If the party asking to be relieved from the effect of an illegal agreement was induced to enter into the agreement by means of fraud, he is not always regarded as being in pari delicto with the other party, and the court may relieve him. As illustrating this rule is a case in which a party sued in equity to set aside a conveyance made in pursuance of an agreement which was illegal on the ground of champerty. It was urged that the parties were in pari delicto, but the court, being satisfied that the plaintiff had been induced to enter into the agreement by the fraud of the defendant, held that he was entitled to relief. "Where the parties," it was said, "to a contract against public policy, or illegal, are not in pari delicto (and they are not always so), and where public policy is considered as advanced by allowing either, or at least the more excusable of the two, to sue for relief against the transaction, relief is given to him." 47
So, where the party asking relief was induced to enter into the agreement under the influence of duress, strong pressure, or undue influence.48 "This is not a case of par delictum," it was said by an English judge in reference to a case of duress. "It is oppression on one side and submission on the other. It never can be predicated as par delictum, when one holds the rod and the other bows to it." 49 In a case, for instance, where a debtor sued to recover an additional sum, paid by him to one of his creditors, in fraud of the others, to induce the former to agree to a composition, he was allowed to recover, it being shown that the decision of several other creditors depended on the defendant's acceptance or rejection of the offer of a composition. "It is said that the parties are in pari delicto," said the court. "It is true that both are in delicto, because the act is a fraud upon the other creditors; but it is not par delictum, because the one has power to dictate, the other no alternative but to submit." 50 So, if one of the parties in the execution of the contract, acted in violation of law, but without the knowledge of the other, the contract may be enforced by the innocent party;51 as, for example, in the case of notes or other contracts executed by one party on Sunday, where the other party did not know they had been executed on that day.52
47 Reynell v. Sprye, 1 De Gex, M. & G. 660. See, also, Ford v. Harrington, 16 N. Y. 285; Roman v. Mali, 42 Md. 513; Green v. Corrigan, 87 Mo. 359; Davidson v. Carter. 55 Iowa, 117, 7 N. W. 466; Barnes v. Brown, 32 Mich. 146; Belding v. Smythe, 138 Mass. 530; Hobbs v. Boatright, 195 Mo. 693, 93 S. W. 934, 5 L, R. A. (N. S.) 906, and note, 113 Am. St. Rep. 709; Stewart v. Wright, 147 Fed. 321, 77 C. C. A. 499; Depue v. Swift 1904 Clothes Washer Co., 144 Mo. App. 656, 129 S. W. 230. So it has been held that money paid to a marriage broker may be recovered by the party who paid it, as obtained by constructive fraud; and that she will not be regarded as in pari delicto with him. Duval v. Wellman, 124 N. Y. 156, 26 N. E. 343; Wenniger v. Mitchell, 139 Mo. App. 420, 122 S. W. 1130. See "Contracts," Dec. Dig. (Key-No.) § 139; Cent. Dig. §§ 684-700.
48 Reynell v. Sprye, 1 De Gex, M. & G. 660; Baehr v. Wolf, 59 I11. 470; Richardson v. Crandall, 48 N. Y. 348; Tracy v. Talmage, 14 N. Y. 162, 67 Am. Dec. 132; Green v. Corrigan, 87 Mo. 359; Roman v. Mali, 42 Md. 513; Curtis v. Leavitt, 15 N. Y. 9; Mount v. Waite, 7 Johns. (N. Y.) 434; WHITE v. BANK, 22 Pick. (Mass.) 181, Throckmorton Cas. Contracts, 298; Bell v. Campbell, 123 Mo. 1, 25 S. W. 359, 45 Am. St. Rep. 505; Woodham v. Allen, 130 Cal. 194, 62 Pac. 398; Gorringe v. Reed, 23 Utah, 120, 63 Pac. 902, 90 Am. St Rep. 692; Colby v. Title Ins. & Trust Co., 160 Cal. 632, 117 Pac. 913, 35 L. R. A. (N. S.) 813, Ann. Cas. 1913A, 515. Though a mortgage given by a father to prevent the prosecution of his son for a crime is illegal, he may sue to set it aside. Having executed it under strong pressure, he is not in pari delicto with the mortgagee. Foley v. Greene, 14 R. I. 618, 51 Am. Rep. 419. See "Contracts," Dec. Dig. (Key-No.) § 139; Cent. Dig. §§ 684-700.
The parties are not to be regarded as being in pari delicto where the agreement is merely malum prohibitum, and the law which makes it illegal was intended for the protection of the party asking relief.58 As illustrating this rule are cases in which banks or other corporations are prohibited under penalties from issuing bills or other securities, but no penalty is imposed on persons who receive the illegal securities. In such cases it is held that the law creating the illegality is to protect the public against the prohibited securities, that the corporation issuing them is the only offender, and that persons who receive them may recover the money paid for them. They are not in pari delicto. "The corporation issuing the bills contrary to law and against penal sanctions is deemed more guilty than the members of the community who receive them, whenever the receiving of them is not expressly prohibited. The latter are regarded as the persons intended to be protected by the law; and, if they have not themselves violated an express law in receiving the bills, the principles of justice require that they should be able to recover the money received by the bank for them." 54
49 Smith v. Cuff, 6 Maule & S. 160, at page 165. See "Contracts," Dec. Dig. (Key-No.) § 139; Cent. Dig. §§ 681-700.
50 Atkinson v. Denby, 6 Hurl. & N. 778, 7 Hurl. & N. 934. And see Solinger v. Earle, 82 N. Y. 393; Crossley v. Moore, 40 N. J. Law, 27; Brown v. Everett-Ridley-Ragan Co., Ill Ga. 404, 36 S. E. 813. See "Contracts," Dec. Dig. (Key-No.) § 138; Cent. Dig. §§ 681-700.
