The general rule in equity, as at law, is in pari delicto portior est conditio defendentis; and, therefore, neither party to an illegal contract will be aided by the court, whether to enforce it or to set it aside. If the contract is illegal, affirmative relief against it will not be granted, at law or in equity, unless the contract remains. executory, or unless the parties are considered not in equal fault, as where the law violated is intended for the coercion of the one party and the protection of the other, or where there has been fraud or oppression on the part of the defendant. Thomas v. Richmond, 12 Wall. 349, 355; Spring Co. v. Knowlton, 103 U. S. 49; Story Eq. Jur. sec. 298. While an unlawful contract, the parties to which are in pari delicto, remains executory, its invalidity is a defense in a court of law; and a court of equity will order its cancellation only as an equitable mode of making that defense effectual, and when necessary for that purpose. Adams on Eq. 175. Consequently, it is well settled at the present day that a court of equity will not entertain jurisdiction to order an instrument to be delivered up and cancelled, upon the ground of illegality appearing on its face, and when, therefore, there is no danger that the lapse of time may deprive the party to be charged upon it of his means of defense. Story Eq. Jur., sec. 7004, and cases cited; Simpson v. Howden, 3 Myl. & Cr. 97; Ayerst v. Jenkins, L. R. 16 Eq. 275, 282. When the parties are in pari delicto, and the contract has been fully executed on the part of the plaintiff by the conveyance of property, or by the payment of money, and has not been repudiated by the defendant, it is now equally well settled that neither a court of law nor a court of equity will assist the plaintiff to recover back the property conveyed or money paid under the contract. Thomas v. Richmond, above cited; Ayerst v. Jenkins, L. R. 16 Eq. 275, 284. For insance, property conveyed pursuant to a contract made in consideration of the compounding of a crime, and the stifling of a criminal prosecution, and therefore clearly illegal, cannot be recovered back at law, nor the conveyance set aside in equity, unless obtained by such fraud or oppression on the part of the grantee, that the conveyance cannot be considered the voluntary act of the grantor. Worcester v. Eaton, 11 Mass. 368, and 13 Mass. 371; Atwood v. Fisk, 101 Mass. 363; Bryant v. Peck & Whipple Co., 154 Mass. 460; Williams v. Bayley, L. R. 1 H. L. 200; Jones v. Merionethshire Society, 1892, 1 Ch. 173, 182, 185, 187. In the case at bar, the contract by which the plaintiff conveyed its railroad and franchise to the defendant for a term of nine hun dred and ninety-nine years was beyond the defendant's corporate powers, and therefore unlawful and void, of which the plaintiff was bound to take notice. The plaintiff stood in the position of alienating the powers which it had received from the state, and the duties which it owed to the public, to another corporation, which it knew had no lawful capacity to exercise those powers or to perform those duties. If, as the plaintiff contends, the contract was also beyond its own corporate powers, it is certainly in no better position. In either aspect of the case, the plaintiff was in pari delicto with the defendant. The invalidity of the contract, in view of the laws of which both parties were bound to take notice, was apparent on its face. The contract has been fully executed on the part of the plaintiff by the actual transfer of its railroad and franchises to the defendant; and the defendant has held the property, and paid the stipulated consideration from time to time, for seventeen years, and has taken no steps to rescind or repudiate the contract. Upon this state of facts, for the reasons above stated, the plaintiff, considered as a party to the unlawful contract, has no right to invoke the assistance of a court of equity to set it aside. And so far as the plaintiff corporation can be considered as representing the stockholders and seeking to protect their interests, it and they are barred by laches. Harwood v. Railroad Co., 17 Wall. 78; Graham v. Birkenhead, etc. Railway, 2 Hall & Twells, 450; S. C. 2 Macn. & Gord. 146; Ffooks v. Southwestern Railway, 1 Sm. & Gif. 142, 164; Gregory v. Patchett, 11 Law Times (N. S.) 357 This case is not like those in which the defendant, having abandoned or refused to perform the unlawful contract, has been held liable to the plaintiff, as upon an implied contract, for the value of what it had received from him and had no right to retain. Spring Co. v. Knowlton, 103 U. S. 49; Logan County Bank v. Townsend, 139 U. S. 67, and cases there cited. But the case is one in which, in the words of Miller J., in a case often cited in this opinion, the court will not disturb the possession of the property that has passed under the contract, but will refuse to interfere as the matter stands. Pennsylvania Railroad v. St. Louis, Alton & Terre Haute Railroad, 118 U. S. 290, 316, 317. See also Union Trust Co. v. Illinois Midland Co., 117 U. S. 434, 468, 469; Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24, 56, 57, 61. Decree affirmed. GILES H. BOYD V. THE AMERICAN CARBON BLACK COMPANY et al. 182 Pennsylvania State Reports 206 (1897) APPEAL by plaintiff from decree of C. P. McKean Co., dismissing bill in equity. A full statement of the facts will be found in the opinion. By an agreement of June 18, 1891, Giles H. Boyd, the appellant, formed a partnership with the appellee, the American Carbon Black Company. Boyd was to furnish gas to the company from his lands. in Sargent township, McKean county, for the manufacture of carbon gas black, at one-half cent per pound of all black manufactured at works to be erected by the company, he to have an option to acquire one-fifth interest in the company on paying onefifth the cost of constructing and operating the plant; this interest he afterwards took. By a subsequent agreement, dated February 13, 1892, he stipulated not to sell gas to any other person or company for the manufacture of carbon black, gas black, or lamp black, from the same premises; in consideration of this the company released him from the obligation of drilling more wells, which he had assumed under the first agreement. On March 11, 1892, the Carbon Black Company, theretofore only an association of individuals, was duly incorporated for the purpose of