Addyston Pipe Steel Company v. United States
| Decision Date | 04 December 1899 |
| Docket Number | No. 51,51 |
| Citation | 20 S.Ct. 96,44 L.Ed. 136,175 U.S. 211 |
| Parties | ADDYSTON PIPE & STEEL COMPANY et al., Appts. , v. UNITED STATES |
| Court | U.S. Supreme Court |
This proceeding was commenced in behalf of the United States, under the so-called anti-trust act of Congress, passed July 2, 1890. 26 Stat. at L. 209, chap. 647. It was undertaken for the purpose of obtaining an injunction perpetually enjoining the six corporations, who were made defendants, and who were engaged in the manufacture, sale, and transportation of iron pipe at their respective places of business in the states of their residence, from further acting under or carrying on the combination alleged in the petition to have been entered into between them, and which was stated to be an illegal and unlawful one, under the act above mentioned, because it was in restraint of trade and commerce among the states, etc.
The trial court dismissed the petition (78 Fed. Rep. 712), but upon appeal to the circuit court of appeals the judgment of the court below was reversed, with instructions to enter a decree for the United States perpetually enjoining defendants from maintaining the combination in cast-iron pipe as described in the petition, and from doing any business under such combination. 54 U. S. App. 723, 85 Fed. Rep. 271, 29 C. C. A. 141, 46 L. R. A. 122. The six defendants are the Addyston Pipe & Steel Company, of Cincinnati, Ohio; Dennis Long & Company, of Louisville, Kentucky; the Howard-Harrison Iron Company, of Bessemer, Alabama; the Anniston Pipe & Foundry Company, of Anniston ALABAMA; THE SOUTH PITTSBURG PIPE WORKS, of south pittsbUrg, tEnnessee; And tHe Chattanooga Foundry & Pipe Works, of Chattanooga, Tennessee; one company being in the state of Ohio, one in Kentucky, two in Alabama, and two in Tennessee.
The following are in substance the facts upon which the judgment of the circuit court of appeals rested, as stated in the record:
It was charged in the petition that on the 28th of December, 1894, the defendants entered into a combination and conspiracy among themselves, by which they agreed that there should be no competition between them in any of the states or territories mentioned in the agreement (comprising some thirty-six in all), in regard to the manufacture and sale of cast-iron pipe, and that in obedience to such agreement and combination, and to carry out the same, the defendants had since that time operated their shops and had been selling and shipping the pipe manufactured by them into other states and territories, under contracts for the manufacture and sale of such pipe with citizens of such other states and territories. There was to be a 'bonus' charged against the manufacture of the pipe, to the extent set forth in the agreements and to be paid as therein stated. The whole agreement was charged to have been entered into in order to enhance the price for the iron pipe dealt in by the defendants.
The petition prayed that all pipe sold and transported from one state to another, under the combination and conspiracy described therein, be forfeited to the petitioner and be seized and confiscated in the manner provided by law, and that a decree be entered dissolving the unlawful conspiracy of defendants and perpetually enjoining them from operating under the same and from selling said cast-iron pipe in accordance therewith to be transported from one state into another.
The defendants filed a joint and separate demurrer to the petition in so far as it prayed for the confiscation of goods in transit, on the ground that such proceedings under the anti-trust act are not to be had in a court of equity, but in a court of law. In addition to the demurrer, the defendants filed a joint and separate answer, in which they admitted the exist- ence of an association between them for the purpose of avoiding the great losses they would otherwise sustain, due to ruinous competition between defendants, but denied that their association was in restraint of trade, state or interstate, or that it was organized to create a monopoly, and denied it was a violation of the antitrust act of Congress.
Testimony in the form of affidavits was submitted by petitioner and defendants, and by stipulation it was agreed that the final hearing might be had thereon.
From the minutes of the association, a copy of which was put in evidence by the petitioner, it appeared that, prior to December 28, 1894, the Anniston Company, the Howard-Harrison Company, the Chattanooga Company, and the South Pittsburg Company had been associated as the Southern Associated Pipe Works. Upon that date the Addyston Company and Dennis Long & Co. were admitted to membership, and the following plan was then adopted:
'First. The bonuses on the first 90,000 tons of pipe secured in any territory, 16" and smaller, shall be divided equally among six shops.
