Appeal, No. 220, Jan. T., 1949, from order of Court of Common Pleas of Luzerne County, Dec. T., 1948, No. 1133, in case of Frank H. Dippel et al., trading as F.H. and W. N. Dippel, v. Angelo Brunozzi. Order reversed.
James P. Costello, Jr., with him Leo T. Conner and Edmund J. McCullough, for appellants.
Mitchell Jenkins, for appellee.
Before Drew, C.j., Stern, Stearne, Jones and Bell, JJ.
OPINION BY MR. JUSTICE HORACE STERN
Plaintiffs brought action to recover the balance of the purchase money alleged to be due on the sale to defendant of two Lorain shovels and a tractor. The complaint set forth an oral agreement between the parties that the purchase price of these three articles should be $33,000, and that, in addition, defendant should pay the cost of transportation and insurance, which amounted to $949.03, or a total of $33,949.03, on account of which defendant had paid $20,213.15, leaving a balance due of $13,735.88. Defendant filed an answer in which he admitted the averments of the complaint but set forth new matter and a counterclaim. He averred that the shovels and tractor were second-hand but warranted by plaintiffs
to be in first class condition, thoroughly workable and in good repair; when they arrived, however, he found that they were all defective, in bad repair, unworkable and not in first class condition, so that he was unable to use them for the purpose for which he had bought them. The result was that he was obliged to expend for repairs the sum of $11,500 and for the purchase of a bulldozer the sum of $6,000, and he also suffered a loss of profits in the amount of $30,000 because of inability to operate the coal stripping project in which he was engaged. He further averred that the price regulations of the Office of Price Administration at the time he purchased this equipment provided that the maximum price at which second-hand equipment could be resold was 55% of its base price when new, and under that provision the maximum prices legally chargeable for the Lorain shovels were $5,610 and $11,770 respectively and for the tractor $4,950, or a total of $22,330; consequently the charge of $33,000 was in violation of the regulations with the result that the sale was null and void and of no effect; therefore he also claimed the return of the $20,213.15 paid by him on account. Plaintiffs moved to strike off the counterclaim on the ground that it failed to state a claim upon which relief could be granted. They asserted that defendant's allegation as to the maximum price legally chargeable constituted an attempt by him to raise the defense of illegality of the transaction and thereby he admitted that a counterclaim arising out of the transaction was not available to him. The court sustained this contention and held that defendant could not recover on the counterclaim because of the illegality of the transaction which he himself averred, but the court went further and held that plaintiffs' demurrer to the counterclaim was an admission on their own part that the contract was illegal; therefore the court, of its own motion, dismissed the entire proceedings. Plaintiffs appeal from that action of the court below.
The Emergency Price Control Act of January 30, 1942, c. 26, Title 1, § 4, 56 Stat. 23 (50 U.S.C.A. § 904) declared it to be unlawful for any person to sell or deliver any commodity, or in the course of trade or business to buy or receive any commodity, in violation of any regulation or order made in pursuance of the Act. Therefore such a sale or such a purchase, during the time when the Act was in effect, was against public policy and consequently unenforceable.*fn1 This accords with the general rule that an agreement which violates a provision of a statute, or which cannot be performed without violation of such a provision, is illegal and void: Pennsylvania R.R. Co. v. Cameron, 280 Pa. 458, 466, 124 A. 638, 640 (contract in violation of the Interstate Commerce Act); Kimble v. Wilson, 352 Pa. 275, 281, 282, 42 A.2d 526, 529 (contract violating the Public Utility Law); Kissell v. Motor Age Transit Lines, 357 Pa. 204, 209, 53 A.2d 593, 595 (violation of the Federal Motor Carrier Act). Where a contract is found to be against public policy "it cannot, under any circumstances, be made the basis of a cause of action. The law when appealed to will have nothing to do with it, but will leave the parties just in the condition in which it finds them. If they have fully executed their unlawful contract, the law will not disturb them in the possession of what each has acquired under it. If one has executed in whole or in part, the law turns a deaf ear when he pleads for its aid to compel the other to do as much....
If the contract is still executory, the promisor is left undisturbed in the possession of the money or other property which he agreed to pay or transfer; if the contract has been executed, the promisee is left undisturbed in the possession of the money or other property which has been paid or conveyed to him": Pittsburg v. Goshorn, 230 Pa. 212, 227, 79 A. 505, 510; see also New York & Pennsylvania Co. v. Cunard Coal Co., 286 Pa. 72, 81, 82, 132 A. 828, 831; 12 Am. Jur. 724, 725, § 213. It is clear, therefore, that in view of defendant's averment that the purchase price in this case exceeded the maximum amount legally chargeable he cannot ...