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made the subject of an indictment for conspiracy (x); and no action CH. XX. s. 6. can be maintained upon such agreement. This was held in Scott
Exchange v. Brown & Co. (y), in which the defendants were stockbrokers, and Contracts. were sued for rescission of a contract to buy the shares and recovery of the purchase-money, on the ground that the defendants had delivered their own shares to the plaintiff, instead of purchasing them on the Stock Exchange. Much buying and selling of stocks and shares is done by brokers “Outside
brokers" who are not members of a Stock Exchange. In Exchange Tele
and “Tape graph Co. v. Gregory (z), under a contract made between the plain- prices. tiffs and the London Stock Exchange, valuable information as to Exchange
Telegraph the prices of stocks and shares from time to time during any day Co. v. was collected on the Stock Exchange and supplied to the plaintiffs,
Gregory. and printed on tapes and sheets of letterpress in their office. It was part of the terms of the contract between the plaintiffs and their subscribers that the information should not be communicated to non-subscribers. The defendant, an outside broker who had once been a subscriber, but with other outside brokers had not been allowed so to continue by the plaintiffs on the request of the Stock Exchange Committee, obtained the information from a subscriber, and posted it up in his office. He was restrained by injunction from continuing to publish it, and from continuing to induce any subscriber of the plaintiffs to supply him with it in breach of the subscriber's contract with the plaintiffs.
(c) See Reg. v. Aspinall (1876), 2 Q. B. D. 48.
(y) Scott v. Brown,  2 Q. B. 724,
(z) Escchange Telegraph Co. v. Gregory & Co.,  1 Q. B. 147, C. A.
OF ILLEGAL, VOID, AND VOIDABLE CONTRACTS.
PAGE 1. Generally
558 2. Unconscionable Bargains with
Expectant Heirs, &c........ 562 3. Illegality at Common Law......
563 (a) Immorality
581 (a) Generally..
(b) Misrepresentation and
583 (c) Fraud on Third Parties... 587 (d) Action for Deceit
589 5. Ilegality or Nullity by Statute 591 (a) In General
591 (b) Wagering, &c., Contracts. 594 (C) Purchase of “pretensed titles"
600 (d) Illegal Companies
600 (e) Sale of Offices...
601 (f) Charge on Benefice
603 Miscellaneous Cases in
which * Freedom of Contract” interfered with .....
Sect. 1.--Illegal Contracts in General.
WHENEVER the contract which a party seeks to enforce, be it illegality in express or implied, is expressly or by implication forbidden by general.
the common or statute law, no Court, either of law or equity, will Cope v. Row- lend its assistance to give it effect (a). For although, in general, lands.
the agreements into which parties enter have the force of laws over those parties,-because Modus et conrentio vincunt legem; yet this rule does not apply where the interests of the public, or of morality, are affected by the agreement, and may be injured by the
observance of its provisions. Foreign Nor will a foreign contract be enforced in this country, if it be
against the law of this country, even although it may be valid Missouri by the law of the country where it was made (1), but a contract Steamship Co., made in this country may be enforced, although it was made In re.
with the intention of violating the law of a foreign country (e); and a clause in a contract void by the law of the foreign country in which it was made may be enforced in this country, if the whole contract shows that the parties intended it to be governed by English
(a) Per Parke, B., Cope v. Rowlands (1836), 2 M. & W. 149, 157 ; per Giffard, L. J., Re Cork and Youghal Rail. Co. (1869), L. R., 4 Ch. 748, 762 ; Sykes v. Beadon (1879), 11 Ch. D. 170.
(6) Grell v. Lery (1854), 16 C. B., N. S. 73; Hope v. Hope (1857), 26 L. J., C. P. 417, App.
(c) Per Lord Kenyon, Smith v. Mar. connay (1796), Peake, Add. Ca. 81.
law, and the particular clause is not immoral or forbidden by Cur. XXI. s. 1. positive law (d).
