est conditio defendentis will apply. (c) If, however, the money be not paid over, but remains, in its transit, in the hands of the intermediate stakeholders, the law will not permit a third person, who is thus incidentally connected with the transaction, to set up the claim of illegality in the contract between the principal parties.2 An agent cannot shelter himself from paying over the money by such a plea, and the money advanced may be reclaimed. (d) When the transaction is of such a nature that the good part of the consideration can be separated from that which is bad, the courts will make the distinction; "for the common law doth divide according to common reason; and having made that void * 468 that is against law, lets the rest stand." (a) The general and more liberal principle now is, that where any matter, void even by statute, be mixed up with good matter, which is entirely independent of it, the good part shall stand, and the rest be held void; (b)1 though if the part which is good depends upon that which is bad, the whole instrument is void; (c)2 and so I take the rule to be if any part of the consideration be malum in se, * 1 (c) Howson v. Hancock, 8 Term Rep. 575. (d) Cotton v. Thurland, 5 Term Rep. 405. Vischer v. Yates, 11 Johns. 23. McAllister v. Hastelow v. Jackson, 8 Barn. & Cress. 221. Burt v. Place, 6 Cowen, 431. Smith v. Bickmore, 4 Taunt. 474. (a) 14 Hen. VIII. ch. 15. Hob. 14. Piggot's case, 11 Co. 27 b. Greenwood v. Bishop of London, 5 Taunt. 727. Lord Stowell said that the admiralty courts adopt this national rule of the common law, in respect to maritime contracts. The Nelson, 1 Hagg. Adm. 176. (b) Mouys v. Leake, 8 Term Rep. 411. Kerrison v. Cole, 8 East, 231. Howe v. Synge, 15 East, 440. Doe v. Pitcher, 6 Taunt. 359. Wigg v. Shuttleworth, 13 East, 87. (c) Best J., in Biddell v. Leeder, 1 Barn. & Cress. 327. 1 Bagg v. Jerome, 7 Mich. 145. The rule of law, that parties in pari delicto, will be denied all relief, both in law and equity, was discussed with uncommon ability by Nesbit J., and approved by the court, in Adams v. Barrett, 5 Georgia, 404. Unless parties to illegal transactions are in pari delicto, as well as participes criminis, the court will afford relief to the more innocent party, when equity requires it. Schermerhorn v. Talman, 4 Kernan (14 N. Y.) 93. Tracy v. Talmage, Ibid. 162. But the losing party in a wager may recover from the stakeholder the money he had deposited with him, though the latter, after the determination of the wager, had, by the order of the depositor, paid over the money to the winner. Ruckman v. Pitcher, 1 Comst. 392. See, also, Morgan v. Groff, 4 Barb. (N. Y.) 524. But see Like v. Thompson, 9 Barb. (N. Y.) 315. 1 In Rand v. Mather, 11 Cush. 1, the Supreme Court of Massachusetts, overruling a former case, held, that a contract, part of which was void by the statute of frauds, might be apportioned, and the rule that, if part of a contract is void by statute, the whole is void, was repudiated. Beard v. Dennis, 6 Ind. 200. See Hodgson v. Johnson, 1 El. B. & El. 685. * Tilson v. Hinees, 5 Barr, 452. Morris v. Way, 16 Ohio, 469. or the good and the void consideration be so mixed, or the contract so entire, that there can be no apportionment. (d) 3 IV. Of the contract of sale. 3 A sale is a contract for the transfer of property from one person to another, for a valuable consideration; (e) and three things are requisite to its validity, viz.: the thing sold, which is the object of the contract, the price, and the consent of the contracting parties. (ƒ) * (1.) The thing sold must have an actual or potential existence, (g) and be specific or indentified, and capable of delivery, (d) Scott v. Gillmore, 3 Taunt. 226. Lord Kenyon, in Mouys v. Leake, 8 Term Rep. 411. Hinde v. Chamberlin, 6 N. Hamp. 225. Frazier v. Thompson, 2 Watts & Serg. 285. (e) Sir William Blackstone defines a sale to be "a transmutation of property from one man to another, in consideration of some price or recompense in value." 