This section contains the nature of the case and procedural background.

Edna Carroll (P) executed a warranty deed to Beardon (D) for a note and mortgage for the sale of a building and acreage in the amount of $42,000. A down payment of $8,000 was made, and D was to pay P $1,000 per month for the first six months of each year and then $2,000 per month for the next six months of each year. P instituted a mortgage foreclosure action because only one month on the note had been paid. P sued for $41,805.53, the amount due on the mortgage. This seemed to be an ordinary real estate transaction until the answer hit the court. This was, in fact, a dispute between two madams over a house of prostitution. D argues that the mortgage is absolutely void as contrary to express law and public policy because the mortgage was entered into by the parties with the knowledge and clear, specific intent that the property would be used for prostitution. In depositions, both parties admit that they are madams, both admit to the sale of liquor without a state license, but D claimed that she had, in fact, a federal license. P apparently got the judgment and D appealed the findings of the district court.

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