or of one who holds the same by a direct illegal indorsement. Because such illegal indorsement confers no title on the indorsee, and consequently no right of action either against the indorser or maker. Story on Prom. Notes, 213; Chitty on Bills, 109,116; Lowes v. Mazzaredo, 1 Starkie’s Rep. 385 ; Parr v. Eliason, 1 East, 92; Chapman v. Black, 2 Barn. & Aid. 588 ; Ackland v. Pearce, 2 Camp R. 599; Lloyd v. Keach, 2 Conn. R. 175 ; Strong v. Tompkins, 8 J. R. 98. See also Gaither v. Farmers and Mechanics Bank, 1 Pet. R. 43, where it was held, that an illegal indorsement was a void act, and that the property in the note and of consequence the right of action, could never pass by it to the indorsee : that the maker may set up the illegal indorsement in avoidance of the contract, even though the indorser might sue the maker, there being nothing illegal as between them.
It has never been questioned, that the indorser or assignor might in such case plead the illegality of the contract. The same rule prevails, even in cases of usurious indorsements.. In Lloyd v. Keach, Mr. Justice Hosmer uses this language. To the objection that no person may take advantage of usury in the indorsement of a note, but the person oppressed with the exaction, I reply, that the assertion is utterly unfounded. The plaintiif can recover only on the exhibition of a legal title, and the defendant may avail himself of the want of it.
Where a contract, however, is absolutely void, even a stranger may take advantage of it, nor can it be confirmed or ratified. Viner’s Ab. title Void and Voidable, letter A.
The assignment of the note applies equally to the mortgage, which is but an incident, and whoever is the owner of the debt, is likewise the owner of the mortgage security. Jackson v. Willat'd, 4 J. R. 41; Johnson v. Hart, 3 J. Ca. 322.
3. I admit, that in general where money has been paid in an illegal transaction, it cannot be again recovered, (except in case of gaming, whilst it is still in the hands of the stake-holder, and there is a locas penitential) But the idea that Rowan and Harris took the legal estate in the mortgage lands, in actual payment for the slaves, in the sense in which it is here sought to be used, is wholly rvithout foundation and absolutely inconsistent with their attitude as complainants seeking relief. Wynne v. Callander, 1 Russ R. 293; Baker v. Williams, 1 Amb. 269, 2 ed. note 5. If they have received actual payment, they are entitled to no farther relief and can have no equity. If not, they are yet the complainants, and being in pari delicto, cannot prevail even as against Runnells; for in such case melior est conditio defendentis, aut possidentis. They are precluded by the maxim.
4. Again, if it be supposed that there was no rescission of the contract of sale and purchase, between Runne'lls and Adams, and that the former held an estate under the mortgage subject to assignment, as distinct from the notes, it follows that Watt is the party now in possession of that estate by deed, and is protected by the maxim either as possessor or as defendant. But
Watt occupies higher ground. After the rescission of the contract between Runnells and Adams, he himself purchased the land from Runnells for the sum of about $24000. Runnells and Adams had an undoubted right to consider the assignment to Rowan and Harris void, and to rescind and cancel the contract of sale and purchase made between them. This was accordingly done, revesting in Runnells the entire estate in the land, who thereby acquired a right, equally undoubted, to convey the same by deed to Watt.
Watt then became a purchaser, in good faith for a valuable consideration. And being so, notice to him of the previous illegal assignment to Rowan and Harris was wholly ineifectual to prejudice his rights, either as creditor or purchaser.
In Clapp v. Tirrill, 20 Pick. R. 247, it was declared, that a conveyance to defraud creditors, was void as against a subsequent purchaser for a valuable consideration, even though he have notice of such prior conveyance. It was also held, in Ricker v. Ham, 14 Mass. R. 137, that such second purchaser may obtain a good title, by a conveyance made whilst the land is in possession of the fraudulent grantee.
“A purchaser, notwithstanding he had notice of a prior fraudulent conveyance might avoid it; for the notice of the purchaser cannot make that good, which an act of parliament has made void.” Newland on Contracts, 396. In Doe v. Manning, 9 East, 59, the conveyance was for a good though not a valuable consideration. Lord C. J. Ellenborough, upon a review of all the authorities, declared it to be void, as against a subsequent purchaser, though he had notice of it.
5. Upon any view of the case which may be taken, Runnells was properly made a party to the bill of complainant. Upon payment by him of one of the notes so transferred, he became again the holder. There was by operation of law a re-transfer of the note, and of the mortgage security pro tanto.
The fact that he filed a cross-bill, did not change his attitude as defendant in the cause. In general a cross-bill is to be considered as a defence to the original bill. It is but auxiliary. Story’s Eq. Plead. 317, § 399. It was therefore not necessary that Run-nells should have offered to return the slaves to the complainants.

Opinion:
Mr. Justice ThacheR
delivered the opinion of the court.
Appeal from the decree of the chancellor, ordering the foreclosure of a mortgage.
