Opinion
No. 5496.
September 22, 1930.
APPEAL from the District Court of the Ninth Judicial District, for Fremont County. Hon. C.J. Taylor, Judge.
Action on note. Judgment for defendants. Reversed.
F.L. Soule, for Appellant.
Even though L.N. Strike had conspired to transport the film in question into Idaho, and had actually done so, that transaction is not involved or connected with plaintiff's suit, nor in the subsequent sale of the films to the defendants, and does not give rise to any defense when sued for the contract price, the defendants not being a party to the conspiracy or the transportation. Plaintiff's case is made without reference to or aid from the previous transaction, but by merely presenting his check, and proving it unpaid.
"The test whether a demand connected with an illegal transaction is capable of being enforced at law is whether the plaintiff requires the aid of the illegal transaction to establish his case. If he cannot open his case, without showing that he has broken the law, the court will not assist him. But if he does not claim through the medium of the illegal transaction, but upon a new contract bottomed on an independent consideration, he may recover." ( The Charles E. Wiswall, 86 Fed. 674, 30 C.C.A. 342; McConnon v. Holden, 35 Idaho 75, 204 P. 656; Dinkelspeel v. O'Day, 47 Utah, 18, 151 P. 344; Bessire Co. v. Corn Products Co., 47 Ind. App. 298, 94 N.E. 353; Ware v. Curry, 67 Ala. 274; 13 C. J. 502, and cases cited.)
The last preceding point and authorities cover the general controlling principle. This principle covers the precise facts of which the defense seek to avail themselves in this case, in that it is no defense to an action for goods sold that plaintiff was a party to a conspiracy or illegal combination to violate any law, "since the illegality of the conspiracy or combination was and is collateral to the contract of sale and could not taint it with illegality or make it contrary to public policy." (13 C. J. 503; National Distilling Co. v. Cream City Importing Co., 86 Wis. 352, 39 Am. St. 902, 56 N.W. 864; Dennehy v. McNulta, 86 Fed. 825; 30 C. C. A. 422; 41 L.R.A. 609; Connelly v. Union Sewer Pipe Co., 184 U.S. 540, 22 Sup. Ct. 431, 46 L. ed. 679.)
E.H. Hillman, George H. Lowe and George Ambrose, for Respondents.
If a contract appears to contravene the design and policy of the law it is illegal and void as against public policy. ( Kraemer v. Earl, 91 Cal. 112, 27 P. 735; Howard v. Farrer, 28 Okl. 490, 114 P. 695; Jackson v. Baker, 48 Or. 155, 85 P. 512.)
It is the duty of the judiciary to refuse to sustain that which is against the public policy of the state when such public policy is manifested by the legislation or fundamental law of the state. (6 R. C. L. 709.)
18 U.S.C.A., sec. 405, making it unlawful to send or carry from one state of the United States to any other state of the United States any film or other pictorial representation of any prize-fight or encounter of pugilists, which is designed to be used or may be used for purposes of public exhibition, was enacted with the design and for the purpose of restricting the public exhibition of prize-fight films. ( United States v. Wilson, (D.C. W. Va.) 23 Fed. (2d) 112.)
November 19, 1927, at St. Anthony, respondents issued and delivered to E.H. Steele their check in the sum of $550. In the lower left-hand corner was written "due 12-19-27." Thus in effect the check was a note. The check was given in part payment for a Dempsey-Tunney prize-fight film. The payee, Steele, indorsed the check and delivered it to his employer, Strike, in Salt Lake City who in turn delivered it to the appellant in this action without indorsing it (it was later indorsed) in part payment of a promissory note for $9,361 which Strike owed appellant for which credit was entered on the latter note.
Geo. H. Lowe, an attorney of St. Anthony, wrote the name of the payee on the check in question and respondents contend that in doing so he drew one or two lines through the words "the order of," thus rendering the note nonnegotiable. Appellant contends that the lines were merely part of a flourish used in executing the initial "E" of payee's name in scroll form, such lines incidentally running through the words "the order of."
Respondents displayed the film for money in Idaho.
To this action brought upon the check three defenses were interposed: (1) Fraudulent representations in the sale of the picture. (2) Breach of contract in the sale of another picture, The Red Kimona. (3) Conspiracy on the part of Steel, Strike and others to violate the federal statutes by transporting a prize-fight film in interstate commerce.
The court found that the note was non-negotiable; that there was no fraud in the sale of the picture for which it was given; that there was no breach of contract in the sale of the other picture, The Red Kimona, but that the check in question was given in connection with the illegal transportation of a prize-fight film from state to state and refused to enforce its payment. The first three findings are justified by the evidence and need not be considered further.
We will take up the question of whether the check or note was given in connection with an illegal transaction. If it was not, even though appellant was not a holder in due course, he was entitled to recover.
Respondents were very careful not only to introduce no evidence which would show any connection between them and the transportation of the film but introduced positive evidence that when negotiations were first begun with them, the film was already in the state of Idaho; that they realized the danger of being connected with its transportation and in this connection communicated with the United States district attorney for Idaho. At all times, by their testimony, they reiterated that they were in no way connected with its transportation.
The federal statute in question (Act of July 31, 1912, chap. 263, 37 Stats. 240, 18 U.S.C.A., secs. 405, 407) does not prohibit the exhibition of prize-fight films within a state but merely prohibits and makes criminal their interstate transportation. ( Cullen v. Esola, 21 Fed. (2d) 877; Consolidated Amusement Co. v. Gober, 22 Fed. (2d) 296; Rose v. St. Clair, 28 Fed. (2d) 189; United States v. Johnston, 232 Fed. 970; Weber v. Freed, 239 U.S. 325, Ann. Cas. 1916C, 317, 36 Sup. Ct. 131, 60 L. ed. 308.)
The record discloses without contradiction that when negotiations were begun with respondents and the sale of the film to them consummated, the transportation in interstate commerce of the film had entirely ceased, was a closed incident, and respondents had nothing to do therewith. The contract of purchase, therefore, the basis of the giving of the note or check in question here, is not shown by anything in the record to have been illegal ( Dinkelspeel v. O'Day, 47 Utah, 18, 151 P. 344) and therefore constitutes no defense to the action on the check or note.
See, also, Municipal Securities Corp. v. Buhl Highway District (on rehearing), 35 Idaho 377, 208 P. 233; Irvine v. Postal Tel. Co., 37 Cal.App. 60, 173 Pac. 487; McCahan v. McCahan, 47 Cal.App. 176, 190 Pac. 460; Kistenmacher v. Travelers' Indemnity Co., (Mo.App.) 273 S.W. 125; State v. Daues, 315 Mo. 22, 285 S.W. 479; Dodd v. Rawleigh, (Tex. Civ.) 203 S.W. 131.
The judgment is reversed and the cause remanded, with instructions to enter judgment for the appellant.
Costs awarded to appellant.
Budge, Lee, Varian and McNaughton, JJ., concur.