will show that this is the principle upon which they rest. The first case of this class is that of Lightfoot v. Tenant, 1 Bos. & Pul. 551. The action was upon a bond given for goods sold, and the defendant pleaded that the plaintiff sold the goods "in order that" they should be shipped to the East Indies without the license of the East India Company, in violation of an express statute. The issue upon this plea was found for the defendant, and a motion for judgment non obstante veredicto was denied. Eyre, C. J., argues that, the jury having found that the plaintiff sold the goods "in order that " they should be shipped, etc., it cannot be said that he had no interest in their future destination; that he may well have sold the goods for an enhanced price, relying exclusively upon the profits to be realized from the illicit trade for payment. He says: "It is a possible case that a tradesman may wish to speculate in this contraband trade, and to do it by dividing the profits with some man of spirit and enterprise, but without capital. Such a man would stipulate that the goods which he sold should be put on board a ship under a foreign commission, and should be sent to Calcutta to be there sold. His share of the profits would be found in the price originally fixed on the goods, but his hopes of payment would rest entirely on the returns of this contraband trade." Again he says: "But the jury having found for the plea, the court cannot say that the plaintiff had nothing to do with the future destination of the goods, unless it was impossible to state a case in which they could have anything to do with it." The decision in this case clearly is based upon the fact that the future use to be made of the goods entered into and formed a part of the contract of sale. There are two other English cases belonging to the same class. The first is that of Cannan v. Bryce, 3 Barn. & Ald. 179. The defendant had lent money to a firm, which afterwards became bankrupt, for the purpose of paying a balance due upon certain illegal stock-jobbing transactions, and which had been applied to that object. He having afterwards received money belonging to the bankrupts, the assignees brought their action to recover those moneys, and it was held that the defendant could not set off his demand for the money loaned. The other case is that of McKinnell v. Robinson, 3 Mee. & W. 434, which was an action of assumpsit for money lent. The defendant pleaded that the money was lent in a certain common gamblingroom for the purpose of the defendant's illegally playing and gaming therewith; and on demurrer the plea was held good. In each of these cases it will be seen that the illegal use was the

In

express object for which the money was lent; and this is relied upon by the court in both cases in giving their judgment. the case of Cannan v. Bryce, supra, Abbott, C. J., says: "It will be recollected that I am speaking of a case wherein the means were furnished with a full knowledge of the object to which they were to be applied, and for the express purpose of accomplishing that object. And in the case of McKinnell v. Robinson, supra, Lord Abinger, in stating the principle by which the case was governed, says: "This principle is that the repayment of money lent for the express purpose of accomplishing an illegal object cannot be enforced."

It is worthy of note that the three cases last referred to present the views respectively of the heads of the three principal English courts, viz.: Abbott, chief justice of the king's bench, Eyre, chief justice of the common pleas, and Abinger, chief baron of the exchequer; and their concurrence in resting their decisions upon the fact that the illegal object was in the contemplation of both parties, and formed a part of the original contract, goes strongly to confirm the doctrine of the cases of Faikney v. Reynous, 4 Burr. 2069; Holman v. Johnson, Cowp. 341, etc. Indeed, the whole current of English authority goes to support those cases, with the single exception of Langton v. Hughes, 1 Mau. & Sel. 593. They have also frequently been referred to by the courts in this country as containing sound doctrine: De Groot v. Van Duzer, 17 Wend. 170; Merchants' Bank v. Spalding, 12 Barb. 302; Armstrong v. Toler, 11 Wheat. 258. In the latter case Chief Justice Marshall refers to the case of Faikney v. Reynous, supra, in the following terms: "The general proposition stated by Lord Mansfield, in Faikney v. Reynous, that if one person pay the debt of another, at his request, an action may be sustained to recover the money, although the original contract was unlawful, goes far in deciding the question now before the court. That the person who paid the money knew it was paid in discharge of a debt not recoverable at law, has never been held to alter the case."

The principles established by this strong array of authorities are in entire accordance with the case of Talmage v. Pell, 7 N. Y. 328, decided by this court. It was a part of the contract in that case, between the banking company and the commissioners of the state of Ohio, that the bonds should remain in the hands of the agent of the state, to be sold on account of the banking company; and this fact is referred to and relied upon by Gardiner, J., by whom the opinion of the court was delivered. He says: "I am,

for the reasons suggested, of the opinion that this bank had no authority to traffic in stocks as an article of merchandise, or to purchase them for the purpose of selling, as a means of obtaining money to discharge existing liabilities; that as the object of the purchase in this case was known to both parties, and made a part of their contract, the debt for the purchase money cannot be enforced by the vendors, and that the collateral securities must stand or fall with the principal agreement." The case contains no intimation whatever that the mere knowledge by the agents of the state of Ohio that the banking company purchased the bonds with a view to a resale would have defeated a recovery. On the contrary, such an inference was carefully guarded against by the learned judge who delivered the opinion, as appears from the extract just given.

