PART III. Covenant to dispose by deed or will. THE MATTER OF CONTRACTS. intention of the parties was that one of them should do a certain thing, but he is allowed at his option to do it in one or other of two modes, and one of these modes becomes impossible by the act of God, he is still bound to perform it in the other mode” (i). Under a policy of fire insurance whereby "the company may reinstate property damaged or destroyed instead of paying the amount of the loss or damage," if it becomes impossible to reinstate, the insurer must pay (k). In a lease of a coal mine the lessee covenanted to raise a stated quantity in each year and pay a royalty upon it, or to pay the same amount of money as a fixed rent, it was held that he must continue to pay the rent during the term, though it became impossible to raise the coal because the mine was worked out (7). A covenant to make a certain disposition of property by deed, or by will, presumptively gives an option during life; and it may be discharged by the death of parties rendering the disposition by will inoperative. A father upon the marriage of his daughter covenanted with the husband by deed or will to give to his daughter an equal share with his other children of all the estate of which he should die possessed, and the daughter died in the lifetime of the father without issue; it was held that the father, having the alternative of the will, was discharged from the covenant (m). And where under like circumstances the covenant was by deed or will to make a settlement of property in certain stated terms for the benefit of the wife and children of the marriage, the covenant was held to be satisfied by a will in the required terms, though the interest of the children lapsed by their death in the lifetime of the testator (n). A father upon the marriage of his daughter promised the intended husband that he would at his death leave to his daughter an equal share of his property with his other children; the daughter died in the lifetime of the father leaving children of the marriage, and the father died bequeathing his property to two surviving daughters; it was held that the promise was alternative as capable of being performed in two ways, viz., either by bequeathing an equal share by will, or by leaving his children to share equally upon intestacy; that the death of the daughter in his (i) Kindersley, V.-C., Barkworth v. Young, 4 Drew. 25; 26 L. J. C. 163. (k) Brown v. Royal Ins., 1 E. & E. 853; 28 L. J. Q. B. 275; Anderson v. Commercial Ass., 55 L. J. Q. B. 116. (1) Bute v. Thompson, 13 M. & W. 487; 14 L. J. Ex. 95. (m) Jones v. How, 9 C. B. 1; 7 Hare, 267; 19 L. J. C. 324. (n) Brookman's Trust, L. R. 5 Ch. 182; 39 L. J. C. 138. lifetime rendered the latter way impossible, but did not render the CHAP. III. former impossible, because under the Wills Act (1 Vict. c. 26), s. 3, the bequest of a share by will would not lapse in the event of the death of the daughter leaving children; that "it was manifestly the intention of the parties that in one way or the other the daughter should have an equal share of the testator's property, and if the testator was prevented even by the act of God from performing his obligation in one way, he was bound to perform it in the other way which was possible” (0). Impossibility of performance may affect the consideration of a Consideration contract, where the consideration is executory. A promise which is impossible of performance. impossible of performance at the time of making it, in fact or in law, cannot form a valid consideration (p). A promise which is Consideration possible and valid at the time of making it is a sufficient considera- becoming impossible. tion, though it may subsequently become impossible. But in such case the mutual promises may be impliedly dependent, or conditional upon performance on each side; and then the one promise would fail by reason of the non-performance of the other as a condition precedent, in the event of such performance becoming impossible (q); or the contract might be such as to import an implied exception of the circumstances of impossibility (r). Where further performance is rendered impossible before completion, questions may arise whether or not a new contract may be implied from the acceptance of a part performance of the consideration on the one hand, or, on the other hand, for a return of money already paid for the consideration which fails; upon the principles already stated respecting the formation of contracts (s). (0) Barkworth v. Young, 4 Drew. 1; 26 L. J. C. 153. See Re Fickus, (1900) 1 Ch. 331; 69 L. J. C. 161. (p) Nerot v. Wallace, 3 T. R. 17; Lery v. Yates, 8 A. & E. 129; 7 L. J. Q. B. 138; Faulkner v. Lowe, 2 Ex. 595. See ante, p. 457. (r) See ante, p. 489. See ante, p. 38; Anglo-Egyptian CHAPTER IV. ILLEGALITY. PAGE Illegality at common law-by statute-by foreign law.......... 505 .... 507 Sale of public offices-salaries and pensions-ecclesiastical bene- 507 Agreements affecting public justice-commission of crimes-com- 509 Agreements and conditions in restraint of marriage-for procur- 539 Separation deeds-custody of children 540 Agreements made for illegal purpose-participation in the illegal 544 ..... Agreements in fraud of third parties-compositions in fraud of 547 Effect of illegality in avoiding agreement-extrinsic evidence of 549 Money paid under executory illegal agreements-money paid ... 