JACKSON BREWING COMPANY, Appellant,
v.
Jack D. CLARKE, Jr., Appellee.
No. 6669.
Court of Civil Appeals of Texas, Beaumont.
January 30, 1964. Rehearing Denied February 19, 1964.*353 Kelley & Ryan, Houston, for appellant.
McClain & Harrell, Conroe, for appellee.
STEPHENSON, Justice.
Plaintiff brought this action to cancel a claim defendant had against plaintiff for beer sold to him. Defendant filed a cross-action to recover from plaintiff the sales price of the beer. Judgment was rendered for plaintiff upon a finding of the jury to the effect that the indebtendness had been incurred in a transaction which violated the Texas Antitrust laws.
The jury found in answer to the first special issue that the beer was sold by defendant to plaintiff under an agreement that plaintiff would sell the beer only in a limited specific territory, that defendant would not sell beer to anyone else in that same territory and that the beer was to be sold by plaintiff only at a wholesale price fixed by defendant. The jury failed to agree upon the answers to the remaining six issues covering matters of cancellation of the debt, payment of the debt and attorney's fee. The parties will be referred to here as they were in the trial court.
Defendant contends the transactions involved were exclusively in interstate commerce and not subject to the antitrust laws of Texas. It is agreed that all sales made were F.O.B., New Orleans, Louisiana, and that the beer was shipped from New Orleans, Louisiana, to Conroe, Texas.
The plaintiff alleged the agreement under which this beer was sold, was in violation of the antitrust laws of the State of Texas, and was specifically in violation of Articles 7426, 7428 and 7437 of Vernon's Ann.Civ. St. A portion of Art. 7426 reads as follows:
"Art. 7426. `Trusts'
"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:
"1. To create, or which may tend to create, or carry out restrictions in trade or commerce * * * or to create or carry out restrictions in the free pursuit of any business authorized or permitted by laws of this State.
* * * * * *
"5. To make * * * or carry out any contract * * * to preclude a free and unrestricted competition among themselves or others in the sale or transportation of any such article or commodity * * *.
"7. To abstain from engaging in or continuing business, or from the purchase or sale of merchandise, produce or commodities partially or entirely within the State of Texas, or any portion thereof."
A portion of Art. 7428 reads as follows:
"Art. 7428. Conspiracies against trade
"Either or any of the following acts shall constitute a conspiracy in restraint of trade:
"1. Where any two or more persons, firms, corporations or associations of persons, who are engaged in buying or selling any article of merchandise * * * enter into an agreement or undertaking to refuse to buy from or sell to any other person, firm, corporation or association of persons, any article of merchandise, produce or commodity."
Art. 7437 reads as follows:
"Art. 7437. All agreements in violation of, void
"Any contract or agreement in violation of any provision of this subdivision shall be absolutely void and not enforcible either in law or equity."
*354 The contract between plaintiff and defendant was in violation of the antitrust laws of the State of Texas. The granting and accepting of the exclusive right to sell a manufacturer's product, in this case beer, within a given territory, is a violation of the antitrust laws. Climatic Air Distributors of South Texas v. Climatic Air Sales, Inc., 162 Tex. 237, 345 S.W.2d 702.
In the Supreme Court Case, Ford Motor Co. v. State, 142 Tex. 5, 175 S.W.2d 230, a clear restatement of the law is made as follows:
"3. It is a violation of our antitrust laws for one party to enter into a contract with another party, whereby it is agreed that goods or products sold by the one party to the other party for resale in this State shall be resold at fixed or agreed prices, or at prices to be fixed or determined by the original seller. * * *
"4. It is a violation of our antitrust laws for one party to enter into a contract with another party, whereby it is agreed that goods or products sold by the one party to the other party, for resale in this State, shall be resold only in a restricted territory in this State. * * *
"5. Any intentional course of conduct by the parties to a contract which accomplishes the result of enabling the seller to dictate or control the resale price of goods or products sold by him for resale in Texas, or which enables the seller to cause the purchaser to confine his resales to a restricted territory in this State, or which otherwise accomplishes results prohibited by our antitrust laws, violates the same."
