Patterson v. The Imperial Window Glass Company and The Caney Window Glass Company

• Decision Date: 10 January 1914
• Docket Number: 18,409
• Citation: 91 Kan. 201,137 P. 955
• Parties: R. M. PATTERSON, Appellant, v. THE IMPERIAL WINDOW GLASS COMPANY and THE CANEY WINDOW GLASS COMPANY, Interpleader, Appellees
• Court: Kansas Supreme Court

137 P. 955

91 Kan. 201

R. M. PATTERSON, Appellant, v. THE IMPERIAL WINDOW GLASS COMPANY and THE CANEY WINDOW GLASS COMPANY, Interpleader, Appellees

No. 18,409

Supreme Court of Kansas

January 10, 1914

Decided January, 1914

Appeal from Montgomery district court; THOMAS J. FLANNELLY, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. COURTS--Inherent Powers--Abuse of Process. Courts possess inherent power to prevent any abuse of their process.

2. SAME--Will Not Entertain Action Based on Unlawful Conspiracy. Whenever at any stage of the proceedings it is established to the satisfaction of the court that the cause of action upon which the plaintiff seeks to recover arose out of an unlawful conspiracy, it becomes at once the duty of the court to refuse to aid either party to profit by the iniquitous agreement.

3. SAME--Form of Procedure--Immaterial. Ordinarily the procedure in such a case would be to dismiss the action at the cost of the party bringing it; but the name given to the procedure is of no consequence if the action of the court be rightly taken.

4. ANTITRUST LAWS--Unlawful Conspiracy in Restraint of Trade--Relief Properly Denied. On the facts stated in the opinion it is held that the plaintiff's cause of action arose out of and was based upon an unlawful conspiracy in restraint of trade and in violation of the antitrust laws of the United States and of the provisions of chapter 257, Laws 1889, and the acts amendatory thereto, and that the court properly denied the plaintiff any relief.

J. B Tomlinson, of Independence, for the appellant; Charles D. Shukers, of Independence, of counsel.

T. H. Sanford, and G. T. Sanford, both of Independence, for the appellees.

OPINION

PORTER, J.:

The only question to be determined is whether the trial court rightly denied the plaintiff any relief on the ground that his cause of action grew out of and was based upon an unlawful conspiracy and upon transactions between plaintiff and defendant in violation of the antitrust laws. The question is largely one of procedure.

R. M. Patterson, the plaintiff, sued the Imperial Window Glass Company to recover the sum of $ 34,946.48 damages for breach of a written contract entered into between himself as lessor of the Osage Window Glass Company and the defendant. Certain property was attached as belonging to the defendant. The Caney Window Glass Company filed an interplea setting up a claim to the attached property, and alleged, among other things, that Patterson was a stockholder in the Imperial Window Glass Company; that it was a corporation organized in the state of West Virginia for the purpose of controlling the price and products of window glass factories and preventing competition in that class of merchandise; that the contract upon which the plaintiff sought to recover grew out of transactions between himself and the defendant which were in violation of the provisions of chapter 81, General Statutes 1909, against monopolies and unlawful combinations.

The cause came on for trial before the court on the interplea. Over the objections of plaintiff the court admitted in evidence an exemplified copy of an indictment and the record of proceedings thereunder filed April 7, 1910, in the district court of the United States for the western district of Pennsylvania against the Imperial Window Glass Company and other defendants. There was endorsed on the exemplified copy the statement that on November 11, 1910, the several defendants in open court severally waived arraignment and entered a plea of nolo contendere. The name of R. M. Patterson did not appear in the record, but the Osage Window Glass Company, of which he was the lessee, was mentioned in the indictment as one of the corporations with which the Imperial Company had entered into an unlawful combination in restraint of trade.

The plaintiff and defendant separately demurred to the interpleader's evidence. The court sustained the demurrers, and at the same time held that all the parties were invoking the aid of the court in furtherance of an unlawful conspiracy, and that the court should not aid either of them, but leave them where it found them. In stating the reasons for the decision the court held that the demurrer of the plaintiff to the evidence of the interpleader should be carried back to the plaintiff's petition.

The plaintiff complains of this ruling, and insists that it is contrary to the rules of practice and of orderly procedure; that he has not had his day in court, and should have been permitted to introduce evidence. While we are not aware of any rule which would authorize a demurrer to evidence to be employed to search the whole record or to be carried back and sustained against a pleading, we think the procedure by which the court denied the plaintiff relief is of little importance. When at any stage of the proceedings it was established to the satisfaction of the court that the cause of action upon which the plaintiff sought to recover arose out of a transaction in violation of the antitrust laws, it became at once the duty of the court to refuse to aid either party to profit by the iniquitous agreement. Ordinarily the procedure would be to dismiss the action at the cost of the party bringing it. In this case the court taxed the costs against the plaintiff, and the name given to the procedure is of no consequence if the action of the court was rightly taken.

In the contract upon which his cause of action is based, plaintiff agreed to manufacture glass upon the orders of the Imperial Window Glass Company, and to sell to that company the entire output of his factory for a certain period. He was to be paid a certain price when the product was delivered, but it was understood that there were to be semiannual adjustments of prices, by which he was to be paid any difference between the first price and the average price received by the Imperial Company from its customers.

With respect to prices, there was this further provision:

"In the event that the wages of skilled labor employed in the manufacture of window glass shall be increased or decreased, from the scale upon which these discounts are based, the above prices shall be governed thereby, and shall be increased or decreased, as the case may be, in proportion to the relative increase or decrease of the scale of such wages as understood by window glass manufacturers."

Severe penalties were imposed for his failure to sell all of his output to the Imperial Company. He was obliged to make daily reports of his business to that company, and it was to be permitted to audit his books and to examine his premises at any time to ascertain whether he had manufactured or sold any glass in violation of the contract. Patterson agreed that the brand of the Osage Window Glass Company should be placed on the boxes in which his product was shipped, but that the Imperial Company should give to its customers, as far as convenient and practicable, the brands of glass they had been accustomed to purchasing prior to the making of the agreement. Plaintiff was to subscribe for stock in the Imperial Company to the extent of $ 3,000. The concluding paragraph of the contract provides that this stock was to be paid for by the Imperial Company and donated to the plaintiff, and likewise contains other provisions which throw additional light upon the character of the agreement. It reads:

"This contract shall become inoperative at such time as lease of the Osage Glass Company's plant at Independence, Kansas terminates. Percentage of cost to conduct Imperial Window Glass Company's business shall be based on duration of said lease and final settlement with lessee shall be made within thirty days from termination of same, and stock subscribed for, amounting...