State v. Standard Oil Co. of Kentucky

• Decision Date: 11 April 1908
• Citation: 110 S.W. 565,120 Tenn. 86
• Parties: STATE ex rel. CATES, Atty. Gen., v. STANDARD OIL CO. OF KENTUCKY.
• Court: Tennessee Supreme Court

110 S.W. 565

120 Tenn. 86

STATE ex rel. CATES, Atty. Gen., v. STANDARD OIL CO. OF KENTUCKY.

Supreme Court of Tennessee.

April 11, 1908

Appeal from Chancery Court, Summer County; J. W. Stout, Chancellor.

Bill by the state, on the relation of Charles T. Cates, Jr., Attorney General, against the Standard Oil Company of Kentucky. From a decree granting a perpetual injunction, restraining defendant from doing business within the state, defendant appeals. Affirmed.

Jno. J Vertrees, Wm. O. Vertrees, and J. W. Blackmore, for appellant.

Charles T. Cates, Jr., Atty. Gen., R. L. Peck, and W. A. Guild, for the State.

NEIL J.

The bill in this case was filed for the purpose of ousting the defendant from the state and to obtain a perpetual injunction against its doing business in the state.

There was a demurrer filed, which was overruled, and then an answer was filed by the defendant, and proof heard. The result was a decree was pronounced by the chancellor in accordance with the prayer of the bill, qualified, however, by a clause that nothing in the decree should be construed to in any way affect or apply to defendant's interstate commerce, or to prohibit it from engaging in interstate commerce within this state.

There was a supplemental bill filed, which was demurred to by the defendant, and the demurrer sustained.

From the decree sustaining the original bill, and granting relief thereon, the defendant appealed to this court, and has here assigned errors; and from the decree sustaining the demurrer to the supplemental bill the state has appealed to this court and assigned errors.

In the view which we take of this case, we need not further advert to the supplemental bill, or the action of the chancellor thereon.

Inasmuch as some of the defenses interposed, both of law and fact depend upon criticisms made upon the language and scope of the bill, it is proper that the pleading be set out substantially in full.

Omitting the caption, it reads as follows:

"Complainant respectfully show unto your honor:

"That the defendant, Standard Oil Company, is a corporation originally chartered and organized under the laws of the state of Kentucky, and since 1893 has been claiming the right to do, and has been doing, business in the state of Tennessee, after having filed a copy of its charter in the office of the Secretary of State of complainant, state of Tennessee, on September 21, 1893. A duly certified copy thereof is herewith filed as Exhibit A to this bill, but need not be copied in issuing process. Said defendant was at the time of the matters hereinafter shown, and still is doing business in Sumner county, Tenn., and has a local agent residing at, in, or near the town of Gallatin, in said Sumner county.

"Complainant further shows and avers that in 1903 the defendant, Standard Oil Company (for convenience hereinafter referred to as defendant company), was engaged in and carrying on the business in Sumner county, and in Tennessee generally, of a dealer in coal oil and other products of petroleum, which were and are commonly used for illuminating and other purposes, which it sold both to retail dealers and the public generally. The business of defendant company in the greater part of Tennessee, including Sumner county, was under the management and control of one J. E. Comer, whose headquarters or offices were at Nashville, in Davidson county, Tenn., and the local agent having in charge the business of said company at or near Gallatin, Tenn., was one O'Donnell Rutherford, and there was also employed in and about the business of defendant company one C. E. Holt, who was styled a 'salesman', but who had charge, under the general supervision of said Comer, of the local agents and agencies of said company, inspecting the same and giving directions and instructions thereto. The said Comer, as special or managing agent, and the said Holt, acting under him, were authorized by defendant company to do, and in fact did, whatever in their judgment was necessary to advance the interests of their employer.

"Complainant further shows that the oil for illuminating and other purposes, handled, sold, and dealt in within the state of Tennessee, was imported and brought into said state from other states, and then stored in large iron tanks located at places where defendant company established local agencies, and from said tanks, usually called 'storage tanks', said oils were offered for sale and sold to retail dealers, and oftentimes to the public generally. Defendant company had one of its storage tanks located at Gallatin, and from this tank it supplied the demand for oil in Gallatin and at other places in Sumner county.

