*1 CO., a South BRADLEY GRAIN Dakota Appellant,

Corporation, Plaintiff and PETERSON, Defendant

James Respondent, Thomas,

Steve Defendant

Respondent.

Nos. Court of

Supreme

Argued 9, 1978. March 13, 1978.

David of Berg, Gronbeck Hacking & Berg, Minneapolis, Minn., Loucks, Oviatt, Bradshaw, Schulz, & Watertown, Green appellant. Raymond A. Gallagher Gallagher & Redfield, Battey, for defendants and re- spondents.

MORGAN,Justice. Appellant brought these actions to recov- damages er respondents for failure to deliver in accordance with oral agree- ments entered into telephone. via Among interposed defenses illegality was the of the contracts under SDCL 38-14-5 and SDCL respondents, motion the trial granted summary judgment in each of the cases based on this defense. From *2 appellant ap- out summary judgments, by offering higher these of business prices at court, By appeals the one station it does peals. order of than at others in to order destroy the competition, for written and oral and any- were consolidated ar- the one in violation to be guments. guilty We reverse actions of the discrimina- tion, prohibited which is and un- trial declared court. Appellant lawful. then reasons the the contracts undisputed It is subsequent regarding written con- for were oral contracts future tered into is only tracts for the furnishing any There was never delivery evidence that would be available the to date, kind, showing memo written the (then Public Utilities Commission the Board bushels, quality, number grade price and Commissioners) of Railroad for investiga- upon, period for agreed allowed deliv- tion. He urges that it is unrealistic to ery signed by agents in the or their conclude that the to intended conformity with SDCL 38-14-5.1 take aim at the local elevators when the the Under SDCL intent was to line police elevators. Chapter violation the of SDCL reading A careful statute, both as misdemeanor, punishable 38-14 is Class 2 originally present enacted and in its codi- days by up thirty imprisonment to support appellant’s fied ar- county jail a one hundred dollar gument. While it is beyond question that both. by the discrimination line operators against Appellant compliance to avoid seeks is locals the basis for the set grounds. with the statute on two section, the in first the subsequent is appellant contends the statute refers section that says pertinent point: present pass where title only purchase to Every public warehouseman agreement time as opposed es at the engaged grain . agreement purchase. to state, (emphasis added) within the shall that the statute does not determined during day each keep posted, . by make the distinction characterized the all prices day by offered that such ware- 1-201, noting under appellant, U.C.C.§ houseman2 . . . . When grain 57-1-2(29), purchase codified . purchased is delivery for after any voluntary creating transaction includes purchase agreement made, the property an interest neces agreement terms such shall (emphasis require sarily title transference. With this ,3 supplied) writing be reduced to . . agree. we that, Appellant next contends as the duty imposed That every ware- suming contracts violate houseman as opposed operators to line can- questioned; they are rendered unenforcea not be nor is it unreasonable to He expect ble on that documented evidence of the operator’s points single first out that are equally important sales prevent grain investigation enactment to to of discrimination. An- warehousemen, operate at more than who other section of the statute authorizes the (line driving operator line raise operators), prices one station to at a location only single meet, exceed, to warehouseman with elevator where but provides: delivery, signatures 1.SDCL of the seller buyer agents. copy or their One shall be purchased grain or When flaxseed by retained seller and the other engaged warehouse miller buyer permanent as a record in his office. purchase of and flaxseed for deliv- made, ery purchase agreement after 2. SDCL 38-14-4. the terms such shall be reduced date, writing duplicate, showing to 3. SDCL 38-14-5. kind, place, grade, quality, number of bushels, price upon, agreed period allowed 4. SDCL 38-14-2. buyer, another prices offered which tween are un- single operator. legisla- Had the could be lawful. the failure to them reduce single operators to relieve ture intended sign writing writing that runs afoul posting prices from the burden of and re- lawful, of the law. The substance is agreements writing, they ducing easily the form is but, so, done lacking any could have mani- Jaeger Professor in Williston on Con- intent, of such festation must construe *3 tracts, ed., 3rd 1752 states: § statute as a we find whole as it. bargain A although itself neither un- provides that the SDCL 38-14-6 vio promises, lawful in what it nor misdemeanor; lation is a of promise, may consideration for the be appellant this not contends that man part general obnoxious of a scheme to date holding a that the contracts were void bring result, may about unlawful or be regard, In against public policy. this his closely connected with some unlawful First, argument multiple. * * * plan act. or If the contract is specifically did not declare such contract merely collaterally connected with an un- Second, void. avoidance of the con that act, purpose however, lawful accomplish tract is not rule purpose prevention monopolization generally of of adopted is that the contract is practices through unfair trade on the it is only remotely valid if connected with Third, operators. of line the contracts are an unlawful transaction and rests Finally, not malum se. avoidance would independent legal consideration, leave to such a both contract with can establish his ease remedy, so a out that farmer who delivered relying upon without the unlawful trans- his could not collect for it. action. respondents argued and the trial case, In this unlawful or act court noted in its memorandum decision against which the statutes are addressed is provides that “A that: con- discrimination in the contrary provision express provi- tract Respondents do plead that express law, policy sion of law or to the was discriminatory, nor was evi- though expressly prohibited or other- dence presented of discrimination to the morals, contrary to good wise is unlawful.” judge the motions summary The court went on to state that a court will attempt judgment. Therefore, lacking any adjudicate rights under an unlaw- refuse to to, connect,the remotely contract even with contract, itself ful and will allow to be the unlawful transaction contemplated by enforcing obliga- instrument of made an the contract would be valid and arising prohib- tions out of an oral contract enforceable. ited law and declared With this disagree. of the trial court we Appellant’s argument finds additional support in the comments in the Tentative inapplicable We think Draft No. Restatement as it refers to Law inasmuch Contracts, provision,” Second on beginning “contract is unlawful. § page 53,5 None of the be- where the Restatement discusses (b) any (1) promise agree- A or other term an forfeiture that would if result en- denied, grounds public is unenforceable on ment forcement were policy legislation provides (c) any special public if is unen- in the en- or if the interest in its enforcement forcement of the forceable term. clearly outweighed (3) weighing public policy against the circumstances In term, policy public the enforcement of forcement account is taken of (a) policy such terms. of that as manifest- legislation decisions, judicial ed (2) weighing the interest in the enforce- (b) the likelihood that refusal enforce term, of a account taken policy, will the term further that (a)the parties’ justified expectations,

