Johnson v. JH Yost Lumber Co.

• Decision Date: 14 February 1941
• Docket Number: No. 11730.,11730.
• Parties: JOHNSON et al. v. J. H. YOST LUMBER CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

117 F.2d 53 (1941)

JOHNSON et al. v. J. H. YOST LUMBER CO. et al.

No. 11730.

Circuit Court of Appeals, Eighth Circuit.

January 21, 1941.

Rehearing Denied February 14, 1941.

COPYRIGHT MATERIAL OMITTED

C. A. Sorensen and James A. Doyle, both of Lincoln, Neb., for appellants.

Paul Boslaugh, of Hastings, Neb., and Alfred G. Ellick and Daniel J. Gross, both of Omaha, Neb. (Lester Stiner, of Hastings, Neb., Robert Van Pelt, of Lincoln, Neb., E. B. Crofoot, of Omaha, Neb., George M. Rassieur, of St. Louis, Mo., Francis S. Gaines, of Omaha, Neb., and Harold A. Prince and William Suhr, both

of Grand Island, Neb., on the brief), for appellees.

Before STONE, GARDNER, and WOODROUGH, Circuit Judges.

GARDNER, Circuit Judge.

This was an action brought by appellants as plaintiffs below to recover treble damages from appellees for alleged injuries to plaintiffs' business and property by reason of a conspiracy, combination, plan, understanding, design, or concert of action in restraint of trade in contravention of the provisions of the Sherman Anti-Trust and Clayton Acts as amended. Title 15 U.S. C.A. §§ 1 to 15. We shall refer to the parties as they were designated below.

Plaintiffs are copartners engaged in the wholesale and retail lumber business under the name of Johnson Cash-Way Lumber Company. In May, 1931, plaintiff L. W. Johnson formed a partnership with O. G. Cousins, and they established business at Hastings, Nebraska. In the fall of 1932, this partnership was dissolved, and a new partnership was formed between L. W. Johnson and his father, F. J. Johnson. They have carried on the business at Hastings, Nebraska, and since June 1, 1935, at Grand Island, Nebraska. L. W. Johnson has been general manager, with resident managers at the two retail yards. Plaintiffs' business is the purchase and sale of lumber, cement, coal and building material. The sources from which they secure these commodities, which are indispensable in the conduct of their business, are situated in states other than Nebraska, and the business is necessarily and intimately related to interstate commerce. There are two groups of defendants, those engaged in the retail lumber business in Nebraska, and those engaged in supplying retailers of lumber and allied merchandise with what they need in the conduct of their business. Under the first group of defendants are: defendant John H. Yost and J. H. Yost Lumber Company, the latter being a Nebraska corporation operating a chain of retail lumber yards at various towns and cities in Nebraska, including the City of Grand Island; the Geer Company, a Nebraska corporation, engaged in the sale at wholesale and retail of building materials and coal at Grand Island, its business being since March 1, 1931, under the management and control of Russell Geer, president; the Sothman Company, a Nebraska corporation, with its principal place of business at Grand Island, Nebraska, where it sells coal, lumber and building supplies and where it manufactures and sells at wholesale and retail millwork and building specialties, it being known as the Goehring-Sothman Company until 1936; the Chicago Lumber Company, a Nebraska corporation, with its principal place of business at Omaha, Nebraska, operating a chain of lumber and coal yards, hardware stores and farm implement stores in many Nebraska cities, including Grand Island, Lawrence J. Simpson being vice president and general manager of the corporation since 1931, and during the same period Otto Schmidt being vice president in charge of the business at Grand Island.

Under the second group, known as supplier defendants, are: the Hawkeye Portland Cement Company, a manufacturer and seller of cement without factories or places of business in Nebraska; the Ash Grove Lime and Portland Cement Company, a Nebraska corporation, engaged in the manufacture and sale of Portland Cement and lime, with its principal place of business at Louisville, Nebraska, where its plant is located; the Nebraska Cement Company, a Delaware corporation, organized under the laws of that state in 1936 to succeed a Nebraska corporation of the same name and which manufactures and sells cement from its factory in Superior, Nebraska; the Missouri Portland Cement Company, a Missouri corporation, engaged in the manufacture of cement and the production of sand and gravel, with its main offices at St. Louis, Kansas City, and Memphis, its manufacturing plants being located in Missouri; the Johns-Manville Sales Corporation, a Delaware corporation, with its principal place of business in New York City, being engaged in the manufacture and sale at wholesale of building materials, its sales in Nebraska being supervised from a district office in St. Louis, Missouri.

