Deering v. Chapman

The opinion of the Court was drawn up by Whitman C. J. — The note declared on was signed by the defendant as surety, it would seem, with Isaac Chapman, who must have been the principal debtor. Payment is resisted upon the ground, that a part of the consideration for the note was ardent spirits, sold by the plaintiffj a retailer, without license therefor, to said Isaac in violation of the statute, which prohibits such selling in less quantities than twenty-eight gallons at one time. The authorities cited by the defendant’s counsel are numerous, and fully establish the general principle, that all contracts, made in violation of law, are nugatory; and that if a note of hand be founded, oven in part, upon such consideration, it is void in tolo. The counsel for the plaintiff, nevertheless, contests the principle, and cites the case of Yundt v. Roberts, 5 Serg. & Raw. 139, as laying down the law differently. Mr. Justice Duncan, in that case, is reported to have said, “ that a note may consist of many items; be composed of many contracts; and, though they are blended in the note, they are divisible in their nature; if part of the contract arises on a good, and part on a bad consideration, they are divisible; the legal contract remains, and the party has a right to maintain his action for so much of his demand as is legal.” This language of the learned Judge, if. would seem, must have been used with reference to a contract or note of hand, the consid [492] eration for a part of which had failed, as being merely void, and not in violation of law; for he afterwards says, “if the contract is entire, and founded on two considerations, one of which is unlawful, that vitiates the whole.” And surely a note, of hand is an entire contract. This case, then, cannot be considered to be clearly opposed to the general principle before named. The counsel for the plaintiff, also cites the case of Dawson v. Remnant, 6 Esp. cases, 24, which, he contends, shows an exception to the general principle. It is, that, where mutual accounts have existed between parties, and a settlement has taken place, and a balance has been struck', it will be obligatory, though some of the items might have arisen from sales made in violation of law. And Mr. Justice Duncan, in his opinion, may be believed to have had such a principle in his mind, as he has, in the course of it remarked, that, “ it would be unreasonable to say, that where a note is given on a final settlement of accounts, for a balance, if one item of the account, consisting of a tavern debt, exceeded twenty shillings, the whole should be void.” The case- of Dawson v. Remnant, was one in which the parties had cross demands, which they settled, and a balance was agreed upon. Though part of the items in the settlement was for liquors sold contrary to law, so that an action could not have been sustained for the value thereof; yet it was held, that the defendant was concluded by the settlement, and bound to pay the balance. And Stephens, in his law of Nisi Prius, a late work, citing the above case, recognizes the supposed exception, as being the settled law, in these words; “ Where parties, having cross demands, settle and balance their accounts, it is no defence to an action brought for the balance, that a great part of the amount was for spirit- - uous liquors delivered in quantities under twenty shillings in value;” yet a debt so arising in England, aside from such settlement, so far as it respected the charges for such liquors, would not be recoverable, except under certain circumstances, not necessary to be named in reference to this case. It must be admitted that if a balance, so ascertained and struck, [493] could be recovered, that a note of hand would be good for it; and the note of hand in this case grew out of such a settlement. The plaintiff had, from time to time, for a considerable period, supplied Isaac Chapman with liquors, and other goods, from his store. The latter had made payments, occasionally, of sundry sums of money on account generally. A settlement finally took place between them; and, the balance being ascertained, and agreed upon, the note in suit was given for it. The plaintiff would here contend, that this case is precisely parallel with that of Dawson v. Remnant. If it be so at all points, that case must be admitted to be an authority of no inconsiderable weight in his favor. If the statutes of England and of this State, were precisely similar, it might be difficult to distinguish the one case from the other. The English statute is, however, that if spirits be sold, at one and the same time, in quantities of a value less than twenty shillings, the seller shall not recover for the value of them. But no penalty is annexed to the act of selling; nor is there any direct prohibition against it. If liquors were sold there in small quantities, and paid for at the time, it would be no breach of law. Under such circumstances the Court might hold, that a settlement of mutual accounts, although in part for spirituous liquors, should be conclusive; when if the selling were prohibited, and a penalty inflicted for a breach of the law, they would hold that public policy required of the Court the disregard of a settlement, which would otherwise contravene the intention of the law makers. Our statute makes selling without license highly penal. In such case a door would be open to an evasion of it, if wo were to admit the settlement to be a shield against one of the consequences ordinarily attaching to an act done in violation of a penal statute. It would bo difficult to distinguish such a case from any other violation of a statute law, whether against acts malum prohibitum or malum in se. We are, therefore, brought to the conclusion, on the whole, that the plaintiff must become nonsuit.