96 So. 849 | Miss. | 1923
after stating the facts as above, delivered the opinion of the court.
Appellant contends that the contract in question violates, those provisions of our statute defining unlawful trusts and combines in restraint of trade which declare in substance all contracts, expressed or implied, void and unenforceable in the courts — “between two or more persons, corporations or firms or associations of persons, or between one or more of either with one or moré of the others” in restraint of trade, or to increase the price of a commodity, or to hinder competition in the sale or purchase of a commodity, or to engross or forestall a commodity, or place the control to any extent “of business or the products and earnings thereof in the power of a trustee or trustees by whatever name called,” or by the terms of which any other person or persons than the parties to such contract, or their proper agents and officers, shall be given the power to dictate or control thé management of the business of said parties, or to unite or pool interest in the price of a commodity. Code of 1906, sections 5002 to 5003, inclusive; Hemingway’s Code, sections 3281 to 3285, inclusive.
In considering this question it should be borne in mind that the case before the court is to be found in the allegations of appellee’s bill well pleaded in connection with the bald provisions of the contract involved, and whatever reasonable inferences that may be drawn therefrom. The intent and purpose of the contract is not aided by any pleading on the part of appellant. If our anti-trust statute is to be applied literally, perhaps this marketing contract comes within its provisions. Every member of the appellee association by this contract (which is not only a contract with the association but with each member there
Section 19S, Constitution 1890, commanded the legislature to “enact laws to prevent all trusts, combinations, contracts, and agreements inimical to the púb lie welfare.” (Italics ours.) In obedience to that command we have chapter 145, Code of 1906, sections 5002 to 5021, inclusive, as amended being chapter 69 Heiningway’s Code, sections 3281 to 3285, inclusive. Putting the question differently, is this contract to be condemned even though it be not inimical to the public welfare? We think this question is answered in the negative by the following decisions of this court: Insurance Co. v. State, 75 Miss. 24, 22 So. 99; Y. & M. V. R. R. Co. v. Searles, 85 Miss. 520, 37 So. 939, 68 L. R. A. 715; Tel. Co. v. State, 100 Miss. 102, 54 So. 670, 39 L. R. A. (N. S.) 277; Standard Oil Co. v. State, 104 Miss. 886, 61 So. 981; Sivley v. Cramer, 105 Miss. 13, 61 So. 653-654; Railroad Co. v. Crawford, 107 Miss. 355, 65 So. 462, L. R. A. 1915C, 250; Standard Oil Co. v. State, 107 Miss. 377, 65 So. 468; Id., 104 Miss. 886, 61 So. 981.
Insurance Company v. State, supra, was an indictment under section 1007, Code of 1892, charging the insurance company with a violation of the anti-trust statute, section 4437, Code of 1892, chapter 56, Laws 1896, defining an insurance monopoly. The court held that the indictment was bad because it failed to charge that the effect of the trust was injurious either to some person or the public.
In discussing this question in the Searles case, supra, the court said that all combinations or contracts without regard to their purpose, intent, or effect by which the control of business is placed within the power of trustees or
We think it would be well in this connection to reiterate what was said in part in Telephone Co. v. State, supra.
