American Banana Co. v. United Fruit Co.
U.S. Supreme Court
213 U.S. 347, 53 L. Ed. 826 (1909)
[213 U.S. 347, 347]
AMERICAN BANANA COMPANY, Plff. in Err.,
UNITED FRUIT COMPANY
(See S. C. Reporter's ed. 347-359.) (*)
Monopolies - threefold damages - acts done outside United States.
Acts done by a domestic corporation outside the United States, which largely depend
[53 L. Ed. 826]
for their efficacy upon the cooperation, in conspiracy to drive a rival out of business, of soldiers and officials in Costa Rica, acting under governmental sanction, in territory over which that state exercises a de facto sovereignty, cannot be made the basis of the action to recover threefold damages authorized by the Sherman antitrust act of July 2, 1890 (26 Stat. at L. 209, 210, chap. 647, U. S. Comp. Stat. 1901, pp. 3200, 3202), § 7, on behalf of those injured in their business by reason of violations of that statute.
[Construction of Sherman act, see Monopoly, II. in Digest Sup. Ct. 1908.]
Argued April 12, 1909. Decided April 26,
IN ERROR to the United States Circuit Court of Appeals for the Second Circuit to review a judgment which affirmed a judgment of the Circuit Court for the Southern District of New York, dismissing the complaint in an action to recover threefold damages under the Sherman antitrust act. Affirmed.
See same case below, 166 Fed. 261.
The facts are stated in the opinion.
Mr. Everett P. Wheeler argued the cause, and, with Mr. Horace E. Deming, filed a brief for plaintiff in error:
The courts are not at liberty to limit the express words of a statute by engrafting upon it exceptions.
United States v. Union P. R. Co. 91 U. S.
[53 L. Ed. 827]
72, 91, 23 L. ed. 224, 233; French v. Spencer, 21 How. 238, 16 L. ed. 99; Demarest v. Wynkoop, 3 Johns. Ch. 142, 8 Am. Dec. 467; Chamberlain v. Western Transp. Co. 44 N. Y. 309, 4 Am. Rep. 681; National Bank v. St. Joseph, 24 Blatchf. 439, 31 Fed. 216.
Whatever value the principles of comity may have, they cannot be extended so far as to cloak a violation of the laws of the nation whose comity is appealed to.
The Santissima Trinidad, 7 Wheat. 283, 354, 5 L. ed. 454, 472; The Bello Cotrunes, 6 Wheat. 152, 169, 5 L. ed. 229, 233; The Marianna Flora, 11 Wheat. 1, 6 L. ed. 405; The Merino, 9 Wheat. 391, 405, 6 L. ed. 118, 121; United States v. La Jeune Eugenie, 2 Mason, 409, Fed. Cas. No. 15,551.
The distinction between Underhill v. Hernandez, 38 L.R.A. 405, 13 C. C. A. 51, 2t3 U. S. App. 573, 65 Fe4. 577, and the case at bar, is illustrated by People v. McLeod, 25 Wend. 483.
The courts of this country can consider and collaterally pass upon the legality of acts of a foreign nation in a suit between its own citizens.
Vasse v. Ball, 2 Dall. 270, 275, 1 L. ed. 377, 379; 3 Kent. Corn. 303, 304; The Santissima Trinidad, 7 Wheat. 283, 351, 354, 5 L. ed. 454, 471, 472; The Estrella, 4 Wheat. 298, 4 L. ed. 574; Angle v. Chicago, St. P. M. & O. R. Co. 151 U. S. 1, 19, 38 L. ed. 55, 64, 14 Sup. Ct. Rep. 240; Rafael v. Verelst, 2 W. Bl. 1055.
A court cannot sit in judgment on the act of a foreign power where that act is
[53 L. Ed. 828]
directly drawn In question in a suit directly against such foreign power, or against an officer acting within its territory under its commands. This is the extent of the rule.
Nabob of Arcot v. East India Co. 4 Bro. Oh. 181; Brunswick v. King of Hanover, 6 Beav. 1, affirmed in 2 H. L. Cas. 1; Hatch v. Baez, 7 Hun, 596.
Every voluntary entrance into neutral territory with hostile purpose is absolutely unlawful.
1 Kent. Corn. 120.
In considering the defense that an act was done under authority of government, the courts have uniformly held that such authority must be valid or lawful.
