Kings Laboratories, Inc. v. Yucaipa Valley Fruit Co.

The plaintiff, a public warehouse company engaged in the business of storing fruit, is a public utility subject to the regulation and control of the Railroad Commission of the state of California, and a rate of seven cents a box for the storage of fresh fruit had been authorized by that commission. In August, 1929, the plaintiff stored a quantity of fresh peaches for the defendant and, at the solicitation of the defendant, agreed to reduce its charge from seven cents to five cents per box. The peaches were removed early the next month and sold. The plaintiff brought this action to collect the amount of the storage charges and the defendant filed what it calls a counterclaim, in fact a cross-complaint, seeking damages because of the deteriorated condition of the fruit. The trial court denied recovery to the plaintiff and entered judgment for $1500 in favor of the defendant. From this judgment the plaintiff has appealed.

The appellant’s main contention is that the judgment in favor of the respondent cannot stand since its cause o.f action is based upon an illegal contract. The alleged illegality consists in the fact that the reduction in the charge, for storage, solicited by the…