Basket v. Moss

The public has a right to some better test of the capacity of their servants than the fact that they possess the means of purchasing their offices. The Code, § 1871, provides, “All bargains, bonds and assurances made or given for the purchase or sale of any office whatsoever, the sale of which is contrary to law, shall be void.” Notwithstanding the office is an office under the United States government, if an action were brought in our Courts to recover upon a bond •or mortgage’given for such consideration, our Courts would hold it void. Such agreements are void at common law, as well as by statute. So also contracts to procure appointments to office are void (Mechem on Public Officers, § 351); or to resign office in another’s favor. Ibid., § 357; Meacham v. Dow, 32 Vt., 721; Gracone v. Wroughton, 11 Exch., 146. Public offices are public trusts, and should be conferred solely upon considerations of ability, integrity, fidelity and fitness for the position. Agreements for compensation to procure these tend directly and necessarily to lower the character of the appointments to' the great detriment of the public. Hence such agreements, of whatever nature, have always been held void as being against public policy. Maguire v. Comine, 101 U. S., 108; Tool Co. v. Norris, 2 Wall., 45; Gray v. Hook, 4 N. Y., 449; Gaston v. Drake, 33 Am. Rep., 548; Filson v. Himes, 47 Am. Dec., 422; Faurie v. Morin, 4 Mar*458tin (La.), 39; Liness v. Hessing, 92 Am. Dec., 153. Says Ames, C. J., in Eddy v. Capron, 67 Am. Dec., 541, “ By the theory of our government, appointments to office are presumed to be made solely upon the principle detur digniori, and any practice whereby the bare consideration of money is brought to bear in any form upon such appointments to or resignatien of office, conflicts with and degrades this great principle. The services performed under such appointments are paid for by salary or fees, presumed to be adjusted at the point of adequate remuneration only. Any premium paid to obtain office interferes with this adjustment and tempts to peculation, overcharges and frauds in the effort to restore the balance thus disturbed.” Besides, the moral sense revolts at traffic to any extent in the bestowal of public office. It is against good morals as well as against the soundest principles of public policy. If public offices can be sold or procured for money, the purchasers will be sure to reimburse themselves by dispensing the functions of their offices for pecuniary consideration. The law wisely guards against the first step in that direction. For that reason, not only the sum agreed to be paid directly to the holder .of this office to resign, but the amounts advanced for expenses and compensation of persons to go to Washington to procure the authorities there to accept the resignation of one party and the appointment of the other, are not recoverable. For the same reason that agreements to pay for lobbying the passage of bills before a legislative body are void (Lawton on Contracts, §309, and Mechem on Officers, §360, and cases cited), all agreements for expenses and compensation of persons seeking to influence or procure appointments to office are void. Lawton, supra, §310. “The Courts condemn the very appearance of evil, and it matters not that in a particular case nothing improper was done or expected to be done. It is enough that the employment tends directly to such results.” Clippinger v. Hepbaugh, 40 Am. Dec., 519: Wood v. McCann, *4596 Dana (Ky.), 366; Mills v. Mills, 100 Am. Dec., 535, and numerous other cases cited in notes to Mechem on Officers, §360; Lawton, supra, §311, and cases cited.

If an action had been brought to recover these sums, or to foreclose a mortgage given to secure payment thereof, the Court would dismiss the action. The defendant contends, however, that as he was careful to take a mortgage with a power of sale, the Courts will not interfere by injunction, but will let him proceed to collect his ill-gotten gains. This would simply legalize the practice which is denounced both by statute and common law. Reasons of public policy forbidding this species of corruption are too profound and too important to the public welfare to be evaded and nullified by so simple a device. A mortgage given to secure a sum of money upon an agreement against public policy is void. The Code, §1871; Teal v. Walker, 111 U. S., 252; Wildey v. Collier, 7 Md., 275; Crowder v. Reed, 80 Ind., 1. The sale under a void mortgage would be a cloud on the title, and an injunction lies, especially when the invalidity does not appear upon the face of the mortgage, but requires extrinsic evidence to prove it. 1 High on Injunc., section 469; Yager v. Murkle, 26 Minn., 429. In cases where the consideration is immoral, the deed will be set aside. 2 Addison Cont., 716.

