Den ex dem. Wooden v. Shotwell

23 N.J.L. 465

• Court: Supreme Court of New Jersey
• Decided: November 15, 1852
• Status: Published

Opinion

Gbeen, C. J.

The first question presented in this case is, whether the transaction in which the conveyance from the plaintiff to Joseph L. Shotwell originated, as set forth in the state of the case, constituted a lottery, within the meaning of the statute of the suppression of lotteries. Upon this point there is no room for doubt; it was, both in substance and in form, a lottery. It was not a plan adopted by the purchasers to make partition of the land purchased among themselves, but a device adopted by the vendor to attract adventurers by holding out the hope of'extraordinary gain, and thus to effect a sale of the land. The scheme was prepared and exhibited previous to the sale, and the purchaser paid his money, net for an equal undivided share of the land, as a tenant in common with the other purchasers, but in the hope and expectation of obtaining a valuable allotment, and thus enriching himself at the expense of others. The prizes were distributed by lot. The fact that the scheme contained no blanks, but that every adventurer was to receive something for his money, only rendered the device the more successful, and its results consequently the more injurious, without altering its essential character. The statute, in its terms, includes as well lotteries for lands as for goods and chattels. The transaction was a lottery within the contemplation of the statute, and conseqnently every grant or conveyance of land made in pursuance of it is, by the terms of the statute, “ invalid and void.” This point is settled by the cases of Den v. Underwood, 4 Wash. C. C. R. 129, and Seidenbender v. Charles’ Administrators, 4 Serg. & R. 151.

But, conceding that the transaction upon which the deed is founded constituted a lottery within the meaning of the act, the inquiry presents itself, whether that fact can be shown between these parties, and for the purposes of this trial.

The deed executed by the lessor of the plaintiff to Joseph L. Shotwell contains no allusion to the transaction in which the conveyance originated, but recites that it is made in consideration of $75, lawful money, paid by the grantee to the grantors. It is laid down by Jenkins (Cent. 4, ease 20,) that against a consideration, alleged in the deed, no averment can be received. And although the American cases hold that the vendor, by the recital in the deed, is not estopped from showing that the consideration lias not been paid, (in an action brought for the recovery of the purchase money) or that it is different in amount from that recited in the deed, they do not admit evidence to show that the consideration is essentially different from that recited in the deed, in order to defeat the effect and operation of the conveyance itself. It goes to subvert the entire transaction as well as to violate the established rules of evidence. 4 Cruise’s Dig. 315, Tit. 32, ch. 20, § 52, Greenleaf’s ed., note 1; Ib. 23, Tit. 32, ch. 2, § 38, note 1 ; Grout v. Townsend, 2 Hill 554; McCrea v. Purmost, 16 Wend. 460 ; Morse v. Shattuck, 4 New Hamp. 229.

But this rule of law has never- been extended to prevent a party from showing that the deed is void for fraud or illegality. It is obvious, indeed, that the statute would be rendered a dead letter if the parties to an illegal transaction could evade the statute by a false recital in a bond, deed, or other instrument made in execution of the illegal contract. Collins v. Blantem, 2 Wils. 347 ; 1 Smith’s Lead. Cas. 154; 1 Greenl. Ev. § 284.

The plaintiff is not estopped by the recital in the deed from showing the illegality of the transaction in which the conveyance originated.

It is insisted that Joseph L. Shotwell, the original grantee of Wooden, was not a subscriber to the lottery, and that, as to him, the deed was made for a valuable pecuniary consideration. But the case shows that the present defendant, being then a minor, subscribed for one of the lots; that, being a minor and incapable of contracting, his father gave his own note for the lot prior to the drawing; that the deed was executed to the father subsequent to the drawing for the lot drawn by the son ; and that, upon the son’s coming of age, the father conveyed the lot to the son. It is obvious, upon this state of facts, that the deed' made to the father was made in pursuance of the lottery. It is equally clear that the son does not stand in the position, nor can he claim the privilege of a bona fide purchaser for a valuable consideration, without notice of the illegal transaction on which the conveyance to his father was founded. The purchase of the lot by the son, the giving of a note by the father for the price, the drawing of the lottery, the conveyance to the father, and the subsequent, conveyance by him to the son, constitute but parts of one and the same transaction. Admit that the son wras a minor at the time of the purchase, it does not render the transaction legal, or the conveyance valid, if made to himself, much less can it give validity to a conveyance made to his father in pursuance of the illegal contract made by himself. If the defendant had had no participation whatever in the original illegal transaction, still it is obvious, from the case, that he had full knowledge of that transaction, and cannot, therefore, claim to be a bona fide purchaser for value, without notice of the defect in the title of his father. It is unnecessary, therefore, to consider whether the grantor, who has made a conveyance of land in pursuance of a lottery, will be permitted to recover it back from a bona fide purchaser for value without notice of the illegal transaction.

