W. T. Raleigh Co. v. Land

• Citation: 279 S.W. 810
• Decision Date: 03 February 1926
• Docket Number: (No. 693-4247.)
• Parties: W. T. RALEIGH CO. v. LAND et al.
• Court: Supreme Court of Texas

279 S.W. 810

W. T. RALEIGH CO. v. LAND et al.

(No. 693-4247.)

Commission of Appeals of Texas, Section A.

February 3, 1926.

Error to Court of Civil Appeals of Sixth Supreme Judicial District.

Suit on contract by W. T. Raleigh Company, an Illinois corporation, against B. B. Land and others. Judgment for defendants was affirmed (261 S. W. 186), and plaintiff brings error. Affirmed.

Thos. P. Steger, of Bonham, and Black & Morrow and Chas. L. Black, all of Austin, for plaintiff in error.

Cunningham, McMahon & Lipscomb, of Bonham, for defendants in error.

Statement of the Case.

NICKELS, J.

Suit was filed by the W. T. Raleigh Company, an Illinois corporation, against B. B. Land, as principal, and G. W. Skinner, G. R. Bobo, and J. T. Graham, as guarantors, in the district court of Fannin county, on the ____ day of ____, 1923, to recover a debt alleged to have been provided for in the instruments to be considered. The defendants alleged that an agreement existed between the company, on the one hand, and the remaining defendants, on the other, of such nature as to be in violation of the state anti-trust laws, thus rendering the contract unenforceable.

The jury in response to a special issue found that Land was restricted to defined territory in making sales of his goods. Thereupon judgment was rendered for the defendants. This judgment was first reversed and rendered, and then, upon rehearing, was affirmed by the Court of Civil Appeals for the Sixth District. 261 S. W. 186.

The case is in the Supreme Court on questions involving the legality of the contract.

Opinion.

1. The paper contemporaneously with which relations between Land and the company began (quoted in full in 261 S. W. 186) contains ten numbered paragraphs. The first is merely formal. The last declares no agreement is made except that contained in the instrument, etc. The remaining parts naturally fall into one or the other of two groups, and they will be considered in that order.

(a) Paragraphs 2 and 3 state Land's desire to purchase "at wholesale" and the company's "agreement to sell," f. o. b. Memphis, Tenn., or Freeport, Ill., or "at any other point agreed upon," "such of its manufactured products as the seller shall hereafter determine to sell to said buyer" at then "current wholesale prices," the "kind and quantity of which is to be optional with the said seller." According to paragraph 5, "the seller will at its option also sell to the buyer a wagon," etc., "for cash" or on credit. If the "buyer" so purchases, then, per the terms of paragraph 4, he "agrees to pay the seller the invoice price." In paragraph 6 it is provided that "either party may, at any time, * * * by written notice, terminate this agreement." Paragraph 8 evidences "agreement" of the company to buy back from Land such goods as "he may have on hand" if Land returns them during or immediately after "the life of the contract." As context of the other paragraphs, this "agreement" is purely contingent upon the will of either party, for Land could have no goods "on hand" unless the company first agrees to sell and Land agrees to buy.

In respect to purchase of goods, etc., the foregoing includes all of the supposed "agreements" and "obligations" of the "contract." Those provisions, obviously, mean only this: If, in the future, Land desires to purchase something from the company, and then orders it, the company will then determine whether it desires to sell anything to Land; if it decides to sell him something, it will then decide the "kind and quantity" of what it cares to sell, and the price and whether "for cash" or on credit; if Land then still desires to purchase that "kind and quantity" at that price and on those terms, he may do so, provided the company does not change its mind at the last moment.

Thus far, the paper is paper, and nothing more. No obligation to sell anything at any time or on any terms, or to do anything else, is laid upon the company, nor is Land bound to buy at all, or to do anything whatever. No right is created and no obligation is declared. The parties are left exactly where they were before. Neither is required to move except at his own will. Hence, there is no contract here. "It is nothing more than a contract to enter into a contract, in the future if the parties can then agree to contract." Weegham v. Killefer (D. C.) 215 F. 170. And no right of action can be predicated on it. Williams v. Phelps (Tex. Civ. App.) 171 S. W. 1100; Hume v. Bogle (Tex. Civ. App.) 204 S. W. 673; Bean v. Holmes (Tex. Civ. App.) 236 S. W. 120; Gordon v. Emerson Shoe Co. (Tex. Civ. App.) 242 S. W. 795; Cold Blast T. Co. v. Nut Co., 114 F. 77, 52 C. C. A. 25, 57 L. R. A. 696; Rutland Marble Co. v. Ripley, 10 Wall. 339, 19 L. Ed. 955; Metropolitan Exhibition Co. v. Ewing, 42 F. 198, 7 L. R. A. 381; Bijur Co. v. Eclipse Co., 243 F. 604, 156 C. C. A. 298; Manning v. Ayers, 77 F. 690, 23 C. C. A. 405; Stagg v. Compton 81 Ind. 171; 9 Cyc. 245; 13 C. J. p. ___, §§ 100, 101; Elliott on Contracts, vol. 1, § 175.

