Texas Public Utilities Corporation v. Edwards, 8262.

• Decision Date: 12 November 1936
• Docket Number: No. 8262.,8262.
• Parties: TEXAS PUBLIC UTILITIES CORPORATION et al. v. EDWARDS et al.
• Court: Texas Court of Appeals

Page 420

99 S.W.2d 420

TEXAS PUBLIC UTILITIES CORPORATION et al. v. EDWARDS et al.

No. 8262.

Court of Civil Appeals of Texas. Austin.

November 12, 1936.

Motions for Rehearing Overruled December 2, 1936.

Appeal from District Court, Bastrop County; John H. Tate, Judge.

Action by H. B. Edwards and another against the Texas Public Utilities Corporation and others. From a judgment in favor of the plaintiffs, the defendants appeal.

Reversed and remanded.

Paul D. Page, of Bastrop, and Worsham, Rollins, Burford, Ryburn & Hincks, of Dallas, for appellant Texas Public Utilities Corporation.

Richard Burns, T. D. Anderson, and Andrews, Kelley, Kurth & Campbell, all of Houston, for appellant W. C. Marshall.

Allen Charlton, of Dallas, for appellants E. D. Bordhead, D. J. Haines, and Worth D. Nowlin.

Merton L. Harris and S. L. Staples, both of Austin, C. W. Webb, of Elgin, and James A. King, of Austin, for appellees.

BLAIR, Justice.

Appellees, H. B. Edwards and A. V. Gold, sued Texas Public Utilities Corporation (a corporation manufacturing and selling ice in 26 cities and towns in Texas, including Elgin and Smithville); E. D. Bordhead, its general manager; J. E. Haines, its district manager; Worth D. Nowlin, its local manager at Smithville; and also sued W. C. Marshall, general manager, and Chester Berry, night superintendent, of the American Service Company, a corporation manufacturing and selling ice in Austin; and others, seeking to recover damages because of certain acts done pursuant to an alleged conspiracy arising in common law and because of certain alleged combinations in restraint of trade in violation of the Antitrust Laws of Texas (articles 7426 and 7429, R.S.1925), which acts resulted in driving appellees out of the retail ice business in Smithville.

The jury found that only appellants Texas Public Utilities Corporation, E. D. Bordhead, J. E. Haines, Worth D. Nowlin, and W. C. Marshall participated in the conspiracy, which was the proximate cause of appellees' being driven out of the ice business, and that appellees sustained damages in the sum of $31,072, consisting of $3,072 actual damages, $25,000 exemplary damages, and $3,000 attorney's fee. Judgment was accordingly rendered for appellees against said appellants, jointly and severally, for $31,072; hence this appeal.

In the case of State v. Standard Oil Company, 82 S.W.(2d) 402, this court declared the Anti-trust Laws of Texas unconstitutional, and therefore appellants contend that their liability for any damages resulting from the alleged conspiracy must be determined by the rules of common law, and that appellees neither alleged nor proved, as a matter of law, any act done pursuant to the alleged conspiracy which would establish their common-law liability for the resulting damages. A writ of error has been granted by the Supreme Court in the Standard Oil Company Case, but whether the Anti-trust Laws are invalid or not is immaterial, because appellees alleged and proved acts done pursuant to an actionable conspiracy arising in common law, rendering appellants liable for the resulting damages.

Appellant Texas Public Utilities Corporation will be referred to as TPU. The relation of its officers, agents, and employees as above stated is not in dispute, and the same is true of the other above-named corporation. Appellees established their retail ice business in Smithville about June 20, 1933, by renting a lot for $6 per month and placing an ice box or vault on it, their total expenses being about $125. Appellee Gold owned a 1½-ton truck, and the arrangement between him and Edwards was for him to purchase at wholesale, and truck the ice at night from Austin, and Edwards was to stay at the place of business and sell ice to retail trade; and after paying for the ice and the actual expenses of trucking it, the profits were to be divided equally. Gold had been in a similar business with one Green at Elgin for the two preceding years, but sold his interest to Green for $12.50 just prior to going to Smithville. The Elgin business purchased its ice at wholesale from TPU, but it refused to sell ice at wholesale to appellees at Smithville. The first truck load of ice (about 4,000 or 4,500 pounds) used in the Smithville business was purchased from the American Service Company in Austin, on the night of June 19, 1933, and thereafter a truck load each night until June 30, 1933. On June 20, 1933, Edwards sold about 2,000 pounds of ice to retail trade, and the business increased daily until July 2, 1933, when about 6,400 pounds were sold and about 150 customers had been secured; but at which time the business was closed, because, according to their evidence, appellees could not purchase any more ice at wholesale in Austin or elsewhere in trucking distance of Smithville, due to the acts done by appellants pursuant to the conspiracy, which in substance were as follows:

