Armstrong v. Toler - 24 U.S. 258 (1826)
U.S. Supreme Court
Armstrong v. Toler, 24 U.S. 11 Wheat. 258 258 (1826)
Armstrong v. Toler
24 U.S. (11 Wheat.) 258
Where a contract grows immediately out of and is connected with an illegal or immoral act, a court of justice will not lend its aid to enforce it.
So if the contract be in part only connected with the illegal consideration and growing immediately out of it, though it be in fact a new contract, it is equally tainted by it. But if the promise be entirely disconnected with the illegal act and is founded on a new consideration, it is not affected by the act, although it was known to the party to whom the promise was made, and although he was the contriver and conductor of the illegal act.
Thus, where A, during a war, contrived a plan for importing goods on his own account from the enemy's country, and goods were sent to B by the same vessel, A, at the request of B, became surety for the payment of the duties on B's goods and became responsible for the expenses on a prosecution for the illegal importation of the goods and was compelled to pay them, held that A might maintain an action on the promise of B to refund the money.
But if the importation is the result of a scheme between the plaintiff and defendant or if the plaintiff has any interest in the goods or if they are consigned to him with his privity in order that he may protect them for the owner, a promise to repay any advances made under such understanding or agreement is utterly void.
General principle as to illegality of contracts, and distinctions by which it is limited.
The authorities on this subject reviewed.
Inconvenience of the practice of bringing the whole evidence, instead of the facts, for review before this Court.
The party cannot, by such a practice, take advantage of any omission in the judge's charge under a general exception to it. If he wishes the instruction of the court to the jury on any point omitted in the charge, he must suggest it and request the judge's opinion on it.
This was an action of assumpsit, brought by the defendant in error, Toler, against the plaintiff in error, Armstrong, to recover a sum of
money paid by Toler on account of goods, the property of Armstrong and others, consigned to Toler which had been seized and libeled in the District Court of Maine in the year 1814 as having been imported contrary to law. The goods were shipped during the late war with Great Britain at St. Johns, in the Province of New Brunswick, for Armstrong and other citizens and residents of the United States and consigned to Toler, also a domiciled citizen of the United States. The goods were delivered to the agent of the claimants on stipulation to abide the event of the suit, Toler becoming liable for the appraised value, and Armstrong's part of the goods was afterwards delivered to him on his promise to pay Toler his proportion of any sum for which Toler might be liable should the goods be condemned. The goods having been condemned, Toler paid their appraised value and brought this action to recover back from Armstrong his proportion of the amount. At the trial of the cause, the defendant below resisted the demand on the principle that the contract was void as having been made on an illegal consideration. When the testimony on the part of the plaintiff below was concluded, the counsel for the defendant insisted on his behalf to the court that the several matters propounded and given in evidence on the part of the plaintiff were not sufficient, and ought not to be allowed as decisive evidence to entitle the plaintiff to maintain the issue, and to recover against the defendant. The judge
thereupon delivered the following charge to the jury, which is spread at large upon the record.
"The rule of law under which the defendant seeks to shelter himself against a compliance with his contract to indemnity the plaintiff for all sums which he might have to pay on account of the goods shipped from New Brunswick for the defendant and consigned to the plaintiff is a salutary one founded in morality and good policy, and which recommends itself to the good sense of every man as soon as it is stated. The principle of the rule is that no man ought to be heard in a court of justice who seeks to enforce a contract founded in or arising out of moral or political turpitude. The rule itself has sometimes been carried to inconvenient lengths, the difficulty being not in any unsoundness in the rule itself, but in its fitness to the particular cases to which it has been applied. Does the taint in the original transaction infect and vitiate every contract growing out of it, however remotely connected with it? This would be to extend the rule beyond the policy which produced it, and would lead to the most inconvenient consequences; carried out to such an extent, it would deserve to be entitled a rule to encourage and protect fraud. So far as the rule operates to discourage the perpetration of an immoral or illegal act, it is founded in the strongest reason, but it cannot safely be pushed further. If, for example, the man who imports goods for another by means of a violation of the laws of his country is disqualified from
founding any action upon such illegal transaction for the value or freight of the goods or other advances made on them, he is justly punished for the immorality of the act, and a powerful discouragement from the perpetration of it is provided by the rule. But after the act is accomplished, no new contract ought to be affected by it; it ought not to vitiate the contract of the retail merchant who buys these goods from the importer, that of the tailor who purchases from the merchant, or of the customers of the former amongst whom the goods are distributed in clothing, although the illegality of the original act was known to each of the above persons at the time he contracted."
"I understand the rule as now clearly settled to be that where the contract grows immediately out of and is connected with an illegal or immoral act, a court of justice will not lend its aid to enforce it. And if the contract be in part only connected with the illegal transaction and growing immediately out of it, though it be in fact a new contract, it is equally tainted by it. The case before supposed of an action for the value of goods illegally imported for another or freight and expenses attending, founded upon a promise express or implied, exemplifies a part of the above rule; the latter part of it may be explained by the following case: as if the importation was the result of a scheme to consign the goods to the friend of the owner, with the privity of the former that he might protect and defend them for the owner in case they should be brought
into jeopardy, I should consider a bond or promise afterwards given by the owner to his friend to indemnify him for his advances on account of any proceedings against the property or otherwise to constitute a part of the res gesta or of the original transaction, though it purports to be a new contract. For it would clearly be a promise growing immediately out of and connected with the illegal transaction. It would be, in fact, all one transaction, and the party to whom the promise was made would by such a contrivance contribute in effect to the success of the illegal measure."
"But if the promise be unconnected with the illegal act and is founded on a new consideration, it is not tainted by the act, although it was known to the party to whom the promise was made and although he was the contriver and conductor of the illegal act. Thus, if A. should, during war, contrive a plan for importing goods from the country of the enemy on his own account by means of smuggling or of a collusive capture, and in the same vessel should be sent goods for B., and A. should, upon the request of B., become surety for payment of the duties or should undertake to become answerable for expenses on account of a prosecution for the illegal importation, or should advance money to B. to enable him to pay those expenses, these acts constituting no part of the original scheme, here would be a new contract upon a valid and legal consideration, unconnected with the original act although remotely caused by it, and such contract
would not be so contaminated by the turpitude of the offensive act as to turn A. out of court when seeking to enforce it, although the illegal introduction of the goods into the country was the consequence of the scheme projected by A. in relation to his own goods."
"Whether the plaintiff has any interest in the goods imported by the defendant from New Brunswick or was the contriver of or concerned in a scheme to introduce these goods, or even his own, if he had any, into the United States by means of a collusive capture or otherwise, or consented to become the consignee of the defendant's goods with a view to their introduction are questions which must depend upon the evidence, of which you must judge. It ought, however, to be remembered that it would seem from the letters of introduction of the defendant to the plaintiff sometime after this importation had taken place that these gentlemen were, at that time, strangers to each other."
And the jurors having submitted to the court an inquiry, in the words following, viz.,
"The jury beg leave to ask the judge whether Toler must have an interest in Armstrong's goods to constitute him a participator in the voyage? If simply having goods on board will constitute him such?"
The court gave its opinion upon the same as follows:
"The plaintiff simply having goods on board would not constitute him a participator or affect the contract with the defendant. Being interested in the goods would."
This charge was excepted to by the defendant,
and a verdict having been found for the plaintiff, on which a judgment was rendered in his favor, the cause was brought by writ of error to this Court.