it is ultra vires. 1a Though the power of courts to invalidate agreements of parties on grounds of public policy is unquestioned, and is obviously necessary, the impropriety of a transaction should be clear in order to justify the exercise of the power. "If there is one thing more than any other which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that contracts when entered into freely and voluntarily, shall be held good and shall be enforced by courts of justice." 2 § 1629. Variation of public policy. In a recent English decision the fundamental principles guiding the court were thus stated: "The question of public policy may well give rise to a difference of judicial opinion. Public policy, it was said by Burroughs, J., in Richardson v. Mellish, 'is a very unruly horse, and when once you get astride it you never know where it will carry you.' But the courts have not hesitated in the past to apply the doctrine whenever the facts demanded its application. In Janson v. Driefontein Consolidated Mines, Ltd., Lord Halsbury, L. C., said: 'I deny that any court can invent a new head of public policy.' I very respectfully doubt if this dictum be consistent with the history of our law or with many modern decisions. In Wilson v. Carnley, the Court of Appeal held that a promise of marriage made by a man who to the knowledge of the promisee was at the time of making the promise married is void as being against public policy. This decision marked a new application or head of public policy. In Neville v. Dominion of Canada News Co., Ltd., the Court of Appeal held affirming Atkin, J., that an 6 1a For performance of an ultra vires agreement, quasi-contractual recovery may be had. See supra, § 271, but not for performance of an illegal agreement. 2 Sir George Jessel, in Printing Co. v. Sampson, 19 Eq. Cas. L. R. 462, quoted in Diamond Match Co. v. Roeber, 106 N. Y. 473, 482, 13 N. E. 419, 60 Am. Rep. 464, and in other decisions. See also Hall Mfg. Co. v. Western Steel & Iron Works, 227 Fed. 588, 142 C. C. A. 220, L. R. A. 1916 C. 620; Styles v. Lyon, 87 Conn. 23, 86 Atl. 564; Harbison-Walker Refactories Co. v. Stanton, 227 Pa. 55, 75 Atl. 988. 3 Naylor Benzon & Co. v. Krainische Industrie Gessellschaft, [1918] 1 K. B. 331, 342. 42 Bing. 229, 252. 5 [1902] A. C. 484, 491. agreement by a journalist not to comment upon the plaintiff's company or its directors or business was void as against public policy. This decision created, I think, a wholly new head of public policy. In Horwood v. Millar's Timber and Trading Co. the Court of Appeal held that an agreement which unduly fettered a man's liberty of action and the free disposal of his property was void as against public policy. This decision also, I think, created in substance a new head of public policy. The truth of the matter seems to be that public policy is a variable thing. It must fluctuate with the circumstances of the time. This view is exemplified by the decisions which were discussed by the House of Lords in Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. The general economic considertions to which the courts will have regard were indicated by Lord Parker in delivering the judgment of the Privy Council in Attorney-General of the Commonwealth of Australia v. Adelaide Steamship Co.10 The principles of public policy remain the same, though the application of them may be applied in novel ways. The ground does not vary. As it was put by Tindal, C. J., in Horner v. Graves,11 'Whatever is injurious to the interests of the public is void, on the grounds of public policy."" § 1630. Effect of illegal agreements. It is commonly said that illegal contracts and agreements are void. This statement, however, is clearly not generally accurate. It is true that a court could only under very exceptional circumstances enforce specifically an illegal agreement, 12 but the rule of public policy that forbids an action for damages 8 [1917] 1 K. B. 305. 9 [1894] A. C. 535. 10 [1913] A. C. 781, 809, 810. See also the judgment of Lord Haldane in North-Western Salt Co. v. Electrolytic Alkali Co. [1914] A. C. 461, 469, 471. 117 Bing. 735, 743. 