McConnon v. Holden

• Decision Date: 13 February 1922
• Citation: 204 P. 656,35 Idaho 75
• Parties: HENRY J. MCCONNON, Appellant, v. WALTER N. HOLDEN and MARY HOLDEN, His Wife, Respondents
• Court: Idaho Supreme Court

204 P. 656

35 Idaho 75

HENRY J. MCCONNON, Appellant, v. WALTER N. HOLDEN and MARY HOLDEN, His Wife, Respondents

Supreme Court of Idaho

February 13, 1922

SALES-ILLEGALITY OF.

1. If a contract of sale is entire and not separable, and any of its elements or ingredients are tainted with illegality, the plaintiff relying on such contract cannot recover; but to have that result the illegality must enter into and become a component part of the contract, or the seller must actively participate in the illegal purpose.

2. In an action based upon a contract of sale, a defense to the effect that the contract is illegal, and on account thereof void, does not present any matter of private right which calls for protection or enforcement by the court.

3. The principle underlying the denial of recovery by one who relies upon a contract void for illegality is that it is against the public policy of the state for the court to lend its aid to one who founds his cause of action upon an immoral or illegal act.

APPEAL from the District Court of the Fourth Judicial District, for Minidoka County. Hon. Wm. A. Babcock, Judge.

Action to foreclose mortgage. Judgment for defendants. Reversed.

Judgment reversed, with costs to appellant.

Cecil M. Adams, and Homer C. Mills, for Appellant.

This contract is one of sale and not agency, and statements of defendant as to his own status as an agent are inadmissible. (Watkins Medical Co. v. Holloway, 182 Mo.App. 140 168 S.W. 290; McConnon & Co. v. McCormick (Tex Civ.), 179 S.W. 275; McConnon & Co. v. Haskins (Mo App.), 180 S.W. 21; Saginaw Medicine Co. v. Batey, 179 Mich. 651, 146 N.W. 329; Dr. Koch Vegetable Tea Co. v. Malone (Tex. Civ.), 163 S.W. 662; W. T. Rawleigh Co. v. Van Duyn, 32 Idaho 767, 188 P. 945; W. T. Rawleigh Medical Co. v. Rose, 133 Ark. 505, 202 S.W. 849.)

The sending of printed matter to purchaser to assist in advertising goods, or price list, or requirement of reports or records of sale by company from salesman, or provision allowing salesmen to return goods to company, or designation of salesman's territory, or suggestions and advice to wagonmen by the company concerning the sale of goods, does not alter character of contract nor tend to establish the relation of agency between them. (Ross v. Northrup, King & Co., 156 Wis. 327, 144 N.W. 1124; Sucker State Drill Co. v. Wirtz, 17 N.D. 313, 115 N.W. 844, 18 L. R. A., N. S., 134; Rich v. Chicago etc. Ry. Co., 34 Wash. 14, 74 P. 1008; Arbuckle v. Kirkpatrick, 98 Tenn. 221, 60 Am. St. 854, 39 S.W. 3, 36 L. R. A. 285; Granite Roofing Co. v. Casler, 82 Mich. 466, 46 N.W. 728; W. T. Rawleigh Medical Co. v. Van Winkle, 67 Ind.App. 24, 118 N.E. 834.)

There is no provision in the statutes denying the right to recover the debt contracted between McConnon & Company and Holden. (21 R. C. L., sec. 72, p. 558; Vermont Loan & Trust Co. v. Hoffman, 5 Idaho 376, 95 Am. St. 186, 49 P. 314, 37 L. R. A. 509; Wood v. Krepps, 168 Cal. 382, 143 P. 691, L. R. A. 1915B, 851; McCall Co. v. Hughes, 102 Miss. 375, 59 So. 794, 42 L. R. A., N. S., 63; Mandlebaum v. Gregovich, 17 Nev. 87, 45 Am. Rep. 433, 28 P. 121; Hughes v. Snell, 28 Okla. 828, Ann. Cas. 1912D, 374, 115 P. 1105, 34 L. R. A., N. S., 1133; Banks v. McCosker, 82 Md. 518, 51 Am. St. 478, 34 A. 539; Robbins v. Taxing District of Shelby County, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694.)

The giving of the note and mortgage by Holden and his wife in payment of the book account, even though such book account was founded on an illegal consideration, is a sufficient consideration for the note and mortgage, and the defendants are estopped from setting up a lack of consideration or its illegality. (Oakdale Mfg. Co. v. Garst, 18 R.I. 484, 49 Am. St. 784, 28 A. 973, 23 L. R. A. 639; McCall Co. v. Hughes, supra; Koons v. Vauconsant, 129 Mich. 260, 95 Am. St. 438, 88 N.W. 630; Smith v. Smith, 4 Idaho 1, 35 P. 697; Fidelity State Bank v. Miller, 29 Idaho 777, 162 P. 244; First National Bank v. Harkey, 63 Okla. 163, 163 P. 273.)

