Pitt County NcArchives Court.....Josiah Wood Executors, Obed Wood V. 1819
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Guy Potts http://www.genrecords.net/emailregistry/vols/00017.html#0004214 January 21, 2009, 3:37 pm

Source: Nc Reports
Written: 1819

Obed Wood v. The Executors of Josiah Wood

From Pitt

May Term 1819

Money betted on a horse race is deposited with a stake holder to be delivered 
by him to the winner of the race. The stake holder pays over the money, after 
notice from the loser of the race not to do so. The loser is entitled to 
recover the money from the stake holder - for

The act of 1810, ch. 14, declares, "that every promise, agreement, note, bill, 
bond, or other contract, to pay, deliver, or secure money or other thing, won 
or obtained by wagering or betting on horse race, or to pay or secure money or 
other thing, lent or advanced for that purpose, shall be void."

In all cases of this sort, the equity is, Who has the money? Is it in the 
hands of the party of the illegal transaction? Or is it in the hands of a 
person not a party? If in the hands of a party, the money cannot be recovered, 
provided it were paid to him by the consent of the other party; because both 
parties are equally criminal, and there can be no reason why he who parted 
with his money voluntarily, shall have it back. To his case both maxims 
apply. "In pari delicto melior est conditio possidentis." And "Volenti non fit 
injuria."

But if the money be in the hands of the stake holder, or he has paid it over 
after notice not to do it, the person who made the deposit, shall recover it 
back; for as in the first case, the party who has voluntarily paid over the 
money, cannot rest his claim to recover it upon a moral foundation, so in 
this, the stake holder cannot rest his claim to retain it upon a moral 
foundation. Between him and the party making the deposit, there is no moral 
turpitude, and while the money remains in his hands, it belongs to the party 
that lodged it there.

In an illegal transaction, money may always be estopped whilst in transitu to 
the party entitled under such illegal transaction.

In October, 1817, the Plaintiff and one Causey agreed to run a quarter race 
for an hundred dollars. The money was deposited in the hands of the 
Defendant's testator, as a stake holder. The race was run, and the horse of 
Causey came out ahead; but the Plaintiff alleged the race was not fairly run, 
and forbade the stake holder from paying over to Causey, the money. He 
tendered to Causey a bond with security to keep him indemnified, and demanded 
the return of his deposit. The stake holder paid over the money to Causey 
after receiving the notice, and this suit was brought to recover the amount of 
the Plaintiff's stake.

The Judge before whom this case was tried, charged, the Jury, that it was 
necessary for the Plaintiff to prove only, that the stake holder was forbidden 
to pay over the money to Causey, and that the Plaintiff demanded his deposit; 
that as to the fairness or unfairness of the race it was entirely immaterial. 
The Jury found a verdict for the Plaintiff, and a rule for a new trial was 
obtained upon the ground of misdirection by the Court. This rule being 
discharged, the Defendant appealed to this Court.

Gaston, for the Plaintiff.

Taylor, Chief-Justice: This action was brought to recover the amount of a sum 
betted on a horse race, and deposited with the Defendant's testator as a stake 
holder. The sum was paid over by him to the supposed winner of the race, after 
notice from the Plaintiff not to do so: and the contract being illegal under 
the act of 1810, the question is, Ought the Plaintiff to recover? Where money 
has been paid on an illegal transaction in which both parties are equally 
criminal, it cannot be recovered back; for there is no reason why he who 
parted with his money freely, should have it again. Volenti non fit injuria; 
and the law in such cases esteems the condition of the Defendant, the most 
eligible, not on account of any superior merit he has to the plaintiff, but 
because the latter cannot build his claim on a moral foundation. This 
principle is distinctly recognized in many cases, and recently in Hauser v. 
Hancock, 8 Term, 575, and Edgar v. Fowler, 3 East, 222. And the first case, 
also proves, that where money deposited on an illegal wager, has been paid 
over to the winner by the consent of the loser the latter cannot afterwards 
maintain an action against the former, to recover back his deposit. But the 
law is different where the action is brought against a stake holder who has 
the money still in his possession, or has paid it over after notice not to do 
so. The distinction is taken in Cotton v. Thurland, 5 Term, 405, where the 
Plaintiff was permitted to recover a stake deposited by him on the event of a 
boxing match; and the latter case does not stand unsupporte4d, for its 
authority has been admitted and confirmed in a recent case of Smith v. 
Bickmore, 4 Taunt., 477; which was an action brought by a person who deposited 
in the hands of a stake holder, a sum of money, as a wager on the event of a 
boxing match, between himself and another; and he was allowed to recover the 
same from the stake holder, having demanded it before it was paid over. In 
that case, Sir James Mansfield observed, "The law is got into sad confusion by 
contradictory decisions respecting illegal contracts. But this case seems made 
for the express purpose of confirming Cotton v. Thurland. In that case, there 
was a doubt about the event, exactly as in this case; and the Court thought 
the money might be recovered against the stake holder. Now this is a case, not 
of an action against one of the parties to the wager, but against a stake 
holder; therefore it is different from the cases of actions against 
underwriters to recover back premiums paid on illegal contracts. Whatever may 
be the illegality of the contract, the stake holder is no party to it, and as 
long as the money remains in the hands, he ought to be accountable to some one 
for it; there can be no justice in his claim of detaining it. The question 
between a party and the stake holder, is susceptible of views and 
considerations, which do not attach to it between the parties themselves. To 
both of the latter the law refuses its aid, on principles of public policy. It 
cannot uphold the winner, for that were to enforce a void contract, and repeal 
an act of Assembly: It will not assist the loser against him, because he has 
voluntarily parted with his money: And, as both parties have violated the law, 
it will not trouble itself to alter the condition in which they have placed 
themselves. A stake holder received the deposit to be paid over to the winner, 
and the authority given him, is contermandable at any time before the payment 
is made. The money may be stopped in transitu to the person entitled to 
receive it. 3 East., 225. The Court think the Jury were improperly instructed.

No Error

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