Culp v. Love., 127 N.C. 457

Eaibcloth, C. J.

The plaintiff demancje 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 plain tiff, Culp, was the agent and broker of the Cumberland Elour Mills, for the sale of their flour, and the defendants were agents and brokers for the Sweetwater Elour 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 and damage. At the close of plaintiff’s evidence, his Honor held that plaintiff could not recover. Plaintiff took a nonsuit, and appealed.

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

Tbe objection of a party to an illegal contract does not sound well in bis mouth. It is not for bis sake that tbe objection is allowed, but it is founded in general principles of policy, of which be has tbe advantage by tbe accident of being sued by bis confederate in wrongdoing. “An execu-tory contract, the consideration of which is contra bonos mores, or against tbe public policy, or laws of tbe State, or in fraud of tbe State, or of any third person, can not be enforced in a court of justice.” Blythe v. Lovinggood, 24 N. C., 20. In Armstrong v. Toler, 11 Wheat., 258, tbe Court spoke in these words: “The principle of tbe rule is, that no man ought to be beard 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: “Tbe distinction between tbe cases where a recovery can be had and the cases where a recovery can not be bad of money connected with illegal transactions, which aeems now best supported, is this: That wherever tbe party seeking to recover is obliged to make out bis case by showing tbe illegal contract, or transaction, or where it appears that be was privy to tbe original illegal contract, or transaction, then be is not entitled to recover any advance made by him connected with that contract. But when tbe advances have been made upon a new contract remotely connected with tbe original illegal contract, or transaction, but tbe title of tbe party to recover is not dependent upon that contract, but his case may be provéd without reference to it, then he is entitled to '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 R agree to rob C. A 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 ? Wo 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 shai’p 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.

Case Details

Case Name: Culp v. Love.

Court Name: Supreme Court of North Carolina

Date Published: Dec 22, 1900

Citations: 127 N.C. 457; 37 S.E. 476; 1900 N.C. LEXIS 107

Court Abbreviation: N.C.