Sec 351

All subsequent securities, given for a prior illegal indebtedness, are, as between the parties, infected with the illegality of the original transaction.2 This is the case with bonds,3 and with judgments as between the parties.4 Negotiable paper, however, so far as concerns bona fide holders without notice, is relieved from the taint of illegality, which operates between the immediate parties.5

Sec 352

Supposing that a contract is executed, it cannot be overhauled by either of the parties on proof of illegality of consideration; nor can a transfer of property when once made be invalidated on the ground of illegality of the consideration.6 It is otherwise, however, when a party defrauded seeks restoration and restitution on ground of fraud.7 - Between an unexecuted and an executed illegal agreement there is this wide difference, that property passed under the former is held as by a mere stakeholder, without consideration received, while property passed under the latter is transferred absolutely, on a consideration which, however illegal, was deemed by the parties adequate. And the rule is that when property so passes it cannot be recovered back.8 This has been held to be the case with regard to money paid to trustees for a woman on account of past illicit cohabitation;1 to contracts with a public enemy;2 to premiums on illegal insurance after the risk is determined;3 and to money-paid on an illegal insurance on account of loss.4 - Whether a title can vest under an illegal contract has been disputed. It has been held by the Supreme Court of the United States that a party who obtains possession of goods by a contract with a public enemy, which is void by the lex fori, cannot, if such goods are taken from him without right by a third party, recover them from such third party.5 But the better view is that, when a party acquires property through an illegal contract, he can recover such property from a third person who has taken it from him without right.6 It is true that, as against the rightful owner, a party without title cannot pass title.7 But title resting on possession may be asserted against a third party who is a mere wrongdoer.8 It has also been held that partners to a contraband contract may obtain the assistance of the courts in adjusting their accounts in which such a contract forms an item.9

Subsequent securities infected with illegality.

Executed contract cannot be overhauled on account of illegality; nor can either party recover back.

1 Carrigan v. Ins. Co., 53 Vt. 418.

2 Chapman v. Black, 2 B. & Ald. 588; Wynne v. Callander, 1 Russ. 293; Graeme v. Wroughton, 11 Ex. 146; Geere v. Mare, 2 H. & C. 339; Dewitt v. Brisbane, 16 N. Y. 508.

3 Fisher v. Bridges, 3 E. & B. 642 (reversing B.C., 2 E. & B. 118); Geere v. Mare, 2 H. & C. 339; Amory v. Mery-weather, 2 B. & C. 573.

4 Hutchinson v. Ledlie, 36 Penn. St. 112.

5 Supra, sec 347.

6 Infra, sec 377, 384; Pollock, 269,.

320; Story, Eq. Jur. sec 296; Ayerst v. Jenkins, L. R. 16 Eq. 275; Howson v. Hancock, 8 T. R. 575; Waun v. Kelly, 2 McCrary, 628; Phelps v. Decker, 10 Mass. 267; Worcester v. Eaton, 11 Mass. 368; Fox v. Cash, 11 Penn. St. 207; Gisaf v. Neval, 81 Penn. St. 354; Pfeuffer v. Maltby, 54 Tex. 454.

7 Supra, sec 282, 340; infra, sec 353.

8 Infra, sec 733; Howson v. Hancock, 8 T. R. 575; Vandyke v. Hewett, 1 East, 97; Taylor v. Chester, L. R. 4 Q. B. 314; Scarfe v. Morgan, 4 M. & W. 281.