Court Opinion

ID: 9658960
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:23:42.421498+00
Date Added: 2024-06-11T18:14:02.220164
License: Public Domain

Gillespie, J.,
Dissenting:
I respectfully dissent.
While I have serious doubts whether appellant could maintain her action under the doctrine of estoppel by judgment, or collateral estoppel, my dissent is grounded on the doctrine in pari delicto.
Mrs. Elizabeth Morrissey, in effect, contended in the first suit that her act in executing the deeds of trust were in furtherance of an illegal business, that of assisting her husband in the whiskey business, and that the deeds of trust and notes were void. This, indeed, is an uncontroverted fact. The chancellor, in Mrs. Elizabeth Morrissey’s suit against the trustee, properly held that Mrs. Elizabeth Morrissey was m pari delicto with her husband, Mike Morrissey, and Bologna, and denied to her the right to use the court to extricate herself from the consequences of her own illegal act. She did not appeal. The present suit is brought by Miss Hazel Morrissey, sister of Mike Morrissey, to have the court cancel the notes and deed of trust as clouds on her title which she derived from Mrs. Elizabeth Morrissey. The appellee, Bologna, contends, and I think there was ample testimony to justify the chancellor in finding, that the conveyance from Mrs. Elizabeth Morrissey to appellant, Miss Hazel Morrissey, was nothing more than a sham *300in an effort on the part of the parties to avoid the legal effect of the adverse judgment rendered against Mrs. Elizabeth Morrissey in her suit against the trustee, Sherard. That fact alone was enough to justify the lower court in denying relief to appellant, but in this dissent I am relying on the uncontroverted fact that Mrs. Elizabeth Morrissey was in pari delicto with the appellee Bologna and was therefore disqualified to call forth the activities of the courts to aid her in escaping the consequences of her own illegal act; and that Hazel succeeded to no greater right or purer position, and likewise is unable to invoke the aid of the courts.
As already indicated, Mrs. Elizabeth Morrissey was in pari delicto with appellee. The majority does not contend she was not. The record is conclusive on that question. The previous suit so adjudicated and Mrs. Elizabeth Morrissey did not appeal. The general rule is as stated in 12 Am. Jur., Contracts, Section 212, that, “In cases where the parties are in pari delicto the law will leave them where it finds them.” In 19 Am. Jur., Equity, Section 478, it is stated: “. . . . where the wrong of one party equals that of the other, the defendant is in the stronger position. ... It signifies that in the situation presented neither a court of equity nor a court of law will administer a remedy.” Lord Mansfield, in Holman v. Johnson, 1 Cowper. 341, decided in 1775, gives us a better understanding of the basis of the doctrine in pari delicto when he said: “. . . . the objection that a contract is immoral or illegal as between the 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 so say. The principle of public policy is this: Ex dolo malo non oritur actio. No Court will lend its aid to a man who founds *301Ms cause of action upon an immoral or an illegal act.” The words of Lord Mansfield have been paraphrased and approved by this Court in at least two cases: Western Union Telegraph Co. vs. McLaurin, 108 Miss. 273, 66 So. 739; Downing vs. City of Jackson, 199 Miss. 464, 24 So. 2d 661.
Before discussing what I understand to be the basis of the majority decision, it should be noted that the opinion says that Miss Hazel Morrissey was not in pari delicto with anyone. But we understand the majority to concede that Miss Hazel Morrissey is in no better position than her grantor, Mrs. Elizabeth Morrissey. Both reason and authority place Mrs. Elizabeth Morrissey and Miss Hazel Morrissey in the same position. If one who is in pari delicto with another could shuck off the disability attached to Ms own illegal position by the simple device of conveying or transferring his purported right to another, then the rule denying relief to one in pari delicto would be meaningless. In the present case, if appellant, Miss Hazel Morrissey, prevails on this appeal, then Mrs. Elizabeth Morrissey is relieved of a liability on her warranty of approximately $100,000. In 19 Am. Jur., Equity, Section 478, in referring to the rule denying a remedy to one who is in pari delicto with another, it is said: ‘ ‘ The principle may be invoked not only against a party to the illegal transaction, but also against the heir of a party or anyone claiming under or through a party. ’ ’ Since Miss Hazel Morrissey stands in no better position than her grantor, Mrs. Elizabeth Morrissey, the majority opinion should be examined as if Mrs. Elizabeth Morrissey was seeking to cancel the deeds of trust as clouds on her title.
