Union Pacific Coal Co. v. United States

• Decision Date: 19 November 1909
• Docket Number: 3,077-3,081.
• Citation: 173 F. 737
• Parties: UNION PACIFIC COAL CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

173 F. 737

UNION PACIFIC COAL CO. v. UNITED STATES.

Nos. 3,077-3,081.

United States Court of Appeals, Eighth Circuit.

November 19, 1909

C. S Varian and N. H. Loomis (P. L. Williams, on the brief), for plaintiffs in error.

Hiram E. Booth, U. S. Atty., and William M. McCrea, Asst. U.S Atty.

Before SANBORN and VAN DEVANTER, Circuit Judges, and WILLIAM H MUNGER, District Judge.

SANBORN Circuit Judge.

This writ of error challenges the legality of the conviction of the Union Pacific Coal Company, a corporation of Wyoming engaged in mining coal in that state and selling it to retail dealers in Salt Lake City and elsewhere, James M. Moore, its general Western agent, the Union Pacific Railroad Company and the Oregon Short Line Railroad Company, corporations of Utah and common carriers, and Everett Buckingham, general superintendent of the transportation business of these carriers between Green River, in the state of Wyoming, and Salt Lake City, in the state of Utah, of a violation of the act of July 2, 1890, to protect trade and commerce against unlawful restraints and monopolies, commonly called the 'Sherman Anti-Trust Act.' 26 Stat. 209, c. 647 (U.S.Comp.St. 1901, p. 3200).

The charge in the indictment was that about July 20, 1906, the defendants below combined to force one Sharp, a purchaser of coal from the coal company and a retail dealer therein at Salt Lake City, out of his business, to control and maintain the retail price of coal in that city, and to prevent competition in the sale of coal at retail in Salt Lake City by failing and refusing to sell and to transport to him any of the coal mined by the coal company unless he would discontinue an advertisement he had caused to be inserted in the newspapers to the effect that he would sell storage coal at a reduction of 50 cents a ton from the regular retail price thereof then prevailing in Salt Lake City, and by the refusal of the coal company and Moore to sell to Sharp any of its coal, and of the railroad companies and Buckingham to transport any coal for him ever after July 22, 1906.

Many specifications of error in the trial are urged upon our consideration; but the most serious is that at its close the court denied the motions of each of the defendants to instruct the jury to return a verdict against the government, because there was no substantial evidence of the alleged combination of any two of the defendants. It may not be unprofitable, before entering upon a review of the evidence challenged by this specification, to call to mind some of the indisputable rules of law by which it must be decided.

The gist of the offense charged in the indictment was not the refusal of the coal company and Moore to sell coal on the purchaser's terms, or of the railroad companies and Buckingham to transport it. It was the combination so to do, and if there was no combination there was no offense. There was no law which forbade the coal company to prescribe the terms on which it would sell its product to Sharp, or to any other purchaser. There was no law which required the coal company to sell its coal to Sharp on the terms which he prescribed, or to sell it to him at all. It had the undoubted right to refuse to sell its coal at any price. It had the right to fix the prices and the terms on which it would sell it, to select its customers, to sell to some and to refuse to sell to others, to sell to some at one price and on one set of terms, and to sell to others at another price and on a different set of terms. There is nothing in the act of July 2, 1890, which deprived the coal company of any of these common rights of the owners and venders of merchandise, and if it did not combine with some other person or persons so to do its refusal to sell its coal to Sharp unless he would withdraw his advertisement of a reduction in his retail price of it was not the violation of the Sherman anti-trust act charged in the indictment. Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. 173, 186, 8 Am.Rep. 159; Whitwell v. Continental Tobacco Co., 125 F. 454, 460, 461, 463, 60 C.C.A. 290, 296, 297, 299, 64 L.R.A. 689; 1 Eddy on Combinations, Sec. 292; Allgeyer v. Louisiana, 165 U.S. 578, 589, 17 Sup.Ct. 427, 41 L.Ed. 832; In re Greene (C.C.) 52 F. 104, 115; In re Grice (C.C.) 79 F. 627, 644; Walsh v. Dwight, 40 A.D. 513, 58 N.Y.Supp. 91, 93; Brown v. Rounsavell, 78 Ill. 589.

A corporation is a person, within the meaning of this act. It is another and different person from any of its stockholders, whether they are corporations or individuals; and no corporation can, by violating a law, make any one of its stockholders who does not himself participate in that violation criminally liable therefor.

