Frey Son v. Cudahy Packing Co

• Decision Date: 18 April 1921
• Docket Number: No. 200,200
• Citation: 65 L.Ed. 892,256 U.S. 208,41 S.Ct. 451
• Parties: FREY & SON, Inc., v. CUDAHY PACKING CO
• Court: U.S. Supreme Court

256 U.S. 208

41 S.Ct. 451

65 L.Ed. 892

FREY & SON, Inc.,

v CUDAHY PACKING CO.

No. 200.

Argued March 16, 1921.

Decided April 18, 1921.

Messrs. Horace T. Smith and Charles Markell, both of Baltimore, Md., for plaintiff in error.

Mr. Gilbert H. Montague, of New York City, for defendant in error.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Alleging the existence of an unlawful contract, combination or conspiracy between the Packing Company, manufacturer of 'Old Dutch Cleanser,' and various jobbers for the maintenance of resale prices, and relying upon the Sherman Act (chapter 647, 26 Stats. 209 [Comp. St. §§ 8820-8823, 8827-8830]), as interpreted in Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 31 Sup. Ct. 376, 55 L. Ed. 502. Frey & Son, Incorporated, instituted this action in the District Court of the United States for Maryland to recover threefold damages. Under an elaborate charge the issues were submitted to the jury for determination. Judgment for $2,139 entered (June 22, 1917) upon a verdict for plaintiff was reversed by the Circuit Court of Appeals July 16, 1919 (Cudahy Packing Co. v. Frey & Son, 261 Fed. 65, 171 C. C. A. 661), after decision of United States v. Colgate & Co. (June 2, 1919), 250 U. S. 300, 39 Sup. Ct. 465, 63 L. Ed. 992, 7 A. L. R. 443, and before United States v. Schrader's Son, Inc., 252 U. S. 85, 40 Sup. Ct. 251, 64 L. Ed. 471. Plaintiff in error reserved its right of review here, waived a new trial and consented to entry of final judgment for the Packing Company. Thomsen v. Cayser, 243 U. S. 66, 37 Sup. Ct. 353, 61 L. Ed. 597, Ann. Cas. 1917D, 322.

The court below concluded 'there was no formal written or oral agreement with jobbers for the maintenance of prices,' and that, considering the doctrine approved in United States v. Colgate & Co., the District Court should have directed a verdict for the defendant. Other errors by the trial court were assigned and relied upon. If any of them was well taken, we must affirm the final judgment, entered after waiver of new trial and upon consent, as above shown.

It is unnecessary to repeat what we said in United States v. Colgate & Co. and United States v. Schrader's Son, Inc. Apparently the former case was misapprehended. The latter opinion distinctly stated that the essential agreement, combination or conspiracy might be implied from a course of dealing or other circumstances. Having regard to the course of dealing and all the pertinent facts disclosed by the present record, we think whether there existed an unlawful combination or agreement between the manufacturer and jobbers was a question for the jury to decide, and that the Circuit Court of Appeals erred when it held otherwise.

Among other things the trial court charged:

'I can only say to you that if you shall find that the defendant indicated a sales plan to the wholesalers and jobbers, which plan fixed the price below which the wholesalers and jobbers were not to sell to retailers, and you find defendant called this particular feature of this plan to their attention on very many different occasions, and you find the great majority of them not only expressing no dissent from such plan, but actually co-operating in carrying it out by themselves selling at the prices named, you may reasonably find from such fact that there was an agreement or combination forbidden by the Sherman Anti-Trust Act.'

The recited facts, standing alone (there were other pregnant ones), did not suffice to establish an agreement or combination forbidden by the Sherman Act. This we pointed out in United States v. Colgate & Co. As given the instruction was erroneous and material.

The judgment below must be

Affirmed.

Mr. Justice PITNEY, with whom concurred Mr. Justice DAY and Mr. Justice CLARKE, dissenting.

