11 N.E.2d 908 | NY | 1937
The plaintiff, a milk dealer, brought this action to recover approximately $11,000 as the agreed and reasonable value of milk sold and delivered to the defendants, who are also milk dealers. The answer admits the sale and delivery of milk, the quantity thereof, and the failure to pay, but denies the allegations concerning the agreed and reasonable value of the milk. As an affirmative defense, it alleges that the plaintiff was not licensed as a milk dealer in accordance with the Agriculture and Markets Law (Cons. Laws, ch. 69) during the period when it sold the milk to the defendants. The lack of license is admitted in the reply of the plaintiff. The defendants assert two counterclaims. The first is for damages for an alleged breach of an oral contract, which, it is asserted, provided that the plaintiff *277 would sell and deliver, and defendants would purchase all milk required by the defendants in connection with their business up to a total of 10,500 forty-quart cans per month. By the second counterclaim, the defendants seek to recover a sum of money alleged to have been overpaid to the plaintiff. The reply of the plaintiff denies allegations of the counterclaims, and pleads in bar the claim urged by the defendants of the illegality of the transaction. It also relies on the Statute of Frauds as a defense to the first counterclaim.
At Special Term a motion to strike out the affirmative defense was granted, and a motion by the defendants to dismiss the complaint was denied. Subsequently Special Term granted summary judgment in favor of the plaintiff and dismissed the counterclaims. Appeals were taken, and both appeals were decided at the same time. The Appellate Division, one justice dissenting, reversed the order striking out the first affirmative defense, and dismissed the complaint on that ground. The Appellate Division also reversed the summary judgment, stating in its opinion that the dismissal of the complaint required this in so far as the summary judgment granted affirmative relief to the plaintiff, and that the affidavits presented issues of fact in so far as they applied to the counterclaims.
The primary issue for decision is whether a dealer in milk, which makes sales while unlicensed, may recover the agreed price or the reasonable value of milk sold to another dealer. The contention that the failure to obtain a license renders the claim unenforcible is based on section
"§ 257. Licenses to milk dealers. No milk dealer shall buy milk from producers or others or deal in, handle, sell or distribute milk unless such dealer be duly licensed as provided in this article. It shall be unlawful for a milk dealer to buy milk from or sell milk to a milk dealer who is unlicensed, or in any way deal in or handle milk *278 which he has reason to believe has previously been dealt in or handled in violation of the provisions of this chapter. The commissioner may by official order exempt from the license requirements provided by this article, milk dealers who purchase or handle milk in a total quantity not exceeding three thousand pounds in any month, and/or milk dealers selling milk in any quantity in markets of one thousand population or less. * * *"
Illegal contracts are generally unenforcible. Where contracts which violate statutory provisions are merely malum prohibitum, the general rule does not always apply. If the statute does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion to the requirements of public policy or appropriate individual punishment, the right to recover will not be denied. (See Williston on The Law of Contracts, vol. 3, § 1789; vol. 5 [2d ed.], § 1630. Cf. American Law Institute, Restatement of the Law of Contracts, §§ 548, 600.)
In Sajor v. Ampol, Inc. (
Of like tenor is Fosdick v. Investors Syndicate, Inc.
(
The reasoning of both these cases is applicable to the case at bar. The statute involved does not expressly provide that contracts made by unlicensed milk dealers shall be unenforcible, although it does make a violation of the so-called milk control law a misdemeanor punishable by a fine of not less than $25 nor more than $200 or *280
by imprisonment for not less than one month nor more than six months, or both. In the case at bar, if the contract is declared unenforcible, the effect will be to punish the plaintiff to the extent of a loss of approximately $11,000 and permit the defendants to evade the payment of a legitimate debt. Nor was the statute enacted for the purpose of protecting dealers such as the defendants. The primary purpose of the statute is to protect producers and the consuming public. Little danger to the public health is involved by the sale of milk by unlicensed dealers, the statute itself providing that dealers who have less than 3,000 pounds of milk a month and those selling milk in any quantity in markets of 1,000 population or less, may be exempted from its requirements. This distinguishes the case at bar from those involving health and morals. (Adler v. Zimmerman,
We have here a statute which provides that milk dealers shall not sell milk unless duly licensed. The statute imposes penalties for its violation by way of fine and imprisonment, but it does not expressly provide that contracts made by milk dealers shall be unenforcible. Nothing in this statute reveals an implied intent to deprive unlicensed dealers of the right to recover the reasonable value of the milk sold by them, and where the wrong committed by the violation of the statute is merely malumprohibitum, and does not endanger health or morals, such additional punishment should not be imposed unless the legislative intent is expressed or appears by clear implication.
The judgment of the Appellate Division dismissing the complaint should be reversed, and the order of the Special Term striking out the separate defense affirmed, and the matter remanded, with costs to abide the event.
CRANE, Ch. J., LEHMAN, O'BRIEN, HUBBS, LOUGHRAN and RIPPEY, JJ., concur.
Judgment accordingly. *281