State v. Ford Motor Co.
| Decision Date | 20 January 1943 |
| Docket Number | No. 9310.,9310. |
| Citation | 169 S.W.2d 504 |
| Parties | STATE v. FORD MOTOR CO. |
| Court | Texas Court of Appeals |
Appeal from District Court, Travis County; Roy C. Archer, Judge.
Suit by the State of Texas against the Ford Motor Company under anti-trust statutes to enjoin perpetually certain alleged unlawful combinations, agreements, conspiracies and practices in violation of the statutes, and to collect stated penalties prescribed by the statutes for such violations. The trial court sustained special exceptions which struck out all allegations in fifth amended original petition, which were essential to the suit, and on the State's refusal to further amend dismissed the suit, and the State appeals.
Judgment set aside, and cause reinstated and remanded for trial on the merits.
Gerald C. Mann, Atty. Gen., Benjamin Woodall, Asst. Atty. Gen., and Pat Coon, Asst. Atty. Gen., for appellant.
Allen & Allen, of Dallas, Bodman, Longley, Bogle, Middleton & Armstrong, of Detroit, Mich., and Black, Graves & Stayton, of Austin, for appellee.
By its fifth amended original petition appellant, the State of Texas, sued appellee, Ford Motor Company, a Delaware corporation with a permit to do business in Texas, herein called Ford, under the anti-trust statutes (Arts. 7426 to 7447, R.S. 1925, Vernon's Ann.Civ.St. arts. 7426-7747), to perpetually enjoin certain alleged unlawful combinations, agreements, conspiracies, unlawful acts, conduct, and practices in violation of the statutes, and to collect the stated penalties prescribed by the statutes for such violations. To this petition the trial court sustained "Special Exceptions Nos. II to XX, inclusive," which struck out all allegations essential to the suit, and upon the refusal of the State to further amend dismissed the suit; hence this appeal.
Like special exceptions had theretofore been sustained to the State's original petition and to its first, second, third and fourth amended original petitions; but as to each of these petitions the State undertook to amend. These pleadings are in the record, but since the fifth amended original petition supersedes all prior pleadings no further notice need be made of them, except to observe that in sustaining certain special exceptions to the third amended original petition the trial court's order recited that the State, "through its counsel, having in open court stated that it was not contending that the written contract attached * * * to petition standing alone constituted a violation of the anti-trust laws." No such statement was made with respect to the same contract attached to the petition here involved; but to the contrary it is alleged and here contended that said written sales contract or agreement between Ford and each of its Texas dealers is in violation of the anti-trust laws of this State, and particularly the provisions thereof entitled "Service Commission," "Genuine Ford Parts," and "Operation of Business" which operate to fix territory, fix the prices, and to restrict and control the resale of Ford's said commodities; that the contract is therefore by its express terms a violation of the anti-trust laws; and that it is so under the interpretation and construction given to it by Ford and its agents, representatives, and its Texas dealers, and in the manner of the enforcing and carrying out of the contract. The petition further alleged that, "but in addition thereto, there were other agreements and conspiracies and combinations in capital, skill and acts between it and its Texas dealers in violation of the anti-trust laws of Texas, as to retail prices; preventing one dealer soliciting sales in another dealer's town; preventing one dealer from operating a used car lot in another dealer's town; preventing a dealer from having parts in his place of business not manufactured by defendant; and other territory restricting agreements, to be hereinafter set out."
The trial court sustained "Special Exceptions II to XX, inclusive," to the petition here involved, but generally upon three grounds, as follows:
1. That the sales contract or agreement attached to the petition was not one in violation of the anti-trust statutes of this State.
2. That the petition did not allege the name or names of the agents or representatives of Ford who made the "other agreements and combinations and conspiracies" challenged by the State.
3. That the allegations with respect to "other agreements, etc.," were too indefinite or too general, and constituted conclusions of the pleader with respect to the matters challenged by the State.
