Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/277

 PART HI.] ACTS BEYOND THE CORPORATE POWERS. [§ 293. § 293. Acts of the first class, by common law principles, are branded as mala in se ; or are prohibited by statute, Fi rst class, and thereby become mala prohibita. To them applies ^ O c ^ s contra the maxim, Ex turpecausa non oritur actio. Accord- mores. ingly, a contract containing an immoral object, or a contract of which the consideration is immoral, is illegal, and may be avoided by either party. Such a contract a court will never lend itself to enforce. Thus, an agreement to pay a certain sum for obtaining the passage of a law in a state legislature is void ; x as is an agreement for contingent compensation for pro- curing a contract to furnish supplies to the government. 2 So a bill of exchange drawn in one state upon a party in another, the known and common purpose of both parties being to carry on a business of private banking, declared unlawful by a statute of the first state, is void in the hands of a party to the bill with notice of its true character. 3 It is essential, however, that the illegality should inhere in the very act or contract sought to be declared illegal. 4 Accord- ingly, it is no defence to a suit for a debt, that it arose from the receipt of the bills of a bank illegally chartered for fraudulent purposes, and that the bills were void in law, and finally proved worthless in fact. 3 Moreover, it is held that the mere knowl- edge of the one party that the other is going to use the proceeds of the contract for some illegal purpose, will not render the contract void, as against the party who does not himself par- ticipate in the illegal undertaking. 6 Thus, knowledge on the part of a bank lending money that it is to be used to carry out a contract to supply arms to the Confederate government, will not prevent the bank from recovering the loan. 7 1 Marshall v. Baltimore and Ohio R. R. Co., 16 How. 314. 2 Tool Co. v. Norris, 2 Wall. 45. 8 Davidson v. Lanier, 4 Wall. 448. Compare People v. Utica Ins. Co., 15 Johus. (N. Y.) 358. 4 See Nat. Pemberton Bk. v. Porter, 125 Mass. 333; Atlas Nat. Bk. v. Savery, 127 Mass. 75; Attleborough Nat. Bk. v. Rogers, 125 Mass. 339. 5 Orchard v. Hughes, 1 Wall. 73. 17 The bills themselves were actually current at the time when the defend- ant received them, and did not prove worthless in his hands; nor had he been forced to take them back from persons to whom he had paid them. e Tracy v. Talmage, 14 N. Y. 162; §286. 7 Jones v. Planters' Bank, 9 Heisk. (Tenn.) 455; Bank of Tennessee V. Cummings, ib. 465. 257 &~*