Newby v. W. T. Rawleigh Co.

• Decision Date: 19 April 1917
• Docket Number: (No. 699.)
• Parties: NEWBY et al. v. W. T. RAWLEIGH CO.
• Court: Texas Court of Appeals

194 S.W. 1173

NEWBY et al. v. W. T. RAWLEIGH CO.

(No. 699.)

Court of Civil Appeals of Texas. El Paso.

April 19, 1917.

Rehearing Denied May 17, 1917.

Appeal from Erath County Court; A. P. Young, Judge.

Action by the W. T. Rawleigh Company against W. H. Newby and others. Judgment for plaintiff, and defendants appeal. Reversed and rendered.

Smith & Palmer, of Comanche, for appellants. J. A. Johnson and J. B. Keith, both of Stephenville, for appellee.

Opinion.

HARPER, C. J.

This suit was instituted by "the W. T. Rawleigh Company, a private corporation, against W. H. Newby, principal debtor, and J. F. Newby, L. H. Capell, and M. D. Williford, as sureties, to recover a balance due of $534.88 for certain medicines, extracts," etc., furnished by plaintiff to W. H. Newby and the other defendants in writing guaranteed payment. For defense, it is alleged that: (1) The plaintiff corporation was not authorized to do business in Texas; (2) the contract between the parties is illegal and unenforceable, because violative of the anti-trust laws of Texas. Tried by court without jury, and judgment rendered for plaintiff for the amount sued for with legal interest.

By their five assignments, appellants urge:

(1) The appellee is a foreign corporation without a permit to do business in Texas, therefore cannot maintain the suit.

(2) The undisputed facts being that, as a part of the contract sued on, W. H. Newby was to devote his entire time to selling plaintiff's products and would have no other occupation, such contract is in violation of the anti-trust laws of Texas.

(3) The facts showing that the goods in question were not sold and delivered under the written contract set up in original petition under and by virtue of a subsequent agreement between appellee and W. H. Newby, which provided that the goods should be sold within a certain defined territory and no other, it was in restraint of trade and void under the statute of Texas.

(4) Because the court erred in rendering judgment against the defendants L. H. Capell, J. S. Newby, and M. D. Williford, in that these defendants were only sureties or guarantors for the principal, W. H. Newby, and the plaintiff and said Newby entered other contracts and agreements other than that shown by the written guaranty executed by these defendants, by which other agreements it was contracted between plaintiff and W. H. Newby that said Newby would sell said products of plaintiff company only, and would have no other business or vocation and would sell said products within certain defined and limited territory, within Milam county, Tex., which agreement was without the knowledge or permission of these guarantors, and because thereof these guarantors were discharged from liability on the alleged contract sued on.

Findings of Fact.

The writing in evidence is simply a contract between the foreign corporation and the defendant Newby, with no illegal provisions in it. Following the execution and delivery of this contract and the suretyship contract of even date therewith, and before any goods were shipped, a printed slip, entitled "Territory Selection," was sent to defendant, signed by him; thereupon the first order for goods was sent in. The shipment was held up until the question of the territory was settled.

It is agreed that, after the question of territory was settled, defendant received through the mail a booklet entitled "Guide Book for Rawleigh Men," which contained the following:

"All Rawleigh men have definitely described territories within which each must confine his sales. It is well settled from 8 to 10 townships is large enough to keep the most industrious man busy thoroughly working it three or four times a year. But if more sparsely settled, 10 or 12 townships, and, in extreme cases, even a little larger territory is necessary to give steady employment the year round. * * * When we accepted your contract, it was with the distinct understanding that you would devote all of your time and attention to selling Rawleigh products. Our rules do not permit any Rawleigh man to divide his time, devoting part of it regularly to any other occupation, such as farming, home work, soliciting or anything else which will interfere with the sale of our products. Our reason for this is that our experience teaches that no man can divide his time between this business and some other occupation and make a success of it. No man can successfully serve two masters. No Rawleigh man can thoroughly work his territory, call on all the farmers in it every three or four months and present the large Rawleigh line well and give customers the service and attention their needs require, unless he puts in practically all of his time traveling. And to keep out competition and secure the best results, this is absolutely necessary. So a Rawleigh man must have no other occupation."

Also, a letter containing the following:

"We have a report from our solicitor Mr. J. H. Shore, the substance of which is that you want...