Poindexter v. Greenhow, 114 U. S. 270, 290, 20 L. ed. 185, 192, 5 Sup. Ct. Rep. 903, 962; United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. Rep. 240; Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204; Ex parte Young, 209 U. S. 123, 159, 52 L. ed. 714, 728, 13 L.R.A.(N.S.) 932, 28 Sup. Ct. Rep. 441; Litchfield v. Bond, 186 N. Y. 66, 78 N. B. 719; People v. McLeod, supra.
An injury to the private property of a citizen by an officer of government is justiciable in the courts of the country of which he is a citizen even if it be an "act of state."
Walker v. Baird  A. C. 491; Feather v. R., 6 Best. & 8. 296; Little v. Barreme, 2 Cranch, 170, 179, 2 L. ed. 243, 246; Poindexter v. Greenhow, 114 U. S. 270, 29 L. ed. 185, 5 Sup. Ct. Rep. 903, 962; Entick v.
[53 L. Ed. 829]
Harrington, 19 How. St. Tr. 1043; Money v. Leach, 3 Burr. 1762.
There is no distinction between the power of the court to sit in judgment upon the act of a foreign government and that of its own government.
Buron v. Denman, 2 Exch. 167; Musgrave v. Pulido, L. R. 5 App. Cas. 112; 1 Goodnow, Comparative Administrative Law, 35, 36; Moodaly v. Moreton, 2 Dick. 652.
The statute applies to acts done in a foreign country. The objection that the acts complained of were done abroad is entitled to no weight.
United States v. Gordon, 5 Blatchf. 18, Fed. Cas. No. 15,231; The Slavers (The Kate v. United States) 2 Wall. 350, 17 L. ed. 878; United States v. Furlong, 5 Wheat. 184, 5 L. ed. 64; The Carib Prince (Wuppermann v. The Carib Prince) 170 U. S. 655, 42 L. ed. 1181, 18 Sup. Ct. Rep. 753; The Silvia, 171 U. S. 462, 43 L. ed. 241, 19 Sup. Ct. Rep. 7; The Chattahoochee, 173 U. S. 540, 43 L. ed. 801, 19 Sup. Ct. Rep. 491; Thomsen v. Union Castle Mail S. S. Co. 166 Fed. 251; Liverpool & G. W. Steam Co. v. Phoenix Ins. Co. 129 U. S. 397, 32 L. ed. 788, 9 Sup. Ct. Rep. 469; Wharton, Crim. Law, §§ 271, 278; Hall, International Law, 5th ed. 202; 1 Oppenheim, International Law, 195.
The act of combination is the element which gives to the acts complained of their illegal character. It is immaterial whether those acts would be lawful or unlawful in themselves if done by a single person. They become actionable when done in combination, and for the purpose of stifling commerce.
Swift & Co. v. United States, 196 U. S. 375, 396, 49 L. ed. 518, 524, 25 Sup. Ct. Rep. 276; Aikens v. Wisconsin, 195 U. S. 194, 206, 49 L. ed. 154, 160, 25 Sup. Ct. Rep. 3; United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540; Loewe v. California State Federation of Labor, 139 Fed. 71; Farmers' Loan & T. Co. v. Northern P. R. Co. 25 L.R.A. 414, note, 4 Inters. Com. Rep. 744, note, 60 Fed. 803; Burke v. Elk Drug Co. 75 App. Div. 145, 77 N. Y. Supp. 373; Quinn v. Leathem  A. C. 495; Shawnee Compress Co. v. Anderson, 209 U. S. 423, 52 L. ed. 865, 28 Sup. Ct. Rep. 572; Angle v. Chicago, St. P. M. & O. R. Co. 151 U. S. 1, 13, 38 L. ed. 55, 62, 14 Sup. Ct. Rep. 240; Loewe v. Lawlor, 208 U. S. 274, 52 L. ed. 488, 2& Sup. Ct. Rep. 301.
Defendant did the wrong. The Costa Rican officials were its instruments.
7 Am. & Eng. Enc. Law, p. 809; Mecheni, Agency, § 64; Killingsworth v. Portland Trust Co. 18 Or. 351, 7 L.R.A. 638, 17 Am. St. Rep. 737, 23 Pac. 66; Lyon v. Kent, 45 Ala. 663; Story, Agency, § 7; Clark & S. Agency, 66; Brown v. Brown, 174 Mass. 201, 75 Am. St. Rep. 292, 54 N. E. 532; Hopkins v. Mollinieux, 4 Wend. 465.
