J.W. Ripy & Son v. Art Wall Paper Mills

• Decision Date: 25 November 1913
• Citation: 136 P. 1080,41 Okla. 20,1913 OK 694
• Parties: J. W. RIPY & SON v. ART WALL PAPER MILLS.
• Court: Oklahoma Supreme Court

136 P. 1080

41 Okla. 20, 1913 OK 694

J. W. RIPY & SON v. ART WALL PAPER MILLS.

Supreme Court of Oklahoma

November 25, 1913

Syllabus by the Court.

An agreement of a retailer to buy a particular line of goods exclusively from a certain manufacturer thereof, for a limited period of time, and confined to a particular locality, in consideration of other covenants therein of mutual advantage to the parties, and when otherwise unobjectionable under the law, is not invalid because in restraint of trade.

A contract between individuals, the main purpose and effect of which is to promote, advance, and increase the business of those making it, will not be held to be in restraint of trade and commerce merely because its operation might possibly, in some slight or theoretical way, incidentally and indirectly restrict such trade and commerce.

In a suit for a balance due for goods under the terms of a written contract, where the answer admits the execution of the contract and the receipt of the goods at the price claimed and defends on the grounds that the contract is illegal and unenforceable, and was procured through fraud, the burden of proof is on the defendant.

All prior and contemporaneous oral negotiations are merged into a written contract finally entered into, and which fully covers the subject-matter of such negotiations.

Commissioners' Opinion, Division No. 2. Error from District Court, Oklahoma County; W. R. Taylor, Judge.

Action by the Art Wall Paper Mills against J. W. Ripy & Son. Judgment for plaintiff, and defendant brings error. Affirmed.

M Fulton, of Oklahoma City, for plaintiff in error.

E. G McAdams, of Oklahoma City, for defendant in error.

BREWER C.

The Art Wall Paper Mills, a corporation of Dallas, Tex., brought this suit in the district court against J. W. Ripy & Son, a copartnership, to recover the purchase price of certain goods, wares, and merchandise, sold and delivered in pursuance to a certain written contract executed by the parties. We will hereafter refer to the parties as they were called in the trial court. The case was tried to a jury, and a verdict returned in favor of the plaintiffs. The defendants, plaintiffs in error here, bring up the case on case-made, and in their brief seem to rely upon the following alleged errors: First. Overruling defendant's demurrer to the petition. Second. Placing the burden of proof upon the defendant. Third. The exclusion of evidence offered by defendant.

1. The defendants claim that plaintiff's petition is demurrable for the reason that the suit is based upon a certain written contract or trade agreement attached to and made a part of the petition, and which it is alleged shows upon its face that it is an agreement in restraint of trade and commerce, and is therefore void; and, that being void, the plaintiff cannot recover for the goods sold and delivered in pursuance of its terms. The portion of the agreement which it is claimed has the above effect is a provision inserted in it requiring the defendants to handle only the wall papers manufactured and kept for sale by plaintiff during the life of the contract, which was from April 5th to January 5th following. In other words, that the defendants agreed that for the limited period of time named in the contract they would buy all their wall papers from the plaintiff. We do not believe that this agreement has the effect contended for. It is not pointed out, and from a reading of the contract we do not believe it can be pointed out, wherein this contract has the effect of restraining trade, or competition in trade, so as to bring it within the denunciation of the law. The plaintiffs are wholesale dealers in wall paper, and had traveling salesmen in Oklahoma and Indian Territory at the time this contract was made in 1904. The defendants are retail dealers in Oklahoma City. In return for defendant's agreement that for a certain period of time they would buy their wall paper exclusively from plaintiff, and would keep in stock a complete line of the same, the reciprocal agreement was made by plaintiff that its traveling salesmen, in the two territories named, would send their "stock fill in orders" to be filled from defendant's stock, and for which sales they received the profits. If plaintiff was going to give defendants the benefit of certain sales made by its traveling salesmen from samples of its line of papers in stock, it certainly was not unreasonable to require defendants to carry, for the time being, only its line of papers. It seems to us that the effect of this agreement, when all of its terms are considered, is to promote and foster the trade of both parties, rather than otherwise. The contract does not undertake to fix the price at which defendants might sell the goods. It does not restrict the plaintiff from selling its goods to others, nor does it restrict either party from selling goods to any other person or class of persons. The parties themselves are not competitors, nor does the contract affect the competitors of defendants, nor can we see wherein it could injuriously affect the public. We think these views find ample support in the authorities.

An agreement of a retailer to buy a particular line of goods exclusively from a certain manufacturer thereof, for a limited period of time, and confined to a particular locality, in consideration of other covenants therein of mutual advantage to the parties, and when otherwise unobjectionable under the law, is not invalid because in restraint of trade. Threlkeld v. Steward, 24 Okl. 403, 103 P. 630, 138 Am. St. Rep. 888; Trentman v. Wahrenburg et al., 30 Ind.App. 304, 65 N.E. 1057; Brown v. Rounsavell, 78 Ill. 589; Live Stock Ass'n v. Levy, 54 N.Y. Super. Ct. 32; Diamond Match Co. v. Roeber, 106 N.Y. 473, 13 N.E. 419, 60 Am. Rep. 464; Olmstead v. Distilling & C. F. Co. (C. C.) 77 F. 265; Arnold Bros. v. Kreutzer & Wasem, 67 Iowa, 214, 25 N.W. 138; Kronschnabel-Smith Co. v. Kronschnabel, 87 Minn. 230, 91 N.W. 892.

A contract between individuals, the main purpose and effect of which is to promote, advance, and increase the business of those making it will not be held to be in restraint of trade and commerce merely because its operations might possibly, in some slight or theoretical way, incidentally and indirectly restrict such trade and commerce. This view is fully sustained by the Supreme Court of the United States in various decisions.

In Anderson et al. v. United States 171 U.S. 604, 19 S.Ct 50, 43 L.Ed. 300, it is said: "Where the subject-matter of the agreement does not directly relate to and act upon and embrace interstate commerce, and where the undisputed facts clearly show that the purpose of the agreement was not to regulate, obstruct, or restrain that commerce, but that it was entered into with the object of properly and fairly regulating the transaction of the business in which the parties to the agreement were engaged, such agreement will be upheld as not within the statute,...