Lawson v. Woodmere

• Decision Date: 09 November 1954
• Docket Number: No. 6831.,6831.
• Citation: 217 F.2d 148
• Parties: Charles L. LAWSON and Herbert M. Lawson, Partners doing business under the firm name of Lawson Vault Company, Appellants, v. WOODMERE, Inc., a corporation, Ridgelawn Cemetery Association, a corporation, Huntington Vault Company, a corporation, Harry S. Shivel, and Robert M. Bagby, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

217 F.2d 148 (1954)

Charles L. LAWSON and Herbert M. Lawson, Partners doing business under the firm name of Lawson Vault Company, Appellants, v.WOODMERE, Inc., a corporation, Ridgelawn Cemetery Association, a corporation, Huntington Vault Company, a corporation, Harry S. Shivel, and Robert M. Bagby, Appellees.

No. 6831.

United States Court of Appeals Fourth Circuit.

Argued October 7, 1954.

Decided November 9, 1954.

Thomas W. Harvey, Huntington, W. Va., for appellants.

Luther E. Woods, Jr., Huntington, W. Va.(Campbell, McNeer & Woods, C. F. Bagley, Jr., Huntington, W. Va., on brief), for appellees.

Before PARKER, Chief Judge, DOBIE, Circuit Judge, and HOFFMAN, District Judge.

DOBIE, Circuit Judge.

Charles L. Lawson and Herbert M. Lawson instituted, in the United States District Court for the Southern District of West Virginia, a civil action against Woodmere, Incorporated, Ridgelawn Cemetery Association, Huntington Vault Company and Harry S. Shivel and Robert M. Bagby, seeking damages and injunctive relief under the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1,2,15.The District Court denied the motion of plaintiffs for summary judgment and granted the motion of defendants to dismiss, on the score that there is no interstate commerce involved within the meaning of the Sherman Anti-Trust Act, 120 F.Supp. 267.Plaintiffs have appealed to us.We think the judgment of the District Judge was quite correct and we must, therefore, affirm it.

Plaintiffs, as partners, carried on, in Huntington, West Virginia, the business of manufacturing and selling concrete burial boxes and concrete burial vaults.They also sold metal burial vaults.These metal vaults, and some of the materials used in the construction of the concrete boxes and concrete vaults, were bought outside of West Virginia.All the boxes and vaults, until they were sold, were stored at Huntington in the warehouse of plaintiffs.On rare occasions, plaintiffs ordered a special metal vault for a customer which, upon its receipt by plaintiffs, was delivered directly for the use of the customer.

Woodmere and Ridgelawn are West Virginia corporations, each operating a cemetery in Cabell County, West Virginia.The stock of Ridgelawn is owned by Woodmere.These two corporations have the same officers, the defendants, Shivel and Bagby.The defendant, Huntington Vault Company, is a West Virginia corporation organized by Shivel and Bagby to engage in the vault business.Vault companies, it seems, would not sell direct to cemeteries.The stock of Huntington Vault Company is owned, in equal amounts, by Shivel and Bagby.It purchases its vaults outside the state and stores them on the property of Woodmere and Ridgelawn cemeteries until they are used.All three of these corporations have the same officers and maintain headquarters in the same building.The Vault Company has been deemed an integral part of the business conducted by Woodmere and Ridgelawn.

In October, 1950, Woodmere and Ridgelawn notified all vault companies and undertakers that all vaults to be used in these cemeteries would be installed by Woodmere and Ridgelawn; that all vaults would have to be delivered at least four hours before the funeral ceremony; and that the vault companies would be charged an installation fee of $25.00, payable before the installation of the vault.

In November, 1952, Woodmere and Ridgelawn entered into a contract with Huntington Vault Company under the terms of which the Vault Company took over the installation of all vaults in Woodmere and Ridgelawn, according to the rules and regulations prescribed by the two cemeteries.By this contract the Vault Company was given the right to charge a fee for each installation, provided the fee did not exceed $25.00.

