Coppell v. Hall
IN error to the Circuit Court for the Eastern District of Louisiana.
The case was this:
During the late civil war the city of New Orleans was in military occupation of the United States forces, and most of the neighboring cotton region around, in military possession of rebel enemies.
In this state of things, a circular of the treasury, of July 3, 1863, declared it to be the intention of that department to allow no intercourse at all beyond the national and within the rebel lines of military occupation. 'Across these lines,' was its language, 'there can be no intercourse, except that of a character exclusively military.'
A treasury regulation also said:
'Commercial intercourse with localities beyond the lines of military occupation by the United States forces, is strictly prohibited; and no permit will be granted for the transportation of any property to any place under the control of insurgents against the United States.'
This regulation was made under an act of Congress,  which, forbidding all commercial intercourse between territory proclaimed by the President to be in insurrection (which the territory about New Orleans had been, though New Orleans was not), and the citizens of the rest of the United States, and enacting that all merchandise coming from such territory into other parts of the United States, should be forfeited, authorized the PRESIDENT to permit such intercourse, in such articles, for such time, and by such persons as he might deem proper; providing, however, that such intercourse, so far as licensed, should be carried on only in pursuance of rules and regulations prescribed by the Treasury Department.
By the general orders of the Military Department of the Gulf, however, dated March 7 and September 3, 1863, the trade of the Mississippi, within that department, was permitted, subject to such restrictions only as should be necessary to prevent the supply of provisions and munitions of war to the enemy. The products of the country were authorized to be brought to New Orleans, and other designated points within the military lines of the United States, and to be sold by the proprietors or their factors.
In this state of orders, civil and military, George Coppell, a British subject, and acting British consul, at New Orleans, and trading there (William Mure being the consul), made a contract, through one James Gonegal, with a certain Hall, a citizen of Louisiana, residing like Coppell in New Orleans, but both being, at the time of the contract, in rebel territory, by which Hall agreed to 'furnish' the said Coppell with a large number of bales of cotton, all of it being then in rebel territory, and owned chiefly by one Mann, also a citizen of Louisiana, resident apparently in the rebel region of it; cotton being at the time an article specially sought for by both combatants; shielded and preserved by each while it was in his own possession, and destroyed when found, without an ability on his own part to capture it, in possession of the other. By this contract, Coppell on his part agreed 'to cause said cotton to be protected and transported to New Orleans, and disposed of to the best advantage, paying to said Hall, first, the actual cost of it, with two-thirds of the net profits, &c., without commissions, retaining one-third of the profits as his compensation.' Coppell now marked a large part of the cotton with his private mark, and soon afterwards issued certificates (the marks and other designations of the cotton being set forth on a document appended), in this form:
HER BRITANNIC MAJESTY'S CONSULATE FOR THE STATE OF LOUISIANA:
Know all persons to whom these presents shall come, that I Wm. Mure, Esq., her Britannic Majesty's consul for the city of New Orleans and State of Louisiana, do hereby certify that on the day of the date hereof personally appeared before me Mr. James Gonegal, who being by me duly sworn, says, that the twenty bales cotton, as described on the document hereunto attached, is the property of and belongs to a British subject, and is duly registered as such at this consulate.
Given under my hand and seal of office, at the city of New Orleans, in the State of Louisiana, the eighth day of October, one thousand eight hundred and sixty-three.
H. B. M.'s Acting Consul.
Under these 'protections,' and escaping destruction from either government or rebels, the cotton remained on Mann's estate, in the rebel region, and in his and Hall's charge, until the rebel forces there surrendered to the government. The whole region coming thus again under the control of the United States, and it becoming easy to transport cotton from the surrounding country to New Orleans, and there to dispose of it to advantage at a rate of factorage much less than one-third the profits, Hall and Mann declined to furnish Coppell with the cotton. Coppell, thereupon, in the court below, by petitions, in which, referring to the contract as made 'under the permission' expressed in military general orders, and alleging that he had been able and desirous to bring the cotton to New Orleans at the time of the contract, and that Hall and Mann had prevented him, to his damage $50,000; now demanded possession of the cotton 'for the purposes enumerated in the agreement,' or if he should be adjudged not entitled to such possession, then to have damages.
The defendants set up that the contract was null and void; as being in violation of public policy of the laws of the United States, and of the neutrality which Coppell, as a British subject, was bound to maintain. But that if it should be determined that the contract was valid, then that they, the said respondents, 'assuming the positions of plaintiffs in reconvention,' averred that Coppell was indebted to them in damages $70,000, for not having transported the cotton to New Orleans under British protection, and sold it during the war; every of which things it was alleged that he was unable to do, and none of which he had ever attempted or offered to do. And they prayed that he 'might be cited to appear and answer this reconventional demand.'
Coppell replied, that he was the consul of Her British Majesty; that he did protect the cotton from all seizures which his agreement included; and that, as soon as the military situation permitted, he was ready and willing to perform all the stipulations of his agreement, and tendered the necessary means for the transportation of the cotton to New Orleans; which tender the defendants declined.
