Southern Mutual Aid Ass'n v. Blount

Buchanan, J.,

(after making the foregoing statement) delivered the opinion of the court.

The appellants insist that the decrees complained of are erroneous upon three grounds: (1) Because the court denied the prayer of the defendants’ cross-bill to cancel the stock held by the appellees; (2) because it held that the Southern Mutual Aid Association was liable to the appellees; and (3) because it held that Sauls was liable to the appellees.

As to the first contention: If it be true, as claimed by the appellants in their answer, which was treated as a cross-bill, that the preferred stock of the appellees in the United States Mutual Savings and Insurance Company was issued for a consideration which grew out of a scheme to suppress bidding at a public sale of lands, it cannot be relied on as a ground for cancelling the said stock of the appellees.

The United States Mutual Savings and Insurance Company, which issued the stock, was a party to the alleged illegal scheme to suppress the bidding; and the general rule is, and no principle of law is better settled than, that a party to an illegal contract cannot set up a case in which he must necessarily disclose an illegal purpose as the ground-work of his claim. The rule is based upon the maxims of the common law, “Nemo allegans suam turpituclinem est audiendus,” “Ex dolo malo non oritur actio,” and “In pari delicto potior est conditio defendentis.” See Harris v. Harris, 23 Gratt. 737 , and authorities cited; 9 Cyc. 546-7, and cases cited in notes.

There are exceptions to the general rule, but this case does not come within either of them.

The trial court, we think, properly refused to cancel the stock held by the appellees since the claim for that relief was based upon the alleged agreement to suppress bidding, *224 and the stock had been issued and passed into the hands of third persons.

The other objections made to the decrees appealed from— viz., that the court erred in decreeing against the Southern Mutual Aid Association and against appellant Sauls in favor of the appellees — may be considered together.

It appears that the insurance business and property of the United States Mutual Savings' and Insurance Company were taken possession of by the Southern Mutual Aid Association, Orr and Sauls, and that they so used and dealt with the same, especially the insurance business, which was the principal asset of the United States Mutual Savings and Insurance Company, by causing its policy holders to surrender their policies in that company and to accept policies of like effect in the Southern Mutual Aid Association; that under the facts disclosed by the record it would be practically impossible to have the insurance business of the United States Mutual Savings and Insurance Company, so used and appropriated by the °said Southern Mutual Aid Association and Orr and Sauls, restored or its present value ascertained. This being so, the most equitable manner of adjusting the claims of the appellees was that adopted by the court of ascertaining the value of their stock at the date the business and property of the company whose stock they held were so appropriated, and decreeing against the parties who had appropriated the property of the company in which the appellees held stock, without regard to their rights.

The contention that the appellees were guilty of laches in asserting their rights under the facts disclosed by the record is wholly without merit.

We are of opinion that there is no error in the decrees appealed from to the prejudice of the appellants, and that they should be affirmed.

A ifirmed.