Davis v. Bronson

Stockton, J. — The defence is based upon the fifteenth section of the “act for the suppression of intemperance,” which provides that “ no action of any kind shall be maintained in any court of the State for intoxicating liquors, or the value thereof, sold in any other State or country, contrary to the laws of said State or country, or with intent to enable any person to violate any provision of this act; nor shall any action be maintained for the recovery or possession of any intoxicating liquors, or the value thereof, except in cases where persons owning or possessing such liquors with lawful intent, may have been unlawfully deprived of the same. Act of January 22, 1855, section 15. The authority of this statute, must be paramount with us, and is decisive of this cause, unless, as is contended by plaintiff, it is not intended to apply to the case made by him, or is unconstitutional and void, as impairing the obligation of contracts. It is claimed by plaintiff that the contract is to be construed according to the law of Illinois, where made ; and if valid there, it is valid every where else, and cannot be rendered invalid by the law of Iowa. — 424 — “ There can be no doubt,” says Lord Mansfield, in Holman v. Johnson, Cowper, 341, “but that every action tried here, must be tried by the law of England ; but the law of England says, that in a variety of circumstances, with regard to contracts legally made abroad, the laws of the country where the cause of action arose, shall govern.” Male v. Roberts, 3 Espinass N. P., 163. Generally speaking, the validity of a contract is to be decided by the law of the place where it is made — lex loei contractu. If valid there, it is, by the general law of nations, held valid everywhere, by the tacit or implied consent of the parties. Story’s Conflict of Laws, section 242. The plaintiff states the rule in language stronger — that if the contract is valid where made, it is valid everywhere, and cannot be rendered invalid by the law of any other State. To give effect to contracts made out of the State, is an act of comity due from the courts of the State in which they are sought to be enforced, to the State in which they are made. The lex loci is to be adopted in deciding on the nature, validity and construction of the contract. So far, the obligation of the law of comity extends, but no farther. Pearsoll v. Dwight, 2 Mass., 88. So, a contract made in a foreign place, to be there executed, if valid,by the laws of that place, may be a legitimate ground of action in the courts of this State, although such contract may not be valid by our laws, or even may be prohibited to our citizens. Contracts for a greater rate of interest than is allowed by the State where they are attempted to be euforced, are instanced as an illustration of this rule. Greenwood v. Curtis, 6 Mass., 378. But where upon a contract made in Now York, and to be there performed, the parties both being residents of that State, a suit was brought in Massachusetts, it was held that the statute of limitations of New York could not be pleaded in bar of the action. Pearsoll v. Dwight, 2 Mass., 88. The rule, however, is subject to important exceptions: 1. That neither the State, nor its citizens may suffer any injury or inconvenience by giving legal effect to the contract; which should not, in itself, nor in the means used to give — 425 — it effect, work injury to the country where it is attempted to be enforced. Story on Conflict of Laws, sec. 244; Greenwood v. Curtis, supra; Ohio Ins. Co. v. Edmondson, 5 Louis., 295. 2. That the consideration of the contract be not immoral, and the giving effect to it will not have a bad tendency, or exhibit to the citizens of the State an example pernicious and detestible. No man ought to be heard in a court of justice, to enforce a contract founded in, or arising out of, moral or political turpitude, or in fraud of the just rights of any foreign nation. Armstrong v. Toler, 11 Wheaton, 258. 3. The contract must not be opposed to the policy and institutions of the State where it is sought to be enforced. In all such cases,the contracts will be held utterly void, whatever may be their validity in the country where they are made, as being inconsistent with the duties, the policy, or the institutions of the State where they are sought to be enforced. Story on Conflict of Laws, sec. 259. It is not claimed by defendant that the law of Iowa operates extra-territorially, to repeal or supercede the laws of Illinois. The State may say how far, however, the laws of another State are to be enforced by her courts; and this, without impairing the obligation of any contract. The plaintiff, without recognizing the exceptions to the rule^ claims for it an authority superior to that of our own legislature. The authority, (says Story), of acts and contracts done in other States, as well as the laws by which they are regulated, are not, proprio vigore, oí any efficiency beyond the territories of that State; and whatever effect is attributed to them elsewhere, is from comity, and not of strict right. Every independent community will, and ought to, judge for itself, how far that comity ought to extend. The reasonable limitation is, that it shall not suffer prejudice by its comity. Confl. Laws, sec. 244. In cases turning upon the comity of nations, (says Mr. Justice Best), it is a maxim that the comity cannot prevail in cases where it violates the law of our own country, or the law of nature, or the law of God. Contracts, therefore, which