Cummings v. Union Bluestone Co.

• Decision Date: 16 November 1900
• Citation: 164 N.Y. 401,58 N.E. 525
• Parties: CUMMINGS v. UNION BLUESTONE CO. et al.
• Court: New York Court of Appeals Court of Appeals

164 N.Y. 401

58 N.E. 525

CUMMINGS

v.UNION BLUESTONE CO. et al.

Court of Appeals of New York.

Nov. 16, 1900.

Appeal from supreme court, appellate division, Second department.

Action by James V. Cummings against the Union Bluestone Company and others to recover damages alleged to have been sustained by plaintiff as the result of a conspiracy between defendants to abrogate a contract creating a combination to control the price of bluestone. From a judgment of the appellate division (44 N. Y. Supp. 787) affirming a judgment in favor of defendants, plaintiff appeals. Affirmed.

Leopold Leo and Benjamin Yates, for appellant.

A. T. Clearwater and John F. Cloonan, for respondents.

LANDON, J.

The trial court, in directing a verdict for the defendants, held that the contract for the alleged violation of which by the defendants the plaintiff sought to recover damages was a combination to control the market of bluestone and the market price, and to increase the market price, and maintain it at the increased price, and was, therefore, void. The evidence was to the effect that in 1887 the plaintiff and 14 other persons were the producers of nearly the whole product of Hudson river bluestone, and of at least 90 per centum of the whole amount of such stone sold in the New York market to customers in various states east of the Mississippi river; that their yearly sales amounted to upwards of $1,500,000; that, owing to competition among themselves, their profits had for some time been practically nominal; that, with the intent to increase their profits, and to secure to each of said producers such part of the sales as his usual production bore to the whole production, they entered into an agreement bearing date the 21st day of February, 1887, with the defendant the Union Bluestone Company, and thereby agreed that the said company should act as their sales agent of all the marketable bluestone, manufactured and unmanufactured, which the market would take for the six years from that date at prices to be fixed by the Bluestone Association, composed of the said producers, and to apportion the sales among the producers according to a schedule set forth in the contract, and to sell for no other parties, the producers agreeing to sell no stone except through such agent, and, acting as the Bluestone Association, to fix the prices, and each to furnish, upon the request of the sales agent, his quota of stone as apportioned. This contract was observed by the parties for about three years. The prices were increased, the sales aggregated about $1,500,000 per year, and the plaintiff's share of the profits was satisfactory to him. By the end of three years, competition in other kinds of stone and in artificial stone had so far developed as to threaten, in the opinion of the greater part of the producers, not including the plaintiff, further successful operation under the contract, and they resolved to discontinue operations under it, with the result to the plaintiff that he took no further benefit under it. The plaintiff meantime had assigned his interest under the contract and certain bluestone and other property to the defendants Sweeney in consideration of their payment to him of 10 per centum of their gross amount of sales under the contract. The plaintiff charges that the blue-stone company and his assignees, the Sweeneys, combined together to prevent any further delivery and sales upon his account under the contract, and thus deprived him of any further profit.

The plaintiff urges that it was a question of fact for the jury, and not of law for the court, whether the contract was simply to secure reasonable prices, or to extort from the public unreasonable prices. It may be conceded that one of its purposes was to enable the parties to obtain reasonable prices, but it gave them the power to fix arbitrary and unreasonable prices. The scope of the contract, and not the possible self-restraint of the parties to it, is the test of its validity. They could raise prices to what they supposed the market would bear; and, as they expected to supply nearly the entire demand of the market, the temptation to extortion was unusually great. The plaintiff cites the cases which permit the vendor to sell his business with or without his plant, and to agree with his vendee that he will not by competition or other acts, do anything to injure what he sells. Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419;Leslie v. Lorillard, 110 N. Y. 519, 18 N. E. 363,1 L. R. A. 456;Tode v. Gross, 127 N. Y. 480, 28 N. E. 469,13 L. R. A. 652;Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335. It may be conceded that the law, as now understood, restrains no one from selling his property, nor does it compel any one to continue a business which he can sell, or...