Case Name: Obed Wood v. The Executor of Josiah Wood
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1819-05
Citations: 3 Mur. 172
Docket Number: 
Parties: Obed Wood v. The Executor of Josiah Wood.
Judges: 
Reporter: North Carolina Reports
Volume: 7
Pages: 172–177

Head Matter:
Obed Wood v. The Executor of Josiah Wood.
1 > From Pitt. J
Money betted on a horse-race is deposited with a stake-holder to he delivered by him to the winner of the race. The stake-holder pays over the money, after notice from the loser of the race not to do so. The loser is entitled to recover the money from the stake-holder — for
The act of 1810, ch. 14, declares, “ that every promise, agreement, note, “ bill, bond, or other contract, to pay, deliver or secure money or other “ tiling, won or obtained by wagering or betting on a horse-race, or to “ pay or secure money or other thing, lent or advanced for that pur- “ pose, shall be voidi”
In all cases of this sort, the enquiry is, Who has the money ? Is it in the hands of a party to the illegal transaction ? Or is it in the hands of a person not a party ? If in the hands of a party, the money cannot be recovered, provided it were paid to him by the consent of the other party; because both parties are equally criminal, and there can be no reason why he who parted with his money voluntarily, shall have it back. To his case both maxims apply, “ In pari delicto meüor est con-ditio possidentis” And “ Volenti non fit injuria.”
But if the money be in the hands of the stake-holder, or he has paid it over after notice not to do it, the person who made the deposit, shall 1 recover it back; for as in the first case, the party who has voluntarily paid over the money, cannot rest his claim to recover it upon a moral foundation, so in this, the stake-holder cannot rest his claim to retain it upon a moral foundation. Between him and the party making the deposit, there is no moral turpitude, and while the money remains in his hands, it belongs to the party that lodged it there.
In an illegal transaction, money may always be stopped whilst in transitu to the party entitled under such illegal transaction.
In October, 1817, the Plaintiff and one Causey agreed to run a quarter race for- an hundred dollars. The money was deposited in the hands of the Defendant’s testator, as a stake-holder. The race was run, and the horse of Causey came out ahead ,* but the Plaintiff alleged the race was not fairly run, and forbade the stake-holder from paying over to Causey, the money. He tendered to Causey a bond with security to keep him indemnified, and demanded the return of his deposit. The stake-holder paid over the money to Causey after receiving the notice, and this suit was brought to recover the amount of the Plaintiff’s stake.
The Judge before whom this case was tried, charged the Jury, that it was necessary for the Plaintiff to prove only, that the stake-holder was forbidden to pay over the money to Causey, and that the Plaintiff demanded his deposit: that as to the fairness or unfairness of the race, it was entirely immaterial. The Jury found a verdict for the Plaintiff, and a rule for a new trial was obtained upon the ground of misdirection by the Court. This rule being discharged, the Defendant appealed to this Court.
Gaston, for the Plaintiff.
If money be deposited with an agent, with instructions in the happening of a certain event, to pay it over to a third person, and there be no contract between the depositor and such third person, such money may be reclaimed after the happening of the event, and before it be paid over. The property is not changed; and the principal, before it is changed, can certainly countermand his orders.
If, therefore, A and B, severally and without any concert or privity, deposit sums of money with C, with instructions on the happening of a certain event, to pay A’s money to B, and on the happening of an opposite event, to pay B’s money to A, either, while the money is in the hands of C, can change his mind and re-demand his own. But if a contract had been made between A and B to that effect, in which the act of each was in consequence of the act of the other, and such contract was valid, then accordingly as the event should turn out, one or the other would have a right to the money deposited. The depository, with a knowledge of this contract, and of the event, would be bound in good faith to deliver the money according to the right. It would be money in his hands, belonging to the successful person, and which had been received to his use.
It is clear, then, that the extinction of the right to reclaim what has been deposited, is in consequence of the contract between tbe parties. By that contract a new right is acciuh'ed, which is in consistence with the continuance of a dominion over the deposit in the former proprietor. If no contract had been made, the stake, notwithstanding the event, was the money of him who staked it. Until paid, he could take it back; if paid, he could not, for then it became a gift: and, though no promise to give is binding, yet an actual gift is a valid transfer of property.
The Legislature has, for public purposes, denied to certain contracts all legal obligation, and declared them utterly void. “ Every provision, agreement, or other contract to “ pay, deliver or secure money, won by wagering on a “ horse-race, &c. shall he and is hereby declared void.” To say that such an agreement could give any rights, or take away any rights, would be to declare it operative and binding. Of course, money deposited on such an agreement, remains the property of the depositor, precisely as; though no such agreement had been made.
