Frank A. Menne Factory v. Harback

• Decision Date: 10 February 1908
• Citation: 107 S.W. 991,85 Ark. 278
• Parties: FRANK A. MENNE FACTORY v. HARBACK
• Court: Arkansas Supreme Court

107 S.W. 991

85 Ark. 278

FRANK A. MENNE FACTORY v. HARBACK

Supreme Court of Arkansas

February 10, 1908

Appeal from Sebastian Circuit Court; Daniel Hon, Judge; reversed.

Judgment reversed and remanded.

Charles E. Warner, for appellant.

1. Judgment by default was unwarranted. Kirby's Digest § § 6120, 3151, 6137; 60 Ark. 399. Appellees by their answer had presented issues, first, as to partial payments and second, as to appellant being a member of a trust, and therefore not being entitled to maintain the action; and the burden was on appellees to prove both these issues. Failing therein, appellant would be entitled to judgment. 7 Ark. 475; 72 Ark. 44; 67 Ark. 169; 64 Ark. 446. Where an issue raised by answer is undis-posed of, no valid judgment could be given. 4 Ark. 526; 5 Ark. 197; 23 Ark. 18; 42 Ark. 268. No presumption in favor of a default judgment. 7 Ark. 447; 30 Ark. 487; 4 Ark. 440. Clearly, there could be no judgment in this case without proof. Kirby's Digest § 4240; 25 Ark. 257; 16 Ark. 200; 2 Ill. 390; Id. 391; 78 Ind. 534; 40 Mo. 180. A judgment on the pleadings is proper only in cases where, notwithstanding any proof which might be offered, no other judgment would be sustained by the pleadings. 16 Col. 484; 87 Cal. 78.

2. The demurrer should have been sustained. In seeking to invoke a penal statute, the pleading must set out every fact necessary to constitute the offense, and such pleading is strictly construed. 58 Ark. 39, 43; 145 Ill. 150; 2 Bibb. (Ky.) 225; 3 Id. 96; 40 Mich. 185; 114 Mo. 210; 5 How. (U.S.) 215. The complaint avers that appellant was doing business in Louisville, Kentucky, and this is admitted; and the answer nowhere alleges that it was engaged in business in Arkansas. The statute applies to "any individual, company or corporation transacting business contrary to the provisions of this act within this State," and it was incumbent on appellees to aver such facts as would bring the appellant within the terms of the statute. The insuf-ficency of the second paragraph, or counterclaim, standing alone, is patent. It does not aver that appellant was engaged in the manufacture and sale of candy in Arkansas or was transacting business within the State at all in violation of law; nor that the candy was sold in furtherance of or in connection with any trust, nor at a price fixed by a trust, etc., nor that the sales were made in Arkansas. 70 Ill.App. 544. Where a pleading fails to state a cause of action, a default judgment thereon will be reversed. 76 Cal. 299. See also 86 Pa.St. 32; 90 Id, 277; 107 Id. 578; 88 Wis. 576; 2 Wend. 280.

3 Section 4 of the act does not warrant affirmative relief to the extent claimed here. The counterclaim rests, not upon the context, but upon the proviso in that section, and there is no warrant in the proviso for the Purchaser retaining the goods and also recovering the price thereof, which he had voluntarily paid. 46 Ark. 310; 50 Ala. 365; 24 How. Pr, 249; 20 A. 456; 17 Ill.App. 200; Lewis Sutherland, St. Cons § 351; L. R. 21 Q. B. D. 544; 106 F. 47.

Mechem & Mechem, for appellees.

The demurrers were properly overruled. The allegations of the complaint and answer, taken together, are sufficient to show that appellant was transacting business in Arkansas. The purpose of the anti-trust act is to prohibit the sale by any one under any circumstances of an article to any one in this State when the seller is a party to a combination or conspiracy to regulate or fix the price of that article. Whenever a party to such a trust or combination sells property the price of which has been so unlawfully fixed, it is "transacting business contrary to the provisions of this act." The answer shows that appellant was selling candy in the State, and it was not necessary to aver that it was engaged in the manufacture thereof in the State. Neither was it necessary to aver that it was sold in furtherance of or in connection with an unlawful trust, etc., since the act nowhere makes any such requirement. There was no duty resting upon appellees to return or offer to return the goods. The act places the penalty upon the offender as a matter of public policy, and in effect says that such a sale furnishes no consideration for a payment or a promise to pay the unlawfully fixed price.

2. This was not a judgment by default, within section 6237, Kirby's Digest, but a judgment upon the pleadings, a thing which this court has approved as proper practice. 69 Ark. 118.

OPINION

BATTLE, J.

On October 28th, 1905, Frank A. Menne Factory commenced an action against S. E. Harback and Frank D. Harback, partners doing business under the firm name and style of Harback Brothers, alleging that plaintiff was doing business in Louisville, Kentucky, and that defendants were indebted to it for goods and merchandise in the sum of $ 5,890.56, an account of which was filed; and that an accounting was had between it and defendants, and defendants agreed to pay the $ 5,890.65 with interest from October 25, 1905; and asked judgment for that amount and interest.

The defendants answered as follows:

"Now come the defendants and answer: First. They admit the purchase of the merchandise, as set out in the complaint, but they allege that since the beginning of this suit they have paid on said account some $ 3,600, and they allege that, at the time plaintiff sold said merchandise to defendants, it had entered into and become a member of and party to a trust, agreement, confederation and understanding with divers other parties, firms or corporations, whose names are to defendants unknown, under the name and style of the National Candy Company, to regulate, fix and limit the production of candy in the State of Arkansas and elsewhere, and to regulate and fix the price at which candy should be sold in Arkansas and elsewhere, and the plaintiff sold said merchandise in the State of Arkansas to defendants at a price so fixed in violation of the provisions of an act of the State of Arkansas, approved January 23, 1905, entitled 'An act providing for the punishment of pools, trusts and conspiracies to control prices, and as evidence and prosecution in such cases.' Wherefore defendants say that plaintiff ought not to have or maintain this action for the price of merchandise so sold to the defendants in violation of law.

"Second. Defendants, further answering by way of counterclaim and setoff, say that, since March 23, 1905, they have bought of the plaintiff in Arkansas candy in value amounting to over $ 5,000, for which they have paid plaintiff, and they allege that at the time they so purchased said candy the plaintiff had entered into and become a party to a trust, agreement, confederation, combination and understanding with various persons, firms and corporations, whose names are to the defendants unknown, under the name and style of the National Candy Company, for the purpose of regulating, limiting the amount of candy manufactured, and fixing and regulating the price of candy in the State of Arkansas and elsewhere, which trust, confederation, agreement and combination and understanding was in violation of an act of the State of Arkansas entitled "An act providing for the punishment of pools, trusts and conspiracies to control prices and as evidence and prosecution in such cases," approved January 23, 1905. Wherefore defendants pray judgment against plaintiff for said sum of $ 5,000, so unlawfully received by it and for costs."

The plaintiff demurred to the first paragraph of the answer because it does not state facts sufficient to constitute a defense; and to the second...