Corbin v. Houlehan

• Decision Date: 19 June 1905
• Citation: 100 Me. 246,61 A. 131
• Parties: CORBIN et al. v. HOULEHAN.
• Court: Maine Supreme Court

61 A. 131

100 Me. 246

CORBIN et al.

v. HOULEHAN.

Supreme Judicial Court of Maine.

June 19, 1905.

Exceptions from Superior Court, Kennebec County.

Action by H. F. Corbin and others against Peter A. Houlehnn. Verdict for defendant, and plaintiffs except. Exceptions overruled.

Assumpsit on account annexed, brought in the superior court, Kennebec county, to recover a balance of $206.85, and interest thereon, alleged to be due for intoxicating liquors sold March 19, 1896, by the plaintiffs, then residents of Cincinnati, Ohio, to the defendant, then residing in Gardiner, Me., and shipped the same day by the plaintiffs from their place of business in Cincinnati by rail, with continuous waybill, to the defendant at Gardiner, where they were received by the defendant from the common carrier in the original packages in which they were shipped. The goods thus sold and shipped consisted of 20 cases of bottled whisky and 5 barrels of whisky in bulk, each case and each barrel constituting a separate package.

Defendant pleaded the general issue, and a brief statement alleging "that the account or claim on which this action is founded is for intoxicating liquor sold in violation of chapter 27 of the Revised Statutes of Maine, or for intoxicating liquor purchased out of the state with intention to sell the same, or a part of the same, in violation of said chapter."

The case was tried to a jury at the April term, 1902, of said superior court. After the evidence was closed, the presiding justice directed the jury to return a verdict for the defendant, which was done.

The plaintiffs excepted to certain rulings made by the presiding justice during the trial, and also to the instructions directing the jury to return a verdict for the defendant.

Argued before WISWELL, C. J., and EMERY, STROUT, SAVAGE, POWERS, and PEABODY, JJ.

A. M. Goddard, for plaintiffs. Beane & Beane, for defendant.

WISWELE, C. J. In this action, brought by citizens of the state of Ohio against a citizen of this state in the superior court for Kennebec county, the plaintiffs seek to recover the unpaid balance of a bill of over $600 for a large quantity of intoxicating liquor in barrels and cases, sold by them to the defendant. The order for this liquor was taken by the plaintiffs' representative at the defendant's place of business, sent to the plaintiffs in Ohio, where, after making certain inquiries in regard to the financial responsibility of the defendant, the order was accepted by the plaintiffs, and the liquor shipped as directed. The contract for the sale and purchase of these liquors was not finally completed until the order was accepted by the plaintiffs in the state of Ohio, so that it may be assumed that the contract of sale was made in the latter state, where such sale was legal. These liquors were bought by the plaintiffs for the purpose and with the intention of selling them in this state, in violation of the laws of the state, and they were subsequently so sold by him, and the plaintiffs, when they accepted the order and thereby completed the contract, not only knew that they were intended for illegal sale, as practically admitted by one of the plaintiffs in his testimony, but also materially aided the defendant in his attempt, apparently successful, to prevent their seizure, by marking the goods, in accordance with a direction of the purchaser contained in the order, in the name of a person other than the purchaser, which name was adopted by him for this purpose, and it was known by the plaintiffs' agent that the name in which the liquors were to be shipped was fictitious, and adopted by the defendant for the purpose of avoiding their seizure.

At the trial the defendant interposed the defense that these liquors were bought by the defendant out of the state with the intention of selling them in the state, contrary to our laws, and relied upon the statute, Rev. St. c. 29, § 64: "No action shall be maintained upon any claim or demand, promissory note or other security, contracted or given for intoxicating liquors sold in violation of this chapter, or for any such liquors purchased out of the state with intention to sell the same or any part thereof in violation thereof." There being no question as to the fact that the liquors were purchased by the defendant for the purpose of selling them in this state in violation of the provisions of the chapter referred to, the court ordered a verdict for the defendant, and the case comes here upon the plaintiffs' exceptions, which it is not necessary to quote, but in which the point is raised that this statute is in violation of the interstate commerce clause of the federal Constitution.

