169 Mo. App. 374 | Mo. Ct. App. | 1912
(after stating the facts).— Prom the evidence in this case it is clear that our Missouri statutes condemning pools and trusts, now chapter 98, Revised Statutes 1909, and which in section 10,307 provides, that “any purchaser of any article or commodity from any individaul, company or corporation transacting business contrary to any provision of the preceding sections of this article shall not be liable for the price or payment of such article or commodity, and may plead this article as a defense to any suit for such price or payment,” does not apply to this transaction; for that article, by the first section of it, section 10,298, Revised Statutes 1909, limits its application to transactions “in this State.” That it relates solely to transactions in this State has been de
As there is no evidence in the case before us that the purchases and sales under consideration were made other than in Pennsylvania and that the transaction is one involving interstate commerce, a subject over the regulation whereof the laws of the United States, Congress having acted, are exclusive and supreme, the question for our determination here is whether this transaction, pertaining as it does to interstate commerce, was unlawful under what is known as the Sherman Anti-Trust Act. (26 S. at L. 209, 7 Fed. Stat. Ann., p. 336.]
Preliminary to the consideration of this, we are met with the question as to whether, conceding that these contracts and this transaction involved violated the Sherman Act or Law, we have jurisdiction to apply it here as to these contracts, the law violated not being that of the State of Missouri but of the United
Counsel for the Westmoreland Company argues in support of the contention that the enforcement of the rights created by the congressional act was intended to be restricted to the federal courts; that the Sherman Act contains nothing suggestive of a concurrent jurisdiction in the State courts; that the act itself not only impliedly but expressly restricts the enforcement of the rights which it creates to the federal courts, referring to sections 4 and 7 of the act. In support of this Carlisle v. Missouri Pacific Ry. Co., 168 Mo. 652, l. c. 656, 68 S. W. 898, is cited. There it is said that when an act creates a new liability or gives a right of action and at the .same time prescribes the means by which, or the court in which, the right is to be enforced,.resort cannot be had to any other means or court than that prescribed. This, it is claimed, was approved in Wabash Railroad Co. v. Sloop, 200 Mo. 198, l. c. 218, 98 S. W. 607; in Copp v. Louisville & Nashville R. Co., 43 Lou. Ann. 511; in Voorhies v. Frisbie, 25 Mich. 476, and Missouri River Telegraph Co. v. First National Bank of Sioux City, 74 Ill. 217. State ex rel. v. Associated Press, 159 Mo. 410, l. c. 466, 60 S. W. 91, is also relied upon. There at page
Opposing this view, counsel for the receivers in bankruptcy, now respondent, urging his contention that the courts of this State have jurisdiction to construe the Sherman Anti-trust Act and to determine whether or not the contracts here, which are identical with those in the Westmoreland Specialty Company case, were essential parts of a combination and scheme in violation of the Sherman Act, further contends that in construing that act, this court is bound to follow decisions upon it by the Supreme Court of the United States. Citing the sixth article of the Constitution of the United States, which ordains that that Constitution and the laws of the United States made in pursuance thereof are the supreme law of the land and that the judges in every State shall be bound thereby, that counsel concedes that in the absence of a federal statute clothing the State courts with such jurisdiction so to act, that the State court neither can nor should enforce a penal law of the United States as such, and that in so far as the Sherman Act by its terms provides for affirmative relief on the part of individuals and provides that such relief should be obtained by actions brought in the federal courts alone, it may be conceded that the courts of the State would have no jurisdiction to grant such affirmative relief, referring for this to Mondou v. New York, New Haven & Hartford R. R. Co., 223 U. S. 1. Counsel contends, however, that in the case at bar respondent is not seeking to enforce any right or affirmative relief granted to it by the Sherman Act, nor is it seeking to recover a penalty under that act; to the contrary the conten
Counsel further claims that our Supreme Court having held in the case now before us (-Mo.-, 147 S. W. 1031) that this court has jurisdiction to pass on this appeal, it necessarily follows that we have the right to pass on the issue raised in the pleadings, namely, that the cause of action is founded on an agreement that is illegal because in violation of the Sherman Anti-trust Act, and is conclusive as to our jurisdiction.
It is finally.argued by that counsel that under the construction of the Sherman Act by the Supreme Court of the United States, the cause of action of the plaintiffs in these cases arises out of, and is an essential part of, a combination and agreement in violation of that act, and that the courts of this State will grant no relief to a plaintiff whose cause of action is based on a violation of that law of the United States.