are in — 426 — evasion or fraud of the laws of a country, or of the rights or duties of its subject— against good morals or against religion — or against public right; and contracts opposed to the national policy or national institutions, are deemed nullities in every country affected by such considerations, although they maybe valid by the laws of the place where they are made. Forbes v. Cochrane, 2 B. & C., 448. The case of Holman v. Johnson, cited often in support of the doctrine contended for by the plaintiff, was for the price of a quantity of tea, sold and delivered to the order of defendant, at Dunkirk, by plaintiff, knowing it whs to be smuggled into England. The plaintiff was to have no hand in the smuggling, but merely sold the tea to defend, ant, as to any other person in the ordinary course of trade. The defence was, that the contract for the sale of the tea was with an intention to make an illicit use of it, with the privity and knowledge of the plaintiff, and he was not, therefore, entitled to the assistance of the laws of England to recover the value of it. Lord Mansfield said: “No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If the cause of action appears to arise ex twrpi causa, or the transgression of a positive law of this country, then the court says he has no right to be assisted. ” “ The question, therefore, is, whether in this case the plaintiff’s demand is founded upon the ground of any immoral act or contract, or upon the ground of his being guilty of anything prohibited by a positive law of this country. An immoral contract it certainly is not, for the revenue laws themselves, as well as the offences against them, are positivi juris.” And the court held, that as the plaintiff’s contract was only to sell and deliver the tea at Dunkirk, although he knew what the buyer was going to do with it, yet, as he had no concern in the transaction itself, and as his intent was totally at an end by the delivery at Dunkirk, he had trangressed no law of England, and was entitled to recover. Holman v. Johnson, Cowper, 341. The case of Pellicat v. Angell, 2 Crompt., Mees, & — 427 — Rosc., 311, was upon a bill of exchange accepted in Prance, by the defendant, a British subject; payable to the plaintiff, a Frenchman, being for the price of goods sold by the plaintiff to the defendant, in Paris, for the avowed purpose of being smuggled into England. The court held, that “ where parties enter into a contract to contravene the laws of their own country, such contract is void ; but that the subject of a foreign country is not bound to pay allegiance to the revenue laws of another; except that where he comes within the act of breaking them himself, he cannot, in such country, recover the fruits of his illegal act. But there is nothing illegal in merely knowing that the goods he sells, are to be disposed of in contravention of the fiscal laws of another country. It has never been said, that merely selling to a party who means to violate the laws of his own country, is a bad contract.” In McIntyre v. Parks, 3 Metc., 207, the consideration of the assignment of a promissory note, was the sale of lottery tickets in New York, authorized by the law of that State, but prohibited in Massachusetts, where they were to be sold, and where suit was brought. It was held that it was no legal objection to the validity of the contract, that the plaintiff knew when the lottery tickets were sold to defendant, that he intended to sell them in Massachusetts. In Orcutt v. Nelson, 1 Gray, 536, the suit was brought to. recover the price of brandy, gin, rum, &c., sold and delivered to defendant by plaintiff. The defence was, that they were intoxicating liquors, sold contrary to the statute of Massachusetts, regulating the sale of intoxicating liquors, the defendant not being an agent appointed according to law, to sell the same for medicinal, chemical, and mechanical purposes. The evidence showed that the liquors were ordered by mail, of the plaintiff, doing business at Hartford, Connecticut, who filled the order, and shipped the goods to defendant, residing in Massachusetts. The law of that State provided, that “ no action of any kind shall be had or maintained in any court of this commonwealth, for the recovery or possession of intoxicating liquors, or the value thereof, except such as are sold in accordance with the — 428 — provisions of this act.” The court held that all sales not prohibited by the terms of the act, or by necessary implication from those terms, were to be deemed made in accordance with the act, and that a sale of liquors in Connecticut, without any fraudulent view to their re-sale in Massachusetts, contrary to law, was not unlawful, and that an action might be maintained in Massachusetts for the price of the liquors so sold. The result of these decisions, (says Story’s Conflict of Laws, section 253), certainly is that the mere knowledge of the illegal purpose for which goods are purchased, will not affect the validity of the contract of sale of goods, intended to be smuggled into a foreign country, even in the courts of that country; but there must be some participation or interest of the seller in the act itself. These are all the reported cases cited by the counsel, or met with in our researches, that go, even in appearance, to sustain the position assumed by the plaintiff. It is evident, however, that it is only in appearance that they sustain it. They do not go to the extent of holding, that if the goods are sold, as alleged in the answer of