Court Opinion

ID: 6693581
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:43:29.327966+00
Date Added: 2024-06-11T16:01:10.734719
License: Public Domain

Shepherd, C.J.
(concurring): I concur in the conclusion of the Court that the agreement which the mortgage is given to secure is contrary to public policy, and therefore illegal, and I am also of the opinion that the injunction should be continued until the final hearing. It is alleged that the plaintiff Joseph Basket has a resulting trust in the land included in the mortgage, and as it does not appear that he had any connection with the illegal transaction between A. M. Basket, the mortgagor (the holder of the legal title),.and the mortgagee, I see no reason why the equitable aid o’f the Court should not be extended to him.
I cannot agree, however, in that part of the opinion which declares that A. M. Basket is entitled to equitable relief. “ Whenever a contract or other transaction is illegal, and the parties thereto are, in contemplation of law, in pari delicto, it is a well-settled rule, subject only to a few special exceptions depending upon other considerations of policy, that a Court of Equity will not aid a particeps criminis, either by enforcing the contract while it is yet executory, or by relieving him against it by setting it aside, or by enabling him to recover the title to property which he has parted with by its means. The principle is thus applied in the same manner when the illegality is merely malum prohibitum, being in contravention of some positive statute, and when it is malum in se, as being contrary to public policy or to good morals. Among the latter class are agreements and transfers, the consideration for which was violative of chastity, compounding of a felony, gambling, false swearing, the commission of any crime or breach of good morals.” 1 Pom. Eq., 402.
*462“ Where the party seeking relief is the sole guilty party, or where he has participated equally and deliberately in the fraud, or where the agreement which he seeks to set aside is founded in illegality, immorality, or is base and unconscionable on his part — in such cases Courts of Equity will leave him to the consequences of his own iniquity, and will decline to assist him to escape from the toils which he has studiously prepared to entangle others, or whereby he has sought to violate with impunity the best interests and morals of social life. * * * Courts of equity could not, without staining the administration of justice, interfere to save the party from the just results of his own misconduct, when the failure of success in the scheme would manifestly be the sole cause of his praying relief.” 2 Story Eq., 696; Adams’ Eq., 418.
These principles are so well established that it is hardly necessary to produce authority to their support, and that they have been recognized by this Court is plainly evident by a reference to the cases of York v. Merritt, 77 N. C., 213; Sparks v. Sparks, 94 N. C., 527, and authorities cited.
There are, it is true, limitations to the rule, as where parties are not equally in fault, or as in the case of usury, where the borrower is considered as in vinculo, or where the security is for past cohabitation; and there are cases where, under peculiar circumstances, considerations of public policy will be best subserved by granting relief. These and other instances will be found- in the text-books and notes to which I have referred, and there seems to be some confusion in the decided cases upon the subject. No satisfactory authority, however, can, in my opinion, be found to take the present case out of the general rule. If, as we have seen, the Court will not interfere where the consideration is the compounding of a felony for the commission of a crime, it is difficult to understand why it should extend its relief where the consideration is for the commission of the offence alleged in the complaint. Certainly, considerations of public policy are as grave in the *463former cases as in the latter. Again, it will hajdly be contended that the plaintiff A. M. Basket is not equally in fault. Indeed, it appears from the written agreement executed contemporaneously with the mortgage, that he was the moving party in the transaction. The proposition was made by him, and it is perfectly clear that his guilt is equal if not greater than that of the defendant. Again, if it be conceded that he is entitled to the relief on the ground that part of the contract, the note, is executory, the Court would only grant it upon terms, and as the mortgagee has, under the agreement, so credited the note that everything is eliminated except certain expenses and counsel fees, and a pre-existing debt (leaving only a balance of about $200), it would seem very clear that the Court, even if it interfered, would not place him in any better condition. The expenses and counsel fees were actually expended in furtherance of his own proposition, and it would seem a complete reversal of the maxim in pari delicto melior est conditio defendentis, to so use the equitable power of the Court as to extricate the plaintiff from the position in which he has placed himself, and put the entire expense of carrying out his own proposition upon the shoulders of the defendant. No clearer case can, in my opinion, be conceived for the application of the rule than the present.
Furthermore, it is a fundamental principle that a Court of Equity never interferes where there is a complete defence at law. High on Injunction, 473. In the present case it is said that the mortgage is utterly void. If this be so, there is no occasion for equitable relief, not even on the ground that it is necessary to discover and preserve the evidence of its illegality, as the contemporaneous agreement executed by all of the parties is plenary proof of the vitiating element. 2 Story Eq., 700.
This consideration, as well as the firmly established rule in pari delicto, etc., is also a complete bar to the prayer that *464the deed be cancelled on the ground that it is a cloud upon plaintiff’s title. 2 Story Eq., 700. Public policy will be far better subserved by leaving the plaintiff where his illegal conduct has placed him, than by encouraging him in another attempt to violate the law by the assurance that a Court of Equity will always stand ready to relieve him against the consequences of his unsuccessful experiments. “The suppression of illegal contracts is far more likely in general to be accomplished by leaving the parties without remedy against each other, and by thus introducing a preventive check naturally connected with a want of confidence, and a sole reliance upon personal honor. And so accordingly the modern practice is established.” 1 Story Eq., 298.
The case of Patterson v. Bonner, 48 Cal., 369, cited in the opinion to the effect that a mortgage given to secure money upon an agreement against public policy does not divest the title, does not aid the plaintiff, for, if the title is not divested, there is certainly no occasion for resorting to a Court of Equity where the illegality is evidenced, as in this case, by the contemporaneous agreement referred to. The case, however, decides the other way. It holds that the title passes, but that the performance of the illegal condition will not divest the title of the grantee. The case cited from Indiana is equally inapplicable, as it was an action at law to enforce an illegal executory agreement, and it was of course held that the defendant could plead the illegality of the consideration. The case from Maryland is also inapplicable, as it was an action to foreclose a morí gage given upon an illegal consideration, and the Court refused relief. It is no authority that the Court would have aided the mortgagor had he been seeking a decree for cancellation. The case of Willyams v. Bullmore, 33 L. J. R., cites no. authority. It seems, however, that the mortgagee was seeking foreclosure, and that this action was consolidated with one brought by the mortgagor for cancellation. Under these circum*465stances there was a decree for cancellation. It is doubtful whether the Court would have made such a decree, had not the mortgagee been seeking foreclosure. However this may he, it cannot be regarded as sufficient authority to overturn the well-established rule embodied in the maxim which I have quoted. There is nothing in the reference to Pome-roy’s Eq. Juris, which at all countenances relief under the circumstances of this case. The defendant has already agreed to terms as favorable as would be imposed by a Court of Equity.
I think that A. M. Basket has no standing in a Court of Equity, and that, under the circumstances, he is entitled to no relief. To interfere in his behalf would be giving aid and comfort to the moving party in this illegal transaction.