Pomeroy Eq. Jur., sections 939, 940, 941, 942, calls attention to the fact that the rule in pari delicto is often misunderstood, and its application is properly and correctly that in such cases “potior est conditio possidentis” — that is, that the Court will permit nothing to be done which will enable a party to collect from the other the fruits of his wrong. When he sues to recover, the law will not give him judgment. When he has shrewdly attempted to evade this by taking a mortgage with a power of sale, the Court will by injunction prevent his collecting on a mortgage denounced as void by reasons of public policy. In section 941 he says: “ Whenever public policy is considered as advanced by allow*460ing either party to sue for relief against the transaction, then relief is given to him. In pursuance of this high principle, and in compliance with the demands of a high public policy, equity may aid a party equally guilty with his opponent, not only by cancelling and ordering the surrender of an execu-tory agreement, but even by setting aside an executed contract, conveyance or transfer, and decree the recovery back of money paid or property delivered in performance of the agreement.” Also, in section 940, he says that whenever the defensive remedy at law will not be equally certain, perfect and adequate, the equitable remedy will be granted by injunction and the like. “ The equitable relief so conferred does not violate the general maxim concerning parties in pari delicto; on the contrary, it carries that maxim into effect.” So in the present case the injunction against sale under the void mortgage taken against public policy, enforces that maxim by prosecuting either party recovering anything from the other. This is also the well settled rule in England In Lloyd v. Gordon, 2 Swan, 181, Lord Eldon granted an injunction to restrain the negotiation of bills of exchange which were made void by statute 9 Anne C, 14, which is in the very tenor of section 1871 of The Code, applicable to the present transaction. Lord Habdwicke granted the injunctive relief in a similar case. Smith v. Aykwell, 3 Atkins, 566, and the vice-Chancellor in Earl of Milltown v. Stewart, 8 Simons, 371, which was affirmed by Lord Cottenhan, 3 M. and C., 18.

In such case, before the Master of the Rolls, Sir John Romilly, where part of the consideration was for money loaned, and part was for an immoral consideration, the whole mortgage was ordered to be cancelled, the Court declining to pass upon the question whether the mortgagee could recover at law for the valid part of the consideration — i. e., the money loaned. Willyams v. Bullmore, 33 L. J. R. (Eq.), N. S., 461. In the present case, upon the defendant’s own showing, $37.50 is the only valid part of the sum attempted to be *461secured. Whether the mortgage can be upheld to that extent is not before us, as the plaintiff in his reply expresses his willingness to pay said sum. The plaintiff recovering judgment for the cancellation of the mortgage, the defendant should be taxed with the costs. The injunction was properly continued to the hearing. Affirmed.

(concurring): I concur in the conclusion of the Court that the agreement which the mortgage is given to secure is contrary to public policy, and therefore illegal, and I am also of the opinion that the injunction should be continued until the final hearing. It is alleged that the plaintiff Joseph Basket has a resulting trust in the land included in the mortgage, and as it does not appear that he had any connection with the illegal transaction between A. M. Basket, the mortgagor (the holder of the legal title),.and the mortgagee, I see no reason why the equitable aid o’f the Court should not be extended to him.

I cannot agree, however, in that part of the opinion which declares that A. M. Basket is entitled to equitable relief. “ Whenever a contract or other transaction is illegal, and the parties thereto are, in contemplation of law, in pari delicto, it is a well-settled rule, subject only to a few special exceptions depending upon other considerations of policy, that a Court of Equity will not aid a particeps criminis, either by enforcing the contract while it is yet executory, or by relieving him against it by setting it aside, or by enabling him to recover the title to property which he has parted with by its means. The principle is thus applied in the same manner when the illegality is merely malum prohibitum, being in contravention of some positive statute, and when it is malum in se, as being contrary to public policy or to good morals. Among the latter class are agreements and transfers, the consideration for which was violative of chastity, compounding of a felony, gambling, false swearing, the commission of any crime or breach of good morals.” 1 Pom. Eq., 402.

*462“ Where the party seeking relief is the sole guilty party, or where he has participated equally and deliberately in the fraud, or where the agreement which he seeks to set aside is founded in illegality, immorality, or is base and unconscionable on his part — in such cases Courts of Equity will leave him to the consequences of his own iniquity, and will decline to assist him to escape from the toils which he has studiously prepared to entangle others, or whereby he has sought to violate with impunity the best interests and morals of social life. * * * Courts of equity could not, without staining the administration of justice, interfere to save the party from the just results of his own misconduct, when the failure of success in the scheme would manifestly be the sole cause of his praying relief.” 2 Story Eq., 696; Adams’ Eq., 418.

These principles are so well established that it is hardly necessary to produce authority to their support, and that they have been recognized by this Court is plainly evident by a reference to the cases of York v. Merritt, 77 N. C., 213; Sparks v. Sparks, 94 N. C., 527, and authorities cited.

