N. Wisconsin Co-Op. Tobacco Pool v. Bekkedal

• Decision Date: 12 February 1924
• Citation: 182 Wis. 571,197 N.W. 936
• Parties: NORTHERN WISCONSIN CO-OP. TOBACCO POOL v. BEKKEDAL ET AL.
• Court: Wisconsin Supreme Court

182 Wis. 571

197 N.W. 936

NORTHERN WISCONSIN CO-OP. TOBACCO POOL

v.BEKKEDAL ET AL.

Supreme Court of Wisconsin.

Nov. 13, 1923.

Rehearing Denied Feb. 12, 1924.

Appeal from Circuit Court, Dane County; Edgar V. Werner, Judge.

Suit by the Northern Wisconsin Co-operative Tobacco Pool against M. H. Bekkedal and others. Judgment for plaintiff, and defendants appeal. Modified and affirmed.

This action is brought by the plaintiff to restrain the defendants from interfering with various and sundry contracts entered into by the plaintiff with various tobacco growers in the state of Wisconsin. The complaint alleges that plaintiff is a corporation duly organized and transacting business as a co-operative association under and pursuant to the laws of the state of Wisconsin; that the defendants M. H. Bekkedal and Lloyd Bekkedal are copartners, transacting business as M. H. Bekkedal & Son, and as such are engaged in buying, sorting, packing, and selling leaf tobacco throughout the entire tobacco-growing area of Wisconsin, their principal place of business being at Viroqua; that the other defendants are employés and agents of M. H. Bekkedal & Son; that plaintiff is incorporated as a co-operative association for the sole and only purpose of buying tobacco from its members and reselling the same; that the association is organized and operates without profit to its members, other than the benefits derived by them from co-operative marketing of their products, and that about 6,500 growers of tobacco in the state of Wisconsin are members of this plaintiff, and have each and all signed contracts for the purchase from them of all of their tobacco grown in the year 1922, and in the succeeding years, by the plaintiff; that the life and existence of the plaintiff depends upon the performance by its members of their contracts to sell and deliver their tobacco to the plaintiff; that plaintiff has contracted to sell and deliver to manufacturers of and dealers in Northern leaf tobacco all of the Northern assorting tobacco grown by its members and delivered to plaintiff pursuant to said contracts, the value of which is between $1,500,000 and $2,000,000; that the cost and expense of operating plaintiff's business is borne by the growers of tobacco, members of the association, and that the cost per pound to the members of the association of transacting its business is very materially reduced in proportion as the number of members who enter into contracts of sale and perform the same is increased; that the buying of tobacco from the farmers of Wisconsin has for many years been subjected to abuses, and that the farmers of Wisconsin have been taken advantage of by certain unscrupulous buyers operating in the state of Wisconsin, and that this plaintiff is operating chiefly for the purpose of providing better business methods in the marketing of the tobacco of its members, making it possible for the growers of tobacco to unite their interests in selling their tobacco to better advantage, and without the imposition and abuse which have heretofore been suffered by the growers of tobacco because of their lack of organization and lack of adequate facilities for handling and marketing their own tobacco; that the defendants have conspired together to interfere with the performance of the contracts between the plaintiff and its tobacco-growing members, and are soliciting members to breach their contracts with plaintiff, and to sell their tobacco to said M. H. Bekkedal & Son, and that they have purchased tobacco from the members of the plaintiff association, well knowing that said tobacco was under contract of sale to the plaintiff, and in furtherance of said conspiracy the defendants have urged members of the plaintiff association to breach their said contracts, and have advised them that said contracts were of no force or effect, and have offered and agreed, as plaintiff verily believes, to protect the said growers of tobacco who breached their contracts with this plaintiff against liability to plaintiff for and on account of such breach; that such interference with the contracts of plaintiff on the part of the defendants is for the purpose of destroying plaintiff, by causing dissatisfaction on the part of its members and creating discontent among them, so that plaintiff would be unable to perform its contract for the sale and delivery of large quantities of tobacco, thereby destroying the business relations existing between plaintiff and most substantial buyers of Northern leaf tobacco in the United States, thereby impairing and destroying the entire business of plaintiff, and ultimately causing it to dissolve its existence, and thereby leave its tobacco-growing members in the same unfortunate condition in which they were before the organization of the corporation; that for the same purpose the said defendants are maliciously and falsely representing to plaintiff's members that the officers and agents of the plaintiff are not dependable or trustworthy, and that the grades established for the tobacco of its members are unfair, and that the prices which the members will receive through the said plaintiff are wholly inadequate, and that they are offering to pay for tobacco of members of the plaintiff prices which they know are more than the tobacco is fairly worth in the open market, and that all of said things are done in pursuance of the conspiracy and design on the part of defendants, and particularly M. H. Bekkedal & Son, to damage, injure, and destroy the business of the plaintiff, by destroying its contract relations with its tobacco-growing members. The prayer is for judgment enjoining the defendants from interfering in any manner with the contracts of plaintiff and with any of the business matters of plaintiff, and particularly that they be enjoined from buying or attempting to buy any tobacco from any persons having contracts with this plaintiff, and from receiving or attempting to receive from any persons having contracts with the plaintiff any of the tobacco grown by them in the year 1922. Upon this complaint, supported by various affidavits, a temporary restraining order was issued, which was continued until the final determination of the case.