“When this statute was enacted, it introduced into the law no new definition of what constituted a ‘restraint of trade’ or ‘a monopoly.’ It did not attempt to define either. These are questions to be determined in the light of the facts of each case and under the law relating to same as it stood before the statute was passed; otherwise there is no guide for the persons charged with the enforcement to be governed by. What does the statute mean when it prohibits contracts ‘in restraint of trade?’ Does it mean that any contract which in any way restrains trade shall be illegal? If so broad a meaning should be given to the statute as this, it would involve a destruction and disaster to the commercial world never dreamed of by its authors, and not comprehended within the evil intended to be rectified. The statute only intended to include within its provisions those contracts in restraint of trade, those monopolies, and attempts to monopolize that were invalid as agaiAst public policy before the enactment of the statute, and under such contracts in relation thereto could not be enforced as between the parties. A contract in reasonable restraint of trade was valid before the enactment of the statute, where its design and purpose is not to create a monopoly, and such contract is valid' now. . . . The law as to what it now takes to make a contract in restraint of trade to monopolize or attempt to monopolize any business remains the same, but the parties who may sue and the penalties have been broadened. As
And also what was said, in part, in Railroad v. Searles, supra:
“It is contended that all combinations or contracts, without regard to purpose, intent, or effect, by which the control, to any extent, of business, or of the products and earnings thereof, is placed within the power of trustees, or by which other persons than the contracting parties or their proper officers, agents, or employees are given the power to dictate or control the management of business, are prohibited by the terms of the act. ■ If this narrow construction is in fact the legislative intent, the entire law would be open to the just criticism of being a wholly unnecessary, if not an unwarranted, invasion of the inherent right of the citizen to deal with his own as he pleases, if without injury to others. Gage v. State, 24 Ohio Cir. Ct. R. 724. Carried to its logical conclusion, this argument would prevent any two or more individuals engaged ,in business from employing the same agents or representatives, or from placing in the hands of the same individual the right to control their separate businesses.”
It was held in the first Standard Oil Case, 104 Miss. 886, 61 So. 981, that where a bill was filed in the chancery court to recover the penalties imposed for a violation of the antitrust act, if was necessary for the pleader to charge as a matter of fact that the sales alleged to have been made in violation of chapter 119, Laws of 1908, amending the anti-trust statutes, were for the purpose of destroying competition, and a failure to so allege rendered the bill demurrable. In Railroad Co. v. Crawford, supra, it was held that our anti-trust statute was only intended to embrace within its provisions those contracts in restraint of trade which were invalid as against public policy before
Contracts of co-operative marketing associations with their members similar to the one under consideration, the purposes and corporate powers of which associations were in all substantial respects the same as those of appellee association, have been upheld as not being in restraint of trade in the following cases: Hollingsworth v. Texas Hay Co. (Tex. Civ. App.), 246 S. W. 1068; Anaheim Citrus Fruit Ass’n v. Yeoman, 51 Cal. App. 759, 197 Pac. 959 (hearing by supreme court denied) ; Tobacco Growers’ Co-operative Ass’n v. Jones (N. C.), 117 S. E. 174; Poultry Producers v. Barlow (Cal. Sup.), 208 Pac. 93; Ore. Growers’ Co-operative Ass’n v. Lentz (Or.), 212 Pac. 811; Ex parte Baldwin County Producers’ Corporation, 203 Ala. 345, 83 So. 69; Washington Cranberry Growers’ Ass’n v. Moore, 117 Wash. 430, 201 Pac. 773, 204 Pac. 811; Burley Tobacco Soc. v. Gillaspy, 51 Ind. App. 583, 100 N. E. 89 ; Castorland Milk & Cheese Co. v. Shantz (Sup.), 179 N. Y. Supp. 131; Bullville Milk Ass’n v. Armstrong, 108 Misc. Rep. 582, 178 N. Y. Supp. 612; Burley Tobacco Growers v. Turner (Circuit Court of Kentucky).
Appellant to sustain his contention relies principally upon Kosciusko Oil Mill Co. v. Wilson, 90 Miss. 551, 43 So. 435, 8 L. R. A. (N. S.) 1053; State v. Jackson Cotton Oil Co., 95 Miss. 6, 48 So. 300; Retail Lumber Dealers’ Ass’n v. State, 95 Miss. 337, 48 So. 1021, 35 L. R. A. (N. S.) 1054; Security Co. v. State, 91 Miss. 195, 44 So. 785, 124 Am. St. Rep. 638; Reeves v. Farmers’ Ass’n, 160 Iowa, 194, 140 N. W. 844, 44 L. R. A. (N. S.) 1104; Ludewese v Farmers’ Ass’n, 164 Iowa, 197, 145 N. W. 475; Ga.
