Standard Oil Co. v. State

• Citation: 100 S.W. 705,117 Tenn. 618
• Parties: STANDARD OIL CO. ET AL. v. STATE.
• Decision Date: 26 February 1907
• Court: Supreme Court of Tennessee

100 S.W. 705

117 Tenn. 618

STANDARD OIL CO. ET AL. v. STATE.

Supreme Court of Tennessee.

February 26, 1907

Error to Circuit Court, Sumner County; B. D. Bell, Judge.

The Standard Oil Company and C. E. Holt were convicted of violating the anti-trust law, and they bring error. Reversed as to defendant Standard Oil Company, and affirmed as to defendant Holt.

John J Vertrees, William O. Vertrees, and James W. Blackmore, for plaintiffs in error.

Atty Gen. Cates, Robert L. Peck, and W. A. Guild, for the State.

SHIELDS J.

The Standard Oil Company, C. E. Holt, and O'Donnell Rutherford were indicted in the circuit court of Sumner county under chapter 140, p. 268, of the Acts of 1903 commonly known as the "Anti-Trust Law" of Tennessee, charged with making an unlawful contract and agreement with one S.W. Love, for the purpose and with a view to lessen full and free competition in the sale of coal oil, an article of sale imported into this state, and carrying out said contract in said county, in violation of the provisions of that act.

The Standard Oil Company and Holt, upon trial, were found guilty by the jury trying them, and a fine of $5,000 assessed against the former defendant, and $3,000 against the latter, upon which verdict judgment was entered. Rutherford was acquitted, upon the request of the district attorney representing the state. This case is before us upon an appeal, in the nature of a writ of error, prosecuted by the Standard Oil Company and Holt from the judgment against them.

The statute under which the indictment against the plaintiffs in error was preferred is as follows:

"Section 1. Be it enacted by the General Assembly of the state of Tennessee, and it is hereby enacted by the authority of the same, that from and after the passage of this act, all arrangements, contracts, agreements, trusts or combinations between persons or corporations made with a view to lessen, or which tend to lessen full and free competition in the importation or sale of articles imported into this state, or in the manufacture or sale of articles of domestic growth or of domestic raw material, and all arrangements, contracts, agreements, trusts or combinations between persons or corporations designed, or which tend to advance, reduce or control the price or the cost to the producer or the consumer of any such product or article, are hereby declared to be against public policy, unlawful and void.

Sec. 2. Be it further enacted, that any corporation chartered under the laws of the state which shall violate any of the provisions of this act, shall thereby forfeit its charter and its franchise and its corporate existence shall thereupon cease and determine. Every foreign corporation which shall violate any of the provisions of this act is hereby denied the right to do, and is prohibited from doing, business in this state. It is hereby made the duty of the Attorney-General of the state to enforce these provisions by due process of law.

Sec. 3. Be it further enacted, that any violation of the provisions of this act shall be deemed, and is hereby declared to be, destructive of full and free competition, and a conspiracy against trade, and any person or persons who may engage in any such conspiracy, or who shall, as principal, manager, director, or agent, or in any other capacity, knowingly carry out any of the stipulations, purposes, prices, rates or orders made in furtherance of such conspiracy, shall, upon conviction, be punished by a fine of not less than one hundred dollars or more than five thousand dollars, and by imprisonment in the penitentiary not less than one year nor more than ten years; or, in the judgment of the court, by either such fine or imprisonment.

Sec. 4. Be it further enacted, that any person or persons or corporations that may be injured or damaged by any such arrangement, contract, agreement, trust or combination, described in section 1 of this act, may sue for and recover in any court of competent jurisdiction in this state of any person or persons or corporation operating such trusts or combination, the full consideration or sum paid by him or them of any goods, wares, merchandise, or articles, the sale of which is controlled by such combination or trust.

Sec. 5. Be it further enacted, that it shall be the duty of the judge of the circuit and criminal courts of this state specially to instruct grand juries as to the provisions of this act.

Sec. 6. Be it further enacted, that all laws and parts of laws in conflict with the provisions of this act, be and the same are hereby repealed.

Sec. 7. Be it further enacted, that this act take effect from and after its passage, the public welfare requiring it."

