not undertake to ascertain the relative guilt of the parties, or afford relief to either. But where money is paid on a contract which is merely prohibited by statute, and the receiver is the principal offender, he may be compelled to refund. This is not only consonant to the principles of sound policy and justice, but is now so settled by authority, whatever doubts may have been entertained respecting it in former times. In the case of Smith v. Bromley, 2 Doug. 696, note, it was decided, that the plaintiff was entitled to recover in an action for money had and received, for money paid by the plaintiff to the defendant for the purpose of inducing him to sign the certificate of a bankrupt, the plaintiff's sister. Lord MANSFIELD laid down the doctrine on this point, which has been repeatedly confirmed. "If the act is in itself immoral, or a violation of the general laws of public policy, there the party paying shall not have this action; for where both parties are equally criminal against such general laws, the rule is potior est conditio defendentis. But there are other laws which are calculated for the protection of the subjects against oppression, extortion, deceit, etc. If such laws are violated, and the defendant takes advantage of the plaintiff's condition or situation, there the plaintiff shall recover." And this doctrine was afterward adhered to and confirmed by the whole court, in the case of Jones v. Barkley, 2 Doug. 684.

On this distinction it has ever since been held, that where usurious interest has been paid, the excess above the legal interest may be recovered by the borrower in an action for money had and received. So, money paid to a lottery-office-keeper as a premium for an illegal insurance is recoverable back in an action for money had and received. Jaques v. Golightly, 2 W. Bl. 1073. But in Browning v. Morris, 2 Cowper 790, it was decided, that where a lotteryoffice-keeper pays money in consequence of having insured the defendant's tickets, such contract being prohibited by St. 17 Geo. 3, c. 46, he cannot recover it back, though the premium of insurance paid by the insured to the lottery-office-keeper might be. The distinction, on which this case was decided, is very material in the present case. Lord MANSFIELD referred to the determination in Jaques v. Golightly, where it was said, "that the statute is made to protect the ignorant and deluded multitude, who, in hopes of gain. and prizes, and not conversant in calculations, are drawn in by the office-keepers." And he adds, "it is very material that the statute itself, by the distinction it makes, has marked the criminal; for the penalties are all on one side; upon the office-keeper. The man who makes the contract is liable to no penalty. So, in usury, there is no penalty upon the party who is imposed upon." The same distinction is noticed and enforced by Lord ELLEN BOROUGH, in Williams v. Hedley, 8 East 378. In that case it was decided, that where money was paid to a plaintiff to compromise a qui tam action for usury, it might be recovered back in an action for money had and received; because the prohibition and penalties of the St. 18 Eliz., c. 5, attached

only on "the informer or plaintiff, or other person suing out process in the penal action, making composition, etc." It was argued for the defendant in that case, "that as the act of the defendant co-operated with that of the plaintiff in producing the mischief meant to be prevented and restrained by the statute, it was so far illegal, on the part of the defendant himself, as to preclude him from any remedy by suit to recover back money paid by him in furtherance of that object, and that if he was not therefore to be considered as strictly in pari delicto with the plaintiff in the qui tam action, he was at any rate particeps criminis, and in that respect not entitled to recover from his co-delinquent, money which he had paid him in the course and prosecution of their mutual crime." This argument was overruled, and Lord ELLENBOROUGH fully approved the doctrine laid down by Lord MANSFIELD in Smith v. Bromley, and the decisions in the several cases in which that doctrine had been confirmed. The same distinction has been recognized in other cases, and was adopted by this court in Worcester v. Eaton, II Mass. R. 376, in which PARKER, C. J., after referring to the above cases, said: "This distinction seems to have been ever afterwards observed in the English courts, and being founded in sound principle, is worthy of adoption, as a principle of the common law in this country."

The principle is, in every respect, applicable to the present case, and is decisive. The prohibition is particularly leveled against the bank, and not against any person dealing with the bank. In the words of Lord MANSFIELD, "the statute itself, by the distinction it makes, has marked the criminal." The plaintiff is subject to no penalty, but the defendants are liable for the violation of the statute to a forfeiture of their charter. To decide that this action cannot be maintained would be to secure to the defendants the fruits of an illegal transaction, and would operate as a temptation to all banks. to violate the statute, by taking advantage of the unwary and of those who may have no actual knowledge of the existence of the prohibition of the statute, and who may deal with a bank without any suspicion of the illegality of the transaction on the part of the bank.

