This is an elementary rule established by decisions both extrinsic at law (0) and in equity (p). Even a document which for evidence. want of a stamp would not be available to establish any right is admissible to prove the illegal nature of the transaction to which it belongs (q). But where the immediate object of the agreement (in the sense explained above) is not unlawful, we have to bear in mind a qualifying rule which has been thus stated: 6a. "When it is sought to avoid an agreement not being in itself 6a. Where unlawful on the ground of its being meant as part of an unlawful scheme unlawful or to carry out an unlawful object, it must be shown that such was the intention of the parties at the time of making the agreement" (r). intention is alleged it must be shown to have agree may be The fact that unlawful means are used in performing an existed at agreement which is primâ facie lawful and capable of being date of lawfully performed does not of itself make the agreement ment. unlawful (s). This or other subsequent conduct of the Subsequent parties in the matter of the agreement may be evidence, conduct of but evidence only, that a violation of the law was part of parties their original intention, and whether it was so is a pure evidence of question of fact (t). The omission of statutory requisites unlawful in carrying on a partnership business is consistent with intention. the contract of partnership itself being lawful; but if it is shown as a fact that there was from the first a secret agreement to carry on the business in an illegal manner, the whole must be taken as one illegal transaction (u). Again, it is no answer to a claim for an account of part (0) Collins v. Blantern, 1 Sm. L. C. 369. (p) Reynell v. Sprye, 1 D. M. G. 660, 672, per Knight Bruce, L. J. (2) Coppock v. Bower, 4 M. & W. 361. (r) Lord Howden v. Simpson, 10 A. & E. 793, 818. (s) A subsequent agreement to vary the performance of a contract in a way that would make it unlawful is merely inoperative, and leaves the original contract in force: City of Memphis v. Brown, 20 Wal- (t) Fraser v. Hill, 1 McQu. 392. original Waugh v. Morris. Material on the question of inten tion whether know the law. nership profits that there was some collateral breach of the law in the particular transaction in which they were earned (x). Where a duly enrolled deed inter vivos purported to create a rent-charge for charitable purposes, but the deed remained in the grantor's keeping, no payment was made during his lifetime, nor was the existence of the deed communicated to the persons interested, and the conduct of the parties otherwise showed an understanding that the deed should not take effect till after the grantor's death, it was set aside as an evasion of the Mortmain Act (y). Again, an agreement is not unlawful merely because something remains to be done by one of the parties in order to make the performance of the agreement or of some part of it lawful, such as obtaining a licence from the Crown (2). On the same principle 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). In Waugh v. Morris (b) it was agreed by charter-party that a ship then at Trouville should go thence with a cargo of hay to London, and all cargo was to be brought and taken from the ship alongside. Before the date of the charter-party an Order in Council had been made and the parties published under the Contagious Diseases (Animals) Act, 1869, prohibiting the landing of hay from France in this country. The parties did not know of this, and the master learnt it for the first time on arriving in the Thames. In the result the charterer took the cargo from alongside the ship in the river into another vessel and exported it, as he lawfully might, but after considerable delay. The shipowner sued him for demurrage, and he contended that the contract was illegal (though it had in fact been lawfully (x) Sharp v. Taylor, 2 Ph. 801. Co. Rep. 25 a, the like as to a condition in a devise. (a) Edgware Highway Board v. Harrow Gas Co. L. R. 10 Q. B. 92. (b) L. R. 8 Q. B. 202. performed), as the parties had intended it to be performed by means which at the time of the contract were unlawful, viz. landing the hay in the port of London. The Court however refused to take this view. It was true that the plaintiff contemplated and expected that the hay would be landed, as that would be the natural course of things. But the landing was no part of the contract, and if the plaintiff had had before him the possibility of the landing being forbidden, he would probably have expected the defendant not to break the law; as in fact he did not, for no attempt was made to land the goods. "We quite agree that where a contract is to do a thing which cannot be performed without a violation of the law it is void, whether the parties knew the law or not. But we think that in order to avoid a contract which can be legally performed on the ground that there was an intention to perform it in an illegal manner, it is necessary to show that there was the wicked intention to break the law; and if this be so, the knowledge of what the law is becomes of great importance" (c). agreement prima facie not But on the other hand where an agreement is prima Where facie illegal, it lies on the party seeking to enforce it to show that the intention was not illegal. It is not enough unlawful, to show a mere possibility of the agreement being lawfully enough to performed in particular contingent events. "If there be show mere possibility on the face of the agreement an illegal intention, the of lawful burden lies on the party who uses expressions prima facie performimporting an illegal purpose to show that the intention was legal" (d). ance. As to back We now come to the rule, which we will first state provisionally in a general form, that money or property paid recovering or delivered under an unlawful agreement cannot be money or recovered back. property. (c) L. R. 8 Q. B. 207-8. (d) Holland v. Hall, 1 B. & Ald. 53, per Abbott, J.; Allkins v. Jupe, 2 C. P. D. 375. The same principle is expressed in a different form by Paulus: "Item quod leges fieri prohibent, si perpetuam causam ser- causa Lord field's ex- rule. Plaintiff can't recover 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 condicio defendentis (e). 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 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" (ƒ). The test for the application of the rule is whether the plaintiff can make out his case otherwise than "through where his the medium and by the act of an illegal transaction to which he was himself a party" (g). It is not confined to the case of actual money payments, though that is the most common. Where the plaintiff had deposited the half own un lawful conduct is part of his own case. (e) Cp. D. 50. 17. de reg. iuris, 154, C. 4. 7. de condict. ob turpem causam, 2. (f) Holman v. Johnson, Cowp. 341, 343. (g) Taylor v. Chester, L. R. 4 Q. B. 309, 314. of a bank note with the defendant by way 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 halfnote 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) (). The Court inclined also to think, but did not decide, that the plaintiff's case must fail on the more general ground that the delivery of the note was an executed contract by which a special property passed, and that such property must remain (i). The rule is not even confined to causes of action ex contractu. An action in tort cannot be maintained when the cause of action springs from an illegal transaction to which the plaintiff was a party, and that transaction is a necessary part of his case (k). 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 (7). 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 prin- Duty of cipal by reason of past unlawful acts or intentions of the agents and principal collateral to the matter of the agency. If A. account to (h) L. R. 4 Q. B. at p. 312. (i) Compare Ex parte Caldecott, 4 Ch. D. 150, p. 306 above; Begbie v. Phosphate Sewage Co. L. R. 10 Q B. 491, 500, affd. in C. A. 1 Q. B. D. 679. (k) Fivaz v. Nicholls, 2 C. B. 501, 513; a peculiar and apparently solitary example. (1) Ayerst v. Jenkins, 16 Eq. 275. Cp. M'Callan v. Mortimer (Ex. Ch.) 9 M. & W. 636. trustees to |