Court Opinion

ID: 8753088
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:35:34.043162+00
Date Added: 2024-06-11T17:01:04.835754
License: Public Domain

On Petition for a Rehearing.
(January 22, 1904.)
ANDERSON, District Judge.
The complainant has filed a petition for a rehearing of this cause, and in support thereof has filed á brief which warrants some attention. It is correctly stated in this brief that “the only piece of property involved in this suit is the 'easement’ created under the 1882 ordinance,” and assigned to complainant, and that “the sole property right in suit is this easement.” The question now is, did the complainant, by the sale alleged and proved in this case, acquire a right in or title to the easement which it can assert in a court of justice? In their brief counsel for complainant treat the contract upon which they base complainant’s title to the “easement” as ultra vires the Evansville Telephone Exchange, and in that respect void. But this view is too narrow. The contract was void also because it was contrary to public policy. In Thomas v. Railroad Company, 101 U. S. 71, 83, 25 L. Ed. 950, the court said:
“There is another principle of equal importance and equally conclusive against the validity of this contract, which, if not coming exactly within the doctrine of ultra vires, as we have just discussed it, shows very clearly that the railroad company was without the power to make such a contract. That principle is that where a corporation like a railroad company has granted to it by charter a franchise intended in large measure to be exercised for the public good, the due performance of those functions being the consideration of the public grant, any contract which disables the corporation from performing those functions which undertakes, without the consent of the state, to- transfer to others the rights and powers conferred by the charter, and to relieve the grantees of the burden which it imposes, is a violation of the contract with the state, and is void as against public policy.”
In Central Transportation Company v. Pullman’s Company, 139 U. S. 24, 11 Sup. Ct. 478, 35 L. Ed. 55, it is said:
“The necessary conclusion from these premises is that the contract sued on was unlawful and void, because it was beyond the powers conferred upon the plaintiff by the Legislature, and because it involved an abandonment by the plaintiff of its duty to the public.”
In Pullman’s Car Co. v. Transportation Co., 171 U. S. 138, 149, 18 Sup. Ct. 808, 43 L. Ed. 108, the court said:
“The so-called lease mentioned in this case has been already pronounced illegal and void by this court. 139 U. S. 24 [11 Sup. Ct. 478, 35 L. Ed. 55]. The contract or lease was held to be unlawful and void because it was beyond the powers conferred upon the Central Company by the Legislature, and because it involved an abandonment by that company of its duty to the public.”
Complainant’s counsel confuse the words “void” and “voidable.” Such confusion has frequently occurred in statutes and decisions of courts, but in the cases cited in the original opinion herein the Supreme Court of the United States used the word “void” in its strict and proper sense; and in the case of Central Transportation Co. v. Pullman’s Co., supra, in the paragraph quoted in the original opinion, the court held the contract in that case to be “not voidable only, but *197wholly void, and of no legal effect.” “Contracts _ to do acts that arc illegal, criminal, or contrary to public policy * * * are absolutely void.” Am. & Eng. Ency. of Law, vol. 28, p. 477.
In Anderson v. Roberts, 38 Johns. 527, 9 Am. Dec. 235, it is
“A thing is void which is done against law at the very time of doing it, and when no person is hound by the act; but a thing is voidable which is done by a person who ought not to have done it, but who nevertheless cannot avoid it himself after it is done.”
In Thomas v. Railroad Co., supra, the court not only holds that; the company entering into the contract in that case had the right to repudiate the contract, but that “it was the duty of the company to rescind or abandon it at the earliest moment.” And this because the contract was against the law; forbidden by public policy.
I think the contract which is the foundation of complainant’s alleged title is absolutely void. “Strictly speaking, ‘void’ means without legal efficacy; ineffectual to bind parties or to convey or support a right.” 28 Am. & Eng. Ency.- of Law, 473. No right can be founded on an absolutely void act. “Whatever may be avoided, may, in good sense, to this purpose, be called void; and this use of the word ‘void’ is not uncommon in the language of statutes and of courts. But in regard to the consequences to third persons the distinction is highly important, because nothing can be founded on what is absolutely void, whereas from those which are only voidable fair titles may flow.” Somes v. Brewer, 2 Pick. (Mass.) 184, 13 Am. Dec. 406. Complainant is in this position: It claims title by virtue of a contract which is absolutely void because in violation of positive law, and it asks this court to recognize and protect a title thus acquired. “No court of justice can, in its nature, be made the handmaid of iniquity.” U. S. Bank v. Owens, 2 Pet. 538, 7 L. Ed. 508. Lord Mansfield, in Holman v. Johnson, Cowp. 341, stated the ground on which courts proceed in such cases as follows:
“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 appear to arise ex turpi causa, or the transgression of a positive law of this country, then 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.”
