Hudson Sales Corp. v. Waldrip

• Decision Date: 09 April 1954
• Docket Number: No. 14511.,14511.
• Citation: 211 F.2d 268
• Parties: HUDSON SALES CORP. v. WALDRIP.
• Court: U.S. Court of Appeals — Fifth Circuit

211 F.2d 268 (1954)

HUDSON SALES CORP. v. WALDRIP.

No. 14511.

United States Court of Appeals, Fifth Circuit.

March 5, 1954.

Rehearing Denied April 9, 1954.

Dan Rogers, Thompson, Knight, Wright & Simmons, Dallas, Tex., Richard W. Larwin, Beaumont, Smith & Harris, Detroit, Mich., for appellant.

Claude R. Miller, Strasburger, Price, Kelton, Miller & Martin, Dallas, Tex., for appellee.

Before HUTCHESON, Chief Judge, and HOLMES and RUSSELL, Circuit Judges.

HUTCHESON, Chief Judge.

Paragraph one of the complaint, as amended, alleged: "This action is for fraud¹ and, in the alternative, arises under the anti-trust acts of July 2, 1890 and October 15, 1914, as amended, U. S.C. Title 15, Sections 1 to 15",² and it was on the basis of these allegations that plaintiff sued for the damages claimed.

The defendant, Hudson Motor Car Company, the manufacturer of Hudson cars, was not served with summons and did not appear in the cause, and at the close of the trial, the action was dismissed as against it with prejudice to the plaintiff.

The defendant, Hudson Sales Corporation, the distributor answered, denying the charges of fraud and conspiracy and the claim that plaintiff had been damaged.

Upon the issues thus joined, the cause was tried to the court without a jury and, the evidence concluded, the district judge, writing no opinion and making no separate findings of fact and conclusions of law as the basis for entering judgment against the defendant for $75,000 plus $7500 attorneys fees and costs, contented himself with this brief oral statement:

"I find as facts, Gentlemen, that the plaintiff was required, by the Hudson Sales Corporation, and the Hudson Motor Car Co., acting together, through a common ownership and common officers, directors, and employees, to give up the dealing in Willys, and Packard, and the Philco apparatus, and in the place of Philco, putting the Philcos upon the Hudson cars, to use the Hudson apparatus upon Hudson cars.

"I find that the restriction was in violation of the Anti-trust Statute, and that that statute is compensatory and punitive.

"And I find that by reason of that, the plaintiff was damaged in the sum of $75,000.

"And I fix the attorney\'s fees at $7,500.00, or a total amount of $82,500.00."

Appealing from that judgment, the defendant is here insisting: (1) that the above statement is not in compliance with Rule 52(a), Federal Rules of Civil Procedure³ and is wholly inadequate to serve as sufficient findings of fact to support the judgment, and (2) that, if it is sufficient to serve as such findings, the evidence affords no substantial basis for them, and they are, therefore, clearly erroneous.

In support of its first contention that the findings are insufficient, appellant, citing some of the many cases⁴ in which judgments have been reversed for violation of this rule, points to the fact that, though plaintiff's complaint charged violations of the Sherman Act, the Robinson Patman Act, and the Clayton Act, the brief statement made by the court did not disclose which section or sections defendant was found to have violated, the wherein of the violation, that is of what the violation consisted, or the basis for the judgment for the damages awarded plaintiff.

In support of its second contention that the findings are clearly erroneous, appellant, citing some of the many cases⁵ dealing with suits of this general nature, which have firmly established the principle that an essential to a private recovery is a showing of a public injury, and that only unreasonable restraints of interstate commerce, restraints which substantially affect competition or which have the purpose or effect of raising or fixing market prices, are condemned under Section 1 of the Sherman Act, points to the complete absence from the evidence of proof that defendant was guilty of any such acts. It points too to the settled construction of Section 2 of the Sherman Act which deals with monopoly and attempts to monopolize,⁶ that there must be shown either an actual monopoly or a specific intent to monopolize, neither of which is claimed or proved here. Finally, as to Sec. 3 of the Clayton Act,⁷ which appellee in his brief⁸ states is the section which the district judge found that the defendants had violated, appellant points out that this section makes illegal only those contracts or sales which tend to substantially lessen competition or create a monopoly and to the complete absence of finding or evidence that anything done by defendant had either of these effects.

