154. Any agreement which is contrary to the policy of the law, or public policy, because of its mischievous nature or tendency, is illegal and void, though the acts contemplated may not be expressly prohibited either by the common law or by statute.
155. The test of public policy must be applied in each case as it arises, and therefore agreements which have been or may be declared contrary to public policy cannot be exactly classified. The most general are:
(b) Agreements involving or tending to the corruption of private citizens with reference to public matters.
(c) Agreements tending to pervert or obstruct public justice.
(d) Agreements tending to encourage litigation.
(e) Agreements of immoral tendency.
(i) Agreements in derogation of the parental relation.
(k) Agreements exempting a person or corporation from liability for negligence.
There are many things which the law does not prohibit in the sense of attaching penalties, but which are so mischievous in their nature and tendency that, on grounds of public policy, they cannot be admitted as the subject of a valid contract.
It is clearly to the interest of the public, however, that persons should not be unnecessarily restricted in their freedom to make their own contracts. As expressed in a celebrated passage in an English decision:28 "It must not be forgotten that you are not to extend arbitrarily those rules which say that a given contract is void as being against public policy, because, if there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into fairly and voluntarily, shall be held sacred, and shall be enforced by courts of justice. Therefore you have this paramount public policy to consider: That you are not lightly to interfere with this freedom of contract." The interests of the public, however, do require that there shall be some restrictions on the freedom of persons to enter into contracts. "The common law will not permit individuals to oblige themselves by a contract either to do or not to do anything when the thing to be done or omitted is in any degree clearly injurious to the public." 29
403, 112 S. W. 1068, 21 L. R. A. (N. S.) 876, 130 Am. St. Rep. 897, 16 Ann. Cas. 844. See "Lotteries" Dec. Dig. (Key-No.) § 8; Cent. Dig. § S.
27 Yellowstone Kit v. State, 88 Ala. 196, 7 South. 338, 7 L. R. A. 599, 16 Am. St. Rep. 38; Cross v. People, 18 Colo. 321, 32 Pae. 821, 36 Am. St Rep. 292; .State v. Nebraska Home Co., 66 Neb. 349, 92 N. W. 763, 60 L. R. A. 448, 103 Am. St Rep. 706, 1 Ann. Cas. 88. See "Lotteries," Dec Dig. (Key-No.) § 3; Cent. Dig. § S.
The phrase public policy "has no fixed legal significance. It varies, and must vary, with the changing conditions and laws of civilizations and peoples." 30 The term is not to be understood in the sense of "political expedience," as meaning what, in the opinion of the courts, is for the advantage of the community.31 Some courts have been even more conservative in their statement of the rule, and have declared that "the public policy of a state or nation must be determined by its constitution, laws, and judicial decisions; not by the varying opinions of laymen, lawyers, or judges as to the demands of the interests of the public." 32 A tendency to prejudice the public interest must clearly appear before a court is warranted in pronouncing a contract void on that account.33 The mere fact that a contract is improvident or foolish as to one of the parties does not render it void as against public policy,34 but a contract is void if its effect would be to prevent a party from thereafter acquiring any property whatever.35
28 Printing & Numerical Registering Co. v. Sampson, L. R. 19 Eq. 462, per Jessel, M. R. And see JAMES QUIRK MILLING CO. v. MINNEAPOLIS & ST. L. R. CO., 98 Minn. 22, 107 N. W. 742, 116 Am. St Rep. 336, Throckmorton Cas. Contracts, 286; Atlantic Coast Line R. Co. v. Beazley, 54 Fla. 311, 45 South. 761 (collecting and discussing cases); Pittsburg, C. C. & St. L. Ry. v. Cox, 55 Ohio St 497, 45 N. E. 641, 35 L. R. A. 507; Hartford Ins. Co. v. Chicago, M. & St P. Ry. Co., 175 U. S. 91, 20 Sup. Ct 33, 44 L. Ed. 84: McCowen v. Pew, 153 Cal. 735, 96 Pac. 893, 21 L. R. A. (N. S.) 800, 15 Ann. Cas. 630; Zeigler v. Illinois Trust & Savings Bank, 245 I11. 180, 91 N. E. 1041, 28 L. R. A. (N. S.) 1112, 19 Ann. Cas. 127. See "Contracts," Dec. Dig. (Key-No.) § 108; Cent. Dig. §§ 498-511.
29 West Virginia Transp. Co. v. Pipe-Line Co., 22 W. Va. 600, 46 Am. Rep. 627. And see Mumford v. Chicago, R. I. & P. Ry. Co., 128 Iowa, 6S5, 104 N. W. 1135. See "Contracts," Dec. Dig. (Key-No.) § 108; Cent. Dig. §§ 498-611.
30 Chicago, B. & Q. R. Co. v. Bell. 44 Neb. 44, 62 N. W. 314; Picket Pub. Co. v. Carbon County Com'rs, 36 Mont. 188, 92 Pac. 524, 13 L. R. A. (N. S.) 1115, 122 Am. St Rep. 352, 12 Ann. Cas. 986. See "Contracts," Dec. Dig. (Key-No.) § 108; Cent. Dig. §§ .498-511.
31 Egerton v. Earl Brownlow, 4 H. L. Cas. 1, 123, per Parke, B. See "Contracts," Dec. Dig. (Key-No.) § 108; Cent. Dig. §§ 498-411.
The validity of a contract must be determined, not by the good faith of the parties, or by what has been done under it, but by its general tendency at the time it is made.30 "If this general tendency is opposed to the interests of the public, such contracts are invalid, however good the intent of the parties to them, and even though no harm to any one resulted, or would result, in the particular case."37