213 U.S. 347 (1909), 686, American Banana Company

Docket Nº:No. 686
Citation:213 U.S. 347, 29 S.Ct. 511, 53 L.Ed. 826
Party Name:American Banana Company
Case Date:April 26, 1909
Court:United States Supreme Court

Page 347

213 U.S. 347 (1909)

29 S.Ct. 511, 53 L.Ed. 826

American Banana Company

No. 686

United States Supreme Court

April 26, 1909

v. United Fruit Company

Argued April 12, 13, 1909




While a country may treat some relations between its own citizens a governed by its own law in regions subject to no sovereign, like the high seas, or to no law recognized as adequate, the general rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where it is done.

Page 348

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 the courts.

A statute will, as a general rule, be construed as intended to be confined in its operation and effect to the territorial limits within the jurisdiction of the lawmaker, and words of universal scope will be construed as meaning only those subject to the legislation.

The prohibitions of the Sherman Anti-Trust Law of July 2, 1890, c. 647. 26 Stat. 209, do not extend to acts done in foreign countries even though done by citizens of the United States and injuriously affecting other citizens of the United States.

Sovereignty means that the decree of the sovereign makes law, and foreign courts cannot condemn the influences persuading the sovereign to make the decree. Rafael v. Verelst, 2 Wm.Bl. 983, 1055, distinguished.

Acts of soldiers and officials of a foreign government must be taken to have been done by its order.

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.

166 F. 261, affirmed.

The facts are stated in the opinion.

Page 353

HOLMES, J., lead opinion

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, c. 647, § 7. 26 Stat. 209, 210. The circuit court dismissed the complaint upon motion as not setting forth a cause of action. 160 F. 184. This judgment was affirmed by the circuit court of appeals, 166 F. 261, and the case then was brought to this Court by writ of error.

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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 [29 S.Ct. 512] 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

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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 damage 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...

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