The answer, for the most part, denied the allegations of the complaint, so far as the conspiracy and the unlawful conduct pursuant thereto as alleged in the complaint is concerned. The answer then alleges, in effect, that the defendants M. H. Bekkedal & Son have long been purchasers of tobacco in the state of Wisconsin, and that for many years many members of the plaintiff association have sold their tobacco to the said Bekkedal & Son, and that any tobacco purchased by them from members of the plaintiff, which tobacco was under contract of sale to the plaintiff, was purchased by them pursuant to a voluntary offer on the part of the grower, and that said Bekkedal & Son purchased the same at the open market at the fair market value thereof, and that such purchase was pursuant to part of the legal conduct of the business of the said copartnership, and was not induced or brought about by any act of the said copartnership, except that it has at all times been willing to pay for such tobacco as was offered to it in the open market the fair market price thereof; that the purchase of said tobacco was not pursuant to any purpose or design on its part to injure the plaintiff, but was made in good faith, and for the primary purpose of promoting and conducting its usual business among the customers from whom it has purchased tobacco in the state of Wisconsin for many years past, and that it had no knowledge whether any of said growers had entered into contractual relations with the plaintiff. The answer further alleged that said partnership has been engaged in the purchase of tobacco in the state of Wisconsin for over 30 years, during which time it has invested large sums of money in such business, and now has invested in warehouses, plants, equipment, and necessary capital to carry on the business in excess of $1,250,000, and that it has large and expensive warehouses at many points in the state of Wisconsin; that it has acquired a valuable element of good will with said growers, and established a reputation for business capacity, integrity, and fairness; and that, unless said firm can purchase tobacco such as is offered to it, the investment in said warehouses and equipment, and the good will established by the copartnership, will be destroyed and rendered valueless.

The defendants then alleged that the existing contract between the plaintiff and the growers is designed for the purpose of monopolizing the tobacco crop, and limiting the sale of tobacco in the state of Wisconsin to such purchasers of tobacco as may be selected or favored by the organizers and promoters of said plaintiff, and that said contract and the course of business of the plaintiff is for the purpose of excluding from the business of purchasing tobacco in the state of Wisconsin any other persons whatsoever, and that the purpose of the said contract is to enable the managers of said plaintiff to prevent and stifle absolutely any competition among sellers of said tobacco produced in the state of Wisconsin and to enable plaintiff to fix absolutely the terms, prices, and grades for and on which the said tobacco shall be sold, and that the said contract is unlawful and void; that the contract between the plaintiff and the tobacco growers, and the manner in which plaintiff's business is conducted, constitutes an unlawful and unreasonable restraint of trade.

The foregoing facts are also pleaded as a counterclaim in which the defendants pray for judgment enjoining the plaintiff from claiming or pretending that the contract existing between plaintiff and its members is a valid contract or that it is in force or effect as to the 1922 crop, or that a breach of said contract on the part of the growers will result in litigation to...