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Statement of the Case.

[57 L. Ed. 393."]

[MONOPOLY-COMBINATION IN RESTRAINT OF TRADE-PATENTED ARTICLES.-A contract by which a corporation, manufacturing dairy .supplies under various patents owned by it, and selling them throughout the United States, constituted another corporation its exclusive sales agent, and fixed the list price of its products, does not violate the prohibition of the act of July 2, 1890 (26 Stat. at L. 209, chap. 647, U. S. Comp. Stat. 1901, p. 3200), against combinations in restraint of commerce.

For other cases, see Monopoly, II. b, in Digest Sup. Ct. 1908. MONOPOLY-COMBINATION IN RESTRAINT OF TRADE-TREBLE DAMAGES.A corporation manufacturing dairy products under patents owned by it is not chargeable with participation in a combination formed contrary to the act of July 2, 1890, by its exclusive sales agent and other manufacturers and dealers, so as to render the corporation and its agent liable under the treble damage clause of 7 of that act to persons joined as defendants in simultaneous patent infringement suits separately brought by such principal and agent, either because the sales agency contract, which antedated the illegal combination, provided that the manufacturer should protect the agent from all suits for infringement, should defend the validity of the patents, and promptly attack infringers, or because of a supplementary contract for the settlement of claims growing out of reciprocal charges of infringement which has no other connection with the unlawful combination than that some of the claims were against corporations which were parties to that unlawful agreement, or because of any negotiations preceding the execution of the sales agency contract which have for their inducement and object the settlement of controversies and rights growing out of earlier contracts, or because of the simultaneous bringing of the infringement suits.

For other cases, see Monopoly, II. a, in Digest Sup. Ct. 1908. APPEAL SCOPE OF REVIEW-QUESTION NOT RAISED BELOW. A Contention not made either in the Circuit Court or in the Circuit Court of Appeals, and which is contrary to the theory on which the case was tried, will not be considered by the Federal Supreme Court.]

For other cases, see Appeal and Error, VIII. j. 3, in Digest Sup. Ct. 1908.

The facts, which involve the construction of § 7 of the Sherman Anti-Trust Act and what constitutes an illegal combination thereunder, are stated in the opinion.

• The paragraphs following, in brackets, comprise the syllabus of the case in volume 57, page 393, Lawyers Edition, Supreme Court Reports. Syllabus copyrighted, 1912, 1913, by The Lawyers Cooperative Publishing Company.

Argument for Plaintiff.

Mr. Harlan E. Leach, with whom Mr. James F. Williamson and Mr. James A. Tawney were on the brief, for plaintiff in error:

It is not necessary to prove the commission of any tort, wrongful act or crime on the part of defendants, aside from what is prohibited by the terms of the Sherman AntiTrust Act, in order to make the defendants liable [10] in damages to the plaintiffs in this action. Loewe v. Lawlor, 208 U. S. 274; Montague v. Lowry, 193 U. S. 38; Chattanooga F. & P. Works v. Atlanta, 203 U. S. 390; Jayne v. Loder, 149 Fed. Rep. 21; Wheeler-Stenzel Co. v. National Window Glass Ass'n, 152 Fed. Rep. 864; S. C., 10 L. R. A. (N. S.) 972; Penn. Sugar Co. v. Am. Sugar Co., 166 Fed. Rep. 254; People's Tobacco Co. v. Am. Tobacco Co., 170 Fed. Rep. 396; Monarch Tobacco Works v. Am. Tobacco Co., 165 Fed. Rep. 774; Swift v. United States, 196 U. S. 395.

The act of combining-the concerted action-is unlawrul in itself, and is the basis of a cause of action for damages. Loewe v. Lawlor; Swift v. United States; Penn. Sugar Co. v. Am. Sugar Co.; Jayne v. Loder, supra; Aikens v. Wisconsin, 195 U. S. 194; Ellis v. Inman, 131 Fed. Rep. 182.

