Frankel v. Hillier

• Decision Date: 15 November 1907
• Court: North Dakota Supreme Court

113 N.W. 1067

16 N.D. 387

MAX FRANKEL, EUGENE REGENTHAL AND FRED W. DAMLER, COPARTNERS DOING BUSINESS UNDER THE FIRM NAME AND STYLE OF FRANKEL, REGENTHAL AND DAMLER, v. GEORGE M. HILLIER AND AUGUST TOETTCHER, CO-PARTNERS DOING BUSINESS UNDER THE FIRM NAME AND STYLE OF GEORGE M. HILLIER

Supreme Court of North Dakota

November 15, 1907

Appeal from District Court, Richland county; Allen, J.

Action by Max Frankel and others against George M. Hillier and others. Judgment for defendants, and plaintiffs appeal.

Reversed.

Judgment reversed and a new trial ordered.

McCumber Forbes & Jones, for appellants.

Illegality of contract must be alleged and proven. 1 Enc. Pl. & Pr. 844; 7 Waits Actions and Defenses, 70; Finley v. Quirk, 9 Minn. 194 (Gil. 179); Buchtel v. Evans, 2 P. 67; Jameson v. Coldwell, 31 P. 279; Lyts v Keevey, 32 P. 534; Heffron v. Pollard, 15 Am St. Rep. 771; 1 Chitty's Pleadings (16th Am. Ed.) 506; Bliss on Code Pleadings, 330; Miller v. Donovan, 83 P. 608; P. J. Bowlin L. Co. v. Brandenburg, 106 N.W. 497; Furst & B. Mfg. Co. v. Black, 12 N.E. 504.

Existence of partnership is a question for the jury. 22 Am. & Eng. Enc. 51; 15 Enc. Pl. & Pr. 948; Swofford B. D. G. Co. v. Cowgill, 96 N.W. 215; Sparling v. Smelter, 95 N.W. 571; Johnson v. Carter, 94 N.W. 850.

Illegality of partnership cannot be asserted as a defense by its members. Rev. Codes, section 5079; 17 Am. & Eng. Enc. Law (1st Ed.) 892; 22 Am. & Eng. Enc. Law, 75; Mellison v. Allen, 2 P. 97.

Right of recovery is not affected by the fact that buyer intended to sell them illegally. 17 Am. & Eng. Enc. Law, 310 and 312.

Where orders are taken in one state, sent to another for approval, and shipped in the latter f. o. b., the sale is in the state where so shipped. 11 Am. & Eng. Enc. Law (1st Ed.) 472, 17 Am. & Eng. Enc. Law, 300; Kling v. Fries, 33 Mich. 274; Boothke v. Philip Best Co., 33 Mich. 340; Webber v. Donnelly, 33 Mich. 468; 1 Benjamin on Sales, sections 327 and 329; Engs v. Priest, 21 N.W. 580; Wind v. Iler, 61 N.W. 1001; Bollinger v. Wilson, 79 N.W. 109; American Express Co. v. State of Iowa, 136 U.S. 131, 49 L.Ed. 417; Black on Intoxicating Liquors, sections 267, 268; P. J. Bowlin Liquor Co. v. Brandenburg, supra.

Presumption of legality is stronger than that of the identity of laws. 1 Jones on Evidence, section 84; 1 Elliott on Evidence, section 120; Ounes v. Dauchy, 82 N.Y. 443.

Illegality of contract not presumed. 7 Waits Actions and Defenses, 65; Bowlin L. Co. v. Brandenburg, supra; 13 Am. & Eng. Enc. Law, 1061; Mohr v. Miesen, 49 N.W. 862; Gross v. Scarr, 33 N.W. 223; Cavender v. Guild, 4 Cal. 250; Black on Intoxicating Liquors, section 266; 3 Waits Actions and Defenses, 642; Abbot's Trial Brief (2d Ed.) 341.

To establish defense, defendant must show liquors were sold with intent to enable defendants to violate laws of North Dakota. 17 Am. & Eng. Enc. Law, 306; Black on Intoxicating Liquors, section 250; Abbott's Trial Brief (2d Ed.) 450; 1 Elliott on Evidence, section 96; 22 Am. & Eng. Enc. Law, 1234; 22 Am. & Eng. Enc. Law, 1341; Bollinger v. Wilson, 79 N.W. 101; M. Levy & Son v. Stegemann, 104 N.W. 372; Kling v. Fries, 33 Mich. 274; Wind v. Iler, supra.

Purcell & Divett, for respondents.

To hold one liable as partner it must appear that he has justified some one in acting upon his representations. Lindley on Partnership (2d Ed.) 42 and 43; 38 Am. Dig. Columns. 591, 592.

He must have done so prior to any one acting thereon. Lindley, Star Paging, 43; Palmer v. Pinkham, 37 Me. 252.

When a transaction in violation of public policy becomes known to the court it will of its own motion refuse relief. Abbott's Pleadings, volume 2, 1649; Critchfield v. Paving Co., 51 N.E. 552; Sheldon v. Pruessner, 35 P. 201; Handy v. St. Paul Globe Co., 42 N.W. 872; Oscanyan v. Arms Co., 103 U.S. 261, 26 L.Ed. 539.

