Okerberg v. Crable

• Decision Date: 10 July 1959
• Docket Number: No. 41348,41348
• Citation: 341 P.2d 966,185 Kan. 211
• Parties: John I. OKERBERG, Jr., Appellant, v. Robert CRABLE and Carl E. Kersley, Appellees.
• Court: Kansas Supreme Court

Page 966

341 P.2d 966

185 Kan. 211

John I. OKERBERG, Jr., Appellant, v. Robert CRABLE and Carl E. Kersley, Appellees.

No. 41348.

Supreme Court of Kansas.

July 10, 1959.

Rehearing Denied Sept. 8, 1959.

Basil W. Kelsey, Ottawa, argued the cause, and Winton A. Winter, Ottawa, was with him on the briefs for appellant.

John C. Gage, Kansas City, Mo., argued the cause, and William S. Bowers, Ottawa, was with him on the briefs for appellees.

ROBB, Justice.

This is an appeal from the trial court's final judgment in favor of appellees (defendants) against appellant (plaintiff) and from that court's order overruling plaintiff's motions to modify its findings of fact and conclusions of law and for a new trial.

The petition sought a money judgment of $1,229.50 based on a contract entered into by certain independent milk truck operators (haulers) who transported milk in cans from the farms of producers to the Bennett Creamery Company plant in Ottawa. The contract was captioned:

'Milk Route Territory Regulations Covering All Independent Milk Trucks Delivering Milk from Producers to the Bennett Creamery Co., Ottawa, Kansas, February 6, 1957.'

The contract provided, in substance, that milk routes were to be recognized by number and color, and when routes overlapped roads should be colored to denote route territory on a route map to be kept and locked in a glass case in the haulers' office at Bennett's plant; any route change was to be made by not less than 'three committee members' at the request of the haulers desiring the change and with all affected haulers present; a hauler had to serve all producers in his territory who sold to Bennetts and he would be penalized if he forfeited a producer's business; far-reaching routes would be protected from encroachment by new and nearer routes; (the compensation feature of the contract is covered in the trial court's findings of fact appended hereto). The remaining portion of the contract required the regulations to be signed by all haulers and posted with the route map, indicating their acceptance of both.

The contract and route map were in effect for a number of years (the record does not reflect the exact number) but it has been at least since the 1951 flood because a new route map was made up at that time.

In February, 1957, in order to provide for a more modern and efficient method of hauling milk from refrigerated bulk tanks on producers' farms via a hauler's bulk tank truck to Bennetts, an additional paragraph (item 10) was added to the regulations whereby it was agreed that tank hauling rights could be sold and transferred by a can hauler to a bulk tank hauler under one of two proposed payment plans. The payment plan with which we are here concerned was the first, or cash, payment plan, under which cash was to be paid within thirty days after the first bulk tank hauling and was to be computed at the 'minimum rate of 50cents per lb. average of previous 12 months daily average weight.' The average weight was determined by dividing the total pounds of milk produced during the previous twelve months by 365, or if the period was less than twelve months, by dividing the total number of pounds by the number of days shipped. Such sale to a purchasing hauler would be final and binding and without recourse except that if a bulk tank farmer-producer reverted to cans within twelve months, then the territory owner (can hauler) had to refund the prorata share of the purchase price to the bulk tank hauler. If the change back to cans occurred after a year then no refund was to be made but the bulk tank hauling rights were not thereby lost to the tank hauler or his successor.

Item 10 further provided that if a producer who converted from cans to bulk tank had not sold to Bennetts for more than a year, then no payment was to be made by the tank hauler to the territory owner (the can hauler). Item 10 was to be applied to bulk tank milk and did not affect previous can milk regulations. The regulations went with the territory and bound the successor. The Haulers' Committee would decide any bulk tank question not covered by item 10. At least ten haulers were required to call a meeting of route owners and a two-thirds majority of all route owners was required to change the regulations. A total of 34 haulers, including appellant and both appellees here, signed the regulations.

The issues were made up and both appellant and the appellees filed requested findings of fact and conclusions of law. The trial court's comprehensive and complete findings and conclusions, as finally amended, are hereto appended and made a part hereof.

