Leach v. Tilton

Doe, J. It was decided in Ladd v. Wiggin, 35 N. H. 421, that the note for $350 was a subsisting and valid contract, notwithstanding it was given up to Tilton. The [475] absolute deed having been avoided by creditors, Tilton and Ladd were restored to their original positions as to the note. The deed being held inoperative, the giving up of the note was necessarily held ineffectual. The whole transaction of November 1, 1853, was such a nullity that it could not be set up by either party to defeat any of their previously existing rights of action. An action could be maintained upon the $350 note, not on account of the transaction of November 1, 1853, but notwithstanding that transaction. The note was valid before that time, and nothing then done had any effect upon it. The other notes stand upon the same ground, and the plaintiff may recover upon them for the same reasons. But the claim of the plaintiff’ to recover the $420, which was paid in money by Ladd to. Tilton when the notes were given up, and which, with the notes, was the consideration of the deed, stands upon different ground. Before November 1, 1853, there was no existing cause of action for that sum, and there were no mutual rights or obligations between the parties in relation to it. If it can be recovered, it must be solely upon the contract of November 1, 1853, under which it was paid, or upon a rescission or defeat of that contract, or a failure of consideration. The plaintiff’s claim can derive no aid from any contract made, act done, or state of things existing before November 1, 1853, but it rests wholly upon the payment of the money and the delivery of the deed at that time, and the subsequent avoidance of .the deed by Tilton’s creditors. ' Money paid upon any legal consideration which has wholly failed, may be recovered back; and illegality in the contract will not prevent the recovery of money paid under it, unless the plaintiff is in pari delicto with the defendant. But when the parties are in pari delicto, the' contract is wholly void; the law does not lend its aid to carry their agreements into effect; neither party can maintain an action which requires the contract for its support, [476] and, if the contract has been executed, the law will not relieve either party, but leaves both in the situation in which it finds them, to suffer or to enjoy the consequences of their unlawful acts. When the contract necessarily involves a violation of the criminal law, the parties are in pari delicto. Where a sale of property, without any special intent on the part of the vendor or vendee, is a crime, the vendor cannot recover the price, if unpaid, and the vendee cannot recover it back, if paid. If Tilton gave the deed to Ladd fraudulently, to prevent the attachment or seizure of his property upon mesne process or execution, he committed an indictable offence; and if Ladd received the deed fraudulently, for the same purpose, he was guilty of a similar offence, and could not recover the money paid. Eev. Stat., ch. 215, secs. 19, 20 and 21. If a purchaser cannot recover back the price paid when the sale only is indictable, he certainly cannot recover it back when the sale and the purchase are both indictable; and if the receiving the deed by Ladd was without the intent necessary to make it a crime, still, if he knew that Tilton gave the deed fraudulently, to prevent the attachment or seizure of the land upon mesne process or execution, Ladd, being conclusively presumed to know the law, stood in the position of a vendee where the sale is indictable without any particular intent on the part of the vendor. If he was aware of Tilton’s fraudulent intent, he is presumed to have known that Tilton’s act, in giving the deed, was criminal, and he could not recover money paid for doing that act; but if Ladd had no fraudulent intent, and did not know or believe that Tilton had such intent, he would not be prevented from recovering the money paid, by the rule of law applicable to criminal offences. If money is hired and lent for the purpose of being used in suppressing a criminal prosecution, it. cannot be recovered, and public policy requires many contracts to be [477] held void which do not constitute a criminal offence; but if Ladd, in receiving the deed, was hot knowingly aiding. Tilton to defraud his creditors — if he received the deed, and paid the money entirely in good faith, without any' fraudulent intent, and without any knowledge or belief that Tilton had such intent, by no rule of law was he in pari delicto with Tilton, and he might recover the money paid. For making a contract which was not unlawful of itself; which he did not know or believe, and was not presumed to know or believe to be unlawful; which was valid between the parties and void only as to creditors, Ladd could not be punished, either directly, in a criminal proceeding, or indirectly, by a denial of legal remedy in a civil suit, but he would be as much entitled to relief as if, after he had paid the money, Tilton had refused tó give a deed, or been unable to give a good title. The plaintiff may recover upon the notes, even if Ladd took the deed with intent to defraud the creditors of Tilton, but his right to recover the $420, paid in money, depends upon the question whether it was paid in entire-good faith, which is a question for the jury. Case discharged.