
    Norton v. Blinn.
    While courts will not enforce an illegal contract betwen the parties, yet, if an agent of one of the parties has, in the prosecution of the illegal enterprise for his principal, received money or other property belonging to his principal, he is bound to turn it over to him, and cannot shield himself from liability therefor upon the ground of the illegality of the original transaction.
    Error to the District Court of Lucas county.
    About the first of May, 1872, Chester Blinn placed in the hands of Jesse S. Norton, at Toledo, Ohio, the sum of $500 to be by him invested as agent for Blinn in options on wheat at Milwaukee, Wisconsin, or Chicago, Illinois, with instructions to invest the money as he would his own. Norton, through his brokers, James Keller & Co., immediately purchased in his own name, but for the sole benefit of Blinn, five thousand bushels of wheat at seller’s option for June delivery at $1.42£ per bushel, and deposited the money of Rlinn as a margin of ten cents per bushel. At the date for delivery the price of ■wheat* had advanced so that a profit of $325 was realized on the transaction. This money, principal and profit, was reinvested by Norton in subsequent transaction of like nature for Blinn’s benefit, but by reason of a decline in the market price of wheat in the latter part of June, the whole amount was lost.
    These transactions were mere speculations or ventures on the future price of wheat, without any intention that the wheat would be either paid for or delivered, but with the intention that settlement between the buyer and seller would be made on the difference between the price stated in the contract and the market price at the date named for delivery. Such transactions were unlawful in the states of Illinois and Wisconsin, as well as in the state of Ohio.
    The original suit was brought in the court of common pleas of Lucas county by Blinn against Norton to recover the sum of $825, (the sum advanced and profit on the first venture,) with interest.
    On the trial testimony was offered by the plaintiff tending to prove that defendant had no authority to invest plaintiff’s money save in a single purchase, namely, the purchase of 5,000 bushels as above stated, whereupon the plaintiff requested the court to instruct the jury as follows :
    “ If the jury shall find from the testimony, that on or about the time stated in the petition, the defendant received from-the plaintiff the sum of $500 of the money of the latter, under an arrangement that the same should be invested by the defendant in wheat transactions, of the illegal character mentioned in the answer, for the benefit of the plaintiff ; that said money was so invested by the defendant, and a profit realized thereon ; and that before the commencement of this action said sum of $500, and the profits so made, came into and are still in the hands of the defendant; or that he received credit therefor in the final settlement of his accounts with the brokers through whom said business was transacted, then the plaintiff is entitled to recover said money from the defendant; nor, in such case, can the defendant avoid his liability to account for said moneys by showing that by the understanding between the plaintiff and himself, said money was to be employed in illegal transactions in wheat of the nature stated in his answer ; and that said money was employed; and said profits realized in such transactions.” ' 0
    Which charge the court refused to give, and to such refusal the plaintiff, by his counsel, then and there excepted.
    The verdict of the jury was in favor of the defendant, and judgment was rendered accordingly. This judgment on petition in error was reversed by the district court, and this proceeding is to reverse the judgment of the district court.
    
      Haynes de Potter, for plaintiff in error:
    An agreement for a sale for future delivery is a gambling contract and as such not enforceable, where the intention is that there shall be no actual sale, but only that at the time fixed for delivery the parties shall settle and the purchasers pay or receive the difference between the agreed price and the market price at the time, according as the market price is less or greater than the agreed price. Barnard v. Backhaus, 52 Wis. 593; In re John Green, 7 Biss. 338; Pickering v. Cease, 79 Ill. 328; Lyon v. Culbertson, 83 Ill. 33; Matter of Chandler, Am. Law Reg. N. S. 13, 310 ; Fareira v. Gabell, 89 Pa. St. 89 ; Ruchizky v. DeHaven, 97 Pa. St. 202; Gregory v. Wendell, 39 Mich. 337 ; Rumsey v. Berry, 65 Me. 570.
    If Norton had agreed to go forward and advance money from time to time on this contract, which Blinn should repay to him, Norton could not recover from Blinn on this contract the money so advanced. Several of the cases above cited are of that character, and are between principal his agent or factor. See Ruchizky v. DeHaven, 97 Pa. St. 202 Fareria v. Gabell, 89 Pa. St. 89; Barnard v. Backhaus, 52 Wis. 593; Rumsey v. Berry, 65 Me. 570 ; Gregeory v. Wendell, 39 Mich. 339.
    If Blinn had not sent to Norton the $500 Norton advanced upon the first option and Norton had lost that amount of money, ho could not, we submit, liave compelled Blinn to pay it on such an agreement under the decisions of the above cases.
    Shall Blinn be in better position than Norton? If the contract is not to be enforced as to the one, shall it be as to the other ?
    