"Complainant further shows and avers that prior to October, 1903, defendant company had succeeded in pre-empting and securing for itself the oil business in Sumner county, and had succeeded in preventing other dealers in coming in competition with its said business in Sumner county, and at said time, to wit, in October, 1903, was engaged in selling in Sumner county an inferior grade of oil at the price of 13 1/2 cents per gallon.

"Complainant further shows that thus matters stood in relation to the oil business carried on by defendant company at Gallatin when, on or about October 5, 1903, one Claude Rosemon, an agent or traveling salesman of the Evansville Oil Company, whose chief office was at Evansville, in the state of Indiana, and which was engaged in the business of selling, among other things, illuminating oils, went to Gallatin, in Sumner county, Tenn., and offered for sale to certain retail dealers at that place a superior grade of oil in competition with the oil of defendant company then stored in its tanks at Gallatin, or which was being offered for sale at that place, and the said Rosemon succeeded in securing from certain customers of defendant company orders for about 60 barrels of oil at the price of 14 1/2 cents per gallon, to be shipped from Oil City, Pa., and delivered in original packages to said persons giving said orders about November 1, 1903. Among others, said Rosemon secured an order from one S.W. Love for 10 barrels of oil, from one W. H. Lane an order for 5 barrels of oil, from one J. E. Cron an order for 10 barrels of oil, and from one L. C. Hunter an order for 6 barrels of oil.

"Thereupon, information having come to defendant company that said Evansville Oil Company had secured orders for it from, and sold oil to, its customers at Gallatin, as hereinbefore shown, and was thereby and in that manner competing with the oil business of defendant company at Gallatin, the said defendant company and its said agents, J. E. Comer, C. E. Holt, and O'Donnell Rutherford, and the said S.W. Love, W. H. Lane, J. E. Cron, and L. C. Hunter, and perhaps others unknown to complainant, unlawfully made and entered into an arrangement, agreement, and combination, with a view to lessen, and which tended to lessen, full and free competition in the sale of defendant company's oil then being sold or offered for sale at Gallatin, and the said defendant company and its said agents, Comer, Holt, and Rutherford, and the said S.W. Love, W. H. Lane, J. E. Cron, and L. C. Hunter, and perhaps others unknown to complainant, entered into and made certain unlawful arrangements, agreements, or combinations, which were designed to advance, and which tended to advance, the price or cost to the purchaser or consumer of defendant company's said oil then being sold or offered for sale at Gallatin as aforesaid.

"And complainant further shows unto your honor that in order to carry said unlawful arrangements, agreements, or combinations into effect, and as a part of such unlawful agreements, arrangements, or combinations, the said defendant company and its agent, C. E. Holt, induced the said S.W. Love, W. H. Lane, J. E. Cron, and L. C. Hunter to rescind and cancel their several purchases of oil or orders for oil from said Evansville Oil Company, and as a consideration or inducement for said rescissions or cancellations, and as a part of said unlawful arrangements, agreements, or combinations, said defendant company gave without cost or charge to the said S.W. Love 100 gallons of oil, and to the said W. H. Lane 50 gallons of oil; to the said J. E. Cron 100 gallons of oil, and to the said L. C. Hunter 50 gallons of oil; and at its own expense sent telegrams, in the name of said Love, Lane, Cron, and Hunter, to said Evansville Oil Company, canceling the orders of said parties.

"Complainant further shows unto your honor that the said Love and others named above, not only rescinded and canceled, in the manner and as above shown, their several orders given to the Evansville Oil Company as aforesaid, but that they refused to accept or receive said oil when the same was shipped to Gallatin, so that the said Evansville Oil Company was driven from the field as a competitor with defendant company in the oil business at Gallatin; and thereupon defendant company, having succeeded by means of and through the aforesaid unlawful agreements, arrangements and combinations in not only lessening, but destroying, full and free competition in the sale of its oil then stored at Gallatin and being offered for sale, immediately advanced the price of its oil, which was of inferior grade, as hereinbefore shown, from 13 1/2 cents per gallon to 14 1/2 cents per gallon, the price at which the said Evansville Oil Company had offered for sale and had sold a grade of oil far superior, as complainant is informed and believes, to the oil sold by defendant company.

"So that complainant avers and charges that the unlawful arrangements, agreements, or combinations made and entered into between the defendant company and its said agents Comer, Holt, and...