§ 1787. Illegality and fraud belong to the second class of defenses enumerated in the last chapter, which admit the execution of the instrument, but deny its effect. The question of illegal consideration has been already considered in detail. Thus, a note is illegal

and void which is given to suppress a criminal prosecution,1 or in payment for liquor sold in violation of law, or for gambling debts.3 But in some statutes against gaming the rights of a bona fide holder are expressly reserved. A bill given for money borrowed for illegal speculations is void in the hands of a party with notice." An action will, however, lie against an agent for money received by him in the collection of such a bill." So, if A.'s debt for an illegal stock transaction is assumed by B., and secured by A.'s note to him, the illegal character of the original debt cannot be set up as a defense to the note. But the statute against gambling contracts need not be specially pleaded.8

§ 1788. In like manner, a note is illegal which was given to procure for the maker a substitute or other discharge from duty in the army. So, more especially, a note to raise money for the use of Confederate troops; 10 or a draft on the Confederate war depart

ment;

11

or a note to a municipal corporation for taxes assessed in aid of the Rebellion; 12 or cotton notes regarded as so issued under a statute of Mississippi during the war.13 But a note for the

1 Brown v. Padgett, 36 Ga. 609. And see § 501, supra. preclude the defense. Morrill v. Goodenow, 65 Me. 178.

And a seal will not

2 Glass v. Alt, 17 Kan. 444. And part payments on it may be applied as setoff on another account. Tolman v. Johnson, 43 Iowa, 127. But the burden of proving the unlawful sale is on the defendant. Brown v. McHugh, 36 Mich. 433. And see §§ 532, 559. supra. And in NEW JERSEY a note to an innkeeper for liquor sold and drunk on premises is void (2 Gen. St. p. 1792, § 27). 3 WISCONSIN (Sanb. & B. Ann. St. § 4538).

4 MAINE (Rev. St. c. 125, § 10; Id. c. 27, § 56); MICHIGAN (How. Ann. St. § 2027).

5 National Bank of Metropolis v. Williams, 46 Mo. 17.

6 Williams v. Wall, 60 Mo. 318.

7 Bangs v. Hornick. 30 Fed. 97. So, where the original note was given for merchandise sold in violation of law by the agent, who took the note and gave the payee his own note for it, the original consideration is no defense to the latter note. Domestic Sewing-Mach. Co. v. Hatfield, 58 Ind. 187.

8 Watson v. Bayley, 2 Cranch, C. C. 67, Fed. Cas. No. 17,276.

9 O'Hara v. Carpenter, 23 Mich. 410. And see § 496, supra.

10 Slifer v. Howell's Adm'r, 9 W. Va. 391; or to purchase supplies, Lewis v. Latham, 74 N. C. 283.

11 Cronly v. Hall, 67 N. C. 9.

12 O'Byrne v. City of Savannah, 41 Ga. 331.

13 Taylor v. Thomas, 22 Wall. 479. And a subsequent provisional govern

transportation of cotton, even for the military board of the Confederate States, has been held to be lawful in the hands of a bona fide holder.1 Any alleged illegality by reason of intended aid to the enemy in war must be particularly pleaded.15 And a note is not void because it is given for the purchase of an interest in a partnership which has, among other business, a contract for the enemy's government.18

Statutory Prohibition.

17

§ 1789. There can be no recovery on a note or bill given for money due on a transaction prohibited by statute, although it will not be affected by a statute subsequently passed.18 The burden is on the defendant, however, to show that the instrument is within the statute relied on to render it void.19 If a statute, such as a usury law, in force when the note was made, is repealed afterwards, before suit brought, the original prohibition will no longer be availment was not bound to receive them for taxes, although so receivable by their terms.

14 Kottwitz v. Alexander's Representatives, 34 Tex. 689. And illegality in a subsequent contract relating to the note will not affect its validity. Wilcoxon v. Logan. 91 N. C. 449.

15 Kimbro v. Bank, 49 Ga. 419.

16 Gullatt v. Thrasher, 42 Ga. 429.

17 Brown v. Tarkington, 3 Wall. 377. But a statutory prohibition under a penalty does not render the instrument void, Harris v. Runnels, 12 How. 79; Darby v. Institution, 1 Dill. 141, Fed. Cas. No. 3.571; although so held in Bacon v. Lee, 4 lowa, 490. Thus, a premium note for premium for insurance to a company not authorized to do business in Indiana is not void, but action will be suspended on it until the law is complied with. American Ins. Co. v. Wellman, 69 Ind. 413.

18 Boyce v. Tabb, 18 Wall. 546. So, of a usury law, Cecil v. Hicks, 29 Grat. (Va.) 1; Hubbard v. Callahan, 42 Conn. 524; Newton v. Wilson, 31 Ark. 484; or a law making usury between maker and payee admissible at the suit of a bona fide holder, North Bridgewater Bank v. Copeland, 7 Allen (Mass.) 139. But a prohibition in a banking act as to banks "subsequently established" applies to a bank charter granted on the same day. Weed v. Snow, 3 McLean, 265, Fed. Cas. No. 17,347.

