Celli & Del Papa v. Galveston Brewing Co.

• Court: Texas Supreme Court
• Writing for the Court: McClendon
• Citation: Celli & Del Papa v. Galveston Brewing Co., 227 S.W. 941 (Tex. 1921)
• Decision Date: 23 February 1921
• Docket Number: (No. 116-2978.)
• Parties: CELLI & DEL PAPA v. GALVESTON BREWING CO.

227 S.W. 941

CELLI & DEL PAPA v. GALVESTON BREWING CO.

(No. 116-2978.)

Commission of Appeals of Texas, Section B

February 23, 1921.

Error to Court of Civil Appeals of First Supreme Judicial District.

Suit by Frank Celli and O. Del Papa, composing the firm of Celli & Del Papa, against the Galveston Brewing Company. Judgment for defendant, affirmed by the Court of Civil Appeals (186 S. W. 278), and plaintiffs bring error. Judgments of district court and Court of Civil Appeals affirmed.

Marsene Johnson, Roy Johnson, and Elmo Johnson, all of Galveston, and Chas. L. Black, of Austin, for plaintiffs in error.

J. B. & Chas. J. Stubbs, of Galveston, and Marion Levy, of Dallas, for defendant in error.

McCLENDON, J.

Celli & Del Papa, a copartnership, engaged in the business of wholesale liquor dealers at Galveston, Tex., brought this suit against the Galveston Brewing Company to recover damages, actual and exemplary, for alleged malicious acts of the defendant in inducing customers of plaintiffs to cease purchasing from plaintiffs. The trial court upon a directed verdict rendered judgment for defendant, which judgment the Court of Civil Appeals affirmed. 186 S. W. 278.

The question presented here is the correctness of the trial court's action in directing a verdict for defendant.

The opinion of the Court of Civil Appeals contains a fair statement of the testimony. In the conclusion we have reached we deem the following statement sufficient:

Plaintiffs were wholesale liquor dealers at Galveston, and had the agency for and sold to the trade in Galveston a brand of beer known as "Cook's beer." Defendant was a corporation, engaged in the manufacture and sale of beer, and for the purpose of facilitating its business either owned, leased, or otherwise controlled a number of saloons located in various parts of the city of Galveston. These saloons were rented from month to month to saloon keepers, most of whom were of the Italian race, and some of whom were either related to or former fellow townsmen in Italy of one or other of the plaintiffs. Shortly before June, 1913, the plaintiffs began to sell "Cook's beer" to the tenants of defendant, and during the months of June, July, and August, 1913, defendant, through its manager, induced a large number of its tenants to discontinue the sale of "Cook's beer" upon premises rented from defendant, and in a large number of instances induced its tenants to cease purchasing other liquors from plaintiffs. In most instances the acquiescence on the part of the tenants to discontinue business with plaintiffs was induced by a threat to discontinue their leases. The evidence was sufficient to warrant a finding that plaintiffs' business suffered as a consequence of this action on the part of the defendant.

It is the contention of plaintiffs that these acts of defendant constituted an actionable wrong, both under our anti-trust statutes and at common law. The holding of the Court of Civil Appeals was to the effect that no cause of action was presented by the evidence because of the right of defendant as owner of the rented premises to agree with its tenants as to the use to which the leased premises should be put, as being one of the inherent rights incident to the ownership of real property, which right was restricted only to the extent of forbidding agreement to use the property for an unlawful purpose.

We have reached the conclusion that this holding of the Court of Civil Appeals should be sustained. Conceding, for the purposes of this case, that the circumstances as above outlined warrant the inference of an agreement or combination between defendant and its tenants to boycott plaintiffs, and that ordinarily such combination would come within the inhibitions of those provisions of our anti-trust laws against agreements in restraint of trade, the circumstance that defendant was engaged in the manufacture and sale of beer, and was the owner, lessor, or otherwise had control of the premises to which alone the agreement or combination complained of had reference, brings this case within the well-recognized exception to the general rule which would render such agreement or combination unlawful under the anti-trust statutes. Railway v. State, 99 Tex. 34, 87 S. W. 336, 70 L. R. A. 950; Redland Fruit Co. v. Sargent, 51 Tex. Civ. App. 619, 113 S. W. 330; Lewis v. Ry., 36 Tex. Civ. App. 48, 81 S. W. 111 (writ of error refused); Wheatley v. Kollear, 63 Tex. Civ. App. 459, 133 S. W. 903; Anderson v. Rowland, 18 Tex. Civ. App. 460, 44 S. W. 911; Edwards v. Old Settlers' Ass'n (Civ. App.) 166 S. W. 423 (writ of error refused).

The following quotation from the Redland Fruit Co. Case above is a clear annunciation of the rule governing in this class of cases:

"We do not think it was the purpose of the statute to prevent the making of exclusive contracts of every kind. Such an inhibition would be productive of a greater evil than that which the law attempts to remedy. The business competition which cannot be restricted is that which under the `laws of the state a person is permitted or authorized' to engage in. The privilege of selling goods upon the premises of another is not derived from the laws of the state, but from the consent of the owner."

We think it cannot be denied that the defendant, in the furtherance of its business, had the legal right to impose upon its tenants, as a term of its lease contracts, an inhibition against selling the goods of a competitor upon the rented premises; and we think it clearly follows that defendant was within its rights in requiring its tenants to cease selling upon the rented premises the wares of its competitors, as a condition precedent to the...