«39 we reverse the granting unenforceable when a term is course, is when the summary judgments by the trial court it unenforceable which remand the cases to the court for a trial on The alternative is if the merits. the case here. is not enforcement in its by public DUNN, J., ZASTROW, J., circumstances

outweighed in the concur. which the com- against enforcement policy PORTER, JJ., WOLLMAN concur balancing of the refers to as the mentator specially. in some pointed It was interests. WOLLMAN, is so (concurring special- contravention of Justice cases the involves a ly)- as when an grave, tort, unenforceability is

serious crime Although agree proposi- I do not with the the contravention and in other cases plain, that the tion SDCL 38-14 are preclude plainly trivial that it so to the contracts in applicable question, do *4 enforcement. agree that the eases should be remanded for trial. I concur in the result factors, weighing majority opinion. reached (3), (2) and with subsections accordance in enforcement of the hold that authorized to state am that Justice outweighs public poli- clearly joins special in this PORTER concurrence. As the commen- against enforcement.

cy out, goes point tary involved is a critical factor public policy Even when the balancing process. legislation, is one manifested outweigh the insubstantial

may be too of the term in in the enforcement

interest

question. In its Laws, imposed only Session O’CONNELL, Marilyn Kay M. Walker not until 1977 that and it was O’Rourke, the crimes and Sheri L. Plaintiffs in reclassification of legislature, Appellants, offenses, of- denominated the petty 2 misdemeanor fense a Class jail subject to a minimal making it also HAMM, O’Rourke, Loy L. J. Rober- Janice further feel We sentence. Heathershaw, Lyle A. O’Rourke ta to enforce the that a refusal little likelihood Heathershaw, and Ronald Co-Executors policy. legislative further the contracts will Lytle, Donald D. Estate of De- was the misconduct involved appears that ceased, Respondents. Defendants worst, deliberate, was, its but rather No. 12185. best, and at its based merely negligent knowledge requirement. absence Supreme Court of against enforce- the factors We hold outweighed Argued March 1978. in this case are protecting the law’s traditional parties, its abhor- expectations enrichment, and the any unjust

rence of special public interest

absence of this the enforcement

contract. (d) connection be- (c) in- the directness misconduct seriousness of misconduct and the term. which it was de- tween that the extent to

volved and liberate,