Oil Company v. State of Texas, WATERS-PIERCE

• Court: United States Supreme Court
• Writing for the Court: Day
• Citation: 53 L.Ed. 417,29 S.Ct. 220,212 U.S. 86
• Parties: OIL COMPANY, Piff. in Err., v. STATE OF TEXAS
• Docket Number: No. 359,WATERS-PIERCE
• Decision Date: 18 January 1909

212 U.S. 86 29 S.Ct. 220 53 L.Ed. 417 WATERS-PIERCE OIL COMPANY, Piff. in Err.,

v.

STATE OF TEXAS.

No. 359. Argued October 30, November 2, 3, 1908. Decided January 18, 1909.

Page 87

Messrs. Moorfield Storey, E. B. Perkins, H. S. Priest, J. L. Thorndike, and J. D. Johnson for plaintiff in error.

[Argument of Counsel from pages 87-92 intentionally omitted]

Page 93

Messrs. G. W. Allen, R. L. Batts, Robert Vance Davidson, Jewel P. Light-foot, John W. Brady, T. W. Gregory, and Messrs. Allen & Hart for defendant in error.

[Argument of Counsel from pages 93-95 intentionally omitted]

Page 96

Mr. Justice Day delivered the opinion of the court:

This case was begun in the state district court of Travis county, Texas, to forfeit the permit of the plaintiff in error, the Waters-Pierce Oil Company, a corporation of the state of Missouri, to conduct business in the state of Texas, and to assess penalties against it for violation of the anti-trust laws of that state. The prosecution was under two laws of the state,—one of 1899 and one of March 31, 1903. The proceeding was brought by the attorney general of Texas and the county attorney of Travis county, to recover penalties, under the act of [May 25] 1899, from the 31st day of May, 1900, until the 31st day of March, 1903, at the rate of $5,000 per day, and under the act of 1903, from the 31st of March, 1903, till the 29th of April, 1907, at the rate of $50 per day, and to cancel the permit of the defendant to do business, other than interstate, in Texas.

The jury returned a verdict against the defendant, and as-

Page 97

sessed penalties, under the act of 1899, from May 31, 1900, to March 31, 1903,—1,033 days. Such penalties were assessed at the rate of $1,500 a day during that period, being the total sum of $1,549,500. The jury also found against the defendant under the act of 1903, and assessed the penalties for each day between April 1, 1903, and April 29, 1907,—1,480 days,—at the rate of $50 per day, making a total of $74,000. The jury further found that the permit of the defendant to do business in the state of Texas should be canceled. Thereupon the court rendered a judgment for the state of Texas for the sum of the penalties assessed, $1,623,500, and ordered a cancelation of the defendant's permit to do business in the state except as to its interstate commerce business. This judgment was affirmed upon appeal to the court of civil appeals of Texas (106 S. W. 918), and, upon application to the supreme court of Texas, that court refused to grant a writ of error, and the case was brought here.

The case was submitted upon oral arguments and elaborate briefs and a voluminous pecord. It was argued, in many aspects, as though this were a proceeding in error to review the weight of the evidence adduced in the state courts, to re-examine the rulings of the court upon the admissibility of testimony, and to determine the effect of the statute of limitations in the state.

The jurisdiction of this court to review the proceedings of the state courts, as we have had frequent occasion to declare, is not that of a general reviewing court in error, but is limited to the specific instances of denials of Federal rights, whether those pertaining to the constitutionality of Federal or state statutes, or to certain rights, immunities, and privileges of Federal origin, specially set up in the state court, and denied by the rulings and judgment of that court. U. S. Rev. Stat. § 709, U. S. Comp. Stat. 1901, p. 575. Nor does this court sit to review the finding of facts made in the state court, but accepts the findings of the court of the state upon matters of fact as conclusive, and is confined to a review of questions of Federal law within the jurisdiction conferred upon this court. Quinby v. Boyd, 128 U. S. 489, 32 L. ed. 503, 9 Sup. Ct. Rep. 147; Egan v. Hart, 165 U. S. 188, 41 L. ed. 680, 17 Sup. Ct. Rep. 300; Downer v. Richards, 151 U. S. 658, 38 L. ed. 305, 14 Sup. Ct. Rep. 452; Thayer v. Spratt, 189

Page 98

U. S. 346, 47 L. ed. 845, 23 Sup. Ct. Rep. 576. We shall not, therefore, undertake to follow counsel in the consideration of all the questions argued, but shall limit our review to questions of a Federal nature which we deem to be properly made in this record and essential to the decision of the case.

Epitomizing the Texas anti-trust statutes for the purposes of his charge, the learned judge who presided in the district court, speaking first of the act of 1899, stated them as follows:

'For the purposes of this charge you are instructed that this act made it unlawful for any corporation transacting or conducting any kind of business in this state to enter into, or become a party to, any agreement or understanding with any other corporation or individual to fix or regulate the price in Texas of any article of manufacture or merchandise, or to control or limit in Texas the trade in any article of manufacture or merchandise.

'You are further instructed that said statute also made it unlawful for any corporation transacting or conducting any kind of business in this state to bring about or permit any union or combination of its capital, property, trade, or acts with the capital, property, trade, or acts of any other person or corporation, whereby the price in Texas of any article of manufacture or merchandise would be fixed or sought to be fixed, regulated or sought to be regulated; or whereby the price in Texas of any article of manufacture or merchandise would be reasonably calculated to be fixed or regulated, or whereby the trade in such article of manufacture or merchandise in Texas would be sought to be controlled or limited, or would be reasonably calculated to be controlled or limited.

'The statute known as the anti-trust law of 1903 became effective on March 31, 1903, and has since continued in force. For the purposes of this charge you are instructed that this statute defines a trust to be a combination of capital, skill, or acts by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any, or all of the following purposes, viz.:

Page 99

'(1) To create or which may tend to create or carry out restrictions in trade or commerce in Texas, or to create or carry out restrictions in the free pursuit in Texas of any business authorized or permitted by the laws of this state.

'(2) To fix, maintain, or increase the price of merchandise in Texas.

'(3) To prevent or lessen competition in Texas in the sale of merchandise.

'(4) To abstain from engaging in business or in the sale of merchandise in Texas, or any portion thereof.

'Said statute of 1903 further defines a monopoly to be a combination or consolidation of two or more corporations when effected in any of the following methods, viz.

'(1) When the direction of the affairs of two or more corporations is in any manner brought under the same management or control for the purpose of producing, or where such common management or control tends to create, a trust, as above defined.

'(2) When any corporation acquires the shares or certificates of stock, franchise, or other rights, or the physical properties or any part thereof of any other corporation for the purpose of preventing or lessening, or where the effect of such acquisition tends to affect or lessen, competition, whether such acquisition is accomplished directly or through the instrumentality of trustees or otherwise.

'(3) Oil, all other products of petroleum, and goods, wares, or merchandise of any character which the defendant or its agents may have purchased or acquired in any manner outside of the state of Texas, and caused to be transported to its agents or others within the state, are the subjects of interstate commerce when they enter this state, and so remain until such commodities are removed from the original tanks, vessels, or other packages in which they are imported into the state and become mixed with the common mass of property of similar character in this state. The anti-trust laws of Texas have no reference to agreements or pools or arrangements of any character concerning subjects of interstate commerce, and no agreement,

Page 100

pool, or other arrangement, if any, which the defendant may have entered into with reference to the sale of any subject of interstate commerce can be considered by you as violating any anti-trust law of Texas. But neither oil purchased by the defendant from the Corsicana Refinery or elsewhere in Texas, nor other merchandise purchased by defendant at points in Texas, nor such oil or other merchandise purchased by defendant at points outside of the state, and transported into the state, and removed from the original packages or vessels in which it was brought into the state, and mingled with other property of similar character in the state, is the subject of interstate commerce, but, on the contrary, is the subject of local commerce, and any agreement or pool or arrangement entered into by defendant with reference to such property or the sale thereof, if any such sale there were, would be unlawful, if in violation of the anti-trust laws of this state.'

The penalties denounced by the act of 1899 were not less than $200 nor more than $5,000 for each day the defendant might be found to have violated the law; under the act of 1903 the penalty was fixed at $50 for each day, and a forfeiture of the right to do business within the state of Texas was declared.

The complaint in the case is voluminous, and its averments contain the history of the so-called conspiracy between the Waters-Pierce Oil Company and a number of persons composing the Standard Oil Company, beginning in January, 1870, for the purpose of monopolizing and controlling the business of refining and transporting and selling petroleum and similar products throughout the United States and in the state of Texas. It charges that the Waters-Pierce Oil...