Contracts The test, as to whether a demand connected with an illegal trans- (Generally). action be capable of being enforced is, whether the plaintiff requires Test of to set up and rely on such transaction, in order to establish his illegality. case (e). Where, therefore, to an action on a covenant to pay money, the defendant pleaded, that there had been an illegal agreement that, for a price to be paid to the plaintiff, land should be sold and conveyed to the defendant for an illegal object; that the land was conveyed to the defendant for that object; and that afterwards,-a part of the purchase-money remaining unpaid, the defendant, to secure payment thereof to the plaintiff, made the covenant in the declaration mentioned : it was held that,-although the plea did not allege that the covenant was given in pursuance of the illegal agreement,-still, as the law would not enforce the original illegal contract, so neither would it allow the parties to enforce the covenant for payment of the purchase-money, because, by the original bargain, it was tainted with illegality (f).
But it is not sufficient, in order to bring the plaintiff within this Action niust rule, that he should merely be obliged to give evidence of an
on illegal illegal contract as part of his case; for the rule applies only where contract. the action is founded upon the illegal contract, and is brought to enforce it (g). Thus, either party to an illegal contract may rescind it whilst it remains executory, and may recover from the other any money which he may have paid to him thereunder, although, to enable him to do so, he must prove as part of his case that he had entered into an illegal contract (h). And so, where A. procured B. to grant him a lease of premises, by a false representation as to the purpose for which they were to be used; and A. took possession, and converted them into a brothel ; whereupon B. forcibly expelled him; it was held that A. might maintain ejectment against B., because the term had vested in A., and therefore he was not calling on the Court, in that action, to aid him in enforcing an illegal agreement (1).
If there be in the same deed certain covenants which are against Part avoidlaw, and others which are not, the deed, although void as to the former, is good as to the rest. And the law is the same as to
(d) Missouri Steamship Co., In ve (1888), 42 Ch. D. 321, c. A.
(e) See Fivaz v. Nicholls (1846), 2 C. B. 501, 512, 513 ; Taylor v. Chester (1869), L. R., 4 Q. B. 309 ; Simpson v. Bloss (1816), 7 Taunt. 246 ; Begbie v. Sewage Phosphate Co. (1875), L. R., 10 Q. B. 491.
() Fisher v. Bridges (1854), 3 E. & B. 642, Ex. Ch. ; and see Geere v. Mare
(1863), 2 H. & C. 339 ; Clay v. Ray
(g) Per Cur., Taylor v. Bowers (1876),
(h) Per Bramwell, B., Bonc v. Eckless (1860), 29 L. J., Ex. 438, 440; aud see ante, p. 89.
(i) Feret v. Hill (1854), 15 C. B. 207.
CH. XXI. s. 1. bonds, where the condition is, in part, against law. But where Nlegal Con
cannot sever the illegal from the legal part of a covenant, the tracts in
you General. whole is void (k); and if a contract be made on several considera
tions, one of which is illegal, the whole contract is void, and that whether the illegality be at common law or by statute (I). But where the consideration is tainted by no illegality, and some of the promises only are illegal, the illegality of these does not communicate itself to, or taint the others, except when, owing to some
peculiarity in the contract, its parts are inseparable (m). Mala prohi. An old distinction between mala prohibita and mala in se has bita.
been long exploded (n). Illegality
Although, in general, parol evidence is not admissible, as between established
the parties to a written instrument, to contradict or add to its by parol provisions, yet facts may be pleaded and evidence, given, in order evidence.
to show that the instrument is void on the ground of fraud or illegality, however regular such instrument itself may appear to
be, and whether it be by parol or under seal (o). Illegality may
And as the benefit of the public, and not the advantage of the be taken advantage of
defendant, is the principle upon which a contract is allowed to be by either impeached on account of illegality; so this objection may be taken party.
by either of the parties to such contract. “The objection,” said Lord Mansfield (p), “ that a contract is immoral or illegal as
between plaintiff and defendant, sounds at all times very ill in the Taylor v. mouth of the defendant. It is not for his sake, however, that the Chester.
objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of contrary to the real justice as between him and the plaintiff; .... not for the sake of the defendant, but because the Court will not lend their aid to such a plaintiff. So, if the plaintiff and defendant were to change sides, and the defendant were to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis." Thus, in Taylor v. Chester (9), the plaintiff failed to recover the half of a 501. bank-note deposited with the defendant to secure a debt due from the plaintiff to the defendant for wine and suppers
(k) See Baker v. Hedgecock (1888), 39 Ch. D. 520, per Chitty, J., and the cases there cited ; Byrne, E.c parte, Burdert, In re (1888), 20 Q. B. D. 314, C. A.
