Lloyd v. Johnson

45 App. D.C. 322, 1916 U.S. App. LEXIS 2692
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 29, 1916
DocketNo. 2911
StatusPublished
Cited by6 cases

This text of 45 App. D.C. 322 (Lloyd v. Johnson) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lloyd v. Johnson, 45 App. D.C. 322, 1916 U.S. App. LEXIS 2692 (D.C. Cir. 1916).

Opinions

Mr. Justice Van Orsdel

delivered the opinion of the Court:

It is not denied that at the time the sale in question was made; plaintiff was'conducting his business of a real estate broker without a license as above required. Hence, the question is squarely presented whether his contract for a commission, which was concededly earned, can be enforced.

The act in question is part of an act of Congress making appropriations for the District of Columbia, and the provision here involved comes under the general head of “License Taxes,” in which taxes similar to the one imposed upon real estate brokers or agents ai’e imposed upon auctioneers, commission merchants, cattle dealers, ticket brokers, hotel keepers, fortune tellers, hucksters, peddlers, bill posters, pawn brokers, - second-hand dealers, and upon persons engaged in some fifty other occupations. - - .

[327]*327It is undoubtedly a general rule of law that contracts made in violation of statutes are void. As was said in Bank of United States v. Owens, 2 Pet. 527, 539, 7 L. ed. 508, 511: “There can be no civil right where there can be no legal remedy; and there can be no legal remedy for that which is itself illegal.” To this general rule, however, the courts have found exceptions. For the exception, resort must be had to the intent of the legislature, as well as to the subject-matter of the legislation. The test for the application of the exception is pointed out in Pangborn v. Westlake, 36 Iowa, 546, 549, and approved in Miller v. Ammon, 145 U. S. 421, 426, 36 L. ed. 759, 762, 12 Sup. Ct. Rep. 884, as follows: “We are, therefore, brought to the true test, which is, that while, as a general rule, a penalty implies a prohibition, yet the courts will always look to the language of the statute, the subject-matter of it, the wrong or evil which it seeks to remedy or prevent, and the purpose sought to be accomplished in its enactment; and if, from all these, it is manifest that it was not intended to imply a prohibition or to render the prohibited act void, the courts will so hold and construe the statute accordingly.”

A like limitation has been placed upon the rule in Harris v. Runnels, 12 How. 79, 84, 13 L. ed. 901, 903, where the court said: “The exemption may be inferred from those rules of interpretation, to which, from the nature of legislation, all of it is liable when subjected to judicial scrutiny. That legislators do not think the rule one of universal obligation, or that, upon grounds of public policy it should always be applied, is very certain. For, in some statutes, it is said in terms that such contracts are void; in others, that they are not so. In one statute, there is no prohibition expressed, and only a penalty; in another, there is prohibition and penalty; in some of which, contracts in violation of them are void or not, according to the subject-matter and object of the statute; and there are other statutes in which there are penalties and prohibitions, in which contracts made in contravention of them will not be void, unless one of the parties to them practises a fraud upon the ignorance of the other. It must be obvious, from such diversities of legis[328]*328lat-ion, that statutes forbidding or enjoining things to be done, with penalties accordingly, should always be fully examined, before courts shohld refuse to give aid to enforce contracts which are said to be in contravention of them.”

Counsel for defendant relies chiefly upon the decision of the Supreme Court in Miller v. Ammon, supra. There, a liquor dealer in Chicago, without the license required, made a large sale of liquors. The purchaser refused to pay. Suit was brought, and defended, as here, upon the ground that the contract was void. The court, adhering to the general rule as above announced, but recognizing the exceptions, upheld the defense and declared the contract void. There, as here, the statute declared a prohibition and a penalty, but did not expressly declare a contract in contravention of it void. A careful inspection of the opinion discloses the ground upon which the court reached its conclusion. The liquor act is referred to as “one of a particularly local character, affecting solely the internal police of the state.” It was not treated as a revenue or taxing-statute, but as an exercise of the police power for the regulation of the liquor traffic. The following clearly imports this distinction: “By the ordinance, a sale without a license is prohibited under penalty. There is in its language nothing which indicates an intent to limit its scope to the exaction of a penalty, or to grant that a sale may be lawful as between the parties, though unlawful as against its prohibitions; nor when we consider the subject-matter of the legislation, is there anything to justify a presumed intent on the part of the lawmakers to relieve the wrongdoer from the ordinary consequences of a forbidden act. By common consent the liquor traffic is freighted with peril to the general welfare, and the necessity of careful regulation is universally conceded. Compliance with those regulations by all engaging in the traffic is imperative; and it cannot be presumed, in the absence of express language, that the lawmakers intended that contracts forbidden by the regulations should be as valid as though there were no such regulations, and that disobedience should be attended with no other consequence than the liability to the- penalty.”

[329]*329It is clear from the opinion of the court that a distinction is deemed to exist between a case like the present, where only the collection of revenue is involved, and the case there under consideration, where the ordinance was primarily a police regulation, aimed at the control and regulation of the liquor traffic, involving a question of public policy affecting in the highest degree the morals and general welfare of the community. In such a case, in view of the subject-matter and object of the legislation and the nature of the business regulated, the case was clearly not within the exception, and in that respect easily distinguishable from the case at bar. That statutes imposing license taxes, involving no exercise of the police power of the State nor any question of public policy, and which do not expressly prohibit unlicensed persons from making contracts nor declare such contracts void, come within the exception, is well settled by both English and American cases. Johnson v. Hudson, 11 East, 180, 10 Revised Rep. 465; Smith v. Mawhood, 14 Mees. & W. 452, 15 L. J. Exch. N. S. 149; Jones v. Berry, 33 N. H. 209; Rahter v. First Nat. Bank, 92 Pa. 393; Mandlebaum v. Gregovich, 17 Nev. 87, 45 Am. Rep. 433, 28 Pac. 121; Prince v. Eighth Street Baptist Church, 20 Mo. App. 332; Fairly v. Wappoo Mills, 44 S. C. 227, 29 L.R.A. 215, 22 S. E. 108; 1 Whart. Contr. see. 364.

In Maryland, contracts made by unlicensed agents under statutes similar to ours have been upheld in many cases. Banks v. McCosker, 82 Md. 518, 51 Am. St. Rep. 478, 34 Atl. 539; Coates v. Locust Paint Co. 102 Md. 291, 62 Atl. 625, 5 Ann. Cas. 895; Walker v. Baldwin, 103 Md. 352, 63 Atl. 362. In the McCosher Case, the court, considering a statute imposing a license upon “hawkers and peddlers,” and containing both a prohibition and a penalty, said: “When the law declares the consequence

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Cite This Page — Counsel Stack

Bluebook (online)
45 App. D.C. 322, 1916 U.S. App. LEXIS 2692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lloyd-v-johnson-cadc-1916.