233 N.W. 499 | Iowa | 1930
The contract sued upon was admittedly fully performed by the plaintiff, and the amount sued for is justly due the plaintiff from the defendants unless the contract itself is void, as in violation of the statute above referred to. We have no occasion, therefore, to consider any question but that of the validity of the contract itself.
The plaintiff was a partnership, comprising Otto Ambroz and Harold Rowe, as partners, and was engaged in business under the firm name indicated in the title hereto. The written order signed by the defendants was addressed to the partnership under such name. The statute relied on by the defense was enacted in 1925. It is as follows:
"9866-a1. Use of trade name — verified statement required. It shall be unlawful for any person or copartnership to engage in or conduct a business under any trade name, or any assumed name of any character other than the true surname of each person or persons owning or having any interest in such business, unless such person or persons shall first file with the county recorder of the county in which the business is to be conducted a verified statement showing the name, post-office address, and residence address of each person owning or having any interest in the business, and the address where the business is to be conducted. * * *
"9866-a3. Penalty. Any person violating the provisions of this chapter shall, upon conviction, be punishable by a fine of not less than twenty-five dollars nor more than one hundred dollars, or by imprisonment in the county jail for a term not exceeding thirty days."
The question presented is whether the foregoing statute operates to render wholly void the contract sued on. The contention of the appellants is that, inasmuch as the contract was entered into in violation of the prohibitions of the statute, it was *278 necessarily void, even though the statute does not in terms declare such contract void. The contention for the appellee is that the contract itself was legitimate in every sense; that the statute should be construed, not as prohibiting the contract, or any other legitimate business done by plaintiff as a going concern, but rather, as the imposition of a duty upon the plaintiffs to file the information required by the statute, and as penalizing the failure to perform such duty.
The appellants rely for authority upon the analogy of our holdings in cases involving other subjects than that involved herein, — such as "Sunday contracts," and violations of prohibitory statutes relating to the practice of medicine and to the operation of machinery without safety appliances. In Pike v.King,
However, the legislative power to regulate a business may be sustained, notwithstanding absence of power to prohibit it. To give this statute any vitality, we must construe it, therefore, as regulatory only, and not prohibitive. As a regulatory measure, it imposes the duty upon a partnership to file certain information as stated therein. It imposes a statutory penalty for failure to comply with such requirement. Statutes of this character have often taken the form which appears in the present statute, whereby they appear to assume a legislative power of prohibition which is not possessed. We have always construed such statutes by giving effect to the legislative intent within the scope of the legislative power. A sufficient illustration of this rule of construction can be found in State v. Gish,
The statute under consideration here is similar to those obtaining in many other states, and the question here presented is one which has been considered in many of the courts of such states, and this with some resulting diversity of opinion. We have no direct precedent of our own. We are, therefore, confined to the consideration of precedents from other states.
In Kusnetsky v. Security Ins. Co.,
"As we held in Bassen v. Monckton, supra [
In Paragon Oil Syndicate v. Rhoades Drilling Co.,
"The right to engage in business in an assumed name is a privilege the law of this state, prior to this enactment, has permitted. This act recognizes this right, and concedes the privilege. It, however, regulates the privilege of conducting business in an assumed name by requiring that the certificate be filed. It does not declare the use of the assumed name wrongful. It permits it. Realizing that the assumed name may be used in a manner harmful to the public unless the identity of the person or persons engaged in the business is known, it requires a disclosure. The assumed name itself is not denounced as harmful. The fact that harm may result from a wrongful use of the name is what induced the legislature to regulate its use. The regulation requires the certificate, and nothing more. To enforce this requirement, a specific penalty is imposed. It is not the use of the name which constitutes the crime, but the failure to comply with the regulatory requirement. The use of the name in a written contract would disclose no element of crime, for the assumed name is only incidental to what the law has denounced as criminal. The crime has no necessary direct relation to the business transacted. The contract entered into in the conduct of the business does not constitute the crime, and the law will not presume that harm has resulted from the contract. So the rule that one who has violated the law is not permitted to recover on evidence which shows his crime in connection with the subject-matter in litigation is not applicable here."
The line of argument indicated in the foregoing excerpts is that adopted by many other courts, including the following: Sagalv. Fylar,
As against the foregoing, a lesser number of courts hold to *282 the contrary. Notably among these are the courts of Kentucky and Michigan. Responsive to the holding of the Michigan court, amended legislation was enacted, which nullified the effect of the Michigan decision, and conformed in terms to the law as construed in the other states here noted.
We think that we are in line with the clear weight of authority in sustaining the validity of the contract in question. As so construed, the statute provides its own exclusive penalty.
The judgment of the district court is, accordingly, —Affirmed.
MORLING, C.J., and FAVILLE, KINDIG, and GRIMM, JJ., concur.