The President, Directors and Company of the Bank of the United States vs. William Owens, Herbert G. Wagooner, George Wagley and Alexander Miller

The President, Directors and Company of the Bank of the United States vs. William Owens, Herbert G. Wagooner, George Wagley and Alexander Miller. ■The branch hank of the.United States, at Lexington, Kentucky, discounted a pro-mi’ssory'note,' reserving interest thereon, at the rate of six per centum per an1 nura; it being agreed that the owner^of the note should receive the'proceeds of the discount in notes .of the bank of Kentucky, at their nominal value; although the same were at the time of no greater current value than fifty.four per "cent, of the said nominal value. Held, that the contract was usurious, and void; and that the bank could not recover of any of the parties to the discounted . note.-. A fraud upon a statute is. a violation of the statute. [536] A profit made, or loss imposed on the necessities of the borrower, whatever form, shape, or disguise it may assume, where the treaty is for ¡¿ loan,' and the capital is'to beTeturned at all events, has always been adjudged to be so much •profit taken-upon a Iban, and to be a violation of those laws, which limit the 'lender to a specific rate of interest. According to this principle, the lend' in this case has taken forty-six per cent, for three. years, or at the rate of about • fittéen per cent, per-annum above his prescribed interest.' This is'contrary to the provisions of the charter of,the'bank of the United States, and against .law. [537] Reserving interest-as discount, is the samé as taking the same; since it can";not be permitted by law to stipulate for the receipt or reservation- of that which it is not permitted to receive.- In thóse instances in which' courts-are '■ -.called upon to inflict penalties upon tbe.lender, whether .in a civil or criminal form of action, it is necessarily otherwise ; for there the actual receipt is generally necessary to consummate the offe'nce. But where the restrictive policy of a law aloné is in contemplation, we hold it to be an universal rule, that it . is unlawful to. contract to do that which, it is unlawful to do. [538] The charter of the -bank of the United States forbids' the taking of a greater rate ' of interest than six per centum, but it does not declare a contract .on which a greater interest has been taken or reserved, to be void. -Such' a contract -is. void upon general principles. Courts of justice are instituted to carry into' effect the laws of a country, and they cánnot becomeauxiliary to the violation of those laws.- There cambe ho civil right where there cán be no legal remedy ;• .and there can be no legal- remedy for that which is itself illegal. ' [538]-' THIS case came up, on a -certificate of the judges of the circuit court for the district of Kentucky-; they-bfeing'opposed in opinion. " The action was. upon á promissory note signed'by the defendants, bearing date the 7th of February 1822, by which they promised to pay to the president, directors and com; pany of the bank of the United States or order, on the. 7th of February 1825., five thousand dollars with interest at the rate of six per centum per annum from the date. Thé following indorsement is,on.the note : . “Mem.: Interest is to be charged .on this note from the 21st day of May 1822 only, and not from the 7th of February 1822 within mentioned, the former being the day oh which the amount was actually received by the makers of this noté. (Signed) JEL Coat. The declaration being in the usual form,.the defendants, .Waggoner, Wagley and Miller pleaded.ás follows:. “ That they ought not to be charge&with. the-said debt by virtue of the said supposed, note or. writing, because they say, that they executed the said note at the instance and for ihe accommodation of the said Owens, and with; the view, of making him to obtain a. loan of the money from the .bank of the.United States, upon the discounting of said note;,and defendants alleged that afterwards, to wit, at, &c: the said Owens presented the said note for discount to the president and directors of the office of discount and deposit of the bank of the United States át Lexington, Kentucky* and that the president and directors of the said office, then atid .thére failed to discount the said note or make any loan thereon; and that, after the rejection of the said note as áforesaid at Lexington in Kentucky, to wit, on the 31st day' of May -1822, it was unjawfully, usuriously and corruptly agreed by and between;the said plaintiffs, by their agents, managers and servants employed in the management' and business of said office, and the.said Owens, that they the said plaintiffs - would reéeivé and discount said note,and that the said Owens' , should receive from them therefor notes of the bank of Kentucky or its branches at the nominal valúe of.said" notes; and for the forbearance and loan aforesaid, that said Owens would pay. said