Illegal contracts are void.

Property transferred thereunder cannot be recovered back.

Sale for illegal purposes known

(s) Above, p. 726.

(t) See Collins v. Blantern, 2 Wils. 341; Holman v. Johnson, 1 Cowp. 341; cases cited above, p. 770, n. (k); Taylor v. Chester, L. R. 4 Q. B. 309; Ayerst v. Jenkins, L. R. 16 Eq. 275; Herman v. Jeuchner, 15 Q. B. D. 561;

Kearley v. Thomson, 24 Q. B. D. 742; Scott v. Brown & Co., 1892, 2 Q. B. 724; Gedge v. Royal Exchange Ass. Corp., 1900, 2Q. B. 214; Harse v. Pearl, etc. Co., 1904, 1 K. B. 558.

(u) Fisher v. Bridges, 3 E. & B. 642.

To both parties.

To one party only.

There are certain exceptions to the rule that money paid or property delivered under an unlawful agreement cannot be recovered back. Thus if one who has paid money or delivered property under such an agreement repudiate his unlawful purpose before anything else be done, he may recover his property back; unless perhaps the object of the agreement were actually criminal or immoral (b). But this exception does not apply if the illegal purpose has been partly performed (c). And where one has made an unlawful bargain, which would (except for its illegality) be voidable by him, as if he were induced to enter into it by fraud, duress or undue influence, he may recover back any property transferred thereunder (d). Another exception to the rule is where it is sought to recover money paid under a contract made void by some statute passed for the protection of a class of persons, of which the plaintiff is one (e). And money or property deposited with a stakeholder or other agent in order to be applied under an illegal contract may be recovered back, if notice not to part with it be given before it be actually delivered over in pursuance of the agreement (f).

Exceptions to the rule that property parted with under an illegal contract cannot be recovered.

(x) See cases cited above, pp. 770, n. (k), 771.

(y) Doe d. Roberts v. Roberts, 2 B. & A. 367.

(z) See Lloyd v. Johnson, IB. & P. 340; Pearce v. Brooks, L. R. 1 Ex. 213.

(a) Cowan v. Milbourn, L. B. 2 Ex. 230.

(b) Tappenden v. Randall, 2 B. & P. 467; Palyart v. Leckie, 6 M. & S. 290; Taylor v. Bowers, 1 Q. B. D. 291.

(c) Kearley v. Thomson, 24 Q. B. D. 742.

Where a contract is not prohibited by law, but is merely made void (g), any money paid or property transferred thereunder is in general equally irrecoverable as in the case of a prohibited contract. For the rule is that money paid or property conveyed away with a full knowledge of the facts, though under a mistake of law, cannot be recovered back (h). And where an agreement is made which is not prohibited, but is binding in honour only and is void at law, the one party has in general no legal remedy if the other refuse to perform his part of the agreement after having received what was due to him thereunder (i). Thus contracts which are illegal merely because they are made void by statute stand in effect on the same footing as contracts which are prohibited. If therefore a void agreement be wholly or partly executed, the law will leave the parties in the position in which they stand, and will not lend its aid to undo what has been actually performed (j). But a party to a merely void contract is at liberty to repudiate it before it be performed, and if he do this, he may recover any money or property deposited with the other party as security for his carrying out the agreement (k). And property transferred to a stakeholder or other agent for the purpose of being applied under a merely void contract may be recovered back, if notice not to part with it be given before it be delivered over (l). Property transferred under a void agreement induced by misrepresentation or coercion may also be recovered; as gifts so induced are voidable (m). And if the contract were made void by a statute passed for the benefit of a certain class of persons, a member of the protected class may recover any property parted with in pursuance of the agreement (n). The case put above (o) of a contract not made in accordance with the Mortmain Act for the sale of land to a charity may afford an illustration of these rules. Thus if the purchasers pay a deposit on such a contract, it is thought that they may repudiate the agreement before completion and recover the deposit, whether paid to the vendor or to a stakeholder; for a deposit is paid as a guarantee for performance of the contract (p); to that extent the vendor is himself a stakeholder; so that when the purchasers abandon the agreement, as they lawfully may, the money paid is held to their use and is recoverable accordingly (q). If, however, the whole price be paid upon a conveyance not satisfying the Act, as where the vendor's execution thereof is attested by one witness only, it does not appear that the purchasers have any remedy to recover it; and the effect of the Act seems to be that the vendor may re-enter without refunding the purchase money (r).

Property transferred under void contracts.

(d) Osborne v. Williams, 18 Ves 379; Reynell v. Sprye, 1 De G. M. & G. 660, 679; Atkinson v. Denby, 6 H. & N. 778, 7 H. & N. 934; and see Harse v. Pearl, etc. Co., 1904, 1 K B. 558, 563, 564; Pollock on Contract, 384 - 386, 7th ed.

(e) Barclay v. Pearson, 1893, 2 Ch. 154, 165 - 168.

(f) Hastelow v. Jackson, 8 B. & C. 221; Bone v. Ekless, 5 H. & N. 925; Barclay v. Pearson, 1893, 2 Ch. 154, 168 - 170; Stra-ehan v. Universal Stock Exchange, 1895, 2 Q. B. 329, 1896, A. C. 166; Shoolbred v. Roberts, 1899, 2 Q. B. 560, 1900, 2 Q. B. 497, 500; Burge v. Ashley, 1900, 1 Q. B. 744.

(g) Above, p. 776.

(h) Bilbie v. Lumley, 2 East, 469; Brisbane v. Dacres, 5 Taunt. 143; Rogers v. Ingham, 3 Ch. D. 351; Kearley v. Thomson, 24 Q. B. D. 742, 745. There is an exception where money is paid under a mistake of law to an officer of the Court; Expte. Sim-monds, 16 Q. B. D. 308; Re Opera, Id., 1891, 2 Ch. 154.