Culp v. Love.

From judgment for defendants, the plaintiff appealed. The plaintiff demands damages for breach of contract (Exhibit A, in the record). The defendants deny the alleged breach of contract, and rely upon the illegality of the contract as their defense. It is agreed by the parties that at the time the contract was made the plaintiff, Culp, was the agent and broker of the Cumberland Flour Mills, for (460) the sale of their flour, and the defendants were agents and brokers for the Sweetwater Flour Mills (located in Tennessee), for the sale of their flour, and that the flour of the respective companies were competitive brands of flour in the territory mentioned in the contract. In the contract (Exhibit A), the plaintiff, Culp, for a valuable consideration, agrees with R. C. G. Love Son, and Edgar Love Co., not to sell meats, lard, and oil in certain territory, including several counties, for a certain number of months, and the said R. C. G. Love Son and Edgar Love Co. agree not to sell flour at wholesale in the same territory and for the same period of time. They also agree to obtain for the plaintiff, Culp, the sale of the Sweetwater Mill Company's flour at all the towns on several railroad lines for the full term of this contract. It was further agreed that the plaintiff is not to neglect the sale of Cumberland Mills flour for that of Sweetwater Mills, nor "to push sale of said Sweetwater Mills flour further than it may be to his interest to do." The plaintiff also agreed to divide with the other contracting parties his brokerage on sale of the Sweetwater Mills flour for the same term and in the same territory. The parties then agreed severally to forfeit and pay $500 if either failed to perform his part of this contract. It appears, from the evidence, that defendants notified the Sweetwater Company that they had transferred their agency to sell flour to the plaintiff, but did not inform the Sweetwater Company of the true nature of said contract, Exhibit A. The Sweetwater Company recognized the transferred agency on condition that the plaintiff handle its goods exclusively. In a few months the Sweetwater Company withdrew plaintiff's agency to sell its flour, and plaintiff sues for the penalty (461) and damage. At the close of the plaintiff's evidence, his Honor held that plaintiff could not recover. Plaintiff took a nonsuit, and appealed.

Concealing the true nature of the contract under consideration was a fraud on the Sweetwater Company, and contrary to good morals, and the combination between plaintiff and defendant to suppress and destroy competition in trade in the necessaries of life was an imposition on the people and against public policy. The agreement was therefore illegal, and no court of justice will lend its aid to either party to enforce such an executory contract.

The objection of a party to an illegal contract does not sound well in his mouth. It is not for his sake that the objection is allowed, but it is found in general principles of policy, of which he has the advantage by the accident of being sued by his confederate in wrongdoing. "An executory contract, the consideration of which is contra bonos mores, or against the public policy, or laws of the State, or in fraud of the State, or of any third person, can not be enforced in a court of justice." Blythe v. Lovinggood, 24 N.C. 20. InArmstrong v. Toler, 11 Wheat, 258, the Court spoke in these words. "The principle of the rule is, that no man ought to be heard in a court of justice who seeks to enforce a contract founded in, or arising out of, moral or political turpitude." In Story Ag., sec. 348, this clear distinction is laid down: "The distinction between the cases where a recovery can be had and the cases where a recovery can not be had of money connected with illegal transactions, which seems now best supported, is this: That wherever the party seeking to recover is obliged to make out his case by showing the illegal contract, or transaction, or where it appears that he was privy to the original illegal contract, or transaction, then he is not entitled to recover any advance made by him connected with that contract. But when the advances have been made upon a new contract remotely connected with the original illegal contract, or transaction, but the title of the party to recover is not dependent upon that contract, but his case may be proved without reference to it, then he is entitled to (462) recover." In the case before us, it is the illegal contract itself between the parties that we are asked to enforce. The proof shows that defendants agreed not to compete with plaintiff in selling flour, leaving him to demand of the public his own price, and he agreeing not to sell meats, lards, and oil in their chosen territory, and to divide with them his brokerage on sales of the Sweetwater flour, and the Court is called on by one party to make the other party pay money for failing to perform his part of this unlawful transaction. A and B agree to rob C. O does the work; B stands off and simply looks on, and then B calls on the Court to make A divide the spoils; or, if they have stipulated that either one failing to do his part of the nefarious work, shall forfeit and pay the other $500. Has any court of justice ever responded favorably to such request by either party? We do not mean to classify these parties with robbers, or to characterize their transactions other than according to the facts which they have brought out in their case. The intention of the parties is immaterial. They may have thought it permissible to make a sharp bargain at the expense of the public and injury to a third party, but we can not agree with, or help them, to do so. King v. Winants, 71 N.C. 469.

Affirmed.

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