Thomsen v. Union Castle Mail S. S. Co.

166 F. 251 | 2d Cir. | 1908

NOYES, Circuit Judge.

The plaintiffs brought an action for the recovery of treble damages under the seventh section of the federal anti-trust statute. The case came to trial, and the plaintiffs put in a part of their testimony, when, over their objection, the trial court dismissed the complaint.

In determining whether there was error in this action, it must be assumed that the plaintiffs, had they been permitted to proceed, would have established that which they alleged, unless negatived by their evidence or admissions upon the trial. The complaint alleges, in substance, that the defendants were engaged as carriers in the South African trade, and entered into a combination in restraint of foreign trade and commerce in violation of the act by means of a scheme under which they united as “The South African Riñes,” fixed rates, and shut off outside competition by requiring shippers to pay a percentage in addition to a reasonable freight rate which they should receive back in case — and only in case — they refrained from shipping by other lines. The evidence shows the existence of a “conference” for the purpose of fixing' and maintaining rates and a return “commission” to “loyal” shippers. The manifest purpose of the combination was to prevent competition between members by maintaining uniform rates, and to eliminate the possibility of competition' with other lines by requiring shippers to pay that which was equivalent to forfeit money. The combination, being in restraint of competition in foreign commerce, was in contravention of the federal anti-trust statute. As said by the Supreme Court of the United States in National Cotton Oil Company v. Texas, 197 U. S. 115, 25 Sup. Ct. 379, 49 L. Ed. 689, in speaking of the purposes of the federal and state statutes against combinations :

‘■According to them, competition, not combination, should be the law ol' trade. If there is evil in this, it is accepted as less than that which may result from the unification of interests and the power such unification gives.”

See, also, Northern Securities Case, 193 U. S. 197, 24 Sup. Ct. 436, 18 L. Ed. 679. And if there be any exception to the rule that the purpose of the statute is to preserve competition, it will not be found in a combination of carriers which not only eliminates competition among themselves, but attempts, in the manner shown in this record, to prevent outside competition.

Whether the. restraint of trade imposed by the combination was reasonable or unreasonable is, under repeated decisions of the Supreme Court, immaterial. Whether the combination was entered into before or after the plaintiffs commenced to do business is equally immaterial. The statute applies to continuing combinations. It is as unlawful to prevent a person from engaging in business as it is to drive a person out of business. That the combination was formed in a foreign country is likewise immaterial. It affected the foreign commerce of this country, and was put into operation here. The complaint, therefore, states an unlawful combination — a thing “forbidden or declared to be unlawful” by the act. And the remaining question is whether the plaintiffs were thereby injured in their business or property.

The complaint alleges, in substance, that the plaintiffs were coerced by the unlawful combination into paying a sum in addition to a reasonable freight rate which was held practically subject to forfeiture in case the plaintiffs shipped by other lines or their consignees received freight by other lines. These are allegations of injuries inflicted by the combination. If the plaintiffs were coerced into paying sums of money, in excess of reasonable rates, which were held for the very purpose of preventing that competition which the statute is designed to promote, they were damaged, within the meaning of the statute, to the extent of the sums so paid. Moreover, the complaint contains general allegations of damage which we do not find to have been with-, drawn upon the trial. It may be that the plaintiffs will be unable to establish the essential elements of the claims for damage which they set up. But they are entitled to their opportunity — to their full day in court.

Judgment reversed.