JULY 1829.

Caller.

The facts admitted by the demurrer to the evidence, so far as material to be noticed, may be thus condensed: At a sale of the government lands in the St Stephens land- Carrington district, in April 1819, a company was formed for the purpose of purchasing them. That the stipulations in the articles of their association were, that no individual should have more than one share, for which he should contribute to the funds of the company one thousand dollars; that none others than those wishing to purchase lands should be permitted to become shareholders; that the members of the company should not bid against each other at the government sale; that the company should appoint a committee from among its members to manage its operations; that the committee should name the persons to bid off the land, and that the lands purchased by them were to be resold at public auction in a very short time thereafter, at which sale all persons were permitted to bid; and the difference between the sum paid to the government, and that at which the lands might be bid off at the company sales, was to constitute the profits, and be equally divided between the members of the company; and that the terms of the company sale was one fourth in cash, the three remaining fourths in four years, for which bonds were to be given. It is further admitted that the members of the company persuaded those who wished to purchase public lands to join them, and some of them, where persuasion proved unavailing, employed threats to effect their purpose; that at the government sales but little resistance was made to the company bidders, and they purchased much the larger portion of the lands sold, at about one fourth of the sum they sold for at the company sales; that the auctioneer employed by the government to vend the lands, was a member of the company, and one of the committee to manage its operations; that the defendant, Caller, was one of the company, and that the bond on which the action of the plaintiff is founded, was given for land purchased at the company sales; that there were deposited or pretended to be deposited by the committee on account of real and fictitious persons, in violation of the stipulations of the articles of association, money to more than twice the amount of the shares actually taken, that their dividend might be increased; and that the bonds taken by the company were distributed in equal proportions to the shares represented by the Committee.

JULY 1829.

Carrington

V.

Caller.

a Wheeler v. Russell, 17 Mass. 256.

In the case of Holder v. Meggison, the foregoing facts, to the extent to which they are applicable, are admitted, and the following in addition: that the defendant Meggison, before the lands he wished to purchase were offered at the government sales, agreed with May, a member of the company, that if the company would purchase for him two quarter sections of land which were designated, that he would pay the company two dollars advance per acre upon the government sale. The company purchased the two quarter sections, refused to acknowledge May's authority to make the agreement, but, as to one quarter, confirmed it, and the defendant became the purchaser at their sale of the other quarter, at eleven dollars per acre; and the bond, on which the plaintiff's action is brought, is for part of the eleven dollar purchase and part of the two dollars advance, the residue of the money agreed to be paid to the company being secured by other bonds. The question is, do these facts constitute an available defence for the defendant? Of this question I shall maintain the affirmative.

The government of the United States have, by Congress, its legitimate organ, provided the manner in which its domain shall be disposed of. They have fixed a value at less than which it shall not be sold; and have directed that it shall be offered at public auction, where it may sell at this minimum, and such an advance as those wishing to purchase may be inclined to pay. I understand by the adoption of the auction system, that the government designed its lands should sell if not for an ideal, at least for an intrinsic value. And that this was not ascertained by the minimum, but that the minimum was settled with a regard rather to the expenditures necessary to acquire the lands, and survey them for market, than any other consideration. And hence the object of government was not effected by a sale of its territory at a sum less than that which, in a fair market, it would yield. Consequently every association, the tendency of whose purposes is to cause the public domain to sell at a diminished value, thwarts, in this particular, the national policy.

Having noticed the policy of the government on this subject, so far as necessary, I proceed to consider such legal rules as the facts suggest. Every contract against public policy, or adverse to the enactments of the legislature, is illegal and void. The principle of this rule is, that no one ought to be heard in a Court of Justice, who

a

sense.

seeks to enforce a demand arising out of moral and political turpitude; and it is well sustained by reason and good The tribunals of justice are instituted, among other purposes, with a view to protect the policy of the country; by administering the laws, when they can be directly administered, or by refusing to coerce a compliance with engagements which are not directly inhibited, but which prevent the law from effecting the end it purposes. If only contracts which are directly prohibited were illegal, it would require but little exercise of the imagination, to devise means to evade the law, and the most salutary enactments might be rendered valueless and inefficient. As in every case of a contract against the policy of the country, both parties are in delicto, the Courts will not lend a favorable ear to either, but leaves them where it finds them, to adjust their differences without legal assistance. This rule is so well ascertained, that I should close this opinion by an application of it to the facts, did I not consider it due to the expectation and excitement produced by these cases, and other cases of a larger amount and of a similar character, that the authorities by which I sustain myself, should be noticed.

JULY 1829.

Carrington

258

V.

Caller.