12 In Seattle Electric Co. v. Snoqualmie Falls Power Co., 40 Wash. 380, 82 Pac. 713, 1 L. R. A. (N. S.) 1032, the court for a brief period specifically enforced a contract which was held illegal as designed to create a monopoly. A refusal to enforce the contract would have involved the sudden cutting off of the supply of electricity upon which the transportation and lighting systems of the city of Seattle were dependent. The court held that the public interest required that the contract be performed until such time as an adequate supply of electricity could be otherwise procured. for breach of such an agreement is not based on the impropriety of compelling the defendant to pay the damages; in itself that would generally be a desirable thing. When relief is denied it is because the plaintiff is a wrongdoer, and to such a person the law denies relief. In a statement of Lord Mansfield frequently quoted in this connection, the matter is correctly put: "The principle of public policy is this: Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If from the plaintiff's own stating or otherwise the cause of action appears to arise ex turpi causa or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis." 13 It will be observed that Lord Mansfield rests the denial of recovery on an illegal agreement upon the illegality of the plaintiff's conduct, not the nature of the transaction. 14 To deny such persons damages, though an equally guilty defendant thereby escapes punishment will tend to diminish the number of illegal agreements. To go farther and assert that all unlawful agreements are ipso facto no contracts and void is opposed to many decisions and unfortunate in its consequences, for it may protect a guilty defendant from paying damages to an innocent plaintiff. Doubtless a statute may and sometimes does make an agreement absolutely void, but even though a statute so states in terms, void has sometimes been held to 13 Holman v. Johnson, Cowp. 341, 343. So in Gibbs & Sterrett Mfg. Co. v. Brucker, 111 U. S. 597, 601, 4 Sup. Ct. 572, 28 L. Ed. 534, the Supreme Court of the United States refers to "the elementary principle that one who has himself participated in a violation of law cannot be permitted to assert in a court of justice any right founded upon or growing out of the illegal transaction." 14 See also, e. g., Levinson v. Boas, 150 Cal. 185; s. c., sub nom., Levison v. Boas, 88 Pac. 825, 12 L. R. A. (N. S.) 575; Leightman v. Kadetska, 58 Ia. 676, 12 N. W. 736, 43 Am. Rep. 129; Gooch v. Gooch, 178 Ia. 902, 160 N. W. 333; Third Nat. Exch. Bank v. Smith, 17 N. Mex. 166, 125 Pac. 632. mean voidable, 15 and unless no other conclusion is possible from the words of a statute it should not be held to make agreements contravening it totally void.16 § 1630a. When illegality must be pleaded. A desirable flexibility of the law frequently demands the construction here contended for in ways not always easily foreseen. Thus it is generally true that illegality if of a serious nature need not pleaded. A court will of its own motion take notice of it if it appears in evidence, and deny relief to the plaintiff, and indeed will not allow a defendant to waive the 15 See, e. g., under the Statute of Frauds, supra, § 531. Consider also decisions cited infra, § 1683, allowing recovery on a contract illegal for usury when entered into, after repeal of the usury statute. 16 In Ferguson v. Sutphen, 8 Ill. 547, 573, the court said: "It does not follow because a statute declares a certain contract to be void, that either of the contracting parties can take advantage of it. A statute may declare a contract to be void, and still but one of the parties be guilty of its violation. Enactments of this character are often made for the purpose of protecting one class of men from the oppression and impositions of another class of men; and in such cases, the really guilty party is never allowed any relief under the statute, or permitted to set up the statute as a defence to relief sought by the other party. Such is the case with all laws, which declare usurious contracts to be null and void. The lender is never allowed to take advantage of the statute, because he is the guilty party; the borrower may do so, because he is not a particeps criminis. He is regarded as the victim of the usurer, and not in pari delicto. This principle applies to every contract declared to be void by the statute, in the making of which but