Nash v. Page

• Decision Date: 14 December 1882
• Citation: 80 Ky. 539,4 Ky.L.Rptr. 477
• Parties: Nash, & c., v. Page, & c.
• Court: Kentucky Court of Appeals

80 Ky. 539

4 Ky.L.Rptr. 477

Nash, & c., v. Page, & c.

Court of Appeals of Kentucky.

December 14, 1882

1. When a warehouseman for the public sale and purchase of tobacco undertakes to sell at auction, and to conduct the business of a public warehouseman, he assumes an obligation to serve the entire public.

2. He has no right to select his own bidders, nor can he refuse to receive the tobacco of the producer when shipped to him.

3. He can no more refuse to sell the tobacco of the producer at auction, or deny the right of any to bid for it when offered than the owner of a stage or steamboat line may decline to take passengers, or the owner of wine-houses refuse to receive the wine of others on storage.

4. He cannot escape the obligation imposed by the reason of the statute and the common law, by changing his appellation from warehouseman to commission merchant.

5. Both parties were in fault, and therefore the injunction was improperly granted.

APPEAL FROM LOUISVILLE CHANCERY COURT.

BROWN &amp DAVIE AND A. BARNETT FOR APPELLANTS.

1. The selling of tobacco at auction at tobacco warehouses is a business affecting the public interests, and appellees, in carrying it on, are under duties and obligations, by common law and by statute, to carry it on in a way that is reasonable and beneficial to the tobacco trade, and therefore they cannot discriminate or exclude buyers or sellers, except on reasonable grounds. (1 Bl. Com., 138; 37 Iowa 145; 10 Met., Mass., 475; 12 Pick., 477; 12 Cushing, 477; 1 Daly 547; 62 Maine, 214; 6 Wis. 546; 12 East., 527; 69 Ill. 91; 4 Otto, 125; 70 N.Y. 570; 30 Ohio 616; 45 Ill. 90; 23 Mich 355; 17 Wallace, 382; Act March 12, 1870; Ib., January 2, 1852; Acts 1851-'2; Act 1865; Story on Agency, sec. 27; 3 Bush, 621; Ambler's Rep., 496; 6 C. & P., 239; 70 Eng. Com. L. R., 54; 102 Ib., 316; 2 Morehead & Brown's Stat., pp. 830 to 851; Acts 1869-'70, vol. 1, 86; 6 Whart., 295; Gen. Stat., 557; 4 Otto, 162; Lane v. Kasey, 1 Met., 414; Cooley's Const. Lim., 572; Dillon on Corp., 93; 5 Bush, 560; 8 Bush, 417; 61 Barb., 539; in re Marriott, 87 Eng. Com. L. Rep., 513; Cooley on Torts, 280; 68 Penn. St., 186; 17 Ohio 190; 6 Ell. & Bl., 73; 6 Mann & Grang., 205; 39 N. H., 183; 7 Eq., 492; 5 Wall., 74.)

2. Whether appellees are " affected with a public interest" by law or by their own advertisements, or whether they be considered as engaged in a strictly private pursuit, the right of appellant to an injunction is equally clear.

J. F. BULLITT, ISAAC CALDWELL, AND W. LINDSAY FOR APPELLEES.

1. Appellants were members of the tobacco board of trade, and chose to secede from it without any sufficient reason. The " rebellion" was a violation of their own agreement, as contained in the articles of incorporation.

2. Whether a valid corporation or not, it is their agreement. Their secession was unreasonable, and their determination, as expressed in their paper of April 19, 1879, not to buy any tobacco at auction or private sale from appellees' warehouses until concessions were made to them, placed them beyond the protection of a court of equity.

3. The court below properly dissolved their injunction. (Session Acts 1869-' 70, p. 86; 3 East., 205; 6 Bacon's Ab., title Statute, letter D; 1 Bland., 165; 6 Wharton, 295; Cooley on Torts, 278; 1 Ld. Raymond, 374; 1 Dev. & Batt., 44; 14 Allen, 499; 34 Md. 407; Cropper v. Keating, 3 Common Pleas, 200.)

OPINION

PRYOR JUDGE:

This is a controversy between the proprietors of ten of the tobacco warehouses in the city of Louisville and the appellants (twenty-seven in number), who are large dealers in tobacco, and licensed by the United States and the city government, with authority to purchase and sell leaf and manufactured tobacco.

