## Facts

- Merchants residing in Dunkirk, France sold and delivered a quantity of tea at Dunkirk to an English buyer’s order.
- The sellers knew the buyer intended to smuggle the tea into England to avoid customs duties.
- The sellers did not agree to transport the tea into England and did not participate in the smuggling; they simply completed a lawful sale and delivery in France in the ordinary course of trade.
- The buyer failed to pay the agreed price, and the sellers sued in assumpsit for goods sold and delivered.
- A jury returned a verdict for the sellers; the buyer sought a new trial on the ground that the contract was unenforceable due to illegality tied to smuggling.

## Issues

1. Whether a court will enforce payment for goods lawfully sold and delivered abroad when the seller knew the buyer intended to use the goods to violate domestic revenue laws.
2. Whether the seller’s knowledge of the buyer’s illegal plan, without participation or an undertaking to assist, makes the seller’s claim “founded” on illegality.
3. Whether public policy requires denying relief because the transaction was connected to an intended breach of domestic law, notwithstanding lawful foreign performance.

## Decision

- The court refused to set aside the verdict and allowed recovery for the sellers.
- The court held that an action lies for goods sold and delivered abroad, even if the seller knows the goods will be illicitly imported into England, so long as the delivery is complete abroad and the seller does not participate in the illegal importation.
- The rule to show cause for a new trial was discharged, and the verdict for the sellers stood.

## Legal Principles

- No court will assist a plaintiff whose cause of action is founded upon the plaintiff’s own immoral or illegal act (ex dolo malo non oritur actio).
- The illegality bar is applied on public policy grounds, not to protect the defendant; where the plaintiff must rely on illegality, the defendant’s position is preferred (potior est conditio defendentis).
- Mere knowledge of the counterparty’s unlawful purpose does not defeat enforcement when the plaintiff’s own performance is lawful and complete, and the plaintiff neither contracts to perform nor participates in the unlawful act.
- A lawful contract made and performed abroad will not be treated as void merely because the buyer intends to violate domestic law later; public policy blocks enforcement only when the plaintiff’s claim necessarily depends on conduct prohibited by domestic law.

## Conclusion

The court enforced the price of tea sold and delivered in France because the sellers’ cause of action rested on a lawful foreign sale, and the sellers’ knowledge of the buyer’s intended smuggling did not convert the sellers’ claim into one founded on illegality absent participation in, or an undertaking to assist with, the unlawful importation.


Holman v. Johnson, 1 Cowp. 341, 98 Eng. Rep. 1120 (K.B. 1775)