United States Congressional Serial Set

59. By Direct Action. A recovery of the treble damages authorized by the Sherman Anti-Trust Act, section 7, in case of injury sustained by violation of the act, can be had only by direct action, and not by way of set-off in an action brought for the price of goods by a company illegally formed in violation of the act-especially when the State practice does not permit the set-off of unliquidated damages. Connolly v. Union Sewer Pipe Co., 184 U. S., 540. 2-118 60. Municipal Corporation May Maintain Action for Damages Under Section 7, Act of 1890.-A municipal corporation engaged in operating water, lighting, or similar plants, from which a revenue is derived, is, in relation to such matters, a business corporation, and may maintain an action under section 7 of the Anti-Trust Act, for injury to its "business" by reason of a combination or conspiracy in restraint of interstate trade or commerce made unlawful by such act. City of Atlanta v. Chattanooga Foundry & Pipe Works, 127 F., 23. 2-299 61. Statutory Limitations Governed by the Laws of the State in Which Action is Brought.-An action under section 7 of the Anti-Trust Act, providing that "any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act may sue therefor in any circuit court of the United States, * * and shall recover threefold the damages by him sustained," is not an action for a penalty or forfeiture, within section 1047, Revised Statutes, prescribing a limitation of five years for a "suit or prosecution for any penalty or forfeiture, pecuniary or otherwise, accruing under the laws of the United States," but one for the enforcement of a civil remedy for a private injury, compensatory in its purpose and effect, the recovery permitted in excess of damages actually sustained being in the nature of exemplary damages, which does not change the nature of the action, and such action is governed as to limitation by the statutes of the State in which it is brought. City of Atlanta v. Chattanooga Foundry and Pipe Co., 101 F., 900. 2-11

Affirmed by Circuit Court of Appeals, 127 F., 23 (2—299). The judgment of the circuit court was, however, reversed, but upon other grounds-a construction of section 4470, Tennessee Code.

Affirmed by Supreme Court (203 U. S., 390). 62. Same-Every Member of the Combination Liable for Damages.

Every member of an illegal combination in restraint of interstate trade or commerce in violation of the Anti-Trust Act is liable for the damages resulting to the business or property of a plaintiff by reason of such combination, and it is immaterial that there were no direct contract relations between

plaintiff and defendant. City of Atlanta v. Chattanooga Foundry and Pipe Works, 127 F., 23.

2-299 63. Same-Measure of Recovery for Injury to Business.-If the effect of an illegal combination between manufacturers to prevent competition in the sale of a commodity which is a subject of interstate commerce be to enhance the price of such commodity to a purchaser, he is entitled to recover the difference between the price paid and the reasonable price under natural competitive conditions, as an injury to his business, whether such business is interstate or not, provided the transaction by which the purchase was made was interstate. Ib. 64. Conspiring to Injure Another in Business-Mailing Printed Circulars. The action of an association of manufacturers in adopting a resolution denouncing a dealer in the product they manufactured, who bought and shipped such product to customers in other States and foreign countries, and in printing such resolution in circulars, and mailing the same to other manufacturers and customers of the dealer, whereby his business was injured, constituted an illegal combination or conspiracy in restraint of interstate and foreign commerce, and gives the person injured a right of action in a circuit court of the United States, under the Anti-Trust Law, to recover the damages sustained. Gibbs v. McNeeley, 2-25

102 F., 594.

Verdict for defendant directed, 107 F., 210 (2—71), but Reversed by Circuit Court of Appeals, 118 F., 120 (2-194). 65. Complaint Fatally Defective where it Fails to Show that Plaintiff Suffered Damage.-A complaint in a civil action based on the Anti-Trust Law, alleging an illegal combination by defendants in restraint of trade, is fatally defective where it fails to show that plaintiff has suffered damage by reason of such combination. Ib. 66. Treble damages are recoverable under the Anti-Trust Act of 1890 only in an action at law by the plaintiff as an individual and not as a stockholder in a corporation violating that act. Metcalf v. Amer. School Furniture Co., 108 F., 909. 2-75

67. Nature of Action for Damages. An action by a shipper, authorized by the Sherman Anti-Trust Law, to recover treble damages to his business and property by reason of a conspiracy and combination by interstate carriers to charge excessive and unlawful rates for the shipment of coal from the mines to tide water, was an action at law as to which the parties were entitled to a jury trial. Meeker v. Lehigh Valley R. R. Co., 162 F., 357. 3-385

68. Where Manufacturer Refused to Sell because Complainant was not a Member of Trust Association.-A dealer in tiles, mantles, and grates in San Francisco, to whom a manufacturer

in another State refused to sell tiles on the sole ground that he was not a member of an association to which he belonged, which association sought to control the output and regulate the prices thereof in California and adjoining States, Held, entitled to damages under section 7 of the Anti-Trust Act. Montague v. Lowry, 115 F., 27. Affirmed, 193 U. S., 38 (2-327).