In Gibbs v. Baltimore Gas Co., 130 U. S. 396, 410, 9 Sup. Ct. 553, 32 L. Ed. 979, the court quotes from Bishop on Contracts:
“The law cannot recognize as valid any undertaking to do what fundamental doctrine or legal rale directly forbids. Nor can it give effect to any agreement the making whereof was an act violating law.”
In Pullman’s Car Co. v. Transportation Co., 171 U. S. 138, 151, 18 Sup. Ct. 808, 43 L. Ed. 108, after citing with approval the Case of Holman v. Johnson, 1 Cowp. 341, and many other cases, the court said:
“They are substantially unanimous in expressing the view that in no, way and through no channels, directly or indirectly, will the courts allow an action to be maintained for the recovery of property delivered under an illegal contract, where, in order to maintain such recovery, it is necessary to have recourse to that contract. The right of recovery must rest upon a disaffirmance *198of the contract, and it is permitted only because of the desire of the courts to do justice as far as possible to the party who has made payment or delivered propérty under a void ágroement, and which in justice he ought to recover. But courts will not, in-such endeavor, permit any recovery which will weaken the rule founded upon the principles of public policy already noticed.”
. How can complainant claim the protection of this court for its alleged title to this easement without having recourse to the contract by' which it claims to have acquired that title? To grant the relief sought by complainant is to both recognize and enforce a contract which the law declares to be absolutely void; void because of want of power to make it, and void because contrary to public policy.
It is insisted that the city of Evansville occupies ‘the position of a third person or stranger to this contract, and therefore it cannot raise the question a,s to its validity. As the authorities cited above show, if this contract is absolutely void, it is void as to everybody, and is a nullity whenever or wherever it is set up. The right asserted here by complainant is the right to use the streets, alleys, and public places of the city. The regulation and control of this use is by law vested in the city. The complainant is asserting the right to this use against the city, which now has control of the right, unless it has granted it to a corporation which has legally assigned it to complainant. It would be strange, indeed, if in such case the city could not question the validity of such assignment.
But it is the duty of courts to refuse recognition to an illegal contract whenever and however its illegality appears. A court is, in the due administration of justice, bound to refuse its aid to enforce an illegal contract, even if its invalidity be not pleaded. Oscanyan v. Arms Co., 103 U. S. 261, 26 L. Ed. 539. A party to the contract cannot waive its invalidity. In Hall v. Coppell, 7 Wall. 542, 559, 19 L. Ed. 244, Mr. Justice Swayne, speaking for the court, said:
“The instruction given to the jury that, if the contract was illegal, the illegality- had been waived by the reconventional demand of the defendants, was founded upon a misconception of the law. In such cases there can be no waiver. The defense is allowed, not for the sake of the defendant, but of the law' itself. The' principle is indispensable to the purity of its administration. It will not enforce what it has forbidden and denounced. The maxim, 'Ex dolo malo non oritur actio,’ is limited by no such, qualification. The proposition to. the contrary strikes us as hardly worthy of serious refutation. Whenever the illegality appears, whether the evidence comes from one side or the other, the disclosure is fatal to the case. No consent of the defendant can neutralize its effect. A stipulation in the most solemn form to waive the objection would be tainted with the vice of the.original contract, and. void for the same reasons. Wherever the contamination reaches, it destroys. The principle to be extracted from all the cases is that the law will not lend its support to a claim founded upon its violation.”
In. order to establish its claim to the right sought to be protected in this .casé, copiplainant.alleged, and it was necessary for it to prove, the contract out of which its alleged right springs. In this way, and in ,tljis ,wa.y alone, can it establish the right alleged in the bill. In McMullen v. Hoffman, 174 U. S. 639, 654, 19 Sup. Ct. 839, 43 L. Ed. 1117, the Supreme Court said:
“The authorities, from the earliest time to the present, unanimously hold that no’court will-lend-its-assistance in any way towards carrying out the *199terms of an illegal contract. In case any action is "brought in which it is necessary to prove the illegal contract in order to maintain the action, courts will not enforce it, nor will they enforce any alleged rights directly springing from such contract.”
The petition to rehear is overruled.