Defendant must make equitable compensa tion. under that contract, (unreported opinion of BELLOWS, J., in Currier v. Railroad Co., December Law Term, 1871,) and so far rendered it void as to deprive either party of the right of recovering expressly for its subsequent breach. Nevertheless, we do not think the defendant is entitled to retain the money or other property so acquired, and for which it has rendered no corresponding equivalent to the plaintiff in return, but, on the contrary, we are of opinion that it is its duty to make. equitable compensation and restitution, and that the duty may be enforced in this proceeding. It is true that, in general, where parties are concerned in illegal agreements or other transactions, whether they are mala prohibita or mala in se, courts of equity will not interpose to grant relief; but this is so only when the parties stand upon equal footing, for the doctrine everywhere running through the books is that relief will be granted when both parties are in delicto provided they do not stand in pari delicto. See Story, Eq. Jur. (12th Ed.) §§ 298, 300. These parties do not so stand, for, however guilty the plaintiff may have been in permitting or in concurring in the illegal operation of its road by the defendant after the act of July 5th, its guilt must fairly be regarded as far less in degree than that of its associate in the offense. And that the legislature regarded the defendant as the greater offender is made entirely plain by the fact that the only penalty prescribed by the act of July 5th for the violation of its provisions is imposed upon the road which operates another road, and not upon the road which is operated; for the reading of the second section is that "in all cases where any road, its directors, officers, or agents, shall hereafter enforce or attempt to enforce or exercise any authority over any other road, situated as provided in said first section or do any act in conflict with said first section, such officers or agents shall severally be subject to a fine or liability not exceeding five hundred dollars for each offense, to be recovered by action of debt, or by information or indictment, for the use of the County within which such suit shall be instituted." These considerations, as well as others of a kindred character, which need not be adverted to, bring the case fully within the exception to the general rule, that equity will not grant relief to parties concerned in illegal transactions; and if this be so, it is the end of the case as regards the questions raised by the pleas, because, if the transactions between the parties were of the character which the defendant now ascribes to them, the plaintiff, not being in pari delicto, is entitled to participate in the property accumulated or its proceeds, which, as between the parties, will be divided according to equity, and it has not been argued to the contrary in the defendant's behalf. There is, however, another ground of relief, which should be briefly mentioned. The contracts have been executed on the part of the plaintiff; they were not immoral; and they were illegal only so far as they were prohibited by statute. Taking this to be so, and regarding the parties as truly in pari delicto, the case still falls within the general rule, " that if an agreement is legally void and unenforceable by reason of some statutory or common-law prohibition, either party to the agreement who has received anything from the other party, and has failed to perform the agreement on his part, must account to the latter for what has been so received. Under these circumstances, the courts will grant relief irrespective of the invalid agreement, unless it involves some positive immorality, or there are other reasons of public policy why the courts should refuse to grant relief in the case." Mor. Corp. § 721. He adds: "These doctrines have been applied repeatedly in suits arising out of contracts entered into by corporations, although prohibited by statute or by the common law; and although the contracts were held illegal and unenforceable in these cases, a recovery was allowed to the extent of the consideration received." Citing White v. Franklin Bank, 22 Pick. (Mass.) 181; Dill v. Wareham, 7 Metc. (Mass.) 438; Episcopal Soc. v. Episcopal Church, 1 Pick. (Mass.), 373: Whitney . Peay, 24 Ark. 22; Philadelphia Loan Co. v. Towner, 13 Conn. 249; Foulke v. San Diego & G. S. R. Co., 51 Cal. 365 Farmers' Loan & Trust Co. v. St. Joseph, etc., R. Co., I McCrary (U. S.), 247, 2 Fed. Rep. 117; Madison Ave. Baptist Church 7. Baptist Church, 