This view is corroborated by a recurrence to judicial decisions. In the case of Lowrig v. Bourdieu, it was held, that he who pays money voluntarily, cannot reclaim it j and in Andrie v. Fletcher, it was held, that where a man pays money upon a contract which is void, and which therefore gives no right, the holder might retain it, though without consideration. It is true, in those cases the decisions rested, in part, on a principle of policy. The contracts were disapproved of by the law, which would lend to neither party aid against the other.
In Sullivan v. Greaves, was said, that where the contract is invalid and void, A shall not recover from a stakeholder what B has put into his hands. The facts of that case did not, perhaps, authorise the adoption of a principle in all this latitude ; because the Defendant was not, in fact, a stake-holder, but a mere agent or receiver for the Plaintiff.
In Cotton v. Thurland, Lord Kenyon lays down the principle,.that while the money remains in the stake-holder’s hands, it belongs to the party that lodged it there, and this decision was frequently recognised afterwards in the King’s Bench.
In Edgar v. Fowler, and Taylor v. Lindey, it was held, that in illegal transactions, money may always be stopped while in transitu to the person entitled under such transaction, to receive it. The same principle is laid down in Yischer v. Yates.
And in Smith v. Bickmore, it was held, that a person who deposits in the hands of a stake-holder, a sum as a wager on the event of a boxing-match between himself and another, may, after committing' a breach of the peace by fighting, recover back his deposit from the stake-holder, having demanded it before it was paid over.
Doug. 467.
2 Term. 162. 3 do. 266.
Park. 8.
Tenant v. Elliot, 1 Bos. and Pull. 3 — Remarks of Cockell, Seargant, and Heath, Justice, in Id. 297-9.
5 Term 405.
7 Term 535, 8 do. 575.
3 East. 222.
9 East 49.
11 Johns. S3,
12 Id. 1,

Opinion:
Taylor, Chief-Justice,
delivered the opinion of the Court:
This action was brought to recover the amount of a sum betted on a horse-race, and deposited with the Defendant's testator as a stake-holder. The sum was paid over by him to the supposed winner of the race, after notice from the Plaintiff not to do so : and the contract being illegal under the act of 1810, the question is, Ought the Plaintiff to recover ? Where money has been paid on an illegal transaction, in which both parties are equally criminal, it cannot be recovered back} for there is no reason why he wrho parted with his money freely, should have it again. Volenti non Jit injuria ; and the law in such case esteems the condition of the Defendant, the most eligible, not on account of any superior merit he has to the Plaintiff, but because the latter cannot build his claim on a moral foundation. This principle is distinctly recognised in many cases, and recently in Hauser v. Hancock, and Edgar and another v. Fow ler and another. And the first case also proves, that where money, deposited on an illegal wager, has been paid over to the winner by the consent of the loser, the latter cannot afterwards maintain an action against the former, to recover back his deposit. But the law is different where the action is brought against a stake-holder who has the money still in his possession, or has paid it over after notice not to do so. The distinction is taken in Cotton v. Thurland, where the Plaintiff was permitted to recover a stake deposited by him on the event of a boxing'-match : and the latter case does not stand unsupported, for its authority has been admitted and confirmed in a recent case of Smith v. Bickmore; which was an action brought by a person who deposited in the hands of a stake-holder, a sum of money, as a wager on the event of a boxing-match, between himself and another : and he was allowed to recover the same from the stake-holder, having demanded it before it Was paid over. In that case, Sir James Mansfield observes, " The law is got into sad confusion by con- " tradictory decisions respecting illegal contracts. But " this' case seems made for the express purpose of confinn- " ing Cotton v. Thurland. In that case, there was a doubt " about the event, exactly as in this case; and the Court " thought the money might be recovered against the stake- " holder. Now this is a case, not of an action against one " of the parties to the wager, but against a stake-holder$ " therefore if is different from the cases of actions against " underwriters to recover back premiums paid on illegal " contracts." Whatever may be the illegality of the contract, the stake-holder is no party to it, and as long as the money remains in his hands, he ought to be accountable to some one for it: there can be no justice in his claim of detaining it. The question between a party and the stakeholder, is susceptible of views and considerations, which do not attach to it between the parties themselves. To both of the latter the law refuses its aid, on principles of public policy : It cannot uphold the winner, for that were to enforce a void contract, and repeal an act of Assembly: It will not assist the loser against him, because he has voluntarily parted with his money : And, as both parties have violated the law, it will not trouble itself to alter the condition in which they have placed themselves. A stakeholder receives the deposit to be paid over to the winner, and the authority given him, is countermandable at any time before the payment is made. The money may be stopped in transitu to the person entitled to receive it. The Court think the Jury were prooerly instructed, and that the rule for a new trial should be discharged.
8 Tern. 575.
3 East 222.
5 Term 405.
4 Taunt. 477.
3 East 225