that his intention in making the sale was not the ordinary pur- to pay for losses and compounding in the same court in 1866. The plaint- "In McKinnell v. Robinson, 3 M. & W. 435, in the exchequer, in 1838, it was held that money knowingly lent for gambling at a game prohibited by law could not be recovered, the case of Cannan v. Bryce being referred to by the court as the decisive authority on this subject. "The latest case, that of Pearce v. Brooks, L. R. 1 Ex. 213, was decided The leading case in the United States is Tracy v. Talmage (1856), 14 N. Y. 162, 67 Am. Dec. 132. This was a claim made by the State of Indìana against the receiver of the insolvent North American Trust & Banking Company to recover for bonds sold by the former to the latter. The amount involved was nearly $350,000. The defense was, among § 1014.. It is true that in many cases the application of this distinction is attended with no little difficulty, and that, as is ordinarily necessary, in determining the intention of the seller as a question of fact from the surrounding circumstances, other things, that the bank bought for the illegal purpose of a speculative resale, of which purpose the seller had knowledge. The lower courts permitted a recovery, and the receiver appealed. The cause was argued by distinguished counsel in 1855; a re-argument was ordered and had in 1856. The opinion of the court was delivered by Selden, J., who, conceding the disputed question that the seller knew of the purpose for which the buyer bought, reached the conclusion "that it is no defense to an action brought to recover the price of goods sold that the vendor knew that they were bought for an illegal purpose; provided it was not made a part of the contract that they shall be used for that purpose; and provided, also, that the vendor has done nothing in aid or furtherance of the unlawful design." Two of the judges were of the opinion that the seller had no knowledge of the unlawful purpose. One dissented from Judge Selden's conclusions, but the four others concurred with him. A motion for reargument was then made, and the motion was argued in behalf of the receiver by three of the strongest lawyers which the State of New York then contained - Nicholas Hill, Jr., Greene C. Bronson and Samuel Beardsley, who attacked Judge Selden's conclusions with great vigor; but the motion was denied unanimously, Comstock, J., writing the opinion, and all of the judges but two concurring in the conclusions of Selden, J., as given above. The opinions of Selden and Comstock, JJ., contain an elaborate review of the authorities. Hill v. Spear (1870), 50 N. H. 253, 9 Am. R. 205, also contains an exceedingly exhaustive collation of the cases, and reaches the same conclusion at which Judge Selden arrived in Tracy v. Talmage. See also the exhaustive discussion in Graves v. Johnson (1892), 156 Mass. 211, 30 N. E. R. 818, 32 Am. St. R. 446. 15 L. R. A. 834, and the notes to that case in the Am. St. R. and L. R. A. In Anheuser-Busch Brewing Ass'n v. Mason (1890), 44 Minn. 318, 20 Am. St. R. 580, 9 L. R. A. 506, 46 N. W. R. 558, Collins, J., says of Tracy v. Talmage and Hill v. Spear, supra: “These cases, now regarded as leading on this side of the Atlantic, announce the rule to be that mere knowledge by a vendor of the unlawful intent of a vendee will not bar a recovery upon a contract of sale. Yet if, in any way, the former aids the latter in his unlawful design to violate the law, such participation will prevent him from maintaining an action to recover. The participation must be active to some extent. The vendor must do something in furtherance of the purchaser's design to transgress, but positive acts in aid of the unlawful purpose are sufficient, though slight. While it is certain that a contract is void when it is illegal or immoral, it is equally as certain that it is not void simply because there is something immoral or illegal in its juries may in many cases reach conclusions substantially alike under either rule; yet the distinction is not without importance, and the rule as enforced in the United States seems most consonant with reason and justice. surroundings or connections. It cannot be declared void merely because it tends to promote illegal or immoral purposes" [citing Armstrong v. Toler, 24 U. S. (11 Wheat.) 