State v. Jackson Cotton Oil Co.

• Court: Mississippi Supreme Court
• Writing for the Court: CAMPBELL, Special Judge.
• Citation: State v. Jackson Cotton Oil Co., 48 So. 300, 95 Miss. 6 (Miss. 1909)
• Decision Date: 25 January 1909
• Docket Number: 12,990
• Parties: STATE OF MISSISSIPPI v. JACKSON COTTON OIL COMPANY

48 So. 300

95 Miss. 6

STATE OF MISSISSIPPI v. JACKSON COTTON OIL COMPANY

No. 12,990

Supreme Court of Mississippi

January 25, 1909

FROM the circuit court of, first district, Hinds county, HON. JOHN B. RICKETTS, Special Judge.

The State, ex rel. R. V. Fletcher, attorney-general, appellant was plaintiff in the court below; the Cotton Oil Company appellee, was defendant there. The suit was begun by an information in the nature of a quo warranto. From a judgment sustaining defendant's demurrer to the information and dismissing the suit the plaintiff appealed to the supreme court.

The information, among other things, charged that defendant and the Wilson Cotton Oil Company, of Lexington, Miss., were competitors in business, each engaged in buying cotton seed and, in the year 1903, agreed between themselves that the Jackson Cotton Oil Company would not buy any cotton seed in the town of Lexington, or in the territory adjacent thereto and in consideration thereof the Wilson Cotton Oil Company agreed to ship the Jackson Cotton Oil Company an agreed amount of cotton seed at Lexington prices, and the pleading asserted that said agreement was an unlawful combination in restraint of trade, for the purpose of limiting the price of a commodity, and that defendant thereby became a member of an unlawful trust or combine, in violation of the statutes of the state.

The demurrer to the information set up the following grounds: (1) That the acts complained of did not constitute a violation of the anti- trust statutes. (2) The statute, if violated, is unconstitutional, because it deprives the defendant of its property without due process of law and denies it equal protection of the law in violation of the fourteenth amendment to the Constitution of the United States. (3) Said statute is unconstitutional, because it impairs the obligations of a contract conferred upon defendant by its charter of incorporation, and is therefore in violation of article 1, § 10, of the Constitution of the United States. (4) Said statute is in violation of section 198, Constitution of the state, 1890, prohibiting combinations inimical to public welfare; the information not averring that the agreement complained of is inimical to the public welfare, or is an unreasonable restraint of trade. (5) Because the statute (chapter 88, p. 125, Laws 1900) under which this action was instituted has been repealed, without a saving clause as to proceedings of this nature. (6) That said petition is bad, because attempting to allege in one joint petition divers, different, and entirely independent grounds for a single cause of action.

Judgment reversed and cause remanded.

R. V. Fletcher, attorney-general, for appellant.

There are twelve grounds of demurrer but they may be safely considered as involving but six propositions.

1. That the declaration is defective because there is no allegation that the acts set out are inimical to the public welfare.

2. That the declaration presents a misjoinder of separate and distinct causes of action.

3. That the acts set out occurred under the anti-trust laws of 1900 which have been repealed without a saving clause.

4. That the things complained of are not a violation of the anti-trust statutes of Mississippi.

5. That if they are in violation of the Mississippi anti-trust statutes, then such statutes are violative of art. 1, section 10, of the Constitution of the United States in that it impairs the obligations of contract.

6. That the anti-trust statute if held to condemn the act complained of is violative of the fourteenth amendment to the Constitution of the United States in that it deprives defendant of his property without due process of law and denies to him the equal protection of the law.

I shall consider these propositions briefly in their order.

1. I respectfully submit that it is not necessary in a complaint to charge in so many words that the acts performed are inimical to the public welfare. If this language had been used it would have been merely a conclusion of the pleader and not a statement of fact. My contention is that the facts set forth show on their face there was a conspiracy or combination in restraint of trade, and that is sufficient. This court has held that the words "inimical to the public welfare" are a mere declaration of the effect of a trust not an added element of definition. Barataria Canning Co. v. Joulian, 80 Miss. 555, 31 So. 96.

