Opinion of the Court.

payment of the notes and using falsehood in respect to the ownership of the notes in order to compel payment, and Morris was resenting the pressure because of the circumstances under which he claimed to have given the notes, circumstances necessarily as well known to Norton as to Morris. Morris' statements were so specific and made such an equity in his favor that it is highly probable that Norton would have denied the statements if he could have done so. Instead of this, he finally answers that he had supposed Morris was an honorable man and would do what he said he would do, a remark rather confirmatory, than otherwise, of Morris' written version of the way in which the notes came to be made. Norton's letters bear marks of studied efforts to make no damaging admissions, and impress one who reads them with the opinion that he was conscious of the truth of Morris' statements as to the circumstances under which the notes were given. In one letter Norton denies knowledge of the facts stated in Morris' letter containing a reference to his assumption of the debt, but when this denial is challenged in a subsequent letter, he limits it to the extent and manner of Morris' individual loss. The letter of August 31, 1886, from Morris was unanswered, but in subsequent letters Norton refers to statements made in it in such a way that we think it cannot be regarded as without recognition and reply. On the whole, we think the correspondence set forth in the statement of fact, with any additional letters which Norton's administratrix may wish to introduce if any there are, explanatory of those above set out, should be submitted to the jury with a caution that Morris' statements concerning the giving of the notes are not evidence against Norton unless they shall be satisfied from Norton's answer and failure to reply on this point that he was silent in regard to them because he could not deny them.

We are of opinion, therefore, that there was evidence before the jury tending to show that Norton gave Morris $4,000 to gamble with in margins on oil; that the investment was successful in that, according to the agreement of the brokers, he was entitled to $5,000; that no proceeds were realized, how

Opinion of the Court.

ever, because of the failure of the brokers; and that Morris with Norton's knowledge and acquiescence then assumed the loss into which he had led Norton by recommending the brokers, and gave him his note for the same. The evidence leaves it a question upon which reasonable minds may differ whether in the agreement of settlement it was stipulated as the consideration for the notes that Norton should transfer to Morris all his beneficial interest in the claim against the Rockefeller firm or whether the assumption by Morris was merely a matter of honor based on no valuable consideration at all. The decision of the question involves disputable inferences of fact, and is peculiarly within the province of the jury to decide. It is to be observed with reference to these alternative conclusions that there is a distinction between consideration and motive. "The motive for making a promise may be something entirely different from the act, or forbearance or promise thereof which is offered and accepted in exchange for the promise." Wald's Pollock on Contracts (2d ed.), Amer. Editor's Note, p. 9; Philpot v. Gruninger, 14 Wall. 570, 577.

A sense of honor might have induced Morris to agree with Norton that in consideration of a transfer of his claim against the Rockefeller firm he would give the note. In that case the legal consideration would be the transfer, and the sense of honor only the motive. On the other hand, if Morris had said to Norton, "I'll assume this obligation of the broker because I feel in honor bound to do so," and accordingly gave him the note without any agreement between them as to the claim against the brokers, the sense of honor would have been not only the motive but also the consideration. "Nothing is consideration that is not regarded as such by both parties." Wald's Pollock on Contracts (2d ed.), 9; Ellis v. Clark, 110 Mass. 389; Sterne v. The Bank of Vincennes, 79 Indiana, 549, 551; Holmes on the Common Law, 293, 295.

Hence the question as to the real consideration for this note is to be determined by what the parties regarded as the consideration when the notes were given, and that depends on what they said and did at the time. This is wholly a matter

Opinion of the Court.

of conjecture from the circumstances, the conduct of the parties, and the correspondence afterward in regard to the giving of the notes. It is our province to consider the rights of the parties on each of the alternative hypotheses above suggested. The transfer of Norton's claim against the brokers for his winnings on a gambling transaction would be a good consideration to support the obligation of Morris' note. This would be so on two grounds: First, the assignment of the right to the fruits of an illegal transaction after the transaction has been closed is not illegal. The assignment would not be in furtherance of the illegal purpose of the original contract, and no public policy forbids a transfer of the unenforceable rights which may grow out of such a contract after the contract and its purpose are things of the past. Me Blair v. Gibbes, 17 How. 232, 235, 237; Armstrong v. Toler, 11 Wheat. 258, 269; Rothrock v. Perkinson, 61 Indiana, 39; Buchanan v. Drovers' National Bank of Chicago, 6 U. S. App. 566, 577; Wald's Pollock on Contracts (2d ed.), 325; Greenhood on Public Policy, 36. In such a case there is the possibility that the person owing the illegal debt may not rely on the illegality as a defense, and, considering it a matter of honor, may pay it. This possibility makes the assignment of the claim a valuable consideration. More than this, under the act of April 15, 1882 (79 Ohio Laws, 118), and section 4270 of the Revised Statutes of Ohio (Giauque's ed., 1892), as construed by the Supreme Court of Ohio in Lester v. Buel, 49 Ohio St. 240, Norton would have the right to recover back the $4,000 from the brokers with whom the gambling was done, and we see no reason why an assignment by Norton of his claim against the brokers would not carry this right with it. The right to recover $4,000 from the brokers would certainly constitute a good and valuable consideration to support Morris' note.