We are of the view that the trial court erred in sustaining each of the special exceptions presented. The sales agreement or contract between Ford and each of its Texas dealers was attached to and made a part of the petition for all purposes, and a copy is appended to and made a part of this opinion.
The petition is lengthy, and except where quoted the substance of the allegations will be stated and as taken from the entire petition rather than from any particular paragraph. It alleged in detail and particularly the various combinations, agreements, conspiracies, acts, conduct, understandings, and practices existing between Ford and its Texas dealers.
By paragraph III the petition alleged that Ford is engaged in the manufacture and sale of automobiles, known as Fords, Ford Trucks, Mercuries, Lincoln-Zephyrs, and Lincolns, and of parts and accessories therefor; that Ford makes sales of such products and commodities to Texas dealers for resale to the public by and through an organization or set-up consisting of two offices, one at Dallas and one at Houston, dividing the State of Texas into the Northern District of Texas and the Southern District of Texas; that the personnel of each branch office is composed of a branch manager, an assistant branch manager, a sales manager, and an assistant sales manager, a chief clerk, and deputy clerk, and numerous "traveling roadmen," the duties of all of whom under the organization or set-up being alleged, and the names of all known to the State being alleged, as well as the names of all officers, agents, and representatives of Ford in Dearborn, Michigan, its principal place of business, who had duties and responsibilities connected therewith; and that it was by and through this organization and set-up and these officers, agents, representatives, and others unknown to the State, but known to Ford, that all of the thereinafter alleged unlawful combinations, agreements, conspiracies, unlawful acts, conduct and undertakings were made and carried out with the Texas dealers, all of which were alleged to be agreements, conspiracies, combinations and unlawful acts and conduct of capital, skill, and acts between Ford and its Texas dealers in violation of the anti-trust statutes of Texas; and all of which will be hereinafter pointed out.
By paragraph IV the petition alleged that Ford, on or about September 1, 1938, entered into a written sales agreement or contract with the several Texas dealers named in paragraph IV, which contract in form and terms was the contract or agreement required of all Texas dealers, the only difference between the contracts being as to kind of automobiles or commodities sold to the dealers and the prices therefor. The petition alleged that under the express terms of such sales contract or agreement the title to the products or commodities passed immediately upon delivery to the Texas dealers, with the right under the laws of this State to sell or dispose of them at any place in this State and at any price they may deem proper and to their best interest; but that under the express terms of the written sales agreement or contract, and particularly the provisions entitled, "Service Commission," and "Genuine Ford Parts," and "Operation of Business", it is expressly provided, and "such provisions operate to limit territory, fix the prices, and to restrict and control the resale of defendant's (Ford's) said commodities," all in violation of the anti-trust statutes of this State. The petition also alleged in this connection that Ford and its Texas dealers have construed the written sales contract or agreement as fixing the territory in the vicinity of, and including surrounding communities neighboring each dealer's place of business, required in each instance to be established, and to resell Ford's products and commodities only in such territory; that pursuant to said agreement and construction thereof, Ford and its agents have changed territories of dealers from time to time, adjusted disputes relating thereto, and have threatened to, and in certain instances alleged have, actually terminated the sales agreement of dealers who violated the territory provisions or price provisions and schemes as reflected by the written contract. The petition further alleged in this connection and with respect to the "other agreements, combinations and conspiracies," in addition to those expressly provided for by the terms of the written contract, and "put into force and effect on September 1, 1938, and simultaneously with the execution of said written sales agreement," that "it was intended and interpreted and construed by the parties, defendant (Ford) and all of its Texas dealers, that said written sales agreement did not represent all of the agreements and combinations, and was only a part of the conspiracy put into effect by the defendant Ford Motor Company and its Texas dealers as of September 1, 1938," all of which were alleged to have remained in force from that time until the time of the filing of the petition here involved.
By paragraph V of the petition it is alleged with respect to the written sales agreement or contract and the "other agreements, combinations and conspiracies * * * put into force and effect on or about September 1, 1938, and simultaneously with the execution of said written agreement," that...
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