There is still another ground on which the plaintiff's counsel rely. This action proceeds in disaffirmance of an executory illegal contract, and was commenced before the money which the defendants contracted to pay was by the terms of the contract payable; the plaintiff therefore had a right to rescind the contract, or rather to treat it as a void contract, and to recover back the consideration money. It was so decided in Walker v. Chapman, Lofft 342, where money had been paid, in order to procure a place in the customs, but the place had not been procured; and in an action brought by the party who paid the money, it was held, that he should recover, because the contract continued executory.1 This case was cited with approbation by BULLER, J., in Lowery v. Bourdieu, 2 Dougl. 470, and the distinction between contracts executed and executory, he said, was a sound one. The same distinction has been recognized 'Compare Liness v. Hesing, reported herein post p. 249.

in actions brought to recover back money paid on illegal wagers, where both parties were in pari delicto. The case of Tappenden v. Randall, 2 Bos. & Pul. 467, was decided on that distinction. HEATH, J., said, "it seems to me that the distinction adopted by Mr. Justice BULLER between contracts executory and executed, if taken with those modifications which he would necessarily have applied to it, is a sound distinction. Undoubtedly there may be cases where the contract may be of a nature too grossly immoral for the court to enter into any discussion of it; as where one man has paid money by way of hire to another to murder a third person. But where nothing of the kind occurs, I think there ought to be locus poenitentiae, and that a party should not be compelled against his will to adhere to the contract." The same distinction is recognized in several other cases. 5 T. R. 405; 1 H. Bl. 67; 7 T. R. 535; 3 Taunt. 277; 4 Taunt. 290. In the case of Aubert v. Walsh, 3 Taunt. 277, the authorities were considered and the law was definitely settled as above stated; and it does not appear that it has ever since been doubted. In Utica Ins. Co. v. Kip, 8 Cowen 20, the same principle is recognized, although the case was not expressly decided on that point. The distinction seems to be founded in wise policy, as it has a tendency in some measure to prevent the execution of unlawful contracts, and can in no case work injustice to either party.

I

It is, however, denied by the defendants' counsel that the contract in question was executory, within the true intent and meaning of these decisions and the doctrine now laid down. This question has not been much discussed, and it is not necessary to decide it in the present case, the court being clearly of opinion that the plaintiff is entitled to recover on the other grounds mentioned. We have considered the question as to the distinction between executory and executed contracts, because it may be of some importance that the law in that respect should not be supposed to be doubtful in our opinion, which might be inferred, perhaps, if we should leave this question unnoticed.

The only remaining question is, whether the plaintiff was bound to make a demand on the bank before he commenced his action. The general rule is that where money is due and payable, an action will lie without any previous demand. But where money is deposited in a bank in the usual course of business, we should certainly hold that a previous demand would be requisite. But if money should be obtained by a bank by fraud, or, as in the present case, by means of an illegal contract, the bank claiming to hold it under such contract, there can be no good reason given why the bank should be exempted from the operation of the general rule. In Clark v. Moody, 17 Mass. R. 145, it was held, that if a factor should render an untrue account, claiming a greater credit than he was entitled to, the principal would have a right of action without a demand. If the defendants had sold to the plaintiff a post-note payable at a future day, it could hardly be doubted that an action would lie to recover back the consideration money, without any previous

demand; and there seems to be no substantial distinction between such a case and the one in question.

Judgment on default.1

STACY v. FOSS.

19 ME. 335-1841.

ASSUMPSIT, to recover the sum of twenty-five dollars, deposited with the defendant by the plaintiff, as a stakeholder, on a bet on a horse-trot.

WESTON, C. J.-It is conceded that the bet out of which this controversy grew is not a valid contract. And it has been decided by this court that all wagers in this state are unlawful. Lewis v. Littlefield, 15 Maine R. 233. The action, however, is resisted on the ground that the stakeholder is a party to the unlawful contract, and that both plaintiff and defendant being in pari delicto, the law will lend its aid to neither. And a distinction is taken between notice to the stakeholder, repudiating and disaffirming the contract, before and after the happening of the event, upon which the wager is made to depend.

