Case ID: scl_17/html/0315-02.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George H. Owen v. Thomas N. Davis.
    The plaintiff and defendant were joint winners, at cards, of a sum of money, for which the loser gave his note to the defendant; the latter transferred the note, in payment of a gaming debt of his own, to a third person, who subsequently received payment, at a discount, from the maker, and the period had elapsed, within which, monry lost at cards, and paid, may, under the St. 9 Ann. c. 14, be recovered back by the loser. Held, that the plaintiff was intitled to recover his share of the sum paid by the maker of the note.
    One, who receives money to the use of another on an illegal contract, cannot retain it to his own use, on the ground of the illegality of the contract. Money paid for a gaming debt cannot be recovered back by the loser, unless he bring his action for it within the period limited by the St. 9 Ann. c. 14.
    Tried before Mr. Justice O’Neall, at Abbeville, Fall Term, 1829.
    Assumpsit for money had and received. The plaintiff claimed one half of a sum of $800, won at cards by himself and the defendant from Titus Murray, who hadgiveu his promissory note to the defendant for the amount. The defendant transferred the note to one Covington, in payment of a note of his own, which j,ar[ likewise been given for a gaming debt; and Covington subse-quentlyreceived $500, from Murray forhis note. More than three months had elapsed since this payment. A witness testified to admissions by the defendant, that the plaintiff was joint owner with him óf the note ; and, on the other hand, several witnesses swore, that the plaintiff' had frequently denied that he had any interest in the money won from Murray.
    It was contended for the defendant, that an action could not be sustained on the foundation of an interest in a gaming debt; more especially in a case like this, where supposing the plaintiff to have an interest, which, however, had been denied even by himself, yet the defendant had received no money, but had exchanged one gaming note for another, both of them being utterly void, and without legal value. And that this suit was, in effect, a bill in equity for an account of the profits of a partnership in gambling.
    The presiding Judge was of opinion, that the illegality of the consideration, for which Murray had given his note, did not affect the question between the present parties. If Murray chose to waive the objection, it did not lie with the defendant to set it up, for the purpose of retaining the whole of the spoil to himself. One, who receives money to the use of another on an illegal contract, cannot retain it to his own use, on the ground of the illegality of the contract. Tenant v. Elliott, 1 Bos. & Pul. 3. Farmer v Russell, Ib. 296. If the defendant had received money, of which, by an agreement between themsekves, the plaintiff was intitled to one half, it was difficult to discover any sound principle, on which the fact, that it had btjen received on an illegal contract, would intitle the defendant to violate his own agreement. The money received might, indeed, he well termed the wages of iniquity ; but why should one of the co-workers be permitted to add a fresh iniquity, by retaining the whole, contrary to his agreement ? No good reason could be given. Murray would have been protected in refusing to pay; but as he /tad paid, the plaintiff was certainly intitled to recover his share of the fund, unless, indeed, Murray might himself recover back the whole. This, however, he could not do, except by the authority of the St. 9 Ann. c. 14, and that statute limited his right to three mouths, which period had now expired. vide P. L. App. 20.
    There -was nothing in the objection, that this suit was, in effect, a bilí in equity. It was not a case of partnership. There was no mutual account of profit and loss to settle ; but it was the case of a single fund belonging to two, which, one of them had received, and the law would raise an assumpsit for the other, to the extent of his interest. A similar case to the present, that of John W. Lee v. John Bates, had occurred on circuit, at Lexington. There the plaintiff and defendant won, at cards, from a third person, a wagon and some other articles of personal property, which the defendant afterwards sold. The plaintiff brought an action for his share of the proceeds ; and Nott, J. who presided, held that he was intitled to recover.
    As to the money not having been received by the defendant, the answer was, that he had authorized Covington to receive it, and he is, therefore, chargeable. It is true be was not bound to pay his note to Covington, but he was certainly at liberty to pay it, if he chose to do so ; and he did choose to regard his own note as an equivalent for Murray’s. As, however, his own note had no other value, but that which he himself placed upon,it, the sum, actually paid by Murray to Covington, was the true measure of the value of both notes ; and to that value the plaintiff’s right to recover, must, in any event, be restricted.
    His Honor, therefore, charged the jury, that the only question was, as to the fact, whether the plaintiff was in reality a joint, owner of Murray’s note. The evidence would authorize their finding either way ; although the plaintiff’s frequent denial of his having any interest furnished a strong inducement to find for the defendant. If, however, the jury were satisfied, that the plaintiff and defendant were joint winners, then the plaintiff was intitled to a verdict, for one half of the sum paid by Murray to Covington.
    The jury found for the plaintiff the sum specified by the Court; and the defendant now moved to set aside their verdict, on the ground of misdirection.
    Lesley, for the motion.
    The maxim, in pari delicto melior est conditio possidentis, is one universally acknowledged, and acted upon. It is, in fact, but a branch of one of the soundest principles of jurisprudence ; to wit, that Courts of justice will never lend their aid to assist a party in securing the benefits of an illegal contract. Cowp. 200, 792. The cases of Tenant v. Elliott, and Farmer v. Russell, went expressly on the ground, that the illegality of the contract, by which the money came to the hands of the agent, was not a subject of inquiry in an action against him by the principal. This is distinctly stated by all the judges in the last mentioned of these cases. Buller, J. said, “it seems to me, that all the confusion in this case has arisen from the plaintiff having proved too much at the trial. He should have shewn, that the defendant had received so much money to his use, and it was immaterial, whether the money were paid on a legal, or an illegal contract.” Heath, J. was of the same opinion. Rooke, J. was utterly opposed to the plaintiff’s recovery ; and Eyre, C. J. said, “ if it be possible to mix the original transaction with the contract on which this action is brought, I agree with my brother Rooke in all his conclusions.” Now, the distinction, between that case and the present, and the remark applies equally to Tenant v. Elliott, is obvious, that here there neither is, nor can be, any evidence of the plaintiff’s interest, but the proof of his participation in the illegal contract. The defendant’s admission of the plaintiff’s interest, considered as a promise, is but nudum pactum, unless you go back to the original transaction, and shew that he was a partner, in the gaming with Murray. The cases of Tenant v. Elliott, and Farmer v. Russel], therefore, do not apply, and this case must be determined by the acknowledged principle.
    In Mitchell v. Cockburn, 2 H. 111. 379, and Aubert v. Maze, 2 Bos. '& Pul. 371, it was held, that money paid by one of two partners, for losses incurred by them in partnership insurances, (which are prohibited by statute,) could not be recovered in an action brought by him against the other partner. And the converse was ruled in a later case, that of Booth v. Hodgson, 6 T. R. 403, where it was held, that one partner could not recover against another his share of the premiums received for similar insurances. This case is directly in point with the present: and the only difference between them is, that here the defendant has not even received any profits of the partnership ; and it is only upon equitable principles, that, supposing the contract to have been legal, he can be held liable to account, to the extent of the sum received by Covington from Murray, as for the profits arising from a joint contract.
    Pressley, contra.
    
