Ruemmeli v. Cravens

Opinion of the court by PaNCoast, J.: While the foregoing statement of facts is quite lengthy, but one issue is raised, and one question only is necessary 'to be passed upon by this court. The defense below sought to defeat the action upon the ground that the contract entered into was an illegal one and against public policy, for the reason that the plaintiff had not procured a *351 license, and was therefore not authorized to sell malt, spirituous and vinous liquors at wholesale within the Territory of Oklahoma. * On the other hand it is claimed by the defendant in error that the contract was neither illegal nor against public policy. That inasmuch as a license was procured by the agent, Cravens, and the business was transacted in his name, the laws of the territory with reference to selling intoxicating liquors at wholesale were, in effect, complied with, and that therefore the contract was neither illegal nor immoral. Sec. 1 of the liquor.law of the territory, Wilson’s Revised Statutes, page 841, provides that before a person may sell intoxicating liquors he shall first present an application by petition signed by thirty resident taxpayers, and procure a license. This section also provides that the petition for a license shall set forth that the applicant is a man of respectable character and standing, and a resident of this territory, and praying that a license may be issued to him. Sec. 8 of the act provides that all persons selling liquors at wholésale shall be subjected to all the provisions of the act, except that they shall only be required to pay a license fee of one hundred dollars per annum, or where the license is for the wholesaling of malt exclusively, shall only be required to pay a license of twenty-five dollars annually. See. 7 of the act provides that anyone receiving a license to sell liquor shall give a bond in the penal sum of $2,000.00, conditioned that he will not violate any of the provisions of the act, and that he will pay all damages, fines, penalties and forfeitures which may be adjudged against him under the provisions of the act. *352 In the following sections there are many provisions restricting the sales of liquor, and many sections prohibiting-sale.s to. certain persons, and providing for the recovery of' damages in eases of violation, and also providing for punishment by fine and imprisonment in case of a .violation of the law by selling without a license, and in cases of violations of the law in other respects as therein provided. The very nature of the business of selling intoxicating liquors necessitates stringent provisions to keep it within proper channels. How can it be said that a license obtained by Cravens,, which allowed him to sell liquor.at wholesale, could be used by any other person? First it is shown by the statement of counsel to the jury, which statement is here treated as facts of the ease, or evidence adduced, that the plaintiff in this case was a non-resident of the territory, and this fact alone made-it impossible for him to procure a license to sell liquors within the territory, either at wholesale or retail. Not one of the provisions of the liquor law was complied with by reason of' the license procured by the defendant. No bond was given upon which a recovery could have been had in case of violation of any of the provisions of the act. The bond given by the defendant could only be held for violations of the law that he might be guilty of, and in no way whatever could a suit be brought upon the bond of the defendant, to recover for violations of the law or injury caused by or through the acts of the plaintiff. It would seem that the contract was entered into for the very purpose of violating the liquor laws; that the agreement was that the defendant should transact the business in his own name in order that the true conditions- *353 and facts might be kept from the public, and that it might appear upon the surface that Cravens was the principal, wholesaling liquors in his own name, instead of being simply an agent of one who, under the law, could not procure a license, and could not transact the business within the territory. It is unnecessary to enter into a discussion of the advisability of this law, its necessity, or-the wholesomeness of it. It is only necessary to know that it is a law of the territory, and that a violation of it is punishable by fine and imprisonment. The business, then, conducted by the plaintiff and defendant, in wholesaling liquor in the territory without a license, was not only against public policy, but was prohibited by the laws of the territory. The contract, therefore, which is the basis of this action, is founded upon, and arises out of a transaction prohibited by statute. All contracts which are in violation of law are illegal, and no action or suit will lie to enforce them. And it is immaterial whether the contract is directly prohibited, or arises collaterally out of transactions