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§ 63. Fraud.-Fraud has been defined as "any cunning, deception or artifice used to circumvent, cheat or deceive another." Courts very wisely refuse to be bound by any definition of fraud, but the foregoing is broad enough to include all contracts into which the element of "cunning used to circumvent, cheat or deceive" enters; and it will be found that many contracts, agreements and combinations which have been condemned by the courts as contrary to public policy or as opposed to some statute more or less remotely applicable, in reality contained sufficient fraud-sufficient cunning used to deceiveto vitiate them. In fact it is difficult to conceive a contract contrary to public policy which is entirely free from fraud-entirely free from all cunning, deception or artifice. A contract that is perfectly fair, just and honest ought not to be contrary to public policy, even though the public is not a gainer therefrom.

§ 64. Public policy.- Public policy has been used as a mantle to cover a multitude of judicial sins. When no better reason is apparent, and the court is too indolent to search deep, a transaction is declared obnoxious to public policy. Beyond question public policy is a force and a factor, but it is a force of a judicial rather than a legislative character-it determines what is bad rather than defines; it is not declaratory like a statute, and reasons should be given for declaring an agreement contrary to public policy; it is contrary because it con-tains such and such obnoxious elements, elements of cunning, of deception, of oppression, as the case may be, and then it is contrary to public policy because cunning, deception and oppression are contrary to public policy. So long as the cunning, the deception or the oppression injures primarily certain individuals, the remedy may be left with them—it is simply a tort and the public is not concerned; but when the cunning, deception or oppression is directed toward the community at large and no one in particular, the courts invoke the doctrine of public policy; but they are simply getting at the elements of fraud or oppression which really vitiate the transaction and without which the transaction would be binding.

§ 65. In short, public policy that "unruly horse" of Justice Burroughs- is simply the force in the absence of stat

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11 Story's Eq. Juris. (3d ed.), sec. 186. 2 Richardson v. Mellish, 2 Bing. 229.

utes-which condemns cunning, deception, artifice and oppression when directed against the public welfare. Courts are too apt to denounce this or that transaction as contrary to public policy without searching to find the reason, when, if investigation were made, it would be found invariably that the transaction contained some of the elements referred to, or, if it did not, then it is not contrary to public or any other policy. The point may be made clear by saying that fraud upon an individual is contrary to "private policy," while fraud against the public is contrary to "public policy" - the element of fraud, of cunning, of deception, of oppression, must be present.1

"All contracts in violation of morality, and founded upon considerations contra bonos mores, are void. All duties enjoined by the divine law are not enforced, indeed, by the common or statute law, not only because its forms and modes of proceeding do not enable it to adjust nice questions of morals, but because strict rules as to ethical questions would tend to destroy freedom of opinion and to afford opportunities for persecution. But no agreements to do acts forbidden by the law of God or which are manifestly in furtherance of immorality, and tend to contaminate the public mind, are tolerated, or can be enforced by the common law." Story on Contracts, vol. 1 (5th ed.), pp. 644, 645.

"We now come to the third clause of illegal contracts, namely, contracts which violate the rules of pub. lic policy. The rule of law applicable to this class of cases is, that all agreements which contravene the public policy are void, whether they be in violation of law or of morals, or tend to interfere with those artificial rules which are supposed by the law to be beneficial to the interests of society, or obstruct the prospective objects following indirectly from some positive legal injunction or prohibition. Public policy is in its nature so uncertain and fluctuating,

varying with the habits and fashions of the day, with the growth of commerce and the usages of trade, that it is difficult to determine its limits with any degree of exactness. It has never been defined by the courts, but has been left loose and free of definition in the same manner as fraud. This rule may, however, be safely laid down, that wherever any contract conflicts with the morals of the time, and contravenes an established interest of society, it is void as being against public policy. The enlargement of the trade and the growth of cities, with the new and various relations created thereby, have rendered many species of contracts valid which were formerly considered to conflict with public policy. For instance, forestalling, which is the buying and contracting for any merchandise or victual on its way to the market, or dissuading persons from bringing their provisions there; regrating, which is the buying of corn or dead victual in any market, and reselling it within four miles of the place where it is bought; and engrossing, which is the purchasing of large quantities of dead victual or corn, to sell again, all of which were formerly considered to be against public policy, when trade was small, and money scarce, and markets few, constitute,

§ 66. Statute. A statute is the legislative declaration of public policy, and is effective, as a rule, only in so far as it is an expression of a well-settled and conservative public policy. In so far as statutes are but the legislative expression of fleeting sentiment and prejudice, to that extent are they futile and inoperative. Statutes to be effective must be based on wellgrounded public sentiment-on a sentiment which amounts to a morality; otherwise they are either dead letter or mischievous.

