McBrearty v. United States Taxpayers Union
Opinion of the Court
Plaintiff Ardie McBrearty seeks reversal of the district court’s
McBrearty alleged that in 1977 he became a member of the United States Taxpayers Union (USTU). In the “Declaration of Client Membership Agreement,” USTU guaranteed, inter alia, “that ... in the event a client member should be incarcerated for a time, the United States Taxpayers Union shall meet all necessary personal and family obligations of said individual as determined by the [USTU Board].” Additional language indicated that “all costs incurred in the defense of a client member” would be paid by the Union. In 1979, following his conviction for violations of the federal tax laws, McBrearty was incarcerated for a period of four months. After his “necessary personal and family” expenses during his incarceration were not paid by USTU, McBrearty initiated this action, naming as defendants both USTU and several individual members of its Board. The defendants moved to dismiss the suit on various grounds; following a hearing, the district court, su a sponte, found the purported contract to be “void as against public policy.” The court reasoned that USTU’s promise to pay defense and other expenses during a member’s incarceration for tax violations amounted to an agreement to insure against the results of a criminal act. Such a bargain, the court concluded, contravened public policy and was therefore unenforceable.
Our review of the record convinces us that the district court was correct. As
. The Honorable Paul X Williams, Chief Judge, United States District Court for the Western District of Arkansas.
. We also find no error in the district court’s unwillingness to order the refund of the annual dues paid by McBrearty to USTU. As a general rule, courts will leave the parties to an illegal contract where it finds them. This result generally obtains even where performance by one party to the agreement has been entered. See
Reference
- Full Case Name
- Ardie McBREARTY v. UNITED STATES TAXPAYERS UNION and all Board Members of Same Armin Moths, Treasurer of the United States Taxpayers Union and Frank Brockway, Secretary of the United States Taxpayers Union
- Cited By
- 4 cases
- Status
- Published