The defendant does not stand in that position.

Lastly, it is insisted that the plaintiff, having executed a deed in pursuance of the lottery, cannot recover it back ; that the contract is executed ; and that the court will not aid a party to recover property when his right of action is based upon an illegal or immoral transaction. It cannot be denied that the plaintiff was the party principally guilty in the erection and drawing of the lottery; that he is at least in pari delicto with the defendant; and that, consequently, he is not entitled to the aid of the court in enforcing a claim founded on the illegal transaction.

The general maxim is undisputed, in pari delicto, potior est conditio possidentis. And the maxim is an effectual bar to the claim of a party who comes into a court of justice to enforce au illegal contract, or who asks the aid of a court to sustain a claim growing out of ah illegal transaction. Thus w'hen money or other personal property is paid by one of two parties to an illegal contract to the other, where both may be considered as participes criminis, an action cannot be maintained after the contract is executed to recover the money.

So money paid upon an illegal wager, or upon an illegal insurance, or for money lost at play, or by illegal gaming, cannot be recovered, except when specially authorized by statute. Brooms Legal Maxims 325.

In all these cases the claim of the plaintiff originates in the illegal transaction itself; and in order to recover, the plaintiff must show that the money passed into the hands of the defendant in pursuance or by virtue of such transaction.

But in the present case, neither the plaintiff’s title to the land nor his right of recovery is in any wise founded upon the illegal transaction. He shows a valid title to the land prior to, and independent of, the existence of the lottery. To support his action, he shows his documentary title, but oilers no evidence of the existence of a lottery. The defendant seeks to defend his possession by means of a conveyance founded on the lottery, and which the law declares to be void. He asks the aid of the court to enforce the illegal contract, and to protect his possession by a conveyance founded upon it.

The plaintiff’s title is perfect, unless the court give legal effect and vitality to a deed which the statute declares invalid and void.

The plaintiff certainly comes into court with a bad grace, seeking to shelter himself under the illegality of a contract., of which, so far as the case shows, he himself may have received the Benefit. But in dealing with illegal contracts, courts do not and cannot look to the interests of those who are parties to the illegal transaction. The law regards the welfare of society as paramount, and in enforcing the law, courts cannot impair its efficiency or cripple its operation by considerations affecting the interests of those who are particeps criminis. Balus populi suprema lex.

J udgment for the defendant.

Elmeb, J. The defendant holds the property in dispute as the tenant of his son, Alexander Shotwell. But Alexander’s title is derived from a deed made to him by his father, and his father’s title being under the deed made by the lessor of the plaintiff, November 19th, 1835, if this last mentioned deed is wholly void, and passed no title to the defendant, then, of course, no title is shown in Alexander, under whom he holds. This depends upon the question, whether the transaction in.pursuance of which the aforesaid deed was made was a lottery, within the meaning of the act entitled, “ An act for suppressing of lotteries,” (Rev. Stat. 590.) That it was a lottery, and, as such, within the prohibition of the act, has been already determined by this court, in the case of Thorn and Cory v. Richard Wooden, decided at April term, 1850, in a suit upon the notes given in the same transaction. With that decision I am entirely satisfied. It was in accordance, with the ruling in the cases of Den v. Underwood, 4 Wash. C. C. R. 129, and of Seidenbender v. Charles, 4 Berg. & R. 151.

By the fourth section of the act for suppressing lotteries, it is enacted, “ that every grant, bargain, sale, conveyance, or transfer of any goods, chattels, lands, tenements, hereditaments, or real estate, which shall be made in pursuance of any such lottery, is hereby declared to be invalid and void.” It is insisted, however, that the lessor of the plaintiff, who himself made the lottery, and, in pursuance of it, executed the deed, cannot be permitted to claim the property in the face of his own deed. The argument is, that this is to be likened to the case of an action to recover back money paid upon an illegal contract, in which it has been held (bat portior est conditio defendentis, and such actions have therefore failed. But the two cases are entirely dissimilar. Where money has been actually paid upon an immoral or illegal consideration, courts have held that it could not be recovered back, upon the principle that they would afford no aid to a person whose claim is based on such a transaction. In this case the court is not asked to aid a party whose claim is based upon, or in any way arises out of the illegal lottery. The evidence to entitle him to a recovery does not touch that transaction. We are asked simply to declare that to be invalid and void, which is made so by a plain unequivocal statute, intended not to benefit third persons, or merely innocent or injured parties, but intended to strike at; and invalidate an illegal transaction in all its results and consequences. Unless the plaintiff, when his deed is produced against him, is in some way estopped from showing that it was illegal, and is therefore void, because to do so he must show his own criminality as well as that of the defendant, his good title must prevail over one that is bad. Undoubtedly there are many cases where a man will be concluded by his own illegal proceedings, if they have been acted upon by innocent parties, and is held upon grounds of public policy and good faith to be estopped from repudiating his own representations and acts. But this case does not come within that class. No innocent third parties are in any way implicated. As was said by Lord Mansfield in the case of Holman v. Johnson, (Cowp. 343), it is not for the sake of the defendant that the objection of illegality is allowed, but it is founded on general principles of policy. The statute has declared such a conveyance to be absolutely void, without reference to its operation upon the rights or interests of any one; and in order to effect the salutary objects of the act, it must be held void, even although the most guilty party profit by such a result. No case or principle has been produced that can authorize the court to disregard the plain words of the statute.

