Under the influence of the oft quoted maxim In pari delicto potior est conditio defendentis, the courts have established what may be said to be a general rule, though not free from exceptions, that a benefit conferred by one who is a party to an illegal contract may not be recovered.2

1 An instance of the denial of relief on the ground that the mistake as to the legality of the contract was a mistake of law is found in Valley R. Co. v. Lake Erie Iron Co., 1888, 46 Ohio St. 44; 18 N. E. 486; 1 L. R. A. 412, {ultra vires subscription to stock). And see Harse v. Pearl Life Assurance Co. [1904], 1 K. B. 558, (insurance contract illegal for want of insurable interest); In re Mutual, etc., Ins. Co., 1899, 107 la. 143; 77 N. W. 868, (ultra vires insurance contract).

2 Browning v. Morris, 1778, Cowp. 790, (insurance on lottery tickets); Van Dyke v. Hewitt, 1800, 1 East 96, (premium paid for insurance to protect trade with enemy); Morck v. Abel, 1802, 3 Bos. & Pul. 35, (premium on goods loaded in violation of navigation laws); Taylor v. Chester, 1869, L. R. 4 Q. B. 309, (banknote deposited as security for debt arising on contract to furnish wine and supper for debauch in a brothel); Thomas v. City of Richmond, 1870, 12 Wall. (U. S.) 349, (money paid for illegal currency of State in rebellion); Dent v. Ferguson, 1889, 132 U. S. 50; 10 S. Ct. 13, (property transferred in fraud of creditors); Levy v. Kansas City, 1909, 168 Fed. 524; 93 C. C. A. 523; 22 L. R. A. (N. S.) 862, (money paid for a pool license); Edwards v. Randle, 1896, 63 Ark. 318; 38 S. W. 343; 36 L. R. A. 174; 58 Am. St. Rep. 108, (money paid in purchase of fixtures of post office, seller agreeing to resign and use his influence to secure appointment of buyer); Abbe v. Marr, 1859, 14 Cal. 210, (money paid in bet on fake horse race); Branham v. Stallings, 1895, 21 Colo. 211; 40 Pac. 396; 52 Am. St. Rep. 213, (money paid in lottery); Thompson Brothers v. Cummings, 1881, 68 Ga. 124, (margins in purchase of futures); Shaffner v. Pintchback, 1890, 133 III. 410; 24 N. E. 867; 23 Am. St. Rep. 624, (money paid to be used in wagering); Boddie v. Brewer Brewing Co., 1903, 204 111. 352; 68 N. E. 394, (money paid for rent of house for gambling purposes); White v. Wilson's Admrs.,

The reasons commonly given for this rule of policy may be stated as follows:

1. That it operates to inflict a deserved punishment upon the plaintiff for participating in an unlawful transaction.1

2. That it warns persons who contemplate illegal transactions that they enter upon them at their own risk and must bear any and all consequences that may result.2

3. That it saves the courts from the indignity of devoting their time and attention to the settlement of disputes between lawbreakers.3

4. That by closing the courts to lawbreakers, the suits of honest litigants are expedited.4

1897, 100 Ky. 367; 38 S. W. 495; 37 L. R. A. 197, (loan of money by participant in game to pay losses at cards); Smith v. Richmond, 1902, 114 Ky. 303; 70 S. W. 846, (money paid to be used for bribery); Chapman v. Haley, 1904, 117 Ky. 1004; 80 S. W. 190, (money paid for counterfeit money); Harvey v. Merril, 1889, 150 Mass. 1; 22 N. E. 49; 5 L. R. A. 200; 15 Am. St. Rep. 159, (money advanced by broker in contract for futures); Walhier v. Weber, 1905, 142 Mich. 322; 105 N. W. 772, (money paid for police immunity); Daimouth v. Bennett, 1853, 15 Barb. (N. Y. Sup. Ct.) 541, (money paid to compound a supposed felony); Edwards v. City of Goldsboro, 1906, 141 N. C. 60; 53 S. E. 652; 4 L. R. A. (N. S.) 589, (money paid to secure location of public building); Hooker v. DePalos, 1876, 28 Ohio St. 251, (money paid in lottery); Grant v. Ryan, 1872-73, 37 Tex. 37, (cattle sold under contract to pay for them in Confederate money); Miller v. Larson, 1865, 19 Wis. 463, (money paid on champertous contract).

1 Bartle v. Nutt, 1830,4 Pet. (U. S.) 184, 189, Mr. Justice Baldwin : "The law leaves the parties to such a contract [to defraud the government] as it found them. If either has sustained a loss by the bad faith of a particeps criminis, it is but a just infliction for premeditated and deeply practiced fraud." See also McCullen v. Hoffman, 1899, 174 U. S. 639, 669; 19 S. Ct. 839.

2 See Russell v. Courier Printing, etc., Co., 1908, 43 Colo. 321, 325; 95 Pac. 936, (influencing act of administrative officer).

3 Tappenden v. Randall, 1801, 2 Bos. & Pul., 467, 471, Heath, J.: "Undoubtedly there may be cases where the contract may be of a nature too grossly immoral for the court to enter into any discussion of it; as where one man has paid money by way of hire to another to murder a third person." Smith v. Richmond, 1902, 114 Ky. 303, 309; 70 S. W. 846, Guffy, C.J.: "This does not seem to be the purpose for which the courts of this state are erected or are existing."

See also Bartle v. Nutt, 1830, 4 Pet. (U. S.) 184, 189.

4 See Cooley, "Torts" (3d ed.), p. 261.

The rule has been severely criticized,1 and the reasons stated above are not thoroughly convincing. As to the first, it is certainly both unscientific and unreasonable to punish a wrongdoer by permitting another wrongdoer to profit at his expense. As to the second, the effectiveness of the deterrent may be doubted, for the parties to contracts, whether lawful or unlawful, usually contemplate performance, and at the outset rarely weigh the consequences of a breach. The third and fourth are difficult of evaluation, but seem hardly adequate to support the rule. However, in view of the fact that the parties to unlawful contracts usually realize that they are unenforceable and therefore cannot be said to misrely upon them {ante, Sec. 133), and in view of the limitations upon the rule, considered in the following sections, it is probable that there are comparatively few cases in which the rule works serious hardship.