51 Collins v. Collins, 139 Iowa, 703, 117 N. W. 1089, 18 L. R. A. (N. S.) 1176, 16 Ann. Cas. 630. See "Contracts," Dec. Dig. (Key-No.) § 139; Cent. Dig. §§ 681-700.
52 Collins v. Collins, 139 Iowa, 703, 117 N. W. 1089, 18 L. R. A. (N. S.) 1176, 16 Ann. Cas. 630. See "Sunday," Dec. Dig. (Key-No.) § 11; Cent. Dig. §§30-31.
53 In Bowditch v. Insurance Co., 141 Mass. 292, 4 N. E. 798, 55 Am. Rep. 474, it was held that a statute providing that "no member of a committee or officer of a domestic insurance company, who is charged with the duty of investing its funds, shall borrow the same," was intended to protect the company and policy holders from the dishonesty or self-interest of the officers, and did not render a loan to an officer illegal, so as to prevent the company from recovering on his promise to repay. And see WHITE v. BANK, 22 Pick. (Mass.) 181, Throckmorton Cas. Contracts, 298; President, etc., of Atlas Bank v. President, etc., 3 Metc. (Mass.) 581; Parkersburg v. Brown, 106 U. S. 487, 1 Sup. Ct. 442, 27 L. Ed. 238; Browning v. Morris, 2 Cowp. 790; Smith v. Bromley, 2 Doug. 696; Clarke v. Lumber Co., 59 Wis. 655, 18 N. W. 492; Mason v. McLeod, 57 Kan. 105, 45 Pac. 76, 41 L. R. A. 548, 57 Am. St Rep. 327. See "Contracts," Deo. Dig. (Key-No.) § 139; Cent. Dig. §§ 681-700.
If a broker or other agent is employed to carry out an illegal transaction, and is privy to the unlawful design, and by virtue of his employment performs services, makes disbursements, suffers losses, or incurs liabilities, he has no remedy against his principal.55 Not only is this true, but it has been held that any express promise made by the principal to reimburse him is void.56 This, of course, does not apply where a broker is employed to make contracts the illegality of which depends on the intention of his principal, and the broker is not aware of such intent; as, for instance, where a stock or grain broker is employed to sell stock or grain on the exchange for future delivery, and he is not aware of the fact that his principal intends, not an actual sale and delivery, but a mere gambling on the rise and fall of prices.57 But where money or property is delivered by a principal to an agent for the purpose of executing an illegal contract, such money or property may be recovered by the principal from the agent so long as it remains in the latter's hands.68
54 Thomas v. City of Richmond, 12 Wall. 349, 20 L. Ed. 453; Oneida Bank v. Bank, 21 N. Y. 490; Smith v. Bromley, 2 Doug. 696. And see Herring v. Cumberland Lumber Co., 159 N. C. 382, 74 S. E. 1011, 42 L. R. A. (N. S.) 64. Where a statute commands certain parties to do or prohibits them from doing certain acts, and prescribes penalties for their violation of its commands, the court may not inflict other penalties for its violation on other parties not named in the law by avoidance of their contracts. Hanover Nat. Bank v. Bank, 109 Fed. 421, 48 C. C. A. 482. See "Contracts," Dec. Dig. (Key-No.) § 139; Cent. Dig. §§ 684-700.
55Greenh. Pub. Pol. 110 (collecting the cases); Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. A. 200, 15 Am. St. Rep. 159; Foss v. Cummings. 149 I11. 353, 36 N. E. 553; Kirkpatrick v. Adams (C. C.) 20 Fed. 287; Gibbs v. Gas Co., 130 U. S. 396, 9 Sup. Ct. 553, 32 L. Ed. 979; Hooker v. Knab, 26 Wis. 511; Gregory v. Wendell, 39 Mich. 337, 33 Am. Rep. 390; Fareira v. Gabell, 89 Pa. 89; Cunningham v. Bank, 71 Ga. 400, 51 Am. Rep. 266; Stewart v. Schall, 65 Md. 308, 4 Atl. 399, 57 Am. Rep. 327; Whitesides v. Hunt, 97 Ind. 191, 49 Am. Rep. 441; Colderwood v. McCrea, 11 I11. 543; Connor v. Black, 119 Mo. 126, 24 S. W. 184; Samuels v. Oliver, 130 I11. 73, 22 N. E. 499; Jamieson v. Wallace, 167 I11. 388, 47 N. E. 762, 59 Am. St. Rep. 302; Rogers v. Marriott, 59 Neb. 759, 82 N. W. 21. See, also, Bibb v. Allen, 149 U. S. 481, 13 Sup. Ct. 950, 37 L. Ed. 819; Tiffany, Ag. .459. See "Contracts," Dec. Dig. (Key-No.) § 138; Cent. Dig. §§ 681-100.
56 Everingham v. Meighan, 55 Wis. 354, 13 N. W. 269; Embrey v. Jemi-son, 131 U. S. 336, 9 Sup. Ct 776, 33 L. Ed. 172; Kahn v. Walton, 46 Ohio St. 195, 20 N. E. 203; Smith v. David B. Crockett Co., 85 Conn. 282. 82 Atl. 569, 39 L. R. A. (N. S.) 1148 (contract with salesman contemplating the bribing of purchasing agents). See "Contracts," Dec. Dig. (Key-No.) § 138; Cent. Dig. §§ 681-700.