National Fireproofing Co. v. Mason Builders' Ass'n

• Decision Date: 26 March 1909
• Docket Number: 187.
• Citation: 169 F. 259
• Parties: NATIONAL FIREPROOFING CO. v. MASON BUILDERS' ASS'N et al.
• Court: U.S. Court of Appeals — Second Circuit

169 F. 259

NATIONAL FIREPROOFING CO. v. MASON BUILDERS' ASS'N et al.

No. 187.

United States Court of Appeals, Second Circuit.

March 26, 1909

[Copyrighted Material Omitted]

This is an appeal from a decree of the Circuit Court for the Southern District of New York dismissing a bill of complaint in a suit in equity.

The complainant is a corporation under the laws of the state of Pennsylvania and is authorized by its charter to manufacture and install install fireproofing. Since its organization it has been engaged almost exclusively in the manufacture and installation of what is known as hollow tile fireproofing and produces over 50 per cent. of the entire output of that article in the United States.

The defendant Mason Builders' Association is a corporation under the laws of the state of New York, composed of master mason builders doing business in the city of New York, but comprising less than a majority of the mason builders of that city.

The defendants the various Bricklayers' Unions, with four exceptions which are chartered, are unincorporated associations. Practically every bricklayer in the city of New York and Long Island is a member of one of these unions.

The object of this suit is to restrain the enforcement of, and to have declared void, and agreement entered into between the Mason Builders' Association and the Bricklayers' Unions, upon the ground that it unlawfully interferes with the business and property of the complainant.

The agreement in question between the Mason Builders' Association and the Bricklayers' Unions is a biennial trade agreement covering the years 1906 and 1907 and relating to rates of wages, hours of labor, the settlement of differences by arbitration, and many other matters in the building trade affecting the interests of the parties. The particular clauses to which the complainant objects are the following:

5) The members of the Mason Builders' Association must include in their contracts for building all cutting of masonry interior brickwork, the paving of brick floors, the installing of concrete blocks, the brickwork of the damp-proofing system and all fireproofing-floor arches slabs, partitions, furring and roof blocks-- and they shall not lump or sublet the installation, if the labor in connection therewith is bricklayers' work as recognized by the trade, the men employed upon the construction of the walls to be given the preference.'

'(10) No members of these Bricklayers' Unions shall work for any one not complying with all the rules and regulations herein agreed to.'

The first agreement between the Builders' Association and the unions was entered into in 1885 and provided only for rates of wages, hours of labor, and arbitration of differences. The agreements since that time have embraced the provisions of the original agreement and also a gradually increasing number of other important stipulations. Clause 5 in substance was inserted in the agreement of 1893 at the request of the unions and has been retained in subsequent agreements. Clause 10 was inserted in the agreement at the request of the association. The precise time when this was done does not appear, but the clause was in force before the complainant started business in the city of New York.

The work of installing tile fireproofing is considered to be bricklayers' work by the trade, and it would be impracticable for the complainant to undertake such work in the city of New York without employing members of the Bricklayers' Unions. Clause 10, however, provides that members of the unions shall only work for persons complying with all the rules and regulations of the agreement. Among them is clause 5, which provides that the work of installing fireproofing shall not be sublet by a contractor, but must be included in the contract for the building. It follows therefore that these two clauses operate to prevent the complainant from installing its fireproofing in New York City unless it takes the entire contract for erecting a building, which it is not authorized by its charter to do.

In actual operation, too, the clauses in question have prevented the complainant from carrying out contracts for the installation of fireproofing. Thus in 1903 the complainant had a contract with the George A. Fuller Company--a general contractor not a member of the Builders' Association-- for installing fireproofing in a building which it was erecting under contract in New York City. The association notified the complainant that its agreement with the unions forbade building contractors subletting the installation of fireproofing, and subsequently all the bricklayers employed upon the building--including those engaged upon the fireproofing-- struck. Consequently the complainant was obliged to cancel its contract. Other similar instances are shown in the testimony.

It is evident therefore that these clauses affect owners and general contractors as well as a person who, like the complainant, desires to take separate fireproofing contracts. An owner is practically unable to make a contract for fireproofing alone because if he does the bricklayers will not only refuse to do that work, but will decline to do the other work upon the building. A general contractor, whether a member of the association or not, practically cannot sublet the fireproofing because if he does he will violate clause 5, and the bricklayers will refuse to work for him.

The defendants claim that the object of clause 5 is to benefit the bricklayers by giving them inside as well as outside work and by preventing specialization in their trade. This subject is fully considered in the opinion.

The object of clause 10 is, obviously, to make the trade agreement effective by extending its operation to third persons requiring the labor of bricklayers. While members of the unions may work for others than members of the association, they can only work for such employers as follow the rules and regulations of the agreement. Should the complainant obtain the power to make general building contracts and enter into such contract it could then obtain the services of members of the unions in setting the fireproofing required. The complainant, however, does not wish to do business in this manner. It desires to take separate contracts for fireproofing installation and is prevented from so doing business by the operation of the clauses in question.

The allegations of the amended complaint with respect to a combination to injure the complainant, accompanied by threats and intimidation-- except as they relate to the enforcement against it of these clauses-- are not supported by the evidence. Whatever the defendants have done has been for the enforcement of such clauses, and if they are valid, and their execution and enforcement in the manner shown lawful, no independent cause of action is established.

James W. Osborne (Henry E. Lineaweaver, of counsel), for appellant.

Eidlitz & Hulse (Frederick Hulse, of counsel), for appellees Mason Builders' Ass'n and others.

Arthur Ofner and Joseph Forrester, for appellees Bricklayers' Union No. 1 and others.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

NOYES Circuit Judge (after stating the facts as above).

In considering the legal questions arising in this case, it must be borne in mind at the outset that it is not sufficient to show that the agreement in question may create a monopoly, may be in restraint of trade, or may be opposed to public policy. Agreements of that nature are invalid and unenforceable. The law takes them as it finds them, and as it finds them leaves them; but they are not illegal in the sense of giving a right of action to third persons for injury sustained. Brown v. Jacobs' Pharmacy Co., 115 Ga. 433, 41 S.E. 553, 57 L.R.A. 547, 90 Am.St.Rep. 126. And upon similar principles it seems equally clear that they afford such persons no ground for seeking an injunction against injury threatened.

But the complainant asserts that the agreement in this case is positively unlawful and not merely negatively invalid-- that it contravenes both national and state statutes against combinations, and thus does give rights of action to injured persons. With respect to the federal statute, it is not obvious in what way a trade agreement between builders and bricklayers, relating to their work in the state of New York, can be said to directly affect interstate commerce; but the consideration of this question is not necessary because a person injured by a violation of the federal act cannot sue for an injunction under it. The injunctive remedy is available to the government only. An individual can only sue for threefold damages. Greer v. Stoller (C.C.) 77 F. 2; Southern Indiana Exp. Co. v. United States Exp. Co. (C.C.) 88 F. 663. See, also, Bement v. National Harrow Co., 186 U.S. 87, 22 Sup.Ct. 747, 46 L.Ed. 1058; Post v. Southern R. Co., 103 Tenn. 184, 52 S.W. 301, 55 L.R.A. 481; Metcalf v. American School-furniture Co. (C.C.) 108 F. 909; Block v. Standard Distilling, etc., Co. (C.C.) 95 F. 978; Gulf, etc., R. Co. v. Miami Steamship Co., 86 F. 407, 30 C.C.A. 142; Pidcock v. Harrington (C.C.) 64 F. 821; Hagan v. Blindell, 56 F. 696, 6 C.C.A. 86, affirming Blindell v. Hagan (C.C.) 54 F. 40.

The statute of New York which it is claimed that the defendants violate provides in its first section as follows:

'Every contract, agreement, arrangement or combination, whereby a monopoly in the manufacture, production or sale in this state of any article or commodity of common use is or may be created, established or maintained, or whereby competition in this state in the supply or price of any such article or commodity is or may be restrained or prevented, or whereby, for the purpose of creating, establishing or maintaining a

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