
    Owen E. Wyatt, Respondent, v. Frank A. McNamee et al., Appellants.
    (Supreme Court, Appellate Term,
    December, 1906.)
    Principal and agent— Mutual rights, duties and liabilities — Compensation of agent — Violation of statute.
    Contracts — Validity of contracts — Contracts involving violation of positive statute.
    Where the general agents of an insurance company employed a person to act as sub-agent and agreed to pay him a commission on policies secured by him and to pay him forty dollars per week “ for two months’ advanced commission” and paid him at that rate for two weeks and then discharged him, before he had earned any commissions or obtained a certificate to act as agent "from the Superintendent of Insurance, as required by law, his want of such certificate is a complete defense to his action for the balance of such “ advanced commission.”
    The knowledge of the defendants that plaintiff had no such certificate at the time of his employment will prevent their recovering from • him, by way of counterclaim, the “ advanced commission ” actually paid him.
    Appeal by the defendants from a judgment of the Municipal Court of the city of New York, thirteenth district, borough of Manhattan, rendered in favor of the plaintiff.
    A. Hamilton, for appellants.
    Porter & Barnes, for respondent.
   Davis, J.

This is an appeal by the defendants from a judgment of the Municipal Court in favor of the pJaiutiff for the sum of $288.40. The defendants were general agents of the Equitable Life Assurance Society of the United States. On June 6, 1904, they entered into a written contract with the plaintiff by the terms of which he was to act as their sub-agent. In return for his services the defendants were to pay plaintiff a commission upon policies secured by him. In a separate letter, also dated June 6, 1904, and intended to be a part of the contract, the defendants agreed to pay the plaintiff the sum of $40 per week for two months’ advanced commission.” These advances were to become a charge against the commissions earned by the plaintiff, and the first year’s commissions were to be drawn when plaintiff’s total indebtedness did not exceed $120 at any time.

The plaintiff entered upon his duties under this agreement, but earned no commissions. He was ultimately discharged by the defendants after two weeks’ service. At the time of his discharge the defendants had paid him $80 of the $320 advanced commissions to be paid. Plaintiff then brought this action to recover the balance of $240 for the remaining six weeks, basing his claim upon his alleged wrongful discharge by the defendants. Judgment for this amount was rendered in favor of the plaintiff. The defendants, among other defenses, alleged that the plaintiff had not the legal capacity to perform the contract sued upon, in that he had not obtained a certificate to act as an agent from the Superintendent of Insurance, as required by section 91 of the Insurance Law. The contract was dated June 6, 1904; the plaintiff got his certificate from the Insurance Department August 26, 1904. Under section 91 of the Insurance Law, the plaintiff was prohibited from carrying out the contract. This fact alone was sufficient to defeat his recovery. Having reached this conclusion on the ground stated, it is unnecessary to consider the other ground of error assigned by the appellants.

The defendants set up a counterclaim to recover the eighty dollars paid to the plaintiff. The evidence shows that the defendants knew of the plaintiff’s statutory inability to perform the contract with them at the time they paid him the money. In disbursing this money they were paying him for services performed for them in violation of an express statute. This fact must defeat their recovery on their counterclaim.

Judgment reversed, with costs, and judgment directed for the defendants, dismissing the complaint on the merits.

Gildebsleeve and Fitzgebald, JJ., concur.

Judgment reversed, with costs,, and judgment directed for the defendants, dismissing the complaint on the merits.  