Olmstead v. Distilling & Cattle-Feeding Co.

• Decision Date: 03 December 1896
• Court: U.S. District Court — Northern District of Illinois
• Parties: OLMSTEAD et al. v. DISTILLING & CATTLE-FEEDING CO. GRAVES v. SAME. BAYER v. SAME.

77 F. 265

OLMSTEAD et al. v. DISTILLING & CATTLE-FEEDING CO. GRAVES v. SAME. BAYER v. SAME.

United States Circuit Court, N.D. Illinois, Northern Division.

December 3, 1896

Moses Solomon, for the exceptors.

Herrick Allen & Boyesen, for the receiver.

Moran Kraus & Mayer, for Distilling & Cattle-Feeding Co.

SHOWALTER Circuit Judge.

Of the rebate vouchers here in question (being 148 in number, and aggregating $8,702.87), 47, originally issued.to a firm doing business under the name of Stein Bros., were transferred by Stein Bros., 'without recourse,' to Wolf. Wolf afterwards alienated his interest therein, and the 47 vouchers are now held by Moses Solomon, claimant and exceptor here. The remaining 91 vouchers, originally issued to a corporation called Charles Dennehy & Co., were also assigned. The corporation, Charles Dennehy & Co., asserts here no right on its own behalf. Its name is here made use of in the interest of one G. F. Jones, who claims to hold the 91 vouchers by assignment from the United States Distilling Company, the concern to which the vouchers were transferred by the said Charles Dennehy & Co. Jones is really the other claimant and exceptor here, though the name 'Dennehy &amp Co.' is made use of by him. Besides the 47 original vouchers, Solomon offered in evidence certain transcripts of judgments on said vouchers rendered by justices of the peace in Cook county, Ill. These transcripts were from the files of the circuit court of Cook county. Appeals from said judgments had been duly perfected, and the causes were undisposed of in the circuit court. By these appeals the judgments of the justices had become inconclusive of the matters in dispute. Upon an appeal from a justice of the peace in Illinois, a trial de novo is had in the circuit court. The case was not different to what it would have been if original suits had been commenced, and remained undisposed of, in the circuit court. It was not error in the master to exclude these transcripts. The claim of Solomon, as does that of Jones, rests upon the vouchers assigned to him-- equitably, at least, as he insists-- in the manner already mentioned. These 148 vouchers are alike, except in figures, dates, and amounts. A specimen is in words following:

'No. 837. Peoria, Ill., Oct. 22, 1891.

'Subject to the conditions named herein, and for the purpose of securing the continuous patronage of the within-named purchaser, and successors and assigns of the same, for its products, the Distilling and Cattle-Feeding Company, six months from the date of this purchase voucher, will pay to Stein Bros., of Chicago, Illinois, purchaser, sixteen and forty-seven hundreds dollars ($16.47), being a rebate of 5 cents per proof gallon on 329 1/2 proof gallons of the Distilling and Cattle-Feeding Company's product purchased this day. This voucher will be valid and payable only on condition that the above-named purchaser, the successors and assigns of the same, from the date of this voucher to the time of its payment, shall have bought their supply of such kind of goods as are produced by the Distilling and Cattle-Feeding Company, and all compounds thereof, exclusively from one or more of the dealers named on the back hereof, until further notified, and shall also have subscribed to the certificate on the back hereof.

'(Signed) Distilling and Cattle-Feeding Company

'By J. B. Greenhut, President.'

Indorsed on this was the certificate to be subscribed by the voucher holder, and the list of dealers of distributers. No one of the certificates was subscribed. Stein Bros. did not, during the six months following October 22, 1891, buy their supply from the Distilling & Cattle-Feeding Company's distributers, as proposed; now was the condition as to the six-months future patronage fulfilled as to any one of the 148 vouchers. Can the $16.47 mentioned in the voucher above set out, or the sum mentioned in any one of the 148 vouchers, be recovered? Counsel for the exceptors treat the foregoing document as a present obligation for the $16.47, to be defeated in case Stein Bros. do not, during the six months, buy their supply from the Distilling & Cattle-feeding Company, or some one or more of the dealers indicated. The condition, they say, is illegal, as being in restraint of trade, or against the federal or state statute in that behalf. The obligation to pay the $16.47 is therefore, as they contend, left valid and indefeasible. On the contrary, as appears from the language made use of in the instrument, the obligation arises-- the voucher becomes valid and payable-- only in case, at the end of the six months, Stein Bros. shall have bought their supply from some one or more of the dealers indicated. If the condition be illegal and void, obviously the voucher fails entirely. In that case there can be no obligation on the voucher to pay anything, and the action, so far as it rests on the promise in that instrument, necessarily fails.

Greenh. Pub. Pol. rule 24. Out of the idea that an obligation to pay the $16.47 named in the voucher of October 22, 1891, was to be defeated in case, during the six months, Stein Bros. bought any portion of their supply from some dealer not a distributer of the Distilling & Cattle-Feeding Company, apparently arises the contention that the $16.47 was a sum in excess of the price of 329 1/2 gallons then purchased by Stein Bros.; that, the condition being void as against public policy or the federal or state statute on trade restraint, the $16.47 was in fact the money of Stein Bros. in the hands of the company without consideration and as a pledge or hostage to secure an unlawful purpose, and that Solomon, being assignee, in equity, is entitled to recover this deposit. A court may refuse to enforce a written agreement or promise, for illegality in the consideration, or on grounds of public policy, but the writing does not thereby become any the less the evidence of what the agreement or promise was. For the money paid by Stein Bros. on October 22, 1891, they received the 329 1/2 gallons, and the promise of the company to pay them $16.47 in a certain contingency, and at the end of six months. If it did not appear, when the time expired, that Stein Bros. had, during that period, bought their entire supply from some one or more of the company's distributers, there would be no obligation to pay the $16.47. In such case the sum paid by Stein Bros. on October 22, 1891, would, within the obvious intent of the parties, remain the price and equivalent for the 329 1/2 gallons then delivered. The $16.47 was not, therefore, money of Stein Bros. in the hands of the company. The rule, if there be such a rule, that one who advances money on an executory illegal agreement may repent and recover back his advance before the illegal purpose has been accomplished, does not apply. If Stein Bros. saw fit to fulfill a certain condition in which the company deemed itself interested, they were to receive the $16.47. Failing the performance of that condition, whether legal or illegal, there was no engagement to pay them anything.

Assuming that the voucher is not illegal,...