It seems that these appellants were denied the right to make purchases of tobacco at the warehouses of which the defendants are the proprietors, and they applied to the chancellor for an injunction, asking that these warehousemen be enjoined from refusing them permission to make purchases at their several warehouses, and from rejecting their purchases when making the highest and best bids for the tobacco offered, upon the payment of such fees as are charged to other buyers.

The appellants, or the most of them, are large dealers in tobacco, buying, as the record shows, two-thirds or more of the tobacco offered in the Louisville market; and becoming dissatisfied with the warehouse fees charged to them as buyers, they, together with other members of what is known as the Tobacco Board of Trade, demanded of the warehousemen a reduction of the fees from $2 to $1.25 per hogshead, with four months' free storage, and forty cents a month storage thereafter. This proposition or demand was rejected by the warehousemen, and on April the 18th, 1879, the appellants met and resolved, on and after the first Tuesday in May, not to purchase tobacco from these warehouses, at auction or otherwise, and also withdrew their membership from the board of trade. A new warehouse was opened about, or shortly after, this time by Schwartz and Johnson, and this house charged much less than the old warehouses were charging for either selling or storing tobacco. About the 1st of July, 1879, the board of trade adopted a by-law by which warehousemen, who were members of the board of trade, were prohibited from selling tobacco, publicly or privately, to any but members of the board, or to applicants for membership, and the members were also prohibited from buying at any warehouse in the city, the proprietors of which were not members. For a violation of this by-law they were subject to expulsion from the board.

On the 10th of February, 1872, the proprietors of these warehouses, or the most of them, said to their patrons and the public, in a publication made, that they had closed their respective tobacco warehouses, and withdrawn from working under the law as it then existed, and would, on the Monday following, open as commission merchants for the sale of tobacco, cotton, and other products of the soil, the fees for selling tobacco the same as heretofore, and for other products the customary commissions, & c.

After the resolution passed by the appellants that they would not purchase tobacco at the warehouses owned by the defendants, and the resolution adopted by the defendants (appellees) prohibiting them from purchasing, the appellants, ascertaining that the new house, known as the Enterprise, could not furnish enough tobacco to supply their wants, offered to purchase of the appellees, and were denied the right, and hence this action. This, in substance, is the history of the controversy, as given by the chancellor, and verified by the record before us. It is a matter of history, and also a fact appearing from this record, that the tobacco trade in the city of Louisville is very large, the annual sales approximating in value six million of dollars, and the trade constantly increasing.

Since the formation of the state government, the sale of this great staple has been fostered and protected by legislation. The rights and duties of the warehousemen, the buyers and sellers, and all the officers connected with the warehouses, have been defined by statute, and no commodity has received the same protection in the way of either general or special legislation. Nine tenths of the tobacco is sold at auction, with the right unquestioned, until the present controversy, of all parties to enter the warehouses as buyers or as sellers, by their warehousemen as their agents, and competition left unrestricted, save the option on the part of the owner to approve or reject the bid. There is no provision, it is true, in any of the statutes now in force, or that existed prior to the law as we now find it, compelling the producer of tobacco to take it to the warehouses in the city of Louisville, or to expose it for sale at public auction; but such warehouses have been always regulated by law for the benefit of the producer, as well as those who are the proprietors of these warehouses, and the latter have assumed an obligation to the public that exists so long as they continue public warehousemen. They have assumed a quasi public character under the protection of the law, and will not be allowed to exercise all the privileges that have heretofore belonged to warehousemen, and evade all the duties and responsibilities of their position by the passage of a resolution disclaiming that they are operating their houses in the capacity of warehousemen, but as commission merchants.

They pursue the same business, without any change as to the manner of selling or of conducting their warehouses, claiming only the exercise of a private right, and an entire exemption from the discharge of a public duty. Can this be done; and is the producer at the mercy of a board of trade claiming, regardless of the law for the protection of this great interest, the right to exclude from the warehouses of the city all persons who offer themselves as buyers because they are not members of that board? and to go further, if they see proper, and refuse to receive or sell at auction the tobacco shipped to their houses by the owner or producer? If they are to be regarded as commission merchants only, they can exercise such a right.

" It is a part of every man's civil rights that he be left at liberty to refuse business relations with any person whomsoever, whether the refusal rests upon reason or is the result of whim, caprice, prejudice, or malice. With his reasons neither the public or third persons have any legal concern." (Cooley on Torts, 278.)

This is a safe rule, and a court, in discriminating between what are public and what are private rights or duties, should be careful not to restrict the citizen in the exercise of a...