Hammond Packing Company v. State of Arkansas

Decision Date23 February 1909
Docket NumberNo. 54,54
Citation212 U.S. 322,53 L.Ed. 530,15 Ann.Cas. 645,29 S.Ct. 370
CourtU.S. Supreme Court

[Syllabus from pages 322-324 intentionally omitted] Messrs. W. E. Hemingway, John G. Johnson, George B. Rose, and Ralph Crews for plaintiff in error.

[Argument of Counsel from pages 324-326 intentionally omitted] Messrs. Lewis Rhoton, Jams H. Stevenson, F. Guy Fulk, W. M. Lewis, W. L. Terry, and William F. Kirby for appellee.

[Argument of Counsel from pages 327-329 intentionally omitted] Mr. Justice White delivered the opinion of the court:

The Hammond Packing Company, an Illinois corporation, hereafter called the Hammond Company,—seeks to reverse a judgment for $10,000 as penalties for alleged violations of a state law referred to as the anti-trust act of 1905.

The Hammond Company challenged the authority which the act purported to exert and the forms of procedure which the statute authorized and which were employed to enforce its requirements, because of their alleged repugnancy to the Constitution of the United States, in particulars which were enumerated. The supreme court of Arkansas held that the acts which the Hammond Company was charged with having committed were within the prohibitions of the law of 1905, and that the statute was in no respect repugnant to the Constitution of the United States. These conclusions were sustained by considering prior cognate legislation, and a construction given thereto, as well as by an analysis of the act of 1905, elucidated by a prior decision made concerning the same. Before recurring particularly to the procedure and judgment in this case, we advert to these subjects, as they are essential to a comprehension of the matters here arising for decision.

The Constitution of Arkansas of 1874 (§ 11, art. 12) authorized foreign corporations to do business in the state, subject to the same regulations and with the same rights as those enjoyed by domestic corporations. Carrying these provisions into effect, the legislature (Kirby's Digest Laws [Ark.] §§ 824 to 827) authorized permits to be issued to foreign corporations, subjecting them to like control and entitling them to the same privileges as domestic corporations on payment of the same fees as were exacted from a domestic corporation, and on compliance with other statutory requirements. In § 16, article 12, of the same Constitution, there was contained a reservation of the power of the legislature to repeal, alter, or amend charters of incorporation, subject, however, to the limitation that thereby 'no injustice shall be done to corporators.'

The Hammond Company obtained a permit and engaged in business within the state of Arkansas.

In 1899 what was known as the Rector act was enacted for the punishment of pools, trusts, and conspiracies to control prices, etc. Under this law an action Was commenced to recover penalties against the Lancashire Fire Insurance Company, a foreign corporation doing business under a permit. The case was in 1899 decided by the supreme court of Arkansas against the state. 66 Ark. 466, 45 L.R.A. 348, 51 S. W. 633. The court held that it [the statute] 'did not intend to prohibit or punish acts done or agreements made in foreign countries by corporations doing business here, when such acts or agreements have reference only to persons, property, or prices in such foreign countries.'

In January, 1905, the Rector act was repealed and the statute now in question was enacted. The 1st section of the new law, which is in the margin, re-enacted the 1st section of the old act with certain additions, which are in italics. Various sec-

Sec. 1. Any corporation organized under the laws of this or any other state or country, and transacting or conducting any kind of business in this state, or any partnership or individual, or other association or persons whatsoever, who are now, or shall hereafter create, enter into, become a member of, or a party to, any pool, trust, agreement, combination, confederation, or understanding, whether the same is made in this state or elsewhere, with any other corporation, partnership, individual, or any other person or association of persons, to regulate or fix, either in this state or elsewhere, the price of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever, or price, or premium to be paid for insuring property against loss or damage by fire, lightning, or tornado, or maintain said price when so regulated or fixed, or who are now, or shall hereafter enter into, become a member of, or a party to any pool, agreement, contract, combination, association, or confederation, whether made in this state or elsewhere, to fix or limit, in this state or elsewhere, the amount or quantity of any article of tions were added in the new law, of which only §§ 8 and 9 are particularly relevant to this controversy. As we shall hereafter have occasion to specially consider these sections, they are presently put out of view.

