Opinion
Decided April 11, 1927.
Contracts — No recovery for services before Internal Revenue Department — Plaintiffs employed in department within two years of executing contract.
Under U.S.C. Title 5, Sections 99 and 261, authorizing Secretary of Treasury to require attorneys representing claimants before department to show competency, and making it unlawful for officer or employe of department within two years after terminating employment to aid in prosecution of claim, plaintiffs, employed to formulate plan acceptable to Internal Revenue Department by which to measure depletion of oil wells, who were not enrolled as attorneys in Treasury Department at time of entering into contract, and who were within two years prior to employment in employ of Internal Revenue Department as agents, inspectors, or clerks, held not entitled to recover for services rendered.
ERROR: Court of Appeals for Lucas county.
Mr. Charles P. Carroll, for plaintiffs in error.
Mr. Wm. H. McLellan, Jr., and Mr. F.A. Baldwin, for defendants in error.
The plaintiffs here were the plaintiffs below, and the defendants here were the defendants below. The plaintiffs in their second amended petition in the court of common pleas in substance said that they are tax specialists, consulting accountants and partners under the style and name of Personal Service Company. The amended petition sets forth two causes of action. In each of these causes of action plaintiffs say that they were employed by the defendants to formulate a plan acceptable to the United States Internal Revenue Department, by which to measure the depletion of certain oil wells owned by the defendants, also to compute the depletion on said oil wells suffered by said defendants in the year 1917, etc., and present a plan and computation to the United States Internal Revenue Department for approval; that they did perform these services, which were done at the instance and request of the defendants. In the first cause of action they seek a judgment in the amount of $14,043.96. In the second cause of action they seek a judgment for $7,486.80. To the allegations of the amended petition of plaintiffs the defendants filed an answer setting forth two defenses. In the first defense it is alleged that plaintiffs were not, nor were either of them, enrolled as either agent or attorney in the United States Treasury Department at the time of entering into the alleged contract set forth in the amended petition, nor at the time of performing the alleged services. In the second defense it is averred that plaintiffs were, within two years prior to the alleged employment and services rendered, in the employ of the Internal Revenue Department, as agents, inspectors, or clerks. A reply was filed which in substance and legal effect admitted the allegations and statements set forth in each and both of the defenses set forth in the answer of defendants. A motion was filed by the defendants for a judgment on the pleadings, which was sustained by the trial judge.
Question: Did the common pleas court commit prejudicial error in sustaining the motion of defendants for a judgment on the pleadings?
It occurs to us that a lengthy discussion of the law of the case is unnecessary, because the decisive question in this case is, under the admitted facts in the answer of the defendants, Were the plaintiffs in law entitled to a judgment?
Title 5, Section 261, U.S.C. § 293, Barnes' Fed. Code; Section 385, U.S. Comp. Stats.), reads:
"The Secretary of the Treasury may prescribe rules and regulations governing the recognition of agents, attorneys, or other persons representing claimants before his department, and may require of such persons, agents and attorneys, before being recognized as representatives of claimants, that they shall show that they are of good character and in good repute, possessed of the necessary qualifications to enable them to render such claimants valuable service, and otherwise competent to advise and assist such claimants in the presentation of their cases."
Title 5, Section 99, U.S.C. § 202, Barnes' Fed. Code; Section 190, U.S. Rev. Stats.; U.S. Comp., Stats., Section 272), reads:
"It shall not be lawful for any person appointed as an officer, clerk, or employe in any of the departments, to act as counsel, attorney, or agent for prosecuting any claim against the United States which was pending in either of said departments while he was such officer, clerk or employe, nor in any manner, nor by any means, to aid in the prosecution of any such claim, within two years next after he shall have ceased to be such officer, clerk, or employe."
Under the admitted facts in the answer of the defendants and the application thereto of the rules laid down for the Internal Revenue Department as hereinbefore set forth, and under the provisions of the section of the United States statutes as quoted, we are of the unanimous opinion that plaintiffs are not entitled to recover under the allegations set forth in their amended petition and the admitted facts and statements set forth in the answer of the defendants.
The court is clearly and fully satisfied that the decision of the Supreme Court in the case of Massillon Savings Loan Co. v. Imperial Finance Co., 114 Ohio St. 523, 151 N.E. 645, is decisive of this case in favor of the defendants and against the plaintiffs. The third paragraph of the syllabus in said case reads:
"A party, who enters into a contract despite a statute prohibiting it, cannot thereafter claim the fruits of its performance in a court of justice."
It is further apparent to us that Section 1759 of Williston on Contracts is also pertinent, and in a measure decisive of the issues in this case in favor of the defendants and against the plaintiffs. Said section reads in part:
"Where the contract was originally legal, but because of a change * * * in the law, performance of the acts contracted for on one side or the other has become illegal, any subsequent performance of such acts is against public policy and the party who has undertaken to perform them is excused from so doing. If in spite of the legal prohibition he still performs, he cannot recover what was promised him in return therefor."
In view of what we have already said, we do not deem it expedient to say anything further, except that it is the unanimous judgment of this court that there is no error in the record prejudicial to the rights of the plaintiff in error. It thus follows that the judgment of the common pleas court should be affirmed.
Judgment affirmed.
LEMERT and JUSTICE, JJ., concur.
Judges HOUCK and LEMERT of the Fifth Appellate District, and Judge JUSTICE of the Third Appellate District, sitting in place of Judges RICHARDS, WILLIAMS and LLOYD of the Sixth Appellate District.