International Harvester Company of America v. Commonwealth of Kentucky

• Citation: 34 S.Ct. 853,234 U.S. 216,58 L.Ed. 1284
• Decision Date: 08 June 1914
• Docket Number: Nos. 276,292,291,s. 276
• Parties: INTERNATIONAL HARVESTER COMPANY OF AMERICA, Plff. in Err., v. COMMONWEALTH OF KENTUCKY
• Court: United States Supreme Court

234 U.S. 216

34 S.Ct. 853

58 L.Ed. 1284

INTERNATIONAL HARVESTER COMPANY OF AMERICA, Plff. in Err.,

v COMMONWEALTH OF KENTUCKY.

Nos. 276, 291, 292.

Argued April 23 and 24, 1914.

Decided June 8, 1914.

Messrs. Alexander Pope Humphrey, Edgar A. Bancroft, and Victor A. Remy for plaintiff in error.

[Argument of Counsel from pages 216-218 intentionally omitted] Mr. James Garnett, Attorney General of Kentucky, and Messrs. Charles Carroll, Frank Ed. Daugherty, J. Robert Layman, and J. R. Mallory for defendant in error.

[Argument of Counsel from page 218 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

The plaintiff in error was prosecuted, convicted, and fined in three different counties for having entered into an agreement with other named companies for the purpose of controlling the price of harvesters, etc., manufactured by them, and of enhancing it above their real value; and for having so fixed and enhanced the price, and for having sold their harvesters, etc., at a price in excess of their real value, in pursuance of the agreement alleged. The judgments were affirmed by the court of appeals. 147 Ky. 564, 144 S. W. 1064, Id. 144 Ky. 795, 146 S. W. 12, 148 Ky. 572, 147 S. W. 1199. The plaintiff in error saved its rights under the 14th Amendment and brought the cases here.

The law of Kentucky in its present form is the result of the construction of several statutes somewhat far apart in time and of seemingly contradictory import. It was argued that construction could not take the place of express language in a statute, and Louisville & N R. Co. v. Central Stock Yards Co. 212 U. S. 132, 144, 53 L. ed. 441, 446, 29 Sup. Ct. Rep. 246, was cited for the proposition. But the case gives no sanction to it. The point there was that a defect in a law could not be cured by precautions in a judgment; not that what seemed a defect could not be cured by the construction given to the words by the court having final authority to declare their intent. We follow the Kentucky court of appeals in taking what they derive from the legislation of the state as if it were embodied in a single act.

The history in brief is this: By an act of May 20, 1890, agreements for the purpose of fixing or limiting the amount or quantity of any article of merchandise to be produced or manufactured, mined, bought, or sold; as also combinations by corporations with others to put the business of the combination under control with intent to limit, fix, or change the price of articles of commerce, or in any way to diminish the output of such articles, were made punishable by fine, imprisonment, or both. Carroll's Stat. (Ky.) §§ 3915-3917. In 1891 a new Constitution was adopted by the state, by § 198 of which it was made the duty of the general assembly 'from time to time, as necessity may require, to enact such laws as may be necessary to prevent all trusts . . . from combining to depreciate below its real value any article, or to enhance the cost of any article above its real value.' (This was held not to repeal the earlier statute. Com. v. International Harvester Co. 131 Ky. 551, 566, 133 Am. St. Rep. 256, 115 S. W. 703. But Kentucy grows tobacco, and the farmers were dissatisfied with the prices that they were able to get, being oppressed, as they alleged, by a combination of buyers. So, on March 21, 1906, a statute was enacted that made it lawful for any number of persons to combine the crops of wheat, tobacco, corn, oats, hay, or other farm products raised by them, for the purpose of obtaining a higher price than they could get by selling them separately. Session Laws 1906, chap. 117, p. 429. And later, by an act of March 13, 1908, not only was the legality of these last-mentioned combinations reaffirmed, but they were protected by injunction, and the sale by or purchase from the owner contrary to his agreement was punished by a fine.

When the court of appeals came to deal with the act of 1890, the Constitution of 1891, and the act of 1906, it reached the conclusion, which now may be regarded as the established construction of the three, taken together, that by interaction and to avoid questions of constitutionality, they were to be taken to make any combination for the purpose of controlling prices lawful unless for the purpose or with the effect of fixing a price that was greater or less than the real value of the article. Owen County Burley Tobacco Soc. v. Brumback, 128 Ky. 137, 151, 10m S. W. 710; Com. v. International Harvester Co. 131 Ky. 551, 568, 571-573, 133 Am. St. Rep. 256, 115 S. W. 703; International Harvester Co. v. Com. 137 Ky. 668, 126 S. W. 352. The result seems to be that combinations of tobacco growers are held to do no more than restore an equilibrium that has been disturbed by a...