Court Opinion

ID: 6581626
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:38:45.552076+00
Date Added: 2024-06-11T15:57:18.463601
License: Public Domain

Dissenting opinion was delivered by
Ross, J.
I am unable to concur in the decision of the court in this case. On the facts found by the master, it may be question*166able whether the sale of the cider was illegal, within the exact terms and language of the statute. However, when a man establishes a business for the bottling and sale of cider and other fermented drinks, in a city, like Burlington, has a warehouse for storing, manufacturing, bottling, and vending the same, and keeps an office, he so far makes the place of his business a place of public resort for the sale of cider, although the vending is carried on by solicitation of orders at the houses and places of business of his customers, and the delivery of the bottled cider is at the latter places, that in my opinion, it comes within the spirit and scope of the statute, and without any forced construction, within its language. But I do not regard this point very material; and should not on this ground have placed my dissent upon record. A part of the consideration of the note being illegal, the note is void and no action can be maintained thereon to enforce its collection. To the cases cited by the court, in the main opinion, may be added Cobb v. Cowdery et al., 40 Vt. 25 ; Bowen v. Buck, 28 Vt. 308. In Cobb v. Cowdery, supra, the distinction is taken between a consideration, in part void, and a consideration in part illegal. The note failing, what is there left for the mortgage to stand upon ? The mortgage is but an incident to the debt it secures. On the authorities cited by the court in support of its decision, as well as all the reasoning, partial illegality of consideration avoids all securities. The note was a security, or evidence of the debt, of a higher nature than the original contract. The latter was merged in the note. The note in suit, and all the notes secured by the mortgage, were tainted by illegal consideration entering into them. Each note being an entire contract of itself, no division of the legal from the illegal, part of the consideration could be effected. Courts established for the enforcement of law, will not give aid, or countenance to anything illegal; nor, where the illegal is commingled with the legal, will they aid in separating, or purging the former from the latter. Their proper function is to establish and enforce the legal and to condemn and punish the illegal. Where a part, however small — of the consideration of an entire contract is illegal, the whole contract is tainted, and courts will not compel its performance. Collins v. Blanton, 2 Wils. 341, is a leading case on *167this subject, in which, the Lord Chief Justice Wilmot uses the quaint but forcible, and often quoted language : “ You shall not stipulate, for iniquity ; all writers upon our law agree in this, no polluted hand shall touch the pure fountains of justice; whoever is a party to an unlawful contract, if he hath once paid the money stipulated to be paid in pursuance thereof, he shall not have the help of a court to fetch it back again ; you shall not have a right of action when you come into a court of justice in this unclean manner to recover it back. Procul! 0 prooul este, profani.” The mortgage is an entire contract. Its consideration was the notes, the payment of which was therein secured ; every one of which was tainted with an illegal consideration in part. It was not given to secure the performance by Carpenter of his contract with Peterson, of July 24, 1872, by which he purchased his business and stock in trade, but was given solely to secure the payment of the notes which were executed in payment of that purchase. %If the action were upon the notes, it is conceded that no recovery could be had ; because every one of them is tainted with illegal consideration. The illegal could not be separated from the legal portion of the consideration; and an enforcement of the collection of the notes would be the enforcement of an illegal contract. How does it differ when the mortgage, which is but an incident to the notes, is allowed to be foreclosed ? Is it not an enforcement of an illegal contract ? To foreclose the mortgage for the legal part of the consideration must not the illegal portion be ascertained and rejected ; which the majority hold could not be done, if the action were upon the notes? *What is the foreclosure but an action upon the notes described in its condition ? and to ascertain the legal part of the consideration of the mortgage must not the notes be treated as divisible ? I can see no other means of separating the legal from the illegal part of its consideration. In Vinton v. King, 4 Allen, 562, Metcalf, J., says : “ In an action brought by a mortgagee against his mortgagor, on a mortgage given to secure payment of a note, the defendant may show the same matters in defence (the Statute of Limitations excepted, 19 Pick. 535,) which he might show in defence of an action on the note.” I am not aware of any exception to the rule *168thus stated, nor of any case to the contrary. I am not unaware that Mr. Jones in his work on mortgages, s. 620, says : “ The mortgage may be upheld for such part of the consideration as was free from the taint of illegality when the consideration is made up of several distinct transactions, some of which are legal, and others are not, and the one can be separated with certainty from the other.” The cases he cites support this doctrine. Feldman v. Gambel, 26 N. J. Eq. 494 ; Williams v. Fitzhugh, 37 N. Y. 444 ; McCraney v. Alden, 46 Barb. (N. Y.) 272; Cooler. Barnes, 36 N. Y. 520.