Referring to Mondou v. New York, New Haven & Hartford R. R. Co., supra, generally referred to as the “Second Employers’ Liability Cases” (Act of Congress, April 22, 1908, 35 S. at L. 65, c. 149, as amended by Act of April 5, 1910, 36 S. at L. 291, c. 143), it is to be noted that the Sherman Anti-trust Act does not in terms vest concurrent jurisdiction for its enforcement in the State courts, as does .the Employers’ Liability Act. This provision in the Employers’ Liability Act, placed there by the. amendatory act of April 5, 1910, is dwelt upon by Mr. Justice Van Deventer in Mondou v. New York, New Haven & Hartford R. R. Co., supra (1. c. 56), as very persuasive in not only conferring, but enforcing, jurisdiction upon the State courts, contrary to the adverse holding on that point by the Supreme Court of Errors of Connecticut. It is true, however, that Mr. Justice Van Deventer on the same page seems to hold that even without such provision in the Employers’ Liability Act, and by parity of reasoning, even for lack of it in the Sherman Act, the jurisdiction of national and
A very instructive opinion concerning some of the points involved in the case before us is Connolly v. Union Sewer Pipe Co., 184 U. S. 540, the opinion delivered by Mr. Justice Harlan, concurred in by all the members of the court sitting, save Mr. Justice Mc-Kenna, whose dissent was on grounds other than relating to the reference we here make to it. In that case it was held (1. c. 545) that even assuming that a combination is illegal if tested by the principles of the common law, “still it would not follow that they (defendants) could, at common law, refuse to pay for pipe bought by them under special contracts with the plaintiff. The illegality of such combination did not prevent the plaintiff corporation from selling pipe that it obtained from its constituent companies or either of them. It could pass a title by a sale to any one desiring to buy, and the buyer could not justify a refusal to p,ay for what he bought and received by proving that the seller had previously, in the prosecution of its business, entered into an illegal combination with others in reference generally to the sale of Akron pipe.” Mr. Justice Harlan quotes approvingly from Dennehy v. McNulta, 86 Fed. Rep. 825, l. c. 827, that “the mere fact that the corporation, as one of the-contracting parties, may constitute an unjust monopoly, and that its general business is illegal . . . cannot serve, ipso facto,, to create default or liability on its contracts generally; nor can such fact be invoked collaterally to affect in any manner its independent contract obligations or rights. ... In the case of an injurious combination of the nature asserted here, the
Announcing these as sound principles, Mr. Justice Harlan says, at page 549, that the action before the court was not an action to enforce or which involves enforcement of the alleged agreement or combination between the plaintiff corporation and other corporations in relation to the sale of pipe; that the plaintiff, even if part of a combination, illegal at common law, was not for that reason forbidden to sell property it acquired or held for sale. To effect that it would be necessary that the purchaser had necessary and direct connection with the illegal combination; for the contracts between the defendants and the plaintiff could have been proven without any reference to the arrangement whereby the latter became an illegal combination.
We refer to this part of the opinion because it is strenuously urged by counsel for both this appellant and for the Westmoreland Specialty Company that the purchases here involved were wholly distinct from the contract, which latter, it is contended, is merely a collateral promise to pay discounts under certain conditions. We will notice this later.
Disposing of the proposition then in the Connolly case, that the transaction involved was not void and did not prevent a recovery by plaintiff on the princi
In Continental Wall Paper Co. v. Voight & Sons Co., 212 U. S. 227, commonly known as the “Wall Paper Trust Case,” the doctrine' announced in the Connolly case is reaffirmed but held not to apply to the transaction there involved. While the members of the Supreme Court divided on the application of the Connolly case on its facts to the Wall Paper case, there was no dissent on any of the propositions here involved. The general principles there announced are recognized as correct by all the members of the court, even by those who dissented in the Wall Paper Trust case. Mr. Justice Holmes, who delivered the opinion for the minority, cited approvingly not only the Connolly case but that of Chattanooga Foundry & Pipe Works v. Atlanta, 203 U. S. 390, l. c. 397, as deciding
In Whitwell v. Continental Tobacco Co.; 60 C. C. A. 290, 125 Fed. Rep. 454, a decision by the circuit court of appeals of this circuit, it is held that an arrangement or agreement to lessen competition is not within the prohibition or meaning of the Sherman Act. In that case Judge Sanborn, concurred in by Judges Thater and Yan Deventer, says (l. c. 295, 60 C. C. A.; l. c. 459, 125 Fed. Rep.): “The right of each competitior to fix the prices of the commodities which he offers for sale, and to dictate the terms upon which he will dispose of them, is indispensible to the very existence of competition. Strike down or stipulate
Without quoting further from that opinion, we refer to it, not only as to be found in the federal reports but to the extract from it, which includes all that we have quoted, set out by Judge Woodson in State ex inf. Attorney General v. Standard Oil Co., supra, l. c. 407, et seq. There Judge Woodson quoting at great length from it, refers approvingly to it as correctly stating the law, although applied to a case in which a manufacturing corporation “restricted the