§ 67. Unfortunately both courts and legislatures mistake waves of sentiment, prejudice and passion for public policy, and condemn this or that as contrary to public policy because it is opposed to public clamor. This leads to statutes so comprehensive and wild in their terms that they are idle fulminations, and to opinions which are little better than screeds.

§ 68. A statute ought not to be directed against a perfectly harmless and innocent transaction. Unhappily, legislatures are so prolific with laws that many a statute is passed which in literal terms prohibits transactions entirely innocent and harmless. In interpreting such anomalous legislation, courts are compelled to resort to this rule and that rule of construction to get rid of the plain words of the act and apply it to only transactions which contain elements of wrong-wrong as against individuals or the public. Legislatures ought to be and courts must be opposed to all restrictions which hamper men in their ordinary pursuits, and it should ever be assumed that no legislature intends to prohibit that which is as innocent and harmless as most of the transactions of commercial life; it should ever be assumed that statutes and prior decisions—no matter what their literal words may be-are intended to cover only transactions containing some element of cunning, artifice, deception or oppression -some element injurious to either the individual or the public.

§ 69. Ancient statutes and decisions and public policy.— Again, courts, in ascertaining the public policy of the hour, are prone to review ancient statutes and decisions and hold

at the present day, great arteries of commerce, and are the very form and pressure of certain branches of trade. Indeed, without them what

would become of wholesale commission merchants and jobbers?" Story on Contracts, vol. 1, pp. 649, 650.

that, because a transaction was contrary to public policy or contrary to the common law two centuries ago, it is contrary to public policy to-day. This is a fatal conclusion. The review of the growth of the law regarding the offenses of forestalling, regrating and engrossing shows how public sentiment changes. What were once crimes are now among the commonest of every-day transactions.

§ 70. The final test of validity of both statute and public policy.— Finally, the test of validity of both statute and public policy is the wrong that is condemned. There must be an injury, actual or threatened, to individual or public before the transaction under investigation can be pronounced contrary to either statute or public policy. The wrong is the gist of the whole matter, and this wrong—this threatened injury to the well-being of society—must be of a very tangible character, not vague or speculative. Under English and American institutions the individual is given the largest possible libertyliberty to waste and dissipate his own resources; to trade and bargain so as to often acquire in a single venture the entire resources of another; and even to so conduct his business as to extort large sums from the public at large,—all these things and more may be done, experience having taught the AngloSaxon race that those who overreach, who attempt too much, who do business contrary to morals and public sentiment, as a rule in the long run pay for their turpitude. Both the courts and the public are content to let men go their own way short of things fraudulent, oppressive, wrongful— subject only to those immutable laws of evolution and social progress which sooner or later relentlessly suppress the wrong-doing and sustain the well-doing.

CHAPTER III.

"CORNERS."

§ 71. Application of ancient law of regrating, forestalling and engrossing to "corners."

72. A "corner" defined.

73-75. "Options" and "futures."

76-80. The gist of the offense of operating a "corner" is the conspiracy. 81, 82. The rule stated.

83. The law concerning contracts in restraint of trade has no applica tion to "corners."

84. Rights of parties to combination to create a "corner."

85-87. "Corners" not confined to necessaries of life.

88. Money advanced to operate a "corner" cannot be recovered back. 89. All parties participating are equally involved.

90, 91. Principal and agent.

92. Court of equity will investigate real nature of contract.

§ 71. Application of the ancient law.- Practically all there is left of the ancient law of regrating, forestalling and engrossing are the statutes and decisions against "corners." While the modern "corner" may include some of the elements of all three of the ancient offenses, it is perhaps more closely akin to the statutory offense of engrossing than to the offenses of regrating and forestalling.

The ancient statutory offense of engrossing was confined to "buying, contracting or promise-taking

any corn

growing in the fields, or any other corn or grain, etc., to the intent to sell the same again." The ancient offense was complete whether committed by one person or by several in combination. The co-operation of several added nothing to the offense, but it is needless to say that the co-operation of several to commit the offense might make them guilty, not only of the offense of engrossing, but of the entirely distinct offense of conspiracy.

It is no longer either an offense or contrary to public policy to buy or contract for any of the articles named with intent to sell again; on the contrary, such dealing is directly encouraged; but it is held to be against public policy - if not an in

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