This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Whether the subject-matter of a contract is such as to make it valid, or void, or illegal, is a question often presented to the courts for decision. The general rule is that questions of illegality are to be determined by the law of the place of performance, as far as such contracts require performance of acts alleged to be illegal.1 This principle has been applied to contracts which in their nature are gambling,2 contracts to pay to brokers commissions on sales alleged to be gambling,3 and to a contract made in one state to deliver a gambling device in another.4 A certificate of deposit was indorsed to secure a gambling debt where such indorsement was valid. Suit was brought where such indorsement was illegal. It was held that the law of the place where such contract was made would control.5 A contract of agency with reference to realty to be performed where the realty is situated is invalid everywhere if unenforceable by that law.6 Since the place where the contract is made is prima facie the place of performance, a note given in Louisiana for Confederate money, held there to be an illegal contract, is unenforceable in Mississippi.7 The question whether a warehouseman can issue his own warehouse certificates to himself and pledge them for his own debt is controlled by the law of the place where the property thus pledged is situated.8 Under peculiar circumstances the law of the domicile, if also the law of the forum, controls. Thus a man and woman were domiciled in California. She had been divorced within the year, and under California law her marriage was forbidden. They intermarried in another state, where such marriage was lawful. An ante-nuptial contract whereby in consideration of such marriage and of her releasing her interest in his property, he agreed to pay her ten thousand dollars, was held unenforceable in California.9 If, however, the act alleged to be illegal has been performed before the contract is entered into, and the liability arising therefrom forms the consideration for the executory agreement, the question of the legality of such transaction is controlled by the law of the place where the transaction takes place.10
878; 44 S. E. 643; affirming on rehearing 130 N. C. 100; 61 L. R. A. 878; 40 S. E. 948.
7 Miller v. Wilson, 146 111. 523; 37 Am. St. Jlep. 186; 34 N. E. 1111; Cochran v. Ward, 5 Ind. App. 89; 51 Am. St. Rep. 229; 29 N. E. 795; 31 N. E. 581; Siegel v. Robinson, 56 Pa. St. 19; 93 Am. Dee. 775; Gates v. Paul, 117 Wis. 170; 94 N. W. 55.
8 Gates v. Paul, 117 Wis. 170; 94 N. W. 55.
1 Price v. Burns,. 101 111. App. 418; Bigelow v. Burnham. 83 la. 120; 32 Am. St. Rep. 294; 49 X. W. 104; Gaylord v. Duryea. 95 Mo. App. 574; 69 S. W. 607; Morris v.
Hockaday, 94 N. C. 286; 55 Am. Rep. 607; Pittsburg, etc., Ry. v. Sheppard, 56 O. S. 68; 60 Am. St. Rep. 732; 46 N. E. 61; Burnett v. R. R., 176 Pa. St. 45; 34 Atl. 972; Hubble v. Land Co., 95 Tenn. 585; 32 S. W 965.
2 Peet v. Hatcher, 112 Ala. 514; 57 Am. St. Rep. 45; 21 So. 711; A. G. Edwards Brokerage Co. v. Stevenson, 160 Mo. 516; 61 S. W. 617; Winward v. Lincoln, 23 R. I. 476; 64 L. R. A. 160; 51 Atl. 106.
3 Gaylord v. Duryea, 95 Mo. App. 574; 69 S. W. 607.
4 Price v. Burns, 101 111. App. 418.