    The distinction observed in Tenant v. Elliott, and Farmer v. Russell, and recognized in all the other cases, is between contracts executory, and contracts executed. Lowry v. Bourdieu, Dctug. 468, 471, note, and see 1 Bos. & Pul. 4. note, (2) Am. Ed. An illegal contract cannot be enforced, for the breach of faith on the one side, is counterbalanced by the breach of the law on the other; and it would be absurd, that the law should lend its aid to enforce a right, founded on a violation of the law. The principle may apply- to all collateral liabilities, whilst the contract remains executory; for the party to be bound, may, at any time, refuse to suffer its being-carried into execution. But when once the contract is executed, it is an end: new rights are acquired, not by force of the illegal contract, but by the consent of the parties ; and the law will not permit a new game of iniquity to be opened in relation to them. The law recognizes no such dangerouspriuciple, as that, because there has once been an illegal contract, therefore, as to the profits derived from that contract, the whole world are perpetually exempt from the restraints of law, and the obligation of contracts.
    In Barjeau v. Walmsley, 2 Str. 1249, and Alcinbrook v. Hall, 2 Wilson, 309, it was decided, that money, lent to game or bet with, may be recovered by the lender, although securities for such loans are expressly avoided by the Statute of Ann. These are very strong cases in support of the principle contended for. Those cited from 2 Bos. & Pul- 2 II. Bl. and 6 T. R. are not in point. There the very contract, which the action was brought to enforce, was illegal, for it is a partnership in insurances, and not the making insurances, which is prohibited by the statute. Here, it is not the agreement between the plaintiff and defendant, but the contract between Murray and both of them, that is illegal. Now Murray having executed his contract, by paying the money, it has ceased to have any existence. It is no longer a subject of inquiry, or discussion ; and it is not the foundation of the plaintiff’s action.
    When Murray paid the money to Covington, he did not intend a gift to him, but to discharge what he considered a debt of honor. The payment, therefore, enures to the benefit of those to whom the debt was due, and the plaintiff, as one of them, becomes intifled to demand his share of the money, by the implied consent of Murray, who voluntarily paid it. The plaintiff has received the whole of it, by his agent, Covington, and there is no principle on which he can be iutitled to retain it. It is immaterial, that he gave the note to Covington in payment of one of his own, which he was not bound to pay. He was intifled to pay it if he pleased ; and if he had a right to recover it back, his remedy would be .against Covington alone. His giving Murray’s note to Covington in exchange for his own, was an application of the proceeds of the former to the latter. He had it in his power to direct the application as he pleased ; and if he had directed, that the money, to be received from Murray, should be thrown into the sea, he would have been equally as responsible to the plaintiff, as if it had actually come into his hands.
   Per Curiam.

We concur in the views taken of this case by. the presiding Judge. We are, therefore, satisfied with the verdict, and the motion must be refused.

Motion refused.