Skrainka v. Scharringhausen

• Decision Date: 06 April 1880
• Parties: WILLIAM SKRAINKA, Respondent, v. DIETTRICH SCHARRINGHAUSEN, Appellant.
• Court: Missouri Court of Appeals

8 Mo.App. 522

WILLIAM SKRAINKA, Respondent,

v.DIETTRICH SCHARRINGHAUSEN, Appellant.

St. Louis Court of Appeals, Missouri.

Apr. 6, 1880.

1. Restraints upon trade imposed by agreement, under limitations as to time, persons, and locality, are not necessarily restraints of trade in the sense which renders the contract void.

2. In such cases the essential question is one of monopoly and of injury to the public.

3. The jurisdiction of a justice is not confined to the district for which he was elected, and on appeal it is not necessary that the papers should show that his court was held within such district.

APPEAL from the St. Louis Circuit Court.

Affirmed.

LOUIS A. STEBER and JOHN MCGAFFEY, for the appellant: Agreements or combinations, the effect of which is to prevent or withdraw competition, are held to be against the policy of the law, and void.-- Wiggins Ferry Co. v. Railroad Co., 5 Mo. App. 373; Morris Coal Co. v. Coal Co., 68 Pa. St. 174; Crawford v. Wick, 18 Ohio St. 190; Doolin v. Ward, 6 Johns. 194; Stanton v. Allen, 5 Denio, 434. Such combinations are contrary to public policy, and cannot be enforced in a court of justice.-- India Assn. v. Kock, 14 La. An. 168; Arnot v. Coal Co., 68 N. Y. 558. The law refuses its sanction to this contract, and a violation of it can create no cause of action.-- Peltz v. Long, 40 Mo. 537; Croft v. McConoughy, 79 Ill. 346; Guernsey v. Cook, 120 Mass. 502. A justice of the peace must keep his office and hold his court in the district for which he was elected.--Wag. Stats. 803, sects. 4, 5. And this fact must be shown.-- Allen v. Scharringhausen, 8 Mo. App. 229; Bast v. Ketchum, 5 Mo. App. 433; Gibson v. Vaughan, 61 Mo. 420; Schultheis v. Nan, 4 Mo. App. 592; Barrett v. Railroad Co., 68 Mo. 65; Cole v. Cole, 3 Mo. App. 571.

R. E. ROMBAUER, for the respondent: Contracts which are limited to time, place, and persons, though in restraint of trade, are not necessarily void.-- Stearns v. Barrett, 1 Pick. 443; Pierce v. Woodward, 6 Pick. 206; Nobles v. Bates, 7 Cow. 307; Palmer v. Stebbins, 3 Pick. 188; Beard v. Dennis, 6 Ind. 200; Wintz v. Vogt, 3 La. An. 16; Presbury v. Fisher, 18 Mo. 50; Long v. Towl, 42 Mo. 549.

BAKEWELL, J., delivered the opinion of the court.

On March 19, 1878, defendant, with twenty-three other persons, owners and operators of stone-quarries in that part of the city of St. Louis lying south of Market Street and Manchester Road, signed an agreement, in which they set forth that the great competition then existing had had the tendency of depressing the price of building-rock in the city so as to make it impossible to work quarries at a profit in certain parts of the city; and that, it being desirable to agree on a plan which will secure a fair, proportionate sale of the produce of all quarries at uniform prices and living rates, they mutually bind themselves as follows: 1. That none of the subscribers will, for a period of six months from date, sell any rubble building-stone, the produce of any quarry in St. Louis south of the line named above, except as set forth in the agreement. 2. An exclusive agent is appointed for the period named, to sell on account of the contracting parties all the rubble building-stone of said quarries, giving to each quarry its proportionate share, taking into consideration its location and producing capacity; and the agent is instructed, until otherwise directed by the committee afterwards named, to sell the rock at prices set out in the instrument for various qualities of stone. 3. An executive supervisory committee of five is appointed to see that the agent deals fairly with each quarry, to modify the scale of prices, and to hear and settle complaints. 4. The sum of $100 is fixed as liquidated damages for each violation of the agreement; and each sale of one hundred perches, or less, of rock is to be held as a separate offence. Skrainka, the plaintiff in this case, is appointed trustee to sue for the damages, and to distribute the amount recovered amongst the parties to the agreement, excluding the offending member. A percentage on sales is to be paid to the treasurer for the expenses of the association. The agent is to keep a record of sales, and to measure the rock and collect for the member furnishing any stone sold; and if any mason or building-contractor fails to pay for stone purchased within fifteen days from presentation of his bill, no more is to be furnished him. A percentage on sales is fixed as a compensation for the agent, and it is provided that he shall give security for the discharge of his duties.

Defendant was sued before a justice for $100 damages for violation of the agreement. On trial anew in the Circuit Court, there was judgment for plaintiff.

There is no dispute as to the facts. Appellant contends that the agreement was against public policy, in restraint of trade, and not enforceable at law. This agreement does not, upon its face, purport to be in restraint of trade, nor does it appear that such must necessarily be its operation. The recital is, rather, that it is to advance trade; because, if competition reaches such a point that goods cannot be sold at living prices, many manufacturers must be driven out of business. But not every agreement in restraint of trade is illegal. Where the contract injures the parties making it, by diminishing their means for supporting their families, tends to deprive the public of the services of useful men, discourages industry, diminishes production, prevents competition, enhances prices, and, being made by large companies or corporations, excludes rivalry and engrosses the markets,--tends to “make a corner,” to use the slang of the stock and provision gamblers,--it is against the policy of the law. But restraints upon trade imposed by agreement, under limitations as to locality, time, and persons, are not necessarily restraints of trade in the general sense which is objectionable. Alger v. Thatcher, 19 Pick. 51.

The old doctrine of the common law, that contracts in restraint of trade are void, is no longer to be rigorously insisted upon precisely as it was insisted upon in the earlier cases in which it was announced. It has been modified by the more recent decisions, as the laws of trade have become better understood during the development of our commercial system and the changes which have been introduced in the...