The arrangements and practices between the defendants under these contracts are attacked by plaintiffs as being violative of the Sherman Anti-Trust Act.Accordingly, plaintiffs, in their complaint, sought treble damages, an injunction against the defendants and such other relief as might be proper and just.

It might be noted that Huntington Vault Company had, under the agreements in question, no exclusive right to sell the vaults which were to be installed in Woodmere and Ridgelawn cemeteries.Indeed, the principal supplier of these vaults has been the Tri-State Vault Company, an independent concern, as to which the defendants exercise neither ownership nor control.At no time has Huntington Vault Company acquired a major part of this vault business and its sales of vaults have shown a decrease.

We come first to the contention of plaintiffs that interstate commerce under the Sherman Act is here involved because plaintiffs import from without West Virginia some of the materials which they use in the manufacture of their burial boxes and vaults.This contention seems to be quite lacking in merit.Certainly, it finds little or no support in the decided cases.

Thus, in Brosious v. Pepsi-Cola Co., 3 Cir., 155 F.2d 99, 103, Circuit Judge Stephens said:

"The concentrate, a principal ingredient of the completed article of commerce, was shipped from New York to warehouse in Pennsylvania, where the article of trade was compounded and packaged.Did the interstate movement of the concentrate end when the ten-gallon containers of concentrate were received at Cloverdale Spring Company\'s plant; or did it, in its transition with other substances into a bottled and labeled beverage sold to the trade, continue in the flow of interstate commerce?We are of the opinion that the interstate movement ended with the containers resting in Cloverdale\'s warehouse."

Again, from the opinion of Circuit Judge Allen in Ewing-Von Allmen Dairy Co. v. C. and C. Ice Cream Co., 6 Cir., 109 F.2d 898, 900, certiorari denied312 U.S. 689, 61 S.Ct. 618, 85 L.Ed. 1126:

"We do not regard the transactions complained of as creating a direct and substantial burden on interstate commerce.The ingredients which came from without the state ceased to be a part of interstate commerce when manufactured and sold in Kentucky.The sales in appellants\' retail stores were entirely of a local nature, made after all transportation, local and interstate, had ceased, and were beyond the regulatory power of Congress over interstate commerce."

And Chief Justice Hughes, in the celebrated case of Schechter Poultry Corporation v. United States, 295 U.S. 495, 543, 55 S.Ct. 837, 849, 79 L.Ed. 1570, stated:

"The undisputed facts thus afford no warrant for the argument that the poultry handled by defendants at their slaughterhouse markets was in a `current\' or `flow\' of interstate commerce, and was thus subject to congressional regulation.The mere fact that there may be a constant flow of commodities into a state does not mean that the flow continues after the property has arrived and has become commingled with the mass of property within the state and is there held solely for local disposition and use.So far as the poultry here in question is concerned, the flow in interstate commerce had ceased.The poultry had come to a permanent rest within the state.It was not held, used, or sold by defendants in relation to any further transactions in interstate commerce and was not destined for transportation to other states.Hence decisions which deal with a stream of interstate commerce — where goods come to rest within a state temporarily and are later to go forward in interstate commerce — and with the regulations of transactions involved in that practical continuity of movement, are not applicable here."

See, also, East Ohio Gas Co. v. Tax Commission, 283 U.S. 465, 51 S.Ct. 499, 75 L.Ed. 1171;Danciger v. Cooley, 248 U.S. 319, 39 S.Ct. 119, 63 L.Ed. 266;Walling v. Goldblatt Brothers, 7 Cir., 128 F.2d 778, 782;Jewel Tea Co. v. Williams, 10 Cir., 118 F.2d 202, 207;Lipson v. Socony-Vacuum Corp., 1 Cir., 87 F.2d 265, 266.

Equally without merit is plaintiff's argument that the Sherman Anti-Trust Act may be invoked on the ground that interstate commerce is involved because some of the metal vaults sold by them in West Virginia had, at some earlier time, been brought into West Virginia...