I consider it, therefore, as entirely settled by the authorities. to which I have referred, that it is no defense to an action brought to recover the price of goods sold that the vendor knew that they were bought for an illegal purpose, provided it is not made a part of the contract that they shall be used for that purpose; and provided, also, that the vendor has done nothing in aid or furtherance of the unlawful design. If, in this case, the bank had had no right to purchase state stocks for any purpose, then the contract of sale would have been necessarily illegal, and the vendor would, perhaps, be precluded from all remedy for the purchase money. But here the purchase and sale for a lawful object was a contract which each party had a perfect right to make. Suppose the banking company, although intending at the time of the purchase to use the stocks for trading purposes, had, the next day, abandoned this intention, and deposited them with the comptroller, would this change of purpose reflect back upon the contract of purchase, if it was corrupt, and divest it of its illegal taint? This could hardly be pretended; and if not, then the consequence of the doctrine contended for here would inevitably be that the vendor of the stocks, without having participated in any illegal act, or even illegal intent, but having simply known of such an intent subsequently abandoned, would be punished with a total loss of the property sold, and that for the benefit of the party alone guilty, if guilt could be predicated of such a transaction.

I am not aware of any principle which could justify this. The law does not punish a wrongful intent when nothing is done to carry that intent into effect; much less bare knowledge of such an intent without any participation in it. Upon the whole, I

think it clear, in reason as well as upon authority, that in a case like this, where the sale is not necessarily per se a violation of law, unless the unlawful purpose enters into and forms a part of the contract of sale, the vendee cannot set up his own illegal intent in bar of an action for the purchase money.

It follows from this that the sale of the stocks would have created a valid and legal obligation on the part of the banking company to pay the purchase money but for the form of the security agreed to be taken in payment; and this brings me to the consideration of the second ground of defense, viz., that the North American Trust and Banking Company had no authority to issue negotiable promissory notes, payable at a future day; and consequently, that the contract which provided for their issue, and for receiving them in payment, was illegal and void.

In considering this branch of the case, I shall not examine at length the questions so ably argued at bar in regard to the nature of corporations and the limitations of their powers, but shall assume it to have been established, for the purposes of this case at least, that associations under the general banking law, even prior to the act of 1840, Laws of 1840, 306, sec. 4, had no power to issue negotiable notes upon time; placing this assumption, however, not upon the safety-fund act of 1829, Laws of 1829, 167, but upon the general principle of law which limits. corporations to the exercise of powers expressly given to them, or such as are necessarily incident thereto, and upon the statute confirmatory of that principle: 1 R. S. 600, sec. 3.

It follows that in issuing the certificates or post-notes delivered to the Morris Canal and Banking Company in consideration of the stocks transferred, the North American Trust and Banking Company exceeded its corporate powers. That those certificates were negotiable promissory notes, is clear: Bank of Orleans v. Merrill, 2 Hill (N. Y.), 295; Leavitt v. Palmer, 3 N. Y. 19 [51 Am. Dec. 333]; Talmage v. Pell, 7 Id. 328. Does this act of the Trust and Banking Company, thus transcending its legitimate powers, so taint and corrupt the contract of sale as to deprive the vendors of the stocks of all remedy for the purchase money? The counsel for the claimants sought, upon the argument, to maintain that the sale of the stocks and the receipt of the certificates were distinct transactions, and hence that the debt credited by the sale would remain, notwithstanding the illegality of the securities. In this, however, he is not sustained, I think, by the evidence. The proof seems to be clear that the agreement to receive the certificates or post-notes was simul

taneous with and formed a part of the contract of purchase. It becomes necessary, therefore, to meet the question whether the consent and agreement of the vendors to receive the certificates in payment will prevent a recovery in any form for the stock sold.

It results, from what has been previously said, that there was nothing in the contract of sale, considered by itself, separately from the agrcement in relation to the security, to impair the validity of the debt; but, on the contrary, that the sale of the stocks created as valid and meritorious a consideration for the obligation assumed by the trust and banking company as if the money had actually been deposited according to the tenor of the certificates. The objection to the claim, therefore, rests upon the nature of the securities alone, and acquires no additional force from the want of power in the trust and banking company to traffic in stocks.

It has long been settled that contracts founded upon an illegal consideration, or which contemplate the performance of that which is either malum in se or prohibited by some positive statute, are void. But the application of this rule to contracts made by corporations, the sole objection to which consists in their being ultra vires, is comparatively modern. The doctrine rests mainly upon three recent English cases, viz.: East Anglian Railway Co. v. Eastern Counties Railway Co., 7 Eng. L. & Eq. 505; McGregor v. Official Manager of Deal & Dover Railway Co., 16 Id. 180; and Mayor of Norwich v. Norfolk Railway Co., 30 Id. 120.

That a contract by a corporation which it has no legal capacity to make is void, and cannot be enforced, it would seem difficult to deny; and this principle alone is abundantly sufficient to sustain the cases above cited, which were all actions founded upon and affirming the validity of the illegal contract. But it is quite another question whether such a contract is so tainted with corruption that the party dealing with the corporation will be refused all remedy in a suit proceeding upon the ground of a disaffirmance of the contract, and asking only such relief as equity demands. Whether a contract of this nature can fairly be brought, consistently with either reason or adjudged cases, within the range of the maxim, Ex turpi causa non oritur actio, cannot be considered as settled by the cases referred to; especially, as in the last of those cases the court was equally divided, and it was only disposed of by one of the judges withdrawing his opinion with a view to an appeal.