and impose a penalty for the making of some others without rendering the contracts void. A statute requiring a lawyer or a physician to be licensed renders a contract made without compliance with it void.

Buckley, acting as a real estate broker in Chicago, purchased certain property for Humason. The ordinance of Chicago required all real estate brokers to be licensed and fixed the license fee at $25, providing a penalty for its violation. Buckley at this time had no license. In an action for his commissions it was held that he could recover nothing for his services. Business transacted in violation of law cannot be the foundation of a valid contract. Buckley v. Humason, 50 Minn. 195.

In the above case, if the contract had been executed, the money paid could not be recovered. When an illegal contract has been executed the law leaves the parties where they are.

A law requiring weights and measures to be sealed, as a condition precedent to a sale of goods by a merchant, renders a contract made in violation thereof void.

A Massachusetts statute provided that all oats and meal should be bargained for and sold by the bushel. Held, the seller could not recover the price of the meal and oats sold by the bag.- Eaton v. Kegan, 114 Mass. 433.

Sometimes a statute simply imposes a penalty and does not invalidate the contract.

Where a city has an ordinance requiring a license of a peddler before he is allowed to sell his wares a penalty is imposed for violation of this ordinance, but usually any contracts which he made before he secured a license are allowed to stand.

In this country statutes against wagers or bets have been passed in most of the states, and all wagers are now practically declared contrary to public policy and void.

Love made a wager of $20 with Harvey that the body of one Dr. Cahill was buried on a certain side of the main avenue in Holywood cemetery. The stakeholder, although forbidden so to do, paid the $40 left with him to Harvey. Held, that all wagers are unlawful. The party receiving the money from the stakeholder after being forbidden to receive it is liable to the other for a return of the money, even though he be the winner of the wager. - Love v. Harvey, 114 Mass. 80..

Adams and Corbin enter into a contract whereby if Adams's horse wins a race with Corbin's horse, Corbin shall pay Adams $100, but if Corbin's horse wins the race, Adams shall pay Corbin $100. Adams's horse won the race and Corbin paid the $100. Afterwards Corbin learned that wagering contracts were illegal in his state and he attempted to recover the $100 paid. As the contract was completed Corbin had no redress.

Statutes in many states also prohibit the desecration of the Sabbath day, and any contract entered into on that day contrary to the statutes is void. It is generally held that a contract entered into on Sunday to be performed on any other day is valid, if the parties thereto recognize it as valid on a subsequent week day, while a contract entered into at any time which is to be performed on Sunday is void. Statutes in the different states vary in this regard.

Sunday contracts which result from necessity such as calling a doctor, or contracts which do not concern worldly business such as contracts in aid to a church, are not affected by the statutes.

The court held, in an action on a promissory note made on Sunday, that contracts made on Sunday are void, and a promissory note made upon that day will not support an action. Clough v. Goggins, 40 Iowa 325.

In some states it is illegal for one to follow his "ordinary calling" or work; in others, to make any contracts, etc. The different statutes differ so materially that no general rule can be laid down as to what acts are prohibited.

Aside from the contracts declared unlawful and void by statute, there are contracts which are illegal at common law. The courts will not enforce an agreement to commit a crime or to do a civil wrong.

Held, that in a composition of a debtor with his creditors, any contract with one of them whereby he is to receive more than his pro rata share is void and any security given upon such a promise is void.

-White v. Kuntz, 107 N. Y. 518.

Contracts Against Public Policy. All contracts which if enforced would be contrary to the good of the public or opposed to the welfare of the community, are said to be against public policy and therefore void. Those contracts which tend to injure the government in its relations with other countries, those with alien enemies which involve any communication over the border line, and those in restraint of trade are illustrations of this class of contracts.

A contract to break a law of a sister state is also against public policy.

Agreements to prevent or hinder the course of justice are

illegal; as, to agree to conceal a crime of which one has knowledge, to refrain for a certain consideration from prosecuting a criminal, to agree not to testify as a witness, to influence a witness's testimony, or to bribe a juror.

Held, that a contract to deed a certain piece of property, where the real consideration was an agreement to drop a criminal prosecution against the grantor's son, was void as against public policy.

- Partridge v. Hood, 120 Mass. 403.

A contract tending to injure the public service is contrary to public policy and therefore void — for example, an agreement by a public officer to assign his salary to a creditor, or an undertaking to influence the action of a legislature by lobbying, or an agreement to hinder or prevent competition for public

contracts.

A

Agreements which tend to promote and encourage litigation are also void; that is, it is not legal to speculate in lawsuits. may have a cause of action against B but it is not lawful for C to buy the action for the purpose of instituting suit. The rule was formerly more strict than now. The holding in most states at the present time is that an attorney can institute a suit on a "contingent fee," which means that he is to receive for his services a percentage of what he recovers. In the earlier days this was forbidden.