Replying to appellant's contention that, viewed as a finding of fact, the court's statement is inadequate to support the judgment, appellee insists that this contention is not a substantial one, first, because Rule 52(a), invoked by appellant, is a technical rule, more honored by the courts in the breach than in the observance, and, second, because it plainly appears from the statement itself that it is completely adequate as a finding of fact.

To appellant's second contention that if the statement is adequate in the sense that there is implicit in it findings as to the essential elements of the violation charged, these findings are clearly erroneous, appellee replies that the record contains conclusive proof that Hudson Motor and Hudson Sales violated Section 1 of the Sherman Act and Section 3 of the Clayton Act, by entering into a conspiracy in restraint of trade and commerce among the several states, and unlawfully making contracts and sales pursuant thereto on the condition that the purchasers should not deal in the products of Hudson's competitors.

For the reasons hereafter briefly stated, we disagree with appellee and agree with appellant as to both of its contentions, and we also agree with appellant that the judgment should be reversed and here rendered for it.

Section 15, Title 15 U.S.C.A., under the authority of which plaintiff's alternative claim is brought, reads as follows:

"15. Suits by persons injured; amount of recovery. Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney\'s fee."

In view of the elements essential to a recovery under this section, as they are stated in it and in the cases cited and discussed in the annotations to it,⁹ it is quite clear, we think, that the appellant is right in its contentions: that the district judge has failed to find the facts which must be found if a judgment under Section 15 is to be entered; and that the judgment is subject to reversal for want of adequate findings to support it.

Because, however, we are also of the opinion that appellant is right in its second contention that there is no basis, in the evidence and the authorities governing recoveries under Section 15, for findings that there was a conspiracy to restrain trade, a monopoly, an attempt to create a monopoly, or an agreement of the kind prohibited in Section 14, and none for a finding that plaintiff has suffered damages "in his business or property" as a proximate cause of any illegal act of defendant, we will not make the useless gesture of reversing for the absence of findings but will order the judgment reversed and here rendered for defendant.

The written contract, which is set out in the record, contains in it no such agreement as plaintiff charges was made and the statements made orally to and by plaintiff, if made as he testified they were, do not amount to an agreement in violation of the act. Taken most favorably to plaintiff, his evidence amounts to no more than a claim: that Hudson Motor Company and Hudson Sales, its wholly owned subsidiary and agent for distribution of its cars, had decided upon a policy deemed necessary in order to promote and increase sales of Hudson products; that this policy was that no new contracts would be made and no old ones renewed with master dealers, such as plaintiff, who handled other lines except upon a clear showing that they had the capacity, the facilities, and the get-up and know-how to adequately handle the Hudson products along with the others; and that they put this policy into effect with plaintiff by not renewing his contract when they finally concluded that he was not in a position to give, was not giving, and would not give Hudson adequate representation and it would not be to Hudson's best interests to again contract with him. Neither the fixing of the policy which led to this determination nor the determination itself was, under the undisputed evidence in this record, in any respect a violation of the antitrust laws. Both were business steps taken for business reasons not for the purpose or with the effect of restraining competition, fixing prices, or otherwise violating the antitrust laws or injuring anyone.

If, without deciding, we should assume that it could be said of these two non-competitive companies, one the wholly owned subsidiary and agent of the other for the distribution of its products, that concerted action by them could constitute a conspiracy in violation of the antitrust laws, but see Nelson Radio & Supply Co. v. Motorola, 5 Cir., 200 F.2d 911, where in a similar situation involving not a corporation and its agent, a wholly owned corporate subsidiary but a corporation and individuals as its agents, we held to the contrary,¹⁰ there is no substantial evidence that what was said and done between plaintiff and defendants constituted the prohibited making of a lease, sale, agreement or understanding with the probable effect of substantially lessening competition or creating or tending to create a monopoly in any line of commerce. What is charged and proven here is no more than was charged in the Motorola ...