Rock v. Mathews

• Court: West Virginia Supreme Court
• Writing for the Court: Brannon, J
• Citation: Rock v. Mathews, 35 W.Va. 531, 14 S.E. 137 (W. Va. 1891)
• Decision Date: 14 November 1891
• Parties: Rock et al. v. Mathews et al.

14 S.E. 137

35 W.Va. 531

Rock et al.

v.Mathews et al.

Supreme Court of Appeals of West Virginia.

Nov. 14, 1891.

Cancellation or Contract—Compounding Felony.

Equity will not entertain a bill to cancel instruments of indebtedness given under an agreement to compound a felony or stifle its prosecution, as the parties are in pari delicto.

(Syllabus by the Court.)

Appeal from circuitcourt, Cabell county.

Suit by James Rock, administrator of J. W. Verlander, deceased, Mary A. Rock, and Annie M. C. Verlander, against R. A. Mathews, John H. Russell, T. H. Harvey, F. B. Enslow, H. C. Simmons, and the Bank of Huntington, to enjoin them from selling property mentioned in a certain trust-deed, and to cancel the deed, and compel certain notes to be delivered up. Decree for defendants. Plaintiffs appeal. Affirmed.

Campbell & Holt, for appellants.

Simms & Enslow, for appellees.

Brannon, J. This is a bill filed in the circuit court of Cabell county by James Rock and others against R. A. Mathews and others, alleging, in effect, that J. W. Verlander, as postmaster at Huntington, gave a bond, with Mathews, Harvey, Enslow, and Russell as sureties, and that Verlander misappropriated to his own use public moneys, whereby the sureties became liable; and that said sureties, while their liability was unpaid, and while Verlander was in danger of arrest and prosecution for embezzlement, went to James Rock and Mary A. Rock, the father and mother of Mrs. Verlander, and to Mrs. Verlander, who were in no wise liable for such money, and demanded that they and said J. W. Verlander should execute a promissory note, secured by deed of trust, payable to said sureties, for $3,000, the amount of the defalcation, so that they might not lose by their suretyship, and represented that, on compliance with such demand, they would discharge the amount of the defalcation, and further represented to said Rock and wife and Verlander and wife that, unless said note and security should be given, they would have Verlander arrested and prosecuted for embezzlement and sent to the penitentiary; and that to save Verlander from prosecu-tfon, and for no other consideration, they executed a note for $3,000, payable at the Bank of Huntington, to said sureties, and a deed of trust on certain real and personal property to secure it; and that said sureties then settled the defalcation with the United States. That, the trustee having advertised the property for sale, said sureties proposed that if said debtors would renew the note of $3,000, and execute certain other notes, and a deed of trust to secure them, no sale would be made under the first trust, but it would be released, and further time given; and accordingly a new note for said $3,000, and a deed of trust to secure it, were given by said parties; and that all the property embraced in this deed of trust was the property of Mary A. Rock, and none of it the property of J. W. Verlander. That under this second deed of trust the trustee was about to sell property conveyed by it to satisfy said note for $3,000. That the renewed note was for the original note of $3,000, executed in expectation that J. W. Verlander would be relieved from prosecution, which note was for a consideration illegal, and contrary to public policy. And the bill prayed that the sale be enjoined, and the note and deed of trust canceled. An injunction was granted, and a motion to dissolve and a demurrer were overruled; and the defendants having answered, and evidence having been taken, on the final hearing the injunction was dissolved, and the bill dismissed; and from this decision the plaintiffs appeal.

