Stacy v. Brothers , 93 Conn. 690 ( 1919 )

There was no error in the ruling of the trial court as to the demurrers. The averments of the special defense and of the counterclaim show that there was an agreement between the plaintiff and the defendant to the effect that the plaintiff for himself should conduct the saloon for the sale of intoxicating liquors, when, as it appears, the defendant was to retain the license in his own name to sell liquors therein. The special defense and counterclaim show that the privilege to sell liquors in this place was personal to the defendant and could only be exercised by him as the licensee. Such being the terms of the agreement between the parties, both the plaintiff and defendant were in pari delicto in making a contract which could not form the basis of a recovery by the plaintiff upon the cause of action set forth in his complaint. The general rule as to executed contracts is that if the parties be in pari delicto they will be left where they have placed themselves. Funk v. Gallivan,49 Conn. 124. For the same reason it follows that the defendant's counterclaim, which was predicated upon this alleged illegal contract, was properly held insufficient by the court below. Connecticut BreweriesCo. v. Murphy, 81 Conn. 145, 148, 70 A. 450.

There was no error in the action of the trial court in refusing to set aside the verdict as against evidence. The jury must have found, as the plaintiff offered evidence to prove, that on October 6th, 1916, the plaintiff and defendant entered into an agreement by the terms of which the defendant agreed to sell to the plaintiff his retail liquor business, liquors, license, stock and fixtures for the agreed price of $16,000. This property was purchased by the plaintiff for the sole purpose of conducting a retail liquor store in his own name, which the defendant well knew. The defendant, as a part of this agreement, falsely and fraudulently represented to the plaintiff that the liquor license and liquor business would be transferred to the plaintiff, and thereby induced the plaintiff to pay him the sum of $16,000. The payment was to be made $8,000 in cash and $8,000 by way of a promissory note. The cash payment was made and the note given. Upon this note $3,888 was subsequently paid, together with $1,750 rent. The defendant refused to transfer the license and the business to the plaintiff as he had agreed to do, and ultimately, after the plaintiff had refused to pay further rent because of the defendant's conduct, evicted the plaintiff and sold the saloon and license to another purchaser. There was evidence offered from which these conclusions could have been reached by the jury as reasonable men.

It cannot be said, as matter of law, that it appears from the evidence that the plaintiff by his conduct evinced his intention to waive and did waive his right to recover of the defendant. This, under the facts presented, was a question of fact, which, under proper instruction, was submitted to the jury.

The same is true, also, of the defendant's claim that the evidence shows the plaintiff was attempting to avoid the contract which he had entered into with the defendant, without offering to return what he had received from the defendant. Upon this subject the jury were instructed as follows: "If you find that the plaintiff is entitled to a verdict, then he is entitled to be replaced, so far as it is possible, in the position which he was in prior to the signing of this agreement with the defendant at the time of the purchase. In other words, he is entitled to be reinstated in that position which he would have been in had he not been induced by these false representations, if you find them to be false, to enter into it. In other words, he is entitled to a return of the consideration with which he parted, which is represented by $8,000 in cash and whatever sum you find he has paid by way of monthly instalments. He is also entitled to interest from the date when the various amounts making up this sum were paid. As against this, he is bound to return to the defendant, in so far as it is possible for him to do so, the consideration which he, the plaintiff, received from the defendant, that is, the saloon property. In other words, he is bound to return to the defendant the saloon and liquor business which he purchased, together with any profits made therein during the period of his occupancy." These instructions are not criticised by the defendant, and the record does not disclose that the jury mistook or misapplied them in reaching their verdict.

One assignment of error relates to the action of the trial court in reviewing and commenting upon the evidence. The part of the charge thus referred to was immediately followed by a statement of the trial court that if the jury found these facts proven by the evidence, the plaintiff would be entitled to recover. It has been established by repeated decisions of this court that the trial judge may comment upon the evidence bearing upon any point in issue in the case, if he does not direct the jury how to decide the matter. This portion of the charge was well within this rule.

Another assignment of error relates to the instructions of the court as to the plaintiff's duty to exercise diligence in finding out that the license in question had not been transferred to him by the defendant. The plaintiff offered evidence to prove, and claimed to have proven, that owing to the misrepresentations made by the defendant and the deceit practiced by him, he did not ascertain that the license had not been transferred until about one year after the agreement to sell had been made. Upon this branch of the case the jury were instructed, among other things, that "it was the duty of the plaintiff if he would rescind the alleged fraudulent contract to rescind it within a reasonable time after discovering the fraud, if any existed, and what in the circumstances of this case was a reasonable time, I charge you, is a question of fact for you to consider and determine. The burden of proving that the plaintiff acted within a reasonable time is on the plaintiff." In view of the special circumstances here disclosed, this was not error. Fox v.Tabel, 66 Conn. 397, 34 A. 101; McLaughlin v. Thomas,86 Conn. 252, 258, 85 A. 370. It appears that upon this branch of the case the evidence was conflicting, and what constituted reasonable time under the special circumstances surrounding this transaction was a question of fact properly submitted to the jury.

The defendant complains of the instructions of the court in failing to charge the jury that the plaintiff must be presumed to know that the law required him to have a license and that he was bound to know that fact. Upon this subject the jury were told that if they found from the evidence that the plaintiff was not equally in the wrong with the defendant in respect to the sale and transfer or want of sale and transfer of said license, he would be entitled to recover in this action; if, on the other hand, the jury believed that both parties knew that the license was issued to the defendant, and that the plaintiff, notwithstanding his knowledge of the fact, on his own account acted as a principal in the business of selling spirituous and intoxicating liquors at the place in question, both the plaintiff and defendant would be equally in the wrong and their alleged contract would be invalid, and the plaintiff could not recover; or, if the jury found that the plaintiff was chargeable with want of good faith in his failure to discover that the license stood in the name of the defendant, he would be chargeable with notice of the defective character of his title to the license, and legally chargeable with the fault that the license had not been transferred to him, and he would in such circumstances be equally in the wrong with the defendant, the alleged contract would be invalid, and he would not be entitled to a verdict in this action.

These instructions were proper and well adapted to the situation here presented. Where the parties to a contract which is against public policy or otherwise illegal are not in pari delicto, or equally guilty, which they may not be, and where public policy is considered as advanced by allowing either, or at least the more excusable of the two, to sue for relief against the transaction, relief is given to him. The cases of this character are generally those wherein the party asking to be relieved from the effect of an illegal agreement, as in the present case, was induced to enter into the same by means of fraud. Here he is not regarded as beingin pari delicto with the other party, and the court may relieve him. 13 Corpus Juris, p. 498.

This disposes of all the reasons of appeal. There are portions of the charge which, if detached and taken by themselves, might be made the subject of criticism, and certain features of the judgment-file, unexplained as they are by the record, are similarly open to criticism. But no complaint of these matters is made, either in the reasons of appeal or in the argument before us. It by no means appears that substantial justice was not done. The plaintiff has paid the defendant about $13,500, and in the assessment of his damages has been required to account for the profits of the business while he was in possession. The license, which was the item of special value, was never transferred to him. On the trial it appeared that the plaintiff had been evicted from the premises and that the defendant had resold the business to a third party. Under these circumstances we see no occasion for ordering a new trial upon grounds which the defendant has elected not to raise.

There is no error.