Hood Rubber Co. v. United States Rubber Co.

• Decision Date: 11 January 1916
• Docket Number: 5.
• Citation: Hood Rubber Co. v. United States Rubber Co., 229 F. 583 (D. Mass. 1916)
• Parties: HOOD RUBBER CO. v. UNITED STATES RUBBER CO. et al.
• Court: U.S. District Court — District of Massachusetts

229 F. 583

HOOD RUBBER CO. v. UNITED STATES RUBBER CO. et al.

No. 5.

United States District Court, D. Massachusetts.

January 11, 1916

Henry E. Warner and Arthur H. Brooks, both of Boston, Mass., for plaintiff.

Robert M. Morse, Wilford D. Gray, George L. Huntress, and Homer Albers, all of Boston, Mass., for defendant United States Rubber Co.

Chamberlain & Fletcher, of Brockton, Mass., for defendants Deland and Cary.

MORTON District Judge.

This is an action at law under the Sherman Act (26 Stat. 209) to recover threefold damages. The defendants are the United States Rubber Company, a New Jersey corporation engaged in the manufacture of rubber footwear (which will be referred to as the defendant where not otherwise indicated), and six other persons and corporations, all citizens of Massachusetts, and engaged separately in that state in the manufacture of lasts used in making rubber boots and shoes. The defendants have demurred, and the question is whether the declaration states a cause of action.

It contains seven counts, the first of which, as I construe it describes the following business situation: Lasts or forms are necessary tools or appliances in the manufacture of rubber boots and shoes. In April, 1896, the only makers of them in the United States were the six last-named defendants who, as it happened, were all citizens of Massachusetts, and did business here, and nowhere else. They sold their product extensively in interstate commerce. In the month referred to the principal defendant acquired control of ten different corporations, organized under the laws of several different states, each of which was engaged in the manufacture and interstate sale of rubber footwear. It did this for the purpose of controlling such rubber companies as were then, or might thereafter be, engaged in the interstate sale of rubber boots and shoes, and of controlling the prices asked for such goods.

In manufacturing rubber footwear, lasts are absolutely essential. The United States Rubber Company, with the intent of restricting and controlling the interstate sale and transportation of them, made in April, 1896, agreements with every one of the last manufacturers, whereby they separately agreed to sell no lasts until January 1, 1897, except to such persons and corporations as might be specified by the defendant. By means of these agreements the defendant restricted and controlled the interstate sale of lasts for rubber boots and shoes from the time when the agreements were made, in April, 1896, until they expired on January 1, 1897 and during that interval deprived other persons engaged in interstate sale of rubber footwear of all opportunity to procure lasts in this country.

In April, 1896, F. C. Hood and A. N. Hood left the employ of one of the rubber companies then controlled by the defendant, and began a rubber business under the name of the Hood Rubber Company. They bought land, and contracted for buildings and machinery to manufacture rubber boots and shoes, and took steps to form a corporation for that purpose. Before the corporation was chartered, F. C. Hood 'on behalf of such corporation to be formed as aforesaid sent an order for' lasts to one of the defendant last companies (declaration, clause 9). This company wrote to the principal defendant, asking to be released from its agreement not to sell to other than designated persons. The defendant declined to grant such release by a letter which is set out in the declaration, and might be found, in connection with the other facts alleged, to evidence an intent to restrict or monopolize the trade in lasts by the contracts referred to. Thereafter F. C. Hood, 'doing business as the Hood Rubber Company, and acting on behalf of himself and others who were forming the plaintiff corporation of the same name, endeavored to procure lasts from each and every one of said last companies, * * * and each and every one of the last companies refused to furnish lasts to the plaintiff, or to any rubber company not named in its contract with the defendant' (declaration, par. 10). Hood, on behalf of the plaintiff, made every endeavor to procure lasts within the United States, but was unable to do so. On or about October 12, 1896, the plaintiff corporation received its charter, and immediately afterward made further efforts to buy lasts from the manufacturers of them, but was unable to obtain any suitable ones until the expiration of said contracts relating to them.

The contracts between the United States Rubber Company and the last companies greatly restricted the trade in such lasts and subjected such trade to the absolute control of the principal defendant; and the contracts, conspiracies, and monopolies between the defendant and the last companies were made with that intent, and to accomplish that result. There are allegations of damage to the plaintiff by the defendants' acts. This is the case stated in the first count.

Each of the remaining counts relates especially to some particular one of the contracts referred to between the defendant and the last companies; each incorporates by reference the first count, so far as material, alleges that 'said contract, agreement, or conspiracy was illegal and void,' and claims damages on account thereof.

There are no allegations that any one of the last companies knew that the rubber company was making contracts with other last companies, or was aware of any purpose or intent by the rubber company to restrain and control trade by the contract made with it, or was informed in any way that its contract was part of an effort by the rubber company to control and restrict interstate commerce by a series of such contracts tieing up all the last companies. No one of the last companies, apparently, occupied...