On the hypothesis that the jury may find from the evidence that the note was given by Morris for the consideration that he felt in honor bound to reimburse the loss Norton had made through trust in brokers recommended by him, and that there was no stipulation as to the transfer of the claim from

Opinion of the Court.

Norton to Morris, a different result follows. The note could not be enforced, because Morris' sense of honor was not a valuable consideration. Eastwood v. Kenyon, 11 Ad. & El. 438, 446; Mills v. Wyman, 3 Pick. 207; Dodge v. Adams, 19 Pick. 429; Wiggins v. Keizer, 6 Indiana, 252; Hendricks v. Robinson, 56 Mississippi, 694; Dearborn v. Bowman, 3 Met. (Mass.) 155; Updike v. Titus, 13 N. J. Eq. 151; Cook v. Bradley, 7 Connecticut, 57; Wald's Pollock on Contracts (2d ed.), 169. More than this, the note would be void for illegality, because it would merely be evidence of Morris' assumption of the brokers' obligation to pay a gambling debt without any new consideration. It would be the same debt with only a change of debtors, and would be subject to the same defense of illegality by the new debtor as by the old. Coulter v. Robertson, 14 S. & Marsh. 18; Edwards v. Skirving, 1 Brevard, 548; Blasdel v. Fowle, 120 Mass. 447.

The result of our consideration of this case is that upon the testimony admitted and which should have been admitted there was evidence enough to sustain a special verdict by the jury, upon which judgment would have to be entered in favor of Morris on the question of the legality and binding effect of the two notes in suit, which were only renewals of the original note. The action of the court below in excluding evidence and in directing a verdict for Norton's administratrix was therefore erroneous. The judgment of the Circuit Court

is

Reversed, at the costs of defendant in error, with directions to order a new trial.

VOL. XLIII-49

Syllabus.

GRETHER v. CORNELL'S EXECUTORS.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DIVISION OF THE NORTHERN DISTRICT OF OHIO.

A demurrer to an answer is unknown in the equity practice of the Federal courts as it was unknown to the practice of the High Court of Chancery in England. The only way by which the sufficiency of an answer on its merits to a bill in equity can be tested is by setting the case down for hearing upon bill and answer, the effect of which is an admission by the complainant of all the averments of fact properly pleaded in the answer and a waiver of any right to contest them by replication and proof. Where no objection was taken to a demurrer filed to an answer, and there was no objection in the court below to the court passing upon the sufficiency of the answer, this court treated the demurrer as an application to the court to set down the case upon bill and answer, and considered the decree as if it had been entered upon such hearing. Federal courts will enforce new equitable rights conferred by state statutes, provided that such enforcement does not impair any right conferred, or conflict with any inhibition imposed by the Constitution or laws of the United States, such as the right to trial by jury. The main purpose of section 723 of the Revised Statutes, which provides that "suits in equity shall not be sustained in the courts of the United States in any case where a plain, adequate, and complete remedy may be had at law," was to emphasize the necessity for preserving to litigants in courts of the United States the right to trial by jury secured by the seventh amendment of the Constitution of the United States in suits at common law; and, where a state statute grants to litigants in its courts an equitable remedy which does not impinge on their right to a trial by jury at common law, courts of the United States sitting in the State as courts of equity may grant the same statutory relief as is afforded in the state tribunals.

The Circuit Courts of the United States in Ohio have the same equitable jurisdiction to enjoin the collection of taxes in the State which have been illegally levied as is given to the state courts of Ohio under the provisions of sections 5848, 5849, 5850, and 5851 of the Revised Statutes of Ohio (Giauque's 6th ed.).

The seventh amendment to the Constitution of the United States does not secure to the person subjected to taxation the right of trial by jury in any controversy which he may raise as to the legality of the tax. It is wholly within the power of the sovereign levying the tax to pro