19 Bayley v. Taber, 6 Mass. 451. E. g. that a premium note to a foreign insurance company was made in a place where it was not authorized to do business. American Ins. Co. v. Woodruff, 34 Mich. 6; Same v. Cutler, 36 Mich. 261; Finch v. Insurance Co., 87 Ind. 302.

able as a defense.20 So, a change of law allowing a higher rate of interest will apply to a banking act previously passed, authorizing loans at the legal rate.21 And if a note draws a rate of interest which is then illegal, but is afterwards made valid, the subsequent repeal of the validating act will not render the note again. invalid.22 If a bill is given after the repeal of a usury law, in renewal of a bill or for a loan which was originally usurious by the law then in force, it will be purged of the original defect.23 A foreign prohibition by the law of the drawee's residence will not discharge an English drawer.24 And courts will not enforce foreign statutory penalties.25

Sunday Laws.

§ 1790. The delivery of a bill on Sunday does not render it void at common law; and it has been held, therefore, that the law of another state, where it was made, will not be presumed to prohibit it.2 And the statute of such state invalidating the bill must be specially pleaded.27 Where a Sunday bill or note is illegal, it must be shown to have been delivered, as well as dated, on that day.28 Thus, an accommodation note made on Sunday, but indorsed and negotiated by the payee on Monday, has been held to be good. 29

20 Holmes v. French, 68 Me. 525; Nicholls v. Gee, 30 Ark. 135; Smith v. Glanton, 39 Tex. 365. But see, contra, Pond v. Horne, 65 N. C. 84; Ayres v. Probasco, 14 Kan. 175. To the effect that such act is constitutional, see Welch

V. Wadsworth, 30 Conn. 149.

21 Cameron v. Pank, 37 Mich. 240.

22 First Ecclesiastical Soc. v. Loomis, 42 Conn. 570.

23 Flight v. Reed, 1 Hurl. & C. 703; Houser v. Bank, 57 Ga. 95.

24 Mellish v. Simeon, 2 H. Bl. 378.

25 Blaine v. Curtis, 59 Vt. 120, 7 Atl. 708, and 24 Cent. Law J. 229. In MICHIGAN (How. Ann. St. § 1601), usury by a foreign statute cannot be set up, unless the rate is also usurious by Michigan statute.

26 Murphy v. Collins, 121 Mass. 6. And see § 520, supra. But, as to the presumption of similar statute law in other states, see § 41, supra.

27 Geer v. Putnam, 10 Mass. 312; and in Georgia it must be averred that it was given in the maker's "crdinary calling," Sanders v. Johnson, 29 Ga. 526. 28 Conrad v. Kinzie, 105 Ind. 281, 4 N. E. 863; and it will be valid if delivered on another day, though signed on Sunday, Hall v. Parker, 37 Mich. 590; Bell v. Mahin, 69 Iowa, 408, 29 N. W. 331. And see § 225, supra.

* Bank of Cumberland v. Mayberry, 48 Me. 198.

On the other hand, a note actually made on Sunday is of no effect in the hands of a holder with notice, although dated on Saturday.30 So, if made on Sunday in renewal of an old note, and delivered on that day to the holder's agent, although not delivered by the agent to the holder until the next day.31 In Missouri a note is not void because made on Sunday.32 On the other hand, in Maine, it has even been held that a Sunday note cannot be ratified by a subsequent promise to pay it, made on a business day.33 And it seems that a payment of interest made on such note on a week day will not amount to a new promise of payment.34 But it has been held that the collection on Wednesday of a check given for the purchase of a note on Sunday is an affirmance of the note.3 If a note is given on Sunday, it will make no difference that the consideration was goods purchased or an account stated and settled on a week day.36 So, a note given on a week day will not be binding, if the consideration was a tort growing out of an unlawful Sunday contract.37

Usury Laws.

35

§ 1791. A note is not usurious because it is drawn by mistake for too large a sum, 38 although a discount at an unlawful rate, made in ignorance of the law, would be usurious, and discharge the indorser. 39 A note will not, however, be rendered invalid by a subsequent agreement for usury, made after its maturity,* 40 or by a separate note taken for usurious interest.11 And, if a valid note

30 Allen v. Deming, 14 N. H. 133.

31 Stevens v. Wood, 127 Mass. 123; Davis v. Barger, 57 Ind. 54.

32 Glover v. Cheatham, 19 Mo. App. 656; especially if given for a prior and valid debt, Kaufman v. Hamm, 30 Mo. 387.

33 Pope v. Linn, 50 Me. 83. But see, contra, Tucker v. West, 29 Ark, 386.

34 Reeves v. Butcher, 31 N. J. Law, 224.

35 Campbell v. Young, 9 Bush (Ky.) 240.

36 Foreman v. Ahl, 55 Pa. St. 325; Morgan v. Bailey, 59 Ga. 683; Miller v. Lynch, 38 Miss. 344; McAuley v. Reynolds, 64 Me. 136.

37 Tillock v. Webb, 56 Me. 100. But see, contra, where the consideration was a Sunday contract, Kountz v. Price, 40 Miss. 341.

38 Lusk v. Campbell, 3 Hun (N. Y.) 607.

39 Bank of Salina v. Alvord, 31 N. Y. 473.

40 Dell v. Oppenheimer, 9 Neb. 454, 4 N. W. 51.

41 Cooper v. Tappan, 4 Wis. 362.