note in current money .of the United States When it feH„due, with interest, at the rate of six per cent, per •annum from the. 7th day of February 1822; and they aver, that In pursuance of said., corrupt and. unlawful-agreement,, the saidnotewas delivered to the said plaintiffs at their said, Lexington office upon the terms aforesaid, they advancing and loaning therefor, as the whole and sole consideration of said note (after deducting a large sum' from the amount of said note for discount) to wit, the sum of $ hrriotes of said bank' of Kentucky, counted and rated at their nominal value. And said defendants aver, that at the time said note was discounted as aforesaid, the notes of said bank of Kentucky ,and its' branches were generally depreciated, so much so that one hundred dollars thereof nominally were of the value of fifty-four dollars only or less, and' current only at that depreciation for greater or smaller sums, to wit, at, &e. And the said defendants aver that said transaction and dealing was contrary to law and thé fundamental articles of said corporation, and the said note founded upon a corrupt and usurious consideration, the said plaintiffs reserving a greater interest than at the rate of six per cent, per annum upon the value of the notes loaned by them as afore.said, and this they are ready to- verify. Wherefore, &c.” To this plea, the plaintiffs by their attorney demurred. Upon the argument of the demurrer, the following questions arose, namely: 1. Whether the facts set forth, and the averments in said plea, make out a case in which the corporation has takeii more than at the rate of six per 'cent, per annum, upon a loan or discount, contrary to, and in violation of the 9th rule of the fundamental articles of the constitution of the corporation 9 2,. If 'the, plea does malte put such á case, whether the notes sued’on, or the contract-therein expressed'to pay. to the plaintiffs five thousand dollars, is void in law, so that no recovery can be had thereon in this suit 9 ■3. If not wholly void, whether the plea is sufficient to1 bar the plaintiffs’ recovery of/any, and if of any, of what part of the said sum of five thousand dollars 9. The jfidges being opposed in opinion upon the questions, they were, upon the-request of the plaintiffs by their counsel, certified to the Supreme-Court of the United States. .Mr Sergeant, for the plaintiffs. ■ 1. Upon the first question, after, referring to the 9th rule{, he proceeded to say, that the case presented by the plea was not wi|hin the words' of the rule. The .prohibition- . is against taking more than 'six per cent. The ’utmost that' can be mádé out of the allegations of the jilea, supposing the. construction attempted to. be put upon 'the transaction to be' correct, is, that there was an-agreement to táke more, .than at .the rate prescribed. Nothing was taken but the note-. There is no'prohibition- against an agreement to take 'more than six’per. pent. - The offence is in taking more, and nothing 'else. Penal provisions in a statute are to be construed strictly. - This’ is highly penal, for it. is made a violation of the charter, and exposes to the danger of forfeiture. Where a penalty is given for taking usurious interest; it is well settled, that the penalty cannot be recovered without proving .an actual. taking of the usurious interest. Fisher vs. Beasley, Doug. 236; Maddock' vs. Hammett, 7 T. R. 180. Here no discount was deducted, as is most usual in banking operations. The interest was.not payable till the? maturity of rite note: It is clear, therefore, that there has not been a taking of more than six per. cent, in violation of the 9th rule. 2. This,question does not arise, unless the' first be made out affirmatively/ If there has been no taking of more than • six per cent.; in violation of the 9th rule, (as there clearly ’has^nat,) this question, being by its ■ statement made dependent upon the first, is also decided in the negative. There is nothing in the act to make the contract void., Th? penalty is specified, and.is of.a different nature. An additional penalty cannot be imposed. A mere prohibition to take more, thfimsix per cent.. does: not ofjtself avoid a contract agreeing to take more. When the agreement is avoided, it is always in consequence of an express provision by law to that effect. Such is the law in England against usurious contracts, and in many of the states. Such is the law of Kentucky, and this; question could..only have arisen from the" application of that law to thé pTesent ease. ‘ Nor. do courts incline tó destroy the contract. Even" under those laws, which avoid the contract for usurious agreement', if chancery-get possession.of the matter, by the application of the debtor, it will compel him to pay the debt and legal interest as a condition of relief. . But state legislation has ho power over the bank of the United States or its contracts. This has been decided, and is obvious from the nature of the case. The bank of; the United States is governed by the law of-congress, and is1 subject to no other jurisdiction. M’Cullough vs. The State of Maryland, 4 Wheat. 