State ex rel. Attorney General v. Kansas City Live Stock Exchange

• Citation: 109 S.W. 675,211 Mo. 181
• Parties: THE STATE ex rel. HADLEY, Attorney-General, Appellant, v. KANSAS CITY LIVE STOCK EXCHANGE et al. and TRADERS LIVE STOCK EXCHANGE et al
• Decision Date: 01 April 1908
• Court: Missouri Supreme Court

109 S.W. 675

211 Mo. 181

THE STATE ex rel. HADLEY, Attorney-General, Appellant, v. KANSAS CITY LIVE STOCK EXCHANGE et al. and TRADERS LIVE STOCK EXCHANGE et al

Supreme Court of Missouri, First Division

April 1, 1908

Appeal from Jackson Circuit Court. -- Hon. W. B. Teasdale, Judge.

Reversed and remanded.

Herbert S. Hadley, Attorney-General, and John Kennish, Assistant Attorney-General, for appellant.

(1) Sections 8978 and 8979 are properly within the exercise of the police power of the State, and are not in violation of the State or Federal Constitution. State ex rel. v Firemen's Fund Ins. Co., 152 Mo. 1; Finck v Granite Co., 187 Mo. 244; State ex rel. v. Standard Oil Co., 194 Mo. 124; Walsh v. Master Plumbers Asso., 97 Mo.App. 280; State ex rel. v. Brewing Co., 104 Tenn. 715; Waters-Pierce Oil Co. v. State of Texas, 19 Tex. Civ. App. 1. (2) The circuit court had jurisdiction to restrain and enjoin violations of the law concerning pools, trusts, conspiracies and unlawful combinations. Sec. 8979, R. S. 1899; Walsh v. Assn. of Master Plumbers, 97 Mo.App. 280; U. S. v Trans-Missouri Freight Assn., 166 U.S. 290; U. S. v. Northern Securities Co., 193 U.S. 197; U. S. v. Elliott, 64 F. 27; U. S. v. Coal Dealers Assn., 85 F. 252. The suit was properly instituted against the defendants as voluntary associations and against the officers and members thereof. Froelich v. Musicians Mut. Ben. Assn., 93 Mo.App. 383; Walsh v. Master Plumbers Assn., 97 Mo.App. 280; U. S. v. Coal Dealers Assn., 85 F. 252; U. S. v. Trans-Missouri Freight Assn., 166 U.S. 290; Hunt v. Riverside Co-operative Assn., 140 Mich. 538. (3) The demurrer admits every allegation of the petition. Goodson v. Goodson, 140 Mo. 206; Shields v. Johnson, 144 Mo. 76; Hogan v. St. Louis, 176 Mo. 149; Dodson v. Lomax, 113 Mo. 555. (4) If the plaintiff was entitled to any relief upon the facts stated in the petition, the demurrer should have been overruled. Ulrici v. Papin, 11 Mo. 31; Tanner v. Railroad, 180 Mo. 1; 16 Cyc., 278. (5) The petition properly charges the Traders Live Stock Exchange, its officers and members, with a violation of section 8978, and also with the violation of section 8966, Revised Statutes 1899, and is amply sufficient to entitle the State to the relief prayed for. State ex rel. v. Firemen's Fund Ins. Co., 152 Mo. 1; State ex inf. v. Armour Packing Co., 173 Mo. 356; State ex inf. v. Continental Tobacco Co., 177 Mo. 13; State ex inf. v. Standard Oil Co., 194 Mo. 124; Finck v. Granite Co., 187 Mo. 244; National Lead Co. v. Grote Paint Co., 80 Mo.App. 247; Froelich v. Musicians Mut. Ben. Assn., 93 Mo.App. 383; Walsh v. Association of Master Plumbers, 97 Mo. 280; Heim Brewing Co. v. Belinder, 97 Mo.App. 64; Addyston Pipe Line Co. v. U.S. 85 F. 764; C. W. & C. Coal Co. v. People, 214 Ill. 21; U. S. v. Coal Dealers Assn., 85 F. 252; U. S. v. Joint Traffic Assn., 171 U.S. 505; U. S. v. Swift Packing Co., 196 U.S. 375; Ex parte Pierce, 155 F. 663.

Kimbrough Stone and Frank Hagerman for respondent Kansas City Live Stock Exchange.

No cause of action was stated against the members of the Live Stock Exchange. (1) The petition is solely for injunctive relief. There is no allegation that the members of the Live Stock Exchange threaten to do any wrong, or that any one is in danger from any acts of theirs in the future. The sum total of the offending is that they, in the past, by a boycott on the Traders Exchange, have in some instances been intimidated from buying from or selling to some persons who were not members thereof. Southard v. Morris Canal, etc., Co., 1 N.J.Eq. 518; 10 Ency. Pl. & Pr., 948; 16 Am. and Eng. Ency. Law (2 Ed.), 362; 1 High on Injunctions (3 Ed.), sec. 23; Verdin v. St. Louis, 131 Mo. 26; Owen v. Ford, 49 Mo. 436; Carlin v. Wolff, 154 Mo. 543; State ex rel. v. Wood, 155 Mo. 446; Lester R. E. Co. v. St. Louis, 169 Mo. 234. (2) The mere fact that the members of the Live Stock Exchange have been, at times, intimidated from dealing with certain persons, in nowise shows them to be parties to the combination sought to be enjoined.