OPINION

FISK, J.

Appellants, who are wholesale liquor dealers at St. Paul, Minn., brought this action against respondent and one Hillier to recover the purchase price of certain intoxicating liquors sold and delivered by them to the defendants. Defendants answered separately; the defendant Hillier expressly admitting liability, while defendant Toetcher denied any connection with the purchase of such liquors either as a partner with his codefendant, as alleged, or otherwise, and alleged upon information and belief that the sales of such liquors were made in this state in violation of law, and hence that no action is maintainable for the purchase price thereof. Upon the trial of the action in the district court, a verdict was directed in respondent's favor, and from a judgment entered pursuant thereto this appeal is prosecuted. A statement of the case was duly settled, embracing 23 specifications of error, 14 of which are assigned in appellant's brief. The first 10 assignments relate to rulings of the trial court upon the admission of certain evidence tending to show prior sales of intoxicating liquor by these plaintiffs to defendant; appellant's contention being that such evidence was inadmissible under the pleadings, the specific point being that there was no sufficient allegation in the answer that the sales were made with intent to enable the defendant to violate the laws of this state by making illegal sales of such liquors therein in contravention of the provisions of chapter 65, section 9353, of the Penal Code of 1905, relating to prohibition or the unlawful dealing in intoxicating liquors. The respondent's answer contains an allegation as follows: "Defendant further alleges upon information and belief that the goods, wares and merchandise for the purchase price of which this action is brought consisted of intoxicating liquors, the sale of which is prohibited in the state of North Dakota, and that the sales thereof, set forth in the complaint, were made in the state of North Dakota, and that such sales are void under the provisions of section 762 of the Revised Codes of 1905 of this state, and that no action is maintainable thereon."

The reference to section 762 was no doubt intended for section 7621 of the Revised Codes of 1899, and was manifestly a mere clerical error which would not render the pleading bad is otherwise sufficient. It is, however, unnecessary for us to consider the sufficiency of the defense thus attempted to be pleaded, or the assignments of error from 1 to 10, inclusive, as the undisputed evidence shows that the sales of these liquors took place in the state of Minnesota, the order for the same having been sent to appellants at St. Paul for approval, and the liquors having been delivered to the consignees f. o. b. cars at that place. As this fact is not seriously controverted by respondent's counsel, we merely cite the case of P. J. Bowlin Liquor Co. v. Brandenburg, 130 Iowa 220, 106 N.W. 497, a case very similar to the case at bar, wherein it was held: "It is shown, however, without dispute, that the order given by defendant was made upon the plaintiff, a dealer in Minnesota, from which place the goods were to be shipped into this state. It is also shown without dispute that the authority of the traveling agent or salesman went no further than to take and transmit such orders subject to the approval of his employers, and that such was the order sent in on behalf of the defendant. This was not a violation of the laws of Iowa, and the indebtedness thus contracted by the defendant is enforceable in our courts because the contract of sale is held to have been made in Minnesota, where it first became effective by the plaintiff's approval of defendant's order"--citing prior decisions of that court. We will therefore assume for the purposes of this case that the defense attempted to be pleaded has not been established.

Respondent however, seeks to invoke the aid of section 9390, Rev. Codes 1905, being section 7621, Rev. Codes 1899, without the necessity of pleading facts bringing the case within its provisions. Among other things, this section provides that "all sales, transfers, conveyances, mortgages, liens, attachments, pledges and securities of every kind, which, either in whole or in part, shall have been made for or on account of intoxicating liquors sold in violation of this chapter, shall be utterly null and void against all persons in all cases, and no rights of any kind shall be acquired thereby, and no action of any kind shall be maintained in any court of this state for intoxicating liquors, or the value thereof, sold in any other state or country contrary to the laws of said state or country or with intent to enable any person to violate any provision of this chapter." Respondent's counsel urge that, even though they have not pleaded in the answer facts showing that plaintiffs sold said liquors with intent to enable the purchasers thereof to violate the provisions of the prohibitory law of this state, still they had the right to rely upon such defense as a bar to any recovery, and they cite in support thereof Crichfield v. Paving Co., 174 Ill. 466, 51 N.E. 552, 42 L. R. A. 347; Sheldon v. Pruessner, 52 Kan. 579, 35 P. 201, 22 L. R. A. 709; Handy v. St. Paul Globe Pub. Co., 41 Minn. 188, 42 N.W. 872, 4 L. R. A. 466, 16 Am. St. Rep. 695; Oscanyan v. Arms Co., 103 U.S. 261, 26 L.Ed. 539. The first case cited was an action in assumpsit brought to recover compensation claimed to have been earned under an agreement which was attached to, the common counts in the declaration, and which upon its face disclosed its invalidity as being against public policy. The defendant pleaded the general issue. This contract was introduced in evidence at the trial, and in the Supreme Court it was urged that the question of the invalidity of the contract was not raised by the pleadings in the court below nor by objections to...