Cox Feedlots, Inc. v. Hope

498 S.W.2d 436, 1973 Tex. App. LEXIS 2527
CourtCourt of Appeals of Texas
DecidedJuly 3, 1973
Docket15185
StatusPublished
Cited by12 cases

This text of 498 S.W.2d 436 (Cox Feedlots, Inc. v. Hope) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cox Feedlots, Inc. v. Hope, 498 S.W.2d 436, 1973 Tex. App. LEXIS 2527 (Tex. Ct. App. 1973).

Opinion

BARROW, Chief Justice.

Appellee brought this suit seeking to recover rebates illegally paid appellant under a contract pertaining to hauling of livestock and commodities, and to recover damages for breach of said contract. It was conceded that said rebates were illegal, and during the course of the trial, the parties stipulated and agreed that $3,600 was owed appellee thereon. The trial court held, as a matter of law, that the contract was clear and unambiguous, and granted appellee an instructed verdict on the issue of liability. The jury found, in response to the single issue submitted, that appellee sustained damages in the sum of $85,000 by reason of appellant’s .breach of the contract. Judgment was entered for the sum of $88,600, and appellant has duly perfected this appeal.

Appellant has presented thirty assignments of error which are briefed under five groups. It urges by ten points that the trial court erred in not granting its motions for instructed verdict and for judgment non obstante veredicto, because the contract was illegal and because of a failure of consideration. It complains by three points of the trial court’s action in construing the contract so as to impose liability on appellant as a matter of law. Appellant complains by five points of the instructions given by the trial court in connection with the damage issue. Specifically, appellant points out that appellee’s permit to haul was cancelled during approximately six months of the period in question, and that the contract was rescinded after about a year of the three-year period in controversy. It also asserts that the trial court erroneously permitted the jury to award a double recovery by the instruction on consequential damages. Eight points complain that the finding of damages is excessive and without support in proper or sufficient evidence in that the testimony of appellee’s expert witness is based on speculation. Finally, appellant asserts by four points that the trial court erred in excluding certain evidence it offered on the damage issue.

The hauling contract sued on was signed on October 30, 1970. Appellant, hereinafter referred to as Cox Feedlots, operated a custom feedlot in Devine. Appellee, hereinafter referred to as Hope, held a Specialized Motor Carrier’s Certificate from the Railroad Commission authorizing him to haul livestock and commodities to and from all points within a 25-mile radius of Hondo. The contract provides in part: “Hope and Cox agree that Hope is to haul all livestock and commodities for Cox to and from the Feed lot owned or controlled by Cox, and to and from other points designated by Cox, up to the capacity of Hope’s men and equipment.”

The principal dispute between the parties was over the construction of this provision. Hope asserted, and the trial court concluded at a pretrial hearing, that as a matter of law, Cox Feedlots was obligated to give Hope first option to haul all livestock and commodities to and from the feedlot owned and operated by Cox Feedlots. Thus, Hope was permitted to project his anticipated earnings over the three-year period based on maximum use of his equipment. On the other hand, Cox Feedlots contended that it was only obligated to give Hope first option to haul all livestock and commodities owned and controlled by Cox Feedlots. It thus sought to show that when cattle owned by a third party were transported to or from the feedlot, Cox Feedlots had no control over who was hired to haul same. In many instances, the owner of the cattle had his own trucks, which were used to haul the cattle; and in other instances, the third party preferred for reasons of his own to use another car *438 rier. The trial court, based on its pretrial construction of the contract, kept out most of this latter type of evidence and granted Hope an instructed verdict on liability.

Paragraph III of the contract provides that Cox was to handle the brokerage work, and was to receive ten per cent of the gross income for such service. In June of 1971, the Railroad Commission determined that such brokerage fee was in reality a rebate in violation of law. The parties did not challenge such construction, and both conceded at the trial that such brokerage fees were illegal rebates. 1 Although Hope continued to haul for Cox Feedlots after the brokerage fees were terminated by the Railroad Commission, the amortnt of hauling given Hope by Cox Feedlots dropped off substantially; 2 and after arbitration failed, this suit for breach of the contract was filed on July 6, 1971.

Cox Feedlots asserts under its first group of points that since the ten per cent provision was an illegal rebate, the contract should not be enforced by the court. Hope affirmatively pleaded the illegality of said provision and sought recovery of the sums retained by Cox Feedlots; however, he urges that the entire contract should not be voided, in that the contract contains a “savings clause” wherein the parties agreed “. . . that if any portion of this Contract is illegal, the remainder of the Contract shall not be affected thereby.” He also asserts that there is other consideration in that Hope agreed to give Cox Feedlots first option on the use of his equipment. Furthermore, Hope was able to borrow $12,000 from a bank on the strength of this contract, and thereby, to discharge a note he had given Cox Feedlots in 1969, when he purchased its trucks and trailers.

The universal rule, which has been consistently followed in Texas and is uniformly set forth by legal treatises and encyclopedias, is that a court will not aid either party to an illegal agreement, whether executory or executed, but will leave the parties where it finds them. Patrizi v. McAninch, 153 Tex. 389, 269 S.W.2d 343 (1954); Yost v. Justin Belt Co., Inc., 488 S.W.2d 850 (Tex.Civ.App. — Fort Worth 1973, no writ); Cain v. Franklin, 476 S.W.2d 952 (Tex.Civ.App.— Austin 1972, writ ref’d n.r.e.) ; Mercury Life & Health Co, v. Hughes, 271 S.W.2d 842 (Tex.Civ.App.— San Antonio 1954, writ ref’d); Herrin Transportation Co. v. Marmion, 113 S.W. 2d 291 (Tex.Civ.App.— Beaumont 1938, no writ); 17 C.J.S. Contracts § 272; 6a Cor-bin on Contracts, Illegal Bargains, § 1521.

One of the recognized exceptions to such rule, and one that is relied upon by Hope to uphold said contract, is that where the consideration for an agreement is made up of several parts, some of which are legal while others are illegal, and the legal portions of the consideration can be separated from the illegal portions, the agreement will be upheld as to the legal portions. 17 Am.Jur.2d Contracts § 231. Hope urges application of such exception here, because of the severability clause in the contract.

Hope was allegedly promised first option to haul for Cox Feedlots all cattle and commodities to the extent of his capacity, for which he was to receive the prevailing Railroad Commission rate. Cox *439 Feedlots also agreed to handle the brokerage work and not to purchase any trucks to compete with Hope.

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Bluebook (online)
498 S.W.2d 436, 1973 Tex. App. LEXIS 2527, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cox-feedlots-inc-v-hope-texapp-1973.