McCall Co. v. Hughes

Cook, J., delivered the opinion of the court. Appellant filed its declaration against appellee, alleging that it had sold to appellee certain patterns at certain fixed prices, and filed with his declaration a written contract, by the terms of which appellee bound himself to sell the patterns of appellant, and none other, in the town in which he was engaged in business. This contract was to extend over a period of two years, and the patterns were to be sold at a price to be fixed in the catalogue of appellant company, to be issued from time to time. Recovery was sought for the value of the pat [382] terns at the contract price, together with a penalty, which was termed “liquidated damages.” ’ To this declaration appellee demurred, upon the ground that the contract set out in the declaration was in violation of the antitrust statute of the state; the provisions of the contract binding appellee to sell no other patterns than those of appellant for a term of two years, and to sell the patterns at prices to be fixed by appellant, tending to create a monopoly and being in restraint of trade. The trial court sustained the demurrer to the declaration. Appellant then filed an amended declaration, simply declaring upon account of goods sold and delivered toappellee, and omitting all claims, for the alleged penalty for a violation by appellee of his contract filed with the original declaration. Appellee filed pleas to this amended declaration, averring: (1) That the contract relied upon by the plaintiff in the case was the same contract set out in his original declaration, and that the terms of the same were unenforceable, because said contract provided that defendant should sell only patterns manufactured and sold by plaintiff, and called “McCall’s patterns;” and (2) that the contract was unenforceable and violative of the anti-trust laws of the state, because defendant was required under said contract to sell the patterns of plaintiff only at such prices as should be fixed by plaintiff in its catalogue, without any reference to the cost of manufacture, the law of supply and demand, or the selling price of like commodities by defendant’s competitors. Plaintiff demurred to these pleas. The demurrer was overruled, and, plaintiff declining to plead further, the suit was dismissed; therefore, this appeal. It is insisted by appellee that plaintiff could not invoke the aid of the court to recover for patterns which had been sold and delivered to defendant under the terms of the contract, because the clauses of the contract obligating defendant to sell no other patterns, and to sell at prices to be fixed by the plaintiff, were in violation [383] of the anti-trust statute. If appellant was seeking to enforce the terms of the contract challenged by appellee, we may concede the soundness of appellee’s conclusion; but does it therefore follow that he should be absolved from paying for the goods purchased and probably sold in due course of trade, because he had entered into a contract in restraint of trade? So far as the sale and delivery of the goods is concerned, the contract was executed, and, according to the averments in the declaration, defendant himself sought to revoke the contract as to the time limit, but declined to pay for the goods which had been purchased. Common honesty demands that defendant should pay for the goods purchased, and he cannot shelter himself behind the provisions of the anti-trust statute against certain provisions of the contract which it is not sought to enforce. It may be true that the terms of the contract which are set up to defeat recovery could not be enforced in a suit filed for that purpose; but the question here is an entirely separate and distinct question from this, and is in no way affected by the anti-trust statute. Conceding the invalidity of the two clauses of the contract referred to, nevertheless, the remainder of the contract is enforceable. Andrews v. Brewing Association, 74 Miss. 362, 20 South. 837, 60 Am, St. Rep. 509; Fleckenstein Bros. Co. v. Fleckenstein, 76 N. J. Law, 613, 71 Atl. 265, 24 L. R. A. (N. S.) 913; Central Tel. Co. v. Averill, 199 N. Y. 128, 92 N. E. 206, 32 L. R. A. (N. S.) 494, 139 Am. St. Rep. 878. Appellee for about two years received the benefits of and profited by the contract; but when he decides to discontinue his business with appellant, and appellant demands payment for goods sold, the answer is: “We have been violating the law for two years, and I have decided to reform my ways, but will retain the gains of our illicit and illegal relations, and you must satisfy yourself with the losses.” Eeversed and remanded. Reversed and remanded.