In line with the decision in the "Whitwell case is that of Phillips v. Iola Portland Cement Co., 125 Fed. Rep. 593, 61 C. C. A. 19, a decision by the same court, also cited and quoted from in State ex inf. Attorney General v. Standard Oil Co., supra (l. c. 405). There Judge Sanborn says (l. c. 594, 125 Fed. Rep.; l. c. 20, 61 C. C. A.): “It is now settled by repeated decisions of the Supreme Court that the test of the validity of a contract, combination, or conspiracy challenged under the anti-trust law is the direct effect of such a contract or combination upon competition in commerce among the States. If its necessary effect is to stifle competition, or to directly and substantially restrict it, it is void. But if it promotes, or only incidentally or indirectly restricts, competition, in commerce among the States, while its main purpose and chief effect are to foster the trade and enhance the business of those who make it, it does not constitute a restraint of interstate commerce within the meaning of that law, and is not obnoxious to its provisions. This act of Congress must have a reasonable construction. It was not its purpose to prohibit or to render illegal the ordinary contracts or combinations of manufacturers, merchants, and traders, or the usual devices to which they resort to promote the success of their business, to enhance their trade, and to make their occupations gainful, so long as those combinations and devices do not necessarily have a direct and substantial effect to restrict competition in commerce among the States.” Following this the opinion is in line with that in the Whitwell case, supra. We refer to this Phillips case
Applying the principles announced in these several decisions to the evidence in the case and to the contract before us, we are unable to see that it violates the Sherman Anti-trust Law. Referring to that contract, it will be noticed that the first clause of it provides that the “Class Association” and “Keystone Selling Association” will pay, on certain conditions designated in the contract itself, a commission in cash on purchases of certain lines of glassware, crystal and colored, from the members of these associations. The basis for payment of the commission is then set out. It is impossible to say that this clause is in violation of any law, common or statutory. It is no more than a provision that the associated companies, so to designate them, will pay a certain commission on all purchases made by the defendant from any of its members. There is nothing unlawful in that. Then follow the conditions upon which this commission is to be paid. They are four in number: First, that the defendant shall have accepted and paid for all its purchases from members of the two associations in conformity with its established prices and terms. In
It is further to be observed, as said in the Whit-well case, supra, referring to tobacco, that domestic, crystal and colored glassware are “not articles of prime necessity.” Paraphrasing what is said in the Whitwell case by the substitution for “tobacco company” the Glass Association and Selling Association and changing from the singular to plural, these associations “and their competitiors were not dealing in .articles of prime necessity, like corn, and coal, nor were they rendering public or quasi public service, like railroad and gas corporations. Each of them, therefore, had' the right to refuse to sell its commodities at any price. Each had the right to fix the prices at which it would dispose of them, and the terms upon which it would contract to sell them. Each of them had the right to determine with what persons it would make its contracts of sale.” We may here assume that there are competitors of the members of these associations, for so is the testimony, it also appearing that the corporations composing the Keystone and the Glass Association by no means include all the manu
Furthermore, as noted, there is a long list of glass and glassware, over sixty different classes, the classes again subdivided, that are outside of, and not subject 'to, the terms o.f this agreement. That is, as to all these sixty or more classes of glassware, the defendant and all others in like situation, could purchase any of them from anyone.
Nor is there a line of testimony in this case even tending to prove that the purchases “were of domestic, crystal and colored glassware.” These are the particular classes of goods' distinctly covered by the agreement and the only ones. There is nothing whatever to show that the articles purchased by this defendant were not of the excepted line comprised within the designation “ware not subject to commission.” All the information that we have as to the character of these purchases by defendant is the price at which the goods were bought, and that is contained in the exhibit attached to the plaintiff’s petition in the case. That was in evidence. Examining it we find that on dates commencing June 6, 1907, and ending October 9, 1907, outside of the charges for the prepayment of freight by the plaintiff company, paid by plaintiff’s assignor and charged against the defendant, the items are ‘ ‘ glassware. ’ ’ So they are designated, noth
These four are all the conditions of this agreement. The only other clause in the contract is that the agreement is not to be binding on any of the parties unless, accepted in writing by the defendant in the attached .form “by February 1, 1907.” In the cautionary letter, as it might be called, of date August 12, 1907, sent out by the two associations to the defendant, its attention is called to “Condition Two,” which, as before stated, confines the purchases of domestic crystal and colored glassware during the year 1907 to members of the Glass Association and Keystone Selling Association; repeating here, there were excepted from this contract and its conditions over
On application of the decisions of our own Supreme Court and those of the United States Courts, Supreme and Circuit, to this contract, we are unable to agree with the learned trial court that it is in violation of the act of Congress known as the Sherman Anti-trust Law.
The correctness of the account and that it is unpaid is specifically admitted. That being so, and holding that the defense set up by the respondent is unavailable, there is nothing to prevent judgment for plaintiff. [See State ex inf. Attorney General v. Delmar Jockey Club, 200 Mo. 34, l. c. 65, 98 S. W. 539.]
The judgment of the circuit court, heretofore rendered in this cause, is accordingly reversed and the cause remanded with directions to that court to enter up judgment for plaintiff for the amount of the account with interest from the date of the commencement of the action.