It is not necessary that the act which caused the damage should be anything in itself prohibited by the AntiTrust Act. It is not necessary that it be a step in the formation of the "contract," "combination," or "conspiracy," or a step in the attempt to secure monopoly. It is sufficient if such an act originated in, or was directly associated with, the motives which were the cause of the contract, combination, conspiracy, or attempt to secure monopoly. Chattanooga Works v. Atlanta, 203 U. S. 390.

Plaintiffs in error were engaged in interstate trade and commerce. Loewe v. Lawlor; Montague v. Lowry; Penn. Sugar Co. v. Am. Sugar Co., supra; Shawnee Compress Co. v. Anderson, 209 U. S. 423.

Every agreement or transaction whose direct effect is to destroy or prevent competition is in restraint of trade. Northern Securities Co. v. United States, 193 U. S. 197; United States v. American Tobacco Co., 164 Fed. Rep, 700; Shawnee Compress Co. v. Anderson, 209 U. S. 423; United

Argument for Plaintiff.

States v. Trans. Mo. Freight Ass'n, 166 U. S. 290; United States v. Joint Traffic Ass'n, 171 U. S. 505.

[11] A scheme or contract whereby a corporation disposes of its business, and agrees to ever thereafter remain out of business, is illegal and void, under the Sherman Anti-Trust Act. Shawnee Compress Co. v. Anderson, 209 U. S. 423.

A combination has obtained a monopoly when it has reached a position where it can control prices and suppress competition. United States v. Am. Tobacco Co., 164 Fed. Rep. 700, 721.

Where the necessary and direct effect of the combination is to restrain trade or effectuate a monopoly, the intent is immaterial. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211.

But where acts in themselves are not directly in restraint of trade or do not directly tend toward a monopoly, or are only an attempt, the intent of the parties becomes material. Swift v. United States; Loewe v. Lawlor, supra; Penn. Sugar Co. v. Am. Refining Co., 166 Fed. Rep. 254; Bigelow v. Calumet & Hecla Co., 167 Fed. Rep. 704, 709.

In cases of conspiracy it is always permissible to allege and prove the history and various steps culminating in the final conspiracy, even though the previous steps were separate and distinct offenses, if they tend to throw light on the present conspiracy and to show the intent with which the final acts were committed. Wharton on Criminal Ev., § 32; Greenleaf on Ev., § 111; 8 Cyc., pp. 677, 678, 684; Swift v. United States, 196 U. S. 395; United States v. Greene, 115 Fed. Rep. 344; Lincoln v. Claflin, 7. Wall. 132; Mut. Life Ins. Co. v. Armstrong, 117 U. S. 598; Moline-Milburn Co. v. Franklin, 37 Minnesota, 137.

A person or corporation joining a conspiracy after it is: formed, and thereafter aiding in its execution, becomes from that time as much a conspirator as if he originally designed and put it in operation. United States v. Standard [12] Oil Co., 152 Fed. Rep. 294; Lincoln v. Claflin, 7 Wall. 132; United States v. Babcock, 24 Fed. Cas. 915, No. 14,487; United States v. Cassidy, 67 Fed. Rep. 698, 702; The Anarchist

Argument for Plaintiff.

Case, 122 Illinois, 1; United States v. Johnson, 26 Fed. Rep. 682, 684; People v. Mather, 4 Wend. 230.

The contract of February 24, 1898, being illegal and void, the defendant Creamery Company obtained no title to the letters patent sued on in the infringement suit brought by it against the plaintiffs herein, it having acquired such patents, if at all, by said illegal and void contract or the assignments executed pursuant to its terms and as a part of the same illegal scheme. McMullen v. Hoffman, 174 U. S. 639; Connolly v. Union Sewer Pipe Co., 184 U. S. 540; Continental Wall Paper Co. v. Voight, 212 U. S. 227; Dunbar v. Am. Tel. & Tel. Co., 87 N. E. Rep. 521; Thomson v. Thomson, 7 Ves. 468; Levy v. Kansas City, 168 Fed. Rep. 524.