258, 6 L. ed. 468; Green v. Collins, 3 Cliff. (U. S. C. C.) 494; Dater v. Earl, 3 Gray (Mass.), 482; Armfield v. Tate, Ired. (N. C.) 258; Read v. Taft, 3 R. I. 175; Cheney v. Duke, 10 Gill & J. 11; Kreiss v. Seligman, 8 Barb. (N. Y.) 439; Michael v. Bacon, 49 Mo. 474, 8 Am. R. 138; Brunswick v. Valleau, 50 Iowa, 120, 32 Am. R. 119; Webber v. Donnelly, 33 Mich. 469; Bishop v. Honey,34 Tex. 245; Wright v. Hughes, 119 Ind. 324, 21 N. E. R. 907, 12 Am. St. R. 412; Feineman v. Sachs, 33 Kan. 621, 52 Am. R. 547, 7 Pac. R. 222; Rose v. Mitchell, 6 Colo. 102, 45 Am. R. 520; Banchor v. Mansel, 47 Me. 58; Henderson v. Waggoner, 2 Lea (Tenn.), 133, 31 Am. R. 591: Gaylord v. Soragen, 32 Vt. 110, 76 Am. Dec. 154; Mahood v. Tealza, 26 La. Ann. 108, 21 Am. R. 546; Delavina v. Hill, 65 N. H. 94, 19 Atl. R. 1000]. See also to like effect: Wallace v. Lark, 12 S. C. 576, 32 Am. R. 516; Frolich v. Alexander, 36 Ill. App. 428; Schankel v. Moffatt, 53 Ill. App. 382; Kerwin v. Doran, 29 Mo. App. 397. In certain of the States, however, the English rule prevails. Thus in Alabama it is said that "mere knowledge of the illegal purpose is all the law requires to pronounce judgment against the contract. This is the rigid rule of the common law, from which there should be no departure." Milner v. Patton, 49 Ala. 423; Oxford Iron Co. v. Spradley, 51 Ala. 171; Ware v. Jones, 61 Ala. 288. In the very recent case of Standard Furniture Co. v. Van Alstine (1900), 22 Wash. 670, 62 Pac. R. 145, involving the validity of a conditional contract to sell furniture which the seller knew was to be used to furnish a house of ill-fame, the court said: "It is urged on behalf of the appellant that the evidence before the trial court upon which it based its judgment showed, at most, nothing more than that the appellant, at the time it entered into the contract of conditional sale and delivered the property to the vendees named therein, had knowledge that the vendees intended to put the property to an unlawful use; and that this fact is not sufficient to justify the trial court in its holding that the contract was void as against public policy. It is true that it is held in many well-considered cases, and it is perhaps the weight of authority, that mere knowledge on the part of a vendor of goods that the vendee designs to and will put them to an immoral or illegal use is not of itself sufficient to bar an action brought to recover the purchase price of the goods sold. But in all of the cases announcing this rule which have been brought to our attention the transaction was one in which the owner of the goods at the time of their delivery to the vendee parted with his title and right of possession, so that thereafter the relation between the vendor and vendee was & 1015. Malum prohibitum or malum in se. It is said in the later English cases that there is no distinction in the application of the rule whether the object contemplated that of debtor and creditor merely, or that of debtor and creditor with a mortgage over to secure the deferred payments of the purchase price. The sale and delivery of the property were complete, and no element of participation or aid in the immoral or illegal design of the vendee could be imputed to the vendor. On the other hand, it is held by all of the cases - even those which announce the rule contended for by the appellant—that if the vendor has knowledge of the immoral or illegal design of the vendee, and in any way aids or participates in that design, or if the contract of sale is so connected with the illegal or immoral purpose or transaction of the vendee as to be inseparable from it, the vendor cannot recover. Tatum v. Kelley, 25 Ark. 209; Tracy v. Talmage, 14 N. Y. 162; Hill v. Spear, 50 N. H. 253; Gaylord v. Soragen, 32 Vt. 110; Aiken v. Blaisdell, 41 Vt. 655; Schankel v. Moffatt, 53 Ill. App. 382; Ralston v. Boady, 20 Ga. 449; Webster v. Munger, 8 Gray, 584; Adams v. Coulliard, 102 Mass. 167; Graves v. Johnson, 156 Mass. 211, 30 N. E. R. 818, 15 L. R. A. 834, and note to this case in 32 Am. St. R. 450; Beach, Mod. Cont., § 457. And there are cases which hold that knowledge on the part of the vendor that the purchaser intends to devote the property purchased to an illegal use will bar a recovery of the purchase