Frank A. Menne Factory v. Harback

BattuS, J. On October 28th, 1905, Frank A. Menne Factory commenced an action against S. E. Harback and Frank D. Harback, partners doing business under the firm name and style of Harback Brothers, alleging that plaintiff was doing business in Louisville, Kentucky, and that defendants were indebted to it for goods’ and merchandise in the sum of $5,890.56, an account of which was filed; and that an accounting was had between it and defendants, and defendants agreed to pay the $5,890.65 with interest from October 25, 1905; and asked judgment for that amount and interest. The defendants answered as follows: “Now come the defendants and answer: First. They admit the purchase of the merchandise, as set out in the complaint, ¡but they allege that since the beginning of this suit they have paid on said account some $3,600, and they allege that, at the time plaintiff sold said merchandise to defendants, it had entered into and become a member of and party to a trust, agreement, confederation and understanding with divers other parties, firms or corporations, whose names are to defendants unknown, under the name and style of the National Candy Company, to regulate, fix and limit the production of candy in the State of Arkansas and elsewhere, and to regulate and fix the price at which candy should be sold in Arkansas and elsewhere, and the plaintiff sold said merchandise in the State of Arkansas to defendants at a price so fixed in violation of the provisions of an act of the State of Arkansas, approved January 23, 1905, entitled ‘An act providing for the punishment of pools, trusts and conspiracies to control prices, and as evidence and prosecution in such cases.’ Wherefore defendants say that plaintiff ought not to have or maintain this action for the price of merchandise so sold to the defendants in violation of law. “Second. Defendants, further answering by way of counterclaim and setoff, say that, since March 23, 1905, they have bought of the plaintiff in Arkansas candy in value amounting to over $5,000, for which they have paid plaintiff, and they allege that at the time they so purchased said candy the plaintiff had entered into and become a party 'to a trust, agreement, confederation, combination and understanding' with various persons, firms and corporations, whose names are to the defendants unknown, under the name and style of the National Candy Company, for the purpose of regulating, limiting the amount of candy manufactured, and fixing and' regulating the price of candy in the State of Arkansas and elsewhere, which trust, confederation, agreement and combination and understanding was in violation of an act of the State of Arkansas entitled “An act providing for the punishment of pools,' trusts and conspiracies to control prices and as evidence and prosecution in such cases,” approved January 23; 1905. Wherefore defendants pray judgment against plaintiff for said sum of $5,000, so unlawfully received by it and for costs.” ■ The plaintiff demurred 'to the first paragraph of the answer because it does not state facts sufficient to constitute a defense; and to the second paragraph “because it does' not state facts sufficient to constitute a cause of defense, or to entitle the defendants to the relief therein sought.” And the court overruled both demurrers, and plaintiff excepted. And the court rendered judgment by default in favor of defendants against plaintiff for $5,000 and interest. And plaintiff appealed. Under the construction of the act of January 23, 1905, upon which defendants rely, by this court in Hartford Insurance Company v. State, 76 Ark. 303, it is unlawful for any corporation, partnership or individual to do business in this State while a member of a pool, trust or combination, whether made in this State or elsewhere, to fix or regulate in this State or elsewhere the price of any article of manufacture, mechanism, merchandise, commodity, or any other article or thing whatsoever, etc. Section four of the act provides: “The sale, delivery, or-disposition of any of the articles, commodities or things herein-before mentioned, by any individual, company or corporation transacting business contrary to the provisions of this act within this State is hereby declared to be unlawful and contrary to public policy, and the purchaser of any article or commodity from any such offending individual, company or corporation shall not be liable for the price or payment thereof, whether the purchase was made directly from the individual, company or' corporation so unlawfully transacting business, .or indirectly from one who acted for such individual, company or corporation, as agent, representative, solicitor or canvasser. And provided further, that where any money or other thing of value is paid to such individual, company or corporation so unlawfully transacting business, its agents, representative, solicitor or canvasser, the person so paying the same may recover back the amount of the money or the value of the thing so paid.” This section makes the sale of any article, goods and merchandise by any individual, company or corporation transacting business in this State contrary to the provisions of the act unlawful, and relieves the purchaser of any liability for the unpaid part of the price, and enables him, so far as it can, to recover the money paid. The defendants do not allege in their answer that the plaintiff was transacting business in this State when it sold goods and merchandise to the defendants. In one paragraph they allege that the plaintiff sold the merchandise to them in the State of Arkansas, and in the other paragraph that they bought candy of the plaintiff in Arkansas. Plaintiff alleged in its complaint that it was doing business in Louisville, Kentucky, and this stands confessed by the defendants. This being true, the allegations of the answer might also be true, and the contracts for the sale of the goods could have been made and completed at plaintiff’s place of business in the State of Kentucky and the sales completed by delivery in Arkansas, and the contract would not have been affected by the act, the validity of the contract being governed by the laws of Kentucky, and would not be a transacting of business within the meaning of the act; for it is not to be presumed that the act was intended to affect a sale beyond its reach. In the event that t^e goods were sold in ■the manner indicated, the citizen of one State selling to citizens of another State, the sale would be a part of interstate commerce, and could not be controlled by any act of the State. No State can invalidate, forbid, or control such a transaction. That power is given only to Congress. ' For a full and complete review of authorities upon this question, see Butler Bros. Shoe Co. v. United States Rubber Co., 156 Federal Reporter, pages 1-21. The defendants seek to enforce a forfeiture in this action. ' In such cases the party seeking the forfeiture must set forth in his pleading every fact necessary to show that he is entitled to it. The pleading is strictly construed. Nothing is taken by implication. Railway Co. v. State, 58 Ark. 39; People v. Fesler, 145 Ill. 150; Jones v. Van Zant, 5 How. (U. S.) 215, 228; McGrew v. Missouri Pac. Ry. Co., 114 Mo. 210; Howser v. Melcher, 40 Mich. 185. The answer of the defendants fails to show a defense or setoff or counterclaim'; and this is true, although every allegation in it be taken for true. The pleadings do not sustain the judgment. The judgment is reversed, and the cause is remanded with directions to the court to sustain the demurrer and for a new trial.