policy upon the life of a domestic citizen before complying with the provisions of such a statute, the assured cannot make that the ground of refusal to pay premiums; but if the policy contains the usual provision of forfeiture for non-payment of premiums, it will lapse by reason of such non-payment, although the company may not have complied with the statute. In other words, if the policy remains in force at all, it remains in force according to its terms; it is not valid in so far as it operates against the company, while at the same time

being void in so far as it imposes a burden upon the assured or the beneficiary."

§ 7958. Doctrine where the Statute Gives a Specific Penalty. Some of the decisions cited in the preceding section have been influenced by the consideration that the statute imposes a distinct penalty upon the foreign corporation and upon its agents for doing business within the State in violation of the statutory restrictions; and the courts have reasoned in such cases that it was the intention of the legislature that the penal or criminal sanction should afford the only remedy for the violation of the statute, and that it did not intend that a violation of the statute should operate to avoid contracts made before its conditions were complied with. There is no hard and fast rule of statutory construction which requires the courts, in every case, to hold that the corporation is disabled from bringing an action upon a contract which it has made with a domestic citizen, while doing business in the State in violation of the provisions of such a statute. The question will, in every case, depend upon a fair construction of the statute; and cases will arise where the reasonable interpretation will be tbat, in annexing the penalty, the legislature intended that that should be the exclusive sanction of the statute.'

3

"Union Mut. Life Ins. Co. v. McMillen, 24 Ohio St. 67, 79. The court hold, arguendo, in compliance with the doctrine of the text, that the policy is not voidable by either party. Ibid.

• Fritts v. Palmer, 132 U. S. 282; Union Mut. Life Ins. Co. v. McMillen, 24 Ohio St. 67; Ehrman v. Teutonia Ins. Co., 1 McCrary (U.S.), 123; The Manistee, 5 Biss. (U. S.) 381; Toledo &c. Co. v. Thomas, 33 W. Va. 566; 8. C. 25 Am. St. Rep. 925; 11 8. E. Rep. 37; Sherwood v. Alvis, 83 Ala. 115; 8. C. 3 Am. St. Rep. 695; 3 South. Rep. 307; Pennypacker v. Capital Ing. Co., 80 Iowa, 56; 8. c. 20 Am. St. Rep. 395. To the doctrine that where the

statute annexes a penalty to the doing of an act, it does not always imply that the prohibition will render the act void, see Pangborn v. Westlake, 36 Iowa, 546, 548.

*Thus, in a case in Alabama, where the court had under consideration the construction of a statute giving effect to a constitutional provision imposing restrictions upon foreign corporations, which statute annexed heavy penalties upon such corporations and their agents for engaging in business without complying with its provisions, it was said that the imposition of those provisions would not have the effect of making contracts void which were entered into, but that the

Many judicial decisions could, no doubt, be adduced in support of the principle that where an act is neither malum in se nor malum prohibitum, — for instance, the act of dealing in bills of exchange, - the mere fact that the legislature has imposed the condition of a license upon the doing of the business, does not avoid contracts made with such a dealer before he has taken out the license. But it must be kept in mind that the rule is totally different where the business is in itself immoral or dangerous to the public, in which cases, the fact that there is a penal or even a criminal sanction in the statute cannot operate to render valid contracts made in violation of its provisions."

offenders would be merely liable to the not an act or agreement intended to
statutory penalties. Sherwood v. Alvis, be rendered inoperative by such a
83 Ala. 115; 8. c. 3 Am. St. Rep. 695, statute, see Payson v. Withers, 5 Biss.
698. The court cited : Sedgw. Stat. & (U. S.) 269.
Const. Law, 2d ed., 339, 341; Alabama See Lindsey v. Rutherford, 17 B.
&c. R. Co. v. McAlpine, 71 Ala. 545. Mon. (Ky.) 245.
But the theory of this decision (in · For instance, where the plaintiff
Sherwood v. Alvis, supra), was over- was the owner of a lottery scheme, and
turned in subsequent cases in that employed the defendant as his agent
State, the court holding that contracts to sell his lottery tickets, empowering
made by foreign corporations without him to receive and retain the proceeds
complying with the constitutional pro- of such sales until satisfied that the
visions, were void in such a sense that drawing was fairly conducted, and re-
they could neither be enforced by the quiring him then to account therefor,
foreign corporation nor by its agent - it was held that he could not recover
for the purpose of recovering his com-