73 N. Y. 82; Tracy z. Talmage, 14 N. Y. 162, 175, 195; Sacketts Harbor Bank . Codd, 18 N. Y. 240; Oneida Bank 7. Ontario Bank, 21 N. Y. 490, 496; Vanatta v. State Bank, 9 Ohio St. 27; United States Express Co. v. Lucas, 36 Ind. 361. See, also, Pratt 2. Short, 79 N. Y. 437, 445; Owen . Davis, 1 Bailey (S. Car. ), 315; Gilliam 7. Brown, 43 Miss. 641, 644; W. U. Tel. Co. v. Union Pac. R. Co., McCrary (U. S.), 558, 562, 3 Fed. Rep. 423; Lewis. v. Alexander, 51 Tex. 578; Brooks 2. Martin, 2 Wall. (U. S.), 70, and cases cited; Planters' Bank v. Union Bank, 16 Wall. (U. S.), 483, and cases cited; Central Trust Co. v. Ohio Cent. R. Co., 23 Fed. Rep. 306. The leading case of Brooks. Martin was a bill in equity for an account of profits between the parties under an executed partnership contract for the purchase and location of soldiers' land warrants "confessedly against public policy," as well as in violation of the express provisions of an act of congress; but the court held that the partner in whose hands the profits were could not refuse to account for or divide them on the ground of the illegal char * * acter of the original contract, saying, (MILLER, J., page 80:) "It is to have an account of these funds, and a division of these proceeds, that this bill is filed. Does it lie in the mouth of the partner who has, by fraudulent means, obtained possession and control of these funds to refuse to do equity to his other partner, because of the wrong originally done or intended to the soldier? It is difficult to perceive how the statute, enacted for the benefit of the soldier, is to be rendered any more effective by leaving all this in the hands of Brooks, instead of requiring him to execute justice as between himself and his partner, or what rule of public morals will be weakened by compelling him to do so. * The transactions which were illegal have become accomplished facts, and cannot be affected by any action of the court in this case." We are aware that the doctrine of this case has been criticised, and perhaps denied, by some of the state courts; but it was reaffirmed in Planters' Bank v. Union Bank, supra, and it is not found to have been changed or modified in any subsequent decision. It requires no words to apply the doctrine of Brooks v. Martin to the present case; it applies itself. Nor do we find that its application involves any immorality, or that it is forbidden by any other reasons of public policy. Doubtless a court of equity is not positively bound to interfere in cases of this description, and may exercise its discretion; but it is peculiarly the office of equity to do justice, and justice manifestly requires that the defendant should not keep any part of the plaintiff's equitable share of the property it obtained from operating the plaintiff's road, whether legally or illegally. Whatever the legislature may have intended to accomplish by the anti-monopoly act of 1867, there is no reason to suppose their intention was to reward the Concord Railroad for its violation. And, however it may once have been, it is certainly now difficult to see how public policy is subserved by allowing the addition of a private wrong to a public wrong, which necessarily results when, without any equivalent in return, one party to an executed illegal transaction excludes the other from participating in the proceeds; and we entirely fail to appreciate the morality which denies in such cases any rights to the party whose money or other property has been thus appropriated by his associate, contrary to express agreement and common honesty, and which in conscience the benefited party cannot retain. The demurrer to the third plea is also sustained. Various causes of demurrer to the bill are assigned by the defendant, but at the argument only the one relating to discovery was insisted upon, or need be considered. The bill prays" that the defendant be ordered to make a full, accurate, Prayer for discovery. and true discovery and disclosure of all and singular the matters and things herein set forth." This is the usual prayer for a discovery, and no objection to its sufficiency is perceived. It is immaterial that the prayer concludes with a request that the "defendant be required, but not under oath, ** * * * to discover and state, fully and with particularity," certain things specified; for, if the word" answer," which it is said was intended to be used, is substituted for "discover," the first objection of the defendant, that a prayer for a discovery not under oath cannot be granted, is readily obviated. The second objection, that