Vischer v. Yates

Kent, Ch. J. delivered the opinion of the court. Two questions have been made upon this case. 1. Whether the action (if any) ought not to have been brought by Alexander, who actually deposited the money ? 2. Whether an action will lie, at all, to recover back the deposit money? 1. The case of the Duke of Norfolk v. Worthy, (1 Campb. N. P. 337.) is in point, to prove that the suit is well brought in the name of the plaintiff; for the 500 dollars deposited was the plaintiff’s money, paid through the medium of his agent, and if the money ought to be refunded to any person, it ought to be to the plaintiff The decision of Lord Ellenborough, in the above case, was afterwards sanctioned by the K. B., and the principle, contained in it appears to be solid. 2. The wager in this case was illegal. This was so decided in Bunn v. Biker, (4 Johns. Rep. 426.) and that decision was afterwards repeated in Lansing v. Lansing. (8 Johns. Rep. 454.) And when we consider the importance of popular elections to the constitution and liberties of this country, and that the value of the right depends upon the independence, moderation, discretion, and purity with which it is exercised; we cannot but be disposed to cherish a decision which declares gambling upon such elections to be illegal, as being founded in the clearest and most incontestable principles of public policy. Here was, then, an illegal contract, and the plaintiff, by his agent, deposited 500 dollars with the defendant, as a stakeholder, to be hazarded at the governor’s election. If, after the determination of the event against the plaintiff the money had actually been paid over to the winner with the plaintiff’s consent, or perhaps without notice to the defendant to the contrary, the plaintiff could not have sustained an action against the winner to recover back the deposit. This was so decided in Howson v. Hancock, (8 Term Rep. 575.) and Lord Kenyon said, in that case, that there was no instance of such an action being maintained. , The case, then, of Lacaussade v. White, in 7 Term Rep. 525. (and which appears to be very imperfectly reported,) was either an action against the stakeholder, before the money was paid over, as Lord Kenyon understood it, or it was corrected and overruled by the [29] case of Howson v. Hancock. There is also a decision in this court, in exact conformity with the latter case. (McCullum v. Gourley, 8 Johns. Rep. 147.) But the present action is not against the winner, after the money has been paid, but it is against the stakeholder before the money has been paid, and after notice to the stakeholder not to pay it over, and it falls within the case of Cotton v. Thurland. (5 Term Rep. 405.) That was the case of a wager deposited with a stakeholder, upon the event of a battle to be fought between the plaintiff and a third person. The battle was fought, and notice was then given to the defendant not to pay over the money; and it was held by the court of IC. B. that the action lay against the stakeholder to recover back the deposit, as the money was still in his hands, and he was answerable to some person for the money, and had no conscience on his part to retain it. This case has never been contradicted or questioned; and it is precisely in point. There is not a decision to be met with in the English law that is against it. The cases axe generally between the principals to the illegal contract; and the courts take a distinction between contracts that are immoral or criminal, and such as are simply illegal and void. Assistance is usually given to the party, in the latter cases, to recover back his money; and this court lent such assistance in the case of Mount & Wardell v. Waites. (7 Johns. Rep. 434.) The stakeholder ought not to be permitted to hold the money in defiance of both parties. There would be no equity in such a defence, and if the plaintiff cannot recover back the deposit in this case, the winner cannot recover it; for that would be compelling the execution of an illegal contract as if it were legal, and would at once prostrate the law that declares such contracts illegal. The case of Edgar v. Fowler (3 East, 222.) is to this effect. In that case the premium, for an illegal insurance, was considered by the assured, and by the broker, as paid to the broker for the insurer, and the policies were signed. The assured afterwards gave notice to the broker “ to hold the stakes deposited by him, in his hands, for his use, and not to pay any money over;” and the insurer was not permitted to recover the premium, so admitted to be deposited, because it would be enforcing an illegal contract. Much is said, in some of the cases, upon the distinction between executed and executory contracts, and that where the plaintiff waits, without taking any step to rescind the contract, [30] until the risk has been run, the courts will not help him td m* cover back the deposit money, but will remain neutral between: the parties. The claim of the plaintiff is repelled by the maxim, that in pari delicto potior cst conditio possidentis. But this objection is applied exclusively to the suit against the principal, or winner; and there is no instance in which it has been used as a protection to the intermediate stakeholder, who, though an agent in the transaction, is no party in interest to the illegal contract. As between the plaintiff and him the maxim has no application. He is not in pari delicto, and the parties must be equally criminal, before the maxim can be applied. The •stakeholder cannot in good conscience appropriate the money to his own use; and as it was received without a valid consideration, and for an illegal purpose, the plaintiff as against him, has the preferable title. The action is founded on the disaffirmance of the unlawful contract, and on the ground that it is void, and that the money ought not to pass to the winner. After the event, it is then, indeed, too late for the loser to reclaim the money from the winner, for then the maxim applies; but before thé event