It appears from the record, that Hiram G. Runnells conveyed land to George W. Adams, but the deed of conveyance was not recorded, and is alleged to have been lost. Adams executed a mortgage to Runnells, to secure the payment of the notes given for the purchase-money of the land. Subsequently, Runnells indorsed the notes, and assigned the mortgage to Rowan and Harris, the complainants, as is set up in the answer of Rowan and Harris to the cross-bill of Runnells, as the consideration for the settlement and compromise of a suit at law, instituted by Rowan and Harris against Runnells, upon certain bills of exchange, drawn by Runnells, the consideration of which was the sale, by Rowan and Harris, to Runnells, of slaves introduced into the state, as merchandise, by Rowan and Harris, since 1833, in violation of the constitution; which suit at law was being contested by Runnells, on the ground of a failure of consideration, occasioned by the unsoundness of a number of the slaves, which were the subject of his purchase. After the indorsement of the notes, and the assignment of the mortgage by Runnells, to Rowan and Harris, Runnells and Adams, as is set up by Runnells in his answer, cancelled the sale of the land and the contract relating thereto; and thereupon Runnells, thus reinvested with the land, conveyed it to John Watt, in payment of a preexisting debt, due by him to the firm of Burke, Watt, & Co., and which had been assigned by that firm to the individual account of Watt, and, at the time of the conveyance, informing Watt of the existence and assignment of the mortgage, but assuring him of its invalidity. Runnells resists the decree of foreclosure, on the ground of the illegality of the consideration for the indorsement of the notes, and the assignment of the mortgage, and likewise sets up the unsoundness of a number of the slaves purchased by him of Rowan and Harris.
The notes and mortgage,-securing their payment, were originally executed for a legal and valid consideration, as between Adams and Runnells. In the hands of Runnells, the notes and their incident, the mortgage, possessed a valid and valuable consideration. It is possible, however, that notes, the consideration of which was valid and legal between the original parties, may become void for illegality as to subsequent parties, who are also parties to the illegality, and even as to a bona fide holder, if he be compellable to make his title, through the parties to the illegal consideration, and such passage of title be void by law. Story's Bills of Exchange, sec. 190. It must, therefore, be first settled, that there was illegality in the in-dorsement, and assignment of the notes and mortgage, by Run-nells, to Rowan and Harris. If the indorsement and assignment were made, as the consideration for the purchase and sale of slaves, introduced into this state, as merchandise, and for sale, since the year 1833, then, it having been determined by this court that all contracts for slaves introduced into this state as merchandise, or for sale, after the first day of May, 1833, are void, by virtue of the prohibition of the constitution in relation to such introduction, (Brien v. Williamson, 7 How. 14,) it must necessarily follow that the indorsement and assignment are void, as between Runnells and Rowan and Harris. The proof shows this to have been the fact.
But it is contended that the consideration of the indorsement, and assignment of the notes and mortgage, was not the purchase-money of the slaves, but was a consideration extended, by Runnells, to Rowan and Harris, in settlement and compromise, and for surceasing the suit which Rowan and Harris had instituted upon the bills of exchange given for the purchase-money of the slaves, and that they were exempted, by this new consideration, from the fatal effects of the original contract, it having been cancelled by this payment. This latter contract was, however, equally void. It was between the same parties, and related to the first void contract, and its illegal consideration. It cannot be permitted, that the parties to a contract void, by law, may evade the provisions of that law, by giving up the security originally taken, and substituting another in its place. It is well settled, that when an original contract is illegal, any subsequent contract, which carries it into effect, is also illegal. And, whenever, in cases of this character, the subject-matter of the contract can be traced back, between privies, to an original illegal contract, the substituted security is void; and even if the parties liable in the last security, were not privy to the illegal bargain, the same result has been held to prevail, if the true distinction of such security was to secure such a bargain, made by others, for the use of him who was to reap the fruits of the bargain. Collins et al. v. McCargo, 6 S. & M. 135. The foregoing principles will be found elaborately discussed in Bridge et al. v. Hubbard, 15 Mass. 96.
The case therefore resolves itself into an application to the chancery court to compel the collection of notes which were yoid in the hands of their holders, by enforcing the foreclosure of a mortgage, by which their payment was secured. The mortgage, being an incident of the notes, partakes of their character and follows their fate. The mortgage, in the hands of Rowan and Harris, was void, as well as the notes.
The chancery court was not required to look further than to ascertain the fact, that the notes and mortgage were void, in the hands of Rowan and Harris; and, upon that circumstance sufficiently appearing, it could safely decree, without reference to equities that might be supposed to have arisen between Run-nells and others, claiming under him and Rowan and Harris, upon the ground of the invalidity of the contract of indorsement and assignment. The security was void in the hands of the complainants, and could not be enforced for their benefit in the chancery court, and it should so have been decreed.
The decree of the chancellor is consequently reversed, and the bill and cross-bill directed to be dismissed without prejudice.