Arnot v. Pittston & Elmira Coal Co.

Miller, P. J. I shall assume, for the purposes of this case, that the ninth paragraph of the contract between the Butler Colliery Company and the Pittston and Elmira Coal Company, which is as follows: “ Einth. The said party of the first part hereby agrees not to sell coal to any other party than the said party of the second part to come north of the State line during the continuance of this agreement,” was illegal and void. Taking this view of .the subject the question arises whether the contract is divisible, and embracing some provisions which are valid standing alone, and there being an adequate independent consideration, the defendant’s agreement can be supported, and the court can disregard the bad and sustain the agreement upon the good consideration. I am inclined to the opinion that this can be done. It is laid down by Parsons in his work on contracts, volume 1, page 457: “ If one gives a good and valid consideration, and thereupon promises to do two things, one legal, the other illegal, he shall be held to do that which is legal, unless the two are so mingled and bound together that they cannot be separated, in which case the whole promise is void.” See also note, where the same principle is substantially maintained. Leavitt v. Palmer, 3 N. Y. 37, and the authorities cited. On the same page of the work mentioned, it is further stated in a note that “ although* a contract contain some provisions or promises which are void by statute, yet if it also embrace other agreements which would be valid if standing alone, they may be enforced; ” and numerous English cases are cited to uphold this principle. Although there are perhaps some cases seemingly in conflict with these general rules stated, I am not satisfied that they are of a character which overthrows the principle referred to in the authorities cited. In support of the position contended for by the plaintiff’s counsel, is the case of Jarvis v. Peck, 10 Paige, 119, which I do not understand has ever been distinctly overruled. The case of Saratoga County Bank v. King, 44 N. Y. 87, does not so hold, and is not, I think, in conflict with the rules laid down; for in this case the action was brought to enforce an illegal agreement, while here it is in disaffirmance of it. The same remark applies to Woodworth v. Bennett, 43 N. Y. 273. The elementary principle is sustained in numerous cases, that where the contract is divisible and the illegal part may be separated from the legal, the contract [146] maybe enforced. Leavitt v. Palmer, 3 N. Y. 37; Arthur v. Arthur, 5 Barb. 10; Vanderpoel v. Van Allen, id. 161; Pepper v. Haight, 20 id. 440; Hawley v. Truax, 21 id. 361; Cook v. Eaton, 16 id. 440; Sanderson v. Goodrich, 46 id. 618; Curtis v. Leavitt, 15 N. Y. 12. In Alcock t. Giberton, 5 Duer, 76, the rule was laid down by the Assistant Vice-Chancellor Hoeehaít to be, “that if a sufficient valuable consideration remained after rejecting the illegal one to support the contract, the court would enforce it.” It is very evident that such consideration does exist in the case at bar to support the plaintiff’s claim, and the action may therefore be maintained within this rule. The intention of the parties is also to be considered as appears from the instrument itself upon the question whether a particular provision in the agreement is dependent or independent. Even when a defendant has received a substantial part qf the consideration of the covenant, which is being enforced against him and the covenants and consideration in their nature cannot be apportioned, then algo they are to be considered as independent. Evans v. Harris, 19 Barb. 423. As to the question of intention, it will be seen that the vendors only obtained the market price for their coal, and the vendees only paid such price. It is hardly to be presumed that either of the parties under such circumstances were influenced by any other provision except the price. We must construe the agreement as it reads independent of the opinion of any of the parties or their agents which was given in evidence on the trial, and which, perhaps, may have been an afterthought, and, therefore, should have no weight. The construction stated, it seems to me, is supported by the instrument itself, and it is not the province of courts to strain a point so as to include an illegal consideration, and by conjecture and speculation defeat the actual designs of a party. These views are sufficient to dispose of the case, but independent of them I am of the opinion that there is no principle of law which interferes with the right of the plaintiffs to maintain an action for the value of the coal sold and delivered to the defendant. It appeared, and the referee has found that soon after the agreement was made it was rescinded and disaffirmed by the plaintiff’s assignor. The action was not brought to enforce the agreement, but in disaffirmance of it and the contract was executory, and was not fully executed. Although both parties had participated in it, they were not in “pari delicto,” where neither can recover from [147] the other. The contract being executory, the plaintiff had a right to rescind, and bring its action to recover the value of the coal delivered. There is a wider distinction between an action brought for the affirmance of an illegal contract, and to enforce its performance, and an action which is prosecuted in disaffirmance of a contract on the ground that it is void, and that the defendant is not entitled to the benefit to be derived from an unlawful act. Morgan v. Groff, 4 Barb. 524, 527; Schemerhorn v. Talman, 14 N. Y. 123; Curtiss v. Leavitt, 15 id. 12. There is no finding of the referee that the plaintiffs were in “pari delicto,” and inasmuch as the plaintiff’s assignor sought to revoke and recede from the contract, I think they cannot be considered as liable to the charge of being equally in fault with the defendant. It may also be observed that the contract in question was made by an agent of the plaintiff’s assignor, and by the president of the defendant, and if they were both in “pari delicto” the Butler Colliery Company, whom the agent represented, when it came to its knowledge had a right to rescind and disaffirm it, and actually did so disaffirm the contract. As it did not ratify it, a right of action accrued to the Butler Colliery Company, which the plaintiff as their assignor is entitled to maintain. Condit v. Baldwin, 21 N. Y. 219; Bell v. Day, 32 id. 165; Algur v. Gardner, 54 id. 360; Clark v. Metropolitan Bank, 3 Duer, 241. The authority of an agent to enter into a contract which is illegal is not to be presumed ordinarily ; nor is it obligatory upon the principal, and the latter has a right to disapprove of and disaffirm it. There is evidence showing that the principal, the Butler Colliery Company, was not acquainted with the terms of the contract when made, and upon ascertaining what it was, repudiated and disaffirmed it. It could do no more, and was entitled by that act to recover for the value of the coal delivered. These views dispose of all the questions which it is material to discuss, and of the entire case. The judgment was right and must be affirmed, with costs. Judgment affirmed.