Hunter v. Big Four Auto Co.

• Decision Date: 16 February 1915
• Citation: 162 Ky. 778,173 S.W. 120
• Parties: HUNTER ET AL. v. BIG FOUR AUTO CO.
• Court: Kentucky Court of Appeals

173 S.W. 120

162 Ky. 778

HUNTER ET AL. v. BIG FOUR AUTO CO.

Court of Appeals of Kentucky.

February 16, 1915

Appeal from Circuit Court, Warren County.

Action by the Big Four Auto Company against J. P. Hunter and others. From a judgment sustaining a general demurrer to the answer defendants appeal. Reversed, with directions.

T. W. &amp R. C. P. Thomas, of Bowling Green, for appellants.

Sims Rodes & Sims, of Bowling Green, for appellees.

CARROLL J.

This suit was brought by partners, P. L. Patterson, Joe Lucas James Massey, and S. A. Kelly, doing business under the assumed name of the "Big Four Auto Company," against the appellants, as defendants, to recover $284, the amount of two notes executed by the defendants to the Big Four Auto Company, growing out of some transactions between the parties about an automobile.

The defendants, for the purpose of defeating the action, pleaded and relied on section 199b of the Kentucky Statutes, the first subsection of which reads as follows:

"No person or persons shall hereafter carry on or conduct or transact business in this state under an assumed name, or under any designation, name or style, corporate or otherwise, other than the real name or names of the individual or individuals conducting or transacting such business, unless such person or persons shall file in the office of the clerk of the county or counties in which such person or persons conduct or transact or intend to conduct or transact such business, a certificate setting forth the name under which said business is, or is to be, conducted or transacted, and the true or real full name or names of the person or persons owning, conducting or transacting the same, with the post office address or addresses of said person or persons. Said certificate shall be executed and duly acknowledged by the person or persons so conducting, or intending to conduct, said business."

Subsections 2 and 3 relate to the certificate. Subsection 4 exempts corporations and partnerships from the application of the statute, with the proviso that:

"Such partnership name or designation shall include the true real name of at least one of such persons transacting business."

Subsection 5, prescribing a penalty for the violation of the statute, reads:

"Any person or persons carrying on, conducting or transacting business as aforesaid, who shall fail to comply with the provisions of this act, shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than twenty-five dollars nor more than one hundred dollars, or imprisoned in the county jail not less than ten days nor more than thirty days, or both so fined and imprisoned, and each day any person or persons continue to conduct business in violation of this act shall be deemed a separate offense."

The trial court sustained a general demurrer to this answer, and the defendants appeal.

This act does not in terms say that it shall be "unlawful" for any person to carry on or transact business under an assumed name, but it is manifest that it was the purpose of the act to make it unlawful, or else the penalty prescribed by subsection 5 would not have been imposed. In view of the fact that this section expressly provides that any person who fails to comply with the provisions of the act shall be guilty of a misdemeanor and subject to a fine and imprisonment, it would be disregarding the purpose of the act, when considered as a whole, to say that the Legislature did not intend to make it unlawful to transact business without observing the requirements of the act. If the Legislature had said in so many words in subsection 1 that "it shall be unlawful for any person or persons to carry on or transact business under an assumed name," it would not have made any plainer the fact that the Legislature intended to make this method of transacting business unlawful.

It being then the intention of the Legislature to make the transaction of business under an assumed name unlawful unless the requirements of the statute are observed, the only remaining question is: Does the fact that the Legislature has made the doing of a thing unlawful prohibit the person engaged in the unlawful thing from maintaining an action to enforce a contract right wholly created in the doing of this unlawful and forbidden thing?

In Fruin-Colnon Contracting Co. v. Chatterson, 146 Ky. 504, 143 S.W. 6, 40 L. R. A. (N. S.) 857, a question so similar to the one here presented that no distinction can be made between them before the court, in the course of the opinion it was said:

"The statute does not provide that contracts entered into before it has been complied with shall be void or nonenforceable, nor does it use any language in reference to the contract; but, when a statute makes it unlawful to do business under certain conditions, it seems to necessarily and logically follow that the doing of the business under the prohibited conditions is in itself unlawful. When the doing of the act is made unlawful, there is no reason why the statute should also declare that contracts made in violation of it should also be unlawful. When the law prohibits a thing, it is unlawful to do it, and the courts should not lend their aid to the enforcement of prohibited contracts. Courts are established to afford

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