2 Com. 446. Ross, in his Treatise on the Law of Purchasers and Vendors, adopts the same definition, and I take this occasion to recommend that work of Mr. Ross as a learned and faithful performance. It is republished in this country as part of the 12th volume of the Law Library, edited by Thomas J. Wharton, Esq., a most valuable series of publications to the profession. (f) Pothier, Traité du Contrat de Vente, n. 3. Bell's Prin. L. S. sec. 85, 90–92. (g) It is sufficient that the thing contracted for has a potential existence; and a single hope or expectation of means founded on a right in esse, may be the object of sale, as the next cast of a fisherman's net, or fruits or animals not yet in existence, or the goodwill of a trade. But a mere possibility or contingency, not coupled with any interest in, or growing out of property, as a grant of the wool of the sheep the grantor may It has been repeatedly held, that a contract for doing an act, in violation of a statute imposing a penalty, though containing no express prohibition of the act, but enacted as a security against fraud or immorality, and not merely for the purpose of revenue, is void. The courts will not uphold a transaction which disregards such statute provisions. Cundel v. Dawson, 4 M. G. & S. 376. Ritchie v. Smith, 6 Idem, 462. Griffith v. Wells, 3 Denio, 226. Territt v. Bartlett, 21 Vermont, 184. Brackett v. Hoyt, 9 Foster, 264. But see Hill v. Smith, Morris, 70. Lewis v. Welch, 14 N. Hamp. 294. Ellis v. Higgins, 32 Maine, 34. Stanley v. Nelson, 28 Ala. 514. But in New York, the party or his assignee may, in some form, recover the consideration he has parted with in obtaining an illegal security. Oneida Bank v. Ontario Bank, 21 N. Y. 490. A contract in violation of a merely local or municipal law is equally void as if in violation of a statute of universal application. Beman v. Tugnot, 5 Sandf. (N. Y.) 153. Harris v. Runnels, 12 How. U. S. 80. The question of illegality is open to investigation by parol evidence. Brown v. Brown, 34 Barb. (N. Y.) 533. 4 Mr. Justice Wayne has defined a sale “to mean at all times a contract between parties, to give and to pass rights of property for money; which the buyer pays, or promises to pay, to the seller, for the thing bought or sold." Williamson v. Berry, 8 How. U. S. 544. Noy's Max. ch. 42. Shep. Touch. 244. otherwise it is not strictly a contract of sale, but a special or executory agreement. (h) If the subject-matter of the sale be in existence, and only constructively in the possession of the seller, as by being in the possession of his agent or carrier abroad, it is nevertheless a sale, though a conditional or imperfect one, depending on the future actual delivery. (i)7 But if the article intended thereafter buy, or the expectancy of an heir apparent, is void as a sale. Dig. 18, 1, 8. Pothier, Cont. de Vente, n. 5, 6. Plowd. 13 a. Grantham v. Hawley, Hob. 132. Harg. Co. Litt. lib. 1, n. 363, S. C. Robinson v. Macdonnell, 5 Maule & Selw. 228. Com. Dig. tit. Grant, D. Carleton v. Leighton, 3 Meriv. 667. See infra, vol. iii. 64. See, also, infra, p. 504. A covenant to pay out of future profits of an existing office is good. Clapham v. Moyle, 1 Lev. 155. Mr. Bell, in his Principles of the Law of Scotland, p. 30, (a work very comprehensive but admirably condensed,) states that the hope of succession may be the subject of sale; but in the case from Merivale, Lord Eldon held, that such an expectancy could not be the subject of assignment or contract. Reversionary interests and expectancies, founded on settlements and entailments, are the subject of sale, as, see post, 475; but a mere hope, where there is no existing right sustaining the expectation, as where the ancestor is seised in a fee simple, with a power of alienation and devise, is not the subject of a valid sale. But see post, 475, n. c. A bill or note, or inland bill of exchange, is not the subject of sale, unless it be such a security in the hands of the seller that he could sue on it at maturity. Powell v. Waters, 8 Cowen, 683. Cram v. Hendricks, 7 Wendell, 589. Munn v. Commis. Company, 15 Johns. 