Hunt v. W. T. Rawleigh Medical Co.

• Decision Date: 26 November 1918
• Docket Number: 7956.
• Citation: 176 P. 410,71 Okla. 193,1918 OK 667
• Parties: HUNT et al. v. W. T. RAWLEIGH MEDICAL CO.
• Court: Oklahoma Supreme Court

176 P. 410

71 Okla. 193, 1918 OK 667

HUNT et al. v. W. T. RAWLEIGH MEDICAL CO.

No. 7956.

Supreme Court of Oklahoma

November 26, 1918

Syllabus by the Court.

An oral admission of a material fact, made by an attorney in his opening statement to the jury, if distinct and formal, and made for the purpose of dispensing with proof of some fact at the trial, is a solemn admission, and binding upon the party making it.

A contract of absolute sale, made by a manufacturer, of its various manufactured preparations, in which the purchaser agrees to sell all goods purchased "at regular retail prices to be indicated by it" (the manufacturer), where its entire product is sold throughout the country only by means of like restrictive contracts, operates as a "restraint of trade," unlawful as to interstate commerce under Act Cong. July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St. 1916, § 8820 et seq.), upon the subject of trusts and restraints of interstate trade.

The courts in the due administration of justice will not enforce a contract in violation of law, or permit a plaintiff to recover upon such a transaction, even though the invalidity of the contract or transaction be not affirmatively pleaded as a defense.

[Ed Note.-For other definitions, see Words and Phrases, First and Second Series, Restraint of Trade.]

Error from County Court, Okmulgee County; Mark L. Bozarth, Judge.

Action by the W. T. Rawleigh Medical Company against Clarence W Hunt and others. Judgment for plaintiff, and defendants bring error. Reversed.

Tillotson & Elliott, of Nowata, for plaintiffs in error.

W. W Wood and W. W. Witten, both of Okmulgee, for defendant in error.

SHARP C.J.

Plaintiff's action was to recover of Clarence W. Hunt, as principal, and W. R. Dawson and I. H. Mayfield, as guarantors, a balance of $826.81 on account of certain bills of merchandise sold Hunt, pursuant to a written contract between him and the plaintiff, the performance of which, it was charged, was guaranteed by the defendants Dawson and Mayfield. The contract in all material respects is identical with the one before us in Stewart et al. v. W. T. Rawleigh Medical Co., 159 P. 1187, L. R. A. 1917A, 1276, and which was held to be a contract in restraint of trade, and unlawful as to interstate commerce under the Anti-Trust Act of July 2, 1890 (26 Stat. 209, c. 647 [U. S. Comp. St. 1916,§ 8820 et seq.]). In defense of the judgment in favor of the defendant in error on the same form of contract condemned in the Stewart Case it is insisted: (1) That as the invalidity does not appear upon the face of the contract, or is not developed by plaintiffs' evidence, the defendants cannot take advantage of its invalidity without specially pleading it; and (2) where the plaintiffs' petition states a cause of action it is error for the court to direct a verdict upon the opening statement of counsel.

The latter point may properly be disposed of first, and will be considered in connection with the contract providing that Hunt should sell no other goods than those sold him by the medical company, which should be sold at regular retail prices, to be indicated by it, and that he should have no other business or employment, and that, if any changes should be made either in the wholesale or retail price of the goods, the company should promptly notify Hunt of such change. At the commencement of the trial counsel for plaintiff stated that the medical company was the manufacturer of extracts, medicines, stock food, and other articles of merchandise and that:

"They do their entire business by giving territories to parties throughout the country, and it is sold by local salesmen. They enter into a contract with a man that he is to sell at a price prescribed by them, and that he should pay them in a certain way, and they sell the goods to him; but he is bound by contract that he must keep their prices, and make payments in a certain way."

On the trial it was established by plaintiffs' evidence that the company had manufactories at Freeport, Ill., Memphis, Tenn., and, for the Canadian trade, at Winnipeg, Canada.

It is a rule very generally observed that an oral admission of a material fact made by an attorney in his opening statement to the jury, if distinct and formal and made for the purpose of dispensing with the formal proof of some fact at the trial, is a solemn admission, and conclusive upon the party making such admission. First State Bank of Keota v. Bridges, 39 Okl. 355, 135 P. 378; Patterson v. Morgan, 53 Okl. 95, 155 P. 694. The latter opinion cites in its support Oscanyan v. Winchester Repeating Arms Co., 103 U.S. 261, 26 L.Ed. 539, wherein, respecting admissions of counsel, it is said:

"In the trial of a cause, the admissions of counsel, as to matters to be proved, are constantly received and acted upon. They may dispense with proof of facts for which witnesses would otherwise be called. They may limit the demand made or the set-off claimed. Indeed, any fact, bearing upon the issues involved, admitted by counsel, may be the ground of the court's procedure equally as if established by the clearest proof. And if in the progress of a trial, either by such admission or proof, a fact is developed which must necessarily put an end to the action, the court may, upon its own motion or that of counsel, act upon it and close the case."

The purpose of the statement was to inform the jury the manner in which the plaintiff transacted business throughout the country, and, being an admission of counsel solemnly made, no proof of the facts so admitted was necessary. As to the manner of doing business and its scope, the statement supplemented the contract. Considered together, the fact of the manner in which the plaintiff carried on its business was quite as fully established as was done by admission in the Stewart Case, in which it was agreed at the trial:

"That the contracts made by plaintiff in the sale of its goods were identical with the Minette contract, and that it sold its products solely by means of such contracts."

In the case at bar with equal effect it was admitted that the company did its entire business throughout the...