Ladd v. S. Cotton Press & Mfg. Co.

• Decision Date: 26 March 1880
• Docket Number: Case No. 1812.
• Citation: 53 Tex. 172
• Parties: ALEXANDER H. LADD v. THE SOUTHERN COTTON PRESS AND MANUFACTURING COMPANY.
• Court: Texas Supreme Court

53 Tex. 172

ALEXANDER H. LADD

v.THE SOUTHERN COTTON PRESS AND MANUFACTURING COMPANY.

Case No. 1812.

Supreme Court of Texas.

Mar. 26, 1880.

APPEAL from Galveston. Tried below before the Hon. Wm. H. Stewart.

Suit by Alex. K. Ladd, appellant, a cotton buyer, against The Southern Cotton Press and Manufacturing Company, a corporation under the laws of Texas, carrying on the business of receiving, storing and compressing cotton, to recover back certain moneys paid on cotton entrusted to them. The money sought to be recovered back was alleged to have been paid by Ladd for charges on cotton purchased by him, after it had been stored, and while so stored in the warehouses and compress establishments of appellant. The right to recover was claimed on the ground, that, upon the facts stated in the petition, the payments had been made involuntarily, and under duress; that the charges demanded by the company were unlawful and without consideration; that by reason of the fact set forth, the property and services of the company had been submitted to public use, and had become affected with a public interest; that the charges exacted were oppressive and extortionate, and that they were received under circumstances entitling the plaintiffs paying the same to recover them back.

The petition, after alleging the incorporation of the company, etc., set forth in substance, that almost the entire cotton crop of Texas was shipped to Galveston for sale there, and shipment elsewhere; that the compressing thereof was necessary to its exportation; that large warehouses and compresses to store and compress the same formed a distinct business, requiring a large investment of capital, machinery, etc.; that there were seven warehouses and compress establishments in Galveston, including defendants, doing almost the entire business, which combined together and agreed on the same prices, terms, etc., forming a powerful monopoly, by and through which the cotton trade of Galveston was of necessity done, and having it in their power to exact from all persons engaged in the cotton trade, whatever charges they chose to impose upon such cotton, whether just or not; and that only one small compress in Galveston, doing only an inconsiderable business, was not united in the monopoly.

That these companies were incorporated and chartered by the state of Texas, and acting under their respective charters in performing the business of the public in preparing cotton for exportation, and in the exercise of a public employment and of franchises in which the public had an interest; that at various times from September 1, 1875 (as shown in exhibits), plaintiff purchased from the owners large quantities of cotton in bales, then in the compress and warehouses of defendants, and received orders in writing, commonly called delivery orders, therefor, from the owners, which were presented by plaintiff, and at the same time defendants ordered in writing the delivery of the cotton to other persons or vessels, as shown in the exhibits, which deliveries they were bound to make at the compress, without charge therefor, but refused to do so unless plaintiff would pay certain charges, called shippers' charges, set forth in the exhibits, or would agree to pay the same in monthly bills, which plaintiff was compelled to do under fear of incurring expenses and delays ruinous to his business.

That these charges were not for any labor, care or service in respect to cotton, but were without consideration on the part of defendant, except the simple act of delivery at the compress or warehouse, involving no labor or service whatever, but consisting in merely parting with the possession and control of the cotton, and permitting plaintiff and his transferees to take possession and control thereof at the warehouse, etc.; that these charges were forty, fifty and thirty cents respectively, per bale, as shown, in which was included fifteen cents per bale for drayage from the establishment, which was included whether drayage was done or not; if drayage was done, it was for account of parties to whom delivery was made, and not for plaintiff; that such charges in excess of fifteen cents were utterly without any consideration, unjust, unreasonable, and a mere tax and imposition on inter-state and foreign commerce, and in violation of the constitution of the United States.

That the charges complained of were mere arbitrary and fictitious, imposed by the compress establishments by unlawful conspiracy, extorted under the necessity of submitting thereto or being deprived of the privilege of dealing in cotton in Galveston, or of delays, trouble, litigation and expense in obtaining possession of their cotton and resisting such charges, alike destructive of their business; that those making such exactions knew at the time that the denial of their justice and legality was public and notorious, and were enforced by the power of exaction and extortion possessed by the combination, and submitted to under protest and under necessity and compulsion; that they knew said charges were without consideration and illegal; that they would not permit the removal of cotton, nor deal with persons refusing to pay or threatening to contest their illegal demands, and held such refusal in terrorem over all persons dealing in cotton in Galveston, and compelled compliance with, and submission to, their illegal demands, under pain of impeding and obstructing the subsequent business of those whose occupations required them to deal with cotton in the presses, and their business would have been broken up.

