THE RULE OF IN PARI DELICTO

(NON ORITUR ACTIO)

I. Contract is void because of illegality of cause or object

Acts constitutes a criminal offense:
a. Both are in pari delicto
- both shall have no cause of action vs. each other
- both shall be prosecuted
- penal code provisions on disposal of effects or instrument
of crime applicable to things & price
b. Only one party is guilty, the other is innocent
- innocent party may claim what he gave
- innocent party not bound to comply with promise (Art.
1411, CC)

II. Contract is void; causa is unlawful or forbidden

Acts does not constitute a criminal offense:

Both parties at fault, neither may recover what he gave or

demand performance by the other

Only one of contracting parties is at fault:

o Party at fault cannot recover what he gave or demand

fulfilment of what was promised him
o Party not at fault may demand the return what he gave
without any obligation to comply with his promise (Art.
1412, CC)

III. Exceptions to In Pari Delicto Rule

General Statement of Exception:

Agreement is not illegal per se, but merely prohibited.

-

Prohibition designed for protection of plaintiff

Plaintiff may recover what he paid or delivered if public policy is

enhanced (Art. 1416)

SPECIFIC EXCEPTIONS:
Art. 1413 - Usurious interest in excess of allowed interest may be
recovered with interest from date of payment
Art. 1414 - Money paid or property delivered for an illegal purpose,
the contract may be repudiated by one party before
purpose is accomplished or damage made to a 3rd person
- party repudiating contract may be allowed to recover
money or property if public interest is subserved
Art. 1415 - One party to illegal contract is incapable of giving
consent, courts may allow recovery if interest of justice so
demands
Art. 1417 - Price paid in excess of maximum price allowed by price
control law may be recovered

Art. 1418 - Additional compensation for service rendered beyond the

maximum hours of labor fixed by law may be recovered
Art. 1419 - Lower wages accepted by laborers below the minimum
wage set by law, difference may be recovered