has happened, either party may repent, and recall the deposit money, even out of the hands of his opponent. And if the money is still with the stakeholder, the happening of the event is immaterial, and either party may, at any time, arrest it. These are the true distinctions; and which go to reconcile all the cases. “ In illegal transactions the money,” as Lord Ellenborough said in Edgar v. Fowler, “ may always be stopped while it is in transitu to the person who is entitled to receive it.” There is not a case, or a dictum, as I apprehend, that does not allow the .merits of the contract to be discussed, so long as the defendant stands in the character of a stakeholder.. There are cases in which the .payment of money to an agent, on the consummation of an illegal contract, to and for the use of the opposite party, has been held recoverable without looking back to the original contract; but in those cases the money was not deposited with the agent, qua stakeholder, to abide the event. (Tenant v. Elliott, 1 Bos. & Pull. 3. and Farmer v. Russell, ibid. 296.) It was paid absolutely for the principal’s use. But where it is a mere deposit on the contingency of the bet, the winner cannot claim it by suit, as that would be an affirmance of the illegal contract, and asking the aid of the court to enforce it. In Edgar v. Fowler some losses had actually happened upon the [31] illegal policies, before the assured gave notice to the broker not to pay over the premium, and yet the assignees of the underwriter were not allowed to recover that premium out of the hands of the broker, though the risk in that case had actually heen run. The English rule is the true rule on this subject. On the disaffirmance of the illegal and void contract, and before it has been carried into effect, and while the money remains in the hands of the stakeholder, each party ought to be allowed to withdraw his own deposit. The court will then be dealing equitably with the case. It will be answering the policy of the law, and putting a stop to the contract before it is perfected. By denying the plaintiff his right of recovery, we should condemn what is now the acknowledged English law, and we should infringe the spirit of many decisions, (and one of them in this court,) which have allowed premiums to be recovered back, when actually paid over, where there is no intrinsic criminality In the contract. We should also find that the practice of betting at elections would be continued, with all the heat and corruption which it engenders; for if the plaintiff cannot, by law, recall his deposit from the stakeholder, it will most certainly pass into the hands of the winner. The courts have gone quite far enough, when they refuse to help either party, as against the oilier, in respect to these illegal contracts. This was a step beyond the policy of the lawgiver. The act of 1801, against gaming, (sess. 24. c. 46. 1 N. R. L. 152.) allowed the loser to recover back of the winner his lost money, and the subsequent act of 1802, against horseracing, (sess. 25. c. 44.1 N. R. L. 222.) contained the same provision. Nor are our statute laws peculiar on this subject. The statute of Anne, from which the act of 1802 was borrowed, contains the same regulation; and so did one of the edicts in the code of the civil law. (Code, 3. 43.1. and 2.) The French ordinance of Lewis XIII. went still further, and gave to the loser an action to recover back his money, even against the owner of the house in which he was permitted to gamble. We may be assured that the present action (and which indeed falls far short of these statute provisions) is perfectly consistent with the policy and the wisdom of the soundest institutions among mankind. And if gambling on elections does really lead to corruption, passion, and violence, we ought anxiously to adopt every just principle calculated to put an end to the mischievous [32] practice. No rule which falls within the cognizance of the courts appears to me to be more fit and effectual than that which suffers the deposit money to be arrested while it is in transitu. We have hitherto proceeded upon the assumption of the fact that the event had happened, within the contemplation of the contract, when notice was given to the defendant not to pay over the money. But this was conceding more than the case required. The money was not to be paid over until the votes for governor were “ canvassed.” The statute renders the decision of the canvassers final and conclusive; and it by no means necessarily followed, that the majority of votes returned into the secretary’s office would determine the event; for some of the votes might have been illegally returned. Frequent instances have occurred in which the candidate for an elective office, with a minority of the votes returned, has been declared duly elected. In this case, the parties referred to the decision of the canvassers, as the true and only certain test of the determination of the bet, and that test had not been given when the money was demanded of the defendant. The risk had not, at that time, been run and determined within the purview of the contract. This objection is, however, founded on a strict construction of the contract; and though it would be sufficient to avoid the application of much of what was urged on the part of the defendant; yet we choose rather to place the decision of this case upon those great and solid principles of public policy which forbids this species of gambling, as tending to debase the character, and impair the value of the right of suffrage. The court are, accordingly, of opinion, that the plaintiff is entitled to judgment. Judgment for the plaintiff. N. B. There were four other suits, by the other persons who had delivered different sums, at the same time, to Alexander, for the purpose of betting on the election of governor, and which, depending on the same facts and principles as the above case, were decided by the court on the same ground, and judgments were entered for the plaintiffs accordingly.