The Man of Last Resort; Or, The Clients of Randolph Mason

by Melville Davisson Post

“'No people,' declares Chancellor Kent in his Commentaries, 'are bound or ought to enforce or hold valid in their courts of justice any contract which is injurious to the public rights or offends their morals or contravenes their policy or violates a public law.' Hence contracts having an illegal or immoral consideration, or tending to the violation of law or the debauching of public morals, are held to be contra bonas mores, and are void.

“It is said that the object of all law is to suppress vice, and to promote the general welfare of society, and it does not give its assistance to persons to enforce a demand originating in their breach or violation of its principles and enactments. It is not necessary that the law expressly prohibit or enjoin an act. It may impliedly prohibit or enjoin it. In either case a contract in violation of its principles is void under the wholesome maxim ex turpi causa non oritur actio.

“It may happen, and, indeed, frequently does happen, that the individual suffers great hurt from this sweeping policy of the law, but it is held that the good of the commonwealth rises above the mere benefit of the individual citizen, and that where the welfare of the whole of society is involved, the law will not pause to consider the injury entailed upon the mere unit. Hence the policy of government in the exigencies of war, when protection must be had against violence, and the policy of government in the peaceful administration of the law, when protection must be had against vice.

“Thus gambling, wagering, and all gambling and wagering contracts and transactions are illegal as against public policy, since they are repugnant to the well-being of society, fraught with vice, pregnant with demoralization, and corrupting alike to the youth and to the aged, as they inspire a hope of reward without labor.

“It is significant that in matters of this nature human society has been progressive. Under the common law of England wagers were not unlawful or unenforceable, but the statute of 9th Anne followed and altered the common law, and the statutes of 8th and 9th Victoria altered it yet farther, and in the United States every separate Commonwealth has its respective statute striking at this vice.

“I think it will not at this day be denied that all transactions in stocks, by way of margin, settlement of differences, and payment of gains or losses, without intending to deliver the stocks, is a gambling or wagering operation which the law does not sanction, and will not carry into effect; and it has been held in the Supreme Court of the United States in the case of Irwin vs. Williar, 'If under the guise of a contract to deliver goods at a future day the real intent be to speculate in the rise or fall of prices, and the goods are not to be delivered, but one party is to pay to the other the difference between the contract price and the market price of the goods at the date fixed for executing the contract, the whole transaction is nothing more than a wager, and is null and void.' And that 'Generally in this country wagering contracts are held to be illegal and void as against public policy.'

“Indeed the courts of the land have gone to the extremity of denouncing in no uncertain terms the dangerous character of these illegal ventures. Judge Blauford, in the case of Cunningham vs. The National Bank of Augusta, in speaking of these transactions termed 'futures,' declares: 'If this is not a speculation on chances—a wagering and betting between the parties, then we are unable to understand the transaction. A betting on a game of faro or poker cannot be more hazardous, dangerous, or uncertain. Indeed it may be said that these animals are tame, gentle, and submissive compared to this monster. The law has caged them and driven them to the den. They have been outlawed; while this ferocious beast has been allowed to stalk about in open mid-day with gilded signs and flaming advertisements to lure the unhappy victim to its embrace of death and destruction. What are some of the consequences of these speculations in 'futures'? The faithful chroniclers of the day have informed us, as growing directly out of these nefarious practices, that there have been bankruptcies, defalcations of public officers, embezzlements, forgeries, larcenies, and deaths. Certainly no one will contend for a moment that a transaction fraught with such evil consequences is not immoral, illegal, and contrary to public policy.'

“In so far as this doctrine is concerned with the case at bar, it is certain that the parties understood and intended that the money loaned should be used for the purpose of engaging in an illegal speculation in oil,—'a gamble in oil,' as it is termed in the agreement, and that such gambling transactions are against public policy and the law of the land. But it is contended by learned counsel that all this can have no bearing upon the case at bar for the reason that in the cases heretofore cited announcing these conclusions of law, the litigants were the parties who dealt with or for each other, and were the immediate parties engaged in an unlawful gambling venture, and the ones to gain or lose directly by the venture, and not a mere stranger who loaned money to another to engage in such transactions, and having but an undetermined interest in the result; and that the law will not lend its aid to a further wrong. The defendant having committed one wrong cannot be permitted to use his first wrongful act as an instrument whereby to effect a second wrongful act.

“The objection is ingenious, but I judge fully met by the declaration of Lord Mansfield in Holman's case: 'The objection,' said the learned judge, 'that a contract is immoral or illegal as between 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 allowed, but it is founded on the general principle of policy which the defendant has the advantage of, contrary to the real justice as between himself and 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 his cause of action upon an immoral or illegal act. If from the plaintiff's own statement 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 it will not lend its aid to such a plaintiff.'

“This claim of the plaintiff to this action is unsound for the further reason that any promise, contract, or undertaking the performance of which would tend to promote, advance, or carry into effect an object or purpose which is unlawful, is itself void and will not maintain an action. The law which prohibits the end, will not lend its aid in promoting the means assigned to carry it into effect. Nor is it possible for an act contrary to law to be made the basis of a contract enforceable in courts of law. Hence when one lends money to another for the express purpose of enabling him to commit a specific unlawful act, and such act be afterwards committed by means of the aid so received, the lender is a particeps criminis, and the law will not aid him to recover money advanced for such a purpose, and much less would it assist him, if, as in this case he retained an interest in the result of the venture.”