The contention of the plaintiffs' counsel is that the statute "is in conflict with the commerce clause of the federal Constitution and inoperative, because its obvious purpose and necessary and direct tendency and effect are to regulate, hinder, obstruct, burden, discourage, and prevent interstate commerce and interstate commerce contracts which are lawful under the Constitution and laws of the United States." His argument, briefly stated, is that this sale of liquors in the state of Ohio was legal, that intoxicating liquors are recognized by federal authority as a legitimate subject of interstate commerce, that one of the essential elements of Interstate commerce is the sale of goods in one state to be transported into another, that the very purpose and motive of that branch of commerce which consists in transportation is that other act of commerce which consists in the sale or exchange of the commodities to be transported, and that the effect of the statute under consideration is to regulate, obstruct, burden, and discourage such interstate commerce transactions.

There can, of course, be no question as to the truth of many of the propositions relied upon by counsel for plaintiffs in his argument. Intoxicating liquor is recognized by the federal authority as a legitimate subject of interstate commerce. Commerce among the several states includes not only the transportation of commodities from one state to another, but, as well, the sale of such commodities in one state to be transported into another. The regulation of commerce between states having been delegated to the federal Congress, no state can interfere therewith, or impose any condition, restrictions, or burdens thereon. The state cannot tax interstate purchases or sales, nor the means or instruments of such commerce. The state cannot make it a criminal offense for any person to solicit or take orders in one state for the sale of liquors in another state, with reason to believe that they are to be illegally sold in the state into which they are to be transported; nor can it prohibit the importation of liquors into the state even if they are intended for illegal sale therein, and such liquors cannot be seized or otherwise interfered with by the state authority until the transportation has been entirely concluded. In a word, the state can do nothing which will directly interfere with or regulate commerce between the several states of the Union. All these limitations upon the power of the states are familiar, having been declared in the decisions of the Supreme Court of the United States, whose interpretation of the meaning of the federal Constitution is final.

But we cannot see that those various inhibitions upon the power of the state are especially applicable to a solution of the question here presented, and we do not think that it necessarily follows from them, and from the fact that a state can do nothing to directly interfere with the commerce between the states, that its Legislature cannot, in the exercise of its police power, or any other of its sovereign powers, in its discretion, enact a law, the practical operation of which may indirectly affect the extent of commercial transactions between the states.

The precise question here is, is it in violation of this clause of the federal Constitution for the Legislature of a state to say by enactment that the courts of the state shall not be open to suitors, whether resident or nonresident of the state, to enforce certain contracts which are in violation of the settled policy of the state, or by means of which one of the parties to the contract is to be given the means of violating the laws of the state?

It is a fundamental and elementary rule of the common law that the courts will not enforce illegal contracts, or contracts which are contrary to public policy, or which are in contravention of the positive legislation of the state. The general rule undoubtedly is that the validity of the contract—that is, the question whether it is a legal or illegal one—is judged by the law of the state or country in which it was made, and that a contract good where made is good everywhere. But this rule is subject to some exceptions, one of the most important of which is that, where the contract violates the positive legislation of the established public policy of the state of the forum, it will not be enforced in that state, although perfectly valid and legal according to the laws of the state or country where it is made. This principle is thus stated in Cooley's Constitutional Limitations, p. 178: "In the making of contracts, the local law enters into and forms a part of the obligation; and, if the contract is valid in the state where it is made, any other state will give remedies for its enforcement, unless, according to the standard of such latter state, it is bad for immorality, or is opposed in its provisions to some accepted principles of public policy, or unless its enforcement would be prejudicial to the state or its people." The same principle was thus clearly Stated in Banchor v. Mansel, 47 Me. 58: "It is a general principle of law that the validity of a contract is to be determined by the law of the place where it is entered into. But to this rule there are exceptions. No nation is bound to enforce...