defendant, “ with intent to enable the defendant to violate the laws of this State,” the contract is valid and enforceable here ; but it will be seen that, if it at all enters as an ingredient into the contract between the parties, that the goods shall be smuggled, or that the seller shall do some act to assist or facilitate the smuggling, or to assist, or be instrumental in breaking the laws of another State or nation, the seller is deemed an active party, and the contract will not be enforced. A case exactly in point is that of Weymell v. Reid, 5 Durnford & East, 599. The defendants applied to the plaintiff, a foreigner at Lisle, for a quantity of lace, which he knew was to be smuggled into England; and for that purpose, it was to be packed by plaintiff in a peculiar manner, by the direction of defendant, for the more easy conveyance of it without discovery. The defence to the suit was, that it was a smuggling transaction; and it was held, — 429 — that as the plaintiff was concerned in giving assistance to the defendant to smuggle the goods, by packing them in a manner most suitable for, and with intent to aid that pulpóse, he cannot resort to the laws of England to assist him in carrying his contract into execution. The case did not rest merely in plaintiff’ ’s knowledge of the use intended to be made of the goods. If he undertook to deliver the goods in the manner shown, knowing the use intended to be made of them, he was offending against the laws of his country in the very contract itself. If the contract and delivery are complete abroad, and the seller does no act to assist in the illegal use to be made of the goods, the contract, it was held, would be valid, and might be recovered upon in England. The cases of Biggs v. Lawrence, 3 Durnford & East, 454, and Clugas v. Penaluna, 4 Durnford & East, 466, were actions for the price of goods sold abroad, and packed in a certain way, to enable the defendant to smuggle them into England. The plaintiffs and defendants were English .subjects. Though the contracts were made abroad, the court held, that they were to be considered as contracts made in England, and in direct violation of the laws of the country. Goods sold abroad, and delivered there in the fair course of trade, may be recovered for, though they be afterwards smuggled into England, (as in the case of Holman v. Johnson); but if the plaintiff assists in the act of smuggling, by packing the goods in a particular way, used for the purpose of smuggling, and with a view to evade the laws of the country to which they are to be exported, the whole transaction is tainted, and the seller cannot receive the aid of the laws of such country to recover their value. A distinction made in the last named causes, between them and the cause of Holman v. Johnson, was, that in the former, the plaintiffs were English subjects, while in the latter the plaintiff was a foreigner. Subjects, it was held, should not be allowed to enforce in England, a contract in violation of the laws of their own country, though such a contract might be enforced in the like case by a foreigner. — 430 — The true doctrine would seem to be, (says Story’s Conflict of Laws, section 255), to make no distinction whatsoever, between the case of a sale between citizens or subjects, and the case of a sale between foreigners ; but to hold the contract in each case to be utterly incapable of being-enforced, at least in the courts of a country whose laws are thus-designedly sought to be violated. The case of Lightfoot v. Lenant, 1 Bosauquet & Pullen, 551, was a suit on a bond given to secure the payment of the price of goods, sold and delivered by the plaintiff to the defendant in London, to be shipped to Ostend, and thence re-shipped to the East Indies, to he trafficked with clandestinely, and without the license of authority of the East India Company, the plaintiff well knowing that the said goods were so to be trafficked with, and disposed of. The court held, that it being prohibited by the positive law of the country to furnish goods for such purpose, the contract was void. And although the prohibition attaches only on the person who has the immediate interest in the supply, and although those who are more remotely concerned in furnishing the supply, may not be directly within the scope of the act, it will not follow that their contracts are valid. Eyre, C. J., said: “ Upon the principles of the common law, the consideration of every valid contract must be meritorious. The sale and delivery of goods — nay, the agreement to sell and deliver goods is, gprima facie, a meritorious consideration to support a contract for the price. But the man who sold arsenic to one who he knew intended to poison his wife-with it, would not be allowed to maintain an action upon his contract. The consideration of the contract, in.itself good, is thereby tainted with turpitude, which destroys the whole merit of it. Other cases, where the means of transgressing a law are furnished, with knowledge that they are intended to be used for that purpose, will differ a shade more or less from this strong case. But the body of the color is the same in all. No man ought to furnish another with the means of trans — 431 — gressing the law, knowing that he intended to make that use of them.” The case of Langton v. Hughes, 1 Maule & Selwyn, 593, was for the price of certain drugs, sold by the plaintiff to a brewer, with the knowledge that they were for the purpose of being used in the brewery, contrary to law. Lord Ellenborough said: “A