44. But foreign exchange in the hands of the drawer is a subject of traffic and sale, - a commodity bought and sold like merchandise. Bankers' drafts are also existing things in action, and subject to the like traffic. The drawer sells his foreign bill as money or funds abroad. His credit abroad is to the payee equivalent to cash, and the bill of exchange is the instrument of transfer. The commission charge on the transfer is part of the price of the sale, and not usurious. Holford v. Blatchford, 2 Sandf. Ch. 149. (h) Rondeau v. Wyatt, 2 H. Blacks. 63. Mucklow v. Mangles, 1 Taunt. 318. Groves v. Buck, 3 Maule & Selw. 178. (i) Boyd v. Siff kin, 2 Campb. 326. Withers v. Lyss, 4 Idem, 237. In the civil law, ownership in the seller at the time of the contract was not essential to its validity. Dig. 15, 1, 1, 57. Heinecc. Elem. Jur. Secund. Ord. Inst. lib. 3, tit. 24, sec. 905. Pothier, Contrat de Vente, n. 7. In Bryan v. Lewis, Ry. & Moody, 386, Lord Tenterden ruled, that if goods be sold to be delivered at a future day, and the seller has not the goods, nor any contract for them, nor any reasonable expectation of receiving them by consign 5 A bill of sale of existing property, with a power to the purchaser to seize future crops, passes no title to the latter until the vendee actually takes possession. When he does so, however, the property vests in him against an execution creditor. Congreve v. Evetts, 26 E.L. & Eq. 493. Hope v. Hayley, 34 Ibid. 189. See, also, Wood v. Lester, 29 Barb. (N. Y.) 145. Van Hoozer v. Cory, 34 Barb. (N. Y.) 10. Cudworth v. Scott, 41 N. Hamp. 456. Beaumont v. Crane, 14 Mass. 400. • An assignment of a ship, and all oil and cargo which might be caught or brought home in said ship, is a valid assignment in equity, as well of the future cargo to be taken during the voyage, as of the cargo, if any, existing at the time. Langton v. Horton, 1 Hare, 549. There is no implied contract that the vendee shall pay the vendor for anything done to the article previous to delivery. Cole v. Kerr, 20 Vermont, 21. to be sold has no existence, there can be no contract of sale. Thus, if A. sells his horse to B., and it turns out that the horse was dead at the time, though the fact was unknown to the parties, the contract is necessarily void. So if A., at New York, sells to B. his house and lot in Albany, and the house should happen to have been destroyed by fire at the time, and the parties are equally ignorant of the fact, the foundation of the * 469 contract fails, provided the house, and not the ground on which it stood, was the essential inducement to the purchase. (a) 1 ment, but intends to go into the market and buy them, it was not a valid contract. It was a mere wager on the price of the commodity. This is contrary to the rule at law, as suggested by Lord Chancellor Parker, in Cud v. Rutter, 1 P. Wms. 570. The observation of Lord Tenterden, in this case, is said to be a mere dictum, and unsupported by any other case. Wells v. Porter, 3 Scott, 141. In this last case in the C. B., it was held, that time bargains in foreign funds were not illegal or void at common law; and in Hibblewhite v. M'Morine, 5 Mees. & W. 462, the decision of Lord Tenterden, in Bryan v. Lewis, was completely overruled. Mr. Bell says, that where the distinction exists between sale as a transfer of property and sale as a contract, as in the civil law, Holland, Scotland, &c., a thing which belongs to another may be the subject of sale, and the seller must make good the contract, or answer in damages. But that in England and America, as a sale is a transfer of property, it cannot exist as to property not belonging to the seller at the time. Bell on the Contract of Sale, Edin. 1844, pp. 26, 27. In France, by the Code Civil, No. 1616, on a contract of sale of goods which can be purchased in the market, the seller is bound to fulfil the contract. By the N. Y. Revised Statutes, 3d edit. vol. i. 892, in order to prevent stock-jobbing, it is declared that all