Carolina Glass Co. v. State

• Decision Date: 17 November 1910
• Citation: 69 S.E. 391,87 S.C. 270
• Parties: CAROLINA GLASS CO. v. STATE. SAME v. MURRAY et al.
• Court: South Carolina Supreme Court

69 S.E. 391

87 S.C. 270

CAROLINA GLASS CO. v. STATE.

SAME v. MURRAY et al.

Supreme Court of South Carolina

November 17, 1910

Rehearing Denied Nov. 29, 1910.

Proceedings by the Carolina Glass Company before the State Dispensary Commission to establish a claim against the state. From a judgment of the commission, claimant appeals, and brings original action in the Supreme Court against W. J. Murray and others to enjoin defendants from asserting any lien on plaintiff's property. Decision of commission affirmed and prayer of plaintiff in original suit granted.

The following is the decision of the Dispensary Commission:

"This commission *** find as follows:

"First. That the Carolina Glass Company was organized during the summer of 1902 in pursuance of an agreement which had been made between its promoters and certain members of the board of directors of the South Carolina State Dispensary, whereby it was intended that the said Carolina Glass Company should manufacture such glass as the board of directors of the State Dispensary might agree to purchase, and that awards for the purchase of glass to be used by said State Dispensary should be made exclusively to the Carolina Glass Company; and that said officers and promoters of the said Carolina Glass Company and said Board of Directors or some of them entered into a conspiracy to defraud the state of South Carolina by preventing and defeating all competition in the sale of glassware needed, used, or purchased by the State Dispensary, and did in fact destroy all such competition.

"Second. That, in pursuance of this understanding and agreement the said Carolina Glass Company bid (in September, 1902) to furnish 50 cars of glass bottles at prices ranging about 10 per cent. in excess of the prices that were then being paid by said State Dispensary to Flaccus & Co., with whom the State Dispensary then had a contract, a large part of which was still unfilled; and notwithstanding this fact, and the further fact that at the same time other bids were filed from other reputable houses at lower prices, said board of directors awarded the contract to said Carolina Glass Company at those prices. That on or about December 3, 1902, the said Carolina Glass Company entered into an agreement with said Flaccus & Co. under and by virtue of which the Carolina Glass Company purchased the contract of said Flaccus & Co., and agreed to assume its full and complete performance, and also by the terms of said contract purchased from said Flaccus & Co. the special moulds needed to manufacture the special bottles required under the rules of the board of directors of the State Dispensary and other material used in connection with their manufacture and packing. That the board of directors of the State Dispensary thereupon ratified the transfer of this contract from Flaccus & Co. to the Carolina Glass Company, and there was at the time the same was purchased 22 cars of glass still to be delivered under its terms. That thereafter said Carolina Glass Company did not deliver any glass whatever to the State Dispensary as being manufactured under the terms of the Flaccus contract, nor at the price named in the Flaccus contract, but continued to manufacture glass under the award which has been made to it under its bid filed in September, 1902, until in March, 1903, another award was made by said board of directors of the South Carolina Dispensary to said Carolina Glass Company at substantially the same prices, although at that time its own contract made in September, 1902, had not been fully executed, and no part of the remaining cars of glass called for under the Flaccus contract had been manufactured or delivered, and notwithstanding the further fact that there were several bids made for the manufacture and delivery of glass under the terms and conditions imposed by the board of directors of the State Dispensary for much lower prices and for goods of just as good quality, the said bid of the Carolina Glass Company being then the highest bid made for the furnishing of glass with the exception of a bid by Flaccus & Co., which was a few cents higher than that of the Carolina Glass Company, and which the commission finds was a dummy bid, not intended to be accepted, but made in pursuance of an understanding between said Flaccus & Co. and the Carolina Glass Company that the former would not compete for business with the State Dispensary but would file this bid as a blind, said Flaccus & Co. having no moulds or other facilities at that time for manufacturing any of the glass required

by the board of directors of the State Dispensary.

