for future delivery, even where an actual delivery is contemplated.59

Lotteries are the distribution of prizes by lot or chance. They are another form of wagering contracts and are illegal. But where there is a mere distribution of prizes and no consideration is paid directly or indirectly for the right to participate, it is not a lottery.

60

106. Same subject-Usury.-Practically all of the states have a rate of interest for the loan of money, beyond which it is not legal to exact interest. Laws dealing with this subject are usually termed usury laws. A contract which violates the provisions of such a statute is said to be usurious. In order to make the contract usurious, there must be an actual borrowing or lending of money.61 Thus, it is permissible to place a penalty of a certain amount in a contract, in case of a default by one party. Where A agrees to convey Blackacre to B, and B promises to pay A $5,000 by January 1st, or pay an additional sum of $50 a day for each day of delay, such a contract is not usurious. But where A loans B $100, and it is agreed that B shall pay twelve per cent. interest, the contract is bad if the legal rate of interest is about seven per cent. Various penalties are attached by statutes to such usurious contracts. Some provide that neither the principal nor the interest may be recovered; others allow the recovery of the principal, but not of the interest. There is a conflict

59 Schneider v. Turner, 130 Ill. 28.

60 People v. Gillson, 109 N. Y. 389; Cross v. People, 18 Colo. 321. 61 Struthers v. Drexel, 122 U. S. 487; Drury v. Wolfe, 134 Ill. 294.

of authority as to whether interest on overdue inter

est is usury.

107. Agreements contrary to public policy.While freedom of contract is a constitutional right which ought not to be interfered with except for good cause, individuals cannot be permitted to do or fail to do anything the performance or omission of which is in any degree clearly injurious to the public. There are various classes of such agreements which will be considered more in detail.

63

Agreements affecting the public service. Agreements which tend in any way to affect the public service are illegal. Within this class are agreements for the sale of a public office or its salary or emoluments. Similar are promises to use personal influence, in distinction from purely professional services, to secure the nomination, election or appointment of a person to an office. An agreement to procure legislation or the favorable action of a public servant is illegal.64

Where A, a land-owner, agreed to use his influence for a public improvement, it was decided that he could not be held to his promise.65 So, a quasi-public corporation cannot make an agreement with an individual which will affect or limit public rights. For

66

62 Young v. Hill, 67 N. Y. 162.

63 W. Va. Transportation Co. v. Ohio, etc., Co., 22 W. Va. 600.

61 Schneider v. Local Union No. 60, 116 La. 270, LEADING ILLUSTRATIVE CASES.

65 Doane v. Chicago City Ry. Co., 160 Ill. 22, LEADING ILLUSTRATIVE CASES.

66 A quasi-public corporation is one which deals in a commodity which the public cannot well do without and in which the public consequently has an interest. It is to be distinguished from a public corporation which is conducted by the public. See subject, CORPORATIONS.

instance, an agreement as to the location of a railroad station may be invalid for this reason. The rights of the public govern; consequently, if the contract is fair to the public, it will be upheld."

67

Agreements obstructing justice. The law will not uphold any agreement which perverts or obstructs justice. There are several illustrations which should be considered.

Champerty is the making of an agreement to carry on another person's suit in consideration of the receipt of a part of the amount to be recovered. Maintenance arises when a person maintains a suit or quarrel to the disturbance or hindrance of a right. Both of these were crimes under the old English common law. But in the United States, the rules have been modified and are not very definitely settled. In some states, they have been discarded entirely, whereas, in others, they exist only by virtue of statutes.68 Maintenance, where recognized, is confined to an improper and intentional stirring up of strife."9

While the policy of the law is in favor of the settlement of litigation, individuals cannot be permitted to dispose of matters in which the people of the whole state have a vital interest. Hence, courts will disregard any agreements to compound a crime or to stifle a prosecution. The private injury involved in the matter may be settled if there is no agreement to forbear prosecution.70 Some authorities permit the making of an agreement between the parties in case

67 Beasley v. T. & P. Ry. Co., 191 U. S. 492.

68 Ackert v. Barker, 131 Mass. 436, LEADING ILLUSTRATIVE CASES.

69 Perine v. Dunn, 3 Johns. 508 (N. Y.).

70 Sloan v. Davies, 105 Ia. 97; Barrett v. Weber, 125 N. Y. 18.

of slight misdemeanors. In any event, it must appear that the crime had been committed or that the prosecution was actually pending at the time the agreement was made, in order to make the agreement invalid."1

72

Agreements to procure, give or suppress evidence are void. Anything inconsistent with the impartial course of justice will not be upheld even if the intent of the parties is not fraudulent, and although no evil resulted. A contract whereby the defendant is to pay the plaintiff a certain compensation if he is successful in detecting acts of larceny by the employees of the defendant's manufacturing plant is illegal. Inasmuch as it tends to induce the plaintiff to make charges in order to earn the money, the agreement will not be upheld by the courts. "It is the contingent nature of the compensation and its tendency to induce false charges and all the fraud and trickery of the private detective business that prima facie stamps this contract with illegality." Similarly, promises to submit to arbitration are regarded by the courts as attempts to oust them from their jurisdiction. While it is legal to make as a condition of a contract that disputes arising therefrom shall be referred to arbitration before any right of action may arise, it has` been held illegal to agree to refer all matters to arbitrators and to them alone, for the latter agreement attempts to prevent any action being brought

71 Schultz v. Catlin, 78 Wis. 611; Columbia Lodge v. Manning, 57 N. J. Eq. 338.

72 Langdon v. Conlin, 67 Nebr. 243.

73 Willemin v. Bateson, 63 Mich. 309.

74 Manufacturers Bureau v. Everwear Hosiery, 138 N. W. 624 (Wis.).

at all.75 Statutes have modified this common-law rule, and arbitration agreements are very generally upheld.

To permit an employer to enter into an agreement with his employee, as part of the contract of employment, whereby the employee deprives himself of rights which he would ordinarily possess under the common law or by statute would be an obvious obstruction of justice. Thus, a contract by A and B, wherein A agrees not to sue his employer, B, for any injuries he may sustain while in the master's employ, would be invalid. Likewise, a common carrier may not exempt itself from liability to its passengers either for its own or its employees' negligence. But a common carrier may exempt itself from liability as an insurer of the safety of the passengers.76 Some authorities hold that a telegraph company may not exempt itself from loss on account of the delay in the transmission of a message, while others hold that it may." Still other jurisdictions take a middle course and permit such an exemption unless the delay is due to defective instruments or to want of skill or ordinary care on the part of the operatives.

Agreements contrary to good morals. Agreements which are contra bonos mores (against good morals) are those contrary to ethical principles and established rules of decency. For instance, a contract involving sexual intercourse and illicit cohabitation, although it is not punishable criminally unless such

75 Clark, Contracts (2d ed.), p. 243; Edwards v. Insurance Society, 1 Q. B. D. 563 (Eng.); Niagara Fire Insurance Co. v. Bishop, 154 Ill. 9. 76 Davis v. Cent. Vermont R. R. Co., 29 Atl. 313.

77 W. U. Telegraph Co. v. Blanchard, Williams & Co., 68 Ga. 299.