Oil Company v. State of Texas 97

CourtUnited States Supreme Court
Citation44 L.Ed. 657,177 U.S. 28,20 S.Ct. 518
Docket NumberWATERS-PIERCE
PartiesOIL COMPANY, Plff. in Err. , v. STATE OF TEXAS. No 97
Decision Date19 March 1900

The Waters-Pierce Oil Company is a private corporation incorporated under the laws of Missouri, and its principal offices are situated in St. Louis.

It was incorporated to deal in naval stores, and to deal in and compound petroleum and other oils and their products, and to buy and sell the same in Missouri and other states. Its capital stock was originally $100,000, but was subsequently increased to $400,000.

On the 6th day of July, 1889, it filed in the office of the secretary of state of Texas, in accordance with the requirements of law, a certified copy of its articles of incorporation, and secured a permit to transact business in the state for the term of ten years.

By virtue of the permit the company engaged in business in the state, and while so engaged, it is claimed, violated the statutes of the state against illegal combinations in restraint of competition in trade (copies of the statutes are inserted in the margin), and thereby incurred a forfeiture of its permit to do business in the state.

This suit is brought to enforce such forfeiture, and was tried in the district court of Travis county, Texas, before the court and a jury. A verdict was rendered against the company, upon which a judgment was duly entered. The judgment was affirmed by the court of civil appeals (19 Tex. Civ. App. 1, 44 S. W. 936), and this writ of error was sued out in due course.

The pleadings are very voluminous, alleging the grounds of action and the grounds of defense, with much elaboration and many repetitions.

The basis of the action is an agreement which is set out in full in the complaint, made on the 2d day of January, 1882 between a great many firms and partnerships, individuals and corporations, owning and controlling a large amount of the money and capital invested in the production of petroleum and its products, and in their shipment and sale.

The parties to the agreement embraced three classes: (1) Certain partnerships and corporations, of the number of eleven; (2) certain individuals, of the number of forty-four, who are enumerated; and (3) a portion of the stockholders and members of other corporations and limited partnerships, twenty-five being enumerated, one of which was the Waters-Pierce Oil Company. Other individuals, partnerships, and corporations could after- wards join upon the request of the trustees provided for by the agreement.

It was mutually agreed that a corporation should be formed in Ohio, New York, Pennsylvania, and New Jersey, or any existing corporation could be used, to mine, manufacture, refine, and deal in petroleum and all its products and all the materials used in such business, and transact other business collateral thereto.

To the several corporations thus organized all the business, rights, and stock of the parties to the agreement were to be transferred, and trust certificates issued in consideration thereof.

It is averred that the object of the parties in entering into said agreement and trust was to control and monopolize the petroleum industry in the United States and the several states thereof, and the business of manufacturing, refining, selling, and transporting petroleum and its products, refined, illuminating, and lubricating oils, and that they intended to and did create, make, and effect a combination of their capital, skill, and acts for such purposes and for the following purposes, to wit:

'1st. To create and carry out restrictions in trade in petroleum and its products, refined, illuminating, and lubricating oil, in the United States, and in the domestic trade of the states thereof.

'2d. To increase the price of petroleum and its products, same being commercial commodities and of prime necessity to the people.

'3d. To prevent competition in the manufacture, sale, and purchase of petroleum and its products.

'4th. To fix at a standard figure the price of petroleum and its products, whereby the price of the same to the public shall be controlled and established, petroleum and its products being commodities of merchandise, intended for use and sale in the state of Texas as well as other states.

'5th. For the purpose of agreeing, obligating, and binding themselves not to sell, dispose of, or transport petroleum and its said products below a common standard figure, and to keep the price of petroleum and its products at a fixed or graded figure, and establish and settle the price of petroleum and its products between themselves and others, and to preclude a free and unrestricted competition among themselves and others in the sale of petroleum and its products, and for the purpose of pooling, combining, and uniting any interest they should and did have in connection with the sale of petroleum and its products, that the prices of same might be affected.'

That the trustees provided for in said agreement proceeded to execute it, and are still executing it, and for such purpose have divided the markets of the United States in various subdivisions, and one of them is composed of southwestern Missouri, Arkansas, Texas, Indian territory, Oklahoma teritory, and a part of Louisiana.

That the means employed to effect the purpose of the agreement is to reduce prices below what is reasonable in order to destroy competition, and when it is destroyed raise them again above the market price. A member of the trust is indemnified against loss by the combined power and wealth of all of its parties.

That the Waters-Pierce Oil Company has become a party to said agreement through the control that the trustees acquired by a transfer of stock of the oil company to them, and that the company has taken no corporate action against the transfer of such stock or such control, but has acquiesced in both, and, 'through its directors, officers, and agents conforms its corporate action to the policy fixed by said nine trustees, . . . and pursues . . . and executes the purposes and objects of said trust agreement above set out in this state.'

That in pursuance of the policy of said agreement it confines its business in the subdivision aforesaid; does not invade or transact business in any other; that no other party to the agreement transacts business in the territory allotted to and accepted by the Waters-Pierce Oil Company, and the latter adopts and pursues the methods of driving out and overcoming competition in the sale of oils that are adopted and pursued by the other members in the territory allotted to them; that in the market of Texas there is no competition between the Waters-Pierce Oil Company and such other parties; and that by reason of the facts stated the Waters-Pierce Oil Company has monopolized and still monopolizes the trade in petroleum and its products in Texas, and performs the unlawful purpose of said trust agreements 'in reference to the trade in said commodities which are of prime importance and necessity to the people of the state.'

