State v. Smiley

• Decision Date: 07 June 1902
• Docket Number: 12,887
• Citation: 65 Kan. 240,69 P. 199
• Parties: THE STATE OF KANSAS v. E. J. SMILEY
• Court: Kansas Supreme Court

69 P. 199

65 Kan. 240

THE STATE OF KANSAS v. E. J. SMILEY

No. 12,887

Supreme Court of Kansas

June 7, 1902

Decided January, 1902.

Appeal from Rush district court; J. E. ANDREWS, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. STATUTES -- Construction -- Presumption of Intention of Legislature. The general language of statutes will be limited to such persons and subjects as it is reasonable to presume the legislature intended it should apply.

2. STATUTES -- Constitutional Validity -- Persons Capable of Making Objection. Objections to the constitutional validity of statutes can be made only by those to whom the enactment applies and against whom attempts to enforce it are made.

3. PUBLIC POLICY -- Anti-competitive Trade Agreements -- Valid Statute. The making of anti-competitive trade agreements, as to products and merchandise bought or sold on the general market, is contrary to public policy, and it is competent for the legislature to enact penal measures to prevent the making and carrying out of such agreements.

4. PUBLIC POLICY -- Anti-trust Law Valid -- No Conflict with Federal Constitution. Chapter 265, Laws of 1897 (Gen Stat. 1901, §§ 7864-7874), known as the "anti-trust law," does not conflict with the guaranty of right to acquire property by lawful contract secured by the federal constitution, and is a valid exercise of legislative power.

5. PUBLIC POLICY -- Agreement in Restraint of Trade. An agreement entered into by all the dealers on a certain market, limiting their right, severally, under stipulated forfeitures or penalties, to buy all the grain they otherwise might on such market, is an agreement in restraint of trade, and falls within the penal terms of the anti-trust act of 1897.

6. INSTRUCTIONS -- Harmless Error. An instruction to the jury, possibly erroneous, but, if so, harmless, discussed, and the lack of error in giving it pointed out.

A. A. Godard, attorney-general, J. W. McCormick, county attorney, Keeler & Hite, and Allen & Allen, for The State.

H. Whiteside, for appellant.

DOSTER C. J. JOHNSTON, SMITH, CUNNINGHAM, GREENE, ELLIS, JJ., concurring. POLLOCK, J., dissenting.

OPINION

DOSTER, C. J.:

This is in appeal from a judgment of conviction of a violation of the anti-trust law. The information on which the conviction was based reads as follows:

"I, the undersigned county attorney of said county, in the name and by authority and on behalf of the state of Kansas, give information that on the 20th day of November, A. D. 1900, in said county of Rush and state of Kansas, one E. J. Smiley, secretary and representative of the Kansas State Grain Dealers' Association, did then and there unlawfully enter into an agreement, contract, and combination, in the county of Rush and the state of Kansas, with divers and sundry persons, partners, companies, and corporations, or grain dealers and grain buyers, in the town of Bison, in said county and state aforesaid, to wit: Humburg & Ahrens, the La Crosse Lumber and Grain Company, the Bison Milling Company, and George E. Weicken, who were at the same time and place competitive grain dealers and buyers, to pool and fix the price the said grain dealers and buyers should pay at the said place and to divide between them the net earnings of said grain dealers and buyers, and to prevent competition in the purchase and sale of grain among the said dealers and buyers, contrary to the form of statute in such case made and provided and against the peace and dignity of the state."

The proceeding was instituted and conviction had under chapter 265, Laws of 1897 (Gen. Stat. 1901, §§ 7864-7874). A question is raised as to whether the charge was made and judgment pronounced under that or certain other statutes. This will be noticed hereafter. The parts of the act of 1897 which apply to the case read as follows:

"SECTION 1. A trust is a combination of capital, skill, or acts, by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any or all of the following purposes:

"First. To create or carry out restrictions in trade or commerce, or aids to commerce, or to carry out restrictions in the full and free pursuit of any business authorized or permitted by the laws of this state.

"Second. To increase or reduce the price of merchandise, produce, or commodities, or to control the cost or rates of insurance.

