US SUPREME COURT DECISIONS

ERROR from the Court of Common Pleas of Luzerne county; where an action of debt had been brought by Smith, for the use of Cash, against Mitchell, upon a single bill, or sealed note, dated the 11th of March 1796, for 483 dollars and 33 cents, payable in three years with interest. The defendant pleaded payment, with leave to give the special matter in evidence: and thereupon issue was joined. On the evidence, it appeared, that the note was given for 1500 acres of land, lying in the township of Smithfield, in the county of Luzerne, out of the seventeen townships, which Smith conveyed to Mitchell, at the time of the sale; that the land had been granted to Smith by the committee of the Susquehanna company; that Mitchell had been in the actual and peaceable possession of the land from the time of the sale; and that he had a full knowledge of the law of April 1795, against intrusions under the Connecticut title, as well as of the general dispute, relative to lands in Luzerne county. On the trial in April term 1802, the defendant below insisted upon three points: 1st. That the consideration of the contract was illegal; and, therefore, the bill, or note, was void. 2d. That the transaction was against the policy of the law. 3d. That the consideration had failed. RUSH, President, in his charge to the jury, delivered an opinion against the defendant, on all the points; and concluded with stating, that 'if the jury are of opinion that the defendant knew, and was acquainted with, every material circumstance, relative to the bargain, it is their duty to make him pay the money, with the interest thereon. But if they are of opinion, that he was, in any degree imposed upon, or purchased ignorantly; in that case, they ought to find a verdict in his favour.' [Footnote 1] To this charge, a bill of exceptions was tendered

Page 4 U.S. 269, 270

and allowed; and thereupon the present writ of error was instituted.

The argument, for the plaintiff in error, turned upon this single proposition: 'That as the transaction, on which the debt arose, was prohibited by the law of Pennsylvania, the bill, or note (being made the evidence of the debt) contravened the policy of the law, and was, in its nature, a nullity: so that no Court of Pennsylvania would sustain an action upon it; though the statute did not expressly declare it to be void.' 3 State Laws, 703. Dall. edit. Cowp. 39. 729. 734. 3 Burr. 1568. 1 T. Rep. 55. 1 Vez. 276. 3 Burr. 2234. Yelv. 197. 2 Lev. 174. 1 P. Wms. 185. 5 T. Tep. 120. Doug. 671. 3 T. Rep. 456. 4 T. Rep.

[270-Continued.]

The 3d and last reason, for setting aside this contract is, that the consideration has failed. When we speak of the consideration of a contract failing, it is understood, that the bargain turns out different from what was expected. The rule is, where the party is deceived, or imposed upon, he is not obliged to pay his money. For example, if A. sell a Susquehanna title to B. who is ignorant of the total defect of such title; there is no doubt B. may avoid the sale, on the ground of want of consideration, and imposition. But that is not the case now before the Court. Here it is admitted that Mitchell knew of the intrusion law, and the circumstances of the dispute relative to titles in this county. Mitchell, therefore, bought with his eyes open, and now comes forward to be relieved from his contract. In such case what is the language of a Court of Chancery? If both parties meant what they did, and were acquainted with the whole circumstances of the bargain, and if neither was deceived, the agreement must stand.

The maxim of law is true, that where two persons engage in an illegal transaction, the condition of the defendant shall be preferred; but as this maxim supposes the contract to be illegal, it cannot apply here.

Upon the whole, gentlemen, if you are of opinion, that the defendant knew and was acquainted with every material circumstance relative to the bargain, it is your duty to make him pay the money, with the interest thereon; but if you are of opinion he was in any degree imposed upon, or purchased ignorantly, in that case you ought to find a verdict in his favour.

The jury retired a few minutes, and returned with a verdict in favour of the plaintiff, for the amount of the sum mentioned in the note, with interest. [4 U.S. 269, 271]

Full Text of Opinion