Caution as to use of terms. mate. B. Contrary to positive morality recognized as such by law. (Immoral.) C. Contrary to the common weal as tending (a) To the prejudice of the State in external relations. (b) To the prejudice of the State in internal relations. (c) To improper or excessive interference with the lawful actions of individual citizens. (Against public policy.) The distinction here made is in the reasons which determine the law to hold the agreement void, not in the nature or operation of the law itself: the nullity of the agreement itself is in every case a matter of positive law. When we speak for shortness of the agreement itself as contrary to positive law, to morality, or to public policy, as the case may be, we must bear in mind that this is an inexact and merely symbolic mode of speech. The arThe arrangement here given is believed to be on the rangewhole the most convenient, and to represent distinctions ment only approxi- which are in fact recognized in the decisions that constitute the law on the subject. But like all classifications it is of course only approximate: and here more especially, where there is perhaps a wider field for judicial discretion than in any other part of the law, one must expect to find many cases which may nearly or quite as well be assigned to one place as to another. The authorities and dicta are too numerous to admit of any detailed review. But the general rules are (with some few exceptions) sufficiently well settled, so far as the nature of the case admits of general rules existing. Any given decision, on the other hand, is likely to be rather suggestive than conclusive when applied to a new set of facts. Some positive rules for the construction of statutes have been worked out by a regular series of decisions. But with this exception we find that the case-law on most of the branches of the subject presents itself as a clustered group of analogies rather than a linear chain of authority. We have then to select from these groups a certain number of the more striking and as it were central instances. The statement of the general rules which apply to all classes of unlawful agreements indifferently will be reserved, so far. as practicable, until we have gone through the several classes in the order above given. A. Agreements contrary to positive law. Classes of unlawful ments. A. Con 1. The simplest case is an agreement to commit a crime agreeor indictable offence: "If one bind himself to kill a man, burn a house, trary to maintain a suit, or the like, it is void" (d). positive law. 1. Agree ment to commit void. doubtful if perform ance of agreement With one or two exceptions on which it is needless to dwell, obviously criminal agreements do not occur in our own time and in civilized countries, and at all events no offence, attempt is made to enforce them. It is said that in the last century a bill was filed in Chancery by a highwayman against his fellow for a partnership account, but the story is more than doubtful (e). The question may arise, how- Sometimes ever, whether a particular thing agreed to be done is or is not an offence, or whether a particular agreement is or is not on the true construction of it an agreement to commit would be an offence. In the singular case of Mayor of Norwich offence. v. Norfolk Ry. Co. (f), the defendant company, being Norwich Mayor of authorized to make a bridge over a navigable river at one . Norfolk Ry. Co. particular place, had found difficulties in executing the statutory plan, and had begun to build the bridge at another place. The plaintiff corporation took steps to indict the company for a nuisance. The matter was compromised by an arrangement that the company should-not discontinue their works, but-complete them in a particular manner, (d) Shepp. Touchst. 370. (e) See Lindley, 1. 183. Lord Kenyon once said by way of illustration, it appears, that he would not sit to take an account between two robbers on Hounslow Heath. May not the legend have arisen from this? The case was cited with (f) 4 E. & B. 397, 24 L. J. Q. B. intended to make sure that no serious obstruction to the navigation should ensue and an agreement was made by deed, in which the company covenanted to pay the corporation £1,000 if the works should not be completed within twelve months, whether an Act of Parliament should within that time be obtained to authorize them or not. The corporation sued on this covenant, and the company set up the defence that the works were a public nuisance, and therefore the covenant to complete them was illegal. The Court of Queen's Bench was divided on the construction and effect of the deed. Erle, J. thought it need not mean that the defendants were to go on with the works if they did not obtain the Act. "Where a contract is capable of two constructions, the one making it valid and the other void, it is clear law the first ought to be adopted." Here it should be taken that the works contracted for were works to be rendered lawful by Act of Parliament. Coleridge, J. to the same effect: he