The English statute of maintenance declares that gifts or feoffments made by fraud or maintenance shall be holden for none, and that the disseissees shall recover against the first disseissor their lands and damages without having regard to such alienations, so that they commence their suit within a year after the disseissin. It was rightly held that, by the true construction of this statute, the gift or feoffment was void only as against the disseissee, but good as between the feoffer and feoffee, because, by the words of the statute itself, it was plain that the intention was to prevent such alienations from injuring the disseissee, and not otherwise to render them void. Bac. Abr. Tit. Maintenance E.; Co. Lit. 369.

So the statutes against fraudulent conveyances, by their express terms, avoid such conveyances as against creditors and purchasers only; they are therefore held good and binding as between the parties themselves and their representatives. It is to be remarked, too, that such a construction best effects the beneficial objects of those acts. But it is otherwise with gaming securities; they are void as against the loser, even in the hands of innocent third persons. 8 Price 287; 7 Bing. 405. In the case of Vaughn v. Whitcomb, (5 Bos. & Pull. 413), which was an action, of trover for a horse, it was held that the fact, that the defendant had won the horse of the plaintiff by tossing up this horse against two others, would not enable him to recover it back, solely because the statute, although it expressly avoided all securities, did not avoid the contract itself, and since the time wnthin which the act authorized the party to recover back what he had lost was elapsed, his action was gone. Here it was agreed that one of the parties in the illegal gaming might have recovered his property’on the strength of his original title, had the statute declared that the contract by which it was transferred was void. In the case before us, the statute does in express terms enact that the deed made in pursuance of a lottery is invalid and void. The consequence of such provision is that the original title stands good. If the maker of such a deed, or his representatives, cannot be permitted to show the facts which render it void, the great object of the act would be very .imperfectly attained, if at all. In many cases, within the mischief intended to be prevented, it would be wholly inoperative.

In the case of Edwards v. Dick (4 B. & Al. 212), it was decided that the drawer and endorser of a bill of exchange, accepted by the loser of money won at play, was liable on his endorsement to an innocent party to whom he had transferred the bill in payment of a bona fide debt. In that case the holder of the bill did not seek to enforce it against the loser of the money, as to whom it was void, in the hands of the drawer or of any person claiming through him, however innocent. In the case before us the defendant is in a position analogous to that of a winner of property lost by gaming, to whom the property lost has been delivered or transferred by the loser. The object of the lottery act, like that of the act to prevent gaming, is to deprive the winner of his gains. To effect this in the most complete manner in the case of a lottery, the transfer itself is declared to be invalid and void. The case stands, and the decision must be the same as if no transfer whatever had been made. The defendant cannot avail himself even of the delivery of possession, which is itself void, and therefore as if it never took place. The lottery act in fact goes farther than our act to prevent gaming, (Rev. Stat. 573). In the latter act, it is declared that the conveyance of land, or transfer of personal property to satisfy a gaming debt, shall enure to the use of the heirs or legal representatives of the grantor, as if he had died intestate, while in the former, the conveyance and transfer are declared absolutely void. However' hard, therefore, the case may seem to bear against the defendant, we have no alternative; we cannot repeal, and must not disregard the plain provisions of a positive statute. But the defendant has in truth no claim to any special indulgence. The note which he gave for the purchase money was not valid, and if he paid it, he did so without necessity. He must be presumed to have been apprized of the statute, which has long been on the statute book, and engaged in this illegal transaction with his eyes open to the consequences. I am of opinion that the plaintiff is entitled to judgment.

Potts, J., concurred.

Affirmed, 4 Zab. 789.

Cited in Huncke v. Francis, 3 Dutch. 67; Mulford v. Peterson, 6 Vr. 134