Costa Rica's immunity from suit has no bearing on defendant's liability.
Erwin v. Dundas, 4 How. 58, 78, 11 L. Ed. 875, 883; Connecticut F. Ins. Co. v. Oldendorff, 19 C. C. A. 379, 44 U. S. App. 487, 73 Fed. 88; Mason v. Eldred, 6 Wall. 231, 18 L. ed. 783; Freeman, Judgm. § 231; Sessions v. Johnson, 95 U. S. 347, 352, 24 L. ed. 596, 598; Cooley, Torts, 3d ed. pp. 224, 226; Union Stock Yards Co. v. Chicago. B & O. R. Co. 196 U. S. 217, 49 L. ed. 453, 25 Sup. Ct. Rep. 226, 2 A. & E. Ann. Cas. 525.
Messrs. Henry W. Taft and Moorfield Storey argued the cause, and, with Messrs. Walker B. Spencer and J. L. Thorndike, filed a brief for defendant in error:
The courts of one country will not sit in judgment on the acts of the government of another, done within its own territory.
Underhill v. Hernandez, 168 U. S. 252, 42 L. ed. 457, 18 Sup. Ct. Rep. 83; Webb's Pollock, Torts, pp. 132, 137; Kennett v. Chambers, 14 How. 38, 51, 14 L. ed. 316, 322; Williams v. Suffolk Ins. Co. 13 Pet. 415, 10 L. ed. 226; United States v. Holliday, 3 Wall. 419, 18 L. ed. 186; Brunswick v. King of Hanover, 2 H. L. Cas. 1, 6 Beav. 1, 13 L. J. Ch. N. 5. 107; Secretary of State v. Kamachee Boye Sahaba, 13 Moore, P. C. 22; Buron v. Denman, 2 Exch. 167; Feather V. R. 6 Best. & S. 257; Doss v. Secretary of State, L. R. 19 Eq. 509.
It is immaterial whether Costa Rica had jurisdiction and sovereignty over this territory in dispute, or whether its attempt to exercise such jurisdiction was by legal right, or was an act of war or aggression against the Republic of Panama.
Underhill v. Hernandez, supra.
The acts complained of were acts of state; and, even if they had been done on territory
[53 L. Ed. 830]
in the possession of Panama, they could not be made the ground of an action in the courts of this country against anyone concerned in them; as is shown by People v. McLeod, 25 Wend. 483, referred to in Underhill v. Hernandez, 38 L.R.A. 405, 13 C. C. A. 51, 26 U. S. App. 573, 65 Fed. 581, as well as by Buron v. Denman, supra. If wrongful, they were international delinquencies, for which the government of Costa Rica was responsible to the nation, but not to a citizen of the nation.
It is the character of the act brought in question which halts a court when matters of state, political in nature, affecting the conduct of foreign nations, are drawn in question.
Nabob of Arcot v. East India Co. 4 Bro. Ch. 180 Brunswick v. King of Hanover, 6 Beav. 1.
Mr. Justice Holmes delivered the opinion of the court:
This is an action brought to recover threefold damages under the act to protect trade against monopolies. July 2, 1890, chap. 647, § 7. 26 Stat. at L. 209, 210, U. S. Comp. Stat. 1901, pp. 3200, 3202. The circuit court dismissed the complaint upon motion, as not setting forth a cause of action. 160 Fed. 184. This judgment was affirmed by the circuit court of appeals, 166 Fed. 261, and the case then was brought to this court by writ of error.
