The State ex rel. Major v. Missouri Pacific Railway Company

• Decision Date: 09 February 1912
• Parties: THE STATE ex rel. ELLIOTT W. MAJOR, Attorney-General, v. MISSOURI PACIFIC RAILWAY COMPANY et al
• Court: Missouri Supreme Court

144 S.W. 1088

240 Mo. 35

THE STATE ex rel. ELLIOTT W. MAJOR, Attorney-General, v. MISSOURI PACIFIC RAILWAY COMPANY et al

Supreme Court of Missouri

February 9, 1912

Demurrer sustained.

Elliott W. Major, Attorney-General, Charles G. Revelle and James T Blair, Assistant Attorneys-General, for the State.

(1) Section 17, article 2 of the Constitution, and Sec. 1062, R S. 1899, are violated when competing railway companies enter into an agreement and combination for the purpose of fixing regulating and maintaining freight rates or passenger fares to be charged between points located in this State. Such agreements restrain and prevent competition, and the chief purpose sought to be accomplished by the above sections is to preserve free and open competition between and among railway companies and prohibit any and all arrangements which defeat such competition. Railroad v. State, 72 Tex. 404; Security Co. v. United States, 193 U.S. 351; Pearsall v. Railroad, 161 U.S. 676; Morrill v. Railroad, 55 N.H. 537; Currier v. Railroad, 48 N.H. 325; Railroad v. Wear, 135 Mo. 230. (2) Such agreements are also illegal at common law as being in restraint of trade and commerce, against public policy, and violative of the law of the corporation's creation. State ex rel. v. Gas Co., 153 Ind. 488; Railroad v. Railroad, 38 Ind.App. 244; Railroad v. Railroad, 3 Robertson, 415; Railroad v. Closser, 126 Ind. 348; Anderson v. Jett, 89 Ky. 375; Stanton v. Allen, 5 Denio, 434, 49 Am. Dec. 282; Hooker v. Vandewater, 4 Denio, 349, 47 Am. Dec. 258; Railroad v. Railroad, 41 La. Ann. 970; People v. Sheldon, 139 N.Y. 251; Railroad v. Interstate Com. Commission, 39 C. C. A. 422; Pratt v. Tapley, 3 Pugsley N. B. 171; Sanford v. Railroad, 24 Pa. St. 382; Cravens v. Rogers, 101 Mo. 247; Clemens v. Meadows, 29 Ky. L. Rep. 619; Mfg. Co. v. Watch & Clock Co., 14 C. C. A. 14; United States v. Freight Assn., 166 U.S. 290; Joint Traffic Assn. v. United States, 171 U.S. 505; State v. Stewart, 59 Vt. 286; Railroad v. Collins, 40 Ga. 582; United States v. Freight Assn., 7 C. C. A. 88; Railroad v. Mining Co., 68 Ill. 494; Security Co. v. United States, 193 U.S. 351; Mobile v. Kimbrell, 102 U.S. 691; Gloucester v. Pennsylvania, 114 U.S. 196; Gibbons v. Ogden, 9 Wheat. 215; People v. Raymond, 34 Cal. 497; United States v. Pipe & Steel Co., 54 U. S. App. 723; State ex rel. v. Ins. Co., 152 Mo. 42; State ex rel. v. Standard Oil Co., 218 Mo. 1; Gibbs v. Gas Co., 130 U.S. 408; Coal Co. v. Coal Co., 68 Pa. St. 173; Brewing Co. v. Belinder, 97 Mo.App. 71; Commonwealth v. Carlisle (N. P.), Brightley, 38; Bailey v. Master Plumbers, 103 Tenn. 118; State v. Glidden, 55 Conn. 75; State ex rel. v. Stock Exchange, 211 Mo. 193; Beach on Monopolies and Industrial Trusts, par. 149; Noyes on Intercorporate Relations, p. 372; Spelling on Trusts and Monopolies, par. 82; Greenhood on Public Policy, p. 2661, 2662 and 2663; 1 Hawkins, P. C., p. 470, sec. 2; Stewart v. Trans. Co., 17 Minn. 395; State v. Board of Trade, 107 Minn. 505; State ex rel. v. Packing Co., 173 Mo. 388. (3) The common law in respect to such unlawful agreements has not been abrogated by statutory provisions, but the same is in full force and effect in this State. Coal Co. v. People, 214 Ill. 421; Branden v. Carter, 119 Mo. 581; Evans v. McFarland, 186 Mo. 723; State ex rel. v. Standard Oil Co., 218 Mo. 360; Humphreys v. Davis, 100 Ind. 284; Laws 1907, sec. 8970, p. 379; Currier v. Railroad, 48 N.H. 329. (4) The Anti-Trust Act, found at page 377, Laws 1907, applies to and covers the transportation of freight by railway, and the agreement which the second count seeks to condemn violates its provisions. Laws 1907, secs. 8965, 8968; United States v. Freight Assn., 166 U.S. 324; State ex inf. v. Standard Oil Co., 218 Mo. 1; State ex rel. v. Packing Co., 173 Mo. 356; State ex rel. v. Ins. Co., 152 Mo. 1. (5) The information, whether measured by the requirements of the common, constitutional or statutory law, is amply sufficient to state an unlawful combination. Laws 1907, sec. 8977, p. 381; Coal Co. v. People, 214 Ill. 421; State v. Dreany, 69 P. 182; State v. Stewart, 59 Vt. 286; State v. Shaw, 42 N.H. 393; United States v. Gardner, 42 F. 829; Hazen v. Commonwealth, 23 Pa. St. 363; State ex inf. v. Standard Oil Co., 218 Mo. 1; State ex rel. v. Insurance Co., 152 Mo. 40; Knight & Jilson Co. v. Miller, 87 N.E. 827; State ex rel. v. Railroad, 206 Mo. 28. (6) The charter of a private or public corporation will be forfeited for any willful misuser or abuse of its franchise which injures or menaces the interests or welfare of the State, or the community in which it transacts business, whether the misuser or abuse consists in the exercise of a franchise or power not conferred on the corporation by its charter, or in the violations of prohibitions in its charter, or in the violations of the common, statutory or constitutional laws to which it is subject, or in the violation of established principles based upon the ground of public policy. State ex inf. v. Standard Oil Co., 218 Mo. 1; State ex rel. v. Delmar Jockey Club, 200 Mo. 70; Railroad v. State ex rel., 155 Ind. 456; 2 Spelling on Extra. Remedies, pr. 1820; Stockton v. Railroad, 50 N.J.Eq. (5 Dick) 52; Attorney-General v. Railroad, 12 C. E. Gr. 631. (7) Both domestic and foreign railway companies, while doing business within this State and transporting persons and property between cities and communities located wholly within this State, and in fixing and maintaining rates and fares applicable solely to traffic within this State, are subject to State jurisdiction and amenable to the State laws governing such matters. Railroad v. Kentucky, 161 U.S. 701; State ex inf. v. Standard Oil Co., 218 Mo. 376; Ins. Co. v. Daggs, 172 U.S. 566; Com. Co. v. Spencer, 205 Mo. 118; Gibbons v. Ogden, 9 Wheat. 195; Thorp v. R. & B. Co., 27 Vt. 142; Bridge Co. v. Kentucky, 154 U.S. 209; sec. 5, art. 12, Mo. Constitution; sec. 14, art. 12 Mo. Constitution; Tenth Amendment to U. S. Constitution; Packing Co. v. Ark., 212 U.S. 322.

