Baker v. Fenley et al.

• Decision Date: 03 April 1939
• Docket Number: No. 19416.,19416.
• Citation: 128 S.W.2d 295
• Court: Missouri Court of Appeals
• Parties: OCTAVE V. BAKER, APPELLANT, v. J.B. FENLEY, ET AL., RESPONDENTS.

128 S.W.2d 295

OCTAVE V. BAKER, APPELLANT, v. J.B. FENLEY, ET AL., RESPONDENTS.

No. 19416.

Kansas City Court of Appeals. Missouri.

April 3, 1939.

Appeal from Circuit Court of Callaway County. — Hon. W.M. Dinwiddie, Judge.

REVERSED AND REMANDED (with directions).

H.C.M. Lamkin, W.C. Maughs and X.Q. Lindel for appellant.

(1) A contract between parties and manufacturers or their employees, agents, officers, subsidiaries, or affiliates and a retailer for repayment of money loaned is void and unenforceable. Secs. 13139z-14, page 399, Sessions Act for Missouri for 1935. (2) A court will not enforce an illegal contract. White v. Bass, 3 Cush. 448; Ashbrook v. Dale, 27 Mo. App. 649; Mitchell v. Smith, 1 Binney 110. (3) A court in equity will enforce a penalty when the parties are in pari delicto as a matter of public policy. 2 Pomery's Eq. Jur. (3 Ed.), sec. 941; Hobbs v. Boatright, 195 Mo. 1906; 9 Cyc., p. 550; Clark v. Barnhart, 108 S.W. 436; State v. Hall, 70 Miss. 678.

Baker & Baker, for respondent.

(1) The judgment should be affirmed because plaintiff does not come into court with clean hands according to his own theory of the transaction. Jones v. Jefferson, 66 S.W. (2d), 555, 334 Mo. 606; Abernathy v. Hampe, 53 S.W. (2d), 1090. (2) The judgment should be affirmed because plaintiff neither in his pleadings nor at any time offers to do equity by returning to defendant money received. McNalt v. Maxwell Ins. Co., 50 S.W. (2d), 1040, 330 Mo. 675; Walker v. James, 85 S.W. (2d) 876, 337 Mo. 750; Queen City Ins. Co. v. Kreider, 31 S.W. (2d) 1002. (3) Equity having acquired jurisdiction of subject-matter will retain it to administer full and complete justice and determine all issues, both legal and equitable. Rains v. Moulder, 90 S.W. (2d) 81, 338 Mo. 275; Winning v. Brown, 100 S.W. (2d) 303, 340 Mo. 178. (4) Secs. 13139z-14, page 399, Laws of Missouri, 1935, has no application to a wholesaler such as defendant. (5) Even if such section applies to a wholesaler, it does not declare void the obligation to repay money actually loaned, but only declares void the contract to sell exclusively products of the creditor.

BLAND, J.

This is a suit in equity, seeking to have a promissory note, executed by the plaintiff in favor of the defendants, and a chattel mortgage and deed of trust securing the same, declared null and void, and to have defendants enjoined from taking possession of the property covered by the chattel mortgage and attempting to sell or dispose of the same, and for other relief.

Defendants filed an answer and cross-bill, containing a general denial. The cross-bill alleged that the note was due and unpaid. It asked judgment for the amount of the note with interest; that the judgment be declared a specific lien on the property described in the chattel mortgage and deed of trust and that the mortgage and deed of trust be foreclosed.

The court found the issues against the plaintiff on his cause of action and for the defendants on theirs and entered a judgment for the latter in the amount unpaid on the note and interest and ordered that the chattel mortgage and deed of trust be declared a first lien upon the personal property and real estate, respectively, described therein; ordered that a special execution issue and that said personal property and real estate be levied on by the sheriff; that he proceed to sell the same according to law and sell as much thereof as necessary to satisfy the judgment and costs, and if they did not bring a sufficient sum to pay the same that a general execution be issued in favor of the defendants and against the plaintiff.

The facts show that plaintiff operated a filling station, restaurant and cabin resort in Callaway County, at which he sold 3.2 beer; that defendants, J.B. Fenley and Margaret M. Fenley are husband and wife and were engaged in the business of wholesaler of beers. Plaintiff claims that the evidence shows that J.B. Fenley was in partnership with Margaret M. Fenley. Margaret M. Fenley denied any such relationship and testified that she was in the business alone, but for the purpose of the case, we may assume that such relationship existed between them.