551 Effect of illegality in part of the consideration-in part of the 555 557 PART III. Effect of illegality supervening upon contract AN agreement may involve some matter or purpose which is illegal, and therefore renders it void of legal effect as a contract. But where a contract has been confirmed by Act of Parliament, no objection can be taken to any of its provisions on the score of illegality (a). The illegality may be found in the matter of the (a) Manchester Ship Canal v. Manchester Racecourse Co., (1901) 2 Ch. 37; 70 L. J. C. 468, consideration or of the promise as expressed in the agreement, or it may be found in the purpose to which the agreement, though legal in expression, is applied.—It is purposed here to consider shortly the sources of illegality in general; and to review the principal matters which have been held to avoid agreements upon the ground of illegality; and then to treat of the effects of such avoidance upon the rights of the parties. CHAP. IV. The Illegality at A matter may be illegal at common law or by statute. common law prohibits generally whatever is contrary to public common law. policy and morality, as defined by the decisions of the courts. "Public policy requires that a contract to commit a crime, or to give a reward to another to commit a crime, is necessarily void. The decisions have gone further, and contracts to commit an immoral offence, or to give money or reward to another to commit an immoral offence, or to induce another to do something against the general rules of morality, though far more indefinite than the previous class, have always been held to be void" (b). But the mere good of the public is not a matter which the court will consider as affecting a legal contract; as where a railway company had covenanted not to build on certain land which they had purchased, it was held that they were not entitled to avoid their covenant and build an extension of the railway, merely for the reason. that it was required for the convenience of the public (c). The statute law expresses commands and prohibitions in written By statute. terms, upon the construction of which it is to be determined in each case whether an act is so far illegal that it cannot be made the subject of a contract. A statute imposing a penalty upon an act presumptively implies a prohibition, though there are no prohibitory words; and an agreement involving such act is void for illegality (d). But a statute may impose a penalty for a special and limited purpose only, as for the protection of the revenue, without intending any further prohibition; and an agreement may then be valid, though involving an infringement of the statute. In (b) Jessel, M. R., Printing Registering Co. v. Sampson, L. R. 19 Eq. 465; 44 L. J. C. 705; see Griffiths v. Dudley, Q. B. D. 357; 51 L. J. C. 543; Davies v. Davies, 36 C. D. 359; 56 L. J. C. 962; Re Hollis' Hospital and Hague, (1899) 2 Ch. 540; 68 L. J. C. 673. (c) Lloyd v. L. C. & D. Ry., 2 D. J. & S. 568; 34 L. J. C. 401; Raphael v. Thames (d) Cope v. Rowlands, 2 M. & W. 149; PART III. Foreign law. such case the question depends upon the construction of the statute, as to the restricted or general operation of the prohibition; but if the words of the statute are clear, the purpose of the legislature is immaterial (e). On the other hand an act may be prohibited without any express penalty, and it cannot then be the subject of a valid contract (ƒ). The phrase in a statute "it shall be lawful," taken literally, is permissive and enabling only, but the context and application may require it to be construed as obligatory (g). There is no distinction between malum prohibitum and malum in se as regards the effect of illegality upon an agreement; "the court is bound, in the administration of the law, to consider every act to be unlawful, which the law has prohibited to be done" (h). The courts of this country admit actions upon foreign contracts for performances which are legal in this country; though they may not be legal in the foreign country; as a contract made in America with a British shipowner to carry cattle to England, excepting all liability for negligence; such exception being valid by English law, but not by American (i). But no action can be brought upon a foreign contract for a performance which is illegal here, though it may be legal by the foreign law (j); as a contract made abroad with a solicitor to transact business in this country upon terms which infringe the law of maintenance (); or a foreign contract which in this country operates in unreasonable restraint of trade; although no laws against such matters existed where the contracts were made (7). The courts of this country admit actions upon contracts to be performed abroad which are legal by the foreign law; unless they are contrary to universally recognised principles of justice, or to express statutory prohibition (m); as a contract for the sale and delivery of slaves in a foreign country where the possession and sale of slaves is legal; except within the statutory prohibitions concerning slavery apply (e) Wetherell v. Jones, 3 B. & Ad. 221; (f) Bramwell, B., Cowan v. Milburn, (h) Per cur. Cannan v. Brice, 3 B. & Ald. B. & Ald. 341. (i) Re Missouri Steam Co., 42 C. D. 321; 58 L. J. C. 721. (j) Robinson v. Bland, 1 W. Bl. 256; 2 Burr. 1077; Turner, L. J., Hope v. Hope, 8 D. M. & G. 731; 26 L. J. C. 417. (k) Grell v. Levy, 16 C. B. N. S. 79. (1) Rousillon v. Rousillon, 14 C. D. 351; 49 L. J. C. 343. See South African Breweries v. King, (1900) 1 Ch. 273; 69 L. J. C. 171. (m) Halsbury, L. C., Re Missouri Steam Co., supra. |