That the Creamery Company held assignments of the patents valid on their face will avail nothing; the court will look into the whole transaction. McMullen v. Hoffman, 174 U. S. 639.

The Creamery Company could not establish its cause of action in the infringement suit without relying on the illegal agreement, for it had to set up and prove its title to the patents sued on, and could only do this by bringing in the assignments which were a part of the illegal scheme. McMullen v. Hoffman, 174 U. S. 639; Continental Wall Paper Co. v. Voight, 212 U. S. 227.

An interlocutory decree in a patent infringement suit, providing for an injunction and ordering an accounting and sending the case to a referee to ascertain the amount of damages, has no force as an adjudication in any other action. The decree must be a final decree to have such effect. The decree in the suit brought by the defendant Creamery Package Manufacturing Company against these [13] plaintiffs was only interlocutory. Further, the questions of monopoly, restraint of trade, and lack of title are new in this action, and were not litigated or at issue in the patent infringement suit, as shown by the pleadings in the patent infringement suit set forth in full in the complaint in this action. Harmon v. Struthers, 48 Fed. Rep. 260; Ex parte National Enameling Co., 201 U. S. 156; McGourkey v. Toledo & Ohio Ry. Co., 146 U. S. 536; Smith v. Vulcan Iron

Argument for Plaintiff.

Works, 165 U. S. 518; Humiston v. Stainthrop, 2 Wall. 106; The Keystone Iron Co. v. Martin, 132 U. S. 91; Water Co. v. Hutchinson, 160 Fed. Rep. 41; Brush Electric Co. v. Western Electric Co., 76 Fed. Rep. 761; Australian Knitting Co. v. Gormly, 138 Fed. Rep. 92; Roth Tool Co. v. New Amsterdam Casualty Co., 161 Fed. Rep. 709.

This conspiracy was a continuing offense; every overt act committed in furtherance thereof was a renewal of the same as to all of the parties. The statute of limitations does not begin to run until the commission of the last overt act. Neither can the parties claim a vested right to violate the law. 19 Am. & Eng. Enc. (2d ed.), "Limitations of Actions, United States v. Green, 115 Fed. Rep. 343; Ochs v. People, 124 Illinois, 399; Spies v. People, 122 Illinois, 1; 8 Cyc., p. 678.

It is an elementary principle of evidence that where two or more persons are associated together for some illegal purpose the acts or declarations of one of them in reference to the common object are admissible against them all. 1 Greenleaf, § 111; 2 Wigmore, § 1079; American Fur Co. v. United States, 2 Pet. 358; S. C., 8 Curtis, 138; Clune v. United States, 159 U. S. 593; Wiborg v. United States, 163 U. S. 656.

A combination between two or more independent and competing corporations engaged in manufacturing and selling under letters patent and having an interstate trade and commerce, to eliminate the competition between [14] them and create a monopoly, is in violation of the Sherman Anti-Trust Act. Blount Mfg. Co. v. Yale, 166 Fed. Rep. 555; National Harrow Co. v. Hench, 83 Fed. Rep. 36; S. C., 76 Fed. Rep. 667; S. C., 84 Fed. Rep. 226; Bobbs-Merrill Co. v. Strauss, 139 Fed. Rep. 155; Strait v. National Harrow Co., 18 N. Y. Supp. 224; National Harrow Co. v. Bement, 47 N. Y. Supp. 462; Mines v. Scribner, 147 Fed. Rep. 927; Bement v. National Harrow Co., 186 U. S. 70.

The court will not render its aid to the carrying out of a scheme prohibited by the Sherman Anti-Trust Act. National Harrow Co. v. Hench, 84 Fed. Rep. 226; Continental Wall Paper Co. v. Voight, 212 U. S. 227; Levy v. Kansas

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