I am constrained to dissent from the opinion and judgment of the court. The action was brought by plaintiff in error, in part to recover threefold damages under section 7 of the Sherman Anti-Trust Act of July 2, 1890 (chapter 647, 26 Stat. 209, 210 [Comp. St. § 8829]), because of injuries sustained in its business by reason of an alleged combination or agreement for the maintenance of prices made between the Packing Company and various wholesalers and jobbers in its product known as 'Old Dutch Cleanser.' The declaration contained a second count, based upon alleged discrimination in violation of the Clayton Act of October 15, 1914 (chapter 323, §§ 2, 4, 38 Stat. 730, 731 [Comp. St. §§ 8835b, 8835d]); but this calls for no special notice. A judgment rendered by the United States District Court upon the verdict of a jury in favor of plaintiff was reversed by the Circuit Court of Appeals (Cudahy Packing Co. v. Frey & Son, 261 Fed. 65, 171 C. C. A. 661), upon the ground that the acts of defendant and its associates amounted to no more than an announcement in advance that customers were expected to charge prices fixed by defendant upon penalty of refusal to sell to an offending customer, observance of the request by customers generally, and actual enforcement of the penalty by refusing to sell to such customers as failed to maintain the price; and hence that under the decision of this court in United States v. Colgate & Co., 250 U. S. 300, 39 Sup. Ct. 465, 63 L. Ed. 992, 7 A. L. R. 443, there was no ground of recovery under the Anti-Trust Act.

I agree with the court that the Circuit Court of Appeals misapprehended the effect of our decision in the case cited, and that under rules laid down in Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 399, 400, 408, 31 Sup. Ct. 376, 55 L. Ed. 502, and United States v. Schrader's Son, Inc., 252 U. S. 85, 99, 40 Sup. Ct. 251, 64 L. Ed. 471, the trial judge was right in submitting the case to the jury.

Notwithstanding its conclusion that the Court of Appeals erred in holding that a verdict ought to have been directed in favor of defendant, the majority holds that the judgment under review here ought to be affirmed, because of supposed error in an instruction given to the jury (a new trial having been waived by plaintiff on consenting to entry of final judgment for the Packing Company by the Circuit Court of Appeals under the practice followed in Thomsen v. Cayser, 243 U. S. 66, 83, 37 Sup. Ct. 353, 61 L. Ed. 597, Ann. Cas. 1917D, 322).

The instruction to which error is attributed related to the question whether a combination between defendant and the wholesalers and jobbers for the purpose of maintaining resale prices had in fact been shown. After referring to the method pursued by defendant in marketing 'Old Dutch Cleanser,' and stating that under the law defendant could not be held liable under the first count unless it was a party to a contract or combination or conspiracy to fix and maintain prices; that defendant denied it was a party to any such combination, contract, or conspiracy, and insisted it had merely notified the jobbing trade what prices it thought were the lowest at which jobbers would resell its product at sufficient return to make it worth their while to push the sale of such product; that plaintiff admitted that, with reference to most of the jobbers at least, there was no written and signed agreement on the subject, and none couched in any formal or express terms; but that defendant from time to time had issued circulars to the trade urging the importance of maintaining 'uniform and fair jobbing and retail prices and trading provisions' and stating that 'any sales by jobbers at special prices would * * * demoralize prices and disturb the entire business in these products,' and that 'uniformity and equality as to terms, delivery and price is essential. It is therefore required of our distributing agents that they fully co-operate with us in this direction, as per terms, conditions, and prices laid down in our published General Sales List,' and that upon bills sent to wholesalers by defendant there was stamped a notice that 'All your quotations, bids, sales and invoices for Old Dutch Cleanser either to jobbers, semijobbers, retailers or consumers, should be at a rate not lower than laid down in our published General Sales List'—the trial judge proceeded, as to the particular question whether in fact there was a combination, to speak thus:

'I can only say to you that if you shall find that the defendant indicated a sales plan to the wholesalers and jobbers, which plan fixed the price below which the wholesalers and jobbers were not to sell to retailers, and you find defendant called this particular feature of the plan to their attention on very many different occasions, and you find the great majority of them not only expressing no dissent from such plan, but actually co-operating in carrying it out by themselves selling at the prices named, you may reasonably find from such fact that there was an agreement or combination forbidden by the Sherman Anti-Trust Act.'

Passing for the moment the question whether this was legally erroneous, I am unable to find in the record any basis for attributing error to the trial judge in respect to it, because it was not made the subject of any proper exception. The trial was litigiously contested, defendant having taken no less than 157 exceptions, of which 20 were directed to the charge given to the jury. Among them, however, I can find none that challenges the proposition embodied in the instruction now held to be erroneous, recites either the words or the substance of that instruction, or otherwise fairly identifies it so as to bring it to the attention of the trial judge. Defendant relies upon an exception which reads as follows:

'I also respectfully except to so much of your honor's charge as indicates that an unlawful contract and combination or conspiracy or understanding is shown where it appears that in the absence of an express obligation some dealer, responding to a suggestion from Cudahy Packing Company, may have sold at the prices mentioned in its literature.'...