The first question arising on the face of the bill is, does the bill show ground for cancellation of the deed of trust and note? The bill charges that they were made for compounding, or with the expectation of preventing and stifling, a criminal prosecution, and are therefore void as against public policy. According to the bill, the parties who gave the note and deed oftrust were as fully aware of the character of the transaction and the illegal purpose as were the beneficiaries under those instruments, and were participants in the transaction. Can they have relief, or are they precluded because equally guilty with their adversaries? Mr. Pomeroy, in his late and elaborate and learned work on Equity Jurisprudence, (volume 1, § 402.) says: "Wherever 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 to only 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 or obligation while yet it is 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 where the illegality is merely a malum prohibitum, being in contravention to some positive statute, and when it is malum in se, as being contrary to public policy or good morals." In the latter class he ranks compounding felony. It is a known maxim that he who comes into equity must come with clean hands. Lord Chief Justice Wilmot said that "all writers upon our law agree in this: no polluted hand shall touch the pure fountain of Justice;" and that those so entering the temple will be expelled with the anathema, 'Procul, O procul este, profani!'" In the supreme court of Massachusetts, in At wood v. Fisk, 101 Mass. 303, the principle iB well stated, thus: "The meaning of the familiar maxim, id pari delicto potior est conditio ile-fendentis, is simply that the law leaves the parties where they stand; not that it prefers the defendant to the plaintiff, but that it will not recognize a right of action, founded on the illegal contract, in favor of either party against the other. They must settle their own questions in such cases without the aid of courts." In Capehart v. Rankin, 3 W. Va. 571, it was held that courts will not aid parties to illegal contracts, which are executory only, to recover thereon, and, where it is executed, a court will not aid a particeps criminis in setting it aside. See Dodson v. Swan, 2 W. "Va. 511. In Helsley v. Fultz, 76 Va. 671, it w^Tas held to be a rule of courts of equity "not to assist one wrongdoer against another;" that, if the agreement be executory, it will neither be enforced nor canceled; if executed, it will not be set aside, and the property restored; that "in all such cases the parties will be left as they placed themselves." On this principle, in Atwood v. Fisk, supra, the supreme court of Massachusetts held that a bill in equity will not lie to compel the surrender or cancellation of a promissory note, and a mortgage to secure it, on the ground that the consideration for them was a promise of the payee to forbear to prosecute for embezzlement. In Smith v. Rowley, 66 Barb. 503, a wife sought to annul a deed conveying property to prevent the prosecution of her husband; but she was refused relief because the contract was against public policy, and she a participant. In Allison v. Hess, 28 Iowa, 389, a conveyance had been made to compound the felony of a son; and the court refused relief, saying: "The rule seems to be well settled that where a contract is illegal, whether because it is malum inse or malum prohibitum, the law will not afford affirmative relief to either, but leave the parties as it found them." In Railroad Co. v. Mathers, 71 111. 598, held that, if a party convey estate in consideration of doing an illegal act, no relief will be given. In Haynes v. Rudd, 102 N.Y. 372, 7 N. E. Rep. 287, held: "One cannot maintain an action to recover money paid on a note wholly or partly to compound a felony, though the note was procured by duress and undue influence. " There was a threat to accuse a son of crime. The court said that it could not agree with the doctrine that if the party was inflenced by duress, and ut the same time both parties intended compounding a felony, they were not in pari delicto, and that it was enough that the vice of compounding was part of the contract, operating in the minds of both parties, thus placing them on an equality. Same principle in Swartzer v. Gillett, 1 Chand. (Wis.) 207, 2 Pin. 238; Harrington v. Bige-low, 11 Paige, 349.

But it is argued for appellants that while the doctrine above stated maybe true as to contracts completely executed, as where money has been paid on the illegal contract, or property has been actually passed under it, yet it does not apply where the debt has not been paid, as here. It is said that the proper words of the maxim are, " in pari delicto melior est conditio possidentis, not defendentis;" and, where the word "defendentis" is used it is to be regarded as equivalent to "possidentis;" and thus it shields only one who has become the possessor under a completely executed contract of the thing sought to be reclaimed by the suit, and does not apply where the contract has not been executed, and the defendant has not possession; that in this case, as the debt has not been paid, the maxim does not apply. It seems to me that the true expression of this great equity maxim is, "in pari delicto potior est conditio defendentis vel possidentis." But it is differently stated in different books. In 1 Story, Eq. Jur. § 63. the closing words are "possidentis et defendentis, " while in section 298 they are "defendentis et possidentis." In Broom, Leg. Max. 290, it reads, "in pari delicto potior est conditio possidentis, (or defendentis,) " while on page 729 it is, "potior est conditio possidentis." In Black, Law Diet, it is, "in...