[213 U.S. 347, 354] The allegations of the complaint may be summed up as follows: The plaintiff is an Alabama corporation, organized in 1904. The defendant is a New Jersey corporation, organized in 1899. Long before the plaintiff was formed, the defendant, with intent to prevent competition and to control and monopolize the banana trade, bought the property and business of several of its previous competitors, with provision against their resuming the trade, made contracts with others, including a majority of the most important, regulating the quantity to be purchased and the price to be paid, and acquired a controlling amount of stock in still others. For the same purpose it organized a selling company, of which it held the stock, that by agreement sold at fixed prices all the bananas of the combining parties. By this and other means it did monopolize and restrain the trade and maintained unreasonable prices. The defendant being in this ominous attitude, one McConnell, in 1903, started a banana plantation in Panama, then part of the United States of Columbia, and began to build a railway (which would afford his only means of export), both in accordance with the laws of the United States of Columbia. He was notified by the defendant that he must either combine or stop. Two months later, it is believed at the defendant's instigation, the governor of Panama recommended to his national government that Costa Rica be allowed to administer the territory through which the railroad was to run, and this although that territory had been awarded to Colombia under an arbitration agreed to by treaty. The defendant, and afterwards, in September, the government of Costa Rica, it is believed by the inducement of the defendant, interfered with McConnell. In November, 1903, Panama revolted and became an independent republic, declaring its boundary to be that settled by the award. In June, 1904, the plaintiff bought out McConnell and went on with the work, as it had a right to do under the laws of Panama. But in July, Costa Rican soldiers and officials, instigated by the defendant, seized a part of the plantation and a cargo of supplies and have held them ever since, and stopped the construction and operation [213 U.S. 347, 355] of the plantation and railway. In August one Astua, by ex parte proceedings, got a judgment from a Costa Rican court, declaring the plantation to be his, although, it is alleged, the proceedings were not within the jurisdiction of Costa Rica, and were contrary to Its laws and void. Agents of the defendant then bought the lands from Astua. The plaintiff has tried to induce the government of Costa Rica to withdraw its soldiers, and also has tried to persuade the United States to interfere, but has been thwarted in both by the defendant and has failed. The government of Costa Rica remained in possession down to the bringing of the suit.
As a result of the defendant's acts the plaintiff has been deprived of the use of the plantation, and the railway, the plantation, and supplies have been injured. The defendant also, by outbidding, has driven purchasers out of the market and has compelled producers to come to its terms, and it has prevented the plaintiff from buying for export and sale. This is the substantial dam. age alleged. There is thrown in a further allegation that the defendant has "sought to injure" the plaintiff's business by offering positions to its employees, and by discharging and threatening to discharge persons in its own employ who were stockholders of the plaintiff. But no particular point is made of this. It is contended, however, that, even if the main argument fails and the defendant is held not to be answerable for acts depending on the cooperation of the government of Costa Rica for their effect, a wrongful conspiracy resulting in driving the plaintiff out of business is to be gathered from the complaint, and that it was entitled to go to trial upon that.
[53 L. Ed. 831]
'It is obvious that, however stated, the plaintiff's case depends on several rather startling propositions. In the first place, the acts causing the damage were done, so far as appears, outside the jurisdiction of the United States, and within that of other states. It is surprising to hear it argued that they were governed by the act of Congress.
No doubt in regions subject to no sovereign, like the high seas, or to no law that civilized countries would recognize as [213 U.S. 347, 356] adequate, such countries may treat some relations between their citizens as governed by their own law, and keep, to some extent, the old notion of personal sovereignty alive. See The Hamilton (Old Dominion S. S. Co. V. Gilmore) 207 U. 8. 898, 403, 52 L. ed. 264, 269, 28 Sup. Ct. Rep. 133; Hart v. Gumpach, L. R. 4 P. C. 439, 463, 464; British South Africa Co. v. Companhia de Mocambique,  A. C. 602. They go further, at times, and declare that they will punish anyone, subject or not, who shall do certain things, if they can catch him, as in the case of pirates on the high seas. In cases immediately affecting national interests they may go further still and may make, and, if they get the chance, execute, similar threats as to acts done within another recognized jurisdiction. An illustration, from our statutes is found with regard to criminal correspondence with foreign governments. Rev. Stat. § 5335, U. S. Comp. Stat. 1901 p. 3624. See further, Com. v. Macloon, 101 Mass. 1, 100 Am. Dec. 89; Sussex Peerage Case, 11 Clark & F. 85, 146. And the notion that English statutes bind British subjects everywhere has found expression in modern times and has had some startling applications. R. v. Sawyer, 2 Car. & K. 101; The Zollverein, Swabey, 96, 98. But the general and almost universal rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act is done. Slater v. Mexican Nat. R. Co. 194 U. S. 120, 126, 48 L. ed. 900, 902, 24 Sup. Ct. Rep. 581. This principle was carried to an extreme in Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241. For another jurisdiction, If it should happen to lay hold of the actor, to treat him according to its own notions rather than those of the place where he did the acts, not only would be unjust, but would be an interference with the authority of another sovereign, contrary to the comity of nations, which the other state concerned justly might resent. Phillips v. Eyre, L. R. 4 Q. B. 225, 239, L. R. 6 Q. B. 1, 28; Dicey, Confl. L. 2d ed. 647. See also Appendix, 724, 726, note 2.
