State of Ohio ex rel. Seney v. Swift & Co.

• Decision Date: 17 January 1921
• Docket Number: 3347.
• Citation: 270 F. 141
• Parties: STATE OF OHIO, ex rel. SENEY, Pros. Atty., v. SWIFT & CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

270 F. 141

STATE OF OHIO, ex rel. SENEY, Pros. Atty., v. SWIFT & CO. et al.

No. 3347.

United States Court of Appeals, Sixth Circuit.

January 17, 1921

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Sections 6390-6402 of the Ohio General Code constitute what is known as the Valentine Anti-Trust Act. It was originally passed in 1898. Section 6391 defines a trust, among other definitions as a combination to create or to carry out restrictions in trade or commerce, or to increase the price of a commodity, or to prevent competition in the sale of a commodity. Such a trust as is defined therein is said to be against public policy and void. Except as indicated by this declaration of invalidity and by section 6393, which declares that contracts in violation of the law are void, there is no prohibition of participation in a 'trust'; but it is provided by section 6395 that one who violates any provision of the law shall forfeit certain penalties, to be recovered in the name of the state, and by section 6396, that a violation of any provision is a conspiracy against trade, and any participant shall be fined or imprisoned. Section 6400 directs that the several courts of common pleas (being the ordinary trial courts of the counties) are invested with jurisdiction to restrain and enjoin violations of the law, and that the Attorney General or prosecuting attorney of the proper county shall institute proper proceedings, in quo warranto, injunction, or otherwise, by way of petition, setting forth the case, and praying that such violation shall be enjoined or otherwise prohibited.

By the so-called Smith Cold Storage Act approved March 30, 1910 (107 Ohio Laws, p. 594), it was provided (referring only to the parts now important) that no person shall sell, or offer or expose for sale, any pork which has been held in a cold storage house for a longer period of time than six months. Section 19 says that whoever violates any provision of the act shall be guilty of a misdemeanor, and for the first offense shall be fined, and for later offenses be fined and imprisoned.

In the summer of 1919, proceedings were commenced against the Columbus Packing Company, by which it appeared that it had kept a quantity of pork in cold storage more than six months. Without allegation or claim that there had been any sale or attempted sale of this article, so as to make an express violation of the Cold Storage Act, or that there had been any contract or arrangement between the Packing Company and the Cold Storage Company, except for the storage which had taken place, and without any trial or opportunity for trial as to whether the owner intended to sell the product in express violation of the Cold Storage Act, or intended any restriction in trade or other violation of the Anti-Trust Act, or as to whether such storage would be in fact injurious to any public interest under existing conditions, summary orders were made that a receiver be appointed to take possession of the property, that he sell the same forthwith at retail in the city markets of Columbus, and that the proceeds of such sale, less the expense of the proceedings, be paid to the owner of the pork. Upon eventual review by the Supreme Court of Ohio, these orders were, on August 27, 1919, affirmed. Columbus Packing Co. v. State ex rel. Schlesinger, 100 Ohio St. 285, 126 N.E. 291.

On the same day, August 27, 1919, a petition was filed in the common pleas court of Lucas county, Ohio, which was entitled, 'State of Ohio ex rel. Allen J. Seney, Prosecuting Attorney of Lucas County, Ohio, Plaintiff, v. Swift & Company and the Northern Refrigerating Company, Defendants. ' This petition alleged that Swift & Co. had placed with the Refrigerating Company, in cold storage, a large quantity of pork carcasses, which had then been in storage for more than six months; that Swift & Co. and the Refrigerating Company had agreed to hold this in cold storage for more than six months for the purpose of increasing the price of the property stored, and that thereby they had created and carried out restrictions in trade and commerce, and had caused the property to be withdrawn from the usual and proper channels of trade, and had caused prices of similar products to be unlawfully increased. In this petition, the relator further alleged that Swift & Co., unless restrained, would take the property from cold storage, and sell it or offer it for sale, within the county of Lucas or elsewhere, contrary to law. He further alleged that, unless an injunction be issued, the parties would remove the property from the jurisdiction of the court and would continue to disregard the law, unless a receiver was appointed to carry out the restraining order and take charge of and control the property which had been so held for more than six months. Thereupon the petition prayed that the Refrigerating Company be enjoined from delivering, and that Swift & Co. be enjoined from receiving or obtaining possession of, the property, and that the court appoint a receiver to take charge of the property and keep it until the final order be made, and that the defendants be enjoined from any further acts or crimes in restriction of trade and commerce. Upon the filing of this petition, and without notice, the Refrigerating Company was enjoined from delivering to Swift & Co., and Swift & Co. was enjoined from receiving, any of the property in question, and a receiver was appointed 'to seize said property and take charge of and keep' the same 'until further order of the court.'

