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as to whether a contractor after having built a structure upon, or driven a canal through, Federal property, or diverted a stream, or appropriated the waters of a pond, or constructed an outlet for a sewer, or directed a sewer into an unpolluted stream, any of which acts is an unlawful act, and which bas been the consideration for his contract, could recover on such a contract for what he has done. It has been held that a party could not avoid a contract on the theory that the doing of extra work was malicious mischief, because the extra work required the contractor to dig or excavate in a street without proper license, which was an unlawful act.'

A contract to build houses on a disused unconsecrated burial-ground, necessitating the removal of many corpses, has been held illegal;' and it has been held that no recovery could be had under a contract to grade a street for earth filled outside the street-line and included in the slopes, and which had been deposited on private property, as it was an unlawful act without the consent of the owner, but the fact that a part of the improvement was on private property did not prevent the contractor from recovering for work done on the street.' Recovery has been allowed a contractor who built a bridge and some track without the railroad company's territory, the contract for which was void, where it appeared that the company had possession and enjoyed the benefit of the structures. The act of the city in preventing the contractor from improving a street in which the city had no right of way does not give the contractor a right to recover as for breach of contract, as the contract was void.

Instances are numerous in the engineering profession where contracts have been taken to build structures or do work by processes that are patented, the execution of which could be stopped by an injunction and the performance of which would be unlawful, but whether the contractor would be excused and the contract declared illegal may well be doubted.'* Such might be cases of patent processes or patent apparatus required, such as patent heating apparatus, patent pavements, etc. A contract to publish a copyrighted book without permission of the author, or to act a play, or to copy a picture without permission of the artist would be of the same character.

Contracts to erect structures the maintenance, ownership, and use of which are contrary to law are not binding. Such are contracts in violation of local ordinances and building regulations, as those fixing the thickness of

· Bernstein 0. Downs (Cal.), 44 Pac. Rep. 557.

9 Gibbons o. Chalmers, 1 C. & E. 577 (1885).

* Davies 0. E. Saginaw (Mich.), 32 N. W. Rep. 919 (1887).

Johnson o. Duer (Mo.), 21 8. W. Rep. 800.

• Cunningham 0. Massena Springs R. Co. (Sup.), 18 N. Y. Supp. 600.

. Sang v. Duluth (Minn.), 59 N. W. Rep. 878; Becker v. Pbila. (Pa.), 16 Atl. Rep. 625 (1889).

See cases in Dillon's Munic. Corp'ns. (4th ed., 1890), & 468, 8 467 noto.

* See Contracts Impossible, Secs. 669-680, infra. + See Secs. 816-825, infra.

walis.' It has been held that a carpenter and builder could not recover for work ho had performed upon a bowling-alley in the state of Ohio, the build. ing being unlawful property. For labor and materials furnished for the erection of an awning which is forbidden by a city ordinance no recovery was allowed, neither upon the express contract with the owner nor upon an implied contract, as on a quantum meruit. The law will not assist those who have transgressed its commands, but leaves the parties where they have placed themselves.' *

When a statute prohibits every contribution of money to promote the election of any person or ticket, except for expenses of printing and the circulation of handbills and other papers previous to such election, an an agreement to pay $1000 to one who had built a log cabin for campaign meetings in consideration that he would keep it open for the accommodation of political meetings to further the success of certain candidates nominated for congress was held illegal and not enforceable."

Contracts for the erection of a building in violation of a city's building regulations, such as pertain to safety of the structure and infringement of others' rights and the protection of citizens, may be declared invalid. It has been held that a contract to erect a proper and legal building is avoided by an ordinance passed two days after the contract was made prohibiting the erection of such a building. A contract to erect a building prohibited by the statute will not become valid by reason of the subsequent repeal of the statute.' A contract executed in consideration of a previous illegal contract is also void.”

77. The act must not be to commit a crime or a misdemeanor, or to injure others in the enjoyment of their rights.

78. The agreement must not be for the sale or supply of adulterated goods, or of intoxicating liquors in violation of excise laws prohibiting traffic in them.

79. The act must not require either party to violate the Sabbath laws or to ignore the laws and regulations of society. +

80. The act must not be to effect something in contravention of the law or public policy or in violation of judicial morals; to do what the law forbids or to neglect what the law requires."

i Stevens v. Gourley, 7 C. B. N. S. 99.

Spurgeon 0. McElwain, 6 Ohio 442; see also 14 Amer. & Eng. Ency. Law 786.

3 Briukman v. Eisler, 16 N. Y. Supp. 154, and many cases cited ; and see another awning case, Simis v. Brookfield, 34 N. Y. Supp. 695 ; and see Ellwood v. Mani (Com. Pl.), 16 Pa. Co. Ct. Rep. 474: and Harper 0. Jonesboro (ca.), 22 S. E. Kep. 139

4 Jackson v. Wulker, 5 Hill (N. Y.) 127 [1843].

* See Sec. 87, infra.