one of the parties is in pari delicto. Browning v. Morris, Cowper, 790; Williams v. Headley, 8 East, 378." See further as recognizing that contracts are not necessarily void in any true sense of the word because of illegality: Fennell v. Ridler, 5 B. & C. 406, 408; Ewell v. Daggs, 108 U. S. 143, 2 Sup. Ct. 408, 27 L. Ed. 682; Hartford Fire Ins. Co. v. Chicago, etc., R. Co., 70 Fed. 201, 36 U. S. App. 152, 30 L. R. A. 193, 17 C. C. A. 62, aff’g 62 Fed. 904, aff'd in 175 U. S. 91, 44 L. Ed. 84, 20 Sup. Ct. 33; Doney v. Laughlin, 50 Ind. App. 38, 94 N. E. 1027; John v. Bailey, 45 Iowa, 241; Chesapeake & O. R. Co. v. Maysville Brick Co., 132 Ky. 643, 116 S. W. 1183; Myers v. Meinrath, 101 Mass. 366, 3 Am. Rep. 368; Smith v. Bean, 15 N. H. 577; Jenness v. Simpson, 84 Vt. 127, 78 Atl. 886. 17 Oscanyan v. Arms Co., 103 U. S. 261, 26 L. Ed. 539; Carter-Crumo Ce. v. Peurrung, 86 Fed. 439, 440, 58 U. S. App. 338, 30 C. C. A. 174, aff'd 99 Fed. 888, 40 C. C. A. 150; Alabama &c. Ins. Co. v. Mobile &c. Ins. Co., 81 Ala. 329, 334, 1 So. 561; Sheldon v. Pruessner, 52 Kans. 579, 589, 35 Pac. 201, 22 L. R. A. 709; Chaflin v. United States Credit System Co., 165 Mass. 501, 52 Am. St. 528; Heffron v. Daly, 133 Mich. 613, 95 N. W. 714; Drake v. Lauer, 93 N. Y. App. Div. 86, 86 N. Y. S. 986; Barry v. Mulhall, 162 N. Y. App. Div. 749, 147 N. Y. S. 996; Cansler v. defense, if he wishes to do so.18 Yet if the illegality was not serious or if public policy does not clearly require denial of relief the court may refuse thus to take notice of illegality which is not pleaded, but appears from the evidence given or offered. 19 Such diversity of treatment would be inexplicable if all unlawful agreements were of necessity void. 20 § 1631. Illustrations of recovery by innocent plaintiffs. That the principle stated in the preceding section is that upon which relief is denied is proved by the fact that if the plaintiff is wholly innocent recovery is allowed though the contract is illegal.21 Such a case arises where the illegality is due to a circumstance of which the plaintiff is justifiably ignorant. The commonest illustration is that of a contract to marry made by one already married. It is well settled that an action for breach of promise will lie in favor of a plaintiff who was ignorant of the defendant's previous marriage. 22 Penland, 125 N. C. 578, 580, 34 S. E. 683, 48 L. R. A. 441; McGuffin v. Coyle, 16 Okl. 648, 652, 85 Pac. 954, 86 Pac. 962; Hunt v. W. T. Rawleigh Medical Co. (Okl.), 176 Pac. 410; Teoli v. Nardolillo, 23 R. I. 87, 49 Atl. 489. But see 4 Encyc. Pl. & Pract. 952; Milbank v. Jones, 127 N. Y. 370, 28 N. E. 31, 24 Am. St. Rep. 454. 18 In Metz Co. v. Boston & M. R., 227 Mass. 307, 116 N. E. 475, 476, the court said: "The doctrine of waiver is not applicable to any subject where the public policy has been authoritatively declared to be contrary to waiver of rights. Laws founded upon considerations of public policy cannot be evaded by the device of waiver. The absolute defence is allowed in such instances, not for the sake of the defendant, but because it is the established principle of the law. It stands on the same footing in law as things forbidden to be done on grounds of public policy. There can be no waiver of an express prohibition embodied in the law for the general welfare. There are numerous examples of this character as to which the law says there can be no waiver, as, for example, contracts with a public enemy, Coppell v. Hall, 7 Wall. 542, 558, 19 L. Ed. 244, contracts made on the Lord's day, Day v. McAllister, 15 Grey, 433, and others of like nature." 19 Day v. Hemings, 4 L. T. (N. S.) 443; O'Brien v. Shea, 208 Mass. 528, 95 N. E. 99, Ann. Cas. 1912 A. 1030; Silver v. Graves, 210 Mass. 26, 31, 95 N. E. 948; Raymond v. Phipps, 215 Mass. 559, 102 N. E. 905; Wilde v. Sawtelle (Mass.), 122 N. E. 167; Cox v. Cameron Lumber Co., 39 Wash. 562, 82 Pac. 116. 20 Clark v. Spencer, 14 Kan. 398, 404, 19 Am. Rep. 96; Boutelle v. Melendy, 19 N. H. 196, 49 Am. Dec. 152; Kneettle v. Newcomb, 22 N. Y. 249, 78 Am. Dec. 186. See also Decker v. Becker, 143 Wis. 542, 128 N. W. 67. 21 Gibbs & Sterrett Mfg. Co. v. Brucker, 111 U. S. 597, 601, 4 Sup. Ct. 572, 28 L. Ed. 534. 22 Millwood v. Littlewood, 5 Ex. 775; Wild v. Harris, 7 C. B. 999; Daniel |