Law is a statement of the circumstances, in which the public force will be brought to bear upon men through the courts. But the word commonly is confined to such prophecies or threats when addressed to persons living within the power of [213 U.S. 347, 357] the courts. A threat that depends upon the choice of the party affected to bring himself within that power hardly would be called law in the ordinary sense. We do not speak of blockade running by neutrals as unlawful. And the usages of speech correspond to the limit of the attempts of the lawmaker, except in extraordinary cases. it is true that domestic corporations remain always within the power of the domestic law; but, in the present case, at least, there is no ground for distinguishing between corporations and men.
The foregoing considerations would lead, in case of doubt, to a construction of any statute as intended to be confined in its operation and effect to the territorial limits over which the lawmaker has general and legitimate power. "All legislation is prima facie territorial." Ex parte Blain, L. R. 12 Ch. Div. 522, 528; State v. Carter, 27 N. J. L. 499; People v. Merrill, 2 Park. Crim. Rep. 590, 596. Words having universal scope, such as "every contract in restraint of trade," "every person who shall monopolize," etc., will be taken, as a matter of course, to mean only everyone subject to such legislation, not all that the legislator subsequently may be able to catch. In the case of the present statute, the improbability of the United States attempting to make acts done in Panama or Costa Rica criminal is obvious, yet the law begins by making criminal the acts for which it gives a right to sue. We think it entirely plain that what the defendant did in Panama or Costa Rica is not within the scope of the statute so far as the present suit is concerned. Other objections of a serious nature are urged, but need not be discussed.
For again, not only were the acts of the defendant in Panama or Costa Rica not within the Sherman act, but they were not torts by the law of the place, and therefore were not torts at all, however contrary to the ethical and economic postulates of that statute. The substance of the complaint is that, the plantation being within the de facto jurisdiction of Costa Rica, that state took and keeps possession of it by virtue of its sovereign power. But a seizure by a state is not a thing that can be [213 U.S. 347, 358] complained of elsewhere in the courts. Underhill v. Hernandez, 168 U. S. 250, 42 L. ed. 456, 18 Sup. Ct. Rep. 83. The fact, if it be one, that de jure the estate is in Panama, does not matter in the least; sovereignty is pure fact. The fact has been recognized by the United States, and, by the implications of the bill, is assented to by Panama.
[53 L. Ed. 832]
The fundamental reason why persuading a sovereign power to do this or that cannot be a tort is not that the sovereign cannot be joined as a defendant or because it must be assumed to be acting lawfully. The intervention of parties who had a right knowingly to produce the harmful result between the defendant and the harm has been thought to be a nonconductor and to bar responsibility (Allen v. Flood  A. C. 1, 121, 151, etc.), but it is not clear that this is always true; for instance, in the case of the privileged repetition of a slander (Elmer v. Fessenden, 151 Mass. 359, 362, 363, 5 L.R.A. 724, 22 N. E. 635, 24 N. E. 208), or the malicious and unjustified persuasion to discharge from employment (Moran v. Dunphy, 177 Mass. 485, 487, 52 L.R.A. 115, 83 Am. St. Rep. 289, 59 N. E. 125). The fundamental reason is that it is a contradiction in terms to say that, within its jurisdiction, it is unlawful to persuade a sovereign power to bring about a result that it declares by its conduct to be desirable and proper. It does not, and foreign courts cannot, admit that the influences were improper or the results bad. It makes the persuasion lawful by its own act. The very meaning of sovereignty is that the decree of the sovereign makes law. See Kawananakoa v. Polyblank, 205 U. S. 349, 353, 51 L. ed. 834, 836, 27 Sup. Ct. Rep. 526. In the case of private persons, it consistently may assert the freedom of the immediate parties to an injury and yet declare that certain persuasions addressed to them are wrong. See Angle v. Chicago, St. P. M. & 0. R. Co. 151 U. S. 1, 16-21, 38 L. ed. 55, 63-65, 14 Sup. Ct. Rep. 240; Fletcher v. Peck, 6 Cranch, 87, 130, 131, 3 L. ed. 162, 176.
