Tallassee Oil & Fertilizer Co. v. H.S. & J.L. Holloway

• Decision Date: 21 June 1917
• Docket Number: 5 Div. 620
• Citation: 76 So. 434,200 Ala. 492
• Parties: TALLASSEE OIL & FERTILIZER CO. et al. v. H.S. & J.L. HOLLOWAY.
• Court: Alabama Supreme Court

76 So. 434

200 Ala. 492

TALLASSEE OIL & FERTILIZER CO. et al. v. H.S. & J.L. HOLLOWAY.

5 Div. 620

Supreme Court of Alabama

June 21, 1917

Appeal from Circuit Court, Elmore County; W.W. Pearson, Judge.

Bill by H.S. & J.L. Holloway against the Tallassee Oil & Fertilizer Company and others. From a decree overruling motion to dissolve a temporary injunction, respondents appeal. Affirmed.

Mayfield and Sayre, JJ., dissenting.

W.M Weston, of Tallassee, and T.G. Hilyer, J.M. Holly, and Smoot & Mullins, all of Wetumpka, for appellants.

Frank W. Lull, of Wetumpka, for appellees.

GARDNER J.

The substance of the bill of complaint is set out in the foregoing statement of the case. Its object is to enjoin the respondent from operating its cotton gin in such a discriminatory manner by refusing to gin cotton for those of the public who do not agree to sell respondent their cotton seed, thereby stifling competition in the sale of cotton seed, in which business complainants are also engaged. The bill shows that the respondent company is engaged in ginning cotton for the public and has virtually a monopoly of that business in that particular locality.

It seems to be the insistence of counsel for appellant that this class of business is of a private nature and not subject to the rule of the common-law doctrine against monopolies and the stifling of competition, and has not been declared subject to governmental regulation. Mills for the grinding of corn for the public were regarded under the common law as property devoted to a public use and affecting the public interest, and therefore subject to governmental regulation. They were placed in the same category with common carriers ferries, common wharves, and similar enterprises affecting the public at large. In the case of State of Maine v Edwards, found cited in 86 Me. 102, 29 A. 947, 25 L.R.A. 504, 41 Am.St.Rep. 528, the Supreme Court of Maine in discussing the regulation of gristmills, said:

"Mills for the grinding of grain and for the sawing of lumber for all comers have been aided or established by the Legislature from the earliest colonial times. Those mills were usually water mills; but it is of no moment what the propelling power may be. Burlington Twp. v. Beasley, 94 U.S. 310, 24 L.Ed. 161. They have always been considered so necessary for the existence of the community that it was proper for government to foster or maintain them, And, in the absence of government aid, the individual proprietor, not pretending to serve the public, might maintain such mills as private mills, free from legislative interference, precisely as he might maintain a store, shop, or other private business; but when such proprietor makes his mill public, assumes to serve the public, then he dedicates his mill to public use, and it becomes a public mill, subject to public regulation and control. He is not compelled to continue such public use, but, so long as he does, he becomes a public servant, and may be regulated by the public."

See, also, Mayor & Aldermen of Mobile v. Yuille, 3 Ala. 137, 36 Am.Dec. 441, and Moore v. Wright & Rice, 34 Ala. 311; Birmingham Water Works Co. v. Brown, 191 Ala. 457, 67 So. 613, L.R.A. 1915D, 1086.

Cotton gins were, of course, not so classed by the common law, for the reason that they are of comparatively modern invention, dating back no further than the year 1792. The question as to when private property becomes so clothed with a public interest and used in such a manner as to make it of public consequence was treated by the Supreme Court of the United States in German Alliance I. Co. v. Lewis, 233 U.S. 389, 34 Sup.Ct. 612, 58 L.Ed. 1011, L.R.A. 1915C, 1189, and also in Munn v. lllinois, 94 U.S. 113, 24 L.Ed. 77. It was also interestingly discussed in McCarter v. Fire Ins. Co., 74 N.J.Eq. 372, 73 A. 80, 29 L.R.A. (N.S.) 1194, 135 Am.St.Rep. 708, 18 Ann.Cas. 1048. We do not consider that the instant case requires a full discussion of these authorities and of the principles upon which they rest, but content ourselves with their citation merely. We live in a great agricultural state, and cotton has long been recognized as our chief staple, considered as the foundation of the wealth and prosperity of the agricultural sections of the state. Its preparation for market is therefore of the utmost concern to the public at large. Any one has of course the right to erect a gin for his own private purposes, but when he undertakes the ginning of cotton for the public his gin is dedicated to the public use, and under the authorities above cited, it becomes clothed with a public interest affecting the community at large and subject to governmental regulation.