The act of July 2, 1890, does not denounce every combination engage in or to conduct commerce among the states or with foreign nations, but those combinations alone which restrain that commerce. It does not denounce every combination which restrains that commerce, but those combinations only, the necessary effect of which is to stifle, or directly and substantially to restrict, free competition in that commerce. United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 330, 339, 340, 17 Sup.Ct. 540, 41 L.Ed. 1007; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 234, 20 Sup.Ct. 96, 44 L.Ed. 136; United States v. Joint Traffic Ass'n, 171 U.S. 505, 576, 577, 19 Sup.Ct. 25, 43 L.Ed. 259; United States v. Northern Securities Company (C.C.) 120 F. 721, 722.

If the necessary effect of a combination to engage in or conduct interstate or international commerce is but incidentally and indirectly to restrict competition therein, while its chief result is to foster the trade and to increase the business of those who make and operate it, it does not fall under the ban of this law. Hopkins v. United States, 171 U.S. 573, 592, 19 Sup.Ct. 40, 43 L.Ed. 230; Anderson v. United States, 171 U.S. 604, 616, 19 Sup.Ct. 50, 43 L.Ed. 300; United States v. Joint Traffic Ass'n, 171 U.S. 505, 568, 19 Sup.Ct. 25, 43 L.Ed. 259; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 245, 20 Sup.Ct. 96, 44 L.Ed. 136; Whitwell v. Continental Tobacco co., 125 F. 454, 458, 60 C.C.A. 290, 294, 64 L.R.A. 689, and cases there cited. There are lawful and unlawful combinations of persons conducting interstate and international commerce, and undoubtedly the former vastly outnumber the latter. There is no presumption that two or more persons who have combined to conduct interstate or international commerce are guilty of a combination in restraint of that commerce.

There was a legal presumption that each of the defendants was innocent until he was proved to be guilty beyond a reasonable doubt. The burden was upon the government to make this proof, and evidence of facts that are as consistent with innocence as with guilt is insufficient to sustain a conviction. Unless there is substantial evidence of facts which exclude every other hypothesis but that of guilt, it is the duty of the trial court to instruct the jury to return a verdict for the accused; and where all the substantial evidence is as consistent with innocence as with guilt, it is the duty of the appellate court to reverse a judgment of conviction. Vernon v. United States, 146 F. 121, 123, 124, 76 C.C.A. 547, 549, 550; United States v. Richards (D.C.) 149 F. 443, 454; Hayes v. United States (C.C.A.) 169 F. 101, 103; United States, 84 F. 799, 28 C.C.A. 612; United states v. M'Kenzie (D.C.) 35 F. 826, 827, 828; United States v. Martin, 26 Fed.Cas. 1183, 1184 (No. 15,731); People v. Ward, 105 Cal. 335, 341, 38 P. 945; People v. Murray, 41 Cal. 66, 67; State v. Hunter, 50 Kan. 302, 32 P. 37; Bradshaw v. State, 17 Neb. 147, 22 N.W. 361, 366.

We turn to an examination of the evidence in the light of these principles. The defendants naturally divide themselves into two groups, the railroad companies and Buckingham, and the coal company and Moore. There is no evidence that either of the railroad companies or Buckingham ever combined with any one to fail or to refuse, or ever failed or refused, to transport any coal or other merchandise which Sharp offered to any of them for transportation or requested any of them to carry, so that the only question regarding them is whether or not there was substantial evidence that any of them unlawfully combined with the coal company, or with Moore, its Western sales agent, to refuse to sell the product of the coal company to Sharp.

There had been times in winter when the demand for coal in Salt Lake City had been so great that it was impossible for the coal companies and railroad companies to supply it, and in the summer of 1906, for the purpose of getting as large a portion of the supply for the coming winter into the city in the summer as possible, so that the demand in the winter might not cause a coal famine, as it had done at other times the coal companies arranged to sell coal which should remain stored with the retail dealers, or with their customers, on August 331, 1906, at a price 25 cents below the regular price for coal sold for general consumption, and the two railroad companies arranged to and did offer a rate of transportation from the mines in Wyoming to Salt Lake City for such stored coal 25 cents lower than the rate on coal sold for general consumption. It had long been, and then was, the practice of the railroad companies bringing coal into Salt Lake City from the mines to collect from the dealers in that city who purchased it both the purchase price of the coal and the freight, to pay over the purchase price to the coal companies which sold it, and to distribute the freight among the carriers that earned it. The reduction on storage coal was to be paid to the purchasers after August 31, 1906, upon proof that the coal...