E. L. Scarritt, Geo. P. B. Jackson, O. M. Spencer, Gardiner Lathrop, Frank Hagerman, John H. Lucas, J. G. Trimble, Samuel W. Moore, R. A. Brown, Sam West, W. F. Evans, J. L. Minnis, Martin L. Clardy and W. C. Marshall for respondents.

(1) The information does not state facts sufficient to constitute a cause of action. The information states no facts whatever. It states mere conclusions of the pleader. Pier v Heinrichoffen, 52 Mo. 336; Sidway v. Land & Live Stock Co., 163 Mo. 372; Chemical Co. v. Nemnich, 169 Mo. 396; Vogeler v. Punch, 25 Mo. 576; State ex rel. v. Grimm, 220 Mo. 490. (2) The information is framed upon the erroneous hypothesis that this is a proceeding to oust defendants from franchises they never had a right to exercise; in which cases it is only necessary for the Attorney-General to inform the court that the defendants are claiming a right to a franchise never granted, and then it devolves upon the defendants to affirmatively show the grant of charter powers; whereas, in this case, the Attorney-General informs the court that the defendants have been legally and properly granted charters and franchises by the State, and seeks to take the same away from them, not because they were not originally legally granted, but because they have misused and abused such charter powers and franchises. In such cases it is not sufficient for the Attorney-General to inform the court in general terms, by legal conclusions of his own, that the defendants have abused or misused their charter powers and franchises, but it is necessary to state specifically the facts relied upon by the Attorney-General to show such abuse or misuse, so that the defendants may "be informed of the nature and cause of the accusation" (Amendment 6 to U. S. Constitution, and sec. 22, art. 2, Constitution of Missouri) in order that they may take issue thereon and properly prepare their defense thereto. This is the distinction between informations to divest defendants of charter powers never legally granted, and to forfeit legally granted powers because of abuse or misuse thereof. State ex rel. v. Grimm, 220 Mo. 491. (3) The information in this case is not sufficient even when measured by the precedents furnished in State ex inf. v. Railroad, 206 Mo. 28, or in State ex inf. v. Standard Oil Co., 218 Mo. 1. In both of those cases the Attorney-General undertook to state with precision the specific facts relied upon to authorize a forfeiture of the charter powers and franchises of the defendants, because of their abuse or misuse thereof, and did not, as the Attorney-General does in this case, simply inform the court generally that the defendants had entered into an unlawful conspiracy to fix and regulate prices. (4) The information in the case at bar is wholly defective even under Sec. 8977, Act of March 19, 1907, Laws 1907, p. 381. This section only makes it unnecessary to allege or plead "the manner in which, or when or where" such pool was created. In these respects only has this act made any change in the law in respect to pleadings in such cases, and these changes in the law are not sufficient to make the information in the case at bar sufficient. The manner in which a conspiracy denounced by the anti-trust laws was made or effected, relates only to the form of the agreement, whether in writing or oral, and does not pertain to the substance of the agreement at all. The substance of the agreement or conspiracy may be shown by either direct or circumstantial evidence, or may be inferred from the conduct of the parties, whilst the manner, fashion, or form of the agreement or conspiracy, or the time when or where the conspiracy was concocted, would not appear from the acts of the parties in carrying out the conspiracy. The manner,...