Agreements contrary to good morals are illegal. So also are contracts which affect the freedom or security of marriage, as an agreement not to marry, and contracts made in consideration of the procuring or bringing about of a marriage, or mutual agreements to obtain a divorce.

Restraint of Trade.-There is another class of agreements, known as contracts in unreasonable restraint of trade, which are prohibited by law as against public policy. It is for the good of the community and the welfare of the individual that competition in trade should exist and that every man should be free to engage in the occupation or vocation he may prefer. Still it is but fair that a man in selling out his business shall include with it the good will, and refrain from opening up a like business at the next door or on the same street. The rule is, therefore; that if the restraint imposed upon the one party is not

greater than the protection the other party requires. the contract is valid.

Martin sold his lumber business, situated in Denver, to Long and agreed not to engage in the lumber business for a period of five years. This is a contract in general restraint of trade and cannot be enforced. If Martin had agreed in writing not to engage in the lumber business in the city of Denver for a period of five years, this would have been a contract in reasonable restraint of trade and would have been enforceable.

From the nature of the case it will be seen that a covenant to refrain from engaging in the same business within the same city might be reasonable in a grocery business, while in another business, the limitation of the whole state would be only just, as in the case of a manufacturer of heavy machinery requiring a wider territory for his sales.

Dandelet sold his dyeing and scouring establishment, and leased the premises to Guerand, entering into a covenant that he would not at any time thereafter engage in a like business in the city of Baltimore. Held, that this covenant was valid, as it was not too comprehensive in its restriction. — Guerand v. Dandelet, 32 Md. 561.

Roeber, who was engaged in the manufacture and sale of matches throughout the United States, sold his stock of machinery and good will to Diamond Match Co. He covenanted that he would not, at any time within ninety-nine years, engage in such business in any of the states or territories except Nevada and Montana. Held, that the covenant was valid, as the restraint was reasonable considering the interests to be protected. - Diamond Match Co. v. Roeber, 106 N. Y. 473.

Perry sold his patent on a sandpapering machine to Berlin Machine Works and in the contract agreed "not to manufacture, sell, or cause to be sold any sandpapering machines of any description.” He violated the agreement and Berlin Machine Works sued for an injunction and damages. It was held that the agreement was not a just and lawful protection to the business of manufacturing and selling under the patent, was in unreasonable restraint of trade, and therefore void.

Berlin Mach. Works v. Perry, 71 Wis. 495.

QUESTIONS

1. What is the subject matter of a contract? Give an example.

2. What may be the subject matter of a contract?

3. Can an illegal object be the subject matter of a contract? Explain. Mention some illegal objects.

4. What contracts are usually forbidden by law?

5. Will courts entertain an action based on an illegal contract? Explain.

6. Can a lawyer or physician practice in your state without a license?

7. How does the law regard contracts made on Sunday? What is the law of your state?

8. Mention a contract which would be against public policy.

9. Is there any difference in effect between an illegal agreement and one against public policy?

10. What is the effect of a contract in violation of an existing law? II. Are wagering contracts lawful in your state?

12. Explain the meaning of "in restraint of trade."

13. Under what conditions are contracts in restraint of trade binding? 14. Distinguish between general restraint of trade and reasonable restraint of trade. Give an example of each.

6. CONSIDERATION

Consideration in an Executory Contract.

Consideration is

the inducement to a contract. There must be some act or thing of value given or promised by the promisee in order to make the promise of the promisor enforceable, unless the terms thereof are fully carried out or executed. Therefore there must be consideration in every executory contract.

Jackson offered Hart $500 for the automobile he was driving. Hart accepted the offer and a sale resulted. The $500, which was the consideration, was what induced Hart to sell his automobile.

A contract under seal is in a way, under the common law, an exception, for the seal is said to import a consideration, and the instrument being sealed, no other evidence of consideration is required. Now, however, in a few of the states, the seal is by statute regarded as only a presumption of consideration in an executory contract and is not sufficient without some actual consideration. But if the seal is used on a gratuitous promise for the purpose of creating a consideration, the effect is the same as at common law.

A father gave his daughter a written instrument under seal by which he promised to pay her $312. This was understood to be a part of the money which the father had owed his wife, now deceased, and he felt it should go to the daughter, although there was no legal obligation. The defense to this promise was want of consideration. Held, that as the promise was intended to be a gratuitous one the seal imported sufficient consideration. - Aller v. Aller, 40 N. J. Law 446.

The Consideration must have Value. While consideration is an essential element of every legally enforceable contract,