The plaintiff relied a good deal on Rafael v. Verelst, 2 W. 131. 983, 1055. But in that case, although the nabob who imprisoned the plaintiff was called a sovereign for certain purposes, he was found to be the mere tool of the defendant, an English governor. That hardly could be listened to concerning a really independent state. But of course it is not alleged [213 U.S. 347, 359] that Costa Rica stands in that relation to the United Fruit Company.
The acts of the soldiers and officials of Costa Rica are not alleged to have been without the consent of the government, and must be taken to have been done by its order. It ratified them, at all events, and adopted and keeps the possession taken by them. O'Reilly de Camara v. Brooke, 209 U. S. 45, 52, 52 L. ed. 676, 678, 28 Sup. Ct. Rep. 439; The Paquete Habana (United States v. The Paquete Habana) 189 U. S. 453, 465, 47 L. ed. 901, 903, 23 Sup. Ct. Rep. 693; Dempsey v. Chambers, 154 Mass. 330, 332, 13 L.R.A. 219, 26 Am. St. Rep. 249, 28 N. B. 279. The injuries to the plantation and supplies seem to have been the direct effect of the acts of the Costa Rican government, which is holding them under an adverse claim of right. The claim for them must fall with the claim for being deprived of the use and profits of the place. As to the buying at a high price, etc., it is enough to say that we have no ground for supposing that it was unlawful in the countries where the purchases were made. Giving to this complaint every reasonable latitude of interpretation we are of opinion that it alleges no case under the act of Congress, and discloses nothing that we can suppose to have been a tort where it was done. A conspiracy in this country to do acts in another jurisdiction does not draw to itself those acts and make them unlawful, if they are permitted by the local law.
Further reasons might be given why this complaint should not be upheld, but we have said enough to dispose of it and to indicate our general point of view.
Mr. Justice Harlan concurs in the result.
[53 L. Ed. 833]
Any person injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by the Federal antitrust act of July 2, 1890 (Sherman act), is given a right of action by §. 7 of that act for threefold the damages so sustained, and the costs of suit, including a reasonable attorneys' fee.
This right of action for treble damages obviously depends primarily upon whether the contract or combination complained of comes within the scope of the act,-a question which is exhaustively discussed in a note to Whitwell v. Continental Tobacco Co. 64 L.R.A 689, on illegal trusts under modern antitrust laws. It is not the intention here to reenter upon a discussion of that question, but, rather, assuming that the contract or combination does offend against the provisions of the act, to point out when and how the action may be maintained.
This action is within the exclusive jurisdiction of the Federal courts. Loewe v. Lawlor, 130 Fed. 633.
Injuries to business or property.
All that is necessary to support the action for threefold damages given by the act of July 2, 1890, § 7, is that the business or property of the plaintiff shall have been in some way injured by reason of the illegal scheme. Monarch Tobacco Works v. American Tobacco Co. 165 Fed. 774.
One who, by reason of an agreement and combination in violation of the antitrust act of July 2, 1890, to increase the price of a commodity to consumers, is compelled to pay such unreasonable and excessive price, and more than its actual value, because of such agreement or combination, is injured in his property thereby, within the meaning of § 7 of that act, giving an action for threefold damages. United States Tobacco Co. v. American Tobacco Co. 163 Fed. 701.
One who is harmed in his business or property by a violation of the antitrust act of July 2, 1890, suffers a legal injury, and is entitled to his action therefor for threefold damages, although there is no technical injury and harm inflicted by a wrong or tort which would be recognized at common law. Wheeler-Stenzel Co. v. National Window Glass Jobbers' Asso. 10 L.R.A. (N.S.) 972, 81 C. C. A. 658, 152 Fed. 804.
The action may be maintained by a Georgia municipal corporation against the foreign corporate members of a combination forbidden by the Federal antitrust act, where the municipality was led, by reason of the illegal combination, to purchase from an Alabama corporation, at an excessive price, the iron pipe needed for its waterworks system. Chattanooga Foundry & Pipe Works v. Atlanta, 203 U. S. 390, 51 L. ed. 241, 27 Sup. Ct. Rep. 65.