on a note given by the defendant for missions : Farrior W. New England the amount of the proceeds of lottery Mortgage &c. Co., 88 Ala. 275; Mul- tickets thus sold by him. Lemon t. lens v. American Freehold &c. Co., 88 Grosskopf, 22 Wis. 447; 8. c. 99 Am. Ala. 280; Christian v. American Free- Dec. 58. So, the sale of intoxicating hold &c. Co., 89 Ala. 198; Dudley u. liquors is generally recognized as an Collier, 87 Ala. 431; 8. c. 13 Am. St. evil to be repressed by legislation, Rep. 55. These decisions distinguish rather than encouraged or tolerated; the case of Sherwood v. Alvis, supra, and therefore the sale of intoxicating upon its facts, by pointing out that liquors without a license, or on Sunthat was a case where a mortgage day, against the prohibition of a statexecuted in favor of a foreign corpo- ute, is a contract of such a nature ration had been foreclosed and the that an action cannot ordinarily be purchaser had brought ejectment; 80 maintained thereon (Melchoir v. Mcthat the contract was executed. That Carty, 31 Wis. 252; 8. c. 11 Am. Rep. the soliciting of subscriptions to the cap- 605), although it is well known that ital stock of a foreign corporation is in many cases such statutes are re

§ 7959. Doctrine that Neither Party can Set up his Own Violation of Law. -Where the prohibitory statute also annexes a penalty, there is more room for doubt; but even in the latter case many courts take the view that the corporation I will not be allowed to make its own violation of the law the ground of an action in the courts of the sovereignty whose law it has violated, so as to maintain an action upon the contract. The general theory probably is, that no action can be maintained, grounded upon the doing of that which is prohibited by law, and that the mere fact that the statute imposes a penalty or a criminal sanction does not alter the principle.'

garded merely as revenue laws, so that the violation of them does not invalidate the contract. The law is not in such a state as the Supreme Court of Wisconsin say in the last case, that "it is quite immaterial whether such illegal contract be malum in se, or only malum prohibitum. In either case the maxim, ex turpi causâ non oritur actio, is applicable." That may be the law in particular jurisdictions, and judges may inadvertently have declared it in broad terms in many cases; but decisions can be cited, even from the Supreme Court of Wisconsin, disputing the proposition. It may not be amiss, however, to note the cases which the Supreme Court of Wisconsin cite in support of it: Schwartzer v. Gillett, 1 Chand. (Wis.) 207; Kellogg v. Larkin, 3 Chand. (Wis.) 133; Bryan v. Reynolds, 5 Wis. 200; s. c. 68 Am. Dec. 55; Fay v. Oatley, 6 Wis. 42; Maxwell v. Reed, 7 Wis. 582; Etna Ins. Co. v. Harvey, 11 Wis. 394; Miller v. Larson, 19 Wis. 463; Phalen v. Clark, 19 Conn. 421; s. c. 50 Am. Dec. 253; Finn v. Donahue, 35 Conn. 216; Gray v. Hook, 4 N. Y. 449; Nellis v. Clark. 4 Hill (N. Y.), 424; Mills v. Rice, 6 Gray (Mass.), 458; Dodson v. Harris, 10 Ala. 566; Pepper v. Haight, 20 Barb. (N. Y.) 429; Martin v. Wade, 87 Cal. 108; Hoover v. Pierce, 27 Miss.

