Southfield v. Barrett

[292]

Opinion

TAMURA, J.

This action arises out of a contract between plaintiff and defendant wherein plaintiff and one Prothro (not a party to the action or this appeal) agreed to advance $40,000 to defendant and defendant agreed to harvest and deliver to plaintiff hay to be grown on certain described lands. Plaintiff agreed to market the hay and to credit defendant with the proceeds less certain deductions, including commissions. After partial performance defendant refused to make further deliveries.

Plaintiff sued for breach of contract, money had and received, and account stated. As a special defense to the action defendant pleaded that the contract was illegal in that plaintiff was acting as a commission merchant without a license in violation of the applicable provisions of the Agricultural Code. Pursuant to stipulation the issue of illegality was tried by the court prior to the trial of any other issues. The court determined that the contract was illegal and void and entered judgment that plaintiff take nothing by his complaint. Plaintiff appeals from the judgment.

The issue of illegality was submitted on the following stipulated facts.

The parties entered into the contract on January 11, 1967. It provided that plaintiff and Prothro were to furnish defendant $40,000 on or before February 3, 1967; the payment was to constitute “advance payment" on hay crops to be harvested by defendant from certain described lands comprising about 1,120 acres; plaintiff agreed to market the hay without delay at “fair market price[s]”; plaintiff was to deduct $10.50 per ton for commissions and costs of handling and marketing and the balance was to be applied to the repayment of the $40,000 advance plus $2,000 interest. Defendant harvested and delivered his crops pursuant to the contract until April 15, 1967. On that date he ceased making further deliveries. It was stipulated that in entering into the contract plaintiff was acting as a commission merchant and that at all times mentioned in the complaint he was unlicensed.

Plaintiff suggests that the transaction was a “cash purchase” and, hence, not proscribed by the Agricultural Code. The contention is devoid of merit. The agreement was clearly not a contract of sale; it was an agreement fo sell the hay for defendant on a commission basis. Such transaction by an unlicensed person was proscribed by statute. Section 1263 of the Agricultural Code, then in effect, provided that “[n]o person shall act as a commission merchant, dealer, broker, cash buyer, or agent” without a license (Stats. 1965, ch. 1287,. p. 3169, § 1) and section 1273 provided that any person guilty of so acting without a license was guilty of