American Banana Company v. United Fruit Company

• Decision Date: 26 April 1909
• Docket Number: No. 686,686
• Parties: AMERICAN BANANA COMPANY, Plff. in Err., v. UNITED FRUIT COMPANY
• Court: U.S. Supreme Court

213 U.S. 347

29 S.Ct. 511

53 L.Ed. 826

AMERICAN BANANA COMPANY, Plff. in Err.,

v UNITED FRUIT COMPANY.

No. 686.

Argued April 12, 1909.

Decided April 26, 1909.

Messrs. Everett P. Wheeler and Horace E. Deming for plaintiff in error.

[Argument of Counsel from pages 348-352 intentionally omitted] Messrs. Henry W. Taft, Moorfield Storey, Walker B. Spencer, and J. L. Thorndike for defendant in error.

[Argument of Counsel from pages 352-353 intentionally omitted] 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, chap. 647, § 7. 26 Stat. at L. 209, 210, U. S. Comp. Stat. 1901, pp. 3200, 3202. The circuit court dismissed the complaint upon motion, as not setting forth a cause of action. 160 Fed. 184. This judgment was affirmed by the circuit court of appeals, 166 Fed. 261, and the case then was brought to this court by writ of error.

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 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 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, even if the main argument fails and the defendant is held not to be answerable for acts depending on the co-operation of the government of Costa Rica for their effect, a wrongful conspiracy resulting in driving the plaintiff out of business is to be gathered from the complaint, and that it was entitled to go to trial upon that.

It is obvious that, however stated, the plaintiff's case depends on several rather startling propositions. In the first place, the acts causing the damage were done, so far as appears, outside the jurisdiction of the United States, and within that of other states. It is surprising to hear it argued that they were governed by the act of Congress.

No doubt in regions subject to no sovereign, like the high seas, or to no law that civilized countries would recognize as adequate, such countries may treat some relations between their citizens as governed by their own law, and keep, to some extent, the old notion of personal sovereignty alive. See The Hamilton (Old Dominion S. S. Co. v. Gilmore) 207 U. S. 398, 403, 52 L. ed. 264, 269, 28 Sup. Ct. Rep. 133; Hart v. Gumpach, L. R. 4 P. C. 439, 463, 464; British South Africa Co. v. Companhia de Mocambique, [1893] A. C. 602. They go further, at times, and declare that they will punish anyone, subject or not, who shall do certain things, if they can catch him, as in the case of pirates on the high seas. In cases immediately affecting national interests they may go further still and may make, and, if they get the chance, execute, similar threats as to acts done within another recognized jurisdiction. An illustration from our statutes is found with regard to criminal correspondence with foreign governments. Rev. Stat. § 5335, U. S. Comp. Stat. 1901, p. 3624. See further, Com. v. Macloon, 101 Mass. 1, 100 Am. Dec. 89; Sussex Peerage Case, 11 Clark & F. 85, 146. And the notion that English statutes bind British subjects everywhere has found expression in modern times and has had some startling applications. R. v. Sawyer, 2 Car. & K. 101; The Zollverein, Swabey, 96, 98. But the general and almost universal rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act is done. Slater v. Mexican Nat. R. Co. 194 U. S. 120, 126, 48 L. ed. 900, 902, 24 Sup. Ct. Rep. 581. This principle was carried to an extreme in Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241. For another jurisdiction, if it should happen to lay hold of the actor, to treat him according to its own notions rather than those of the place where he did the acts, not only would be unjust, but would be an interference with the authority of another sovereign, contrary to the comity of nations, which the other state concerned justly might resent. Phillips v. Eyre, L. R. 4 Q. B. 225, 239, L. R. 6 Q. B. 1, 28; Dicey, Confl. L. 2d ed. 647. See also Appendix, 724, 726, note 2.

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