Kellogg v. Sowerby

• Decision Date: 20 December 1907
• Citation: 190 N.Y. 370,83 N.E. 47
• Parties: KELLOGG et al. v. SOWERBY et al.
• Court: New York Court of Appeals Court of Appeals

190 N.Y. 370

83 N.E. 47

KELLOGG et al.

v.SOWERBY et al.

Court of Appeals of New York.

Dec. 20, 1907.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Spencer Kellogg and another against George F. Sowerby, as president of the Western Elevating Association, and others. From a judgment of the Appellate Division (114 App. Div. 916,100 N. Y. Supp. 1123), affirming a judgment for plaintiffs, defendants appeal. Reversed, and new trial ordered.

James McCormick Mitchell, L. L. Babcock, Charles A. Pooley, Adelbert Moot, and Spencer Clinton, for appellants.

George L. Lewis, for respondents.

WILLARD BARTLETT, J.

It is a misdemeanor under the law of this state for two or more persons to conspire to commit any act injurious to trade or commerce. Pen. Code, § 168, subd. 6. The prevention of competition in business is an act injurious to trade in contemplation of law. People v. Sheldon, 139 N. Y. 251, 34 N. E. 785, 23 L. R. A. 221, 36 Am. St. Rep. 690. In the case cited it was held that, if the purpose of the agreement there under consideration was to prevent competition in the price of coal between the retail dealers in that commodity, it was illegal, and justified the conviction of the defendants under our conspiracy statute.

A civil action is maintainable, by one who suffers injury as the result of a conspiracy forbidden by the criminal law, to recover the damages which he has sustained at the hands of the parties to the combination. The present suit is of that character. It is based upon an alleged conspiracy to prevent the plaintiffs from competing with other owners of grain elevators in the business of elevating grain at the port of Buffalo. The character of the combination, its object, and the means adopted for carrying its purpose into effect are fully set forth in the opinion written at the Appellate Division reversing a judgment of nonsuit. Kellogg v. Sowerby, 93 App. Div. 124,87 N. Y. Supp. 412. It is not necessary to restate the facts here. The Appellate Division reached the conclusion that ‘the acts of the defendant companies in refusing to handle grain from the Kellogg elevator upon the same terms that they handled grain from the other elevators were unlawful, and such refusal being the natural result, and that contemplated by the defendant association when it entered into the contracts referred to with said companies, the defendant association became a party to such unlawful acts, and equally liable with the other defendants therefor.’

This statement involves the proposition, which we deem to be correct, that in order to render the defendants liable as for a conspiracy they must have contemplated discriminating against the plaintiffs when they entered into the agreements in question. Upon the trial which now comes up for review, however, they endeavored to prove that no such discrimination was in contemplation, but were not permitted to introduce evidence tending to establish that fact. When Mr. Nathan Guilford, the traffic manager of the New York Central lines, was on the stand, the defendants offered to prove by him that the contracts were executed on the part of the railroad companies by their respective officers in the belief that Mr. Kellogg would come into the association and take...