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Opinion of the Court.
There is no proof that the company received the warrants for any other purpose. No inference could properly, as we think, be drawn from the evidence that there was any intent, design or wish on its part to aid the rebellion by the acquisition of these warrants and so far as can be seen, it was a transaction in the way of the business of the company, entered into for the simple purpose of paying an indebtedness which it owed the State, and which, by these acts, the State permitted to be paid in this way. Even though portions of the warrants had been procured at less than par, of which fact there is no affirmative evidence, still the transaction on the part of the company did not thereby become one in aid of the rebellion, and upon this point we do not see that the prices which may have been paid for the warrants were material in the inquiry. The contract between the State and the company did not in any way aid the former in issuing them, nor did it aid the purpose for which the State may have desired to issue them.
Where the validity of a contract is attacked on the ground of its illegal purpose, that purpose must clearly appear, and it will not be inferred simply because the performance of the contract might possibly result in a remote, incidental and unintentional aid to an illegal transaction.
It is somewhat difficult to see how the offer to receive these warrants and their reception pursuant to the offer can be said to be illegal as based upon a consideration which looked to aiding the rebellion by its performance.
It has been held that a contract between parties resident within the lines of insurrectionary States stipulating for payment in Confederate notes, issued in furtherance of a scheme to overturn the authority of the United States within the territory dominated by the Confederate States, was not to be regarded for that reason only as invalid. Contracts thus made, not designed to aid an insurrectionary government, it was held, could not therefore, without manifest injustice to the parties, be treated as invalid. Thorington v. Smith, 8 Wall. 1; Delmas v. Insurance Co., 14 Wall. 661.
The receipt of these warrants, like the contract to receive payment in Confederate notes, was not for that reason only
Opinion of the Court.
unlawful, although the State was the party that received them. The company was not an agent of the State in putting them in circulation, nor is there any proof that in fact it circulated any of them. The company did not take them for the purpose of giving currency to them, but in order to consummate a transaction which, when consummated, was simply a business one on the part of the company, and if by any possibility it could "indirectly or remotely promote the ends of the de facto government organized to effect a dissolution of the Union, it was without blame, except when proved to have been entered into with actual intent to further invasion or insurrection." Thorington v. Smith, 8 Wall. 1, 12; Baldy v. Hunter, 171 U. S. 388, 394.
A specimen of the contract condemned under the rule is to be found in Sprott v. United States, 20 Wall. 459, where the plaintiff sought to recover from the defendant the value of certain cotton which he had purchased from and paid the price in money to the Confederate government and which the Union forces took from its possession in the last days of the existence of that government. The court held that in the transaction the plaintiff gave aid and assistance to the rebellion in the most efficient manner he possibly could; that he could not have aided that cause more acceptably if he had entered its service and become a blockade runner, or under the guise of a privateer had preyed upon the unoffending commerce of his country. The plaintiff asked the court to in effect carry out his void contract with the Confederate government. That is very different from holding that these warrants were so far void that they could not form the basis of payment of debts by their holders, who had not received them from the State but had taken them in the course of business from other parties and who then offered them in payment of their debts due the State.
This whole subject has recently been gone over in Baldy v. Hunter, 171 U. S. 388, where many other cases are commented upon, and the principle of that and the other decisions of this court therein referred to would seem to hold this contract not unlawful.
But suppose these warrants were issued in aid of the rebel
Opinion of the Court.
lion and were therefore void, and that the subsequent offer of the State to receive them in payment of the debt of the company, under the provisions of the legislative acts already referred to, was, while unexecuted, also void on that ground, still their actual receipt and the acquittance given were not, for that reason, void as between these parties.
