to show A still more recent case in the Queen's Bench may also be referred to as illustrating the general rule that an unlawful intention is not to be presumed. It is not illegal for a highway board to give a licence to a gas company to open a highway within the board's jurisdiction, for it must be taken to mean that they are to do it so as not to create a nuisance (a). Where But on the other hand where an agreement is prima facie agreement illegal, it lies on the party seeking to enforce it to show that the prima facie unlawful, intention was not illegal. It is not enough to show a mere not enough possibility of the agreement being lawfully performed in parmere pos- ticular contingent events. "If there be on the face of the sibility of lawful peragreement an illegal intention, the burden lies on the party who formance. uses expressions prima facie importing an illegal purpose to show that the intention was legal" (b). As to back We now come to the rule, which we will first state prorecovering visionally in a general form, that money or property paid or money or delivered under an unlawful agreement cannot be recovered property. back. Lord Mans field's explanation of the rule. This rule (which is subject to exceptions to be presently stated) is the chief part, though not quite the whole, of what is meant by the maxim In pari delicto potior est conditio defendentis (c). To some extent it coincides with the more general rule that money voluntarily paid with full knowledge of all material facts cannot be recovered back. However the principle proper to this class of cases is that persons who have entered into dealings forbidden by the law must not expect any assistance from the law, save so far as the simple refusal to enforce such an agreement is unavoidably beneficial to the party sued upon it. As it is sometimes expressed, the Court is neutral between the parties. The matter is thus put by Lord Mansfield: "The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is (a) Edgware Highway Board v. Harrow Gas Co. L. R. 10 Q. B. 92. (b) Holland v. Hall, 1 B. & Ald. 53, per Abbott, J. The same principle is expressed in a different form by Paulus: "Item quod leges fieri prohibent, si perpetuam causam servaturum est, cessat obligatio.. causa quamquam etiam si non sit perpetua idem dicendum est, quia statim contra mores sit.' D. 45. 1. de v. o. 35 § 1. (c) Cp. D. 50. 17. de reg. iuris, 154, C. 4. 7. de condict. ob turpem causam, 2. 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, by accident, if I may say so. The principle of public policy is this; ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If from the plaintiff's own stating or otherwise the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was 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" (a). can't own un part of his The test for the application of the rule is whether the plaintiff Plaintiff can make out his case otherwise than "through the medium and recover by the aid of an illegal transaction to which he was himself a where his party" (). It is not confined to the case of actual money pay lawful ments, though that is the most common. Where the plaintiff conduct is had deposited the half of a bank note with the defendant by way own case of pledge to secure the repayment of money due for wine and suppers supplied by the defendant in a brothel and disorderly house kept by the defendant for the purpose of being consumed there in a debauch, and for money lent for similar purposes, it was held that the plaintiff could not recover, as it was necessary to his case to show the true character of the deposit. (This is apparent by the course of the pleadings: the declaration was on a bailment of the half-note to be re-delivered on request, and in detinue. Pleas, in effect, that it was deposited by way of pledge to secure money due. Replication, the immoral character of the debt as above) (c). The Court inclined also to think, but did not decide, that the plaintiff's case must fail on the more general gronnd that the delivery of the note was an executed contract by which a special property passed, and that such property must remain. The rule is not even confined to causes of action ex contractu. An action in tort cannot be maintained when the cause of (a) Holman v. Johnson, Cowp. 341, 343. (b) Taylor v. Chester, L. R. 4 Q. B. 309, 314. (c) L. R. 4 Q. B. at p. 312. Duty of agents and trustees to notwith illegality. action springs from an illegal transaction to which the plaintiff was a party, and that transaction is a necessary part of his case (a). Independently of the special grounds of this rule, a completely executed transfer of property, though originally made upon an unlawful consideration or in pursuance of an unlawful agreement, is afterwards valid and irrevocable both at law and in equity (b). The rule is not applicable in the following classes of cases, most of which however cannot properly be called exceptions. An agent is not discharged from accounting to his principal by reason of past unlawful acts or intentions of the account to principal collateral to the matter of the agency. If A. pays principals money to B. for the use of C., B. cannot justify a refusal to standing pay over to C. by showing that it was paid under an unlawful collateral agreement between A. and C. (c). Again, if A. and B. make bets at a horse-race on a joint account and B. receives the winnings, A. can recover his share of the money or sue on a bill given to him by B. for it: here however there is nothing illegal in any part of the business (d). In like manner the right to an account of partnership profits is not lost by the particular transaction in which they were earned having involved a breach of the law (e). Nor can a trustee of property refuse to account to his cestui que trust on grounds of this kind: a trust was enforced where the persons interested were the members of an unincorporated trading association, though it was doubtful whether the association itself was not illegal (f). If a man entrusts another as his agent with money to be paid for an unlawful purpose, he may recover it at any time before it is actually so paid; or even if the agent does pay it after having been warned not to do so (g); the reason of this, clearly put in one of the earlier cases (h), is that whether the intended payment be lawful or not an authority may always be countermanded as between the (a) Fivaz v. Nicholls, 2 C. B. 501, 513. (b) Ayerst v. Jenkins, 16 Eq. 275. Cp. M'Callan v. Mortimer (Ex. Ch.) 9 M. & W. 636. (c) Tenant v. Elliott, 1 B. & P. 3. (d) Johnson v. Lansley, 12 C. B. 468. (e) Sharp v. Taylor, 2 Ph. 801. Of course it is not so where the main object of the partnership is unlawful. See Lindley, 1. 203-212. (f) Sheppard v. Oxenford, 1 K. & J. 491. (y) Hastelow v. Jackson, 8 B. & C. 221, 226. (h) Taylor v. Lendey, 9 East 49. principal and agent so long as it is not executed (a). It is the same where the agent is authorized to apply in an unlawful manner any part of the moneys to be received by him on account of the principal; he must account for so much of that part as he has not actually paid over (a). The language of the statute 8 & 9 Vict. c. 109, s. 18, which says that no money can be recovered "which shall have been deposited in the hands of any person to abide the event upon which any wager shall have been made" does not prevent either party from repudiating the wager at any time before the event and recovering his own deposit from the stakeholder (b). Where money has been paid under an unlawful agreement, Money but nothing else done in performance of it, the money may be able back, recover not exe recovered back. But in the decision which establishes this ex- where ception it is intimated that it probably would not be allowed if agreement the agreement were actually criminal or immoral (c). And the cuted. action cannot be maintained by a party who has not given previous notice that he repudiates the agreement and claims his money back (d). In a recent case in equity somewhat of the same kind the plaintiff had assigned certain leasehold property to a trustee with the intention of defeating his creditors; afterwards under an arrangement with his creditors he sued for the recovery of the property, having undertaken to pay them a composition in case of success. The Court held that, as the illegal purpose had not been executed, he was entitled to a reconveyance. It will be observed however that the plaintiff was in effect suing as a trustee for his creditors, so that the real question was whether the fraud upon the creditors should be continued against the better mind of the debtor himself (e). The cases above mentioned as to recovering money from agents or stakeholders are also put partly on this ground, which however does not seem necessary to them (ƒ). (a) Bone v. Ekless, 5 H. & N. 925, 29 L. J. Ex. 438. (b) Varney v. Hickman, 5 C. B. 271. (c) Tappenden v. Randall, 2 B. & P. 467. (d) Palyart v. Leckie, 6 M. & S. 290. (e) Symes v. Hughes, 9 Eq. 475. 221. Mearing v. Hellings, 14 M. & X delicto. of cre ditor's compo. sition. Parties not In certain cases the parties are said not to be in pari delicto, in pari namely where the unlawful agreement and the payment take Purchase place under circumstances practically amounting to coercion. The chief instances of this kind in courts of law have been assent to payments made by a debtor by way of fraudulent preference to purchase a particular creditor's assent to his discharge in bankruptey or to a composition. The leading case is now Atkinson v. Denby (a). There the defendant, one of the plaintiff's creditors, refused to accept the composition unless he had something more, and the plaintiff paid him £50 before he executed the composition deed. It was held that this money could be recovered back. "It is true" said the Court of Exchequer Chamber. "that both are in delicto, because the act is a fraud upon the other creditors, but it is not par delictum, because the one has the power to dictate, the other no alternative but to submit." On the same ground money paid for compounding a penal action contrary to the statute of Elizabeth may be recovered back (b). But where a bill is given by way of fraudulent preference to purchase a creditor's assent to a composition, and after the composition the debtor chooses to pay the amount of the bill, this is a voluntary payment which cannot be recovered (c). Like doctrine of equity. In equity the application of this doctrine has been the same in substance, though more varied in its circumstances. Courts of Equity do not as a rule order the return of money, or exercise their peculiar jurisdiction of setting aside instruments, when the parties are in pari delicto. The qualification is thus expressed by Knight Bruce, L. J.: "Where the parties to a contract against public policy or illegal are not in pari delicto (and they are not always so) and where public policy is considered as advanced by allowing either, or at least the more excusable of the two, to sue for relief against the transaction, relief is given to him, as we know from various authorities, of which Osborne v. Williams [see below] is one" (d). (a) 6 H. & N. 778, 30 L. J. Ex. 361, in Ex. Ch. 7 H. & N. 934, 31 L. J. Ex. 362: the chief earlier ones are Smith v. Bromley, 2 Doug. 695, Smith v. Cuff, 6 M. & S. 160. (b) Williams v. Hedley, 8 East 378. (c) Wilson v. Ray, 10 A. & E. 82. (d) Reynell v. Sprye, 1 D. M. G. 660, 679. |