316 ; Osborn ns. The Bank of the United States, 9 Wheat: 859; Wayman vs. Southard, 10 Wheat.. 1; Bank of the Unitéd States vs. Halstead, 10 Wheat. 51. The rule in the charter* therefore, is the governing rule. .That even the taking of more than the legal interest does not under the charter avoid the contract, has been already-decided by this Court. Eleciner vs. Bank of the United States, S Wheat. 355. “ The taking of interest by the bank, beyond the sum authorized by the charter, would doubtless be a violation of. the charter, for which a remedy might be appliéd by the government; but as the act of congress does not declare that it shall avoid the contract, it is not perceived how the original defendant could avail himself of this ground to defeat a recovery.” Still less, can the agreement to take. "3. Admitting, for the argument’s sake, that if the bank had agreed to.takemore than by law it was authorized tp take, tire Court would npt lend its aid to. recover the excess, the question arises whether this was an agreement to take more than six per cent, on a loan or discount. It was not so in terms, for the interest payable- was pre^ cis.ely six per cent, neither more nor less. It was not so in extent. The object of the transaction was not to cover illegal interest. The real design was to dispose of the notes of the Bank of Kentucky. It was in substance a sale upon a credit of three years,.and not a loan. If the transaction be unimpeachable on this ground, can it be questioned on. any other ? The plea seems to aim to extricate the defendants from knowledge of the negotiation. But there are two particulars to be observed in it. 1. It does not aver that the bank knew that the note was’given to enable Owens to get a discount in the ordinary way. 2. It. does not aver that the defendants were ignorant of the negotiation for the Kentucky Bank notes. What is not denied • in pleading, must be .considered as admitted. There is an admission, therefore, that the, bank did not know that the note was given for any particular purpose (if such, were the fact), and that the defendants did know of the negotiation for the bank notes, Upon this basis of knowledge and assent, the case is to be considered. Was there not then an adequate considération given “? It was so agreed, voluntarily, without coercion, compulsion or duresse ; the parties'being able and willing to contract, and understanding the subject matter of the contract. The bank had a perfect right to fix the. terms upon which it would part with the- notes, and the defendants án equal, right to decide-whether they would accede to them. Both were the exclusive roasters of their own judgment in making the contract; but that, once made, and not in itself unlawful, becomes the law between them. No one has a right to alter it. The consideration has passed; the contract is executed; and the parties cannot now be restored to the condition they were in at the time of .contracting. Sales are made according to the views of the parties, understood by themselves and influenced by many circumstances. Here, the sale, was upon a long credit, enhancing the risk to the séller, and increasing the chances of the buyer. The notes might, and did appreciate during the interval. It is impossible now to adjust, the terms differently.There is no evidence to furnish a rule. . What were these notes worth to the Bank of the Unitéd States ^ They were notes for the payment of money, which the Bank of Kentucky was bound' to pay, and the payment of which, to tlie' full amount, was compellable by process of law. ‘Who can say, that the full amount might not have been recovered \ Again, what was the value to the buyer ‘l He, too, could enforce the payment, and use the notes, for some purposes, as equivalent to money. It does not appear that he did not so use1 them.. He may have recovered the. full amount; or passed them off in advantageous negotiation. . The case is not new. Bank paper, being a kind of currency,, has been variously depreciated at different periods, and in different parts of the United States'; in some to the extent of more than twetity per cent. Contracts made wfien spe,cie was the basis of circulation were satisfied with1 depreciated bank paper. Was.it ever heard, that he who chose to take them in payment (and none could be compelled to do so) could afterwards recover the difference Contracts were made in the time of a .depreciated currency, and executed since. by payment with specie. Was it ever understood that' the payee could claim a deduction, or recover back any part of what he had paid % Bank paper too, which, besides being a currency, was a commodity,as the subject of purchase arM sale, for cash and on credit, under all the modifications that affect- the dealings in'any other article. Those who dealt in it were' thé judgés, as they are with respect to other commodities. It was never thought that courts of justice could be require^ to revise and reform their bargains. This would be an exercise of equity power, that would end in any thing' but equity. It would be wholly without limit or guide. The pleadings, however, do noi admit of. such a.defence in part. The plea is entire apd goes to the whole,.. If bad for a part, it is bad for the whole.... They should have taken defence only for as1 much as they controverted. 