131 Ky. 551 | Ky. Ct. App. | 1909
Lead Opinion
Opinion of the Court by
Affirming.
Appellee was indicted on June 9, 1909, under the Kentucky anti-trust statute, the indictment reading;
“The grand jurors of the county of Hardin, in the name and; by the authority of the Commonwealth of Kentucky, accuse the International Harvester Company of America, a corporation, of the offense of unlawfully and willfully creating, establishing, organizing, entering into and becoming and being a member and party to and interested in a pool, trust, combine and agreement, and understanding with a number of machine companies, which are independent companies from it for the purpose of controlling and fixing prices of certain articles of farming machinery and repairs, and fixing and controlling the output and number manufactured, committed in manner and form as follows, to-wit: The said International Harvester Company of America, a corporation, in said county of Hardin on the- day of —:-,*557 1906, and before the finding of this indictment being a corporation created under and by the laws of one of the states of the United States of America other than Kentucky, organized for -the purpose and engaged in doing business in Kentucky and other states of said United States, did unlawfully create, establish, organize, enter into, become a member of a party to and interested in a pool, trust, combine, agreement, confederation and understanding with the McCormick Mlachine Company, the Champion Machine Company, the Piano Machine Company, Deering Harvester Company, some of which are corporations and some of which are joint-stock companies but this jury cannot say which are corporations, and which are not, nor can they say who constitute the members of any joint-stock company named or in what state those companies being corporations, are incorporated, and various other companies and' incorporations to this grand jury unknown, for the purpose of controlling and fixing the prices, and limiting the quantity of mowers, reapers, binders, rakes and repairs for same, and various other articles unknown to this grand jury, and binder twine, and said understanding, argreement, arrangement and combine now exists and has existed for some time, and said International Harvester Company of America handles and disposes of such articles in said county. This grand jury does not know and cannot say what state said' company is incorporated in. All business done in said county by all of said companies is done pursuant to said agreement and understanding by said parties against the peace and dignity of the Commonwealth of Kentucky. ’ ’
The statute under which the indictment was returned is section 3915, Ky. St. (Ed. 1903) and is the
Ah act of the General Assembly was passed and approved March 21, 1906, being chapter 117, p. 429, of the Acts of 1906, the first section of which reads: “It is hereby declared lawful for any number of persons to combine, unite or pool, any or all of the crops of wheat, tobacco, corn, oats, hay, or other farm products raised by them, for the purpose of classifying, grading, storing, holding, selling or disposing of same:, either in parcels or as a whole, in order or for the purpose of obtaining a greater or higher price therefor than they might or could obtain or receive by selling said crops separately or individually.”
Appellee demurred to the indictment, on the ground that, as- it failed to show when the offense charged had been committed, it must be presumed that it was at any period covered by the indictment most unfavorable to the prosecution, which would be subsequent to March 21,1906, and prior to the time the indictment was returned. Commonwealth v. T. J. Megibben Co., 101 Ky. 195, 40 S. W. 694, 19 Ky. Law Rep. 291. It was therefore contended by appellee that inasmuch as the act of 1890 made the transaction with which it was charged illegal, and as the act of March 21, 1906, allowed farmers to do the same thing as legal, the defendant was not furnished equal protection under the law's of Kentucky, and that in consequence the act of May 20, 1890, must fail, as the State is forbidden by the fourteenth amendment to the Constitution of the United States from denying equal protection of the laws to all persons within its jurisdiction. The circuit court sustained the demurrer on the ground that discrimination was worked against appellee under the statute, and dismissed the indictment. From that judgment the Commonwealth has prosecuted this appeal for a construction of the law.
Me are satisfied the circuit court was not in error in sustaining the demurrer to the indictment, but that it was in error as to the ground upon which it based its ruling. As the construction of these statutes seems to be important to the Welfare of the State, we here set down our interpretation of them, as reasons for the conclusion at which we have arrived.
