Sawyer v. Thomas

BLAND, P. J.

(after stating the facts). — 1. It is conclusively shown by the bill of sale that the licenses were included in the things sold by plaintiff to the defendants, and defendants’ evidence is that after the sale, they took possession of the saloon and conducted it in the plaintiff’s name and under his license until the expiration of the State and county license, and that no dramshop licenses were issued to them in their names during this period. Their evidence also is that at the time the trade was made, it was agreed and understood by and between them and the plaintiff that the saloon should be run in his name. The plaintiff admitted that the licenses were mentioned and considered in the trade and confessed, on cross-examination, that he knew the saloon was not closed for an hour after the sale was made; that he knew the defendants were conducting it under his licenses, but denied that there was any agreement that it should be so conducted. There may have been no express agreement that defendants should run the saloon under plaintiff’s licenses but if such was not the understanding, why were the licenses discussed in the negotiations for the sale, and why was plaintiff willing for defendants to have the licenses, and why did he embrace them in the. bill of sale as one of the things sold? Plaintiff’s denial that there was such an agreement is inconsistent with the bill of sale, inconsistent with his other testimony, inconsistent with every other scrap of evidence in the record and inconsistent with the facts and circumstances characterizing the sale and what was done by the parties immediately after the bargain was made.

2. Section 2992, R. S. 1899, prohibits the transfer or assignment of a dramshop (saloon) license. “Transfer” means “the act by which the owner of a thing delivers it to another person, with the intent of passing the rights which he has in it to the latter.” [Bouvier’s Law Diet. (RaAvle’s Rev.), 1133.] One of the definitions given the term by Webster is, “to make over the possession or control of; to pass; to convey as a right from one person to another.” The bill of sale is conclusive evidence of a formal transfer of the license. The transfer of 'the license was as complete as the transfer of the liquor and other things mentioned in the bill of sale and was as effectual as if a written assignment had been indorsed on the back thereof transferring them to the defendants, signed by the plaintiff, and it was no less a transfer, in fact, because it gave defendants no legal right to sell liquor under them, and was void in law because prohibited by statute. For the reason the transfer was void in law, the learned circuit judge was of the opinion that it furnished no part of the consideration for the sale and' therefore did not affect the validity of the sale and that the note is valid, unless it was shown by the evidence that it was agreed that the liquors were to be sold by defendants under the license which had been transferred to them by the plaintiff. This view of the law finds support in the case of Pierce v. Pierce, 46 N. E. (Ind.) 490, where there was a bill of sale of saloon goods and fixtures, including license (the transfer of the license being illegal). The contention of the defendant was that the contract was illegal for the reason the license was transferred along with the saloon goods. The court, at page 483, said: “The answer avers that the ‘stock mentioned in the contract consisted of intoxicating liquors then and there for sale,’ but it does not aver that, Avithout the license to sell, they were of no value. It is only the ‘other property mentioned in the contract’ that was without value in the absence of the right to sell under the license. It must be presumed, nothing to the. contrary appearing, that the stock of liquors had some value, and, where there is some consideration' to support the contract, it will be upheld. Mere inadequacy of consideration is not sufficient to defeat a contract. [Sibbitt v. Stryker, 62 Ind. 41.] Where a person obtains all the consideration he contracts for, he cannot say there was no consideration. [Laboyteaux v. Swigart, 103 Ind. 596, 3 N. E. 373.] In the case at bar, the appellant having been bound to know that no benefit would accrue to him under the transfer of the license, and there being some consideration to support the contract, it must be presumed he obtained all the consideration for which he contracted.” See also the case Strahn v. Hamilton, 38 Ind. 57. In the latter case appellant sold appellee a saloon, stock, and fixtures, furniture, etc., and transferred to him his license to sell intoxicating liquors. The transfer of the license was valued at one hundred dollars. The court held the contract divisible and allowed a recovery for the purchase price of the sale, etc., less the one hundred dollars, the consideration for the license. The authority of the Pierce case is shaken by the case of Sandage v. Studebaker Bros. Mfg Co., 142 Ind. 148, 34 L. R. A. 363, where it was held: “There can be no recovery as between the parties, on a contract made in violation of a statute, the violation of which is a penalty, although the statute does not pronounce the contract void or expressly prohibit the saihe.” The Pierce case is certainly out of line with about all the decisions of the courts of other States ’ where the common law prevails and is diametrically opposed to an unbroken line of decisions in this State, which hold that a contract prohibited by statute is void and that no action or suit can be maintained either at law or in equity upon such contracts, even where the statute does not expressly declare them void. [Live Stock Ass’n v. L. C. Co., 138 Mo. 394; Friend v. Porter, 50 Mo. App. 89-92; Mitchell v. Branham, 104 Mo. App. 480; 79 S. W. 739; Sedalia Board of Trade v. Brady, 78 Mo. App. 585; Swing v. Cider & Vinegar Co., 77 Mo. App. 391; Bick v. Seal, 45 Mo. App. 475.]

