Court Opinion

ID: 4936253
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:15:46.884441+00
Date Added: 2024-06-11T08:14:41.835113
License: Public Domain

Savage, J.
The plaintiff, as indorsee, seeks to recover against the defendant upon two notes, one for $75 and one for $200, given by the defendant, payable to the order of J. H. Montgomery.
The case shows that on November 18, 1896, the defendant gave to the firm of C. Berry & Co., Boston, a note payable to his own order, for the sum of $437.20. In May, 1897, Berry & Co. indorsed and delivered the note to Mr. Montgomery, and he brought an action upon it, in his own name, by trustee process. October 23, 1897, the action was settled and the trustee released upon the defendant’s giving to Mr. Montgomery $50 in money and the two notes in suit, which Mr. Montgomery indorsed upon the original note. The defendant, however, claims that the money and notes were given in full settlement and payment of the original cause of action.
It is admitted that the consideration of the first note was intoxicating liquors purchased in Boston, and the defense claims that those liquors were purchased out of the state with intention to sell the same in violation of the laws of this state, and that the provisions of R. S., c. 27, § 56, afford a perfect defense. The section referred to provides that “ no action shall be maintained upon any claim or demand, promissory note, or other security contracted or given for intoxicating liquors sold in violation of this chapter, or for any such liquors purchased out of the state with intention to sell the same or any part thereof in violation thereof; but this *300section shall not extend to negotiable paper in the hands of a holder for a valuable consideration and without notice of the illegality of the contract.”
The contention of the plaintiff is (1), that there is no evidence that the liquors were intended for unlawful sale in this state; (2), that Montgomery was a holder of the original note “for a valuable consideration and without notice of the illegality of the contract,” and hence that notes given in settlement or renewal of it would be valid, Field v. Tibbetts, 57 Maine, 358; and (3) that, even if the statutory defense might have been made in an action upon the original note, it is not open upon the notes in suit, which plaintiff claims were given for new, independent and lawful considerations, namely, the discontinuance of the first suit and the releasing of the trustee.
In regard to the plaintiff’s first contention, it is sufficient to say that we think that the only reasonable and legitimate inference to be drawn from the evidence is that the liquors were intended for unlawful sale in this state. The defendant was a hotel keeper. The value of the liquors purchased was $537, for which he gave his note for $437 and his check for $100. It does not appear that the defendant was authorized by law to sell liquors in this state, and it is hardly to be supposed that he would purchase liquors to such an amount for his personal use. We think that the facts above stated, in the absence of any explanation, warrant the conclusion that the liquors were intended to be unlawfully sold; and we have no doubt that such was the fact.
As to the plaintiff’s second contention, that the prohibition of the statute excepts “negotiable paper in the hands of a holder for a valuable consideration and without notice of the illegality of the contract,” it is enough to say that we think that Mr. Montgomery was not a holder of the original note “for a valuable consideration.” He says that he bought it, but he does not say that he paid anything for it. Upon this question, the burden is upon the plaintiff. Cottle v. Cleaves, 70 Maine, 256. Giving full effect to Mr. Montgomery’s testimony upon this point, it would seem that he was to make payment only if he succeeded in collecting. The consider*301afcion, therefore, of the contract for the purchase of the note was was not “valuable.” It follows that the statutory defense of illegality was available as against the original note in the hands of Mr. Montgomery.
Has the illegality been cured by giving the new notes in settlement of the old? We are of the opinion that it has not. The new notes are only the renewal of some part of the old one. Miller v. Hilton, 88 Maine, 429. The taint is not purged by renewal. It still remains true that the notes were given for intoxicating liquors. Or if, as claimed by the plaintiff, the discontinuance of the original action and the release of the trustee constituted a new consideration, and a legal one, for these notes, nevertheless, the old consideration remained also. That was a part of the consideration of these notes, and that has not ceased to be illegal. The question is not whether there was any legal consideration, but whether there was any illegal consideration. If any portion of the consideration for the note was illegal, the court cannot separate the legal from the illegal. Hay v. Parker, 55 Maine, 355. The whole transaction is void.
It is not claimed that the present plaintiff; is a holder of the notes for a valuable consideration. He has no greater rights than Mr. Montgomery would have had if suit had been brought in his name.

Judgment for the defendant.