The case of Armstrong v. Toler," which was mainly a 2 Wheaton relied on by the plaintiffs, I consider a very strong authority for the defendants. That was a case of an illegal importation of goods by Armstrong and others, resident citizens of the United States, during the late war with Great-Britain. The goods were shipped at St Johns, New Brunswick, and consigned to Toler, also a resident citizen of the United States. They were seized and libelled. The goods were delivered to the agent of the claimants on a stipulation to abide the event of the suit, Toler becoming liable for their appraised value; and a part of the goods were delivered to Armstrong, on his promise to pay Toler his proportion of any sum for which Toler might be liable, should the goods be condemned. Toler paid their appraised value, and brought his action to recover from Armstrong his proportion of the amount. The Charge delivered by the judge in the Court below was excepted to, and assigned for error. In his charge, the learned judge speaks thus: "I understand the rule, as now clearly settled, to be, that when the contract grows immediately out of, and is connected with an illegal or immoral act, a Court of justice will not lend its aid to enforce it; and if the contract be, in part only, connected

JULY 1829.

Carrington

61.

V.

Caller.

with the illegal transaction, and growing immediately out of it, though it be in fact a new contract, it is equally tainted by it." In illustration, he supposes this case: "If the importation was the result of a scheme to consign the goods to the friend of the owner, with the privity of the former, that he might protect and defend them for the owner, in case they should be brought into jeopardy; I should consider a bond or promise, afterwards given by the owner to his friend, to indemnify him for any advances on account of any proceeding against the property or otherwise, to constitute a part of the res gesta, or of the original transaction, though it purports to be a new contract. For it would clearly be a promise growing immediately out of, and connected with the illegal transaction. It would in fact be all one transaction, and the party to whom the promise was made, would, by such contrivance, contribute in effect to the success of the illegal measure." The principles maintained by the charge are elaborately considered and fully sanctioned and sustained by the opinion pronounced by the Supreme Court. In Steers v. 16 Term Rep. Lashley, a the broker, who had been concerned in stockjobbing transactions, paid the losses, drew a bill on the defendant for the amount, and after its acceptance, indorsed it to a person who knew of the illegal transaction. The Court held that the indorsee, having notice of the cause of drawing the bill, stood in the same situation with the drawer, and as the drawer could not recover the sum for which it was drawn, so neither could the indorsee. In b 8 John. 346. Wilbur v. How, a contract for making a certain road was set up at auction, and it was agreed between the plaintiff and defendant, that if either party should bid it off, it should be divided betewen them: Wilbur bid it off, and refused to give How a share in it according to his agreement; for the breach of which, How claimed damages. The Court refused to enforce the contract, because c8 Term Rep. it was a fraud on the vendor. In Howson v. Hancock, e the Court of King's bench say, that no case can be found of an action having been maintained to recover back money paid on an illegal contract, both parties being particeps criminis. In Belding v. Pitkin, d the Court refus ed to entertain an action on a contract to pay over half the proceeds of an illegal contract, though the money arising from it had been received by the defendant. In Hunt v. e 5 John. 327. Knickerbocker, e the plaintiffs were managers of a lottery in the State of Connecticut, and delivered to the defendant

575.

d 2 Caines Rep. 147.

b

b

The

JULY 1829.

Carrington

599.

V.

Caller.

tickets to sell in New-York. The defendant failing to return the unsold tickets according to his contract, the plaintiffs brought an action to recover their value. Court held that the action was not maintainable, because the contract went to defeat the intent of the act of the Legislature of that State against private lotteries. And Mr Justice Thompson, who delivered the opinion of the Court, recognizes the general principle, that a Court of justice ought not in any manner to assist an illegal transaction. In Waymell v. Reed, the sellers in France, by the a5 Term Rep. order of the buyer, packed the goods up in a particular manner, with a knowledge that they were to be smuggled, and was not allowed to recover the price of them of the buyer in England. In Maybin v. Coulon, the b4 Dallas 298. action was brought to recover balances claimed of the defendant, on certain transactions, wich it appeared were opposed so the policy of the navigation system. Chief Justice Shippen, in expressing the opinion of the Court, uses this emphatic language: "The act of the court is necessary to give effect to the report of the referees; but no Court of justice of the United States can lend its aid, at any time or in any degree, to recover a debt originating in a source so forbidden, so foul, and so pernicious. In Wilkerson v. Londonsack, it is held that the smuggling of prohi- c3 M. and S. bited goods into England cannot be made the foundation of an action for not bringing them in a perfect state; and that an action would not lie for the freight of goods in an illegal voyage. It was also ruled, that the intention of the parties could have no influence in determining whether the contract was illegal. 2 Starkie, 117; 4 Dallas, 269, and 308; 6 Massachusetts, 111; and 1 Bosanquet and Puller, 264, furnish cases in which the general rule was recognized and applied. In fact this rule is almost universal; not confined in its operation to this country and England, but it exists in other countries which cherish an enlightened jurisprudence. d

Having shewn by the authorities recited, the existence of the rule and its qualifications, sa far as important, I next purpose to shew its application; and first to the case of Carrington v. Caller. I consider it a proposition too obvious to require proof, that an association, such as the facts shew to have existed, must have had the effect to prevent the government lands from selling at their fair market value. Whatever may have been the effect, such at least was the tendency of the measure, and no case can

117.

d Pothier des Obligations No. 43. & 55.