The Johnson Cash-Way Lumber Company is commonly referred to as a "cut rate" or "cash and carry" lumber yard. The business policy of the company has been to sell its merchandise in all parts of Central and Western Nebraska in competition with other dealers and at prices lower than competitors if sales could be made at a profit. One of the plaintiffs defined such a "cut rate" yard as one that buys in the open market and sells its merchandise at a close margin of profit, depending for success upon a large volume of business. Plaintiffs' claim for damages is for injury sustained to their business or property as a result of acts committed pursuant to a combination or conspiracy among the defendants to destroy their retail lumber, coal and building material business by means of persuasion, coercion and threats of boycott against manufacturers, producers, wholesalers and jobbers of cement, coal, lumber and building materials, the direct effect of which was to restrain, obstruct and cut off shipments of indispensable commodities from sources outside the State of Nebraska. It claims that the supplier defendants became co-conspirators with the retail lumber dealers by acquiescing and participating in the object and plan of the lumber companies by refusing to sell supplies and commodities to the plaintiffs in interstate commerce.

At the close of plaintiffs' testimony, the court sustained separate motions of the various defendants to direct a verdict in behalf of the defendants. Upon the verdict so returned, the court entered judgment dismissing plaintiffs' complaint on its merits, from which judgment plaintiffs prosecute this appeal, alleging error in granting the motions of the defendants for a directed verdict and also in sustaining objections to certain testimony offered by them during the trial of the action.

We must assume that the evidence established all facts that it reasonably tended to prove, and in considering the evidence, plaintiffs are entitled to all favorable inferences that may reasonably be deducible from the facts proven. Svenson v. Mutual Life Ins. Co., 8 Cir., 87 F.2d 441; Egan Chevrolet Co. v. Bruner, 8 Cir., 102 F.2d 373, 122 A.L.R. 987; Champlin Refining Co. v. Walker, 8 Cir., 113 F.2d 844.

Plaintiffs' sources of cement, coal and building materials are in the main outside the State of Nebraska. These materials are indispensable to their business. If the conspiracy of the retail lumber dealers resulted in the refusal of the supplier defendants to sell to plaintiffs, then there was an interference with interstate trade, the amount of commerce so affected being immaterial. Eastern States Retail Lumber Dealers' Ass'n v. United States, 234 U.S. 600, 34 S.Ct. 951, 58 L.Ed. 1490, L.R. A.1915A, 788; Binderup v. Pathe Exchange, 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308; Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044; Arkansas Wholesale Grocers' Ass'n v. Federal Trade Commission, 8 Cir., 18 F.2d 866.

Was there proof of such facts and circumstances as to have warranted the jury in finding that there was an unlawful combination between the retail lumber dealers as claimed by the plaintiffs? There are many issues of fact which are rarely susceptible of direct proof. As said by the Supreme Court in Interstate Circuit, Inc. v. United States, 306 U.S. 208, 59 S.Ct. 467, 472, 83 L.Ed. 610, in discussing unlawful agreements: "As is usual in cases of alleged unlawful agreements to restrain commerce, the government is without the aid of direct testimony that the distributors entered into any agreement with each other to impose the restrictions upon subsequent-run exhibitors. In order to establish agreement it is compelled to rely on inferences drawn from the course of conduct of the alleged conspirators."

Where there is unanimity of action showing an initial desire or threat to seek or compel a certain result, there is sufficient evidence of the agreement, unless there is persuasive evidence to the contrary. Similarity of action by interested parties is not necessarily to be regarded as coincidence. Federal Trade Commission v. Pacific States Paper Trade Ass'n, 273 U.S. 52, 47 S.Ct. 255, 71 L.Ed. 534; Eastern States Retail Lumber Dealers' Ass'n v. United States, supra; Vitagraph, Inc. v. Perelman, 3 Cir., 95 F.2d 142.

Representatives of the retail lumber dealer defendants made declarations which, viewed in the light of the circumstances disclosed and the results achieved thereby, are substantial and cogent evidence of a conspiracy to restrain trade in interstate commerce with the plaintiffs. Some of these circumstances will suffice to illustrate our thought. In 1931, when it became known that plaintiffs intended to establish a "cut rate" lumber yard at Hastings, Nebraska, defendants J. H. Yost Lumber Company and Chicago Lumber Company, and others who were competitors in the retail lumber business, organized a rival retail yard known as the Consumers Lumber Company, to be situated on a site directly across the street from plaintiffs' lumber yard. Plaintiffs offered evidence, which, on objection of the defendants, was excluded, to establish that the lumber dealer group cooperated in the operation of the Consumers...