King v. Winants

• Citation: 71 N.C. 469,17 Am.Rep. 11
• Parties: J. FRANCIS KING v. J. E. WINANTS.
• Decision Date: 30 June 1874
• Court: United States State Supreme Court of North Carolina

17 Am.Rep. 11

71 N.C. 469

J. FRANCIS KING

v.J. E. WINANTS.

Supreme Court of North Carolina.

June Term, 1874.

The law prohibits everything which is contra bonos mores, and therefore no contract which originates in an act contrary to the true principles of morality, can be made the subject of complaint in Courts of justice.

( Blythe v. Lovingood, 2 Ired. 20, cited and approved.)

CIVIL ACTION for the dissolution of a co-partnership, for an account and the appointment of a receiver, and in the meantime for an injunction, restraining the defendant from receiving moneys due the co-partnership, heard before Russell, J., at Spring Term, 1874, of NEW HANOVER Superior Court.

It was referred to a referee, who after finding certain facts, reported as his conclusion, that the parties were never at any time partners inter se, whatever may have been their status as to third persons. And that the agreement between the parties, was in fraud of the city of Wilmington, illegal and void, and both parties being in pari delicto, no Court would lend its aid to either to enforce the contract in this case, to compel an account.

The plaintiff excepted to the report of the referee, and his Honor, on the trial below, sustained some of his exceptions, adjudging, among other things, that the plaintiff was entitled to an account, and referring it to the Clerk to take the account. From the orders and rulings of his Honor, the defendant appealed.

Strange and Battle & Son, for appellant .

A. T. & J. London, contra .

READE, J.

The care and maintenance of certain sick persons in the service of the United States, and of the sick of the city of Wilmington, and of the county of New Hanover, were let to the lowest bidder by the several governments, and the plaintiff and defendant, who were rival bidders for the same, entered into a contract not to bid against each other, so as to enable one or both to get the contract at a much higher rate, and divide the profits between them. It is not denied that this was a fraud upon those governments, and against public policy, and that the contracts could not have been enforced against those governments. But the contracts having been performed by the governments, and the parties coming now to settle the profits between themselves, and being unable to agree, it is insisted that the aid of the Courts may be invoked. And whether that can be, is the question.

Ex turpi causa non oritur actio, is a maxim as old as the law itself. The Courts will not lend their aid to enforce contracts founded upon considerations immoral or against public policy. And where the fault is mutual between the parties in pari delicto, potior est conditio defendentis.

Suppose, in the case before us, the parties had come to a settlement, and the defendant had given to the plaintiff his note for the amount due, could the plaintiff have recovered on the note? Blythe v. Lovingood, 2 Ired., 20, is an express authority that he could not. In that case, commissioners to sell land for the State proclaimed at the sale, that if the highest bidder did not comply, the next highest bid would be taken. The plaintiff and defendant were both bidders, the plaintiff the highest and the defendant next, and they entered into an agreement by which the plaintiff was not to comply with his bid, so that it might be given to the defendant, and the defendant was to give the plaintiff his note for $100 which he did, and the plaintiff sued him on the note. Held, that he could not recover. DANIEL, J. delivering the opinion said: “If the plaintiff intended to comply with the terms of the sale, but failed in consideration of the defendants executing to him the note, then the conspiracy had the effect of depriving the State of so much of the purchase money as made up the difference between the two bids; and such a transaction, we think, was fraudulent towards the State. The plaintiff's counsel contends, that, if the parties intended to defraud the State, it could be taken advantage of by the State only, and not by the defendant, who has reaped the benefit, and was particeps criminis in the transaction. We are of a different opinion. The law prohibits every thing which is contra bonos mores, and therefore no contract which originates in an act contrary to the true principles of morality can be made the subject of complaint in the Courts of justice.” And Judge DANIEL quoted from Holman v. Johnson, Cowper 343, where Lord MANSFIELD said, the objection that a contract is immoral or illegal, as between plaintiff and defendant, sounded 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 upon general principles of policy, which the defendant has the advantage of, contrary to the real justice between him and the plaintiff, by accident if I may say so. 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 stating or otherwise the action appears to arise ex turpi causa, or the transgression of a positive law of the country, then the Court says that he has no right to be assisted. It is upon this ground the Court goes; not for the sake of the defendant but because they will not lend their aid to such a plaintiff.” We are of the opinion that the agreement in this case was in pursuance of a fraudulent design to deprive the State of a fair price for its land, and that the plaintiff ought not to recover.”

Our case is much stronger than that. There the parties had...