A consumer injured in the purchase of supplies by a combination which is illegal under such antitrust act may maintain an action to recover threefold damages, although he himself is not engaged in interstate business. Atlanta v. Chattanooga Foundry & Pipe Works, 64 L.R.A. 721, 61 C. C. A. 387, 127 Fed. 23.
Threefold damages are recoverable by a dealer who, by reason of an association of -wholesale dealers, in which such dealers agreed not to purchase from manufacturers not members of the association, and not to sell to nonmembers for less than list prices, which were more than 50 per cent higher -than prices to members, while the manufacturers agreed not to sell to nonmembers at any price, under penalty of forfeiture of membership, was unable to procure goods except from the local dealers, and at the excessive price charged nonmembers of the association. W. W. Montague & Co. v. Lowry, 193 U. S. 38, 48 L. ed. 608, 24 Sup. Ct. Rep. 307, affirming 63 L.R.A. 58, 52 1 C. C. A. 621, 115 Fed. 27.
See also infra, Ellis v. Inman, P. & Co. 65 C. C. A. 488, 131 Fed. 182.
But the owner of goods may dictate the prices at which he will sell them, and the damages which are caused to an applicant to buy because of the refusal of the owner to sell to him at prices which will enable him to resell them at a profit constitute no legal injury, and cannot give rise to this action for threefold damages, because they are not the result of any breach of duty or of contract by the owner. Whitwell v. Continental Tobacco Co. 64 L.R.A. 689, 60 C. C. A. 290, 125 Fed. 454.
The action lies on behalf of one who, by reason of the combination, cannot secure all of a certain commodity required by his business, and is thus deprived of customers and the profit upon his legitimate business as theretofore existing. Wheeler-Stenzel Co. v. National Window Glass Jobbers' Asso. supra.
Hence a dealer who is unable to buy books because of the rule adopted by a publishers' association controlling 90 per cent of the book business of the country, that they would not sell to anyone who cut prices on copyrighted books, nor to anyone who should be known to have sold to others at cut prices, may maintain an action for threefold damages to his business, occasioned thereby. Mines v. Scribner, 147 Fed. 927.
A corporation not engaged in business at the time of the conspiracy may maintain this action, where the conspiracy alleged was one to prevent its reentry into business, when it had only temporarily ceased to do business, and had enlarged its plant at great expense with the expectation of resuming. Pennsylvania Sugar Ref. Co. v. American Sugar Ref. Co. 166 Fed. 254, reversing 160 Fed. 144.
Shippers who were coerced by an unlawful combination of carriers to pay a certain percentage in - addition to a reasonable freight rate, which was held subject to forfeiture in case- they shipped by other lines or their consignees received freight by other lines, are damaged in their business thereby, within the meaning of the act of July 2, 1890, § 7, to the extent of the sum so paid. Thomsen v. Union Castle Mail S. S. Co. 166 Fed. 251, reversing 149 Fed. 933.
Limitation of action.
The limitation of five years, prescribed by U. S. Rev. Stat. § 1047, U. S. Comp. Stat. 1901, p. 727, for any "suit or prosecution for any penalty or forfeiture, pecuniary or otherwise, accruing under the laws of the United States," does not apply to this action. Chattanooga Foundry & Pipe Works v. Atlanta, 203 U. 5. 390, 51 L. ed. 241, 27 Sup. CU. Rep. 65.
The ten years' limitation prescribed by Tenn. Code, § 2776, for "all other cases not expressly provided for," rather than the one year limitation prescribed by § 2772 for "statute penalties," or the three years' limitation prescribed by § 2773 for injuries to personal or real property, governs this action, where the right of recovery is based on the excessive price for iron water pipe which a municipality was led to pay by reason of an illegal arrangement between the members of a trust or combination formed in violation of the Federal antitrust act. Ibid.
The declaration in an action under the antitrust act of July 2, 1890, § 7, must describe with definiteness and certainty the alleged combination or conspiracy entered into by the defendant, and the acts done in pursuance thereof, which resulted in damage to the business or property of the plaintiff. Rice v. Standard Oil Co. 134 Fed. 464.
It is not sufficient to frame the declaration in the words of the statute, but the substance of the contracts in restraint of trade, or the substantial facts which constitute the attempt to monopoly, must be set forth. Cilley v. United Shoe Mach. Co. 152 Fed. 726.