The laws of a state, particularly its statutory laws, are such enactments as its legislative, body promulgates, as expounded and applied by its courts. A state statute has such meaning as the judicial department of that state construes it to have. Bank of Hamilton v. Dudley’s Lessee, 2 Pet. 492, 7 L. Ed. 496; Elmendorf v. Taylor, 10 Wheat. 152, 6 L. Ed. 289; Railroad v. Georgia, 98 U. S. 359, 25 L. Ed. 185. This is so, even though, without such judicial construction, the federal courts might have, from the language of the statute, construed it differently. Green v. Neal’s Lessee, 6 Pet. 291, 8 L. Ed. 402; Bell v. Morrison, 1 Pet. 351, 7 L. Ed. 174; Nesmith v. Sheldon, 7 How. 812, 12 L. Ed. 925. It is primarily for each state to say what police regulation it will adopt. In that matter it speaks through its Legis
The last statute is the first to be construed, as it is the latest in date, and as it controls if there is conflict between it and the other statute. Reading it in connection with the act of May 20, 1890, it is perceived the two deal in part with the same subject. When considered literally, they seem to be in conflict. There then exists an ambiguity, an uncertainty as to what the Legislature intended, as the latter does not expressly repeal the former, nor allude to it in terms. Among the aids to which the court may resort in arriving at the legislative purpose in enacting a statute which is ambiguous, is to look to the evil which it was intended to correct. This may be done by resorting to the history of the times, of which the court will take judicial notice. For two decades or more those commercial combinations of capital .and resources for reducing competition in their products so as to realize greater and more certain profits from them, by which monopolies more- or less complete have been created, have attracted wide public attention. They have been the subject of considerable discussion in the press, and of a great deal of legislation, both State and national. The question has become one of
That such' combinations of the capital and resources of competitors in any business whereby they produce a monopoly with which the public must deal, and by reason of which extortion is practiced upon the pub-lie, is admitted everywhere as being highly impolitic, and dangerous in the extreme to the general welfare. Kentucky has taken a part in this general crusade against the evils of the trusts. At a time when much similar legislation was being adopted, and when the subject was comparatively new as a legislative venture, this State enacted the act of May 20, 1890,. already quoted in this opinion. The terms .of that act seem to us to be as comprehensive as it is possible to have made them. The act included every form of combination, by whomsoever entered into in this State, and whatever kind of property, where the object was to “regulate, control or fix” the price of a commodity, and whether the object was successful or not. Notwithstanding, the evils which it was intended by that act to cure were not materially abated in this State. The statute was upon the books, but the conditions remained the same, or became worse. The effect was that many people of this State were being oppressed,, or believed they were being oppressed, by one concern or another operating here in violation of that act.
But to go back a step. Directly after the passage of the act of May 20,1890, something like a year after its passage, a convention was called by the popular vote to frame a new Constitution for this State. Tn the debates leading up to the selection of members of
It was supposed by some that section 198 of the Constitution repealed the act of May 20, 1890. But not so. This court, in Commonwealth v. Grinstead, 108 Ky. 59, 55 S. W. 720, 57 S. W. 471, 21 Ky. Law Rep. 1444, held that that section of the Constitution and' the statute of May 20,1890, were not inconsistent. On the contrary, it was said in the response to a petition for rehearing, at page 76 of 108 Ky., page 471 of 57 S. W.; “The requirement that the General Assembly shall ‘enact such laws as may be necessary to prevent all trusts, pools, ’ etc., leaves to the Legislature the choice of the legislative machinery to effect the required purpose, and necessarily some discretion as to how much machinery will be required to be effective. Both the means to be employed and the extent to which they are to be employed are committed to the discretion of the Legislature; and if, in order to prevent combinations to depreciate or enhance an article below or above its real value, it is necessary to enact laws to prevent all combinations to fix prices, that is a detail of the necessary legislation required. ’ ’ It was further said that the Legislature had refrained from other legislation for the accomplishment of the requirement of the Constitution upon the assumption that the previous act left in force was best calculated to effectuate that purpose.
The evils intended to be suppressed by the Constitution and the statute of 1890 were unabated. Conditions had grown up where the agricultural c’lass in particular were being made the victims of such com
State Constitutions are limitations of power. While a Legislature may enact any statute not prohibited by the organic law, when it reaches that limit it must stop. It was because of that fundamental principle that it was said in the opinion last quoted from, that the Legislature was without power to authorize any set of men to enter into a combination to sell tbeir combined property at greater than its real value. Looking again to that rule of statutory construction which presumes that the Legislature did not intend to enact a void statute, but that it intended to comply with the Constitution, it was also held in the case just cited that the legislative purposes Was to “-enable the farmers to> combine their resources, and place their property in the hands of an agent selected by them, to the end that better prices might be obtained, ’ ’ but not “for the purpose of enhancing the price of an article above its real value.” That construction of the act of 1906 the court now adopts.
