Use IRAC Issue Rule Application Conclusion

1. Kyne was a "betting commissioner." He accepted bets, held the stakes, issued receipts and charged other betters. If there weren't enough off-setting betters, he would cover the bet with his own money. Three individuals made bets on election results and won $3,115.00. Kyne had covered these and other bets with $10,000 of his own money. Prior to paying the three betters, the sheriff took $7,702.87 of the $10,000 to pay a prior judgment against Kyne, previously recovered by Kyne's son in a lawsuit to establish paternity and for support. Other betters were paid with the remaining amount. The three betters claimed their winnings from the $7,702.87 acquired by Kyne's son. They admit that they can't recover against Kyne because of illegality, but claim that Kyne's son was not a party to the illegal act and, therefore cannot use the illegality defense against them. Who wins and why?