Three Star Food Prod.s Corp. v. Ofsa

• Decision Date: 30 October 1923
• Docket Number: No. 4789.,4789.
• Citation: 94 W.Va. 636
• Parties: Three Star Food Products Corporation v. Simon Ofsa.
• Court: West Virginia Supreme Court

94 W.Va. 636

Three Star Food Products Corporation

v.Simon Ofsa.

No. 4789.

Supreme Court of Appeals of West Virginia.

Submitted October 23, 1923.

Decided October 30, 1923.

1. Sales Purchase Price of Substance for Unlawful Manufacture of Intoxicating Liquor can not be Recovered.

The sale of a preparation or substance designed or intended to be used in the unlawful manufacture of intoxicating liquor, being violative of the federal prohibition statute, (Serial section 8351q, 1922 cum. sup. Barnes' Federal Code), the purchase price for such preparation or substance can not be recovered in a court of this state. (p. 638).

2. Same Error to Direct Verdict for Plaintiff in Action to Recover for Sale of Substance for Unlawful Manufacture of Intoxicating Liquor.

If upon the trial of the action to recover such purchase price, the evidence be sufficient to reasonably warrant the jury in finding that the substance was sold in violation of the federal statute, it is error to direct a verdict in plaintiff's favor. (p. 643).

Error to Circuit Court, McDowell County.

Action by the Three Star Food Products Corporation against Simon Ofsa. From a judgment for plaintiff, defendant brings error.

Reversed and remanded.

Harman & Harman and JR. Brown Zinn, for plaintiff in error.

Pratlow & Christie, for defendant in error.

Meredith, Judge:

Defendant, Ofsa, seeks to reverse the judgment of the circuit court of McDowell County, rendered against him in a proceeding by notice of motion for the recovery of the price of a quantity of malt extract and hops sold to defendant by plaintiff. The circuit court directed the jury to return a verdict for plaintiff for the amount sued for, $343.00, and judgment was entered thereon.

The facts are largely undisputed. Defendant is the owner of a grocery and meat shop in the town of Keystone. Plain- tiff, a Baltimore concern, is the manufacturer and dispenser of a preparation called '' Non-Such'' Malt Extract, to be used by consumers in making a malt beverage. In September, 1921, a salesman of plantiff took defendant's order for 25 cases of the extract, 25 dozen packages of hops, and a case of crowns. The crowns were to be used in capping the bottles in which it was contemplated that the users would preserve the beverage. Defendant was to sell the malt extract and the hops to purchasers, who, by adding water thereto in certain proportions, could manufacture the drink in their own homes. Plaintiff also furnished a quantity of printed directions which were to be distributed to the purchasers of the extract. These directions are interesting and important documents in this case. They are entitled: ''Directions for making Temperance Beverage."

They state that the preparation of the Temperance Beverage consists of but three simple operations, and that no special apparatus is required except a boiling pot and a six gallon stone crock. The three operations are described in detail. For our purpose, they can be considered as one. The malt extract, hops and sugar are to be mixed in certain proportions, boiled in water and strained into the stone crock. To this mixture 15 gallons of water are to be added, and the whole allowed to cool. Later, yeast is dissolved in the mixture, and after fermentation the beverage is bottled, and sealed with the crowns provided.

To these directions was added the following "Caution":

"Be sure to comply with the National Prohibition Laws, and do not use less than 20 gallons of water in making this beverage, as using a small quantity of water will create a greater percentage of alcohol, and thereby you will violate the prohibition laws."

Defendant testified that he inquired of the salesman as to his legal right to handle the extract when the sale was solicited; that the salesman assured him that he had nothing to fear on that score; and that the company would back the defendant in case any trouble of that kind should arise. Plaintiff's treasurer denies that the salesman had authority to make any such engagement for the company, but, as to the legal character of the extract, he testifies that their product is advertised and distributed throughout the country, that it is widely used as a sweetening syrup in the manufacture of candy and in baking, as well as in the Temperance Beverage, and that he never before this action knew of its being confiscated as being in violation of the prohibition law. That is just what occurred in defendant's case, however. He had displayed the preparation in his show window but a few days, when a federal officer arrested him, seized his stock of extract and hops, and reported him to the federal district attorney. Upon the latter officer being satisfied of defendant's innocent intentions in the matter, the criminal charges against defendant were ultimately withdrawn. However, these circumstances were not sufficient explanation to plaintiff to satisfy its claim for the purchase price of the order; therefore this action.

The evidence recited makes clear the theory of the defense. Defendant's position is that as the contract with plaintiff involved the sale of goods, forbidden by the prohibition laws of the state and nation, it was therefore illegal and unenforceable. Plaintiff, on the other hand, conceding that an illegal contract would be unenforceable, urges that while it is undisputed that the commodity sold could be used for the preparation of an intoxicating beverage, it was intended and designed to be used for no such purpose; and that it is incumbent upon the court to impute proper and legal motives to the parties to the transaction.

The circuit court seems to have been persuaded that the principle urged by plaintiff was so controlling on the facts presented, and that there was such slight evidence if in fact any at all of violation of or intent to violate existing law, that it held the contract of sale to be a legal and binding obligation on the defendant, and directed the verdict to be found.

To ascertain whether this finding be correct, we must consider the sections of the prohibition statutes involved in the issue of fact presented.

Serial section 8351q, cum. sup. 1922, Barnes' Federal Code (Act Oct, 28, 1919, ch. 85, Title II, §18) reads:

"It shall be unlawful to advertise, manufacture, sell, or possess for sale any utensil, contrivance, machine, preparation, compound, tablet, substance, formula, direction, recipe advertised, designed, or intended for use in the unlawful manufacture of intoxicating liquor."

No section of our state prohibition law in effect when the sale in question was made so nearly describes the offense of which it is argued the plaintiff was guilty, as the provision quoted above. However, serial section 8352, cum. sup. 1922, Barnes' Federal Code, making it unlawful to have or possess "any liquor or property designed for the manufacture of liquor, '' would less specifically cover the offense chargeable to the parties.

Concede for the moment, however, that the plaintiff, by its sale of the extract and hops was guilty of the offense created by the federal statute above quoted, and concede also the general, principle that a contract having for its object the commission of an illegal act is unenforceable, is the matter then concluded? The point that suggests itself to us, and it has not been argued in the briefs, is whether or not a contract having for its object the violation of a federal statute, be, as a consequence of such violation, unenforceable in the state courts. Counsel seem content with the mere statement that an illegal sale would fasten no obligations on the parties, and cite no authorities directly bearing on the subject involved.

By a special plea filed in that behalf, defendant has distinctly directed judicial notice to the federal statutes to which we have referred, and the only issue is as to what effect they have relative to the action on the contract in this action.

We are familiar with the often stated principle that public policy forbids the enforcement of obligations which are violative of penal statutes. We are also familiar with some of the decisions announcing what circumstances shall be considered in ascertaining what such public policy is. Some of them would limit such ascertainment to the latest expressions of the legislature and the courts of the particular state; others would open the way to more extensive investi- gation; but all agree that public policy is in most instances a nebulous and unsatisfactory basis for judicial decision. We prefer, therefore, to determine what force or comity our own and other courts have given to national legislation in cases of this general character.

A somewhat similar case in principle is Dorr v....