A statutory or common law prohibition under which a contract is held illegal may be said to be aimed at the act of the defendant rather than that of the plaintiff, either when it is primarily intended to restrain persons in the position of the defendant or of a class represented by the defendant, or when it is primarily intended to protect persons in the position of the plaintiff or of a class represented by the plaintiff. As illustrations of the former sort may be mentioned prohibitions against the sale of liquor1 and prohibitions against the acceptance by banks of deposits to be repaid on a day certain.2 If such prohibitions are violated, the liquor seller or the bank, as the case may be, is the real offender, not the purchaser of the liquor or the depositor, and money paid by such purchaser or depositor may be recovered. In the Kansas case of Stans-field v. Kunz,3 in which a recovery of money paid under a contract to purchase a stock of liquor from a druggist, who was prohibited to sell liquor except for medical, mechanical, and scientific purposes or to one holding a druggist's permit, was allowed, the court said:
"The inhibition of the law is not upon the purchaser, but upon the seller; and if this agreement to sell had been consummated, plaintiff in error [seller] would have been guilty of a misdemeanor.
1 Stansfield v. Kunz, 1901, 62 Kan. 797; 64 Pac. 614. See also Walan v. Kerby, 1868, 99 Mass. 1.
2 White v. Franklin Bank, 1839, 22 Pick. (Mass.) 181. 31901, 62 Kan. 797, 800; 64 Pac. 614.
If it had been fully consummated, the court would not have relieved either party. Its illegality consists in the plaintiff in error contracting to sell a person to whom the law forbade him, and not in the purchaser contracting to purchase, because the law does not forbid him from so doing. The parties are therefore not in equal fault. The duty imposed by the law was imposed upon the plaintiff in error and not upon the defendant in error."
Illustrations of prohibitions primarily intended to protect persons in the position of the plaintiff or of a class represented by the plaintiff, are usury laws (post, Sec. 223) and laws forbidding contracts by which a person is charged more than the statutory price for prosecuting a pension claim.1 Of the same class is a statute making it unlawful to sell a patent right without filing copies of the letters patent together with an affidavit that the letters patent are genuine, have not been revoked or annulled, and that the vendor has full authority to sell. In an action by the buyer of a patent right to rescind his contract as illegal under the last mentioned statute, and to recover the value of property delivered and money paid in part performance of such contract, the Supreme Court of Kansas declared that the parties were not in pari delicto because, "the duties prescribed by the statute are imposed upon the vendor of patent rights, and are provided for the protection of purchasers.2
1 Smart v. White, 1882, 73 Me. 332; 40 Am. Rep. 356; Ladd v.. Barton, 1886, 64 N. H. 613; 6 Atl. 483.
2 Mason v. McLeod, 1896, 57 Kan. 105, 110; 45 Pac. 76; 41 L. R. A. 548; 57 Am. St. Rep. 327.
In Smith v. Bromley, 1760, 2 Doug. 696, 697, action was brought to recover money paid under an illegal contract by which the defendant signed a certificate consenting to the discharge in bankruptcy of a relative of the plaintiff. Lord Mansfield, in allowing a recovery, said : "If the act is in itself immoral, or in violation of the general laws of public policy, there the party paying shall not have his action; for where both parties are equally criminal against such general laws, the rule is potior est conditio defendentis. But there are other laws, which are calculated for the protection of the subject against oppression, extortion, deceit, etc. If such laws are violated, and the defendant takes advantage of the plaintiff's condition or situation, there the plaintiff shall recover." Cf. Kearley v. Thomson, 1890, 24 Q. B. D. 742.
In many cases the intention of the legislature to discriminate between the parties to the prohibited transaction is evinced by the imposition of a penalty on one party only, or by the express limitation of the prohibition to the act of one party only:
Browning v. Morris, 1778, Cowp. 790: Action to recover premiums paid for illegal insurance of lottery tickets. Lord Mansfield (p. 793): "And it is very material that the statute itself, by the distinction it makes, has marked the criminal: For the penalties are all on one side; upon the office-keeper." l