Auman v. Fabiano, Civ. No. 1641.

• Decision Date: 07 July 1955
• Docket Number: Civ. No. 1641.
• Parties: Arthur B. AUMAN v. Frank FABIANO.
• Court: U.S. District Court — Northern District of Indiana

132 F. Supp. 353

Arthur B. AUMAN v. Frank FABIANO.

Civ. No. 1641.

United States District Court N. D. Indiana, South Bend Division.

July 7, 1955.

Louis L. Anderson, South Bend, Ind., for plaintiff.

Harry S. Taylor, South Bend, Ind., for defendant.

PARKINSON, District Judge.

This is an action tried to the court seeking recovery on two contracts, one executed by the parties on May 1, 1953, and the other on July 23, 1953.

As to the contract of May 1, 1953, there is no contention that the subject matter thereof was illegal and the parties are in agreement that there is a balance due to the plaintiff by the defendant thereon in the sum of $1,025.00, which the plaintiff is entitled to recover.

As to the contract of July 23, 1953, the defendant has pleaded illegality of consideration and the core question is whether the contract is unenforceable by reason thereof.

The evidence is conclusive that prior to July 23, 1953, the plaintiff was the sole owner of the A & B Distributing Company and was engaged in the gambling business through the operation of pin ball machines in locations secured thereby in South Bend and St. Joseph County, Indiana; that he sold said business to the defendant under the contract of July 23, 1953, which was executed by the parties in South Bend, Indiana, and the business was to continue to be operated by the defendant as a gambling business with the balance of the purchase price to be paid to the plaintiff by the defendant by the plaintiff receiving one-half of the net profits of the business each week.

In Indiana gambling is illegal, and we believe it to be the law in Indiana, and we so hold, that if a contract, upon which the claim is founded, can be wholly disconnected from the illegal transaction, it is enforceable, but if it is in furtherance of the illegal transaction the law will not assist in enforcing the contract and will leave the parties in the situation in which they have placed themselves.

Under the evidence before us we have no alternative but to find that the subject matter of the contract of July 23, 1953 was illegal and that the contract is unenforceable.

Therefore, the court having considered all of the evidence, the arguments of counsel, and the law applicable thereto, does now make the following

Findings of Fact

On May 1, 1953 the parties entered into a written contract reading as follows:

"A & B Distributing Company May 1, 1953 Agreement

It is agreed between Arthur Auman and Frank Fabiano that the following business transaction is in order and amounts listed as correct.

Frank Fabiano is purchasing from Arthur Auman the Jukes on location and Arthur Auman's interest complete of the Clover Bowlers also on location.

                                          Juke Locations ................... $5,000.00
                                          (also to pay balance due on
                                            Jukes)
                                          to reimburse payments made on
                                            Jukes this date ................    209.92
                                          Locations & previous service on
                                            Clover Bowlers .................    250.00
                                                                              _________
                                                                              $5,459.92
                                                      Down Payment .........    959.92
                                                      Balance 
                                                                             _________
                                                                             $4,500.00
                

Balance shall be paid as follows:

$400.00 per month beginning June 1, 1953. St. Joseph County S/ Arthur Auman signed this 1st day of May, 1953 S/Frank R. Fabiano S/ Mary J. Kettering Notary Public Comm. Ex. 1-27-57" There is due and owing to the plaintiff by the defendant on the contract of May 1, 1953, set out in Finding No. 1, the sum of $1,025.00.

On July 23, 1953 the parties entered into a written contract in South Bend, Indiana, reading as follows:

"A & B Distributing Company July 23, 1953 Agreement Between Arthur Auman and Frank Fabiano

Arthur Auman agrees to sell entire business known as the A & B Distributing Company to Frank Fabiano as of July 27, 1953 for terms as follows:

                Business Exchange .....$50,000.00
                Frank Fabiano assuming
                 outstanding debts .... 10,125.11
                                       __________
                       Total ......... $39,874.89
                Down Payment .........   6,500.00
                                       __________
                      Balance ........ $33,374.89
                

It is agreed that Balance shall be paid off weekly and the amount of payment shall be based on Net Profit of the business of the A & B Distributing Company.

Mr. Auman is to receive 50% of the Net Profit weekly.

There is to be a 4% interest carrying charge on unpaid balance.

If, at any time, payments are in arrears for a period of thirty days — the business will automatically revert back to original owner.

S/ Arthur Auman Arthur Auman S/ Frank R. Fabiano Frank Fabiano

the above has been agreed to by both parties and witness and signed before me a Notary Public in St. Joseph County State of Indiana this 23rd day of July, 1953.

S/ Mary Jane Kettering Notary Public Comm. Expires — 1-27-57" The A & B Distributing Company was, prior to July 23, 1953, a business owned by the plaintiff and engaged in operating coin pin ball machines which were adapted for use in such a way that as a result of the insertion of a piece of money or coin they could be caused to operate or might be operated, and by reason of the element of chance or of the other outcome of such operation unpredictable to the operator, he might receive or secure additional chances or rights to use such machines or be paid in cash therefor.

Said pin ball machines operated by the plaintiff under the name and style of A & B Distributing Company were gambling devices.

The pin ball machines were placed by the plaintiff in various...