The Hartford Fire Insurance Company—a Connecticut corporation was proceeded against for alleged violations of the act of 1905. The company defended on the ground that it was not a member of or a party to any pool, etc., made in Arkansas, and that it was not a member of any pool, etc., which in any manner affected the premium for insuring property within that state.

In disposing of the case the supreme court of Arkansas (76 Ark. 303, 89 S. W. 2) considered two questions: First, the proper construction of the act; and second, its constitutionality as construed. The first question was thus stated:

'1. Does the act prohibit, under the penalty named therein, a foreign insurance corporation from doing business in Arkan- sas while such corporation is a member of a pool, trust, or combination to fix insurance rates anywhere, although such pool, trust, or combination is not created or maintained in Arkansas, and does not affect or fix, or attempt to do so, rates of insurance in Arkansas? To state the proposition by illustration: Assume that the appellant is a member of a trust—called a rating bureau—created and maintained in New York city, to fix [and maintain] insurance rates in New York city and St. Petersburg, but which does not fix or affect rates in Arkansas,—is it guilty of a violation of the act if it transacts an insurance business in Arkansas upon complying with all the statutes of this state, except the one at bar?'

In solving this question the court deemed that the correct meaning of the statute was to be ascertained by its text, as illustrated by the history of the times, indicating the motives which led to the adoption of the act. On this subject it was pointed out that after the decision in the Lancashire Case public agitation concerning the effect of that decision had arisen and had occasioned an introduction in the legislature at different times of a proposed bill, known as the King bill, intended to counteract the effect of the decision in the Lancashire Case, but which bill had failed of passage. The court said:

'In 1904 the dominant political party in this state, through its party platform, demanded of the next general assembly the passage of the King bill, and of the purpose of said bill said: 'Whereby all foreign corporations shall be prevented from doing business in this state, if they are members of any trust, pool, combination, or conspiracy against trade, whether such trust, pool, combination, or conspiracy affects or is intended to affect prices or rates in Arkansas or not.' The general assembly elected in 1904, composed almost entirely of members of the political party whose platform is quoted, with remarkable unanimity and rapidity passed the King bill, which had been rejected by the two preceding general assemblies, and in less than a fortnight of its organization it was approved, and it is the statute now at bar.'

It was decided (Wood and Battle, JJ., dissenting) 'that the general assembly intended by this act to subject to the penalty of it any foreign corporation doing business in this state while a member of a trust formed to fix prices anywhere.'

The act, as thus interpreted, was sustained upon the theory that 'the state has dictated these terms upon which foreign insurance companies can do business in this state,' and the state 'possesses the right to declare that foreign insurance corporations cannot do business in this state while belonging to a pool, trust, combination, conspiracy, or confederation to fix or affect insurance rates anywhere.'

Shortly after the decision in the Hartford Case this action was commenced by the state against the Hammond Company for a forfeiture of its permit to do business in Arkansas and for money penalties. As finally amended the complaint consisted of four paragraphs or counts. As, however, during the progress of the cause, counsel stipulated that, if any relief was awarded against the Hammond Company, it should be confined to the matters charged in the first paragraph of the complaint, and be limited to a money recovery not exceeding $10,000, and effect was given to the stipulation in the final action of the court, we put all but the first paragraph out of view.

In the first paragraph the existence of the Hammond Company and its carrying on the business of dealing in live stock and the products thereof in Arkansas at a date named was averred. It was then charged that on the date mentioned, and other stated days, the company, in violation of the act of 1905, was a member or party to a pool or trust, agreement, combination, or understanding with corporations and persons, named and unnamed, who were engaged in the same line of business, to regulate the prices of slaughtered live stock, and to maintain such prices as so regulated and fixed. The paragraph concluded with the prayer for 'judgment that the right and privilege of said defendant to...

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