But if it should be conceded that the actual purpose of the Legislature was to authorize farmers to pool their property so as to get for it as much, and if possible more, than its real value, and holding, as we do, that such purpose would be in contravention of section 198 of the Constitution as to tlxe latter purpose, still the act of 1906 would not be a nullity. • So far as it was within the legislative power, it would he upheld, and the excess alone would be held invalid. An act of the Legislature of this State created the office of Prison Commissioners, defined their powers and duties and mode of selection, and fixed, their term of office at six years. The Constitution forbade the creation of
Construing the act of 1906 in consonance with section 198 of the Constitution, the question, then is, what is its effect upon the act of 1890 ? When two or more statutes are enacted at different sessions of the Legislature, all having the same subject, the rule is, they are to be treated in pairi materia. It is thus stated in Sutherland on Statutory Construction, section 238: “One who contends that a section of an act must not be read literally must be able to show one of two things: Either that there is some other section which outs down or expands its meaning, or •else the section itself is repugnant to the general purview. The question for the court is, what did the Legislature really intend to direct? and this intention must be sought in the whole' of the act, taken together, and other acts in pari materia.” It is not the custom of Legislatures to declare their purposes as such. Legislation is usually enacted' from time to time bearing on particular subjects. The courts presume that the Legislature intended all its enactments on a given subject to constitute a consistent treatment within constitutional limitations of the whole subject. Provisions of the Constitutions are therefore to be read in conjunction with such statutes, and' all of them, the provisions of the Constitutions, state and federal, and the several enactments of the Legislature,
As, then, the Legislature had left the act of 1890 upon the statute books-, and had enacted the one of 1906, upon the same subject, meaning by it to confer the right upon some for pool their property for the purpose and to the extent not forbidden by .section 198 of the Constitution, we must construe these two statutes and the section of the Constitution together. And, in doing so, we must take into view the fourteenth amendment to the Constitution of the United States, as it also was presumably in the legislative mind in enacting the last statute. If it be construed that the Legislature intended a discrimination between farmers and all others, their enactment would be void. We must reject that view of it, if any other can be made to apply. If, however, it be construed that the act of 1906 operates to confer upon all persons the same benefits, as was intimated in the opinion in Owen County Burley Tobacco Society v. Brumback, supra, then there is no discrimination as that construction is possible under the language employed, and as it would sustain the validity of the act it must be adopted. It therefore follows that appellee and all others have the right under the existing laws in Kentucky to pool their property, or combine their capital and other resources, so a-s to get no more than the r.eal value of their uronerty when sold in the market-
But if it should- be conceded that the legislative purpose Was not to confer upon all others the benefits expressly given to farmers by the act of 1906, what would be the result? An attempted discrimination would result, it is true, but it would be ineffectual as
Appellee relies upon the opinion in Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679. as sustaining the lower court in holding the act of 1890 void because of the subsequent act of 1906. In the Connolly case, Illinois had enacted a drastic anti-trust statute, but in one section excluded agriculturists from its effect altogether. No right was by the statute conferred upon the farmers. On the contrary that was made a crime if done by any person other than a farmer. The statute was not severable. Any combination; except that by farmers of the products of their farms, was penalized. There was no room in the statute for any construction save that of an attempted purposeful discrimination as against all others than farmers. The Supreme Court held that under the operation of the fourteenth amendment all others were entitled to the same protection by the laws of Illinois as the farmers were. As there was no instance in which'the farmer who pooled his farm products would be punishable, it followed that in no instance could others be punished under the State statute for pooling their products. There is a wide difference between that case and the situation we have in hand here. We say that both our statutes apply to the farmer as well as to others, and that both
We are gratified in reaching this conclusion, as we are well satisfied that it more nearly comports with the fixed rules for construing statutes and our Constitutions, as well as more effectually carries out the real purpose of the Legislature, than by holding either that the act of 1906 is void, or that those vast aggregations of capital employed in monopolies that practice extortion in selling commodities to the public, and oppression in buying from the public, are unbridled upon the people of this State to do their worst without liability to punishment.
