(2) A, owning a house, leases it to B, knowing that B intends to use it for illegal or immoral purposes, but he does nothing to encourage or assist such illegal purpose, and is indifferent what use B makes of the premises. Is the lease void? Can A recover the rent?

(Note: Answer to Question (2). On this point there is some conflict of authority. See the late cases of Ashford v. Mace, — Ark., 39 L. R. A. N. S. 1104, and Harbison v. Shirley, 139 Iowa 605, 19 L. R. A. N. S. 662, holding that the landlord's knowledge, if there is no connivance of any sort, will not make the lease void. The first case bases its decision on the ground that uses of premises for gambling and bawdy house purposes are classed as offenses of lesser magnitude within the distinctions taken by the cases. But many courts hold such leases void. There would seem to be a distinction between a sale of goods in which the vendor parts with all property and control and a rental of premises of which he remains the landlord. See Fields v. Brown, 188 Ill. 111. The subject is governed by statute in some states.)

(b) Knowledge of the Other's Intent to Commit Offense of Greater Magnitude.

Case 114.

Hanauer v. Doane, 12 Wall. 342.

Facts: Suit to recover the price of supplies and commissary stores for the Confederate army. Defense, illegality. The lower court instructed the jury that the seller's knowledge of defendant's purpose was immaterial. Appeal.

• Point Involved: Whether a contract in other respects fully in compliance with law is rendered illegal merely because one of the parties thereto, otherwise not in fault, knows that the other intends to make use of the results of the contract to commit a crime of "greater magnitude."

MR. JUSTICE BRADLEY delivered the opinion of the Court: In this instruction we think the judge erred. With whatever impunity a man may lend money or sells goods to another who he knows intends to devote

them to a use

not do it

*

*

of inferior criminality, he canwhen he knows or has every reason

to believe that such money or goods are to be used for the perpetration of a heinous crime, and that they were procured for that purpose. * Can a man furnish another with the means of committing murder or any abominable crime, knowing that the purchaser procures them and intends to use them for that purpose and then pretend that he is not a participator, in the guilt? Can he wrap himself up in his own selfishness and heartlessness and say, 'What business is that of mine? Am I the keeper of another man's conscience?' No one can hesitate to say that such a man is almost, if

**

not quite, as guilty as the principal offender. "No crime is greater than treason.

Question 114: State the facts, the question presented and the decision of the Court in the above case.

(c) Assistance in Carrying Out Illegal Design.

Case 115. Kohn v. Milcher, 43 Fed. R. 641.

Facts: K. & A. were wholesale liquor dealers at Rock Island, Illinois. M. was a druggist at Atlantic, Iowa, holding a permit to sell spirituous liquors for medicinal purposes. Under cover of this permit and in violation of law, M. was virtually engaged in a saloon business, obtaining his liquor from K. & A. M. was required to make monthly statements to the authorities, and in these he falsified the amounts of his sales and profits. K. & A. knew of M.'s illegal practices, and in order to aid him in the same furnished him from time to time two sets of invoices, one showing the true purchase price, and the other, which he might show to the authorities, a higher, fictitious price. They also shipped a part of the liquors to M. under a fictitious name, and also enclosed a part of the liquors in boxes and barrels, labeling them as containing hardware, crockery, etc. K. & A. bring suit for unpaid purchase price of some of these goods. Defense, illegality.

Point Involved: Whether a contract that would otherwise be legal is rendered illegal by the purpose of one party to make an illegal use thereof, accompanied with an encouragement or connivance in such illegal use by the other party.

SHIRAS, J., delivered the opinion of the Court: "To recover the balance due from defendant and resulting from transactions of the nature indicated, the plaintiffs now ask the aid of this Court:

"It is refused.

*

"The statute of Iowa expressly forbids a registered pharmacist from selling intoxicating liquors as beverThe plaintiffs and defendant combined together to evade this statute, resorting to fraud and perjury to accomplish that purpose.

ages.