person who sells drugs with the knowledge that they are meant to be mixed, may be said to cause or procure, guantvm in ille, the drugs to be mixed. What is done in contravention of an act of parliament, cannot be made the subject matter of an action. And although the case does not show that the drugs were, in fact, mixed, but they were sold with a view to be mixed ; and the court will not give sanction to a contract entered into against the policy of the law.” In Wetherell v. Jones, 3 Barnwell & Adolphus, 225, Lord Tenterden said : “ When a contract which a plaintiff seeks to enforce is expressly, or by implication, forbidden by the statute or common law, no court will lend assistance to give it effect. And there are numerous cases in the books, where an action on a contract has failed, because either the consideration for the promise, or the act to be done, was illegal, as being against the express provision of the law, or contrary to justice, morality or sound policy.” That the law is in accordance with the authority of these decisions, when the contract is sought to be enforced in the jurisdiction where it was made, we think there can be little reason to doubt. Does it make apy difference, that the contract was consummated in Illinois, and was not prohibited by the laws of that State ? If, as averred in the answer of defendant, the liquors were sold and shipped to defendant, with a view to enable him to violate the laws of the State of Iowa,?.we think the plaintiff cannot recover. No State is bound to lend the assistance of its courts, to enable a party to evade or contravene its laws, or to enforce a contract subversive of its policy or institutions. It can make no difference that the contract was valid in lili — 432 — nois, and might have been enforced in the courts of that State. The law of the place where the thing happens, (says Lord Mansfield), does not always prevail. In many countries, a contract may be maintained by a courtesan, for the price of her prostitution, and one may suppose an action to be brought here upon such a contract, which arose in such a country. But that would never be allowed in this country. Therefore, the lex looi cannot, in all cases, govern and direct. Robinson v. Bland, 2 Burrows, 1077, 1084. See also, Greenwood v. Curtis, 6 Mass., 358, 379, in which Parsons, C. L, says: “ This contract, if lawful where it was made, could not be the legal ground of an action here; for the consideration is confessedly immoral, and a judgment in support of it, would be pernicious from its example.” By the prohibitory liquor law of the State of Iowa, the sale of intoxicating liquors, or the keeping of the same for sale within the State, is, under heavy penalties, prohibited, and the liquors, with the vessels in which they are contained, are declared to be a nuisance and subject to forfeiture, and when ascertained to be so kept, they may be ordered to be destroyed. By virtue of this act, the total prohibition of the manufacture and sale of intoxicating liquors, had become the settled policy of the State. The State v. Geebrick, 5 Iowa, 491. Whether the consideration of the contract of sale, in this instance, was immoral or not, there can be no question, that if made with intent to enable the defendant to sell the liquors within this State, in violation of our laws, it was opposed to the policy of the State, and cannot be enforced. The State of Iowa, as an independent community, may judge and determine for herself, how far the obligation of comity to a neighboring State, renders it becoming in her to give effect to contacts made within such neighboring State, and valid there, but which may be prejudicial to her interests, and entered into with a view to the violation of her laws. This comity is, in all cases, a voluntary conces — 433 — sion on the part of the State by whom it is offered, and is inadmissible, when contrary to its policy, or prejudicial to its interests. Bank of Augusta v. Earle, 13 Peters, 589. The State, in the exercise of her rights, and in defence of her policy and interests, has chosen to declare that no action of any kind shall be maintained in the courts of the State, for the value of any intoxicating liquor sold in any other State, with intent to enable any person to violate the provisions of the act for the suppression of intemperance. The plaintiff, by his demurrer, admits that the liquoi s Avere sold to the defendant, to enable him to violate this laAv of the State. It is claimed by him, however, that this provision of the laiv is unconstitutional and void, as operating to impair the obligation of contracts. The law w’as not intended to affect the obligation of contracts, in the sense in which these words arc used in the constitution. This law was in force -when the contract was made, and can, therefore, in no legal sense, be said to impair its obligation. Laws made subsequent to the formation of a contract, may certainly operate so as to impair its obligation. Rut laws made prior to the formation of the contract, cannot do so, because all existing laws enter into contracts when made under them, and define and determine that contract. 2 Parsons on Conts., 537. The contract Aras so far made, in this instance, with reference to the law, that it appears from the pleadings, that it Avas entered into by the parties with a view to the violation of the law, which it is now argued impaired its obligation. "We think the demurrer was properly overruled, and the judgment of the district court will be affirmed. Judgment affirmed.