Rufus Wheeler Peckham

“ Justice Swayne, delivering the opinion of the court, said:
'Whenever the illegality appears, whether the evidence comes from one side or the other, the disclosure is fatal to the case. No consent of the defendant can neutralize its effect. A stipulation in the most solemn form to waive the objection would be tainted with the vice of the original contract, and void for the same reasons. Wherever the contamination reaches it destroys. ”

“ Just how the fraud is to be successfully worked out by the combination, it is not necessary to show. It is enough to see what the natural tendency is. Public policy requires that officers of such corporations, acting in the interest of others, and not using the sharp eye of a practical man engaged in the conduct of his own business, and not controlled by the powerful motive of self-interest, should, so far as possible, and for the sake of the public whom they represent, be protected from the dangers arising out of a concealed combination and from fictitious bids. ”

“ The court refuses to enforce such a contract, and it permits defendant to set up its illegality, not out of any regard for the defendant who sets it up, but only on account of the public interest. It has been often stated in similar cases that the defense is a very dishonest one, and it lies ill in the mouth of the defendant to allege it, and it is only allowed for public considerations, and in order the better to secure the public against dishonest transactions. ”

“ It may be admitted that even a subsequent collateral contract, if made in aid and in furtherance of the execution of one infected with illegality, partakes of its nature, and is equally in violation of law; but that is not this case. Oliver, by the assignment, became simply owner in the place of Goodwin, and, as to any public policy or concern supposed to be involved in the making or in the fulfillment of such contracts, it was a matter of entire indifference to which it belonged. The assignee took it, liable to any defense, legal or equitable, to which it was subject in the hands of Goodwin. ”

“ Upon general principles it must be apparent that biddings for contracts for public works cannot be surrounded with too many precautions for the purpose of obtaining perfectly fair and bona fide bids. Such precautions are absolutely necessary in order to prevent the successful perpetration of fraud in the way of combinations among those who are ostensible rivals, but who in truth are secretly banded together for the purpose of obtaining contracts from public bodies, such as municipal and other corporations, at a higher figure than they otherwise would. ”

“ It might readily be surmised that, if these parties had bid in competition, one or both of the bids would have been lower than their combined bid. It was not necessary, however, to prove so difficult a fact. The inference would be natural.
In Richardson v. Crandall, 48 N. Y. 348, 362, the court said: 'In all cases where contracts are claimed to be void as against public policy, it matters not that any particular contract is free from any taint of actual fraud, oppression, or corruption. The law looks to the general tendency of such contracts. ”

“ Counsel for the complainant also refer to a case where a plaintiff had let his horse to the defendant on Sunday, and the defendant had injured the horse by his recklessness and negligence, and a recovery against him was had for the damages occasioned by such negligence, notwithstanding the illegality of the contract of hiring, because in violation of the law relating to the Sabbath day. ”

“ But where A. claims money from B., although due upon an illegal contract, and B. acknowledges the obligation, and waives the defense of illegality, and pays the money to a third party upon his promise to pay it to A., the third party cannot successfully defend an action brought by A. to recover the money by alleging that the original contract between A. and B. was illegal. ”

“ In my opinion, no action can be maintained for the one purpose more than for the other.'
Continuing, the master of the rolls observed:
'Then Lord Cottenham goes on, in Sharp v. Taylor, to say: 'Do the authorities negative this view of the case? The difference between enforcing illegal contracts and asserting title to money which has arisen from them is distinctly taken in Tenant v. Elliott and Farmer v. Russell, and recognized and approved by Sir William Grant in Thomson v. Thomson.' Yes; but not in that way. ”

“ Thomson. But the alleged illegality in this case was not in the freight being paid to English subjects claiming as owners of the ship, as in Campbell v. Innes. The importation of the goods in a ship American built, and not professing to have any English registry, would not be illegal, and the American owner might assign the freight to any one. Assuming this to be so, I am of opinion that, under the authorities referred to, Taylor, who received the freight on account of himself and Sharp, cannot set up this defense to Sharp's claim. ”

“ The complainant, McMullen, living in San Francisco, and being a large stockholder in, and manager of, the San Francisco Bridge Company, came to Portland for the purpose of giving his attention to the matter, and, if possible, to make an arrangement with the defendant by which they might together become bidders for the work. ”

“ Can one of two partners possess himself of the property of the firm, and be permitted to retain it, if he can show that, in realizing it, some provision in some act of parliament has been violated r neglected? ”

“ In case any action is brought in which it is necessary to prove the illegal contract in order to maintain the action, courts will not enforce it, nor will they enforce any alleged rights directly springing from such contract. In cases of this kind the maxim is, 'Potior est conditio defendentis.' The following are only a few of the numerous cases upon the subject in England and in this country: Holman v. Johnson (1775) 1 Cowp. 341; Booth v. Hodgson (1795) 6 Term R. 405; Thomson v. Thomson (1802) 7 Ves. ”