price, even though he does no other act than deliver the property to the vendee. It was so held by the supreme court of the United States in Hanauer v. Doane, 12 Wall. 342, 20 L. ed. 439, thougn the court seems to admit that there might be a distinction between the cases where the use to which the property is to be devoted is only malum prohibitum, or of inferior criminality, and the cases where it is to be used in aid of the perpetration of a heinous crime, such as treason, as was the fact in that case. See also Tatum v. Kelley, supra; Milner v. Patton, 49 Ala. 423; Lewis v. Latham, 74 N. C. 283; Bickel v. Sheets, 24 Ind. 1; Steele v. Curle, 4 Dana, 381. Where the sale is absolute, though on credit, the vendee becomes the owner of the property purchased, and has all the rights therein that any owner has over his own property, and he may make such use of it as to him seems fit, without let or hindrance from his vendor. Under an ordinary contract of conditional sale, the law is different. The vendee thereunder, the title being reserved in the vendor, is a mere bailee of the property. If the use of the property be not prescribed in the contract of sale, the purchaser must nevertheless use it for a lawful and proper purpose, and in the way its nature contemplates it should be used, or else suffer a forfeiture of its contract. It is clear that the relation between the parties to the contract in the present case was something more than that of debtor and creditor merely, and it would seem it was something more than an ordinary contract of conditional sale. The appellant not only reserved 'title, ownership and possession of the property,' but reserved the right to take possession of the aforesaid per was malum prohibitum or malum in se,' and this is undoubtedly true in the United States as well, though in determining whether there was that participation in the wrongful purpose which the American rule requires it is impossible to lose sight in many cases of the character and enormity of the of fense contemplated; "as where,” to use the language of Clifford, J., "the property purchased is intended for treasonable purposes, or to commit murder, or to promote some other offense of such enormity and so violative of the fundamental laws of society that silence on the part of the citizen is itself a crime, or would be evidence tending to show that the seller was an accessory before the fact to the commission of the offense." & 1016. In the leading case in the United States supreme court the same distinction is pointed out and enforced.' "Where to draw the precise line," said the court, "between the cases in which the vendor's knowledge of the purchaser's sonal property whenever it may deem itself insecure, even before the maturity' of the deferred payments. This practically left the control of the use of the property with the appellant, and, as the evidence shows that it had knowledge of the immoral and illegal use to which the vendees intended to and did put the property, it is hard to conceive why it did not aid and participate in that immoral and illegal use. The distinction between knowing that a buyer is intending to put the property to some unlawful use, and participating in that unlawful intent, is, to say the least, somewhat refined; and where a vendor, for the mere sake of gain, makes a contract, the effect of which is to put his own property in the hands of persons who will use it to conduct a house of prostitution, knowing it will be so used, the courts ought not to be as tute to find nice distinctions which will enable him to avoid the consequences of his acts." 1 For the earlier view see Faikney v. Reynous (1767), 4 Burr. 2070; Petrie v. Hannay (1789), 3 T. R. 418. For the later view see Pearce v. Brooks (1866), L. R. 1 Exch. 214; Booth v. Hodgson, 6 T. R. 405: Aubert v. Maze, 2 Bos. & P. 371; Mitchell v. Cockburn, 2 H. Bl. 379; Webb v. Brooke, 3 Taunt. 6; Langton v. Hughes, 1 Maule & S 593. 2 In Green v. Collins (U. S. C. C.), 3 Cliff. 494. See also per Comstock, J., in Tracy v. Talmage, 14 N. Y., at p. 215. 3 Hanauer v. Doane (1870), 79 U. S. (12 Wall.) 342, 20 L. ed. 439. This was a case involving recovery for goods sold in aid of rebellion — a subject which will be fully considered in a later section. Post, § 1024 |