"Third. That for several quarterly periods following that of March 1903, bids were invited for glass to be furnished to the State Dispensary and other bidders filed bids besides the Carolina Glass Company, all of which were lower in price (though for goods equal in quality) than those proposed at the same time by the Carolina Glass Company, and that some of said bids were suppressed by said board of directors, with the consent of the Carolina Glass Company, so that no entry or record was made upon the books of said board of directors of the State Dispensary in regard thereto. That, notwithstanding this, awards in each instance were made to the said Carolina Glass Company and purchases made from it at the higher prices named in their bids.

"Fourth. That after December 3, 1902, and until the early part of the year 1906, when pursuant to a concurrent resolution of the Senate and House of Representatives of the state of South Carolina, the existing contract between the State Dispensary and the Carolina Glass Company, as to unfilled portions thereof, were canceled, the said Carolina Glass Company, by and with the aid and assistance of the board of directors of said State Dispensary and in furtherance of the conspiracy already formed to destroy and prevent all competition in the sale of glass to said dispensary, secured and maintained a complete monopoly of all the business in that commodity that was done with said State Dispensary. That after the year 1902, and during the remainder of the period above named, said Carolina Glass Company secure in the monopoly then created, raised its prices from time to time, and were awarded contracts therefor by said board of directors, said prices being at all times much above the fair market prices for the goods sold, said board of directors continuing at nearly every quarterly meeting to award new contracts to said glass company at those exorbitant prices, whether the goods were then needed or not, and notwithstanding that said glass company had never filled said Flaccus contract until, at the time of the passage of the concurrent resolution by the two Houses of the General Assembly of South Carolina in 1906 canceling the unfilled portions of existing contracts, there were outstanding contracts at exorbitant prices under which there remained to be filled orders for more than 200 cars of glass bottles of the approximate value of more than $200,000, by which action on the part of the General Assembly, according to the testimony of one of the officers of said glass company, the state saved more than $50,000, when comparison is made with the prices paid for goods subsequently purchased .

"Fifth. That said Carolina Glass Company sold goods of the same quality and size and general character as that sold to the State Dispensary in other states and in other parts of the state of South Carolina at prices which, making allowances for all credits properly to be given to said Carolina Glass Company for the different conditions under which those sales were made, averaged in prices from 20 to 25 per cent. below the prices at which the same goods were being sold to the state of South Carolina; the agent of said Carolina Glass Company admitting in his evidence before this commission that the purchase of the Flaccus contract was made for the purpose of getting rid of a competitor, and that wherever his company sold goods in competition with others they met that competition by selling the goods at lower prices than the same were sold to the state of South Carolina.

"We therefore find that the contracts made between the Carolina Glass Company and the board of directors of the State Dispensary were contrary to the laws of the state and against public policy, and for those reasons null and void, and that the said Carolina Glass Company should not as a matter of strict law be entitled to recover any sum of money from the state of South Carolina on account of said contracts, even if the state had no offsets against them whatsoever; but the commission further finds that it should determine the matter on equitable principles and fix the matter of liability on a 'quantum meruit' basis, and that the prices at which the Carolina Glass Company sold to the State Dispensary the glassware manufactured by it ranged throughout the entire period of their transactions with the State Dispensary, except for the years 1906 and 1907, at about 10 per cent. above the fair and reasonable market price for said goods. The commission finds that the total amount of sales, after making all proper corrections therein, made by the Carolina Glass Company during the entire period of the transactions with the State Dispensary up to the time it was abolished, was $613,437. Of this amount the sum of $99,108 was for goods sold during the year 1906 and the short period during 1907 during which that dispensary was conducted, so that the total sales made by the Carolina Glass Company during the years preceding the year 1906 aggregated $514,329.90.

"The commission finds that beginning early in the year 1906, as the result of a legislative investigation made by a committee appointed by the General...