There are, it is true, limitations to the rule, as where parties are not equally in fault, or as in the case of usury, where the borrower is considered as in vinculo, or where the security is for past cohabitation; and there are cases where, under peculiar circumstances, considerations of public policy will be best subserved by granting relief. These and other instances will be found- in the text-books and notes to which I have referred, and there seems to be some confusion in the decided cases upon the subject. No satisfactory authority, however, can, in my opinion, be found to take the present case out of the general rule. If, as we have seen, the Court will not interfere where the consideration is the compounding of a felony for the commission of a crime, it is difficult to understand why it should extend its relief where the consideration is for the commission of the offence alleged in the complaint. Certainly, considerations of public policy are as grave in the *463former cases as in the latter. Again, it will hajdly be contended that the plaintiff A. M. Basket is not equally in fault. Indeed, it appears from the written agreement executed contemporaneously with the mortgage, that he was the moving party in the transaction. The proposition was made by him, and it is perfectly clear that his guilt is equal if not greater than that of the defendant. Again, if it be conceded that he is entitled to the relief on the ground that part of the contract, the note, is executory, the Court would only grant it upon terms, and as the mortgagee has, under the agreement, so credited the note that everything is eliminated except certain expenses and counsel fees, and a pre-existing debt (leaving only a balance of about $200), it would seem very clear that the Court, even if it interfered, would not place him in any better condition. The expenses and counsel fees were actually expended in furtherance of his own proposition, and it would seem a complete reversal of the maxim in pari delicto melior est conditio defendentis, to so use the equitable power of the Court as to extricate the plaintiff from the position in which he has placed himself, and put the entire expense of carrying out his own proposition upon the shoulders of the defendant. No clearer case can, in my opinion, be conceived for the application of the rule than the present.

Furthermore, it is a fundamental principle that a Court of Equity never interferes where there is a complete defence at law. High on Injunction, 473. In the present case it is said that the mortgage is utterly void. If this be so, there is no occasion for equitable relief, not even on the ground that it is necessary to discover and preserve the evidence of its illegality, as the contemporaneous agreement executed by all of the parties is plenary proof of the vitiating element. 2 Story Eq., 700.

This consideration, as well as the firmly established rule in pari delicto, etc., is also a complete bar to the prayer that *464the deed be cancelled on the ground that it is a cloud upon plaintiff’s title. 2 Story Eq., 700. Public policy will be far better subserved by leaving the plaintiff where his illegal conduct has placed him, than by encouraging him in another attempt to violate the law by the assurance that a Court of Equity will always stand ready to relieve him against the consequences of his unsuccessful experiments. “The suppression of illegal contracts is far more likely in general to be accomplished by leaving the parties without remedy against each other, and by thus introducing a preventive check naturally connected with a want of confidence, and a sole reliance upon personal honor. And so accordingly the modern practice is established.” 1 Story Eq., 298.

The case of Patterson v. Bonner, 48 Cal., 369, cited in the opinion to the effect that a mortgage given to secure money upon an agreement against public policy does not divest the title, does not aid the plaintiff, for, if the title is not divested, there is certainly no occasion for resorting to a Court of Equity where the illegality is evidenced, as in this case, by the contemporaneous agreement referred to. The case, however, decides the other way. It holds that the title passes, but that the performance of the illegal condition will not divest the title of the grantee. The case cited from Indiana is equally inapplicable, as it was an action at law to enforce an illegal executory agreement, and it was of course held that the defendant could plead the illegality of the consideration. The case from Maryland is also inapplicable, as it was an action to foreclose a morí gage given upon an illegal consideration, and the Court refused relief. It is no authority that the Court would have aided the mortgagor had he been seeking a decree for cancellation. The case of Willyams v. Bullmore, 33 L. J. R., cites no. authority. It seems, however, that the mortgagee was seeking foreclosure, and that this action was consolidated with one brought by the mortgagor for cancellation. Under these circum*465stances there was a decree for cancellation. It is doubtful whether the Court would have made such a decree, had not the mortgagee been seeking foreclosure. However this may he, it cannot be regarded as sufficient authority to overturn the well-established rule embodied in the maxim which I have quoted. There is nothing in the reference to Pome-roy’s Eq. Juris, which at all countenances relief under the circumstances of this case. The defendant has already agreed to terms as favorable as would be imposed by a Court of Equity.

I think that A. M. Basket has no standing in a Court of Equity, and that, under the circumstances, he is entitled to no relief. To interfere in his behalf would be giving aid and comfort to the moving party in this illegal transaction.