Miller v. Larson

By the Court, DixoN, C. J. There can be no doubt as to the champertous nature of the agreement. The difficulty is to determine how it affects the plaintiff’s action. It is set up as a defense, not as a counter-claim. If it had been stated as a counter-claim and affirmative relief demanded, or if the defendant had brought suit for a specific performance or to get back the money which he has expended under the contract, in neither case could he have recovered. The reason why the defendant could not have recovered is obvious. The law will not aid in enforcing an unlawful contract, nor give damages for a breach of it. Neither will it assist a party in recovering 'back money which he has expended in the unlawful execution of such contract. The question is whether the plaintiff is not in the same position with regard to the possession of the land. We think that he is, and that there can be no recovery in this action. The plaintiff’s title and the defendant’s possession of the land came through the same champertous contract. The plaintiff obtained the title by means of the partial, if not the full performance of the contract by the defendant ; and the defendant was put into the possession in part execution of the same contract by the plaintiff. It is difficult to perceive how, under such circumstances, the condition of •the plaintiff can be better than that of the defendant; or how the plaintiff, in disaffirmance of the contract, can sue for and recover the possession of the land, and yet that the defendant cannot, in disaffirmance also, sue for and recover back the money he has expended, nor the value of the permanent improvements made by him upon the land. That both propositions should be true seems quite inconsistent with correct ideas of law and justice. The truth of the latter seems to prove the falsity of the former. The right and obligations 'of the parties to such a contract, whatever they may be, ought to be [467] the same. If one is not bound the other ought not to be; and if one cannot rescind and recover back, the other should not. The maxim in 'pari delicto potior est conditio possidentis should be applicable alike to each ; and we think that it is. The law, which is just in its vindication of the rights of the innocent, is also just in its resentment of the conduct of the guilty. It does not afford a remedy to one of two equally guilty parties, and deny it to the other under precisely the same circumstances. The plaintiff’s counsel admit the champerty, but insist that it is no defense because the plaintiff sues in disaffirmance of-the contract. Rut it is too late for the plaintiff to disaffirm. The contract has already been executed, if not wholly, at least partially, by both parties. It is only where the contract is exe-cutory that a rescission and a recovery are allowed. If it has been partially executed, and money or labor expended on one side and land or property delivered on the other, in part performance of it, as to such part performance the condition of the parties is the same as if it had been fully performed. The law will not aid either party to undo what was so unlawfully done; but as a punishment to the plaintiff for his unlawful participation, it refuses him all remedy. It is only when the contract is wholly unexecuted, and by way of anticipating and preventing the wrong, that the party can rescind. Money deposited in consideration of some unlawful act to be done, may be recovered back. In such case nothing having been done under the contract by the party against whom the action is brought, and the party suing not having participated in the performance of any unlawful act, nor derived any benefit or advantage from the contract, the action may be maintained. The contract is then regarded as purely executory. But where the contract has been executed in whole or in part, it is obvious that the object of the law in allowing the action cannot be attained. Here the contract has been executed as to one forty acres of the land at all events. The plaintiff per [468] mitted the defendant to litigate in his name — assisted him in doing so — and having acquired the title at the expense of the defendant, now proposes to rescind. He comes into court, himself fresh from the work of transgression. Having gained all that he can from the performance of that contract, he proposes to gain still more by avoiding it. He proposes to vindicate the majesty and justice of the law by depriving the defendant of what he has gained — by turning him out of the ■possession. We are very confident that he cannot do so, and that the judgment below is right. The law is correctly stated in Parsons on Contracts, 253 : “ As all contracts which provide that anything shall be done which is distinctly prohibited by law, or morality, or public policy, are void, so he who advances money in consideration of a promise or undertaking to do such a thing, may, at any time before it is done, rescind the contract, and prevent the thing from being done, and recover back his money. But it would seem obvious that if he delays rescinding until his rescission is inoperative, and the thing will still be done, although the contract, at the time of the rescission, was in form executory, it should come under the same rule as any executed contract for unlawful purposes ; and here the law, in general, refuses to interfere, but leaves both parties as they were; unless the case sjhows that there is a substantial difference between them; the one doing and the other suffering the wrong. And in this case the sufferer may have a remedy, but not the wrong doer.” Judgment affirmed.