      C. II. Scribner and J. If. Ritchie, for defendant in error:
    •The real question is as to whether or not an agent, who has received moneys from his principal to be invested in such transactions, and who has realized upon them, may put the •money in his pocket and keep it.
    Wharton Agency §§ 28, 250; 2 Kent’s Com. (11th ed.) 613, 14; Wood on Master and Servant, 394 § 202; Ewell’s Evans on Agency, side page 31, note 1 ; Id. 327, note 1; Brooks v. Martin, 2 Wall. 70; Murrey v. Vanderbilt, 39 Barb. 140; S. C. Zinn’s Lead. Cas. on Trusts, 103; Tenant v. Elliott, 1 B. & P. 3; Farmer v. Russell, 1 B. & P. 295 ; Bousfield v. Wilson, 16 M. & W. 185 ; Johnson v. Lansley, 12 C. B. 468; Baldwin v. Potter, 46 Verm. 402; Evans v. City of Trenton, 4 Zab. N. J., 764-771; Pointer v. Smith, 7 Heisk. (Tenn.) 137; German, &c. Church v. Stegner, 21 Ohio St. 488. See, also, Insurance Co. v. Ellis, 32 Ohio St. 388.
   McIlvaine, J.

While it has ever been the policy of the law to leave the parties to an illegal transaction where it finds them by refusing relief to either in respect thereto, it has, oii the other hand, never regarded property or money employed therein or produced thereby as common plunder to be seized or retained by others in no way interested in such business.

The question, however, in this case, arising on the refusal of the court of common pleas to charge the' jury as requested by the plaintift is : May an agent who has transacted illegal business for his principal and has received money belonging to his principal and accruing from such business, defend himself, in a court of law, against liability to account therefor, by showing such unlawful business and his connection therewith as such agent ?

If tlie agent receiving such money had not been employed in conducting such business, it would seem to be quite plain, upon principles of purest morality, that-he should account to his principal therefor; but where the sole employment of the agent was to manage and conduct the unlawful transactions, it seems to me, a much more difficult question arises. In the latter case the agent is a partioeps eriminis. In offenses against trade, and the like, the law, regulating the administration of penal justice, does not recognize the relation of principal and agent, unless the agent be an innocent instrument merely. In such cases the guilty offenders against the law are all principals; hence, as between such, with some show of reason it might be said, that the law will afford no redress by civil remedies.

The rulings upon this question, however, have been so uniformly the other way, it becomes our duty to follow them, unless we find them totally repugnant to public policy and and morality. Upon a careful examination of the authorities, we find no such repugnancy — indeed they commend themselves to our judgment.

In the first place the rulé which denies civil remedies in such cases applies only to the parties to the illegal transaction. Public policy does not require that one engaged in an unlawful enterprise should, by pleading it, shield himself from liability for the wages of his employees, agents or servants. It is enough that the rule should be enforced as between those who have some interest in the enterprise as principals.

In the second place, it is contrary to public policy and good morals, to permit employees, agents or servants to seize or retain the property of their principal, although 'it may be employed in illegal business and under their control. No consideration of public policy can justify a lowering of the standard of moral honesty required of persons in these relations.

And again, if parties to an illegal contract, waive the illegality, and honestly account as between themselves, no other person can be heard to complain of such accounting. Hence, we think, that if in making such' settlement one of the guilty parties should deliver property or money to an agent of another to be delivered by the agent to his principal, such agent is bound to account therefor to his principal.

A leading case on this question is Tenant v. Elliott, 1 Bos. and Pul. 2, where the defendant, a broker, affected an illegal insurance for the plaintiff on a ship, and after a loss the underwriters paid 'the amount of the insurance to the defendant, who refused to pay the same over to plaintiff, on the ground that the insurance contract was illegal. Judgment for the plaintiff. Eyre, C. J., said : The defendant is not like a stockholder. Whether he who has received money to another’s use on an illegal contract, can be allowed to retain it, and that not even at the desire of those who paid it to him ? I think he cannot.”

In Brooks v. Martin, 2 Wall. 70, it was held by the supreme court of the United States, that “ After a partnership contract confessedly against public,policy has been carried out, and money contributed by one of the partners was passed into other forms — the results of the contemplated operation completed, a partner in whose hands the ¡profits are, cannot refuse to account for and divide them 'on the ground of the illegal character of the original contract.”

In Baldwin v. Potter, 46 Vermont, 402, it was held that “ an agent is bound to account to his principal for money received in the course of his agency, for goods sold by his principal on orders obtained by him as such ageut on commission, although such sales as between the principal and purchaser be illegal and void.”

In Evans v. Trenton, 4 Zab. 764, it was held “ The mere agent of a party to an illegal transaction cannot set up the illegality of the transaction in a suit by his principal to recover money that has been paid to such agent for his principal on account of the illegal transaction. This defense can be set up only by a party to the illegal transaction.” In this case the illegal transaction was accomplished through the agent.

See also Wood on Master and Servant, section 202, where it is said:

While the courts will not enforce an illegal contract, yet, if a servant or agent of another has, in the prosecution of an illegal enterprise for his master, received money or other property belonging to the master, lie is bound to turn it over to him, and cannot shield himself from liability therefor upon the ground of the illegality of the original transaction.”

The doctrine of these authorities, and many others which might be cited is recognized, applied and enforced in German, &c. Church v. Stegner, 21 Ohio St. 488, wherein it is held: “ While a protniss'ory note given to and discounted by a corporation for a loan of money in the course of an unauthorized banking business will not be enforced, yet where the treasurer of such corporation has taken and appropriated to his prívate use moneys deposited with it contrary to the statute against unauthorized banking, and being unable when called on to refund the.same, secures it by his promissory note, such note will not be held to have been given in the course and furtherance of an illegitimate business, and an action will lie thereon.”

Ludgmetit of district court affirmed.  