State v. Kansas City Live Stock Exchange

• Decision Date: 01 April 1908
• Citation: 211 Mo. 181,109 S.W. 675
• Parties: STATE ex rel. ATTORNEY GENERAL v. KANSAS CITY LIVE STOCK EXCHANGE et al.
• Court: Missouri Supreme Court

109 S.W. 675

211 Mo. 181

STATE ex rel. ATTORNEY GENERAL v. KANSAS CITY LIVE STOCK EXCHANGE et al.

Supreme Court of Missouri. Division No. 1.

April 1, 1908.

1. MONOPOLIES — RESTRAINT OF TRADE — RESTRICTION OF COMPETITION—BOYCOTTING.

Two voluntary associations, known as the Kansas City Live Stock Exchange and the Traders' Live Stock Exchange, were engaged in the live stock business in Kansas City. The Kansas City Exchange was chiefly engaged, as commission merchants, to receive shipments of stock consigned to them for sale, while the Traders' Exchange consisted of buyers and speculators in live stock; the members of the two exchanges doing a large business with each other and together handling practically all the live stock business in that market. A complaint, charging that such exchanges had combined in restraint of trade, alleged that the Traders' Exchange had taken such action as tended to exclude all persons from buying and selling live stock coming to that market, except members of that exchange, and to limit competition to those members; but there was no allegation that the members of the Kansas City Exchange had done anything, or proposed to do anything, to exclude others who might desire to do business with them, or to limit competition, except that the members of the Traders' Exchange had so boycotted, or threatened to boycott, the members of the Kansas City Exchange that, if they did any live stock business with any persons not members of the Traders' Exchange, no further business would be done with them, by the members of such exchange, for that reason alone. Held, that the petition did not state a cause of action against the members of the Kansas City Exchange, since an injunction against the members of the Traders' Exchange from boycotting the members of the Kansas City Exchange would afford complete relief.

2. ASSOCIATIONS—ACTION AGAINST MEMBERS—DESIGNATION.

Where the individuals and corporations composing an exchange, which was a mere voluntary association, were defendants in a suit to restrain certain acts in alleged restraint of trade, the fact that defendants were referred to by their association name, to distinguish them in their associated capacity, was not objectionable as an attempt to sue a nonlegal entity.

3. PARTNERSHIP—VOLUNTARY ASSOCIATION.

An association of persons and corporations, engaged in the live stock business, in a certain market, for their mutual benefit, not constituting a combination of skill and capital in a definite business for mutual profit, no one of the members being authorized to contract for all, was not a partnership.

4. MONOPOLIES—COMBINATION OF TRADERS— AGREEMENT—PRESUMPTION.

Where a large body of persons and corporations, engaged in the live stock business in a certain market, combined for a particular purpose, and agreed between themselves each to adopt a uniform course of conduct which, if pursued by a large number, would result to the prejudice of others, and the members of such association, though acting separately in each transaction, pursued the course of conduct agreed on, it would be presumed that the acts performed were the result of the agreement; and hence all who entered into the combination as instigators, aiders, and abettors would be held liable, not only for his own acts, but for those of the other co-conspirators.

5. SAME—ACCOMPLISHMENT OF CONSPIRACY.

Under Rev. St. 1899, §§ 8978, 8979 (Ann. St. 1906, pp. 4157, 4158), forbidding combinations and acts in restraint of trade, a combination or agreement which results in restraint of trade is illegal, whether the result is accomplished by the acts of each individual, acting on his own account, in doing as he has agreed to do, or by the joint action of all parties to the combination.

6. SAME — NATURE OF COMBINATION—ACTS OF MEMBERS—PETITION.

Certain persons and corporations dealing in live stock in Kansas City formed a voluntary association, to promote and protect all interests connected with the buying and selling of live stock at the Kansas City Stockyards, etc., and to prescribe rules to that end. The rules forbade members dealing with any yard traders, except themselves, or with any person or concern who did so. Membership in the exchange could only be obtained on payment of $1,000, for which a transferable certificate was issued, and no yard trader not a member of the exchange could be recognized thereby. Other rules declared that where two or more parties traded together as partners, they should each and all be members of the exchange, and that no member should employ any person to buy or sell cattle unless such person held a certificate of membership. A petition against the members of such association for alleged restraint of trade charged that, in conformity to the rules of the exchange, its members refused to have any dealings with persons or corporations not members, because they were not members, and that by threats to boycott they had so intimidated the members of another exchange that they would not buy from or sell to persons or corporations not members of such exchange, a number of specific transactions being alleged in which the exchange, by boycotting, and threats to boycott, intimidated other live stock dealers from trading with persons and corporations not members of the exchange because of such nonmembership, and that by such method the members of the exchange had obtained control of the market and of the price of live stock therein, and had stifled competition. Held, that the petition stated sufficient facts to show that the exchange was an illegal combination in restraint of trade, in violation of Rev. St. 1899, §§ 8978, 8979 (Ann. St. 1906, pp. 4157, 4158).

Appeal from Circuit Court, Jackson County; W. B. Teasdale, Judge.

Suit by the state, on relation of the Attorney General, against the Kansas City Live Stock Exchange and others. Judgment for defendants, and relator appeals. Affirmed as to defendant Kansas City Live Stock Exchange and reversed as to the Traders' Live Stock Exchange.

The Attorney General, Milton Oldham, H. H. Blanton, and Wm. Buchholz, for appellant. Kimbrough Stone and Frank Hagerman, for respondents.

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, Rev. St. 1899 (Ann. St. 1906, pp. 4157, 4158), 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 laws, or laws forbidding acts in restraint of trade?

1. 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, which are 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, and, in accordance with the averments of the petition, they together handle practically all the live stock business in that market. The gravamen of the complaint is the members of the Traders' Exchange have taken such action as tends to exclude all persons from buying and selling live stock coming to that market, except members of that exchange, and to limit competition in such trade to those members. We will notice more particularly presently what the amended petition charges on that point. But there is no allegation that the defendants composing the Kansas City Live Stock Exchange have willfully done anything, or purpose to do anything, to so exclude others who may desire to do business with them, or to limit competition in the trade, but the allegation is that defendants composing the Traders' Exchange have boycotted and are threatening to boycott the members of the other exchange if they do any live stock business with any persons not members of the Traders' Exchange, and the inference to be drawn is that, if the members of the Kansas City Live Stock Exchange have done any of the acts complained of, they have done so only by fear of the boycott. It...