Elgin Corporation v. Atlas Building Products Co.

• Decision Date: 08 February 1958
• Docket Number: No. 5574.,5574.
• Citation: 251 F.2d 7
• Parties: The ELGIN CORPORATION, Appellant, v. The ATLAS BUILDING PRODUCTS COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

251 F.2d 7 (1958)

The ELGIN CORPORATION, Appellant, v. The ATLAS BUILDING PRODUCTS COMPANY, Appellee.

No. 5574.

United States Court of Appeals Tenth Circuit.

January 11, 1958.

Rehearing Denied February 8, 1958.

Dee C. Blythe, Clovis, N. M. (Hubert O. Robertson, Silver City, N. M., was with him on the brief), for appellant.

W. A. Sloan and John P. Eastham, Albuquerque, N. M. (Scott, Hulse, Marshall & Feuille, El Paso, Tex., and Rodey, Dickason, Sloan, Akin & Robb, Albuquerque, N. M., were with them on the brief), for appellee.

Before BRATTON, Chief Judge, and HUXMAN and BREITENSTEIN, Circuit Judges.

BRATTON, Chief Judge.

Invoking pertinent provisions of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U.S.C.A. § 13, The Elgin Corporation instituted this action against The Atlas Building Products Company to recover damages for alleged price discrimination in the sale of concrete cinder building blocks, and also to obtain injunctive relief to prevent future discrimination of that kind. It was alleged in the complaint that plaintiff was a corporation organized under the laws of New Mexico; that its principal place of business was at Silver City, New Mexico; that it was engaged in the manufacture and sale at wholesale and retail of concrete cinder building blocks and related building materials wholly within New Mexico; that the defendant was a corporation organized under the laws of Texas; that its principal place of business was at El Paso, Texas; that it was engaged in the manufacture and sale at wholesale of concrete cinder building blocks; that it manufactured such blocks at El Paso and sold them to dealers and builders in both Texas and New Mexico; and that the sales to purchasers in New Mexico were made in the course of interstate commerce and in direct competition with plaintiff. It was further alleged that commencing in 1948 and continuing to the time of the institution of the action in 1956, defendant in the course of its business in interstate commerce had sold and was continuing to sell blocks in New Mexico to dealers and contractors at prices lower actually, or lower by reason of discounts and rebates, than those exacted for its products of like grade and quality from purchasers in Texas; that the practice constituted price discrimination; and that the effect of such price discrimination might be substantially to lessen competition or tend to create a monopoly in a line of commerce, or to injure, destroy, or prevent competition by plaintiff with persons who received the benefits of such discrimination, or with customers of either of them. It was further alleged that commencing in 1948 and continuing to the time of the institution of the action, defendant in the course of interstate commerce had systematically sold and was continuing systematically to sell blocks in New Mexico to dealers and contractors at prices lower actually, or lower by reason of discounts and rebates, than those exacted by the defendant for products of like grade and quality elsewhere in the United States for the purpose of destroying competition and eliminating competitors, particularly plaintiff. And it was further pleaded that the defendant sold blocks manufactured at El Paso to dealers in New Mexico at varying base prices, less varying discounts, plus charges for freight which were less than actual cost of such freight; that the defendant absorbed part of the freight charges, thus resulting in further discrimination in the delivered price of the products; that the defendant adhered to no base price in bidding on contracts with building contractors in New Mexico but consistently underbid all other bidders, including plaintiff, by any amount necessary to get such contracts; that the prices exacted by the defendant in New Mexico frequently were below the cost of production plus transportation; that such prices were unreasonably low and were made for the purpose of destroying competition and eliminating competitors, particularly plaintiff; that such prices constituted price discrimination; and that the effect of such price discrimination might be substantially to lessen competition or tend to create a monopoly in a line of commerce, or to injure, destroy, or prevent competition by plaintiff with defendant and with persons who received the benefit of such discrimination, or with customers of either of them. The defendant denied discriminating in prices; denied that plaintiff had suffered damages resulting from illegal acts and practices on the part of defendant; pleaded good faith in meeting the equally low price of a competitor; and pleaded limitation. The cause was tried to a jury. The jury returned a verdict for defendant. Judgment was entered upon the verdict; plaintiff appealed; and for convenience, continued reference will be made to the parties as plaintiff and defendant, respectively.

Error is predicated upon the action of the court in denying the motion to strike from the amended answer the defense of good faith in meeting the equally low price of a competitor. The substance of the defense pleaded was that if the defendant had discriminated, which was specifically denied, such discrimination was made in good faith to meet the equally low price of a competitor. It is argued that the defense was not only inconsistent with other defenses raised in the amended answer and with various affidavits and answers to interrogatories filed in the case, but was inconsistent within itself. In presently pertinent part, Rule of Civil Procedure 8(e) (2), 28 U.S.C.A., provides that a party may state as many separate defenses as he has regardless of inconsistency. It is clear that under the sweep of the rule, defendant was at liberty to plead the defense of good faith in meeting the equally low price of a competitor, even though it may have been inconsistent with other defenses raised and with various affidavits and interrogatories filed in the case. Southwestern Packing Co. v. Cincinnati Butchers' Supply Co., 5 Cir., 139 F.2d 201; M. Snower & Co. v. United States, 7 Cir., 140 F.2d 367; Fidelity & Deposit Co. of Maryland v. Krout, 2 Cir., 146 F.2d 531; Washington Annapolis Hotel Co. v. Riddle, 83 U. S.App.D.C. 288, 171 F.2d 732. And it is further argued that the defense was interposed so late that plaintiff had to go to trial without an opportunity to prepare to meet the issue. The defense was not pleaded in the original answer. It was first tendered in the amended answer filed four days before the trial of the case. But in connection with oral argument at a hearing upon other matters soon after the institution of the action, defendant requested and was granted leave to amend its answer to raise the defense. And at a pre-trial conference held more than a month prior to the trial of the case, defendant again requested and again was granted leave to amend its answer to tender the issue. But in neither instance was an order entered formally granting leave to amend. After leave to amend had been twice informally granted and almost a month prior to the trial of the...