Colbert v. Ashland Const. Co. Inc
Decision Date | 25 November 1940 |
Parties | COLBERT. v. ASHLAND CONST. CO., Inc. |
Court | Virginia Supreme Court |
Rehearing Denied Jan. 14, 1041.
Error to Circuit Court of City of Hopewell; Robert W. Arnold, Judge.
Action by L. R. Colbert, trading as Virginia Construction Company, against the Ashland Construction Company, Incorporated, to recover an unpaid balance due on account of a construction contract. From a judgment for defendant, plaintiff brings error.
Affirmed.
Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, EGGLESTON, and SPRATLEY, JJ.
James O. Heflin, of Hopewell, for plaintiff in error.
Guy B. Hazelgrove, and Ralph T. Catterall, both of Richmond, for defendant in error.
The plaintiff in this case, L. R. Colbert, trading as Virginia Construction Company, is seeking to recover an unpaid balance from the defendant, Ashland Construction Company, Inc., due on account of a construction contract which they had entered into. The value of the work done was $15,247.28; payments made had reduced it to $3,843.86, and it is to recover that sum that this action was brought.
There is no dispute about the amount due. Plaintiff was not permitted to recover because of his failure to comply with the provisions of Section 4722(1) of the Code of Virginia in that he had not registered the assumed or fictitious name under which he was doing business. There was no deception, but the trial court was of opinion that the statute is mandatory and so ordered.
Statutes of this nature have been widely adopted, but their construction has led to a great deal of litigation and to some confusion. Their phraseology is not always the same. A comprehensive note on this subject appears in 45 A.L.R. 198, supplemented by a further note on the same subject in 59 A.L.R. 455. In the first it was said:
"The majority of the cases sustain the rule that contracts or transactions entered into by individuals or partnerships which have failed to comply with statutes relating to the doing of business under assumed or fictitious names or designations not showing the names of the partners are not, for that reason, invalid and unenforceable by such parties."
Many cases are cited; most of them we have examined and they support this annotation, but there is higher authority to the contrary.
Contracts, section 580, it is said:
(Italics supplied.)
In the late case of Kryl v. Frank Holton & Co., 1935, 217 Wis. 628, 259 N.W. 828, the rule laid down in Restatement of the Law is cited and approved.
In Padgett v. Silver Lake Park Corporation, 168 Ga. 759, 149 S.E. 180, it was held that a real estate agent could not recover.
In Dunn & McCarthy v. Pinkston, 179 Ga. 31, 175 S.E. 4, it was held that the same rule applied to a retailer of shoes. To the same effect is Prater v. Larabee Flour Mills Co., 180 Ga. 581, 180 S.E. 235.
In Courtney v. Parker, 173 N.C. 479, 92 S.E. 324, the same rule was applied, and it was said:
"It is well established that no recovery can be had on a contract forbidden by the positive law of the state, and the principle prevails as a general rule whether it is forbidden in express terms or by implication arising from the fact that the transaction in question has been made an indictable offense or subjected to the imposition of a penalty."
There this statement of the law in Pinney v. Nat. Bank, 68 Kan. 223, 75 P. 119, 1 Ann.Cas. 331, is quoted with approval:
"Where a statute expressly provides that a violation thereof shall be a misdemeanor, a contract made in direct violation of the same is illegal, and there can be no recovery thereon, although such statute does not in express terms prohibit the contract or pronounce it void."
In North Carolina a recovery may now be had under an amended statute. Security Finance Co. v. Hendry, 189 N.C. 549, 127 S.E. 629.
In Cashin v. Pliter, 168 Mich. 386, 134 N.W. 482, 483, Ann.Cas.l913C, 697, is this forceful statement:
It was also said there that principles of estoppel did not apply.
"If the law prohibits a contract under criminal penalty or as a matter of general public policy or specifically denies the right to make it, of course it could not be legalized by ratification." Fine Arts Corporation v. Kuchins Furniture Mfg. Co., 269 Mich. 277, 257 N.W. 822, 824.
See also Morgan Munitions Supply Co. v. Studebaker Corporation, 226 N.Y. 94, 123 N.E. 146, and Zindle, Inc. v. Friedman's Express, 258 App.Div. 636, 17 N.Y. S.2d 594.
The same principles are approved in Citizens State Bank of Long Beach v. Gentry, 20 Cal.App.2d 415, 67 P.2d 364, 366:
"Undoubtedly, the rule in this state is that when it appears there is a violation of a statute designed for the protection of the public, with a penalty prescribed for the violation thereof, that such penalty is the equivalent of an express prohibition, and that a contract made contrary to the terms thereof is void."
In McMullcn v. Hoffman, 174 U.S. 639, 654, 669, 19 S.Ct. 839, 845, 43 L.Ed. 1117, where the authorities are reviewed and the whole subject carefully examined, the court said:
"The authorities from the earliest time to the present unanimously hold thatno court will lend its assistance in any way towards carrying out the terms of an illegal contract."
In the leading case of Continental Wall Paper Co. v. Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 292, 53 L.Ed. 486, the Wall Paper Case, an anti-trust statute, Act of July 2, 1890, c. 647, 26 Stat. 209, [15 U.S. C.A. §§ 1-7, 15 note], was under review. Mr. Justice Harlan gives this reason for the rule:
17 C.J.Secundum, Contracts, § 202, p. 557.
This general rule was recognized in Watters & Martin v. Homes Corp., 136 Va. 114, 116 S.E. 366, 370, where it was said:
"The general rule of law is that a contract made in violation of a statute is void, and that when a plaintiff cannot establish his cause of action without relying upon an illegal contract he cannot recover."
There an act governing the sale of securities, commonly known as the "Blue-Sky Law, " Acts 1918, c. 408, came under review. A judgment for the purchase price of stock sold in violation of its terms was sustained and this reason therefor was given: ...
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