13; Day v. McAllister, 15 Gray
(Mass.), 433; Toler v. Armstrong, 4
Wash. (U. S.) 297. That these hold-
ings do not express any hard and fast
rule of law may be proved by the
mere reference to the decisions in the
next section, and especially to such
cases as Chase's Patent Elevator Co.
v. Boston Tow-Boat Co., 152 Mass.
428, where a statute provided the
manner in which corporations of a
certain kind might be organized, and
forebade every such corporation to
"commence the transaction of the
business for which it was organized"
until those things are done. Here it
was held that a contract made by
such a corporation, in the course of
its business, before "those things"
had been done, was nevertheless
valid. And see the reasoning in Rog-
ers &c. Corp. v. Simmons, 155 Mass.
259, 260.

1 Cincinnati &c. Co. v. Rosenthal, 55 Ill. 85; 8. c. 8 Am. Rep. 626; Thorne v. Travelers' Insurance Co., 80 Pa. St. 15; 8. c. 21 Am. Rep. 89.

2 See Mitchell v. Smith, 1 Binn. (Pa.) 110, 118; s. c. 2 Am. Dec. 417; Seidenbender v. Charles, 4 Serg. & R. (Pa.) 151; s. c. 8 Am. Dec. 682; Swan v. Scott, 11 Serg. & R. (Pa.) 155; Columbia Bank v. Haldeman, 7 Watts & S. (Pa.) 233; s. c. 42 Am. Dec. 229; 397 6337

But the rule is not universal, either in respect of actions ex contractu or ex delicto. Properly restrained, the rule is that a plaintiff cannot recover where he derives his title to maintain his action from his own breach of the law. But the mere fact that, at the time when the cause of action arose, whether it be a cause of action ex contractu or ex delicto, the plaintiff was engaged in a collateral violation of law, will not, under the rule, disable him from maintaining his action. For illustration, coming into the domain of the law of torts, if a man is driv ing with his team on the wrong side of the road, or is allowing his wagon to stand transversely across the street, instead of lengthwise upon it as required by a city ordinance,3-and in that condition another traveler negligently drives upon his team and vehicle, he may have an action for the resulting damages. On this principle, although the corporation cannot make its own violation of the law the ground of an action, yet the other contracting party is not precluded thereby from maintaining his action to enforce the contract; for the prohibition of the statute is not against him, but in so far as he participates in its violation, his act is not of such a character that his right of action arises proximately out of his own wrongful act, but if his act is wrongful at all, its wrongfulness is collateral to his right of action. He may, indeed, know that the corporation has no right to do business in the State without complying with certain statutory conditions; indeed he is bound to know this if he is bound to know the law; but he may not know whether or not, in the particular case, the corporation has complied with those conditions; and where

Thomas v. Brady, 10 Pa. St. 164; Scott v. Duffy, 14 Pa. St. 18, 20; Holt v. Green, 73 Pa. St. 198; s. c. 13 Am. Rep. 737; Law v. Hodgson, 2 Camp. 147; 8. c. 11 East, 300; Langton v. Hughes, 1 Maule & S. 593.

1 Gregg v. Wyman, 4 Cush. (Mass.) 322; Way v. Foster, 1 Allen (Mass.), 408; Woodman v. Hubbard, 25 N. H. 67; s. c. 57 Am. Dec. 310; Phalen v. Clark, 19 Conn. 421; s. c. 50 Am. Dec.

253; Simpson v. Bloss, 7 Taunt. 246; Bosworth บ. Swansey, 10 Met. (Mass.) 363; s. c. 43 Am. Dec. 441.

2 Spofford v. Harlow, 3 Allen (Mass.), 176.

Steele v. Burkhardt, 104 Mass. 59; s. c. 6 Am. Rep. 191.

See, for further illustrations of this principle, 2 Thomp. Neg. (1st ed.), p. 1161, § 11, and p. 1201, § 49.