• Stevens v. Gourley, 7 C. B. N. S. 99; Burger o. Roelsch (Sup.), 28 N. Y. Supp. 460.

6 McMillin v. Walker, 21 N. B. R. 31.

? Banchor v. Mansel, 9 Amer. & Eng. Ency. Law 881, and cases cited.

8 Cate o. Blair, 6 Coldw. 639: Pierce o. Kibbee. 51 Vt. 559 : King v. Winanto, 71 N. U. 469, als0 73 N. C. 50.

9 9 Amer. & Eng. Ency. Law 8.


+ See Sec. 59, supr.



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81. The Undertaking must Not Have for Its Object the Creation of a Monopoly.- Such acts are attempts by the officers of cities, railroads, and other corporations to grant exclusive rights or franchises to individuals and other companies, as "the exclusive right to sell water to a city,”! “the exclusive right to maintain and construct a telegraph-line along a railroad.": A contract by a railroad company granting to a hackman the exclusive right to bring his hacks into its depot grounds has been held not against public policy.' But a contract by a town to give to one party an exclusive right or frarchise for many years to light its streets and its residences is a monopoly, and cannot be enforced. The granting of exclusive privileges to telegraph companies to run wires along the line of a railroad or to lay an oil-line across a large tract of land is void as tending to create monopolies."

A railroad company may not agree to refrain from applying to the legislature for a land grant and to assist another railroad company in getting it. Such a contract is void, even though it stipulates that the means employed in securing the grant shall be reasonable and proper. A contract not to sell water rights to any other person or persons under a penalty called liquidated damages, and not to make any settlement or compromise with other parties, is void as imposing a restraint upon compromises of litigation and disputes.'

Certain cases may be recited to show how near the line one can walk and yet keep within public policy. Thus it has been held that two railroad companies whose lines are parallel may agree to extend their lines so as not to interfere with one another, the agreement being made to prevent an unprofitable war of construction. A contract by a railroad company by which it agrees to give all its ferry business at a certain point to one company and to employ none other has been held a good and valid contract.' An agreement to refrain from forming a corporation for the construction of waterworks and from carrying on or prosecuting such work so that another may incorporate for that purpose and conduct the business without competition is not void as against public policy.“ An agreement by a vendor in consideration of the sale of a lot not to build a fat in the imme. diate neighborhood is not against public policy as being in restraint of trade."



· Davenport o. Kleinschmidt (Mont.), 13 Pac. Rep. 249 (1887).

• Pac. Tele. Cable Co. o. W. Union Telegraph Co., 50 Fed. Rep. 493.

• Cbippewa, etc., Ry. v. Chicag), etc., Ry., 44 N. W. Rep 17.

· Ford v. Gregson (Mont.), 14 Pac. Rep. 659 (1887).

* Brwn 0. N. Y. Ces etc., R Co., 27 N Y. Supp. 69.

* Saginaw Gas & Light Co. o. Saginaw (U. S. Cir. Ct.) (Mich.), 22 The Repir 579 (1886); Gale o. Kalamazoo. 23 Mich. 344.

69 Amer. & Evg. Ency. Law 892: Union T:ust Co. o. Atchison, etc., R. Co. (N. M.), 43 Pac. Rep. 701.

8 Ives v. Smith, 8 N. Y. Supp. 46.

9 Wiggins Ferry Co. o. C. & A. R. Co., 73 Mo. 389 (1881).

Onkes v. Cattaraugus Water Co. (N. Y.), 38 N. E. Rep. 461.

11 Lewis v. Gallner (N. Y.), 29 N. E. Rep. 81, reversing 14 N. Y. Supp. 362.

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Contracts in general for total restraint of trade, or contracts for the pur pose of creating a monopoly, or compacts having for their object the eleva. tion or depression of the market prices, or to raise or lower the prices of goods and produce, or sales of stocks, grain, and produce on margins, or option contracts whose effect is to corner the markets, are held to be against public policy and void.'

82. Contracts Not to Bid or Compete. If the undertaking is to prevent competition in trade at public sales or in bidding for public work it is against public policy. A compact entered into by members of a trade-union to establish and maintain uniform rates of charges and to prevent competition among its members is illegal, and one party cannot maintain an action against another who has underbid him.' A contract, or a note given by reason of an agreement, between contractors who belong to an association of masons and wilders, the by-laws of which require the members to pay to the association 6 per cent. on all contracts taken by them, and to submit all bids for work first to the association, and which provide that the lowest bid. der shall add 6 per cent. to his bid before it is submitted to the owner or his architect, is contrary to public policy and void."