The opinion says that even where the contracting parties are in pari delicto, the courts may interfere from motives of public policy, and that whenever public policy is advanced by allowing either party to sue for relief against the transaction, then relief is given to him, citing *302Pomeroy’s Equity Jurisprudence, 4th Ed., Section 941, pp. 1998-9. The majority then says that Section 2612, Mississippi Code of 1942, announces a public policy which is strongly against the collection of whiskey debts and the enforcement of liens attaching on that account. Therefore, according to the reasoning of the majority, the court should aid Mrs. Elizabeth Morrissey, or her grantee, in affording her affirmative relief to cancel as clouds on her title deeds of trust given in a whiskey deal, and that this should be done in furtherance of the public policy of this State.
But the fallacy in the reasoning of the majority is the assumption that the purpose of Section 2612 is solely to prevent the collection of whiskey debts. The statute is merely a codification of the common law with reference to illegal contracts. This Court so stated in Goodman v. Sweat, 108 Miss. 224, 66 So. 535, wherein the Court said: “The statute was wholly unnecessary in order to prevent the collection of debts for intoxicating liquors sold in this state, for the reason that the sale of intoxicating liquors therein is illegal, and therefore the courts will not aid in the collection of debts due therefor. ’ ’ The statute did not add or take away from the large body of law involving the non-enforceability of illegal contracts. The public policy behind all the law denying relief to either party to an illegal contract is to deny to wrongdoers the processes of the courts. See discussion Western Union Telegraph Co. v. McLaurin, supra. The purpose is not solely to deny to the creditor his debt or to aid the debtor in escaping payment of what he honestly owes, as between the parties. Indeed, from the early cases we note that the formulators of the policy embodied in our statute recognized that as between the parties the debt should be paid; that it was not for the sake of the debtor in an illegal transaction that a remedy was denied the creditor, but considerations of the policy already stated above. We think it is to misunderstand *303the statute and the historic policy that brought it into being to hold that because of it the court should give affirmative relief to a party to an illeg’al contract and cancel a conveyance settling a debt that was justly owing, as between the parties.
Appellant has cited no case, and I am unable to find one, holding that in a similar situation public policy demands a party to an illegal contract should be given relief in the courts. A typical case for the application of the rule cited in Pomeroy’s Equity Jurisprudence, supra, is City of Philadelphia v. Rosin’s Parking Lot, Inc., 358 Pa. 174, 56 A. 2d 207, where certain officials of the city made an unlawful contract with a corporation in reference to not collecting a portion of certain taxes. When the city brought suit to collect the taxes and rescind the illegal contract, the illegality of the contract was set up to prevent the city access to the courts. The court said that the case was not within the rule prohibiting recovery for breach of an illegal contract. I cannot think of any reason why the courts of this State, much less a court of equity, should suspend a general rule of law on grounds of public policy to give affirmative aid to assist Mrs. Elizabeth Morrissey, or her grantee, in escaping the consequences of her illegal contract. Of course, if Bologna could not collect his debt without resorting to the courts, then he would be denied relief. But the deeds of trust were capable of being foreclosed in pais without the aid of a court, and were so foreclosed.
It is true that the statute says that whiskey debts and the securities therefor are void. This is true of all illegal contracts whether so declared by statute or the common law. But they are not void in the sense that no property rights can grow out of such illegal transactions. ‘ ‘ Such contracts are void in the sense that they are incapable of enforcement in courts of justice, and will not support a remedy. No legal obligation is incur*304red by either party. But such contracts are not void in the sense that they can confer no rights. They can be executed by the voluntary acts of the parties, or through some means or agency, other than the courts, agreed upon between the parties; and if, and when, so executed, they may confer actual and irrevocable rights upon the parties.” Hall v. Edwards, 222 S.W. 167 (Tex.). See McBlair v. Gibbes, 17 How. 232, 15 L. Ed. 132; 12 Am. Jur., Contracts, Section 213, pp. 724, 725. That is what appellee had in this case, an executed contract which needed no court to enforce. I think the learned chancellor correctly dismissed the bill, and his action should, in my opinion, be affirmed.
Ethridge, J., joins in this dissent.