Acts 1903, pp. 268, 269, c. 140.

The indictment contains two counts. The charging part of the first count is as follows:

"That the Standard Oil Company, a corporation, C. E. Holt and O'Donnell Rutherford, agents of the Standard Oil Company, unlawfully, knowingly, feloniously, wickedly and maliciously conspired together, contracted and agreed with one S.W. Love, for the purpose and with a view of lessening and destroying full and free competition in the sale of a certain article of sale, imported into said state, to wit: coal oil, all to the evil example of all others in such case made and provided, and against the peace and dignity of the state."

The second count is more elaborate in its averments. They are in these words:

"That said Standard Oil Company, C. E. Holt and O'Donnell Rutherford, agents of the said Standard Oil Company, * * * knowingly, wickedly and maliciously with a view to lessen and destroy full and free competition in the sale of a certain article of sale and imported into the state, to wit: coal oil, did unlawfully and knowingly conspire, contract and agree with one S.W. Love, a customer of the Evansville Oil Company, that upon consideration of the said S.W. Love countermanding an order of ten barrels of coal oil theretofore given to the Evansville Oil Company, for which the said Love was to pay ______ cents per gallon, to give him, the said Love, 100 gallons of oil; and the said Love, accepting said proposition, the said Holt, agent as aforesaid, knowingly carrying said stipulation and order, made in furtherance of said conspiracy, wrote a telegram addressed to the Evansville Oil Company, at Evansville, Indiana, countermanding the said order of ten barrels of oil, which he, the said Love, at the request of the said Holt, agent as aforesaid, sent to the said Evansville Oil Company, he, the said Holt, agent as aforesaid, paying for said telegraph message; and the said Holt, agent as aforesaid, knowingly carrying out said stipulation and order, made in said furtherance of said conspiracy by the said Standard Oil Company, delivered said 100 gallons of coal oil to the said S.W. Love, thereby lessening competition in said article of sale as aforesaid, and so the grand jurors aforesaid, upon their oaths aforesaid, present and say that the Standard Oil Company, C. E. Holt and O'Donnell Rutherford, agents of the said Standard Oil Company, by means aforesaid, in the manner and form aforesaid, unlawfully, feloniously, wilfully, wickedly and maliciously conspired, controlled, stipulated and agreed with the said S.W. Love for the purpose and with the view of lessening and destroying full and free competition in the sale of a certain article of sale imported into said state, to wit: coal oil, to the evil example of all others in like cases offending, contrary to the statute and against the peace and dignity of the state."

A motion to quash the indictment was made and overruled. It is not necessary to here notice the grounds of this motion, further than to say that those going to the form of the indictment were properly overruled, and that those to the merits are involved in exceptions to the charge of the court, and the action of the trial judge in refusing certain special requests for instructions to the jury seasonably submitted by the plaintiffs in error, and in overruling the motion in arrest of judgment properly made; all of which will be passed upon in disposing of the assignments of error predicated upon this adverse action of the trial court.

The facts upon which the charge against the plaintiffs in error are based are these:

The Standard Oil Company is a corporation chartered under the laws of the commonwealth of Kentucky, and a subsidiary of the parent corporation of the same name, and deals in coal oil and other products of petroleum, refined and manufactured in Chicago, Ill., and perhaps other points out of this state.

The Evansville Oil Company is a foreign corporation or partnership, with its chief office in Evansville, Ind., engaged in the same business, having its refinery and base of supplies at Oil City, Pa.

These two corporations or companies are competitors in business. The Evansville Oil Company, so far as disclosed by this record, confines its operations in Tennessee to interstate commerce; that is, it sells oil to be shipped from Oil City Pa., and delivered here in the original packages. The Standard Oil Company is engaged in interstate commerce, and at the time of the occurrence of the transactions herein involved had complied with the laws of Tennessee in reference to foreign corporations doing business in this state and the revenue laws imposing a privilege tax upon all corporations and persons engaged in the sale of illuminating oils and lubricants. In conducting this business, it established agencies at the principal towns in the state, where it keeps stored a stock of coal oil to supply the local trade. The oil is brought to these agencies by railroad transportation in large iron tanks, called "tank cars," from which it is drawn and stored in other...