A contract in aid of the rebellion has been held illegal because it belonged to that class of contracts which are mala in se, whose consideration is immoral and founded upon a criminal purpose. If a State were a party to such a contract it would not be void on the technical ground that it was ultra vires as beyond the contract making power of the State, but because of the illegal nature of its consideration. The contract would be void for the same reason that it would be void as between individuals, not because they had no capacity to make it, but because, being founded upon an illegal consideration, no court would recognize its validity or enforce its provisions. A State as a sovereignty has power generally to make contracts, unless there be some constitutional inhibition as to certain classes of contracts, and if the consideration of a particular contract is bad or immoral, the contract is illegal because of the character of its consideration, and not because the contract would be beyond the general scope and power of the State. Hence, as between the parties to it, the State might, if it chose, perform all its requirements, and if the acts of its officers were performed in obedience to legislative authority, their performance in executing the contract would be the act of the State. If, on the other hand, the constitution of the State had prohibited its officers from ever receiving anything but gold in payment of this debt of the company, a delivery of something else in assumed payment of the debt, though received as such by its officers under the authority of the legislature, would be no payment. That would be a case where the payment would be absolutely void because beyond the capacity of the State to authorize and equally beyond its capacity to ratify. It would be ultra vires in the strict sense of the term. In such event, it would be true that the act of the officer would be his individual act, and in no sense would he represent or bind the State by his action. Such VOL. CLXXVII-7
Opinion of the Court.
an attempted payment might, therefore, be regarded by any subsequent officer of the State as wholly void and ineffectual for any purpose.
The distinction between the two cases is obvious. In the one the contract is void because of the illegality of the consideration, not because of the legal incapacity of either party to make the contract, while in the other there is an entire lack of power to make it under any circumstances. When, therefore, the officers of the State pursuant to its statutes received the warrants as payment, they acted for the State in carrying out an offer upon its part which the State had the legal capacity to make and to carry out, and which it in this manner did carry out. The State in such case had the same power to carry out its contract (so far as the parties to it are concerned) as individuals would have had to carry out the same kind of a contract, and when the warrants were received by the officers acting for the State in payment of the interest, and the bonds of the State were issued to the school fund and acquittance given to the company, the transaction was finished and completed, in the case of the State, just as it would have been in like circumstances in the case of the individual, and by such action (as between the parties) the State is bound; the acts of its officers are its own acts, and it must be judged in the same way as an individual would be judged. In other words, the contract having been fully executed by the company and the State, neither party having chosen to refuse to perform its terms, neither party as between themselves can thereafter act as if the contract had not been performed, nor can the State pass any act which shall impair the obligation which springs from its performance. After the complete execution of the transaction it must be that each party thereupon and at once became possessed of certain legal rights arising from its performance. Neither party could undo what had been fully executed and completed, and the law therefore implies a contract that neither party will attempt to do so, or, in other words, the law implies a contract that the payments made shall not be thereafter repudiated or denied. Any subsequent statute of the State which repudiated or permitted the repudia
Opinion of the Court.
tion of the payments would impair the obligation of the contract which the law raises from the transaction itself.
That a contract will be implied under such circumstances is stated in Planters' Bank v. Union Bank, 16 Wall. 483, 500. There the court said: "Some of the authorities show that, though an illegal contract will not be executed, yet when it has been executed by the parties themselves, and the illegal object of it has been accomplished, the money or thing which was the price of it may be a legal consideration between the parties for a promise, express or implied, and the court will not unravel the transaction to discover its origin."
So in this case. The illegal object was fully executed and accomplished, and upon its accomplishment and by reason of the whole transaction there arose an implied contract that the settlement should be conclusive upon all parties to it. This principle calls for no aid from the court in the enforcement of a void contract. The parties have already fully complied with all its terms, and by reason thereof the implied contract has arisen.
The State cannot now be permitted to repudiate or set aside the acts of its former officers, done in pursuance of the direction of the legislature of the State, and effectually and forever closed long before the present proceeding was commenced. As between the parties to those transactions, this cannot be done.
The action of the present officers of the State in bringing this proceeding has been undoubtedly prompted by the best motives and from a desire to promote the true interests of their State, but we nevertheless are unable to see how the proceeding can be successful without overturning those principles of law which must guide and control our judgment.
We are then brought to the question whether the subsequent legislation of the State has in any manner impaired the obligation of the contracts made by the State at the times when these various payments were made.
We have shown in the treatment of the motion to dismiss how the judgment of the court below gave effect to the subse