The court below charged:
1. That Hall and the plaintiff, both residing in New Orleans, the contract was valid under the law of nations.
2. That the military orders, then in force, authorized and gave validity to the contract.
3. That the demand for reconvention, set up by the defendants, 'cured any nullity or illegality in the contract, if any existed, and that, under the pleadings, the plaintiff might recover, notwithstanding such illegality.'
And judgment having been given for the plaintiff for $29,644, the case was brought by the defendants here.
Messrs. Evarts and Ashton, for the plaintiffs in error:
I. The court in effect instructed the jury:
1st. That a British subject, domiciled at New Orleans, could make a valid contract, during the war, with a citizen of the United States, by which such British subject should agree to cover and protect, with his neutral British name, cotton situated in the hostile territory within the rebel lines; and,
2d. That a contract between such citizen and a British consul at New Orleans, by which the latter agreed to issue false certificates that such cotton was British property, with a view to its protection within the rebel lines, was a valid contract, enforceable in a court of the United States by that British consul.
It needs no argument to disclose the error of such rulings. We should suppose no one would have the hardihood to doubt that such a contract was absolutely void, as against public policy, and as in contravention of the belligerent rights of the United States.  Nor do we believe that this court will tolerate, for one moment, the monstrous doctrine, that the issuing, by a British consul residing in our jurisdiction, of false and fraudulent papers, asserting that property in the enemy's country belonged to British subjects, is a consideration which will sustain a contract between that consul and a citizen of the United States. 
II. The military orders did not authorize the contract sued on. At the date of the contract all commercial intercourse with territory beyond our lines of military occupation in Louisiana was strictly prohibited, except with the license of the President. And no officer of the government, save the President, had any authority to permit such intercourse to be carried on by the plaintiff, and therefore no authority except that of the President could take from such a contract as this the 'sting of disability.' 
Independently of which, they were not meant to be relied on. If they had been, the cotton would have needed no British protection.
III. As to the effect of the further defence of 'reconvention,' if the first defence failed. The ruling of the court, on this point, exhibits a total misapprehension of the character, foundation, and policy of the rule ex turpi causa non oritur actio.
Every contract stipulating for the performance of an illegal act, or founded upon an illegal consideration, is rendered void by the power, and to conserve the policy, of the law; and this altogether independently of the will or wish of the parties concerned. An English judge declared, 'You shall not stipulate for iniquity.' Lord Mansfield said, that it is not for the sake of a defendant that the objection is ever allowed that a contract is immoral or illegal, but is founded on general principles of policy, which the defendant has the advantage of, contrary to the real justice of the case. 
Mr. Durant (who filed a brief for Messrs. Sullivan, Billings, and Hughes), contra:
1. It is settled beyond controversy that two members of the same community may make any transfer of personal property within the enemy's lines, not based upon, nor looking to communication with the enemy. Coppell, either as British consul or British subject, had then the right to enter into this contract. Communication with the enemy was negatived by the presumption of law, which presumes the protection to be legal when it was reasonably possible. In aid of this presumption it should be observed (as the fact was within common knowledge), that the military occupation of the region in which this cotton was situated frequently and rapidly changed, the Federal forces to-day advancing beyond, and in a short time falling back on the hither side of this region, and the Confederate forces receding and advancing correspondingly, so that communication with persons in charge of the cotton would be strictly lawful at one time, and the effect of that communication might be at another time to prevent the destruction of the cotton by the enemy's forces.
The restraints upon the defendant in error, as British subject or consul, were even less than those springing from his domicile, i. e., viewed as a member of the community of New Orleans; for the announced attitude of his government, in the proclamation of Her Britannic Majesty, of May 31, 1861,  had not in the least added to the ordinary duties of neutrals, nor imposed any additional restraints upon her subjects.
2. The military general orders were the governing law of a region wholly occupied by military force, and were a sufficient permission for what was done.
3. The parties sued had, by their reconventional demand, taken the position of plaintiffs in the suit. They set up the contract, and claimed damages for its alleged violation. By taking that attitude they had waived their exception of illegality, and both parties alike stood upon the contract. 
Mr. Justice SWAYNE delivered the opinion of the court.
^1 Act of July 13, 1861, 12 Stat. at Large, 257, § 5.
^2 Patton v. Nicholson, 3 Wheaton, 204.
^3 Bartle v. Coleman, 4 Peters, 187.
^4 The Reform, 3 Wallace, 632; The Sea Lion, 5 Id. 647; The Ouachita Cotton, 6 Id. 521.
^5 Tool Company v. Norris, 2 Wallace, 45; Craig v. Missouri, 4 Peters, 436
^6 Lawrence's Wheaton's International Law, p. 698.
^7 1 Story's Eq. Jurisprudence, § 296; Batty v. Chester, 5 Beavan, 103.