The petition need not state the facts showing a right of action with all the fullness and particularity required in an indictment, but the sufficiency of such pleading must be tested by the local practice obtaining in civil actions. Monarch Tobacco Works v. American Tobacco Co. 165 Fed. 774.
A cause of action under the antitrust act of July 2, 1890, § 7, is stated by a complaint filed by a builder, alleging that, in his business, he had occasion to purchase rough lumber from mills located in a neighboring state, and was unable to obtain finished lumber from the defendants, who comprised all the manufacturers and dealers in the city in which he was doing business, and upon whom he was dependent for his supply of finished lumber, because of an agreement among themselves that they would not sell any such lumber at any price to such consumers as bought lumber of any kind from other dealers, unless such consumer would pay the defendants the difference between the price he paid for lumber so bought from others and the price charged by defendants therefor, and should promise thereafter to buy all his lumber from them. Ellis v. Inman, P. & Co. 65 C. C. A. 488, 131 Fed. 182.
Injury to one's business, giving a right of action for threefold damages under the antitrust act of July 2, 1890, § 7, was sufficiently shown by a declaration which alleged that because of defendant's combination, plaintiff could not secure all of a certain commodity required by his business, and was deprived of customers and the profit upon his legitimate business as theretofore existing. Wheeler-Stenzel Co. v. National Window Jobbers' Asso. 10 L.R.A. (NS.) 972, 71 C. C. A. 658, 152 Fed. 864.
The complaint in an action for threefold damages states a cause of action where it charges, in substance, that the defendants obtained the control of the plaintiff corporation to ruin it, and prevent it from becoming a competitor, and that they carried out their unlawful purpose in violation of the trust imposed upon the majority of stockholders for the benefit of the minority, and by inducing directors to be unfaithful in performance of the duties of their office. Pennsylvania Sugar Ref. Co. v. American Sugar Ref. Co. supra.
An allegation in the petition that by reason of the alleged unlawful acts of the defendants, plaintiff was damaged in a specified sum, is sufficient as against a motion to have the averments as to damages made more definite and certain, where, under the local practice, it is sufficient to allege damages in general terms, unless the recovery of special damages is sought. Monarch Tobacco Works v. American Tobacco Co. supra.
The declaration in such an action is bad for duplicity where it charges in a single count that the defendant entered into a contract, combination, and conspiracy in restraint of interstate or foreign commerce. The unlawful contract should be set up in one count and the unlawful combination or conspiracy in another. Rice v. Standard Oil Co. supra.
In such an action brought against members of a combination in restraint of trade, having for its object the driving out of business of aggressive cutters of prices, evidence is not admissible of other measures adopted by only part of the members of such combination, which are separate and distinct from it, unless they are shown to have been agreed to by all of the defendants. Jayne v. Loder, 7 L.R.A. (N.S.) 984, 78 C. C. A. 653, 149 Fed. 21, 9 A. & E. Ann. Cas. 294, reversing 142 Fed. 1010.
All the members of the combination need not be made parties to the action, since each is responsible for the torts committed in the course of the illegal combination. Atlanta v. Chattanooga Foundry & Pipe Works, 64 L.R.A. 721, 61 C. 0. A. 387, 127 Fed. 23.
The discretion of the trial court under the antitrust act of July 2, 1890, § 7, to allow a reasonable attorneys' fee to the successful plaintiff in an action brought under that section to recover damages for a violation of the provisions of that act against combinations in restraint of trade, is not abused by an allowance of $750, although the verdict was for but $500, where the trial took five days, and there was proof. that from $750 to $1,000 would be a reasonable sum. W. W. Montague & Co. v. Lowry, 193 U. S. 38, 48 L. ed. 608, 24 Sup. Ct. Rep. 307, affirming 63 L.R.A. 68, 52 C. C. A. 621, 115 Fed. 27.
Plaintiff in an action for threefold damages under the antitrust act of July 2, 1890, § 7, who has charged all of the defendants jointly with having entered into each of the alleged combinations and conspiracies complained of, and has alleged that they were all done in pursuance of the common design, is not put to his election because one of the defendants is charged with doing one thing and one with doing another. Monarch Tobacco Works v. American Tobacco Co. 165 Fed. 774.