Plaintiff testified that he had a conversation with J.B. Fenley when he was ready to open his place; that he told Fenley that he needed $100 to get a beer license and money for other things; that Fenley told him if he would sell defendants' beer and soda water, exclusively, that he would lend the witness the needed money; that the witness agreed with Fenley to buy, exclusively, defendants' beer and soda water, with the exception of Budweiser and Coca Cola; that Fenley told him that defendants handled Falstaff, Alpen Brau, Green Tree and Capitol beer, all manufactured by four distinct companies, and that defendants were exclusive agents for these types of beer in this "territory."

Thereupon, plaintiff executed to defendants his note dated December 29, 1937 in the sum of $1605.77, bearing interest at the rate of 7 per cent per annum, payable $40 per month on the first day of each month, beginning January 1, 1938. To secure the note plaintiff executed a chattel mortgage upon the furniture, equipment and supplies on hand at his place of business and upon his filling station lease and, also, a deed of trust on certain real estate located in Callaway County (not the land upon which his place of business was situated). This note was given partly for cash needed in plaintiff's business at the time and partly for money to pay bills. It was also given to cover advances to be made by defendants in the future.

It appears that prior to the bringing of this suit the chattel mortgage was foreclosed. It was admitted at the trial that this foreclosure was void. No reason is shown why it was void but for all the record shows it may have been because the foreclosure proceedings were irregular.

Plaintiff testified that he complied with his part of the agreement and purchased only the beers sold by the defendants, with the exception of Budweiser and that he bought none other than their soda water.

The defendant, Margaret M. Fenley, denied that her husband was either her partner or her agent. She testified that he transacted some of her business; that she was a wholesaler of beers; that among the most popular brand of beer was Griesedieck, Country Club and Budweiser and there was nothing in her agreement with the companies whose beer she handled that prevented her from handling these three beers and she could have bought beers from companies making said brands of beer, but she had never attempted to do so; that at one time she handled Sterling ale, Green Tree and Cardinal; that she had no understanding with the Capitol Brewing Company with reference to the exclusive right to sell their beer "in this territory;" that she had no such agreement with the makers of Falstaff or Alpen Brau; that she could sell any one of these beers which she handled to any one who had a permit to sell beer; that her territory was not limited but, was limited in the sense that she could not "go several hundred miles" on account of the expense; that "the company" did not have any objection to her going to Mexico, Missouri, and selling beer; that she sold beer in Mexico, Missouri; that she thought there was someone else there who sold Alpen Brau or Capital Beers; that she sold beer in the territory consisting of Warren, Montgomery, Boone, Audrain and Callaway County; that she never sold any beer in Jefferson City; that she did not sell any across, or south, of the Missouri River because "there are distributors there" and she did "not have a chance to sell over there."

It appears that defendants had not paid all of the items for which the note was given, but had paid everything that was due at the time the suit was tried, except an amount of $50, which they agreed to pay for insurance for plaintiff. This had not been paid because the insurance could not be procured. The evidence shows that plaintiff has paid but $40, or the payment due on January 1st, 1938, on the note.

Plaintiff insists that defendants were guilty of the violation of that part of section 13139z-14 (see Laws 1935, p. 399) providing (in part): "Neither brewers or manufacturers of non-intoxicating beer, or their employees, officers, agents, subsidiaries or affiliates shall, under any circumstances, directly or indirectly, have any financial interest in the retail business for sale of such non-intoxicating beer, nor shall they, directly or indirectly, loan, give away or furnish equipment, money, credit or property of any kind, except ordinary commercial credit for such beer sold to such retail dealers." Section 13139z-20 (Laws 1933, p. 401) provides that "any person violating any of the provisions of this Act shall be deemed guilty of a misdemeanor" and fixes the punishment therefor.

Plaintiff does not claim that defendants, or either of them, were brewers or manufacturers of non-intoxicating beer. He does claim that they were agents, subsidiaries or affiliates of such brewers or manufacturers. "An agency is the legal relation which arises when one party, called the agent, is authorized to represent and act for another party, called the principal, in bringing or to aid in bringing such principal in contractual relation with a third person, however, such authority may be conferred." [Keyser v. Hinkle and Adair, 127 Mo. App. 62, 72, 73.] "An agent is defined to be one who acts for or in the place of another by authority from him, one who undertakes to transact some business or manage some affairs for another by authority and on account of the latter, and to render an...