Kosciusko Co. v. Wilson and State v. Jackson, supra, are companion eases. In each there was an attempt to create a complete monopoly of the business of buying cotton seed in a fixed territory. The court held that such an arrangement was inimical to the public welfare and violative of the anti-trust statute. Retail Lumber Dealers v. State, supra, involved an agreement to suppress competition. All those who competed with members of the association were sought to be put out of business. Security Co. v. State, supra, involved a holding company which was to be utilized to control competing railroad corporations and thereby fix the fares to be charged the public without regard to their reasonableness. Reeves v. Farmers’ Ass’n, supra, involved a marketing association entirely different from that ci appellee. The principal differences are as follows: The association there was an ordinary corporation organized for pecuniary profit in which voting was allowed by the members on the basis of stock ownership instead of limiting each member to one vote as is done by appellee association. That association bought from and sold to both members and nonmembers; it operated an open market; both growers and non-growers were stockholders. The by-laws of the association provided that a stockholder should be penalized if-he sold his produce to a competitor of the society. The difference between that
“This society was something more than a mere selling agency. It not only acted as a seller, but also purchased, in the open market, from members and nonmembers, alike, save as heretofore stated. ... Of course, a mere selling agency is not a monopoly, and neither the common law nor the anU-trust statute applied to a genuine sales' agency.” (Italics ours.)
Ga. Fruit Exchange v. Turnipseed, supra, was decided by an intermediate court of appeal of Alabama, therefore Ex parte Baldwin County Producers’ Ass’n, supra, holding to the contrary, which was decided by the supreme court of Alabama, is controlling. Cummings v. Union Blue Stone Co., supra, involved a corporation which controlled ninety per cent, of all marketable Hudson blue stone. It was organized for the purpose of fixing prices. The court held that since the association was able to fix arbitrary and unreasonable prices it was illegal. Pocahontas v. Powhatan Coal Co., supra, involved a combination of twenty coke manufacturing corporations which had the exclusive power to fix prices and prescribe other essentials of the business. All competition with others engaged in the same business was destroyed. The court held the combination illegal. In Whitridge v. Mt. Vernon Co., the contract considered was held void because a corporation holding a majority of the stock in a second corporation was making contracts for its own benefit between the second corporation and a third corporation in which it owned all the stock. This was held to be a violation of a trust relationship. The question of the restraint of trade was not'involved nor discussed. People v. Milk Exchange, supra, involved a combination of milk distributors to fix the prices to the consuming public. Prices were actually fixed and the milk market of New York was controlled. The court said that the logical effect of so fixing the prices was to paralyze the production and limit the supply and
It will be seen that this court in construing our statute prohibiting monopolies has applied the rule of reason, as has the supreme court of the United States in con-also the courts of other states in passing on co-operative marketing contracts substantially the same as the one here involved. There must be an unreasonable or undue restraint of trade. It must be such a restraint of trade as is detrimental to the public interest. A statute will not be construed so as to lead to unreasonable or absurd results if that can be avoided. The legislature must be given credit, if the language of the statute in question will permit it, of legislating in the public interest. It is inconceivable that it was intended by our anti-trust statute to condemn any and all contracts between two or more persons which might have the effect to hinder the freedom of trade to the very smallest extent. Such a construction, as it will be seen at once, would lead to absurd results. It would destroy to a large extent the public welfare instead of promote it. The plan of appellee association considered in connection with the marketing and association, contracts between appellee and its members does not undertake to fix prices of long staple cotton. The outstanding purpose is to promote intelligent warehousing and marketing of such cotton. Appellee association goes out in the open market and hunts purchasers who compete against each other. It is simply a sales agency or a plan struing the federal statute
Although the Co-operative Marketing Act (chapter 179, Laws of 1922) does not and could not declare what the public policy of the state was before its adoption, still it ought to be persuasive on the courts as to what was inimical to the public welfare at that time. It embodies the judgment of the legislature recently after the making of the contract involved. By .it all such contracts for the future are declared legal; they are authorized in order to promote what the legislature thought was the public welfare. Was the public interest one thing in September, 1921, when this contract was made, and another thing in the early part of 1922, when this statute was passed? We think not.
Affirmed.