When the money has once been paid over to the winner, unless where made recoverable by statute, the parties being clearly in pari delicto, no action can be maintained to recover it back. Howson v. Hancock, 8 T. R. 575; McCullum v. Gourlay, 8 Johns. 147. But where the money has not been paid over by the stakeholder, although it has been lost by the happening of the event, it has been held, that upon notice and demand the stakeholder is liable to the loser for the amount by him deposited. Cotton v. Thurland, 5 T. R. 405; Lacaus

1

Accord, Smart v. White, 73 Me. 332 (1882), and Tracy v. Talmage, 14 N. Y. 162 (1856), in both of which cases the authorities are reviewed, and in which latter case the rule is stated as follows (p. 181):

"It was insisted by the counsel for the receiver, upon the argument, that in no case would relief be afforded to any party to an illegal contract, unless he applied for such relief, or, at least, had elected to disaffirm the contract while it remained executory. This position cannot, I think, be sustained. It overlooks distinctions which are clearly settled. The cases in which the courts will give relief to one of the parties on the ground that he is not in pari delicto, form an independent class, entirely distinct from those cases which rest upon a disaffirmance of the contract before it is executed. It is essential, to both classes, that the contract be merely malum prohibitum. If malum in se, the courts will in no case interfere to relieve either party from any of its consequences. But where the contract neither involves moral turpitude nor violates any general principle of public policy, and money or property has been advanced upon it, relief will be granted to the party making the advance: 1. Where he is not in pari delicto; or, 2. In some cases where he elects to disaffirm the contract while it remains executory. In cases belonging to the first of these classes, it is of no importance whether the contract has been executed or not; and in those belonging to the second, it is equally unimportant that the parties are in pari delicto."

See Eastern Metal Co. v. Webb Co., 195 Mass. 356 (1907), where recovery was allowed for benefits conferred by performance of the non-prohibited part of an entire contract, there being no performance of the prohibited part.

sade v. White, 7 T. R. 535. The case of Yates v. Foote, 12 Johns. I, has been cited for the defendant, where it was held that after the event has happened no action will lie by the loser against the stakeholder, upon notice and demand, while the money remains in his hands. And in McKeon v. Caherty, 3 Wend. 494, the law is stated to have been thus settled, by the case of Yates v. Foote. That was a decision of the court for the correction of errors, fifteen to six, against the unanimous opinion of the Supreme Court, delivered by Chief Justice KENT. It was one of five cases depending upon the same facts and principles, in one of which, Vischer v. Yates, II Johns. 23, the judgment of the Supreme Court is reported. KENT, C. J., there reviews the English cases, and he thence deduces that an action may be maintained against the stakeholder, upon notice and demand, before he pays over the money, as well after as before the happening of the event. To this result, as sound and correct, is added the undivided opinion of the Supreme Court of New York. The rule, that no action lies where the parties are in pari delicto, was interposed. The learned Chief Justice says, "this objection is applied exclusively to the suit against the principal or winner; and there is no instance in which it has been used as a protection to the intermediate stakeholder, who, though an agent in the transaction, is no party in interest to the illegal contract." It best comports with public policy, to arrest the illegal proceeding before it is consummated, and, in our judgment, the opinion of the Supreme Court is better sustained, upon principle and authority, than that of the court of errors. The non-suit, ordered by the court below, is not warranted by the law of the case.

Exceptions sustained.1

'In Bernard v. Taylor, 23 Ore. 416 (1893), plaintiff deposited with defendant $560, for the benefit of Grant, who was to compete with Anderson in a foot race which was known by plaintiff and the rest of the above persons to be a "bogus" race for the purpose of "roping in" somebody. Before the time appointed for the race, plaintiff demanded back his money, defendant refused, and plaintiff sued and was allowed to recover it. And after the pretended race was run the victim was allowed, in a tort action, to recover his money, in Hobbs v. Boatright, 195 Mo. 693 (1906); Stewart v. Wright, 147 Fed. 321 (1906); Lockman v. Cobb, 77 Ark. 279 (1905). See also 21 Har. L. Rev. 60.

The right of recovery of money or property by a loser on a gaming contract is sometimes much enlarged by statute. See, for example, New York Penal Law, §§ 993-995.