Riley v. Jordan

Lord, J. When a contract between parties is tainted with illegality, the law will not lend its aid to either party for the enforcement of such contract. Nor is it necessary that the illegality shall be apparent upon the face of the contract. Ordinarily, when parties enter into such a contract, it is done in such manner as, in form, to conceal the illegality. In the present case, although the lease from Hayes to Thompson & Riley was legal in form, and contained no stipulation that the estate was to be used for an unlawful purpose, yet if, by the agreement ■md understanding of the parties, the use was to be an unlawful use, no action could have been maintained upon it. It appears that, subsequently to the lease by Hayes, Riley, one of the lessees under Hayes, assigned his interest in the lease to Thompson, the other lessee, and, as a part of the settlement between the partners, the guaranty declared on was executed and delivered. One of the terms of the settlement was the assignment of Riley’s interest in the lease to Thompson, and the consideration of the 234 guaranty is recited to be such assignment. The defendants do not offer in terms to prove that, at the time of the assignment by Riley to Thompson, it was agreed between the parties that the estate should be used for an illegal purpose. We think, however, the evidence offered was competent, and that the jury would be warranted in the inference that the use of the estate was to be the same as it had previously been. The evidence offered was that the original lease was made upon the agreement that the estate was to be put to an unlawful use; that, in pursuance thereof, the estate was thus unlawfully used during the whole time that Thompson & Riley occupied it; that it was thus used at the time of the assignment, and, in the absence of all other testimony, we think that offered by the defendants was competent, as tending to prove that the parties to the settlement understood that the use was to continue' the same that it had been. It does not appear, from the whole case, that the sole consideration, for the promise of Thompson to pay monthly to the plaintiff in advance the sum of $116.67 during a time exactly corresponding with the time the lease had to run, was the assignment of his interest in the lease by Riley to him, but it does appear that such assignment entered into the consideration. It is, however, a significant fact that the assignment of that lease is the only consideration named in the defendants’ guaranty, as it is also significant that the monthly payment of $116.67 is to be made at the same times that the rent is to be paid, and up to June 1, 1878, the time at which the lease terminated. The question is not whether the lease was or would in any event become a nullity. It was rather this: Was the arrange-' ment between Thompson and Riley one by which Thompson was to derive gain from an illegal business, out of which, or in consequence of which, he was to pay Riley a certain sum of money. If such was the arrangement, it was tainted with illegality, and the contract could not be enforced against him, and, of course, if not against him, it could not be enforced against one who has merely guaranteed that Thompson shall perform his contract. Our decision is, not that the evidence tendered proved a defence, but that the court cannot, as matter of law, say that the jury would not be authorized, upon such evidence and such inferences as they may legally draw from it, to find the 235 transaction between Thompson and Riley tainted with illegality. As the case was presented, the plaintiff was not called upon to reply to the evidence offered, and it may be that he is able to show such a state of facts as will preclude the inference that there was any illegality in the transaction between him and Thompson. We are therefore of opinion that the verdict must be set aside and a New trial ordered.