1 Chitty, 523; 6 Cránch, 13é.f That such a transaction could not be considered -a cover for usury, was quite evident... An-increased rate of interest, or profit for the use of the money, was no part of the object. There is no pretence of any such thing. If not, it is unobjectionable, even under, the usury laws. A bond, or note,. or other s.ecufity, may bé purchased at any discount, without.. incurring the charge of usury. Müsgrave us. Gibbs,. 1 Dalh '217; Wycoff vs., Loughed, 2 Dali. 92. Cases more analor gous to the present, and inyolving the very same sorbof negotiation, had been judicially decided upon principles decisive of this. Northampton Bank vs. Allen, 10 Mass. Rep. 25.4,; Stuart us. Farmers’and Mechanics’Bank, 19 Johns. Rep. 496. The question whether the bank had a right to make a sale of notes'was not presented here. If it had been, he would have cjted, as deciding it, Fleckner vs. The Bank of the. United • States, 8 Wheat. , 349. 351. The same point, he would remark, had been fully-discussed-and decided in the, court of appeals in Kentucky, in the case of the Bank of the United. States us. Norton. The opinion would be found at length ki the. record of the case of the Bank of the Uni ted States, vs. Venable,, decided at the present term of this Court. No counsel appeared'for the appellees. .The demurrer entered in this case, prevented that investigation of the facts attending the transaction, which was the subject of the suit; and by which the plaintiffs would have been enabled to present the circumstances' under which the loan was made to the drawer of the note, so as to fully.vindicate the institution from any Charge of intentional violation of the provisions of the charter of the Bank of the United States, or the general rules of law. The following authentic and explanatory statement has been furnished to the reporter.' The note in this case is joint and several, and was not offered, as the plea suggests, for a loan in thfe ordinary course of discount, in United States bank notes, or specie; (it being generally known that the Lexington office was at that time restrained from making such loans) but specially for notes of the bank of Kentucky. These notes had been received by the bank of the United States, at their office at Lexington, at their nominal specie value, a part of them being for government deposits; they had always preserved that value to the-bank, by the' balance being liquidated, and interest being paid by the bank of Kentucky periodically, and by the actual payment in specie, within a few (six) months after the loan to Owens, of the balance due. The bank therefore would haye received in specie from the bank of Kentucky, the amount, loaned to Owens with its interest, in addition to the sum actually paid, had the loan not been made to him. The public exhibits of the bank of Kentucky, at the time of the loan, and before and since, have shown its entire ultimate ability to pay its' notes and deposits in specie ; and individuals have, in a great number of instances, received from that bank by compromise on time, or by assignments of its discounted notes, or by recovery on suit, the nominal amount of their notes and deposits in specie. ' The great issue of commonwealth bank notes at the period referred to, and their free reception by the bank of Kentucky in payment of its debtshad, however, the effect of giving to thfe notes of the bank' of Kentucky! nearly the same; nominakdepreciated- . character .as those of the bank.of the commonwealth. “ The said corporation shall’not,- directly or indirectly, deal or trade in any thing except "bills of exchange, gold or silver bullion, or in the sale-of goods really and truly pledged for money lent and not redeemed in due time, or goods which'shall be the proceeds of its lands. It shall not be at liberty to purchase any public debt whatsoever, nor shall it takp more than at the rate of six. per centum per annum, for or upon its loans or discounti.” [MAJORITY — Mr Justice Johnson] Mr Justice Johnson delivered the opinion of.the Court. This suit is instituted for the recovery of a promissory note; The plea is. filed by the three last named defendants, who represent themselves as securities to Owens, and sets Out in substance, that the note was created for the purpose of enabling Owens to obtain a loan of money from the plaintiff, in-the. ordinary course of discount;. that it was offered for discount, and rejected, and after such rejection