manufacturing "carbon black," etc., and Boyd subscribed and paid for fifty shares of the capital stock of the par value of $100 per share, and then he was duly elected a director. The corporation, by the name of the American Carbon Black Company, succeeded to all the rights of the partnership under the two agreements. On April 5, 1893, another agreement was entered into between Boyd and the corporation, by which it was stipulated that the parties to the agreement would erect another factory of a daily capacity of thirty barrels, at Gallagher, Pa., the expense to be borne equally by Boyd and the corporation; the corporation agreeing to manufacture carbon black from surplus gas from Boyd's lands, market it and divide the profits equally with Boyd; they to jointly drill gas wells. Accordingly, a factory of thirty barrels' daily capacity was erected and put in operation. But in December, 1895, the corporation partly stopped operations at the second plant, and in June following suspended altogether at that point; neither would it permit Boyd to operate it; in the meantime, adjoining owners drilled wells, and are draining the gas underneath Boyd's lands. After stopping operations at Gallagher the corporation entered into an agreement with the Columbian Black Company, another corpo ration, to sell to the Columbian all the black it manufactured at four cents per pound, and that the two corporations should divide profits. and losses, after deducting three-fourths of a cent per pound for expenses and losses; and that the American Carbon Black Company should close down its factories for one year from January 1, 1896, and would manufacture, when running, to only one-half its capacity, on notice at any time from the Columbian. On October 5, 1896, Boyd filed a bill in equity against the American Carbon Black Company and its officers, praying, on the facts as we have in substance stated them: I. That the several agreements between him and the company, and the one between the two companies, be declared void, and that they be ordered to deliver them up for cancellation. 2. That an account be taken of all the rents, royalties and profits properly due plaintiff, as well as his proportionate share of the money improperly paid to the Columbian Company. 3. That the partnership between him and defendant be declared. dissolved, and an account be taken. 4. That a receiver be appointed to take charge of the partnership property, books and business. 5. That defendants be decreed to pay whatever balance was found due. 6. That defendants be restrained by injunction from taking gas from plaintiff's land. 7. General relief. The defendants filed a general demurrer to the jurisdiction, and further demurred specifically, on the grounds: 1. That plaintiff had an adequate remedy at law for all his alleged complaints. 2. That no such partnership as averred by him could be lawfully entered into by a corporation; therefore, equity would not take jurisdiction, either to decree dissolution, an account, or the appointment of a receiver. The court below, after argument, sustained the demurrer and dismissed the bill. From that decree we have this appeal. Of course, the demurrer admits the truth of the averments in plaintiff's bill. We have, then, the facts that the contracts of partnership were made by the plaintiff with the corporation of which he was a stockholder and director and a gross violation by defendants, not only of the contract of partnership, but of the contracts made with him for the purchase of gas from his premises by the partnership. The principal reason given by the learned judge of the court below for sustaining the demurrer is that the contract of partnership by the corporation was ultra vires; that no corporation has authority to share its corporate management with natural persons, in a partnership. And for this ample authority is cited, and the rule cannot be questioned. But, conceding the full force of this rule, does it deprive the plaintiff, on the facts, of all remedy in equity? Assume that the partnership has not now and never had a legal existence; that is only because one of the partners had no power to enter into it; but, while it had no legal existence, it had one in fact; and the other partner fully performed; the corporation had the full benefit of the contract up to the time it concluded that it was more profitable to violate its agreements. Beach on Corporations, section 842, says: "It may be considered prima facie ultra vires for an incorporated company to enter into a partnership with other persons;" but, all the authorities hold that, notwithstanding the prima facies, if it be shown that the other partner had fully performed his obligations under the contract, this plea will not avail. "A corporation may not avail itself of the defense ultra vires when the contract has been in good faith fully performed by the other party, and it has had the full benefit of the performance and of the contract." 27 Am. & Eng. Ency. of Law, 363; Morawetz on Corporations, sec. 689; Wright v. Pipe Line Co., 101 Pa. 204; R. R. Co. v. Transportation Co., 83 Pa. 160. Taking, as we must, every material averment of plaintiff's bill as an admitted fact, the defense, if it should prevail, would work a palpable injustice. While public policy demands that the courts should declare such contracts by corporations unlawful, and that they will make no decree which prolongs their life, in fact, for a single day, every principle of equity commands that the corporation receiving a benefit from such contract shall account for what it has received from him who has fully performed. The contract is not malum in se, but only malum prohibitum; it was illegal, but not iniquitous. If the corporation has had the benefit of $15,000 paid by Boyd for the construction of the second plant; has received the proceeds of the manufactured product; has used and continues to use his gas, it ought to and must account. It is wholly immaterial whether the partnership be declared dissolved because it is illegal to carry it on, or it be declared at an end in fact, because of want of power on part of the corporation to enter it; in either case the plaintiff is entitled to his property in possession of defendants, and whatever money they have received more than their share. As they allege that the contracts with plaintiff were illegal, they can claim no rights of possession of the whole partnership assets and |