## Facts

- A brewing corporation sold bottled beer to Emma Mason on credit.
- Mason operated a house of prostitution, and the seller’s agent knew Mason’s occupation.
- The agent did not know precisely how the beer would be used, but supposed it would be used or sold in the brothel.
- Mason failed to pay the full balance (about $122), and the seller sued for goods sold and delivered.
- Mason pleaded that the beer was sold expressly to maintain the brothel and was to be paid for out of brothel profits, but at trial she did not prove those pleaded facts.
- Based only on the agent’s knowledge and supposition, the trial court dismissed the seller’s claim.

## Issues

1. Whether a sales contract for lawful goods is unenforceable on public policy grounds when the seller knows the buyer operates a house of prostitution and supposes the goods will be used or sold there, absent proof the contract was made to further the illegal business or to be paid from its profits.

## Decision

- The Minnesota Supreme Court reversed the dismissal and ordered a new trial.
- The court held the seller could recover the unpaid balance on the facts proven.
- Mere knowledge of the buyer’s illegal business and a supposition about use of the goods did not, without more, make the sale contract illegal or void.

## Legal Principles

- A contract is unenforceable for illegality when the contract’s consideration or object is itself illegal, or when the seller’s performance directly violates law.
- A lawful sale is not rendered void merely because it is collateral to, or incidentally connected with, the buyer’s illegal or immoral enterprise.
- To bar recovery on public policy grounds in this setting, there must be proof that the seller agreed to further the illegal business (e.g., by contracting that the goods be used to carry it on) or that payment terms integrate the transaction with illegal proceeds.
- Allegations of such direct connection must be supported by evidence; otherwise, the seller’s general knowledge of the buyer’s wrongdoing is insufficient to defeat the claim.

## Conclusion

Because the defendant proved only that the seller’s agent knew she kept a brothel and supposed the beer might be used or sold there, and did not prove an agreement tying the sale to maintaining the illegal business or to payment from illegal profits, the contract remained enforceable and the seller could pursue recovery of the unpaid price.


Anheuser-Busch Brewing Ass'n v. Mason, 44 Minn. 316, 46 N.W. 558 (Minn. 1890)