In
determining whether an allegation is relevant to the cause
and hence not to be stricken even if prejudicial or
scandalous, an approved test is whether the matter alleged is
competent to be shown on the hearing. C.S. § 537.
The
plaintiff sued for recovery of damages caused by alleged
injury to his business of hauling gasoline and kerosene, by
means of a conspiracy entered into by the defendants to
reduce transportation rates in order to eliminate plaintiff
as a competitor, with the purpose of raising such rates after
competition had been removed. The defendants answered the
complaint, denying the material allegations thereof and
setting up numerous defenses, amongst which are the
following:
1.
Paragraph 7 of the First Further Defense of Defendants
(except Piedmont & Northern Railroad Company): "The
effect of the railroad rate reductions of August, 1935, and
of May, 1936, has been beneficial to the public of this
State. This defendant alleges on information and belief
that immediately after the railroad rate reductions of
August, 1935, the price of gasoline to consumers in the
areas to which such rates were applicable was decreased by
approximately one-half cent per gallon and that immediately
after the railroad rate reductions of May, 1936, there was
a further decrease in the price to consumers of
approximately one-half cent per gallon. Said reductions to
the consuming public were the direct and immediate results
of the competitive rates so established by the railroads by
the said reductions."
2.
Paragraph 8 of the said First Further Defense of all of
said defendants (except Piedmont & Northern Railroad
Company): "As the result of the railroad rate
reductions of August, 1935, and of May, 1936, competition
between trucks and railroads at Wilmington has been
preserved and the price of gasoline to consumers has been
reduced. Should plaintiff prevail in this action, it will
result in an increase in rail rates and the elimination of
all rail competition for the transportation of petroleum
products out of Wilmington and an immediate increase in the
price of gasoline to North Carolina consumers. This
defendant alleges and says that such result is contrary to
the public policy of this State and will be injurious to
the citizens of this State, that the objective of
plaintiff's suit is contrary to law and contrary to
public policy, and that plaintiff should not prevail. The
facts set forth herein are pleaded by this defendant as a
defense to plaintiff's right to recover in this
action."
3.
Paragraph 6 of the Second Further Defense of all of said
defendants (except Piedmont & Northern Railroad Company)
"This defendant alleges on information and belief that
immediately after the rate reduction of August 17, 1935
and because of such railroad rate reduction, the price of
gasoline distributed by plaintiff in the vicinity of
Burlington was reduced approximately one-half cent per
gallon; that immediately after the said railroad rate
reduction of May 5, 1936, and because of such reduction
the price of gasoline distributed by plaintiff in the
vicinity of Burlington was reduced approximately one-half
cent per gallon."
4.
Portions of the Fifth Further Defense of all of said
defendants (except the Piedmont & Northern Railroad
Company), and portions of the Second Further Defense of
Piedmont & Northern Railroad Company, being the whole of
paragraphs 3 to 12, inclusive, of all of said answers:
"For the
year 1935 application was made by plaintiff to the
Commissioner of Revenue of the State of North Carolina for
the issuance of a pri vate hauler license
of each tractor or truck and trailer used by plaintiff in
such transportation."
"For
the year 1936 application was made by plaintiff to the
Commissioner of Revenue of the State of North Carolina for
the issuance of a private hauler license for each tractor or
truck and trailer used by plaintiff in such
transportation."
"For
the year 1937 application was made by plaintiff to the
Commissioner of Revenue of the State of North Carolina for
the issuance of a private hauler license for each tractor or
truck and trailer used by plaintiff in such
transportation."
"In
each such application plaintiff represented to the
Commissioner of Revenue that such tractor or truck and
trailer would not be used in any contract or for hire
haul."
"On
the strength of such representations the Commissioner of
Revenue of North Carolina, for the year 1935, 1936, and 1937,
issued to plaintiff for each such tractor or truck and
trailer used by plaintiff a private hauler license, and for
each such license plaintiff paid an amount of money
substantially less than would have been required for a
contract hauler license."
"In
performing all of the transportation of petroleum products
mentioned in the complaint, plaintiff has operated under
private hauler licenses."
"That
the private hauler licenses were obtained by plaintiff with
the purpose and intention of using said licenses for the
transportation of petroleum products for hire and under
contract of hire."
"That
in obtaining said private hauler licenses and so using them
plaintiff has defrauded the Department of Revenue of the
State of North Carolina and the State of North Carolina, and
the transportation of petroleum products for hire under
contract of hire by him in vehicles licensed solely as
private haulers has been in violation of the laws of the
State of North Carolina."
"In
securing the 'private hauler' licenses above
mentioned for all of the vehicles used by plaintiff in his
transportation of petroleum products as described in the
complaint, plaintiff has stated the combined weights of the
tractors, trailers and loads to be driven over the roads of
the State. In connection with the issuance of each such
license plaintiff has knowingly and intentionally and with
the intent to defraud the State, grossly understated the
combined weight of tractors, trailers and loads and has
obtained from the State licenses based upon weights greatly
less than the actual and true weights. By such fraudulent
misrepresentations plaintiff has obtained licenses for sums
greatly less than would have been charged by the State had
plaintiff truly and correctly stated such weights. In
connection with all of the transportation performed by
plaintiff, as alleged in the complaint, plaintiff has
operated his motor vehicles and containers under licenses
fraudulently obtained by the understatement of weights and
has operated each such vehicle contrary to the provisions of
the laws of this State."
"In
the transportation of petroleum products described in the
complaint plaintiff has regularly and consistently and
knowingly and intentionally violated the laws of the State of
North Carolina as has been set forth above in this further
answer and has knowingly and intentionally conducted an
illegal business, and plaintiff is not entitled to recover
any damage or loss of profits in this action, and plaintiff
should not be permitted to claim or recover any profits
growing out of his illegal operations and should not be
permitted to claim or recover any damages to his illegal
business. Defendant specifically pleads the illegality of
plaintiff's transportation operations in bar of any right
which plaintiff may have to recover in this action."
The
plaintiff moved to strike out certain portions of the answer,
including the above, upon the ground that they were
irrelevant, redundant, and prejudicial. C.S. § 537. The
judge, allowing such motion in part, struck out all of the
foregoing paragraphs of the answer and defendants excepted
and appealed.
Craige & Craige, of Winston-Salem, and Murray Allen, of Raleigh, for
appellee Winston-Salem Southbound Ry. Co.
Hobgood & Ward, of Greensboro, for appellee Atlantic & Yadkin Ry.
R. B.
Gwathmey, of Washington, D. C., and Murray Allen, of Raleigh,
for appellee Atlantic Coast Line R. Co.
Robert
H. Dye, of Fayetteville, for appellee Aberdeen & R. Ry. Co.
W. T.
Joyner, of Raleigh, for appellees High Point, R., A. & S. R.
Co. and Yadkin R. Co.
W. T.
Joyner, of Raleigh, and Long, Long & Barrett, of Burlington,
for appellee Southern R. Co.
W. S.
O'B. Robinson, Jr., of Charlotte, and Fuller, Reade & Fuller, of Durham, for appellee Piedmont & N. Ry. Co.
Cooper,
Curlee & Sanders, of Burlington, for plaintiff, appellee.