2. It will readily be seen by a casual reading of the information that only one cause of action is pleaded. The case is predicated of the unlawful agreement between defendant and the Wilson Cotton Oil Cotton Company. If this act violates more than one provision of law, it is yet but a single act. But if mistaken in this, no rule of pleading requires a quo warranto complaint to be limited to a single cause of action.

3. The third contention is perfectly met by the statute. Code 1906 § 5020.

4. Upon the question as to whether the acts complained of constitute a violation of the anti-trust statutes, it is respectfully submitted that this question is conclusively settled by the case of Kosciusko Oil Mill & Fertilizer Co. v. Wilson Cotton Oil Company, 90 Miss. 551, 43 So. 435. It is impossible by the utmost stretch of ingenuity to distinguish the facts in that case from the ones in the case at bar. The agreements in the two cases are identical, and since this court has held under the precise state of facts in this declaration described that the law has been violated, I deem it useless to argue this phase of the case. Unless the Kosciusko Oil Mill Company case is to be overruled, the demurrer in this case must be overruled on this point.

5. Upon the fifth point, which I hardly think will be pressed seriously, it is perhaps sufficient to say that the granting of a charter to any corporation does not constitute a contract giving permission to violate either the laws or public policy of the state. The corporation exists subject to provisions of the Constitution, and among others section 198, expressly conferring power on the legislature to suppress combinations in restraint of trade.

6. But it is finally said that the anti-trust statutes, if construed to condemn the acts charged in this case are obnoxious to that palladium of liberty, the fourteenth amendment to the Constitution of the United States? But the supreme court of the United States does not think so. In Smiley v. Kansas, 196 U.S. 447, 49 L.Ed. 564, the anti-trust statutes of Kansas were under review. The supreme court of Kansas had held that an agreement between four competing grain dealers whereby each agreed not to purchase more than one fourth of the entire output offered on that market upon penalty of paying to the others a certain per cent was a violation of the Kansas anti-trust law. The supreme court affirmed the Kansas court, holding that the agreement was clearly in restraint of trade and that freedom of contract was not thereby disturbed.

Now if an agreement not to buy more than one fourth of the product is unlawful, what about a contract not to buy any at all? National Cotton Oil Co. v. Texas, 197 U.S. 115, 49 L.Ed. 689; United States v. Joint Traffic Association, 171 U.S. 505; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L.Ed. 136; Northern Securities Co. v. United States, 193 U.S. 197, 48 L.Ed. 79.

Green & Green, for appellee.

The questions presented are subdivided into two main heads:

If the anti-trust statute covers this contract then such portion violates (a) the fourteenth amendment to the federal Constitution, and (b) section 1, article 10.

Section 1, article 10, declares: "No state shall pass any law impairing the obligation of contracts," and the fourteenth amendment--"Nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the law."

The only section of the anti-trust act whereon reliance can be placed is section 1, which provides "A trust and combine is a combination, contract, understanding or agreement expressed or implied between two or more persons, corporations or firms, or associations of persons, or between one or more either with one or more of the others (a) in restraint of trade."

These constitutional guaranties must be respected by the state courts, but the construction by a state court of its statutes in determining their meaning, their extent, and what is embraced, is conclusive upon the federal supreme court. In Canning Co. v. Joulian, 80 Miss. 561, 31 So. 961, it is said: "The words 'and is inimical to the public welfare, unlawful and a criminal conspiracy,' are a mere declaration of the effect of a trust--not an added element of definition attaching to each of the definitions already perfectly given in section 1437, Code 1892, from paragraphs 'a' to 'i' inclusive. This, if a proper construction of the statute, eliminates from consideration the question of what might be the effect if these limiting words were integrated into the definition. Legislation for the prevention of trusts is had solely in pursuance of the state's police power; and unless the contract sought to be condemned falls within the scope of that power, the state is without authority.

The information is burdened with a multitude of damning expletives--mere conclusions of law foreshadowing the argument as to the legal effect of facts averred, and which for the purpose of this discussion are brushed aside (Whitewell v. Company, 125 F. [1903] 458), and grasping the facts which are sought to be tortured into an agreement within the police power it is alleged in the declaration:

"That in 1903, the said Jackson Cotton Oil Company, and the said Wilson Cotton Oil...