TPU had no competition in the retail ice business in Smithville prior to the time appellees began their ice business. Appellees paid 25 cents per hundred pounds for their ice at Austin, and sold it for 50 cents at the ice box and 60 cents where delivered to the residence or business of the purchasers in Smithville. These were the prices charged by TPU in Smithville, where it manufactured and sold ice to both wholesale and retail trade, the wholesale price being 20 cents per hundred pounds at the factory. Shortly after appellees established their ice business, Nowlin, the local manager of TPU, notified Bordhead and Haines of such business. Bordhead through Haines ordered Nowlin to put on one day ice sales in Smithville, on June 27 and 30, 1933, cutting the price to 20 cents per hundred pounds for those days, either at the plant or delivered. A similar sale was had on July 2, 1933, which was the last day appellees were in business. TPU sold ice at the usual prices of 50 and 60 cents on Wednesday, Thursday, and Saturday of that week. These one day cut price sales naturally affected the ice business, particularly on the following day, and there was no profit in them for TPU. They were admitted to have been made as a competitive measure against appellees, it being the view of Bordhead, Haines, and Nowlin that if appellees sold any appreciable amount of ice, there would have been no profit even at the regular prices in the retail business of TPU. Each of the one day ice sales was advertised by hand bills distributed by the agents and employees of TPU in Smithville.

Bordhead and Haines ordered Nowlin and other named employees to find out where the appellees were buying their ice and they accordingly began spying upon appellees; and on the night of June 29, 1933, Haines and one Westmoreland, in separate automobiles, followed Gold's truck to the American Service Company's plant in Austin, and Westmoreland drove his automobile slowly by the plant several times while Gold was loading his ice. Gold called the attention of Berry, the night superintendent, to the automobile, told him that it had been following him, and asked Berry if he knew what it meant. Berry replied that it meant that this was Gold's last load of ice, and that he would likely get his orders to cut him off on the next morning. After appellees closed their business, Berry told Gold that he received such orders on the following morning. After Gold loaded his ice, he went a short distance to a filling station for gasoline, and Westmoreland was there, out of his automobile. He asked Gold for a ride back to Smithville, claiming his automobile was out of repair. Gold accused him of following him and demanded an explanation. Westmoreland denied he was doing so, and went to the automobile of Haines, which was parked nearby. Westmoreland later told Gold he was following him on the night in question, under the instruction of Haines, for the purpose of finding where Gold was getting ice. On the following morning, June 30, 1933, Gold and Edwards went to the office of Marshall, in Austin, and when asked why he refused to sell them any more ice, he replied, according to Edwards, as follows:

"Well, Mr. Marshall said he didn't believe in invading on anybody's territory and he said, `Why don't you all buy ice from the Texas Public Utility Corporation?' And we told him they wouldn't sell us ice."

Marshall testified that he was afraid if he sold ice for delivery in Smithville in competition with TPU that he would thereby "mess up his own back yard," meaning that TPU would retaliate by selling ice in Austin in competition with the American Service Company, and, in addition, because of certain local conditions, he had sold all the surplus ice he could manufacture to other ice companies in Austin. Marshall testified further that he sold ice both before and after cutting appellees off to several customers at wholesale, and, further, as follows:

"Q. Yes, sir; name somebody else you refused to let have ice? A. I don't recall anyone."

"Q. I am talking about people in Austin. The only man since you have been there is Edwards and Gold that you refused to sell ice for cash there at your business? A. That is all."

In the latter part of June, 1933, Green, who bought ice at wholesale from TPU at Elgin and sold it to retail trade in Elgin, was called to TPU's office and Bordhead and Haines told him that they were going to cut him off from buying ice because they believed he was selling the same ice to appellees to be used in retail trade against TPU in Smithville. Green denied that he was doing so. On this occasion Bordhead told Haines that he heard appellees were going to ship a car load of ice from San Antonio to Smithville, and Bordhead said, "I wish them boys would ship in a car of ice—I would like to see it stand there and melt and run down the track." Green further testified that in this same conversation Bordhead referred to Gold as follows:

"Yes, sir; he said that Gold had invaded his territory three times, and, he said he was getting tired of it, and ...