A final objection is urged against the construction being applied to these statutes, that, when read in conjunction with section 198 of the Constitution, as we have held they now must be, there is such uncertainty in them as to what constitutes a breach of the statutes as to render them void. This is supposed to be so, because, it is argued, there is no way of establishing the “real value” of an article that is fixed and certain; that one jury might say upon a state of facts that the accused was guilty, while another jury upon the same facts would pronounce not guilty; that the accused ought not in justice be left in such uncertainty as to the state of law, as to whether the law made his act a crime. The opinion in L. & N. R. R. Co. v. Commonwealth, 99 Ky. 132, 35 S. W. 129, 33 L. R. A. 209, 59 Am. St. Rep. 457, is relied on. Section 816, Ky. Stats., 1903, made it an, offense for any railroad to charge or receive “more than a just and reasonable rate of toll ’ ’ for the transportation of freight or passengers. That appellant railroad was indicted for having violated the statute. In holding the statute to
There is a marked difference between the qualities of the “real value” of an article and “reasonable compensation” for a service. The latter may depend alone upon the opinion of the trier of the fact; the former is itself a fact susceptible of proof and exact ascertainment. It is not an open question in the criminal law of the land. For example, the larceny of a chattel worth less than $20 is in this State a misdemeanor; if more than $20 in value, it is a felony. Different juries might form different conclusions
When the law endeavors to maintain the real value of an article, it has in contemplation the value of the thing as sold under ordinary, normal conditions, unaffected by any combination of producers or dealers whose object is to create an abnormal condition in that market. If it is argued that this is difficult of proof and uncertain, it must be answered that the difficulty of proving the existence of a fact can not be urged against the propriety of its being established. Nor is the standard uncertain. What the state of a market was immediately before an act, how it was affected by that act, the quantity of the commodity within reach of the market, the normal — that is, the usual — demand for it, are all facts susceptible of proof. They are in fact acted upon every day in the commercial affairs of the world; large business ventures are launched in reliance upon that identical evidence, and, in truth, upon it all commerce depends and is conducted. It is idle to say that that which everybody out of court can know, and does act upon as a fact, is too uncertain to be adopted as a standard,
The application of this principle in law is not new. The Romans had laws based upon it. In 5 and 6 Ed. VI., a statute was passed punishing “forestalling” and “ regrating, ” the first being the buying of merchandise or victual coming to1 market, or dissuading persons from bringing their goods or provisions there, and the latter was the buying of corn or other dead victual in any market, and selling it again in the same market, or within four miles of the place. “Engrossing was described to bd getting into one’s possession, or buying up, large quantities of corn or other dead victual, with intent to sell them again.” Bl. Com. 155. That statute was repealed in the 12th year of George III. But Wharton in his Criminal Law says: “Entirely apart from these statutes, we must hold it to be indictable, on general principles of common law, to engross and absorb any particular necessary staple or constituent of life so as to impoverish and distress the mass of the community for the purpose of extorting, by terror or other coercive means, prices greatly above the real value.” Wharton, Criminal Law, 1851. In Hale’s Pl C., c. 80, it is laid down that to absorb, by fraud or corercion, all of a particular
The indictment in the case at bar should have stated that the purpose or effect of the alleged combination or pool which appellee is claimed to have entered into was to enhance the articles named in the
It is therefore ordered that the judgment be affirmed.
Dissenting Opinion
dissenting. Judge' Barker, Judge Lassing, and I concur in the conclusion of the court affirming the judgment appealed from1; but We do not concur in so much of the opinion as holds that prosecutions may now be maintained under the act of 1890. The Legislature of Illinois passed an act similar to our act of 1890, but by one provision of it exempted from it agricultural products in the hands of the producer. In Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679, it was held •by the Supreme Court of the United States that the' ■ act was void upon the ground that farmers were ■exempted from its operation, and, therefore it could not be enforced against any one. Our act of 1890 did not exempt farmers from its operation, but the act of 1906 expressly authorized farmers to do what was forbidden by the act of 1890. We are unable to see that there is any substantial distinction between an exemption of farmers in the original act, and an exemption of them in a subsequent act. If the provisions of the Constitution of the United States may be evaded by putting the exemption in a subsequent act and not in the original act, they amount to nothing.
