D.R. Wilder Mfg. Co. v. Corn Products Refining Co.

• Decision Date: 02 October 1912
• Docket Number: 3,771.
• Citation: 75 S.E. 918,11 Ga.App. 588
• Parties: D. R. WILDER MFG. CO. v. CORN PRODUCTS REFINING CO.
• Court: Georgia Court of Appeals

75 S.E. 918

11 Ga.App. 588

D. R. WILDER MFG. CO. v. CORN PRODUCTS REFINING CO.

No. 3,771.

Court of Appeals of Georgia

October 2, 1912

Syllabus by the Court.

Suit was brought upon a contract to recover the purchase price of goods sold and delivered. The defendant pleaded that the plaintiff was an unlawful combination and conspiracy, formed for the purpose of restraining interstate trade, in violation of the acts of Congress; that through a system of contracts with various purchasers it had secured a monopoly of the business; and that the defendant was forced to purchase the commodity from the plaintiff upon whatever terms could be made. The contract of sale was in writing, and provided that the seller would set aside, out of its profits from the manufacture and sale of the commodity for a certain period an amount equal to 10 cents per hundred pounds on all purchases of the commodity which should be made by the plaintiff during a certain period. It was agreed that this rebate or discount should be paid to the defendant at the end of the year next succeeding the period above mentioned, on condition that for the remainder of the previous year and during the whole of the next year the defendant should have purchased the commodity exclusively from the plaintiff. It was averred, in the answer, that under the working of this system of contracts each purchaser was placed and kept in a situation whereby, if any competing firm entered into the business, the purchaser, by dealing with such competing firm would sacrifice a large rebate on the last year's purchases of goods. It was further averred that the entire system of contracts was designed for the purpose of preventing competition, and did in fact prevent competition. It was further averred that the prices charged by the plaintiff were unreasonable; and that each order for goods bought by the defendant contained a clause reciting that the goods were for consumption by the defendant only, and not for resale. It was further averred that the original combination the series of contracts referred to in the answer, the stipulation against resale and the individual sales, all constituted elements of a general plan or design which, in its entirety, constituted a combination or conspiracy intended and having the effect to restrain and monopolize interstate trade and commerce, in violation of the Sherman anti-trust act of July 2, 1890 (Act July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3200]); and that the account upon which the suit was brought was made up, in the knowledge of both the defendant and the plaintiff, with direct reference to the agreement heretofore referred to. Held, that the facts set forth in the answer constituted no defense to the action, and that the answer was properly stricken, on motion in the nature of a general demurrer. The case of Continental Wall Paper Co. v. Voight, 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486, is distinguishable from the present case, which falls within the principle announced in Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679.

Error from City Court of Atlanta; H. M. Reid, Judge.

Action by the Corn Products Refining Company against the D. R. Wilder Manufacturing Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Russell J., dissenting.

The Corn Products Refining Company brought its action against the D. R. Wilder Manufacturing Company upon an open account for goods sold and delivered. The defendant filed an answer, admitting the purchase of the goods at the price stated in the account, but set up the following defense:

"The defendant further shows to the court that the plaintiff is an unlawful combination and conspiracy in restraint of interstate trade, being a corporation formed by the consolidation of the Glucose Refining Co., the American Glucose Co., the United States Sugar Refining Co., the Pope Glucose Co., the Illinois Sugar Refining Co., the National Starch Co., the United Starch Co., the Corn Products Co., the Warner Sugar Refining Co., the St. Louis Syrup & Preserving Co., the New York Glucose Co., and many other firms and corporations which, before the formation of the plaintiff company, were independent and competing manufacturing concerns, manufacturing and selling goods of the kind sued for in the plaintiff's complaint. Said combination was for the purpose of monopolizing and restraining interstate trade in the products handled by the plaintiff, and did result in a monopoly of interstate trade, and in greatly advancing the price at which said commodities were sold, and constituted a combination or conspiracy, in violation of the federal statute. Shortly after said combination was effectuated, and while the plaintiff controlled an absolute monopoly of the glucose and grape sugar industry, the plaintiff inaugurated a system of contracts with its purchasers, which it referred to as its 'profitsharing plan.' Under said system of contracts, it agreed to give to its purchasers a rebate of some certain amount per hundred pounds upon all purchases of glucose or grape sugar during any years, provided and upon the condition that the said purchaser, during the following year, gave to the said Corn Products Refining Co. its exclusive patronage. All of said contracts were substantially similar, except that the amount of the rebate varied from year to year. The defendant attaches hereto, as Exhibit A, a copy of the contract relative to the rebate on its 1906 business, under which it was agreed to give the defendant a rebate of 10 cents per hundred pounds on all shipments of glucose purchased by it from the plaintiff during 1906, provided it gave to the plaintiff its exclusive trade during the year 1907. A substantially similar contract was entered into relative trades in 1907, and relative to trades in 1908 and 1909, with this difference, relative to the two latter years, viz., that the rebate was advanced from 10 cents to 15 cents per hundred pounds. The defendant alleges that substantially similar contracts were given to practically all consumers of glucose and grape sugar in the United States. The defendant alleges that at the time said so-called 'profit-sharing plan' was originated, the plaintiff was the sole firm or corporation in the United States manufacturing and selling glucose and grape sugar, having absorbed all independent and competing concerns; and this defendant and the other manufacturing plants which consumed glucose or grape sugar in the United States were forced to purchase from the plaintiff upon whatever terms could be made, a part of which terms are embraced in this so-called 'profit-sharing plan.'

"Under the working of said system of contracts, each purchaser of glucose or grape sugar was placed and kept in a situation whereby, if any independent or competing firm or corporation entered into the business of manufacturing or selling glucose or grape sugar, such purchaser, by dealing with such independent or competing firm, would sacrifice a large rebate on the previous year's business by giving his trade to such independent or competing concern. The entire system of contracts herein outlined, and the contracts hereinafter referred to, were designed for the purpose of preventing competition from arising in the business which had previously been monopolized by the plaintiff company, and did, in fact, have such effect to a large extent. Defendant alleges that the plaintiff advanced the price of glucose and grape sugar to such exorbitant extent that a few independent concerns have been created, and are now attempting to compete with the plaintiff, and are offering lower prices than those asked by the plaintiff, but are having great difficulty in doing so, because of the fact that the plaintiff has heretofore obtained a hold upon so large a part of the consumers through the working of the system of contracts heretofore described as the so-called 'profit-sharing plan.' The plaintiff is claiming that any consumer who now trades with the said independent concerns forfeits to the plaintiff the rebate on the 1908 business, and is thereby coercing a large number of consumers into buying from the plaintiff at its advanced prices. The defendant alleges that the prices charged by the plaintiff, even after deducting the rebates, are in excess of the prices charged by the independent firms that are now attempting to compete with the plaintiff, and the prices heretofore charged for glucose and grape sugar prior to organization of the plaintiff company, but that the immediate sacrifice claimed by the plaintiff against any consumer who trades with independent concerns, as heretofore described, is so great, and so many consumers are uncertain that said independent concerns will continue to do business, that the plaintiff is able to control and coerce a large part of the trade, and still controls a partial monopoly of the trade.

"The defendant shows that each purchase made by it, and by other purchasers, from the Corn Products Refining Co. contained the following clause in the contract of purchase: 'The goods herein sold are for your own consumption only, and not for resale.' The defendant shows that the sales for the purchase price of which suit is brought were made under the system of contracts herein outlined. The defendant shows that the original combination, the series of contracts known as the 'profit-sharing plan,' the provision heretofore referred to in the contracts of sale, and the individual sales, all constituted elements of one general plan or design, which, in its entirety, constitutes a combination or conspiracy intended and having the effect directly to restrain and monopolize interstate trade and commerce, in violation of the federal anti-trust act of

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