71 Neb. 314 | Neb. | 1904
Tbis action was brought by Cornelius J. O’Connor, as plaintiff, against A. W. Padget, T. J. Foley and John 0. Sullivan, as defendants, to recover the amount due upon two promissory notes, on the face of which the said Padget and Foley appeared as makers, and John C. Sullivan as payee and endorser. O’Connor alleged he had purchased these notes before maturity, in the usual course of business, for a valuable consideration, from the defendant John C. Sullivan. The defense set up by Padget and Foley, in substance, is that the notes were given by Padget as principal, and Foley as surety, to one E. E. Sullivan, in part payment of the purchase price of a stock of liquors, saloon fixtures and the unexpired term of a saloon license in Bancroft, Nebraska. That, for the purpose of defrauding his creditors, E. E. Siillivan procured the notes to be made payable to John C. Sullivan, his brother, instead of to himself; that a part of the consideration for the same Avas illegal, being for the six months unexpired term of the license of E. E. Sullivan, and that Sullivan delivered the possession of the saloon to Padget, and Padget sold liquor for himself under Sullivan’s license for six months, as agreed, and that O’Connor had knowledge of all these facts and Avas not an innocent purchaser of the notes. A further defense was, in substance, that the Fred Krug Brewing Company procured a judgment against E. E. Sullivan in the county court of Cuming county. That an execution was issued and returned- unsatisfied upon said judgment. That garnishment proceedings were had after the return of said execution, and that Padget, Foley and the.Citizens Bank of Bancroft, which was then in possession of the notes sued upon as agent of O’Connor,
At the trial in the district court, the original notes were introduced in evidence. The record of the proceedings in garnishment before the county court of (turning county was excluded from the jury upon the objection of O’Con-nor, and a verdict was directed for O’Connor against the defendants, Padget and Foley. From this judgment they prosecute error to this court.
At the trial, O’Connor testified that he purchased the notes from John C. Sullivan, by applying them in payment of a debt due from Sullivan to him for rent of land in the Winnebago reservation, and by paying the sum of |170 in cash to make up the amount of the notes; that he knew nothing of any transaction between the two Sul-livans as to a transfer of the notes.for the purpose of defrauding creditors, or whether it was for the sale of a license or not; that he did not know that a saloon license had been sold; that, at the time of the maturity of the notes, the notes were sent to the Citizens Bank of Bancroft for collection, by his direction.
L. II. Keefe, one of the attorneys for the defendants, testified that he had a conversation with Mr. O’Connor over the telephone, and that he asked O’Connor if he knew, at the time he bought the notes, that they were given for the stock of liquors, the fixtures and the unexpired term
A more serious question, however, is presented by the action of the court in directing a verdict for the plaintiff. If the notes were based upon an illegal consideration, or upon a consideration a part of which was illegal, a defense sought to be made upon that ground between the original parties to the instrument Avould, if established, he a complete defense, and, if in the hands of any one but an innocent purchaser, tin enforcement of the contract would be subject to the same infirmity. In the case at bar, Pad-get testifies that the notes were given in payment for. a stock of liquors, for saloon fixtures and for the unexpired term of the. license of E. E. Sullivan. That the agreement was that Sullivan should deliver possession of the saloon property and stock of liquors to Padget, and should allow Padget to run the saloon in Sullivan’s name for six months, the length of time for which the license had been paid to the village of Bancroft. This testimony is un-contradicted. A license to sell liquor under the Slocumb law in this state is a personal privilege granted to the individual by the authorities, upon proof by him that he is possessed of certain qualifications, and in case he has not been guilty of certain prohibited acts. As a condition precedent to the issuance of the same, a petition praying the proper authorities to grant him a license must he presented, signed by a specific number of resident freeholders. One object of the law is to place it within the power of the resident freeholders of the ward or precinct to designate the individual whom they are willing should conduct the traffic in intoxicating liquors in their locality. The agreement between Sullivan and Padget, whereby Padget was to be allowed to conduct the liquor traffic under Sullivan’s name for the unexpired term of Sullivan’s license, urns clearly an agreement to violate the laws of the state, and was illegal. A promissory note given with such an agreement as its sole consideration could not be enforced, and where, as in this case', the
“If any part of a consideration is illegal, the whole consideration is void; because public policy will not permit a party to enforce a promise which he has obtained by an illegal act or an illegal promise, although he may have connected with this act or promise another which is legal.” 1 Parsons, Contracts,, 457; Norton, Bills & Notes (2d ed.), 276; Taylor & Co. v. Pickett, 52 Ia. 467; Wilde v. Wilde, 37 Neb. 891; Wilson v. Parrish, 52 Neb. 6; McCormick Harvesting Machine Co. v. Miller, 54 Neb. 644; McClelland v. Citizens Bank, 60 Neh. 90. It is evident therefore that, if the illegality of part of the consideration he established, there could he no recovery upon these notes if the action had been brought by Sullivan against Padget and Foley. It becomes then a vital point in this case, whether or not the plaintiff, O’Connor, was entitled to the protection given by the law to an innocent purchasin’ of negotiable paper before maturity. As to this point, O’Con-nor’s testimony in chief was to the effect that he was an innocent purchaser, but, upon cross-examination, it was developed that O’Connor had other dealings with the Sul-livans; and the witness Keefe testified that O’Connor told him that he had not bought the notes, but that he had them for collection, and that he know that the license was included in the consideration. There is a direct conflict in the testimony between these two Avitnesses. If O’Con-nor’s testimony is to be believed, he was an innocent purchaser of the notes and should recover in this action. If Keefe’s testimony is most credible, then O’Connor merely stood in the shoes of E. E. Sullivan, and the illegality of the consideration, if established, furnished a complete defense. Whether or not O’Connor was an innocent purchaser Avas a question of fact that should have, been submitted to the jury. It is possible that, had the question
By the Court: For the reasons stated in the foregoing opinion, the judgment of the district'court is reversed and the cause remanded for further proceedings.
REVERSED.