(1) Waite v. Jones (1835), 1 Scott, 730 ; Shackell v. Rosier (1836), 3 Scott, 59; Featherstone v. Hutchinson (1590), Cro. El. 199; Lound v. Grimwade (1888), 39 Ch. D. 605.
(m) See Price v. Green (1847), 16 M. & W. 346, Ex. Ch. ; AI'Allen v. Churchill (1826), 11 Moore, 483.
(n) Bensley v. Bignold (1822), 5 B. & A. 341, per Best, J.
(6) Collins v. Blantern (1767), 2 Wils. 341, 347 ; Wright v. Crookes (1840), 1 Scott, N. R. 685, 698; Abbott v. Hen. dricks (1840), 1 M. & G. 791 ; Gaslight Co. v. Turner (1839), 7 Scott, 779, 794.
(p) Holmun v. Johnson (1775), Cowp. 341, 343.
(9) Taylor v. Chester (1869), L. R., 4 Q. B. 309; an
parte Caldecott (1876), 4 Ch. D. 150, C. A.
tracts in General.
supplied to the plaintiff by the defendant in a brothel kept 'by her. C1. XXI. s. 1. And as a general rule the trustee of a bankrupt is in no better Ilegal Conposition than the bankrupt, except where there is an offence against the bankruptcy laws, or the money is paid away in fraud on the creditors, where the trustee can recover back money so paid, although the bankrupt could not, because he was in pari delicto (r). So where parties to a contract against public policy, or illegal, Relief in
equity where are not in pari delicto ; but public policy is considered as advanced parties not in by allowing either, or at least the more excusable of the two, to sue
pari delicto. for relief against the transaction,-a Court of Equity will grant such relief (s). But equitable terms may be imposed on a plaintiff who seeks to set aside an illegal contract, as the price of the relief he asks (t).
The presumption of law is in favour of the legality of a contract; Presumption and therefore, if it be reasonably susceptible of two meanings,- favour of the one legal, and the other not,—that interpretation is to be put upon contract. it which will support and give it operation (u); and it lies upon the party-even a defendant-attempting to set aside a transaction for illegality to prove it (x).
Therefore, where a plaintiff declared that the defendant, who had chartered a ship, put on board a dangerous commodity, by which a loss happened, without due notice to the captain or other person employed in the navigation; it was held that it lay upon him to prove this averment: for it was not to be presumed that the defendant had been guilty of an omission, which would amount to a criminal neglect of duty (y). So, in an action against a carrier for the loss of goods, delivered to him at Dublin to be conveyed to Liverpool, it was objected for the defendant, that unless the goods were proved to have been duly entered at the custom-house, the importation would be illegal, and the contract with the carrier void; but it was held that the defendant could not raise this objection, without proving the non-entry of the goods (2).
And where a contract which can be performed legally, is sought to be avoided on the ground that the parties intended to perform it in an illegal manner ; it is necessary to show that they knew what the law was, and intended to break it (a).
(n) Ex parte Wolverhampton Banking C. J., Rex v. The Inhabitants of HaslingCo. (1884), 14 Q. B. D. 32; distinguish field (1814), 2 M. & S. 558 ; 15 R. Ř. ing Ex parte Caldecott (1876), 4 Ch. D. 350 ; Bennett v. Clough (1818), 1 B. & 150, C. A.
Al. 461 ; 19 R. R. 352. (8) Per Bruce, L, J., Reynell v. Sprye (a) Per Bowen, L.J., in Hire-Purchase (1852), 21 L. J., Ch. 633, 651, App. Furnishing Co. v. Richens (1887), 20 Q.
(t) Per Giffard, L. J., Re Cork and B. D. 387, C. A. Youghal Rail. Co. (1869), L. R., 4 Ch. (y) Williams v. East India Co. (1802), 748, 762.
3 East, 192 ; 6 R. R. 589. (u) Mittelholzer v. Fullarton (1842), 6 (z) Sissons v. Dixon (1826), 5 B. & C. Q. B. 989, Ex. Ch. ; per Lord Abinger, 758. C. B., Lorris v. Davison (1839), 4 M. & (a) Waugh v. Morris (1873), L. R., 8 W. 654, 657 ; per Lord Ellenborough, Q. B. 202. C.C.