Court Opinion

ID: 7103352
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:18:06.437719+00
Date Added: 2024-06-11T16:13:29.278149
License: Public Domain

Reed, J.
The cases cited by appellee, and relied on as sustaining the ruling of the district court, are of two classes, viz.: (1) Cases in which a party to an unlawful or fraudulent contract, but which has been fully executed, sought to recover the consideration paid by him, and (2) cases in which a party to an executory contract, which, although tainted by fraud in its inception, was still supported by a valuable consideration, sought to defeat its enforcement. The uniform holding of the cases of the first class is., that the party is not entitled to relief. In the other class it has been held that the party will not be permitted to allege or prove the unlawful or fraudulent character of the contract to defeat its enforcement. The present case does not fall within either of those classes. The action is for the enforcement of a right claimed by plaintiff to have accrued to him under the contract. If the mortgage is valid, it conferred upon him the right to the possession of the property; there being no provision in it to the contrary. But possession had not been delivered under it, and the contract, to that extent, was executory, and the action is for its enforcement. While, on its face, the contract imparts a consideration, it was absolutely without consideration ; and, because of the fraudulent intent with which it was executed, it was not only contrary to good-morals and public policy, but was positively prohibited by law. The statute (Code, sec. 4074) denounces the making of such contracts as criminal, and imposes penalties upon the parties thereto by way of punishment for the act. The parties also are in pari delicto.
The question in the case is whether, when one of *456the parties to such an agreement seeks the aid of the courts for its enforcement, the other will be permitted to show its real character for the purpose of defeating a recovery. It seems to us that there should be but one answer to that question. The courts will not be made the instruments for the consummation of the fraudulent or criminal purposes of parties. They will not lend their aid for the enforcement of contracts which have been entered into for the single purpose of accomplish-ing criminal or fraudulent objects, but will leave the parties in the position in which they have placed themselves ; and they will do this, not for the purpose of protecting the one party from the consequence of his crime or fraud, but of preventing the other from reaping the fruits of his iniquity. It is to be borne in mind that it is plaintiff who is asking the aid of the court. The matter alleged by defendant, and which he proposed to prove, is purely defensive. It was set up, not as constituting a right in him, or as entitling him to any relief, but in resistance of the right alleged by plaintiff. If the real character of the transaction appeared on the face of the mortgage, there could be no question as to its effect. The courts would not enforce it, even if its enforcement were not resisted ; for, as we have said, relief is denied in such cases as a measure of preventive justice. But it was contended that the rule in such cases is that the question must be determined alone from the writing, and that, if it makes a prima-facie case for the plaintiff, the defendant should not be permitted to stultify himself by showing the criminal or fraudulent character of the transaction. That such a rule has obtained in cases where the contract sought to be enforced was supported by a valuable consideration, and was not criminal, although alleged to be fraudulent, is true; and in tha-t class of cases it is probably the true rule. But it would be a monstrous absurdity to hold that the law will aid a party to gather the fruits of his evil conduct, while it denounces and punishes the act as a crime. When parties contract in violation of the criminal law, they are not apt to embody the *457evidence of their guilt in their written agreement; and, if such contracts are to be defeated at all on the ground of their criminality, it must ordinarily be done upon' extrinsic evidence.
We think, therefore, that the court erred in excluding the evidence, and the judgment will be
Reversed.