Licensed Retail Liquor Dealers Ass'n v. Denton , 140 Minn. 461 ( 1918 )

Holt, J.

The action is brought upon 16 promissory notes, each for $5, given by defendant to plaintiff. The answer admits the execution of the notes, but alleges “that said notes were given as part of a slush fund which the plaintiff was collecting to unlawfully and wrongfully influence certain public officials in regard to the regulations to be imposed upon the sale of alcoholic, poisonous and intoxicating drinks;” that the notes were given for an illegal consideration; “that no steps were taken or nothing was ever done by the plaintiff herein to benefit this defendant in any way¹ in his businss as a retail liquor dealer and that this was the sole consideration for said sixteen notes;” and that defendant has received nothing at all for said notes. Upon affidavits plaintiff moved to strike out the answer as false, frivolous and sham. The motion was granted, with leave to defendant to serve an amended answer upon payment of costs. Defendant appeals.

The answer is not frivolous. But if it conclusively appears to be false and sham, the action of the court below was right. Plaintiff is a corporation organized under the laws of this state. The affidavit of its secretary sets forth that defendant, upon his own application, was elected 'a member of the corporation, and, pursuant to its by-laws, paid $10 entrance fee; and, in payment of his monthly dues, executed and delivered to it his 23 promissory notes, each for $5, maturing one each month thereafter, and that defendant continued to be a member as each note matured; that the notes sued upon are the notes so given, except the ones that have been paid by defendant; that the by-law of the corporation pursuant 'to which the notes were executed, reads as follows:

“Section 1. Initiation Fee. (a) All members of this corporation shall, upon joining the same, pay to the Treasurer an initiation fee of Ten Dollars ($10.00), which shall also cover and pay the dues of said member for the first month of such membership.

“Section 2. Monthly Dues, (a) The monthly dues shall be the sum of five dollars ($5.00) per month for each member of the Corporation. Immediately upon becoming a member of the Corporation each member shall forthwith make, execute and deliver to the Treasurer of said Corporation twenty-three promisory notes in writing payable to the order of said Corporation, each for the sum of five dollars and bearing interest at the rate of six per cent per annum from its maturity, which date of maturity shall be so fixed and designated in each of said notes as to make one of said notes mature each consecutive month from and after the signing and delivery of the same; the payment of each of said notes at its respective date of maturity being equivalent to the payment of dues for a corresponding period.”

The affidavit of plaintiff’s attorney shows that defendant paid two of the S3 notes to the attorney, and sets out a letter from defendant wherein he promised to pay the balance as soon as able. The opposing affidavit of defendant states that, if it be true that the notes were given in payment of monthly dues to the corporation, he signed them because of false representations made by plaintiff’s agents; he admits paying ‘$10 to join the corporation and the attendance at one meeting; and he states that his membership was terminated, but concedes this occurred after the maturity of the notes in suit.

It will be noticed that the answer admits the execution of the notes and does not set up the defense, suggested in the affidavit, that they were procured by means of misrepresentation or fraud. It attempts to set forth an illegal consideration; but it seems to us that this defense is refuted by the subsequent admission, above set forth, that the sole-consideration was that steps were to be taken and something done by plaintiff to benefit defendant in his business of retail liquor dealer which he was conducting in Minneapolis, Minnesota. It is to be assumed, until the contrary is made to appear, that defe¿dant had the lawful right to conduct the business in which he was engaged at that place. That being so, it cannot be unlawful to procure and pay for such assistance as may be lawfully rendered in promoting the success of that business.

But, aside from the above consideration, we think it conclusively appears that the notes represent membership dues, under the by-law of the corporation, and that they all' matured while defendant remained a member in good standing. The attempted defense of want of consideration and failure of consideration must therefore be held sham. And so must be held the defense of illegal consideration, for it cannot be regarded unlawful to become a member of a corporation and pay the monthly dues imposed upon such member by the by-laws of the organization.

Order affirmed.