it goes on to aver, that “ it was unlawfully, usuriously* and corruptly agreed by and between the sáid plaintiffs, by their agents employed in the management and business of the said office,, and the said OWens; that they the said plaintiffs would ré-ceive and discount the said note, and that the said Owens should deceive from them therefor, notes of the bank of Ken-: tuqky, or its branches, at the nominal .value of said-notes, and for the forbearance and loan aforesaid, that Owens should. pay said note in correct money of the United States, when ,it fell due, with interest at the rate of six per centum' per annum from, &c.; the plea then avers, that in. pursuance of said corrupt and unlawful"agreement,” this note , was passed to the plaintiffs, and Kentucky notes received in loan, “ as the sole consideration thereof,” at their nominal valúe,_ and further, “'that at the time the said note was discounted, as aforesaid, the notes of thé said bank.of Kentucky arid its ■ branches were. generally, depreciated, so much so, that one hundred dollars thereof, nominally, were of.the vafue.of fifty-four dollars .only, or less; and current only at that depreciation for greater or smaller sums,” &c.; and the defen-', dants further aver,. “ that the said transaction and déaling ..was contrary to law, and the fundamental articles of the said ■corporation; and the said note,' founded, upon a corrupt and usurious consideration, the said plaintiffs reserving, a greater. interest than at the rate of six per centum per annum, upon the valué of the notes loáned by them, as aforesaid.” To this plea the plaintiffs demurred, and thrée points, are made on which the court below Certify a difference of opinion to this Court. , The 1st is, Whether the facts set forth, and the averments in. said plea make out a case on-which the corporation has taken more than at the rate of six per céntum per. annum, upon a load or discoúnt, contrary to, and in violation of the ninth rule of the fundamental articles of the constitution-of the corporation. The proposition here presented to the Court, has relation altogether to the violation of the ninth fundamental rule of the act of incorporation, and it.brings under consideration the sufficiency both of the facts and averment contained in the. plea,' to make .out ¿ violation of that article. I háve, myself, entertained very serious doubts of the suffix ■cieiiey of the averments in the plea; for it is npt a case of a direct reservation of a higher interest than the. law allows, since, on the face of the note,only six. per cent, is reserved;but the facts áre calculated to present one of those cases in which a device is resorted to* by which is reserved a higher profit than the legal interest,, under a. mask thrown over the transaction ; to wit, by taking a note payable in-gold, or, silver, for a loan of depreciated paper; a return, in fact, in specie, for an article of scarcely half the value of specie; a Iban of adulterated .dollars, for which a note is taken, payable dollar for dollar, in coin of the United States; That the law will not tolerate- such transactions has. long been settled, for a^fraud upon a statute is a violation of the statute. But the difficulty with me was this, that the plea neither avers ah intentioh to evade the statute, nor a knowledge in the plaintiffs of the actual depreciation of Kentucky money. I am con tent,however, to unite with the three of my brethren,* who. make up the majority on this point, in holding the aver1 merits to be sufficient; because* in a considerable .dearth of authorities on this subject, I find it décideu in the case of Bolton vs. Durham, in Croke's Reports, Cro. Eliz. 642, that the. confession of the quo animo, implied in a demurrer, will affect a case with usury,, when a very similar case, in the same book, in. which the plaintiff had traversed the .plea, was left to the -jury, with a favourable charge. Benningfield vs. Ashley, Cro. Eliz. 741. In the present instance, the. loan; the unconditional return of the sum lent; the illegality, and even corruption- of the bargain ; are all distinctly averred, and more than once reiterated. If the transaction tvás corrupt, and in violation, of the fundamental' laws of -the Charter, as averred in the plea, and admitted by the demurrer; it could only have been upon the grojlnd of. an intention to evade the-statute, and with a knowledge of.the reduced value ofthe-'Kentucky bills. And it is not unnatural here to remark, that the plea sets out a refusal to-make a loan in. the ordinary course, to wit, in gold cftsilver, or the plaintiffs’own nptes; and a'subsequent agreement-to. make the loan, provided payment wouid be received in this depreciated paper. This state of facts presents an obvious, analogy, to the leading case of. Lowe vs. Waller, Douglas, 736, in which the negotiation commenced for a loan pfjnonéy,, but terminated in a sale of goods, ori the re-salé of which, the borrower, (as he' was -, held, to.be,) sustained a great loss. The court charged the 'lender, with .that loss, as so pouch exacted from- ttre necessities of the borrower. That part of the 9th section of the fundamental rules of the bank , charter;, which is here drawn , in question-, is expressed in. these words, “ The bank shall not be at liberty to- purchase ány public debt whatever, nor shall it take more, than at the rate of six per centum per annum, for or upon its loans or discounts.’; A profit made, or loss imposed on the necessities of the borrower," whatever form, shape, or .disguise it may assume where the treaty is for a loan, and the. capital is to be returned at all events; has always been adjudged to be-so much profit taken upon a" loan; and to be a.violation of those laws which limit the. lender tó a specified vate of interest; According to this principle, the lender- has here taken forty-six per cent, for three years, or at the rate of about fifteen per cent, pgr annum above his prescribed interest. So that in this poin.t the certificate of this Court must be in the affirmative. . Some doubts have. been thrown out, whether, as. the charter speaks only of taking, it can apply to a Case in which' the interest has been only reserved, ■ not received. But on that point the majority are clearly of opinion, that reséYving must be implied in the word taking; since it can-’ not be permitted by law to stipulate for the reservation of that which it is*not permitted to receive. 1 Hawk. P. C. 620. In -those instances in which courts. are called upon to inflict a penalty upon the" lender,, whether in a civil'or criminal form of action, it is necessarily otherwise; for then the actual receipt is generally necessary to consummate the offence. But when the restrictive policy of a law alone is • in contemplation, we hold it to be an. universal rule, that it is,unlawful to contract to do that which it is unlawful to do. ' The second question propounded to this Court is,.“ Whether if the plea dogs make.oút a Case of violation Of a provision of the charter, the notes sued on, 6r the contract therein expressed, is void iri law,; so that no recovery can be had therein in this suit.: The question here propounded has relation exclusively to the legal effect of a violation of the provision in the charter^ on the subject of interest; and does not bring in question the operation of the statute of usury of Kentucky'upon the validi ty of this contract. To understand.the gist of the question, it is necessary to-observe, that although thejact of incorporation' forbids the.taking of a greater interest than six per eent;.it does-not declare void any contract reserving a greater sum than is permitted. Most, if not all the acts passed in England; and in the states on .the same subject, declare such contracts usurious and void. The question then is,.whethér such contracts ate void in law, upon general principles. The answer would seem, to be plain and obvious, that no o'Ourt of justice can in its nature be made the. handmaid of iniquity. Courts are instituted to. carry into effect the laws. of a country, how can they then become auxiliary to the consummation ofwmlations of law? To. énu inerale here all the instances and cases in tyhich this reasoning has beén practically applied, would be to incur the imputation of vain parade. There-can be no civil right where there, can be no legal remedy ; and there can be no. legal remedy for that which is itselfillegal. That this is true of contracts violating the laws of morality, is ¡recognized in the familiar maxim, “ ex turpi causa non oritur actio;” as has been exemplified' in some modern cases of a house let for immoral purposes. (Cited and admitted in 1 B. & P.,340, and Esp. N. P. J 3.) In the case of Aubert vs. Maze, 2 B. & P. 374, it is exr pressly affirmed that there is no distinction as to vitiating the contract, between malum in se, and malum prohibitum. And that casé is a strong one to this point, since the contract there arose collaterally out-of transactions prohibited by statute. .So the same doctrine was maintained in equity upon a similar contract in the case of Watts vs. Brooks, 3 Ves. Jun. 612, in; which th¿ court observes, There is nothing immoral in this -transaction, but it is against a prohibitory statute. I' doubt a little the policy of the act, but I cannot allSw: it to be arguéd, that you can break a law covertly. Thé court will not execute these contracts.” So in the case of Webb vs. Pritcnett, 1 B. & P. 264, where the action 'was by a tavern keeper against a candidate for provisions furnished .to the voters.at an.election, contrary to.the statute of William. Although-the statute does not-declare the contract void, the Court declared it void, and in this explicit language: “ This action is. apparently founded on^a contract to disobey the law.” ' “ The defence set up proves the principle of the contract.” “ Then how shall an action be .maintained in that, which is a direct violation