On August 30th the relator filed a motion, asking an order that the receiver sell the property 'at the earliest possible date and in such manner as the court may prescribe. ' Notice was given to Swift & Co. that this motion would be heard September 3d. On September 2d Swift & Co. filed in the common pleas court its petition for the removal of its separable controversy in this cause to the United States District Court for the Northern District of Ohio. What seems to have been regarded as a sufficient bond on removal was filed at the same time. Notice was given that this petition and bond would be presented to the judge on September 3d. This was done, and the relator then asked delay on both matters until September 5th. Without entering any order, the court delayed accordingly. On September 5th the relator applied for an order-- and the court entered the same-- dismissing Swift & Co. without prejudice, from the action, and the hearing of the motion for an order of sale was passed until September 8th. On September 11th, Swift & Co. filed in the court below a certified copy of the proceedings in the court of common pleas, and on September 12th filed its answer and cross-petition in the cause so removed. Thereupon the relator moved to remand, and Swift & Co. moved to have the receiver discharged and the property returned to it, and for final judgment on the pleadings, and because relator declined to proceed further. The court below denied the motion to remand, and upon the hearing of defendant's motion proofs were taken on behalf of Swift & Co. The relator declined to take any proofs as against this motion or in support of his petition. Thereupon, on October 8th, the court ordered the receiver to be discharged, the property to be returned to Swift & Co., and the order, after reciting that relator declined to take any proofs or proceed in the cause, and finding that the property was in transit in interstate commerce, finally dismissed the original petition. Upon application made to this court for a stay of this order pending appeal, we directed a stay, unless Swift & Co. should give a certain bond, the conditions of which are hereafter stated. This bond was given and the property returned to Swift & Co., subject to its duties fixed by this bond.

Upon the hearing below (as is shown by the recitals of the opinion and by concessions of counsel (in part) as well as by the testimony printed), it was made to appear that the property consisted of certain parts of the carcasses of hogs which had been slaughtered by Swift & Co., at Cleveland, from six to eight months before the relator's petition was filed; that they were and had been intended only for manufacture into bacon at Swift & Co.'s factory, in Chicago, for which purpose they were material of great value, and that in their existing condition they were of comparatively little value for retail sale; that Swift & Co. had been engaged in supplying bacon to the government, and especially to the American Expeditionary Force, in great quantities, and did not have sufficient storage facilities in Chicago; that in the summer of 1919 this situation had not yet been relieved; and that the carcasses in question had all been shipped from Cleveland to Chicago, and had been held in Toledo in cold storage pending their further shipment to Chicago. Relator expressly conceded that he had no proof of any intent to sell in Ohio. A tariff, duly approved by the Interstate Commerce Commission, expressly permitted stoppage in transit for cold storage in such cases for a period of nine months, and this storage of this pork at Toledo had been within and covered by this transit privilege. The privilege would soon expire, and, unless the shippers could have prompt possession and proceed with shipment to Chicago, they would not only lose the advantage of their through rate, but the property might lose its character as being in the process of interstate shipment.

Allen J. Seney and Nolan Boggs, both of Toledo, Ohio, for appellant.

Harold W. Fraser and E. J. Marshall, both of Toledo, Ohio (A. L. Boylan, of Sioux City, Iowa, and Marshall & Fraser, of Toledo, Ohio, on the brief), for appellees.

Before KNAPPEN, DENISON, and WARRINGTON, Circuit Judges.

DENISON,...