Case Name: CULP v. LOVE
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1900-12-22
Citations: 127 N.C. 457
Docket Number: 
Parties: CULP v. LOVE.
Judges: 
Reporter: North Carolina Reports
Volume: 127
Pages: 457–462

Head Matter:
CULP v. LOVE.
(December 22, 1900.)
■Contracts — Restraint of Trade — Enforcement—Competition.
A contract whereby persons enter into a combination to destroy competition in trade in tbe necessities of life is against public policy and illegal.
Civil ActioN by James P. Culp against R. C. G. Love & Son, and Edgar Love & Co., beard by Judge H. R. Btarbuck .and a jury, at August (Special) Term, 1900, of GastoN Superior Court.
Exhibit A.
Articles of agreement between R. O. G. Love & Son, and Edgar Love & Co., and James P. Culp, made tbis tbe lltb ■day of June, 1896, to go in effect June 15, 1896.
Parties of tbe first part, R. C. G. Love & Son, as also parties of the second part, Edgar Love & Co., hereby bind and ■obligate themselves, parties of tbe first part and second part, to pay James P. Culp, party of third part, monthly, the sum of $15 for the term of seventeen and one-half months, making sum total of $262.50, and in consideration of the above-named sum, $15 per month, for time above-named, seventeen and one-half months, James P. Culp, party of the third part, binds and obligates himself not to sell, or offer for sale, meats, lard, and oil in York County, S. C., Gaston, Lincoln, Catawba, Caldwell, and Cleveland counties, North Carolina, ■during term of this contract. As further consideration to James P. Culp, party of the third part, not to- sell, or offer for sale, meats, lard, or oil, in counties above named, and for term of seventeen and one-half months, R. O. G. Love & Son, parties of the first part, and Edgar Love & Co., parties of the second part, do hereby bind and obligate themselve's not to-sell, or offer for sale, flour in any quantity at wholesale to merchants in excess of two thousand pounds to any one merchant in counties above named, during term of this contract, commencing June 10, 1896, and continuing in full force and effect to January 1, 1898.
It is further promised and agreed by R. C. Gr. Love & Son, parties of the first part, and also Edgar Love & Co., parties of the second part, to obtain for party of the third part, James P. Culp, the sale of Sweetwater Mill Company’s flour, Sweetwater, Tennessee, on line of railroads below named, for the full term of this contract, beginning June 15, 1896, and lasting'until January 1, 1898. Commencing at Pleasant Ridge, on Chester and Lenoir Railroad, including all the towns on said railroad to, and including, Lenoir, N. C.; on Carolina Central Railroad Company, including and beginning at Mount Holly; N. C., with, and including, every town and station between Mount Holly and Rutherfordton, N. C., and also Charlotte and Atlanta Piedmont Air Line Railroad, including and beginning at Belmont, N. C., including each and every town and station between Belmont and Blacksburg, S. C.
It is further agreed and understood that party of the third part, James P. Culp, is not to neglect sale of Cumberland Mills flour for that of Sweetwater Mills, nor is party of third part to push sale of said Sweetwater Mills flour further than it may be to his interest to do so.
It is further agreed by party of the third part, James P. Culp, in consideration of R. C. G-. Love & Son, and Edgar Love & Co., parties of the first and second part, obtaining for him the sale of Sweetwater Mills flour in territory above named, and for term above mentioned, and in further consideration that the said R. C. Gr. Love & Son, and Edgar Love- & Co., are not to sell, or offer for sale, flour at wholesale in excess of two thousand pounds to any one merchant, the said James P. Culp, party of the third paid, is and does hereby bind and obligate himself to divide brokerage with E. C. Gr. Love & Son, and Edgar Love & Co., on any and all sales of flour made for Sweetwater Mill Company during term of this contract in territory named.
In further consideration of the full and faithful performance of this contract, we, the parties of the first part, E. C. Gr. Love & Son, and Edgar Love & Co., parties of the second part, and J ames P. Culp, party of the third part, .do hereby bind and obligate ourselves one to the other the full and faithful performance of this contract, and failure on the part of one of the principals, or his agent, to fulfill this contract to the letter, party,, or parties, violating this contract is due to the other party, and hereby binds himself, ordhemselves, to pay the other party the sum of $500.
Witness our hands and seals, this 11th day of June, 189G.
E. O. Gr. Love & SoN. (Seal.)
Edgar Love & Go. (Seal.)
James P. Culp. (Seal.)
Attest: T. L. CliNtok.
Erom judgment for defendants, the plaintiff appealed.
J ones & Tillett, and A. O. Mangum, for the plaintiff.
Burwell, Walker & Gansler, and D. W. Robinson, for the defendants.

Opinion:
Eaibcloth, C. J.