of a public law. The- contract is bottomed in ma-lum prohibitum of a very serious nature in the opinion of the legislature; -bow then can we enforce a contract to do that very thing which is .so much reprobated by the act1?” “This Court cannot give any assistance to the plaintiff consistently with the principles which havé governed the courts of justice at all times. Persons who engage in such transactions must not bring their cases before a court. of law, &c.” So in the case of assurance in illegal voyages, even where the underwriters have contracted with their eyes open, they are notwithstanding permitted to avail themselves of the plea of illegality ad libitum ;■ as in the cases of Camden vs. Anderson, 6 T. R. 723? adjudged in the king’s bench and affirmed in the exchequer; where it is declared that “ the defence is founded .upon a principle of law which is permanent to all obligation, by which the parties to a contract can bind themselves. 1 B. Sf P. 272. Áftd so in another case-of great hardship, Morck vs. Abel, 3 B. & P. 35, where the insurance was. upon a trading in the East Indies prohibited by an obsolete statute, the plaintiff could not even recover back his premium, although admitted that" the risk never commenced because the policy was void in. its inception, on the ground of illegality.' Nor is it to voyages illegal by statute alone, that this principle applies. A respectable writer on insurance makes these remarks. “ Whenever an insurance is made on a voyage expressly prohibited by the common, statute, or maritime law of the country, the policy is of no effect. The principle on which such a regulation is founded, is not peculiar to this kind of contracts, for it is nothing more than that which destroys all contracts whatsoever, Park, 232, that. metí can never be presumed tp make an agreement forbidden by the laws;’ and if they should attempt it, it is. ip valid and will not receive the assistance of a eourt. of justice to carry it. into execution. Nor is the rule applicable only to contracts expressly forbidden; for it is extended to such as are calculated to affect the general interest and policy of the country. Thus a note givetl by a bankrupt upon a. secret compromise with á creditor is declared void ; as it produces inequality in the distribution of the bankrupt’s ’ effects, and evades the provisions and policy of the law,, which proposes to put all the creditors upon an equal footing. Wells vs. Girling, 1 Brod. & Bing. 447. And bn the same principle a note given for a wager on the future amount of a bianch of the .public. revenue is declared void ¡ because it interests an individual in diminishing the production of the revenue, 2 T. R. 610. 2 B. & P. 130. After citing these more modern decisions upon this subject, it may not be amiss to refer to some reporters, whose authority nas Deen consecrated by; the respect of ages. They will serve • to show the antiquity and„ universality of this doctrine. Thus in-1- Bulls. 38, ft is laid down “ that wherever the ' consideration which is the ground of the promise, or the promise which is the consequence or effect of the consideration be unlawful, the whole contract is void. So in Hobart, 72, and Dyer, 356, “ if one promises to do a thing that is unlawful,- such promise is void.” And innumerable ancient cases might be cited from the best reporters, of the application of the rule to maintenance, to simony, and to promises made to public officers, engaging them to act contrary to. the duties of their, offices, or to individuals imposing upon them restraint inconsistent with the public interest. For. these reasons, and upon these decisions, ihe majority of the Court are of opinion that an'affirmative answer must also be certified upon the second question in the cause. And.this renders.it unnecessary to consider the third question. This cause came on to be heard on the transcript of the record from the. circuit court of the.United States, for the district of Kentucky, and on the questions and points bir which the judges of the said Circuit court were opposed in opinion, and which were certified to this Court for its opinion, and was argued by counsel^ oh consideration whereof, it is -the opinion of this Court, 1. That the facts set forth, and the averments in said plea, make out a case in which the corporation has taken more than at the rate .of six per cetatum per antium upon a loan or discount contrary tb and in violation of the ninth rule of the fundamental articles of the. constitution of the corporation. 2. That the plea does make out such a case where the notes sued on, or the contract therein expressed to pay the plaintiffs five thousand dollars is void in law, so that no recovery can be had thereon in. this suit. And 3. This Court being of opinion in the affirmative on the first and second points, renders it unnecessary to consider the third question; all of which is ordered and adjudged to be certified to the said circuit court.