There is no merit to the contention of defendant that the transactions involved were exclusively in interstate commerce and therefore not subject to the antitrust laws of the State of Texas. A clear expression as to this proposition is set out in the Supreme Court Case of Segal v. McCall Co., 108 Tex. 55, 184 S.W. 188, as follows:
"The use to which the property may then be put in Texas, and the acts of the vendee in relation to it while in Texas, come under the jurisdiction of the Texas laws. When the contract relates wholly to interstate commerce, only the federal Anti-Trust Act could apply; but when the contract contains more, as in this case it does, than a contract for interstate shipment, and embraces acts to be performed after the completed sale and shipment, which are not essential ingredients of an interstate shipment, it falls within the regulation of state law. * * *"
Defendant contends there was no evidence to sustain the jury's answer to special issue #1. This is a question of law to be determined by considering only the evidence favorable to such finding and disregarding all other. The testimony of witnesses for both plaintiff and defendant showed that defendant did not make written agreements with any of their dealers or distributors, and that the agreement between the plaintiff and defendant, whatever its terms might have been, was not in writing. The plaintiff testified as follows: That at the time he first obtained the Jax beer distributorship in 1948, it was agreed that he would have a specifically defined territory. That it was agreed that he would not sell in any other territory. That it was agreed that defendant would not sell to anyone else, except plaintiff in this territory. That it was agreed plaintiff would sell the Jax beer at the price fixed by defendant. Plaintiff further testified that this agreement continued from the time he first took over the account, and existed at the time of the sale of the Jax beer involved in this suit. That during the time plaintiff had the distributorship defendant did not sell Jax beer to anyone else in this territory, and did set the prices at which plaintiff could *355 sell the beer. All of this testimony supported the answer of the jury to special issue #1.
Defendant also contends this finding of the jury was not supported by sufficient evidence and was so contrary to the great weight and preponderance of all of the evidence as to be manifestly wrong and unjust. This is a question of fact to be determined by considering all of the evidence. Jeff Roberts, defendant's Division Sales Manager, and Lawrence J. Fabacher, defendant's Vice President and Director of Sales, each testified that they had not told plaintiff he could sell only in a certain territory and could not sell in any other territory, and had not told plaintiff what prices to charge when he resold the beer. This testimony was not conclusive in itself, but did no more than raise an issue of fact for the jury to determine.
Where a contract is oral, and there is little evidence as to actual terms of such agreement, evidence as to the action of the parties in carrying out an agreement is not only admissible, but persuasive as to what the parties had agreed to. When questioned on cross-examination, as to what action was taken by the parties, Jeff Roberts testified as follows:
"Q. And Jack Clarke didn't service any accounts; outside of that area, did he?
"A. Not to my knowledge.
"Q. And nobody else but Jack Clarke services that area for Jax beer, did they?
"A. To the best of my knowledge, that would be correct."
As to the question of telling plaintiff at which price he must sell the beer, Lawrence J. Fabacher testified as follows:
"Q. Is it any concern of yours what exact price the ditributor in any particular area may charge in his sales to a retailer?
"A. Well, it's a concern to the extent that we want them to be as competitive as they possibly can."
"Q. And as to the price that the dealer such as Clarke sells to the retailers, there is not anything sent out in writing on that, is there?
"A. We will from time to time suggest certain price increases on their part."
There is no evidence in the record that during the 12 years plaintiff had the Jax beer distributorship, that he sold beer in any except the defined territory, and that defendant sold beer to anyone else except plaintiff. The evidence is not so against the great weight and preponderance of the evidence as to be manifestly unjust.
The point complaining of the action of the trial court in refusing to permit defendant to file a third party petition against W. L. McMillan, was one involving the discretion of the trial court. We do not believe that discretion was abused.
Affirmed.