That since the 6th day of July, 1889, the oil company has made contracts, sometimes in writing and sometimes verbally, with merchants and others through its agents in this state, in consideration of a small rebate on the oil purchased, or for other considerations unknown to the plaintiff, whereby the said merchants have contracted not to buy any oil from any other person, or corporation,

That since the 6th day of July, 1889, the from said defendant company exclusively,' and in some instances agreed with said company not to sell the oils so bought to anyone buying from or dealing with any other person or corporation dealing in oils in competition with the defendant.

The names of some of the persons and merchants are given.

That about the year 1890 the defendant company entered into contracts with certain jobbers and merchants of the city of Brownsville, whereby they respectively agreed to buy all the oil needed in their respective businesses of the defendant company for various rebates on the box or gallon, and they were respectively to sell such oil to retail dealers at the invoice price fixed by the company, and various penalties were agreed to be paid to the company if oil should be purchased from anyone else, and that business was done under said contracts until certain dates in the latter part of December, 1896.

That the company is seeking to renew all of said contracts, and is seeking to carry on its business in said city under the same.

That the Eagle Refining Company is a corporation legally incorporated in Ohio for the purpose of manufacturing, refining, compounding, and dealing in all kinds of oils, greases, and petroleum and its various products, and duly obtained a permit to do such business in the state of Texas on the 6th day of November, 1891, and began to transact such business in the state 'in honest and sharp competition with the Waters Pierce Oil Company,' and continued to do so up to the 13th day of October, 1894, when the two companies 'entered into a certain combination and trust,' the exact terms of which are unknown to petitioner, whereby the oil company secured the control of all the property, business, and franchises of the Eagle Company, and the latter agreed to withdraw from doing any business in the state in competition with the oil company for fifteen years.

That since said date the oil company has been doing business in the name of the Eagle Company, in apparent, but not real, competition with itself, and that said contract has affected the production of petroleum and has affected also the sale of its products.

It is also averred that prior to the year 1890 one C. W. Robinson was engaged in the oil business in competition with the oil company, and that some day in that year the company entered into an agreement with him by the terms of which the company secured the control and management of his business, although it is conducted in his name;...

To continue reading

Request your trial
134 cases
  • Continental Life Ins. & Inv. Co. v. Hattabaugh
    • United States
    • Idaho Supreme Court
    • February 3, 1912
    ... 121 P. 81 21 Idaho 285 CONTINENTAL LIFE INSURANCE AND INVESTMENT COMPANY, a Corporation, Plaintiff, v. I. C. HATTABAUGH, as Insurance ner of the State of Idaho, Defendant Supreme Court of Idaho February 3, 1912 ... S.Ct. 207, 39 L.Ed. 297; Waters-Pierce Oil Co. v ... Texas, 177 U.S. 29, 20 S.Ct. 518, 44 L.Ed. 657; Hancock ... Mutual Life Ins ... Cas. 317, 26 S.Ct. 619, 50 L.Ed. 1013; ... Opinion of the Justices , 97 Me. 590, 55 A. 828.) ... In the ... case now on hearing, ... ...
  • Ballard v. Mississippi Cotton Oil Co.
    • United States
    • Mississippi Supreme Court
    • April 27, 1903
    ...is that this court accepts the interpretation of a statute of a state affixed by the court of last resort thereto." And so, in Waters-Pierce Oil Co. v. Texas, the court was asked to apply the doctrine of the Harris, and Franks' cases to the Texas statute, and hold it violative of the fourte......
  • State ex rel. Collins v. Crescent Cotton Oil Co.
    • United States
    • Mississippi Supreme Court
    • January 14, 1918
    ... ... Collins, Attorney ... General, against the Crescent Cotton Oil Company. Relief ... denied and relator appeals ... The ... facts are fully stated in the ... 972; Pembina, etc., Co. v. Penn, 125 U.S. 181, ... 31 L.Ed. 650; Walters, etc., Oil Co. v. Texas, 177 ... U.S. 45, 54 L.Ed. 657; Silver etc., v. Walsh, 226 U.S. 112, ... 57 L.Ed. 146 ... In the case of the ... State v. Louisville & Nashville Railroad Co., 97 ... Miss. 35, at page 53, this court says: "Our attention is ... called to the case of Southern ... ...
  • Western Union Telegraph Company v. State of Kansas On the Relation of Coleman
    • United States
    • U.S. Supreme Court
    • January 17, 1910
    ...v. Prewitt, 202 U. S. 246, 249, 50 L. ed. 1013, 1014, 26 Sup. Ct. Rep. 619, 6 A. & E. Ann. Cas. 317; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 44 L. ed. 657, 20 Sup. Ct. Rep. 518; Paul v. Virginia, 8 Wall. 168, 19 L. ed. 357. I make the same assumption as to what has been decided twice,......
  • Request a trial to view additional results
1 books & journal articles
  • The Market Participant Doctrine and the Clear Statement Rule
    • United States
    • Seattle University School of Law Seattle University Law Review No. 29-03, March 2006
    • Invalid date
    ...each State shall be entitled to all Privileges and Immunities of Citizens in the several States."). 200. Waters-Pierce Oil Co. v. Texas, 177 U.S. 28, 45 (1900) (holding that a corporation does not have the rights of its individual members and cannot invoke the Privileges and Immunities 201.......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT