State v. Omaha Elevator Co.

• Decision Date: 21 December 1906
• Citation: 75 Neb. 637,110 N.W. 874
• Parties: STATE v. OMAHA ELEVATOR CO. ET AL.
• Court: Nebraska Supreme Court

75 Neb. 637

110 N.W. 874

STATE

v.OMAHA ELEVATOR CO. ET AL.

Supreme Court of Nebraska.

Dec. 21, 1906.

Syllabus by the Court.

Depositions cannot be used as evidence against parties who were not notified of the time and place of taking the same, and did not participate therein.

In an action under the statute commonly called the “Junkin Act” (Laws 1905, p. 636, c. 162) to obtain an injunction restraining violations of the act, the court is not authorized, in the first instance, to declare a forfeiture of the charters of corporations found to have violated the act.

The allowance by railroad companies of certain charges as elevator charges to terminal elevators on shipments of grain from points in this state to points without the state is an incident of interstate commerce, and this court has no jurisdiction to limit or control the same.

Upon the filing of the report of a referee in an action brought originally in this court there is no doubt that the court in its discretion might, upon motion of one of the parties, recommit the matter to the referee to take additional evidence and report thereon. But when there has been a fair hearing before the referee, and there is no evidence of accident or surprise preventing a full investigation of the facts, nor that further evidence can be furnished that might probably change the result reached by the referee, such motion will be denied.

The report of a referee will not be set aside because it appears that he has given more weight to certain evidence tending to support his report than the facts, as shown by the whole record, will warrant. If the evidence considered together supports his findings, it is sufficient.

For several years prior to the time the act of 1905 took effect, the defendants had been engaged, through the means of an association which they had formed for that purpose, in a systematic course of conduct made unlawful that act. In forming that association, and becoming members thereof, they had agreed to continue to promote its objects until they severed their relations with it. In the absence of evidence showing affirmatively that they had taken the necessary steps to sever their connection with the association before or at the time the act took effect, the presumption will obtain against them that this action, brought soon after the act took effect to enjoin a continuation of the association and restrain the defendants from carrying out its purposes, was necessary and proper for the enforcement of the act.

Petition by the state against the Omaha Elevator Company and another. Heard on exceptions to report of referee.Norris Brown, J. J. Sullivan, and Jefferis & Howell, for the State.

Kennedy & Learned, Hall, Woods & Pound, Smyth & Smith, Courtright & Sidner, Strode & Strode, W. C. Walton, F. A. Brogan, O. B. Polk, I. E. Congdon, A. A. Welch, D. O. Dwyer, L. S. Hastings, John C. Watson, Clark O'Hanlon, Brome & Burnett, and McDonald & Woodland, for defendants.

SEDGWICK, C. J.

In overruling the general demurrer to the petition the nature of the case as disclosed in the petition was stated, and the various statutes against illegal agreements and combinations in restraint of trade were discussed. 106 N. W. 979. Subsequently the issues were formed, and Hon. L. M. Pemberton was appointed referee to take the evidence, and report his findings of fact and conclusions of law. This duty was performed by the referee, and a comprehensive report was filed. Exceptions to this report were filed by the state, and also by various defendants.

The referee's findings of fact upon the main issues are as follows:

“Some time prior to the year 1899 an association known as the ‘Nebraska Grain Dealers' Association’ was organized in this state, which adopted a constitution and by-laws under which it operated. Its officers consisted of a president, vice president, secretary, treasurer, and a governing board, consisting of the president, secretary, and three other members of the association. (2) The object of such association, as expressed in the preamble of its constitution, was the advancement and protection of the common interests of those regularly engaged in the grain business, the formulation of rules for the transaction of business, and the promotion of friendly relations among legitimate grain men of the state. (3) According to the constitution, ‘any person, firm or corporation conducting a reputable, regular, and continuous business of buying and selling grain, and having proper facilities for handling same, may be admitted to membership in this association.’ And ‘any regular grain receiver, track buyer, terminal elevator, or commission merchant who conducts a reputable business, and confines their business to the regular elevator operators, shall be eligible to membership on the payment of regular fees and shall be rated as the owner of one elevator.’ And no person, firm, or corporation could be admitted to membership unless he or it should receive the unanimous approval of the governing board, subject to the approval of the association, and should subscribe the constitution and by-laws. (4) It was made the duty of the governing board to look after the interest of the association between all meetings, to follow the general policy outlined by the meetings, transact the necessary business of the association, investigate all complaints that might come before them, and work for their adjustment, act as a board of appeals and arbitration, and have all powers delegated to them by the constitution and by-laws. (5) It was provided that each member of the association should be governed in all matters pertaining to the association by the governing board, and a failure to obey the orders of the governing board subjected him to a fine not to exceed his membership fee, or expulsion, as the governing board should decide, subject to appeal to the association. (6) It was provided in the by-laws that no person should be allowed at any meeting of the association, or governing board, unless a member in good standing, except as a witness in case of trial. (7) According to the evidence introduced by the state (there was no evidence introduced by the defendants), the main objects of said association were to fix, regulate, and control the prices of grain in this state; to put an end to competition in the grain business; and to drive out of business all irregular and independent dealers in grain. (8) There were about 1,200 grain dealers, all told, in the state on April 1, 1905, of whom about 770 belonged to said Nebraska Grain Dealers' Association, and about 200 more were in sympathy with such association. (9) To accomplish the objects of said association as above set forth, various expedients were resorted to by it, some of which were as follows: (a) A price committee, consisting of persons chosen from five of the leading corporation members of said association, was formed, whose business it was to fix the prices which should be paid for grain by the various members of said association throughout the state, and the other regular dealers who worked in harmony with said association. All such members and persons were notified by card what such prices were, and as members of such association and regular dealers they were expected and required to fix their bids for grain on the basis of the prices sent to them on the cards, and they were not to pay any more for grain than other regular dealers in the same locality. For the purpose of facilitating the business, the state was divided into 13 districts, and it was the duty of some member of the association, selected for that purpose on account of his or its superior location and facilities for that purpose, to send cards to all the regular dealers in his district. The prices were changed as often as the fluctuations of the market made it necessary; sometimes every day and sometimes less often. The new prices always went into effect on the morning of the day succeeding the issuance of the cards and never on the same day. In said manner and by said method uniformity of prices was maintained amongst the members of said association and other regular dealers over the state. Regular dealers were those who were in harmony with the purpose and objects of said association. (b) In a town where there were two grain dealers, one or both of whom were ‘irregular,’ and refused to abide by the prices sent out on cards as aforesaid, the association resorted to various methods to force such dealer or dealers to become ‘regular.’ The committee of the association, or some one appointed by it for that purpose, would send some person or persons to visit such irregular dealers, whose business it was to prevail upon such dealers to agree to abide by the prices fixed as aforesaid, and also to agree upon a division of the grain marketed at said station between them, so that there would be no competition between them in the purchase of such grain. In this the person or persons so sent out were generally successful. If a dealer at any point persisted in being ‘irregular,’ he was summarily dealt with according to circumstances. If weak financially, prices would be raised on him so that he could not make any money, and he would be forced to surrender or get out of business. If he was strong financially, so as to make such a proceeding as that just named unprofitable for the association, the bidders in the market where he sold would be prevailed upon to bid him less than the market price for his grain, so that he could not sell for as much as the regular dealers. By such means the ‘irregular’ dealers were generally either driven out of the business or forced to become ‘regular.’ (c) The association also made it a part of its business to look after legislation in order to prevent any laws from being passed which were unfavorable to the interests of the ‘regular’ dealers. The testimony shows that during the 1903 session of the Legislature several thousand dollars were...