Contracts by builders or bidders to refrain from bidding against each other for public works or to share the profits with others not bidding at a public sale, or any agreements which tend to destroy competition, which the law requires before the contract is awarded, ok to induce a sacrifice of the property sold, are illegal and void. However, an agreement to bid, the object of it being fair, is not void. It is a fraud upon the public for persons

? to obligate themselves not to bid, or not to bid beyond a certain sum.' An agreement to pay certain commissions to a person who shall become a mock subscriber and purchaser of house-lots, which the owner is to take back off his hands if he does not wish to keep them, the object Aeing to induce others to purchase, is against public policy.'* Contracts by campanies who have been competitors who agree not to compete with each other either as railroads for traffic, but to divide their earnings; or as gas com

anies, not to compete in certain districts of a city, will not be enforced. A railroad pooling contract, the evident object of which is to stisle competition;

for the purpose of raising rates, is void as contrary to public policy.'



Illegal Contracts, 9 Amer. & Eng. also McMullen o. Hoffman (C. C), 75 Fed. Ency. Law 879.

Rep. 547. Moore v. Bennelt(Ill.), 29 N. E. Rep. 888. McDonnell 0. Rigney (Mich.), 60: N. W: 3 Milwaukee Maisons' & Builders' Ass'n Rep. 52; Atlas Nat. Bavk v. Holin C. C. v. Niezerowski (Wis.), 70 N. W. Rep. 166. A.), 71 Fed. Rep. 489.

49 Amer. & Eug Ency. Law 898: People & Texas & R. Ry. Co. v. So. Pac. R.O. 0. Stevens, 71 N. Y. 527; Durfee v. Moran, (La.), 6 So. Rep. 888. 57 Mo. 374 (1874).

9 Chicago G L. Co. 0. People's G. L. 5 Wicker 0. Hoppock, 6 Wall. 94 (1867); Co. (III.). 13 N. E. Rep. 169 (1887). Flanders o. Wood (Tex.), 18 S. W. Rep.572, 10 Cbicigo, M & St. P. Ry. Co. o. Wa. between competing architects.

bash, St. L. & P. Ry. Co. (C. C. A ), 61 • Hunter 0. Pfeifer, 108 Iud. 197; see Fed. Rep. 993.

* See Lowest Bidder Chup. VI., Sec. 148, infra.


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83. Contracts that Promote Gambling. It is against the policy of the law to sustain gaming or gambling contracts, whether at games of chance or on the stock-market; or even to enforce agreements to repay money borrowed for the purpose of gambling.' Anything which induces a man to risk his money or property without any other liope of return than to get for nothing any given amount from another is gambling and demoralizing to the community. All gambling is immoral, and, wagering or gambling agreements being in violation of the law and in the nature of a public wrong, have no legal effect. Money lent for the express purpose of settling losses on illegal stock-jobbing transactions to which the lender was no party, cannot be recovered back. It being unlawful for one man to pay, it cannot be lawful for another to furnish him with the means of paying. The mere fact that a lender of money knew that it was to be used for gambling in oil is not sufficient to defeat a recovery unless he confederated with the bor. rower for its unlawful use.* *

84. The Act Must Not be Inconsistent with the Duties and Obligations of a Party Who has Undertaken It.-Such duties and obligations may be due to the public, or they may be such as arise from fiduciary relations, as those of an agent to his employer, or of an officer to his company, or of a trustee to his beneficiary. Thus it has been repeatedly held that the officers of a railroad company cannot agree to locate its depot at a particular point,' or the route of its road through a certain place." If the contract tends to sacrifice the interests of stockholders or of the public it is against public policy and therefore not valid. The agreement is not of itself void,' and will hold if the company's and public interests have not suffered.'

An interesting case came before the courts in Oregon, where one H. being director and president of a railroad company and owner of a controlling interest in the stock, agreed for a money consideration to cause the line of railroad to be relocated over a longer and more expensive route; the contract was held to be contrary to public policy. It was beld that a railroad company was a sort of public corporation, and that its officers were bound to be disinterested in the consideration of public questions.

85. A Fiduciary Can have No Personal Interest in His Principal's Contract. - Independent of the fact that a railroad company is a quasi-public cor


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Stebbins o. Leowolf, 3 Cush. 137 (1849). 6 Railroad Co. 0. Ralston, 41 Ohio St. : Waugh o. Buck (Pa.), 6 Atl. Rep. 923 573. (1886).

. Frey v. Ft. Worth & R. G. Ry. (Tex.),

0. : Florida Cent. & P. R. Co. 0. State 24 S. W. Rep. 950; Bank v. Hendrie, 49 (Fla.), 13 So. Rep. 103: Northern Pac. R. Iowa 402 (1878]: Mills County v. B. & M. Co. o Territory (Wish ), 13 Pac. Rep. R. Co , 47 Iowa 66 (1877). 604 (1887).

• Holiday 0. Peiterson, 5 Oregon 177 * Linder v. Carpenter, 62 III. 309 (1872); [1874]: 1 Redfield on Rys. 577. § 140; alko 13 III App. 568.

Fuller v. Dame, 18 Pick. 472; Pacific R. • Bestor o. Watben, 60 III. 138 (1871). Co. v. Sceley, 25 Mo. 212; Bestor v. Wat.

hen, 60 III. 138 (1871). * See Sec. 75, supra.

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