the policy of the law exempts the defendant and its officials from discovery, is based wholly upon the unfounded assumption that the plaintiff's action is against public policy, and has already been sufficiently considered. Discovery of to expose parties to penalty. * * The third and last objection is that the fundamental law does not require the defendant to discover. The argument in its support is that the defendant is charged with matters liable the doing of that which was positively prohibited by the act of July 5, 1867; that, if the charge is sustained, each of the defendants is liable to the penalty prescribed by the act; and that they are asked to niake discovery of facts which, in any event, would tend to fix their penal liability under that act, contrary to the constitutional provision that "no subject shall be compelled to *** furnish evidence against himself." This objection is unavailing. See Currier 7. Concord R. Corp., 48 N. H. 322. Of course the defendants are not obliged to discover any matters that may expose them to the penalty of the act of 1867; but they cannot do so, however willing they may be, because prosecution under that act is barred by the statute of limitations. The transactions between the parties as to which discovery is sought ended July 1, 1887, and section 10, chap. 266, Gen. Laws, provides that "all pros ecutions founded upon any penal statute, which are wholly or in part for the use of the prosecutor, shall be brought within one year, and all other suits and prosecutions thereon within two years after the commission of the offense, unless otherwise specially provided." The demurrer is overruled. Case discharged. SMITH, J., did not sit. The others concurred. Executed Ultra Vires Contracts-Estoppel to Set up Defense.-See note 20 Am. & Eng. R. Cas. 537. Validity of Contracts Between Rival and Competing Railroad Companies. -See Cleveland, C. C. & I. R. Co. v. Closser, 45 Am. & Eng. R. Cas. 275, note 291; Gulf, etc.. R. Co. v. State, 36 Id. 481; South Fla. R. Co. v. Rhoods (Fla.), 37 Id. 100; Texas & P. R. Co. v. Southern Pac. R. Co. (La.), 40 Id. 475. Acquisition by Railroad Company of Competing Line-Construction of Missouri Statute.-In Kimball et al. v. Atchison, T. & S. F. R. Co. et al., 46 Fed. Rep. 888, it is held that Rev. St. Mo. § 2569, which prohibits any railroad company within the state from owning, operating, or managing any other parallel or competing railroad within the state, applies only where both the roads are situated within the state, and the competition between the two must be of some practical importance, such as is liable to have an appreciable effect on rates. Two railroads which do not touch at any two common points, and between which for a distance of 40 miles another railroad is interposed, and whose traffic, except an unimportant amount, would in no event pass over the other, are not competing lines, within the meaning of the statute. As to what constitutes competing lines see also Gulf, etc. R. Co. v. State, 36 Am. & Eng. R. Cas. 481; Texas & P. R. Co. v. Southern Pac. R. Co. (La.), 40 Id 475. MILLER et al. ข. NEW YORK, LACKAWANNA & WESTERN R. Co. (New York Court of Appeals, Dec. 16, 1890.) Lease-Construction of Embankment-Liability of Lessór.-Under the general rule that the lessor of a railroad is not liable for the negligence or torts of the lessee, a railroad company cannot be held liable for damages caused by the washing of earth from an embankment erected by the lessee, which the lessor was not bound by statute or contract to build and which was not necessarily a nuisance. The fact that the lessor was bound under the lease to pay the lessee for any work chargeable to construction cannot make it liable. APPEAL from Superior Court of Buffalo, General Term. John G. Milburn, for appellant. Seward A. Simons, for respondents. Case stated. EARL, J.-On the 2d day of October, 1882, the defendant, a railroad corporation, organized under the laws of this state, owned a railroad completed for operation, extending from Binghamton to the city of Buffalo, and on that day it leased its road with all its real estate, personal property, and franchises to the Delaware, Lackawanna & Western Railroad Company, a Pennsylvania corporation. The term of the lease was for the corporate life of the lessor, and any extension thereof. In consideration of the lease the lessee agreed to pay all the debts of the lessor, then existing and outstanding, and, during the enjoyment of the demised property, also agreed to pay all the taxes upon the same, and, 47 A. & E. R. Cas.-24 |