"Third. To prevent competition in the manufacture, making, transportation, sale or purchase of merchandise, produce, or commodities, or to prevent competition in aids to commerce.

"Fourth. To fix any standard or figure, whereby its price to the public shall be, in any manner, controlled or established, any article or commodity of merchandise, produce or commerce intended for sale, use or consumption in this state.

"Fifth. To make or enter into, or execute or carry out, any contract, obligation or agreement of any kind or description by which they shall bind or have to bind themselves not to sell, manufacture, dispose of or transport any article or commodity, or article of trade, use, merchandise, commerce, or consumption, below a common standard figure; or by which they shall agree in any manner to keep the price of such article, commodity or transportation at a fixed or graded figure; or by which they shall in any manner establish or settle the price of any article or commodity or transportation between them or themselves and others, to preclude a free and unrestricted competition among themselves or others in transportation, sale or manufacture of any such article or commodity; or by which they shall agree to pool, combine or unite any interest they may have in connection with the manufacture, sale or transportation of any such article or commodity, that its price may in any manner be affected. And any such combinations are hereby declared to be against public policy, unlawful, and void.

"SEC. 2. All persons, companies or corporations within this state are hereby denied the right to form or to be in any manner interested, either directly or indirectly, as principal, agent, representative, consignee, or otherwise, in any trust as defined in section 1 of this act."

Subsequent sections of the act contain penal provisions under which appellant was fined and ordered committed to jail. The above statute is assailed with great vehemence by counsel for appellant. Their contention is that it imposes such limitations upon freedom of contract as to constitute a deprivation of the right of property, contrary to the guaranty of the fourteenth amendment to the federal constitution. They say that, instead of being what it purports, an act to prevent unreasonable restrictions upon trade, it is itself such restriction, and is therefore violative of the fundamental right to acquire property by lawful contract. To enforce these contentions, many generalities of language, culled out of the reported decisions and the writings of the commentators, have been quoted, but no concrete instances of holdings by courts of last resort adverse to enactments of the character of the one in question have been cited. Two recent decisions by subordinate federal judges ruling against the validity of statutes of a similar kind have been called to our attention. (In re Grice, 79 F. 627; Niagara Fire Ins. Co. v. Cornell, 110 id. 816.) The opinions in both these cases, so far as they discuss the subject of the repugnancy of the acts under consideration to the constitutional guaranty of freedom of contract, are open to the criticism of being without the bounds of the meritorious question at issue. This is perceivable at once. The first-mentioned case involved the "anti-trust" statute of Texas. That statute exempted from its terms the original producer or raiser of agricultural products or live stock. The other case involved the "anti-trust" statute of Nebraska. That statute exempted from its provisions assemblies or associations of laboring men. The making of these exceptions was class legislation, and constituted a denial of the equal protection of the law -- so the judges ruled. That ruling was all-sufficient for the purpose of the cases. Not only that, it was on the only necessary question in the cases. Hence, the disposition made of them on the one special feature forbade an opinion on the abstract general question, and rendered all that was said upon it dictum of the baldest kind. The supreme court of the United States recently had a like occasion to declare the law in advance of the presentation of a necessary issue concerning it. It was in the case of Connolly et al. v. The Union Sewer Pipe Co., just decided. (22 S.Ct. 431.) That case involved the validity of the "anti-trust" law of Illinois, an enactment similar to the statutes of Texas and Nebraska, and like them containing an exception in favor of a certain class. The court held the statute invalid because of the exception, but very properly refrained from making pronouncement of what the law would be if it had not contained the exception.

The opinions of the judges in the cases of In re Grice, supra, and Niagara Fire Ins. Co. v. Cornell, supra, are not regarded by us as authority. They are, however, adopted as arguments by counsel for appellant, and as such are entitled to consideration. Nevertheless, as arguments, they are barren of reference to adjudged cases, except in the form of quotations of abstract and general statement. The burden of their reasoning is that the statutes under consideration were so broad and comprehensive in their terms as to be inclusive of classes of persons and kinds of business that it would be unreasonable and tyrannical to regulate in the mode attempted. In the case first cited it was said, among other things of like kind:

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