Since the trial court's findings are supported by the evidence, they are conclusive on appeal. Davis-Wellcome Mortgage Co. v. Long-Bell Lumber Co., 184 Kan. 209, 336 P.2d 469. We believe that findings No. 11, 12, 18, and 27 substantially contain the theory set out in the suggested additional findings of appellant submitted in connection with his motion to modify the trial court's findings and we do not deem it necessary to discuss this claim of error.

Without repeating, we are of the opinion the last-mentioned findings establish the fact that there was competition between Bennetts and other plants in the territory in question and that there was competition between the signers of the regulations and the haulers for other plants. This competition was active in the territory under consideration here. If the producer did not wish to use the services of the hauler on his territory, he could haul the milk to Bennetts in his own truck but if he wished to use the services, the hauler was compelled to furnish them.

Under the trial court's findings 7 and 8, which refer to federal regulations controlling this particular business, it is apparent why the parties do not make a material issue as to whether the territory regulations affect the price of milk and its byproducts to the consumer. It is admitted, and the record shows, that the trial court was not confronted with, nor did it determine, any application or effect of the Federal Anti-Trust Laws and by reason thereof we shall not consider them in this appeal. In other words, this court is committed to the rule that it will not pass upon an issue which has not previously been presented to the court below. In re Estate of Cramer, 183 Kan. 808, 816, 332 P.2d 554.

The case was tried and decided by the trial court under two of our 'restraint of trade' statutes. G.S.1949, 50-101 in pertinent part reads:

'A trust is a combination of capital, skill, or acts, by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any or all of the following purposes:

'First. To create or carry out restrictions in trade or commerce, or aids to commerce, or to carry out restrictions in the full and free pursuit of any business authorized or permitted by the laws of this state.

* * *

* * *

'Third. To prevent competition in the manufacture, making, transportation, sale or purchase of merchandise, produce or commodities, or to prevent competition in aids to commerce.

'Fourth. To fix any standard or figure, whereby its price to the public shall be, in any manner, controlled or established, any article * * * of * * * produce or commerce intended for sale, use or consumption in this state.

'Fifth. To make * * * any contract * * * by which they shall bind * * * themselves not to * * * transport any article or commodity * * * of * * * commerce or consumption below a common standard figure; or by which they shall agree * * * to keep the price of such article, commodity or transportation at a fixed or graded figure * * * to preclude a free and unrestricted competition among themselves or others in transportation * * * of any such article or commodity * * * that its price may in any manner be affected. And any such combinations are hereby declared to be against public policy, unlawful and void.'

G.S.1949, 50-112, in part, provides:

'That all arrangements, contracts * * * which tend to prevent full and free competition in the * * * transportation or sale of articles * * * of domestic growth or product of domestic raw material * * * which tend to advance, reduce or control the price or the cost to the producer or to the consumer * * * are hereby declared to be against public policy, unlawful and void.'

In support of their argument that the agreement therein is contrary to public policy, illegal per se, and void, appellees rely on a number of our contract cases and we will examine some of them. The agreement in State v. Smiley, 65 Kan. 240, 69 P. 199, 67 L.R.A. 903; 196 U.S. 447, 25 S.Ct. 289, 49 L.Ed. 546, was entered into by all the grain buyers of a certain market for the express purpose of preventing competition among the buyers. It was for the further purpose and effect of pooling the profits of the grain trade and the formation of a grain trust among the buyers. 65 Kan. at pages 264-265, 69 P. at page 207. State v. Wilson, 73 Kan. 334, 343, 80 P. 639, 84 P. 737, concerned an agreement among the members of an association, which practically controlled the business at a great commercial center, that they would make no purchases or sales for others without charging as a commission for their services at least 50cents for each head of cattle handled. This obviously created a restriction in the full and free pursuit of that business. 73 Kan. at page 348, 84 P. at page 738. In Mills v. General Ordnance Co., 113 Kan. 479, 215 P. 314, a contract providing for the purchase and sale of tractors with the price fixed at which the purchaser should sell the tractors was held illegal because it was violative of the anti-monopoly statutes of this state. The contract involved in McGregor v. Farmers' State Bank, 114 Kan. 356, 219 P. 520, related to a settlement between a borrower and a bank and was held to be void because it was unfair and unjust to their persons, namely, creditors of the bank. A...