contracts, written or verbal, for the sale or transfer of stocks, are void, unless the party contracting to sell be, at the time, in the actual possession of the evidence of the debt or interest, or otherwise entitled in his own right or with due authority to sell the same; 8 and all wagers upon the price of stock are void. The English statute of 7 Geo. II. c. 8, was made to prevent stock-jobbing, and which the statute termed an infamous practice. The discussions in the English courts on this statute have been many and interesting, and the operation of the statute made subject to important distinctions. An agreement to transfer stocks for a valuable consideration to be paid, though the seller was not at the time actually possessed of, or entitled to the stock, in his own right, has been held not to be within the statute, which only applied to fictitious sales of stocks. Mortimer v. M'Callan, 6 Mees. & W. 58. S. C. 7 Idem, 20. 9 Idem, 636. (a) Dig. 18, 1, 1, 57. Pothier, 135. S. C. Daniell's Exch. 1. Hammond, 11 Peters U. S. 63. Cont. de Vente, n. 4. Hitchcock v. Giddings, 4 Price, 8 It has been decided, in Massachusetts, that a sale, by a pledger of stocks, of which the pledgee holds the certificates, but which the pledger is authorized to sell, is not within the New York statute, cited in the note supra. Thompson v. Alger, 12 Metcalf, 428. These sections of the Revised Statutes were repealed by chap. 134, of the Laws of 1858, and it was enacted that contracts for the sale of stock shall not be void or voidable because the party contracting to sell is not the owner or possessor of the stock. 1 Strickland v. Turner, 14 E. L. & Eq. 471. Couturier v. Hastie, 16 Idem, 562. 20 Idem, 538. 38 Idem, 8. The civil law came to the same conclusion on this point. (6) But if the house was only destroyed in part, then if it was destroyed to the value of only half or less, the opinion stated in the civil law is, that the sale would remain good, and the seller would be obliged to allow a ratable diminution of the price. Pothier thinks, however, (c) that in equity the buyer ought not to be bound to any part or modification of the contract, when the inducement of the contract had thus failed; and this would seem to be the reasoning of Papinian, from another passage in the Pandects, (d) and it is certainly the more just and reasonable doctrine. The Code Napoleon (e) has settled the French law in favor of the opinion of Pothier, by declaring, that if part of the thing sold be destroyed at the time, it is at the option of the buyer to abandon the sale, or to take the part preserved, on a reasonable abatement of price; and, I presume, the principles contained in the English and American cases tend to the same conclusion, provided the inducement to the purchase be thereby materially affected. Where the parties had entered into an agreement for the sale and purchase of an interest in a public house, which was stated to have had eight years and a half to come, and it turned out on examination that the vendor had an interest of only six years in the house, Lord Kenyon ruled, (ƒ) that the buyer had a right to consider the contract at an end, and recover back any money which he had paid in part performance of the agreement for the sale. The buyer had a right to say it was not the interest he had agreed to purchase. So, in another case, and upon the * 470 same principle, * Lord Eldon held, (a) that if A. purchased a horse of B., which was warranted sound, if it turned out that he was unsound, the buyer might keep the horse, and bring an action on his warranty for the difference of the value; or he might return the horse, and recover back the money paid; though if he elected to pursue that course, he must be prompt in rescinding the contract. (b) There are other cases, however, in which (b) Dig. 18, 1, 57. (c) Traité du Contract, de Vente, n. 4. (d) Dig. 18, 1, 58. (e) No. 1601. (f) Farrer v. Nightingale, 2 Esp. 639. (a) Curtis v. Hannay, 3 Esp. 82. (b) Buller J., 1 Term Rep. 136; and in Compton v. Burn, Esp. Dig, 13. |