Quinlivan v. Brown Oil Co.

Citation29 P.2d 374,96 Mont. 147
Decision Date25 January 1934
Docket Number7181.
PartiesQUINLIVAN v. BROWN OIL CO. et al.
CourtUnited States State Supreme Court of Montana

Appeal from District Court, Yellowstone County; Robert C. Stong Judge.

Action by John R. Quinlivan against Brown Oil Company and another. From an adverse judgment, plaintiff appeals.

Affirmed.

W. L Smith, of Billings, for appellant.

Wood & Cooke, of Billings, for respondents.

STEWART Justice.

The defendant, Brown Oil Company, a corporation, was engaged in the business of wholesale and retail handling and selling of gasoline and lubricating oils at Billings, Mont., where, as owner or lessee, it controlled a number of service stations. The defendant C. H. Brown, as president and manager, had direct charge of the business.

In the spring of 1931, the above-named company leased one of its service stations in Billings to Harold Sayer. The lease provided that the lessor Brown Oil Company should sell the gasoline that passed through the station to the lessee Sayer at a price equal to 1 cent per gallon less than the normal tank wagon price in effect at Billings at the time of delivery. It also contained the following provision: "It is further understood and agreed by the second party [Sayer] that he will maintain the established price for gasoline of the Brown Oil Company at their other service stations in Billings, Mont., and that any attempt to evade this clause shall be just cause for cancelling this agreement and that the first party does reserve the right to cancel this agreement by giving the second party 10 days written notice of their intention of doing so."

Soon after entering into this lease, Sayer entered into a contract with one C. H. Cooke and John R. Quinlivan, doing business under the name of C. & Q. Business Builders. In this contract, C. & Q. Business Builders agreed to sell, and Sayer agreed to redeem, coupon books containing coupons which, upon the making of certain purchases at Sayers' service station, would entitle the purchaser to one gallon of gasoline and/or a lubricating job free, depending upon the type and amount of the purchase made. It was agreed that Sayer would redeem not to exceed 500 of these coupon books.

Upon learning of this agreement, defendants protested to Sayer that such practice tended to reduce the regular retail price of gasoline, and consequently violated that provision of his lease which bound him to maintain "the established price for gasoline of the Brown Oil Company at their other service stations in Billings." Sayer then notified C. & Q Business Builders of the situation and of the objections interposed by defendants, and directed them not to sell any more of the coupon books. He also had a notice published in the local newspaper, stating that he would no longer redeem the coupons. At that time C. & Q. Business Builders had sold 170 of the coupon books, but thereafter were unable to sell any more of them.

Upon this state of facts, plaintiff, as assignee of C. & Q. Business Builders, brought this action against Brown Oil Company and C. H. Brown personally for their alleged interference with the contractual relations between plaintiff's assignor and Sayer. The cause was tried to the court with a jury, and, at the close of the evidence for both sides, the court granted the defendants' motion for a directed verdict. Plaintiff has appealed from the judgment.

Though plaintiff asserts seven specifications of error, it will not be necessary to discuss all of them. All the questions raised can be disposed of upon a determination of whether or not the court erred in sustaining defendants' motion for a directed verdict.

As we view the case, the principal legal point involved in deciding the above question is whether the defendants were legally justified in inducing Sayer to breach his contract with C. & Q. Business Builders. Before passing to a treatment of this subject, however, it will be necessary to dispose of three other questions raised by plaintiff in his specifications of error, viz.: (1) Did defendants' failure to affirmatively plead justification deprive them of the right to assert such a defense at the trial? (2) Was the lease between defendants and Sayer void as in violation of section 10901, Revised Codes of 1921? (3) Did the court err in excluding evidence offered by plaintiff relative to the damages sustained by C. & Q. Business Builders?

Defendants in their answer did not plead any justification. Therefore plaintiff contends that they cannot avail themselves of that defense because it is affirmative matter, and as such, he asserts, it must be pleaded. Certainly this is the general rule. Nelson v. Young, 70 Mont. 112, 224 P. 237; 49 C.J. 294, and cases cited. In this case, however, the plaintiff set out in his complaint (by way of anticipating the defense) the facts which, when denied by defendants in their answer, relieved them of the necessity of affirmatively pleading justification.

Paragraph 5 of the amended complaint reads in part as follows: "*** But the defendants caused and induced the said Harold A. Sayer to violate and refuse to perform the same, by intimidations and threats that unless he did so they would cancel the lease to his said filling station and force him out of business. That the defendants had no right or authority to cancel said lease nor to interfere with the performance of said contract." Thus it appears that plaintiff has set up in negative form the very facts which defendants otherwise would have had to affirmatively plead in their answer in order to avail themselves of such a defense. We hold that when defendants denied the allegations they raised the issue just as completely as though they had affirmatively pleaded the facts relied upon as constituting justification.

In the case of Digen v. Schultz, 65 Mont. 190, 210 P. 1057, 1058, the court said: "It is urged by counsel for plaintiff that waiver is an affirmative defense, which must be set up in the answer. This is undoubtedly the law, when the facts constituting the waiver do not otherwise appear. A waiver of lien is defensive matter which must generally be pleaded in the answer unless it otherwise appears. *** The facts above related, constituting the waiver, are set forth in the plaintiff's complaint, and are also testified to by the plaintiff himself, which may be taken advantage of by the defendant." Likewise, in this case, the facts constituting the justification are set forth in plaintiff's complaint, and are testified to by plaintiff's witness. Hence the defendants cannot be deprived of the right to prove justification as a defense. Digen v. Schultz, supra; First National Bank of Morrill v. Ford, 30 Wyo. 110, 216 P. 691, 31 A. L. R. 1441; Eldridge v. Pierce, 90 Ill. 474; Williams v. Rhodes, 81 Ill. 571; see, also, 49 C.J. 151.

Plaintiff contends that the lease between defendants and Sayer was void as in violation of section 10901, Revised Codes of 1921. The section is a general one dealing with "Unlawful trusts and monopolies." In substance, the statute makes it unlawful for any person to make contracts for the purpose of fixing the price of any article of commerce, or in any way to control or prevent unrestricted competition in the same.

The lease under consideration here binds the lessee to maintain the established price of gasoline of the lessor at its other service stations in Billings. But there is nothing in the record to indicate that defendants and Sayer controlled, or were by the terms of the lease attempting to control, the price of gasoline generally in and around Billings. In reality, all that the defendants did was merely to attempt to protect the sale price of their own product when sold by their lessee through their own station. Such a contractual provision is not void; it is not within the contemplation of section 10901, supra. In a note under this section reference is made to an annotation in 9 Ann. Cas. 906, for authorities upon the "Test of Legality of Combinations in Restraint of Trade." In that annotation numerous authorities on this point are to be found. The case of Merriman v. Cover, 104 Va. 428, 51 S.E. 817, 819, is cited there. In that case the court said: "Whether or not the restraint is reasonable is to be determined by considering whether it is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public."

Again in the case of Over v. Byram Foundry Co., 37 Ind.App. 452, 77 N.E. 302, 304, 117 Am. St. Rep. 327, it was said: "Combinations between individuals or firms for the regulation of prices and of competition in business are not monopolies, and are not unlawful as in restraint of trade, so long as they are reasonable, and do not include all of a commodity or trade, or create such restrictions as to materially affect the freedom of commerce." See, also, Fisher Flouring Mills Co. v. Swanson, 76 Wash....

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4 cases
  • Rocky Mountain Biologicals, Inc. v. Microbix Biosystems, Inc.
    • United States
    • U.S. District Court — District of Montana
    • 30 Octubre 2013
    ...interference so long as its primary purpose is “the honest furtherance of [its] own business enterprise.” Quinlivan v. Brown Oil Co., 96 Mont. 147, 29 P.2d 374, 375 (1934). A party “should be allowed, under the law, to exercise its business judgment to protect its own financial interests fr......
  • Statewide Rent-A-Car, Inc. v. Subaru of America, CV-88-042-BU-PGH.
    • United States
    • U.S. District Court — District of Montana
    • 15 Diciembre 1988
    ...its own financial interests free from liability under the tort of malicious interference with contract. See, Quinlivan v. Brown Oil Co., 96 Mont. 147, 29 P.2d 374, 377-378 (1934); Howard v. Chrysler Corp., 705 F.2d 1285, 1287 (10th Cir.1983); PROSSER, LAW OF TORTS, 5th ed., p. 986 (1984). T......
  • Hoeh v. Kirby
    • United States
    • Montana Supreme Court
    • 2 Enero 1935
    ... ... can be drawn therefrom by reasonable men, the trial court may ... direct a verdict or withdraw the case from the jury ... Quinlivan v. Brown Oil Co., 96 Mont. 147, 29 P.2d ...          The ... motion for a directed verdict is, in effect, a demurrer to ... the evidence, ... ...
  • Taylor v. Anaconda Federal Credit Union, 13175
    • United States
    • Montana Supreme Court
    • 20 Mayo 1976
    ...of a lawful act. Simonsen v. Barth, 64 Mont. 95, 208 P. 938; Burden v. Elling State Bank, 76 Mont. 24, 245 P. 958; Quinlivan v. Brown Oil Co., 96 Mont. 147, 29 P.2d 374. Nothing more being shown than the commission of a lawful act by McLean and the Credit Union the burden was on Taylor to p......

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