It may well be admitted that a mortgage, given to secure the payment of several notes, or debts, a part of which arose out of wholly legal transactions, and a part of which were tainted with illegality, could be enforced to compel the payment of the former alone. In such a case the orator would not have to show in evidence, nor rely upon anything illegal, in maintaining his suit. In the language of Gibbs, Ch. J., in Simpson v. Bloss, 7 Taunt. 246, in speaking of Faikney v. Reynous, 4 Burr. 2069, and Petrie v. Hannay, 3 Term Rep. 418 : “ The ground of their decision was, that the plaintiffs required no aid from the illegal transaction to establish their case.” This, as I understand, is the test most frequently applied in this -class of cases. If the plaintiff can show a good cause of action, independent of, and without bringing into the case anything illegal, either by way of proof or otherwise, he may maintain his action therefor; If, on the other hand, he derives any aid from the illegal part of the transaction, by being obliged to show it to make out the legal part, or otherwise, he must fail. The court will not allow the unclean thing within the temple of justice. In the foreclosure of his mortgage the orator was bound to show in proof his notes, every one of which was tainted with illegality ; 'aud for that reason the notes all fall, and the mortgage given to secure them alone, falls with them. This •point my brethren have not deemed worthy of their attention, nor alluded to. But if I am in error on this point, I cannot concur with my associates in holding that the original contract is divisible. It is in writing, and amenable to the rules of evidence which forbid varying, lessening or enlarging such contracts by parol tos*169timony. It is in the following language: “ In consideration of three thousand three hundred thirty-seven dollars and eighty-one cents received of John W. Carpenter, I, Benjamin D. Peterson do hereby sell, transfer and assign unto said Carpenter the good will of a certain business for bottling cider, soda and mineral waters, now carried on by me in Burlington, together with all the stock, tools, bottles, machinery and fixtures, now in use in said business, as specified in certain inventories hereto attached, and I agree to deliver to said Carpenter the gross amount of property described in ,said inventories, which said inventories are signed with my name.” The inventories are referred to and made a part of the contract to show what personal property was to pass with the good will of the business. They are not referred to for the price of the several articles included. The master has found that the aggregate of the prices there carried out, did not amount to the sum named in the contract, and for which the notes were given, into $116. Hence, if the prices carried out on the inventories are to be regarded as a part of the contract, they do not show that the articles were severally sold for the price set against them, but the reverse. The contract is to be construed as a whole. Thus con-’ strued, it is an entire, indivisible contract. It was a sale of a business, as a going concern, including the good will, stock in trade, machinery and fixtures. It is not to be inferred, or intended, that Peterson would have sold the good will of the business, without selling the stock in trade, machinery and fixtures, nor that Carpenter would have purchased the latter without the former. It was not the sale of the good will as one separate transaction, of each bottle, barrel, and fixture as another separate transaction, and so divisible. But one consideration is named or paid ; and but one thing is sold — the business, including the stock, &c., and good will as a going concern. As said by Devens, J., in Young Conant Mfg. Co. v. Wakefield, 121 Mass. 91: “ If but one consideration is paid for all the articles sold, so that it is not possible to determine the amount of consideration paid for each, the contract is entire. Miner v. Bradley, 22 Pick. 457. So if the purchase is of goods as a particular lot, even if the price is to be ascex-tained by the number of pounds in the lot, or num*170ber of barrels in which the goods are packed, the contract is also held entire. Clark v. Baker, 5 Met. 452 ; Morse v. Brackett, 98 Mass. 205 ; Mansfield v. Trigg, 113 Mass. 350. While in the cases last referred to, it could be ascertained what was the amount of consideration paid for each pound, or barrel, yet the articles having been sold as one lot, it was to be inferred that one pound or barrel would not have been sold unless all were sold.” On these principles, if the mortgage can be upheld as a security for the payment of the consideration of the original contract, as well as the notes given in payment therefor, the consideration of the contract is entire, indivisible, and tainted with illegality, and for that reason void, and should not be enforced. To my mind, the cases principally relied upon by my associates are not authority for their decision. In Robinson v. Bland, 2 Burr. 1077, the transactions were separate and distinct. One was borrowing three hundred pounds; the other losing three hundred seventy-two pounds in gaming. While the bill of exchange given for the two was held to be void because tainted with in part illegal consideration, the plaintiff was allowed to recover on the count for money loaned, for the three hundred pounds borrowed by the intestate. The plaintiff could establish this part of his claim without the aid of the other, in any manner. The remark of Justice Denison, made in that case : “ There is a distinction between the contract and the security. If part of the contract arises upon a good consideration, and part upon a bad one, it is divisible. But it is otherwise as to the security; that being entire, is bad for the whole,” is not to be pressed beyond the case in hand, and given universal application. His language, as to its being “ divisible,” was true as applied to the facts of that case. The law was more accurately expressed by Mr. Justice Wilmot : “ Here are two sums demanded, which are blended together in one bill of exchange ; but are divisible in their nature, as to the money lent. The cases that have been cited are in point, that it is recoverable.” Carleton v. Woods, 28 N. H. 290, comes nearer to supporting the decision of the majority of the court, but in my judgment, is distinguishable from the case at bar. It is there distinctly held that if the contract is entire, and part of the consideration is illegal, *171the contract is void ; but that where an entire stock of goods is sold, at one and the same time, but each article for a separate and distinct agreed value, the contract is not to be regarded as entire and indivisible. The sale was for cost and freight, and Woods, J., says: “ We are unable to see how this case differs from the case of a sale by a merchant of various goods to his customers, at one and the same time, for separate values, stated at the time, which, when computed, would, of course, amount to a certain sum in the aggregate.” It was on this theory that the court held, that, although the notes could not be maintained, because a part of the consideration was for spirituous liquors illegally sold, yet, on the general counts in assumpsit, for goods sold and delivered, the plaintiff might recover for the goods sold, as the court held, independently of, and as transactions separate from, the purchase of the liquors. To say the least, this was pressing the doctrine of divisibility of a contract to the extreme verge, and I am unwilling to go further. There may have been more in the case than appears in the report, justifying the holding of the court. On the facts stated, I think the authority is clearly against that contract being divisible. That case, however, lacks the element of being the sale of a going business, including the good will, and does not appear to have been reduced to writing. In my judgment, the decree of the Court of Chancery should be reversed, and the cause remanded, with a mandate to enter a decree dismissing the bill with costs.
Taft, J., desires me to say that he concurs in the views I have expressed, except in regard to the sale of the cider being illegal, on which point he concurs in the views of the majority of the court.