*

*

**

The ground upon which the plaintiff's right of action for the liquors sold is defeated is that the plaintiffs sold the liquors to the defendant, well knowing that the statute of Iowa forbade such pharmacist from selling intoxicating liquors as a beverage, and in order to aid defendant in evading the statute they forwarded the liquors in concealed packages, to a fictitious consignee, and furnished false invoices as a protection to defendant in making the false statement sworn to by him, thus actively aiding defendant in the commission of perjury as well as in other violations of law.

"The conclusion reached is that plaintiffs cannot maintain their action."

Question 115: State the facts, the question presented and the Court's decision in the above case.

D. Judicial Remedies in Illegal Agreements.

§102. No remedy by way of enforcement in any case. §103. No remedy by way of rescission.

$104. Exception: Parties not in equal guilt.

$105. Exception: Defendants contract wholly executory. § 106. Exception: Where statute allows rescission.

§ 102. (Contracts, Sec. 70.) No remedy by way of enforcement in any case. ("Ex turpi contractu non oritur actio.")

Case 116. Goodrich v. Tenney, 144 Ill. 422.

Facts: Suit brought to enforce an accounting for and payment of money alleged to have been earned by services performed under a contract found by the court to have been made for an illegal purpose.

Point Involved: Whether the Court will enforce an illegal agreement.

MR. JUSTICE SHOPE: ""*

Courts of Justice will

not enforce the execution of illegal contracts, nor aid in the division of profits of an illegal transaction between associates. Neustadt v. Hall, 58 Ill. 172: It is there said, 'In the language of Lord Ellenborough, we will not assist an illegal transaction in any respect; we leave the matter as we find it. It may be insisted that it is unjust as between the parties for Tenney to raise the question, and very dishonest for him to take advantage of it, but the contract being illegal, no rights can be enforced under it. The maxim,

*

'ex turpi contractu non oritur actio' (out of an illegal contract no action arises), applies in all such cases, and neither party if in pari delicto (in equal guilt) can have assistance in courts of justice in enforcing the contract. And the objection may be made by a party in pari delicto, for the defense is not allowed because the party raising the objection is entitled to the relief, but upon principles of public policy and to conserve the public welfare.

Question 116: Does the court even enforce an illegal agreement? Suppose it should appear to the court agreement was illegal, although that point was not made by the defendants would the court consider the point waived, or raise it on its own motion?

§ 103. (Contracts, Sec. 71.) No remedy by way of rescission.. ("Allegans suam turpitudinem non est audiendus.")

Case 117. Chapman v. Haley, 80 S. W. (Ky.) 190. Facts: Suit by Haley to recover of Chapman $300 alleged to have been paid to Chapman for investment purposes. The evidence disclosed that Chapman agreed with Haley that if Haley would pay him $300, he would sell him $3,000 in "good" money, that the parties met in a small room in Cincinnati to carry out the agreement; that Haley paid Chapman the $300 and Chapman went out to get the $3,000 promising to return in a few minutes, but that he did not come back. Haley testified that he thought the $3,000 was all right, except that he understood there was something wrong about the numbers. But the court says "that appellee [Haley] fully understood that under the contract he was to purchase counterfeit money, cannot be doubted."

Point Involved: Whether the court will lend its aid to compel repayment of money (or surrender of any property) parted with under an illegal agreement not performed by the other side.

BARKER, J.:

It is unnecessary to say that this conspiracy between these two men to purchase counterfeit money constituted an illegal contract and was void. The question as to whether or not appellee who was equally guilty with appellant, can recover the money paid by him in pursuance of this criminal conspiracy, is the first question for adjudication?

"In the case of Kimbrough v. Lane, 11 Bush, 556, the contract was for the payment of $3,000 to secure the dismission of an indictment against Lane for a felony. In affirming a judgment dismissing the petition in the action wherein it was sought to recover the $3,000, this court said: 'It is sufficient to say on this point that the rule of law inhibiting such contracts was not made for the benefit of the obligors. The courts will not en