In Haggerty v. Ice Mfg. & Storage Co., 143 Mo. l. c. 247-8, 44 S. W. 1114, it is said: “The law will not stultify itself by promoting on the one hand what it prohibits on the other.”

In Woolfolk v. Donovan, 80 Mo. App. l. c. 427, the Kansas City Court of Appeals said: “There is no distinction between a contract that is immoral in nature and tendency and therefore void as against public policy and one that is illegal and prohibited by law.” Substantially the same rulings were made in Parsons v. Randolph, 21 Mo. App. 353; Sumner v. Summers, 54 Mo. 340; Shanklin v. McCracken, 140 Mo. l. c. 358-60, 41 S. W. 898; Porter v. Gaines, 151 Mo. 560, 52 S. W. 376; Ullman v. St. Louis Pair Ass’n, 167 Mo. l. c. 284, 67 S. W. 949.

In Patton v. Nicholson, 16 U. S. 204, it was ruled by Chief Justice Marshall, speaking for the court, that where one citizen sells to another citizen of the United States at war with Great Britain, a British sailing license for which a note was taken, the note was void because given for a license under which it was not lawful for an American citizen to sail.

In Miller v. Amon, 145 U. S. 421, it is said: “The general rule of law is, that a contract made in violation of a statute is void; and that when plaintiff cannot establish his cause of action without relying upon an illelegal contract, he cannot recover.”

In Penn v. Bornman, 102 Ill. 523, the court said:

“All contracts made in violation of an express statutory provision are inoperative and void, and no recovery can be had upon them.” The same doctrine is announced in Ohio, etc., Trust Co. v. Ins. & Trust Co., 53 Am. Dec. (Tenn.) 742; Tatum v. Kelley, 94 Am. Dec. (Ark.) 717; Handy v. St. Paul Globe Pub. Co., 16 Am. St. Rep. (Miss.) 695. In the latter case it was held that a void contract was not capable of ratification.

In Gerlach v. Skinner, 55 Am. Rep. (Kan.) 240, it was held that where the consideration for an assignment and transfer of a thing by a mere order to pay another the money due thereon was in part only contrary to a prohibitory statute against fraudulent assignments and conveyances, it vitiated the whole contract.

In Dow v. Taylor, 76 Am. St. Rep. (Vt.) 775, it was held: “If a contract is made in part on an illegal consideration, the whole contract is void.”

The general rule is well stated in the Cyclopedia of Law and Procedure, vol. 9, page 566, as follows: “If any part of a single consideration for one or more provisions be illegal, or if there are sevc- l considerations for one promise, some of which are legal and others illegal, the promise is wholly void, as it is impossible to say which part or which one of the considerations induced the promise.”

■ ' The written contract of sale is conclusive that the license was one of the things contracted for, and the consideration being single and indivisible, it seems to us that part of the single and inseparable consideration .being void the contract as a whole is void because opposed to positive law enacted by the Legislature concerning dramshop license. But it is contended that the insertion of the word “license” in the bill of sale was without legal effect and that the mere knowledge of the plaintiff that defendants intended to use it for an illegal purpose did not vitiate the contract. Aside from felonies and crimes the majority of the decisions hold that the mere knowledge of the seller or the lender that the purchaser or borrower intends to use the article sold or money borrowed for an illegal purpose does not invalidate the contract. [Michael v. Bacon, 49 Mo. 474; Howell v. Stewart, 54 Mo. 400; Sprague v. Rooney, 82 Mo. 493; Cockrell v. Thompson, 85 Mo. 510; Prince v. Church, 20 Mo. App. 332; Kerwin & Co. v. Doran, 29 Mo. App. 397; Mitchell v. Branham, 79 S. W. (Mo. App.) 739; Webber v. Donnelly, 33 Mich. 469; Tracy v. Talmage, 14 N. Y. 162; Feineman v. Sachs, 33 Kan. 621; Anheuser-Busch Brewing Association v. Mason, 9 L. R. A. (Minn.) 506; McConihe & Co. v. McMann, 27 Vt. 95; Smith v. Godfrey, 28 N. H. 379; Wallace v. Lark, 32 Am. Rep. 516; Armfield v. Tate, 29 N. C. 258; Bishop v. Honey, 34 Texas 245; Hines v. Bank, 48 S. E. 120.]