2-112

See also Bishop v. Amer. Preservers Co., 105 F., 845. 2-51

8. Equity-Injunctions, etc.

69. Private Individuals no Remedy in Equity under the Statute.The Anti-Trust Act confers no right upon private individuals to sue in equity for the restraint of acts forbidden by that statute. Pidcock v. Harrington, 64 F., 821. 1-377 70. Private Party no Remedy in Equity.-The Anti-Trust Act does not authorize a court of equity to entertain a bill by a private party to enforce its provisions. Southern Ind. Exp. Co. v. U. S. Exp. Co., 88 F., 659. 1-862

71. The right to bring suits for injunction under section 4 of the Anti-Trust Act is limited to suits instituted on behalf of the Government. Greer, Mills & Co. v. Stoller, 77 F., 1. 1-620 72. The only party entitled to maintain a bill of injunction for an alleged breach of the Anti-Trust Act is the United States, by its district attorney, on the authority of the Attorney General. Gulf C. & S. F. Ry. Co. v. Miami S. S. Co., 86 F., 407. 1-824 73. Suit Enjoining Infringement Maintainable by Owner of Patent Though Member of Illegal Combination.-Complainant, though a member of a combination in violation of the AntiTrust Law, can maintain a suit in equity to enjoin an infringement of a patent owned by him. General Electric Co. v. Wise, 119 F., 922. 2-205

74. Maliciously Interfering With Contracts. An actionable wrong is committed by one who maliciously interferes with a contract between two parties and induces one of them to break the contract to the injury of the other, and in the absence of an adequate remedy at law equitable relief will be granted; but held, in this case, that plaintiffs were not entitled to relief as the contract under which they claimed was invalid. Dr. Miles Medical Co. v. J. D. Park & Sons Co., 220 U. S., 394. 4-19, 32

9. Purchases from, or services rendered by, illegal corporations. 75. Can Not Retain Goods and Recover Price Paid.-One purchasing liquors from an illegal combination of distillers, which controls the market and prices, though impelled thereto by business needs and policy, enters into the contract volun- . tarily, and can not retain the goods, and recover the price

77 Fed., 700, af

paid, or any part of it, either on the ground that the combination was illegal or the price excessive. firmed. Dennehy v. McNulta, 86 F., 825. 1-855 76. Rebate vouchers issued by a distilling company to customers, by which it promised to refund a certain sum per gallon on their purchases at the end of six months, on condition of their purchasing exclusively from the company during that time, can not be enforced, either at law or in equity, where the condition has not been performed, though such condition be illegal, as in restraint of trade, there being no other consideration for the promise. 77 Fed., 700, affirmed. Ib. 77. Must Pay Reasonable Value of Services-Towage.-One who requests and accepts the services of a tug for towage purposes can not escape paying the reasonable value of the services rendered on the ground that the tug owners are members of an association which is illegal under the act of July 2, 1890, relating to trusts and monopolies. The Charles E. Wisewall, 74 F., 802.

Affirmed, 86 F., 671 (1-850).

10. Patents-Actions for infringement.

1-608

78. Third Party can not Enjoin Combination from Bringing Suit for Infringement of its Patents.-The fact that a corporation owning letters patent upon a particular kind of machinery has entered into a combination with other manufacturers thereof to secure a monopoly in its manufacture and sale, and to that end has acquired all the rights of other manufacturers for the exclusive sale and manufacture of such machines under patents, will not entitle a stranger to the combination to enjoin the corporation from bringing any suits for infringement against him or his customers. Strait v. National Harrow Co., 51 F., 819. 1-52

See also National Folding Box & Paper Co. v. Robertson, 99 F., 985 (2-4); and Otis Elevator Co. v. Geiger, 107 F., 131 (2-66).

79. Owner of Patent, though Member of Illegal Combination, can Maintain Action for Infringement.-That a complainant is a member of a combination in violation of the Anti-Trust Law, does not give third persons the right to infringe a patent of which he, the complainant, is owner, nor preclude complainant from maintaining a suit in equity to enjoin such infringement. General Electric Co. v. Wise, 119 F., 922. 2-205 80. Combination Organized to Receive Assignments of Patents can not Maintain Action for Infringement against Assignor.A combination among manufacturers of spring-tooth harrows, whereby a corporation, organized for the purpose, becomes the assignee of all patents owned by the various man10870°-S. Doc. 111, 62-1, vol 4-33

ufacturers, and executes licenses to them, so as to control the entire business and enhance prices, is void both as to the assignments and licenses, so that the corporation can not maintain a suit against one of its assignors who violates the agreement, for infringement. National Harrow Co. v. 1-746

Hench., 84 F., 226.

See also National Harrow Co. v. Quick, 67 F., 130 (1—443).

11. Generally.

81. What Must Be Shown. To vitiate a combination, such as the Anti-Trust Act condemns, it need not be shown that the combination, in fact, results, or will result, in a total suppression of trade or in a complete monopoly, but it is only essential to show that by its necessary operation it tends to restrain interstate or international trade or commerce, or tends to create a monopoly in such trade or commerce, and to deprive the public of the advantages that flow from free competition. Northern Securities Co. v. United States, 193 U. S., 197. (Harlan, Brown, McKenna, Day.) 2-340 82. Same.

In order to maintain this suit the Government is not obliged to show that the agreement in question was entered into for the purpose of restraining trade or commerce. if such restraint is its necessary effect. U. S. v. Trans-Mo. Ft. Assn., 166 U. S., 290. 1-649

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