'Second. The bonuses on the next 75,000 tons, 30" and smaller, sizes to be divided among five shops, South Pittsburgh not participating.
'Third. The bonuses of the next 40,000 tons, 36" and smaller, sizes to be divided among four shops, Anniston and South Pittsburg not participating.
'Fourth. The bonus on the next 15,000 tons, consisting of all sizes of pipe, shall be divided among three shops, Chattanooga, South Pittsburg, and Anniston not participating.
'The above division is based on the following tonnage of capacity:
South Pittsburg............... 15,000 tons.
Anniston...................... 30,000 tons.
Chattanooga................... 40,000 tons.
Bessemer...................... 45,000 tons.
Louisville.................... 45,000 tons.
Cincinnati.................... 45,000 tons.
'When the 220,000 tons have been made and shipped and the bonuses divided as hereafter provided, the auditor shall set aside into a reserve fund all bonuses arising from the excess of shipments over 220,000 tons, and shall divide the same at the end of the year among the respective companies according to the percentage of the excess of tonnage they may have shipped (of the sizes made by them) either in pay or free territory. It is also the intention of this proposition that the bonuses on all pipe larger than 36 inches in diameter shall be divided equally between the Addyston Pipe & Steel Company, Dennis Long & Co., and the Howard-Harrison Company.
'It was thereupon resolved:
'First. That this agreement shall last for two years from the date of the signing of same, until December 31, 1896.
'Second. On any question coming before the association requiring a vote, it shall take five affirmative votes thereon to carry said question, each member of this association being entitled to but one vote.
'Third. The Addyston Pipe & Steel Company shall handle the business of the gas and water companies of Cincinnati, Ohio, Covington and Newport, Ky., and pay the bonus hereafter mentioned, and the balance of the parties to this agreement shall bid on such work such reasonable prices as they shall dictate.
'Fourth. Dennis Long & Company, of Louisville, Ky., shall handle Louisville, Ky., Jeffersonville, Ind., and New Albany, Ind., furnishing all the pipe for gas and water works in above-named cities.
'Fifth. The Anniston Pipe & Foundry Company shall handle Anniston, Ala., and Atlanta, Ga., furnishing all pipe for gas and water companies in above-named cities.
'Sixth. The Chattanooga Foundry & Pipe Works shall handle Chattanooga, Tenn., and New Orleans, La., furnishing all gas and water pipe in above-named cities.
'Seventh. The Howard-Harrison Iron Company shall handle Bessemer and Birmingham, Ala., and St. Louis, Mo., furnishing all pipe for gas and water companies in the above-named cities; extra bonus to be put on East St. Louis and Madison, Ill., so as to protect the prices named for St. Louis, Mo.
'Eighth. South Pittsburg Pipe Works shall handle Omaha, Neb., on all sizes required by that city during the year of 1895, conferring with the other companies and cooperating with them; thereafter they shall handle the gas and water companies of Omaha, Neb., on such sizes as they make.
'Note.—It is understood that all the shops who are members of this association shall handle the business of the gas and water companies of the cities set apart for them, including all sizes of pipe made by them.
'The following bonuses were adopted for the different states as named below: All railroad or culvert pipe or pipe for any drainage or sewerage purposes on 12" and larger sizes shipped into bonus territory shall pay a bonus of $1 per ton. On all sizes below 12" and shipped into 'bonus territory' for the purposes above named, there shall be a bonus of $2 per ton.
List of Bonuses.
Alabama...........$3.00
Tenn., east of C'land.2.00
Tenn., middle and west.3.00
Illinois, except Madison and
East St. Louis, as previously
provided..........2.00
Ga. coast p'ts.....1.00
Texas, interior....3.00
Texas coast........1.00
Wash'ton Ter.......1.00
Page 216-Continued.
All other territory free.
'On motion of Mr. Llewellyn, the bonuses on all city work as specially reserved shall be $2 per ton.'
The states for sale in which bonuses had to be paid into the...
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