But this doctrine applies to sales of legitimate articles of commerce that may be lawfully sold at the place •of sale. It has no application to sales of things prohibited, and when it does apply the courts require but slight aid by the seller, in connection with his knowledge that the purchase is for an unlawful purpose to defeat the contract. Thus in Gaylord v. Soragen, 32 Vt. 110, where the seller marked packages of intoxicating liquors in order to aid the purchaser in quickly identifying and removing them on arrival at destination (where they could not be lawfully sold) before the officers had their suspicions aroused, it was held such aid for the unlawful purpose of the purchaser as to defeat a recovery. In Aiken v. Blaisdell, 41 Vt. 655, and Fienman v. Sachs, supra, similar rulings were made.

Discussing the question of aid given by a seller- to •a purchaser in order to carry out the latter’s unlawful purpose, the court, in Standard Furniture Co. v. Van Alstine, 51 L. R, A. l. c. 891, 22 Wash. 670, said: “If the vendor has knowledge of the immoral or illegal design of the vendee, and in any way aids or participates in that design, or if the contract of sale is so connected with the illegal or immoral purpose or transaction of the vendee as to be inseparable from it, the vendor cannot recover. [Tatum v. Kelley, 25 Ark. 209, 94 Am. Dec. 717; Tracy v. Talmage, 14 N. Y. 162, 67 Am. Dec. 132; Hill v. Spear, 50 N. H. 253, 9 Am. Rep. 205; Gaylord v. Soragen, 32 Vt. 110, 76 Am. Dec. 154; Aiken v. Blaisdell, 41 Vt. 665; Schankel v. Moffatt, 53 Ill. App. 382; Ralston v. Boady, 20 Ga. 449; Webster v. Munger, 8 Gray 584; Adams v. Coulliard, 102 Mass. 167; Graves v. Johnson, 156 Mass. 211, 15 L. R. A. 834, 30 N. E. 818, and note to the case in 32 Am. St. Rep. 450; Beach, Modern Law of Contracts, section 457.”]

In Smith v. Godfrey, 8 Foster 379, it was held that if it enters at all as an ingredient of the contract between parties, that the goods shall be illegally sold or that the seller shall do some act to assist or facilitate the illegal sale, the contract will not be enforced.

In Tatum v. Kelley, 25 Ark. 209; it was held that contracts which controvert the law are void and courts will never lend their aid to enforce them, and where the intention of one of the parties is to enable the other to violate the law',' the contract is void.

The evidence clearly shows that the license entered as an ingredient into the sale, and the plaintiff’s evidence shows that he not only knew' that defendant intended to use his license in violation of the law, but that he aided them in their unlawful purpose by transferring the license to them and turning his saloon over to their possession to be conducted by them without license. We think, on plaintiff’s theory of the case, this wras sufficient aid to render the entire contract void and that plaintiff should have been nonsuited, independent of the statute declaring a dramshop license non-transferable it clearly appears by the dramshop act that such a transfer cannot be lawfully made. The act prohibits thé sale of intoxicating liquors in less quantities than three gallons by any person other than a licensed dram-shop keeper; it requires the county court to find that the applicant is a law-abiding, assessed taxpaying, male citizen, over twenty-one years of age, as a prerequisite to granting the license; it requires that the applicant; shall obtain the consent of the taxpaying citizens in the locality to be affected by the dramshop that he may keep the proposed dramshop and that this consent shall be made known to the county court by a petition signed by the taxpaying citizens; it requires the applicant, as a . condition precedent to receiving the license, to give-a bond to be approved by the county court,, conditioned that the applicant shall at all times keep-an orderly house, that he will not sell or give away liquors to minors, etc., it requires that he pay in advance-the State and county license tax. The law also' provides that protests may be filed against the granting of licenses to keep dramshops. Such protests- may be-against the dramshop itself or may be against the keeping of the dramshop by the particular applicant. These-provisions show that the granting of licenses is a personal privilege to be awarded by the county court only on petition of the taxpaying citizen and only to persons, possessing the statutory qualifications. For these reasons a license cannot be transferred by the licensee; to-do so would be in contravention of the dramshop act, and we will not -stultify ourselves by sanctioning a contract wherein the sale and transfer of a dramshop license enters and forms a part of an indivisable consideration.

The judgment is reversed.

Nortoni, J., concurs;. Goode, J., dissents.