It is said, however, that the act of 1906, in so far as it authorizes farmers to pool their products or to combine together to raise the prices of their products beyond their real value, is in conflict with the Constitution of the State; and the act, therefoie, being to
The Legislature realized that the farmers were confronted by an unusual condition ,and that the act of 1890 had failed of its purpose. So concluding, they determined to give the farmers a free hand, and to allow them to fight combination with combination. No one can read thé act of 1906 (though he reads as he runs) without perceiving that the Legislature intended it to apply to corn, wheat, oats, tobacco, cattle, and all other farm products, and that they intended that the farmers should be entirely exempt from the operation of the act of 1890. Section 198 of the Constitution is not self-executing. The Legislature is left to determine when the necessity arises for legislation, and what legislation will best meet the necessity. This was expressly so determined in Commonwealth v. Grinstead, supra. Under the power thus vested in the
The Legislature had undoubted power to repeal the act of 1890, and it could do so without enacting any law in its place. By the act of 1906, it did repeal the act of 1890, so far as farmers and their products are concerned. Nothing is clearer than that the Legislature intended to wipe out the act of 1890 as to farmers and their products. By the first section of the act, combinations and pools as to farm products are declared lawful. By the second section of the act, it is provided that such combinations shall not be declared illegal or invalid. The same idea is again expressed in the third section. The fourth section declares that an emergency exists which requires the act to take effect from its passage. See, also,. Acts 1908, p. 38, c. 8. The things which the act permits and which it declares shall not be illegal are the things which the act of 1890 made illegal. The second act is therefore necessarily a repeal of the first act as to farmers and their products, and no prosecution can now be maintained under the act of 1890 for any combination of farmers in the selling of their products. But under the decision of the United States Supreme Court, this repeal of the act of 1890 as to farmers operates to
Under the rule now declared by the court, it will be a question for the jury in each case whether the combination raised the price above the real value of the article or lowered it below it. It will therefore be a question for the jury in each case what was the real value of the article. The people who make the combinations may suppose that the value which they fix is the real value, while one jury may come to one conclusion on the subject, and another to a different conclusion ; so no man will be able to know whether he has violated the law until after he is tried. In ex parte McNulty, 77 Cal. 164, 19 Pac. 237, 11 Am. St. Rep. 257, it was well said by the Supreme Court of California: “Before one can be convicted of a crime, there must be some rule of action prescribing with some certainty and expressing intelligently the sovereign will.”
By section 816, Ky. Stats., 1903, a penalty was imposed upon a carrier if he charged more than a just and reasonable rate of toll. Holding this statute void in L. & N. R. R. Co. v. Commonwealth, 99 Ky. 136, 35 S. W. 130, 18 Ky. Law Rep. 42 ( 33 L. R.
. This opinion followed the decision of Judge Baxter in the L. & N. R. R. Co. v. Railroad Commission (C. C.), 19 Fed. 679. In Tozer v. U. S. (C. C.), 52 Fed. 917, Justice Brewer thus states the rule: “But in order to constitute a crime, the act must be one which the party is able to know in advance whether it is criminal or not. The criminality of an act can not depend upon whether a jury may-think it reasonable or unreasonable. There must he some definiteness and certainty.5 ’
The same principle was applied in Matthews v. Murphy, 63 S. W. 785, 23 Ky. Law Rep. 750, 54 L. R. A. 415, where the statute authorizing a physician’s certificate to be canceled for unprofessional conduct was held void. In the same way, in Jackson ex parte, 45 Ark. 164, a statute was held void which punished any one who committed any act injurious to the public health or morals or the due administration of the laws. To same effect are Samuelson v. State, 116 Tenn. 470, 95 S. W. 1017, 115 Am. St. Rep. 805, and Cook v. State, 26 Ind. App. 278, 59 N. E. 489.
The real value of a thing is much more indefinite than the expressions used in any of the acts referred to. It may mean the cost of production plus a reasonable profit and allowance for the amount of money invested. But what is a reasonable profit, or what allowance should be made for investment, are too
To steal is an offense. Statutes grading the punishment of the offense according to the amount stolen are universally in force. The value of the* article stolen, though, in such cases is always determined by its market value, a thing which can be* fixed with reasonable certainty. To compare with this the speculation as to what the market value of a thing might be under different circumstances than those existing, is for the court to shut its eyes to the principle upon which the rule of law rests. Where- there is a question of market value or of ordinary care, it may be submitted to the jury in a civil or a criminal ease, because there is no better standard that may be reasonably attained. But when you come to agreements raising or lowering the prices of products, it is very easy for the Legislature to define to what extent such
We, therefore, dissent from the opinion of the court.