The Merchants' Bank of New-York v. . Spalding

9 N.Y. 53

Opinion

Denio, J.,

delivered the opinion of the court.

The judge was unquestionably mistaken in holding that the circulation in this state of bank notes issued by foreign corporations, under the denomination of $5-was legal. The act of 1830 (ch. 295) declared it to -be unlawful to pass, circulate or receive such notes; and subjected the offender to a penalty equal to the nominal amount of the note. In 1835, the legislature, by prospective provision's, forbade the receiving, circulating and passing of notes issued by any banking corporation or private banker, whether in or out of the state, of notes under $5, or for a sum between $5 and $10 ; and prescribed a penalty of five times the nomi- - nal value of the note. It also prohibited (prospectively) the banks of this state from issuing such small notes under a heavy penalty. The act repealed so much of the act of 1830, to which I have referred, as was inconsistent with it. The only inconsistency between the several provisions was in the amount of the penalty, if even that could be so considered. The repealing clause would probably prevent the penalty in the last act from being held cumulative, or • an addition to that prescribed by the act of 1830. (Laws 1835, ch. 37, §§ 1, 2, 3, 6; id., ch. 155; Commonwealth v. Kimball, 21 Pick., 373.) The act of February 28, 1838, was passed during the suspension of specie payments, which commenced in May of the preceding year. It repealed absolutely all the provisions of the act of 1835, and provided that the small bills which might be issued by the banks of this state should not be. within the protection of the act authorizing the suspension of specie payments. It then enacted, prospectively, another system of provisions] against the issuing of small notes by our own banks, and against the circulating,of such notes, whether issued"by institutions in or out of the state; and for the last offence it provided a penalty of five times the amount of the note ; but none of the inhibitory provisions were to be operative until two years after the passage of the act. (Laws 1838, ch. 51.) By chapter 80 of the Laws of the ensuing year (Laws 1839, 26), the last mentioned act (of 1838) and the act of 1835 were both repealed, without qualification, by an act of a single section, containing no other provision. It will be remembered that the act of 1835 had been in terms repealed by that of 1838 ; and the motive of repeating the sentence of repeal was probably to prevent its being held to be revived by abolishing the act which repealed it. It will be seen by this recital that the essential provisions of the act of 1830 have never been changed at all, and hence that the doctrine of reviving a repealed statute by abrogating the act which repealed it, has no application to the case. It has at no time since 1830 been lawful to pass a foreign bank note under the denomination of $5 in this state; though at one period the offence was more highly penal than at present. It has seemed necessary to say thus much upon this part of the case, as it is a question of too practical a character to be left open to controversy.

• Although the judge took a wrong view of the state of the law upon this point, the judgment ought not to be" reversed unless there was a case proper to be presented to the jury upon the other questions at issue- There was no evidence upon which the jury could properly have found that there was an agreement between Pound and the bank by which the former was bound to pay out the small bills in this state. Pound had stated to the president that his business would lead him to expend the money in the purchase of flour in the western part of this state, and that small bills would be available to him; and the same thing was, in effect, communicated to the board when the note was laid before them. This, though quite sufficient to prove a notice of the use it was intended to make of the money, did not tend to establish an' agreement upon that subject. There is nothing to show that Pound was not entirely at liberty to change his mind as to the use to be made of the notes as soon as he got them; and he would not have subjected himself to an action in favor of the bank if he had immediately paid them out in New Jersey. But the jury might well have found that the bank had notice that they were expected to be paid out in New-York, and that they were actually so passed; and the question now is whether that circumstance vitiates the contract. Both parties were citizens of New Jersey. The contract was made in that state, and it was to be wholly performed in that state, and there is no evidence that either of the parties actually knew of the legal regulations respecting small bills in force'in New-York. They were not chargeable with such knowledge. Even the courts of this state regard the laws of every other state as facts to he proved, and of which they cannot otherwise take notice. (Holmes v. Broughton, 10 Wend., 75, 78.) It is true that where an agreement is made in one state, to be executed in another, as the laws of the latter country prevail in determining the validity of the contract, it is reasonable that the parties should.be presumed to know the law of the country in reference to which they are contracting. (Holman v. Johnson, Cowp., 341.) I do not doubt but that a contract might be made in another state, and to be performed there, which our courts would refuse to enforce, though none of its actual provisions were in conflict with our laws. Should parties abroad conspire to do an act in this state which was forbidden by its laws, a foreign contract, unobjectionable in its provisions, but made in furtherance of the general design, would be considered void here when its connection with the illegal enterprise was shown. In Lightfoot v. Tenant (1 Bos. & Pull., 551), the actual contract was unobjectionable, but it was part of a contrivance to violate an act of parliament concerning the East India trade,, and was therefore held to be illegal. It cannot, however, be said that the parties in this case conspired to. violate our laws respecting the paper currency, with which, so far as it appears, they were wholly unacquainted. It has been repeatedly held that a foreigner selling and delivering goods abroad may recover the price in the English courts, though he knows at the time of the sale and delivery that the buyer intends to smuggle them into England. (Pellecat v. Angel, 2 Cr., Mees, & Ros., 311; Holman v. Johnson, supra.) ^ These cases, however, are said to he placed upon grounds peculiar to the revenue laws, and it is insisted that the principle ought not to be applied where legal provisions were enacted for the benefit and protection of the public. In Massachusetts, however, the rule has been applied without such a qualification. In McIntyre v. Parks (5 Metc., 207), it was held that a sale of lottery tickets made in another state, where such sale was lawful, to a citizen of Massachusetts, was a valid transaction, though the seller knew that the purchaser bought them for the purpose of sale in Massachusetts, where such sale was prohibited by statute. And we are of opinion that when the act to be done in another, state, the knowledge of which is sought to affect the contract, is simply a violation of a positive law, having in it nothing of an immoral nature, and when it is not shown that the parties were cognizant that the act was forbidden by the local law of such other state, and they therefore chargeable with a confederacy to defeat those laws, the contract is valid and should be enforced in such other state.

In Pratt v. Adams (7 Paige, 653), it was one of the express provisions of the loan that the small bills of the foreign bank should be taken, and the cashier of the bank actually brought and delivered them to the borrower in the city of New-York. It was therefore essentially a domestic transaction.

The judgment therefore should be affirmed.

Taggart, J., gave no opinion.

Morse, J., was not present. -

All the other judges concurring,

Judgment affirmed.