prohibited by statute. Nor is it material whether there is in fact any corrupt intention on the part of either of the contracting parties to violate the law. Courts are instituted to carry into effect the laws of the country, and they cannot become auxiliary to the consummation of violations of the law. There can be no civil right where there can be no legal remedy, and there can be no legal remedy for that which is in itself illegal. And this is true as well of contracts malum in se as of contracts malum prohibitum, for the rule is extended to such as are calculated to affect the general interests and policy *354 of the country. (Kelly v. Courter et al., 1st Okla. 277; Garst v. Love & Word, 6 Okla. 46.) To enumerate here all the instances of cases in which this reasoning has been practically applied, would be simply a useless parade. But it is strenuously contended that this case does not fall within the principles laid down here, because the agent transacted the business in his own name, made the contracts for payment to himself, secured a license for himself, and the plaintiff was not to be, and was not, known to the customers to whom the sales were made, or to the general public. This requires a discussion of the rule which has been laid down by some of the courts, that when money or property has been delivered by a principal to an agent for an illpgal purpose, or for the purpose of carrjdng into execution an illegal contract, the agent cannot set up such illegal contract to prevent a recovery by the principal from the agent of such money or property so long as it remains in his hands. (American and English Encyclopedia of Law [2 ed.], page 1009, and cases there cited.) This rule, however, only applies in one class of cases. It must be a case in which the illegal transaction or act has; been entirely completed or consummated, and the property or money, the proceeds of the illegal act or transaction, remains in the hands of the agent, and the test whether the demand connected with the illegal act can be enforced, is whether the plaintiff requires any aid from the illegal transaction to establish his case. (Floyd v. Patterson, 13 Am. St. Rep. 787; Gilliam v. Brown, 43 Miss. 641; Simpson v. Blass, 2 Taunt 246; Roby v. West, 4 N. H. 290.) This rule as stated by the supreme court of the United States in Planters' Bank v. Union Bank. 16 Wall. 483, is that *355 while no action could be maintained upon the illegal contract : “But when the illegal transaction has been consummated; when no court has been called upon to give aid to it; when the proceeds oí the sale have been actually received, and received in that which the law .recognizes as having had value; and when they have been carried to the credit of the plaintiffs, the case is different. The court- is there not asked to enforce an illegal contract. The plaintiffs do not require the aid of any illegal transaction to establish their case. It is enough that the defendants have in hand a thing of value that belongs to, them. Some of the authorities show that, though an illegal contract will not be executed, yet, when it has been executed by the parties themselves, and the illegal object of it has been accomplished, the money or thing which was the price of it may be a legal consideration between the parties for a promise, express or implied, and the court will not unravel the transaction to discover its origin.” It is plain to be seen that the present case does not fall within this rule. The plaintiff cannot recover in this case without the aid of the illegal transaction. This action is in the nature of an accounting between the plaintiff and defendant. Allegations of "fraud, embezzlement, and bad faith generally, are made against the defendant, and the court, in order to arrive at the fact of whether or not there is any money in the hands of the defendant, as agent of the plaintiff, unaccounted for, must investigate the entire transaction. This the court will not do, but will leave the parties where it finds them. To do otherwise, courts would become auxiliary to the consummation of violations of the law. (Leonard v. Poole, 11 Am. St. Rep. 667.) Another rule which meets the plaintiff here face to face, *356 and which cannot be overcome, is that where an agent transacts an illegal business, without disclosing the fact of his agency, and the money is paid to him in his own right, and not as an intermediary or agent, he cannot be compelled to account therefor to his principal, for the reason that the principal cannot show his title to the property except through the illegal contract. (Wooten v. Miller, 7 Smed. & M. [Miss.] 380; Maybin v. Coulon, 4 Dall. [Pa.] 298; Floyd v. Patterson, 72 Tex. 202.) Having fully examined the entire record, and seeing no error therein, the judgment of the court below will lie affirmed. Hamer, J., who presided in the court below, not sitting; Irwin, J., dissenting; Gillette, J., absent; all the other Justices concurring.