Hill County v. Shaw & Borden Co.

• Decision Date: 09 August 1915
• Docket Number: 2520.
• Parties: HILL COUNTY v. SHAW & BORDEN CO.
• Court: U.S. Court of Appeals — Ninth Circuit

225 F. 475

HILL COUNTY v. SHAW & BORDEN CO.

No. 2520.

United States Court of Appeals, Ninth Circuit.

August 9, 1915

C. A Spaulding, of Helena, Mont., and L. V. Beaulieu and Victor R Griggs, both of Havre, Mont., for plaintiff in error.

John B Clayberg, of San Francisco, Cal., and Gunn, Rasch & Hall, of Helena, Mont., for defendant in error.

This is an action for conversion of certain books and other property which Hill county procured of Shaw & Borden Company, a corporation, defendant in error, for sue by the county for keeping its records and carrying on the public business of the county. The books and property were procured from Shaw & Borden Company under a subcontract with one B. B. Weldy, who was under contract with the county to furnish them. The complaint sets up the fact that the county entered into a contract in writing with Weldy, proprietor and publisher of a newspaper which had been published in the county for more than six months prior thereto, for furnishing such books and property, and that the Shaw & Borden Company agreed with Weldy to sell, furnish, and deliver to the county the property in question. It is further alleged:

'That this plaintiff has never owned nor published a newspaper and has never owned nor operated a printing establishment in the state of Montana, by reason of which the said defendant asserts and claims that the said Weldy was prohibited by section 2897 of the Revised Codes from subletting his said contract with said county, or any portion thereof to this plaintiff and from contracting and agreeing with this plaintiff to furnish and deliver the said books and other property so described in Exhibit A to said county, and denies any liability or obligation to pay this plaintiff or said Weldy for said books or other property or any part thereof, and has refused and still refuses to pay any amount whatsoever therefor.'

Then follow allegations of ownership in Shaw & Borden Company, value, and conversion by the county, and prayer for judgment for the value of the property.

Before GILBERT and ROSS, Circuit Judges, and WOLVERTON, District judge.

WOLVERTON District Judge (after stating the facts as above).

The statutory provision of which it is alleged the contract of the defendant in error is in violation is as follows (we quote from appellant's brief, as its correctness is not questioned):

'It is hereby made the duty of the county commissioners of the several counties of the state of Montana to contract with some newspaper of general circulation, published within the county, and having been published continuously in such county at least six months immediately preceding the awarding of such contract to do and perform all the printing for which said counties may be chargeable, including all legal advertising required by law to be made, blanks, blank books, and official publications, at not exceeding the following prices: * * * All newspapers which may receive any contract for printing under this act which may not be able to execute any part of such contract shall be required to sublet such contract or portion to some newspaper or printing establishment within the state, which may be competent to execute such work, at not to exceed the rates herein mentioned.'

This statute has been held to be constitutional and valid by the Supreme Court of Montana in a case involving the validity of the very contract which defendant in error seeks to disavow for the purpose of recovery in the present action. Hersey v. Neilson et al., 47 Mont. 132, 131 P. 30, Ann. Cas. 1914C, 963.

The contention presented here is that, notwithstanding the illegality of such contract, the plaintiff is entitled to recover the property delivered to the county, or rather the value thereof; the county having converted the same to its own use.

It will be premised that the plaintiff's contract was and is illegal and void because prohibited by law. The law requires the commissioners of the county to contract with some newspaper of the county, and the newspaper contracted with to sublet, if at all, to some newspaper of the state. The requirement is a prohibition against contracting with any other parties than those specified, and any contract in derogation thereof is nugatory and void.

'The general principle,' says the Supreme Court of California, 'is well established that a contract founded on an illegal consideration, or which is made for the purpose of furthering any matter or thing prohibited by statute, or to aid or assist any party therein, is void. This rule applies to every contract which is founded on a transaction malum in se, or which is prohibited by statute, on the ground of public policy. ' Swanger v. Mayberry et al., 59 Cal. 91, 94.

And the Supreme Court of the United States has expressed itself thus:

'The principle is not new; but, on the contrary, it has been frequently announced, commencing in cases considerably over a hundred years old. It was said by Lord Mansfield, in Holman v. Johnson, 1 Cowper, 341, decided in 1775, that: 'The objection that a contract is immoral or illegal as between the plaintiff and defendant sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this: Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.' The cases upholding this doctrine are numerous and emphatic. Indeed, there is really no dispute concerning it. ' Pullman's Car Co. v. Transportation Co., 171 U.S. 138, 150, 18 Sup.Ct. 808, 43 L.Ed. 108.

It is a doctrine of the courts, however, now well established, that sanction will be given a cause of action proceeding as for quantum meruit, or for recovery of property or in trover where the property has been converted, aside from the contract and independent thereof, where the contract is merely malum prohibitum, not malum in se nor involving moral turpitude, and does not contravene public policy, and where the statute imposes no penalty for its infraction. This upon...