That from the known power, influence and disposition of the combination, contest with them would have fatally injured the credit of cotton buyers, barred them of the usual and necessary facilities for business, and compelled them to abandon the same, all of which was well known to defendants at the time of making and receiving said charges.

The appellee demurred generally and specially, first, that the facts pleaded showed no duress; second, that the business was a private and not a public one. Demurrer sustained and appeal perfected.

Ballinger, Jack & Mott for appellants:

I. There are two points deemed controlling in this case: First. That the Cotton Press Company was a chartered company, undertaking and engaged to perform services to the public of a character involving public use, interest and policy in an eminent degree, subject, therefore, to legislative control whenever exercised; or if not exercised, then entitled to charge and receive only reasonable compensation for such services, always to be judicially determined. Second. The petition shows that the charges exacted by the company were without consideration, unreasonable, oppressive and extortionate, and that they were received under circumstances entitling the plaintiffs paying the same to recover them back. This subject is presented fully in the Illinois Grain Elevator and Railroad cases, decided in 4th Otto. These were cases of the greatest consideration, argued and reargued, held under long advisement, decided by a court not only of the highest authority in the country, but by a court not hitherto deemed the friendliest to the rights of the public as against the rights of corporations or monopolies. They are believed to be decisive of the principles involved in this case, and it is confidently relied that they will receive the cordial approval of this court, and be followed to their rightful results with no unwilling steps.

II. In support of the same, we refer to the following authorities, viz.:

County of Galveston v. Gorham, Sup. Ct. of Tex., 49 Tex., 279;1 Tex. L. J., 250;Maxwell v. Griswold, 10 How., 256; Astley v. Reynolds, 2 Strange, 915; Morgan v. Palmer, 2 B. & C., 729; Dow v. Parsons, 2 B. & Ald., 563; Shaw v. Woodcock, 7 B. & C., 73 (14 E. C. L. R.); Smith v. Cuff, 6 M. & S., 160; Duke de Cordoval v. Collins, 4 A. & E., 864 (31 E. C. L. R., 379); Carter v. Carter, 5 Bing., 406; same, 37; Ashmole v. Wainright, 2 Ad. & E., 844 (42 E. C. L. R., 938); Valpy v. Manley, 1 C. B. R., 594 (50 E. C. L. R., 592); Steele v. Williams, 4 Exch., 624; Oates v. Hudson, 6 Exch., 346; Goddard v. Bulow, 1 Nott. & McC., 55, 56;Bates v. N. Y. Ins. Co., 3 Johns. Cas., 241;Hearsey v. Pruyn, 7 Johns., 181;Ripley v. Gelston, 9 Johns., 201;Clinton v. Strong, Id., 377;Frye v. Lockwood, 4 Cow., 456; Joynes v. Third School Dist., 3 Cush., 567;Northrop v. Graves, 19 Conn., 548;Henry v. Chester, 15 Vt., 460;Chase v. Dwinal, 7 Greenl., 134.

Flournoy & Scott also for appellants.

I. The petition shows that appellees had submitted their property and service to public use: 1. By becoming incorporated by the legislature for the purpose of carrying on the business designated. 2. By virtue of the nature and extent of the business. 3. Because by combination with others in the same line of business, it became a virtual monopoly, the exercise of which enabled them to exact fictitious charges and charges without consideration, as a substantial toll on nearly all of the chief commodity of the state, and that thereby their services and property became affected with a public interest. Constitution of Texas, sec. 4, art. Private Corporations; 1 Hargrave's Law Tracts, 78; 5 How., 583;Munn v. Illinois, 4 Otto, 125et seq.; Bolt v. Stennett, 8 Term, 606; Aldnutt v. Inglis, 12 East, 527.

II. That the charges complained of having been utterly without consideration, and involuntary or enforced payment having been made under protest and without mutuality of assent necessary to a contract, in fact under duress of property and absolute enforcement of the appellants, under all circumstances the amounts so paid are recoverable. Astley v. Reynolds, 2 Strange, 915; Oates v. Hudson, 6 Exch., 344; 5 E. L. & E., 469; Chase v. Dwinal, 7 Greenl., 134, marg.; Crawford v. Cato, 22 Ga., 594; Elliot v. Swartout, 9 Pet., 138; Foshay v. Furgeson, 5 Hill (N. Y.), 158;Collins v. Westbury, 2 Bay (S. C.),...