The plaintiff demancje damages for breach of contract (Exhibit A, in the record). The defendants deny the alleged breach of contract, and rely upon the illegality of the contract as their defense. It is agreed by the parties that at the time the contract was made the plain tiff, Culp, was the agent and broker of the Cumberland Elour Mills, for the sale of their flour, and the defendants were agents and brokers for the Sweetwater Elour Mills (located in Tennessee), for the sale of their flour, and that the flour of the respective companies were competitive brands of flour in the territory mentioned in the contract. In the contract (Exhibit A), the plaintiff, Culp, for a valuable consideration, agrees with R. C. G. Love & Son, and Edgar Love & Co., not to sell meats, lard, and oil in certain territory, including several counties, for a certain number of months, and the said R. C. G. Love & Son and Edgar Love & Co. agree not to sell flour at wholesale in the same territory and for the same period of time. They also agree to obtain for the plaintiff, Culp, the sale of the Sweetwater Mill Company's flour at all the towns on several railroad lines for the full term of this contract. It was further agreed that the plaintiff is not to neglect the sale of Cumberland Mills flour for that of Sweetwater Mills, nor "to push sale of said Sweetwater Mills flour further than it may be to his interest to do." The plaintiff also agreed to divide with the other contracting parties his brokerage on sale of the Sweetwater Mills flour for the same term and in the same territory. The parties then agreed severally to forfeit and pay $500 if either failed to perform his part of this contract. It appears, from the evidence, that defendants notified the Sweetwater Company that they had transferred their agency to sell flour to the plaintiff, but did not inform the Sweetwater Company of the true nature of said contract, Exhibit A. The Sweetwater Company recognized the transferred agency on condition that the plaintiff handle its goods exclusively. In a few months the Sweetwater Company withdrew plaintiff's agency to sell its flour, and plaintiff sues for the penalty and damage. At the close of plaintiff's evidence, his Honor held that plaintiff could not recover. Plaintiff took a nonsuit, and appealed.
Concealing tbe true nature of tbe contract under consideration was a fraud on tbe Sweetwater Company, and contrary to good morals, and tbe combination between plaintiff and defendants to suppress and destroy competition in trade in tbe necessaries of life was an imposition on tbe people and against public policy. Tbe agreement was therefore illegal, and no court of justice will lend its aid to either party to enforce such an executory contract
Tbe objection of a party to an illegal contract does not sound well in bis mouth. It is not for bis sake that tbe objection is allowed, but it is founded in general principles of policy, of which be has tbe advantage by tbe accident of being sued by bis confederate in wrongdoing. "An execu-tory contract, the consideration of which is contra bonos mores, or against tbe public policy, or laws of tbe State, or in fraud of tbe State, or of any third person, can not be enforced in a court of justice." Blythe v. Lovinggood, 24 N. C., 20. In Armstrong v. Toler, 11 Wheat., 258, tbe Court spoke in these words: "The principle of tbe rule is, that no man ought to be beard in a court of justice who seeks to enforce a contract founded in, or arising out of, moral or political turpitude." In Story, Ag., sec. 348, this clear distinction is laid down: "Tbe distinction between tbe cases where a recovery can be had and the cases where a recovery can not be bad of money connected with illegal transactions, which aeems now best supported, is this: That wherever tbe party seeking to recover is obliged to make out bis case by showing tbe illegal contract, or transaction, or where it appears that be was privy to tbe original illegal contract, or transaction, then be is not entitled to recover any advance made by him connected with that contract. But when tbe advances have been made upon a new contract remotely connected with tbe original illegal contract, or transaction, but tbe title of tbe party to recover is not dependent upon that contract, but his case may be provéd without reference to it, then he is entitled to 'recover." In the case before us, it is the illegal contract itself between the parties that we are asked to enforce. The proof shows that defendants agreed not to compete with plaintiff in selling flour, leaving him to demand of the public his own price, and he agreeing not to sell meats, lards, and oil in their chosen territory, and to divide with them his brokerage on sales of the Sweetwater flour, and the Court is called on by one party to make the other party pay money for failing to perform his part of this unlawful transaction. A and R agree to rob C. A does the work; B stands off and simply looks on, and then B calls on the Court to make A divide the spoils; or, if they have stipulated that either one failing to do his part of the nefarious work, shall forfeit and pay the other $500. Has any court of justice ever responded favorably to such request by either party ? Wo do not mean to classify these parties with robbers, or to characterize their transactions other than according to the facts which they have brought out in their case. The intention of the parties is immaterial. They may have thought it permissible to make a shai'p bargain at the expense of the public and injury to a third party, but we can not agree with, or help them, to do so. King v. Winants 71 N. C., 469.
Affirmed.