W. W. Mattinson, for Respondents.

Secs. 2353-2359, C. S., is a police measure, enacted to protect public from fraud, and to prohibit peddling except in compliance with those sections. Contracts or sales made in violation thereof are void; notes and securities given to secure payment of price of goods sold in violation of the statute likewise are void and unenforceable. (17 R. C. L. 560; 3 R. C. L. 963; Benjamin on Sales, 521; Vermont Loan etc. Co. v. Hoffman, 5 Idaho 376, 95 Am. St. 186, 49 P. 314, 37 L. R. A. 509; Levinson v. Boas, 150 Cal. 185, 11 Ann. Cas. 661, 88 P. 825, 12 L. R. A., N. S., 575; Wood v. Krepps, 168 Cal. 382, 143 P. 691, L. R. A. 1915B, 851; Mandlebaum v. Gregovich, 17 Nev. 87, 45 Am. Rep. 433, 28 P. 121; Banks v. McCosker, 82 Md. 518, 51 Am. St. 478, 34 A. 539; Smith v. Bach, 183 Cal. 259, 191 P. 14; Rash v. Farley, 91 Ky. 344, 34 Am. St. 233, 15 S.W. 862; 8 C. J. 244; 13 C. J. 510; Martin v. Steele, 7 Idaho 497, 63 P. 1040; Baker v. Lehman etc. Co., 186 Ala. 493, 65 So. 321; Mo Yaen v. State, 18 Ariz. 491, 163 P. 135, L. R. A. 1917D, 1014; Leonard v. Poole, 114 N.Y. 371, 11 Am. St. 667, 21 N.E. 707, 4 L. R. A. 728.)

Where it is intended by the parties that the subject matter of the sale is to be taken into the jurisdiction of the forum and there sold in violation of the laws of the latter state, and the seller aids in the furtherance of such illegal purpose, the courts of the latter state will not permit an action to be maintained thereon. (23 R. C. L. 1316, 1320; Gaylord v. Soragen, 32 Vt. 110, 76 Am. Dec. 154; Coffe & Clarkener v. Wilhite, 56 Okla. 394, 156 P. 169; Standard Furniture Co. v. Van Alstine, 22 Wash. 670, 79 Am. St. 960, 62 P. 145, 51 L. R. A. 889; Arnott v. Pittston & Elmira Coal Co., 68 N.Y. 558, 23 Am. Rep. 190; Graves v. Johnson, 179 Mass. 53, 88 Am. St. 355, 60 N.E. 383; Tracy v. Talmage, 14 N.Y. 162, 67 Am. Dec. 132; Corbin v. Houlehan, 100 Me. 246, 61 A. 131, 70 L. R. A. 568; Wasserboehr v. Boulier, 84 Me. 165, 30 Am. St. 344, 24 A. 808; Smith v. Godfrey, 28 N.H. 379, 61 Am. Dec. 617.)

Apart from the contract of sale, the evidence establishes the relation of principal and agent between McConnon & Co. and Holden in the resale of McConnon products in Idaho, and this finding of the court sitting as a jury will not be disturbed. (Clark v. J. R. Watkins Medical Co., 115 Ark. 166, 171 S.W. 136; 2 C. J. 438; Willcox & G. Sewing Mach. Co. v. Ewing, 141 U.S. 627, 12 S.Ct. 94, 35 L.Ed. 882; Sturm v. Boker, 150 U.S. 312, 14 S.Ct. 99, 37 L.Ed. 1093; McKinney v. Grant, 76 Kan. 779, 93 P. 180; Studebaker Corp. of America v. Hanson, 24 Wyo. 222, Ann. Cas. 1917E, 557, 157 P. 582, 160 P. 336; Moline Plow Co. v. Rodgers, 53 Kan. 743, 42 Am. St. 317, 37 P. 111; Carstens v. Nut House, 96 Wash. 50, 164 P. 770; Herring-Hall-Marvin Safe Co. v. Balliet, 38 Nev. 164, 145 P. 941; Cauthorn v. Burley State Bank, 26 Idaho 532, 144 P. 1108; Blackwell v. Kercheval, 29 Idaho 473, 160 P. 741.)

RICE, C. J. McCarthy, Dunn and Lee, JJ., concur. Budge, J., did not sit at the hearing and took no part in the opinion.

OPINION

RICE, C. J.

This is an action to foreclose a mortgage given for the purchase price of certain goods sold to respondent Walter N. Holden, under the following contract:

"This agreement, made the 11th day of March, A. D., 1913, between McConnon & Company, a corporation of Winona, Minnesota, party of the first part, and Walter N. Holden, of Heyburn, in the State of Idaho, party of the second part--

"Witnesseth That for and in consideration of the promises and agreements hereinafter contained, to be kept and performed by the party of the second part, the party of the first part promises and agrees to sell and deliver to the party of the second part f. o. b. at Winona, Minnesota, in such reasonable quantities as the party of the second part may from time to time require in his territory hereinafter described, all medicines, extracts, and other articles, manufactured or sold by it, such goods to be sold and delivered to the party of the second part at the usual and customary wholesale prices to be shown by invoices accompanying each shipment.

"The party of the second party hereby acknowledges that he is indebted to the party of the first part in the sum of $ 300 Dollars, the same being part of the balance now due from Peter Verburg to the party of the first part under a certain agreement entered into between him and it on February 8, 1912, and agrees to pay on or before the expiration of this contract in consideration of the execution of this agreement and the extension of the time of payment of said indebtedness by the party of the first part.

"The party of the second part agrees to sell goods delivered to him under this agreement in the county of Minidoka and in the western one-half of Cassia County, and State of Idaho, or in such other territory as the party of the first part may direct, from the date hereof until the first day of March, 1914, when this agreement shall terminate.

"The party of the second part further agrees to keep a complete record of all goods disposed of in his said territory and on hand, and to make written reports of the same to the party of the first part at such times and in such manner as it may from time to time require, and to pay the party of the first part the wholesale prices f. o. b. Winona, Minnesota, as aforesaid for all goods furnished to him from time to time as hereinbefore provided, at the time and in the manner and in accordance with the provisions of the weekly report blanks of the party of the first part furnished to the party of the second part and further agrees, that at the expiration of this agreement, he will pay to it the whole amount then remaining unpaid, but the time of making such payments or...