But the spectacle of men thus solemnly covenanting about nothing involves more than transparent folly. It indicates use of language to conceal thought. And this, in turn, invites close scrutiny of what is left of the paper.

(b) Paragraph 7 declares that "if dealings conducted hereunder are mutually agreeable," a "new contract" may be made for the next year. This, of course, is wholly without sense, if considered as an attempt to define a right or obligation; but, as a threat and warning of what will happen unless Land conducts himself "agreeably" and "satisfactorily" it has a measure of reason. Its prophetic application is to things next appearing.

The balance of the instrument (with an exception to be noted) is in paragraph 9, which reads thus:

"It is mutually understood that the seller will furnish the buyer, from time to time, with educational salesmanship literature, consisting of Raleigh's Weekly, Guide Book, and other booklets, bulletins, leaflets, and letters of advice and suggestions, for the sole purpose of aiding and assisting buyer in making sales and collections; but it is expressly agreed that nothing contained in any of the aforesaid literature, letters, booklets, bulletins, leaflets, etc., shall be taken in any wise to alter, modify, change, or affect this agreement, and shall only be considered as educational and advisory; and it is further expressly understood and agreed that any advice or suggestions contained therein is not to be considered by the buyer as orders, directions or instructions, nor in any way binding on him; it being mutually and fully understood and agreed that the said buyer is not, nor never has been, an agent or representative of the seller, but in business strictly for theirself."

Here is an expressed promise by the company to furnish "educational salesmanship literature" to Land, "from time to time," and a plainly implied promise by Land to receive the "literature" and ponder its "advice and suggestions" in connection with his resale business. To this mutual agreement is coupled the proviso that "advise and suggestions" are not to be considered as binding on Land. The proviso, of course, is without meaning, except as a self-serving declaration of intent whose prima facie evidential value, if any, is greatly diminished by the patent efforts at concealment and wholly destroyed (or rather turned against the parties) if in fact a bad purpose appears in the execution of the agreement. We say it is otherwise meaningless, because Land was not at all obligated to buy, nor was the company bound to sell; consequently, the "literature" could have no present "binding" effect as against his will.

The declared purpose of the agreement to furnish, receive, and consider the "literature" is to "aid and assist" Land in making sales, etc., of such goods as he may have bought of the company. If the communication advised or suggested the doing or omission of acts by Land, and thereupon, or by reason thereof, he decided to do those acts, an agreement between him and the company was accomplished. The company says to Land:

"We are mutually interested in the success of your business; we agreed long ago that it was our right and duty to advise you, and make suggestions, so as to aid and assist you in making sales; hence, we believe you will make more or better sales and thereby make more money for all of us, if you will do thus and so, and we therefore, in virtue of our right, duty, and interest, advise and suggest you do that thing."

Land desires to stay in business. The company, in virtue of law, has the right (which it also declared in words) to terminate relations at will, and of this right Land has knowledge. He remembers, also, the company has already said that unless he shall be "agreeable" and his dealings "satisfactory" it will have no business with him next year. He thinks, also, that the method proposed will, if adopted, redound in profit. He readily contributes (by word and act) new acceptance of the proposition embraced in the suggestion as it was contemplated he would do. What was mutually intended (thus agreed to) ab initio sequently appears in practically interpretive conduct. State v. Racine Sattley Co., 63 Tex. Civ. App. 663, 134 S. W. 400, 404; State v. Livestock Exchange, 211 Mo. 181, 109 S. W. 677, 124 Am. St. Rep. 776. Thereupon perfection of the arrangement (contemplated and provided for in futuro in the instrument) is wrought.

If the subject-matter and object are lawful, an enforceable contract is made. If the purpose be unlawful, it prevents enforceability of the obligation, but it does not remove or terminate the agreement (combination) itself. The true purpose, as well as details of its achievement, not being clearly or fully defined in the writing, they are supplied extrinsically by proof of what the parties said and did in its execution, despite what the paper says about the all-comprehensiveness of its provisions....