thought the real object was to secure by a penalty the speedy reduction of a nuisance to a nominal amount, which was quite lawful, the corporation not being bound to prosecute for a nominal nuisance. Lord Campbell, C. J. and Wightman, J. held the agreement bad, as being in fact an agreement to continue an existing unlawful state of things. The performance of it (without a new Act of Parliament) would have been an indictable offence, and the Court could not presume that an Act would have been obtained. Lord Campbell said, "In principle I do not see how the present case is to be distinguished from an action by A. against B. to recover £1000, B. having covenanted with A. that within twelve calendar months he would murder C., and that on failing to do so he would forfeit and pay to A. £1000 as liquidated damages, the declaration alleging that although B. did not murder C. within the twelve calendar months he had not paid A. the £1000 ” (g). (g) 4 E. & B. 441. It seems impossible to draw any conclusion in point of law from such a division of opinion (h). But the case gives this practical warning, that whenever it is desired to contract for the doing of something which is not certainly lawful at the time, or the lawfulness of which depends on some event not within the control of the parties, the terms of the contract should make it clear that the thing is not to be done unless it becomes or is ascertained to be lawful. Moreover a contract may be illegal because an offence is contemplated as its ulterior result, or because it invites to the commission of crime. For example, an agreement to pay money to A.'s executors if A. commits suicide would be void (i); and although there is nothing unlawful in printing, no right of action can arise for work done in printing a criminal libel (k). But this depends on the more general considerations which we reserve for the present. When the ulterior object is an offence. ment for civil wrong to third per 2. Again an agreement will generally be illegal, though 2. Agreethe matter of it may not be an indictable offence, and though the formation of it may not amount to the offence of conspiracy, if it contemplates (1) any civil injury to sons is third persons. Thus an agreement to divide the profits of void. a fraudulent scheme, or to carry out some object in itself not unlawful by means of an apparent trespass, breach of contract, or breach of trust is unlawful and void (m). A. (h) Not only was the Court equally divided, but a perusal of the judgments at large will show that no two members of it really looked at the case in the same way. The reporters (4 E. & B. 397) add not without reason to the head-note: Et quaere inde. (i) Per Bramwell, L. J. 5 C. P. D. at p. 307. (k) Poplett v. Stockdale, 1 R. & M. 337. (1) If A. contracts with B. to do something which in fact, but not to B.'s knowledge, would involve a breach of contract or trust, A. cannot lawfully perform his pro mise, but yet may well be liable in (m) An agreement to commit a Agreement in fraud of void. applies to his friend B. to advance him the price of certain goods which he wants to buy of C. B. treats with C. for the sale, and pays a sum agreed upon between them as the price. It is secretly agreed between A. and C. that A. shall pay a further sum: this last agreement is void as a fraud upon B., whose intention was to relieve A. from paying any part of the price (n). Again, A. and B. are interested in common with other persons in a transaction the nature of which requires good faith on all hands, and a secret agreement is made between A. and B. to the prejudice of those others' interest. Such are in fact the cases of agreements "in fraud of creditors": that is, where creditors is there is an arrangement between a debtor and the general body of the creditors, but in order to procure the consent of some particular creditor, or for some other reason, the debtor or any person on his behalf secretly promises that creditor some advantage over the rest. All such secret agreements are void: securities given in pursuance of them may be set aside, and money paid under them ordered to And other be repaid (o). Moreover, the other creditors who know nothing of the fraud and enter into the arrangement on the assumption "that they are contracting on terms of equality as to each and all" are under such circumstances not bound by any release they give (p). And it will not do to say that the underhand bargain was in fact for the benefit of the creditors generally, as where the preferred creditor becomes surety for the payment of the composition, and the real consideration for this is the debtor's promise to pay his own debt in full; for the creditors ought to creditors not bound by the composition. v. Warburton, L. R. 1 C. C. R. 274, indemnify trustees against formal breaches of trust are in practice constantly assumed to be valid in equity as well as at law. (n) Jackson v. Duchaire, 3 T. R. 551. (0) McKewan v. Sanderson, 15 Eq. at p. 234, per Malins, V.-C. (p) Dauglish v. Tennent, L. R. 2 Q. B. 49, 54. |