According to the averments of the bill in this cause, the respondent company had virtually a monopoly in the cotton ginning business in the immediate vicinity of Tallassee, but refused to gin for any of the public who would not sell it their cotton seed, which rule of practice tended to stifle competition and is contrary to the public policy of the state. Having thus dedicated its property to public use the fertilizer company had no right to thus unfairly discriminate among its public patronage. The practice complained of might not come within the letter of the act of August 29, 1909 (Gen.Acts S.S.1909, p. 247), making it unlawful for any person, firm, or corporation engaged in buying cotton seed, and also in the operation of a public ginnery in this state, to make different prices to those customers who do and those who do not sell their cotton seed to such person, firm, or corporation, but it comes clearly within the spirit of said act. See, in this connection, section 7581, Code 1907, providing penalties for restraint of competition in trade. Speaking to the question, this court, in Arnold v. Jones Co., 152 Ala. 501, 44 So. 662, 12 L.R.A. (N.S.) 150, said:

"While the utmost liberty of contract, consistent with the rights of others, must be allowed, yet it must be seen that the exercise of that liberty does not impinge upon the rights of the public generally or of individuals. Combinations to enhance or depress prices are recognized as contrary to public policy and void. Nearly all of the decisions on the subject of preventing and 'stifling' competition involved combinations among those having commodities for sale to hold up the prices; but the principle is the same, whether the combination be upon the part of the sellers or of the purchasers. He who has commodities to sell in the market has the same right to competition among buyers as the purchaser has to competition among sellers."

It is insisted that complainants cannot maintain a bill of this character; that their only remedy is an action for damages, as provided by Code, § 2487, and that, aside from this, the discontinuance of the practice complained of rests alone in the government. 20 Am.Enc.Law, 862; 7 Cyc. 907. We do not think this position is well taken. The bill shows on its face that the complainants are competitors with the respondent in the buying of cotton seed in that particular locality, and that by the unfair methods practiced by respondent the complainants' business is injured and will be destroyed if such practice in restraint of free trade is allowed to be continued. The right to maintain a suit of this character was considered by the Supreme Court of Iowa in the recent case of Reeves v. Farmers' Soc., 160 Iowa, 194, 140 N.W. 844, 44 L.R.A. (N.S.) 1104. It was there held that the suit could be maintained. This conclusion seems to be rested on common sense and justice. That the complainants' remedy at law is inadequate is quite clear. They are engaged in a lawful business, and have a right to free and untrammeled competition. The practice here complained of is alleged to be ruinous to the continuance of their business. Speaking to the question, the Supreme Court of Iowa, in the above-cited case, said:

"It is contended that, conceding the arrangement and agreement is illegal, plaintiff is not entitled to an injunction to restrain the defendants from carrying it out. It seems to us that plaintiff has suffered a wrong, and that he is threatened with further injury to his business, growing out of defendant's illegal acts. In virtue of his being a competitor with the defendant association, he has the right to free and untrammeled competition with it; and if through illegal means he has been made to suffer in the past, and will do so in the future, he is entitled to the protective arm of the court. *** If, for no other reason, he is entitled to an injunction to avoid a multiplicity of suits. In at least two cases it has been held that one circumstanced as plaintiff may maintain an action to enjoin the illegal acts. *** [Employing Printers' Club v. Doctor Blosser Co., 122 Ga. 509, 50 S.E. 353] 69 L.R.A. 90, 106 St.Rep. 137 ."

The motion to dissolve the injunction was rested solely upon the ground of a want of equity in the bill, and not upon the answer and affidavits accompanying the same. We have therefore considered only the equity of the bill. It may not be improper to state, however, in view of the fact...