Nahas v. George

156 Ohio St. (N.S.) 52
CourtOhio Supreme Court
DecidedJuly 5, 1951
DocketNo. 32455
StatusPublished

This text of 156 Ohio St. (N.S.) 52 (Nahas v. George) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nahas v. George, 156 Ohio St. (N.S.) 52 (Ohio 1951).

Opinion

Zimmerman, J.

The evidence as to the existence of a partnership between the decedent and defendant is in sharp conflict. There are a number of indicia which would support the conclusion that no partnership was intended or created andthat the decedent was no more than an employee of defendant. Be that as it may, the Court of Appeals found upon some evidence that a partnership did exist, and since this court does not weigh evidence such finding will be accepted.

It appears from the bill of exceptions that during 1938 defendant was a resident of the city of Akron, and during the spring of that year entered into nego[55]*55tiations with, the Walsh brothers for the purchase of the Elk Cafe located in that city and which they owned and operated. Plaintiff’s decedent resided in the state of Illinois and came to Akron about April 1, 1938. Under date of March 31,1938, the Walsh brothers executed and delivered a bill of sale to defendant for all the physical equipment and chattels in the Elk Cafe, and he paid them the sum of $5,000 therefor. The Walsh brothers then held permits from the Ohio Department of Liquor Control for the sale of beer and intoxicating liquor in the Elk Cafe, viz., D-l, D-2, and D-3 permits. Walsh brothers made application for the transfer of these permits to defendant and he, upon approval of the transfers, became a permit holder.

Each year thereafter, permits were issued to defendant alone and the name of plaintiff’s decedent was not mentioned and did not appear in any of the transactions. The entire cafe business was ostensibly carried on in the name of defendant and,there is no clear indication in any of the written records produced at the trial that the decedent was a partner in the business.

Several provisions of the Liquor Control Act of Ohio are pertinent to this controversy.

By Section 6064-8 (2), General Code, the Department of Liquor Control has the power to grant or refuse permits for the sale of beer and intoxicating liquor.

By Section 6064-14, General Code, “no person shall directly or indirectly * * * sell * * * any beer or intoxicating liquor * * * unless such person * * * shall be the holder of a permit issued by the Department of Liquor Control.”

By Section 6064-17, General Code, no permits, of the classifications specified, “shall be issued to a firm or partnership unless all of the members of said firm •or partnership are citizens of the United States and a [56]*56majority thereof have resided in this state for one year prior to application therefor.”

By Section 6064-18, General Code, successful applicants for permits of the classifications herein involved shall give an approved bond.

By Section 6064-20, General Code, the permit issued “shall authorize the person therein named to carry on the business therein specified at the place * * * therein described,” and such permit shall not “authorize any person other than the.one therein named to carry on such business at the place * * * named therein. ’ ’

For obvious reasons, the state is vitally concerned with the character and reputation of every individual who sells alcoholic beverages and with the manner in which this activity is conducted. As has been noted, the statutes of Ohio set out definite and specific rules which must be strictly complied with for one lawfully to engage in the business of selling beer and intoxicating liquor, and the identity of all those desiring to engage in such business must be disclosed in the applications for permits. As a condition to the issuance of permits applicants must meet the qualifications prescribed by statute and by rules and regulations of the Department of Liquor Control. One of the principal purposes of the Liquor Control Act is to promote public policy by restricting and regulating a business potentially dangerous to the morals of the people.

As long ago as 1775, Lord Mansfield said in the case of Holman v. Johnson, 1 Cowper, 341, 343:

“The objection that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the [57]*57real justice, as between him and the plaintiff, by accident, if I may so say. The principle of public policy is this; ex dolo malo non oritur actio [out of fraud.no action arises]. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff’s own stating or otherwise, the cause of action appears to arise ex turpi causa [out of a base consideration], or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. ’ ’

A part of the above language was quoted with approval and applied in Kahn, Jr., v. Walton, 46 Ohio St., 195, 207, 20 N. E., 203, 209.

Upon the principle stated, the courts in most jurisdictions will not recognize a partnership agreement to carry on an illegal business or to conduct a legal business in an unlawful manner and will not enforce or compel an accounting or contribution between or among the partners in such an illegal enterprise. 40 American Jurisprudence, 358, Section-326.

In Massillon Savings & Loan Co. v. Imperial Finance Co., 114 Ohio St., 523, 151 N. E., 645, the third paragraph of the syllabus baldly states:

“A party who enters into a contract despite a statute prohibiting it, cannot thereafter claim the fruits of its performance in a court of justice.”

In the case of Tucker v. Binenstock, 310 Pa., 254, 259, 165 A., 247, 248, one partner attempted to secure an accounting from his copartner in connection with a project involving the illegal sale of intoxicating liquor. The court, in refusing to accord the relief, stated in the course of its opinion:

“There is no principle more clearly established than that the law will not enforce an illegal transaction, [58]*58nor will it be an instrument for distribution of moneys illegally gained. * * * It simply leaves the wrongdoers where it finds them. The rule is not designed for the protection of the more dishonest of the partners, although the latter may benefit from its application, but rests upon a broad principle of public policy; the government seeks to punish transgressions of the law, not to reward or aid them by countenancing any phase of the illegality. Therefore, in litigation where the government is not a party, where transactions are tainted with wrongdoing, as violations of statutes intended for the upbuilding of the moral structure of the body politic, no court will lend its aid where the cause of action is grounded on such immoral or illegal acts.”

A frequently cited case of similár import is Vandegrift v. Vandegrift, 226 Pa., 254, 75 A., 365, 18 Ann.

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Related

Cerino v. Van Orden
129 A. 704 (New Jersey Court of Chancery, 1925)
Massillon Savings & Loan Co. v. Imperial Finance Co.
151 N.E. 645 (Ohio Supreme Court, 1926)
Tucker v. Binenstock
165 A. 247 (Supreme Court of Pennsylvania, 1932)
Vandegrift v. Vandegrift
75 A. 365 (Supreme Court of Pennsylvania, 1910)
Eisenman v. Seitz
25 A.2d 496 (Court of Chancery of Delaware, 1942)

Cite This Page — Counsel Stack

Bluebook (online)
156 Ohio St. (N.S.) 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nahas-v-george-ohio-1951.