R. E. Ball for respondent Traders Live Stock Exchange.

(1) The exchanges, as such, are not parties to the action. Blakeley v. Benneke, 59 Mo. 193; Ferris v. Thaw, 72 Mo. 446; Heath v. Goslin, 80 Mo. 310; Insurance Co. v. Burkett, 72 Mo.App. 1. (2) The members are not partners, and no act of one could bind the others except where expressly authorized. Mo. Bottlers' Assn. v. Fennerty, 81 Mo.App. 525; Maclay v. Freeman, 48 Mo. 234; Campbell v. Dent, 54 Mo. 325; Deyerle v. Hunt, 50 Mo.App. 541; Ashby v. Shaw, 80 Mo. 76. (3) The bill must therefore be considered with sole reference to the alleged conduct of business by each of the individual defendants. 25 Am. and Eng. Ency. Law, 1132, par. 5; Maxwell & Co. v. Edens, 65 Mo.App. 439. (4) Eliminating mere conclusions of law and regarding only substantive facts pleaded, there is no case against defendants or any of them. In re Greene, 52 F. 104; Storey v. Ins. Co., 61 Mo.App. 534; Bank v. Mulhall, 8 Mo.App. 558; Dannan v. Coleman, 8 Mo.App. 595; Mullanphy v. Phillipson, 1 Mo. 188; Weimer v. Shelton, 7 Mo. 237; Manker v. Faulkhaber, 94 Mo. 430; Sidway v. Mo. Land & Live Stock Co., 163 Mo. 342; Nagel v. Railroad, 167 Mo. 89; Mallinckrodt Chemical Wks. v. Nemnich, 169 Mo. 388; State ex inf. v. Railroad, 182 Mo. 284. (5) The rules of the exchange do not constitute a combination in restraint of trade or a pool, trust, monoply or conspiracy to restrain trade or control prices, or supply of live stock. Anderson v. United States, 171 U.S. 604; Gladish v. K. C. Live Stock Exch., 113 Mo.App. 726; Arthur v. Oakes, 63 F. 317. (6) The rules and obedience to them having been held by the Supreme Court not to have the effect and tendency attributed to them by the mere assertion of the pleader, that holding should be conclusive. Holmes v. Cleveland, 93 F. 100; Simons Co. v. Knox, 39 F. 702; Klobb v. Swan, 68 Md. 516; McIntosh v. Pittsburg, 112 F. 705; Harmon v. Auditor, 123 Ill. 132; Stalcupp v. Tacoma, 13 Wash. 141. (7) The Missouri statute is misconstrued by the relator in his pleading and brief. It does not apply to the facts stated. State ex rel. v. Associated Press, 159 Mo. 410; 26 Am. and Eng. Ency. Law (2 Ed.), 658, 652; R. S. 1899, sec. 8978; State v. Schuchman, 135 Mo. 116. (8) If the relator is justified as a matter of statutory interpretation in separating the concluding sentence from the remainder of section 8978, and is correct in the broad claim that the Legislature has undertaken to make it a crime for two or more persons to refuse to deal for a particular reason, then the Legislature has transcended its constitutional authority, and its act, if enforced, would deprive defendants of liberty and property and would so far violate the Constitution of the State and of the United States. Am. Live Stock Com. Co. v. Chicago Live Stock Exchange, 143 Ill. 210; State v. Goodwill, 33 W.Va. 179 (approved 129 Mo. 173, State v. Julow); In re Jacobs, 98 N.Y. 98 (approved 129 Mo. 177, State v. Julow); People v. Fillson, 109 N.Y. 389; State v. Julow, 129 Mo. 163; State ex rel. v. Associated Press, 159 Mo. 410; Marx & Haas v. Watson, 168 Mo. 133.

OPINION

VALLIANT, P. J.

In January, 1905, the Attorney-General instituted this suit in the circuit court of Jackson county against the defendants, alleging that they had formed a pool or combination to control and limit the trade in live stock on the market of Kansas City and to limit competition in that trade, in violation of sections 8978 and 8979, Revised Statutes 1899, and of the common law, and praying an injunction to restrain them from further practice of the alleged unlawful conduct. The defendants are nominated in the petition as the Kansas City Live Stock Exchange, a voluntary association, and the individuals and corporations composing that association, and also the Traders Live Stock Exchange, likewise a voluntary association, and the individuals and corporations composing that association. The appearance of all the defendants was entered by their respective counsel. On the filing of the petition a temporary injunction was issued. An amended petition was filed in April, 1905. Each group of defendants, that is, those composing the Kansas City Live Stock Exchange and those composing the Traders Live Stock Exchange, filed a demurrer to the amended petition; the court sustained the demurrers, whereupon, the Attorney-General declining to plead further, final judgment for defendants was rendered, and this appeal was taken.

The only question is, does the amended petition state facts sufficient to show that defendants have committed or are in the attitude of committing acts that constitute a violation of the laws of this State commonly called the anti-trust law or laws forbidding acts in restraint of trade?

I. There are two groups of defendants named in the petition; one is composed of those who constitute what is called the Kansas City Live Stock Exchange, the other of those who constitute what is designated as the Traders Live Stock Exchange. The difference, if any, in the character of business done by the defendants composing one of these exchanges, and that of those composing the other, is not very clearly set out in the amended petition and perhaps is not very important, but we gather from the briefs the idea that the defendants composing the Kansas City Live Stock Exchange are engaged chiefly as commission merchants to receive shipments of live stock for that market consigned to be by them sold or otherwise disposed of as directed by the shippers, whilst the defendants composing the Traders Live Stock Exchange are buyers and speculators in such live stock. At all events the members of the two exchanges do a large business with each other,...