United States v. Borden Co

Decision Date04 December 1939
Docket NumberNo. 397,397
PartiesUNITED STATES v. BORDEN CO. et al
CourtU.S. Supreme Court

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[Syllabus from pages 188-190 intentionally omitted] Messrs. Frank Murphy, Atty. Gen., and Thurman Arnold, Asst. Atty. Gen., for appellant.

Messrs. Loy N. McIntosh and Bernhardt Frank, both of Chicago, Ill., for appellees Sidney Wanzer & Sons, Inc., et al.

Mr. William C. Graves, of Chicago, Ill., for appellees Pure Milk Ass'n et al.

Mr. Joseph A. Padway, of Washington, D.C., for appellees Robert G. Fitchie et al.

Messrs. Frederic Burnham, Donald F. McPherson, Cecil I. Crouse, Howard Neitzert, and Miles G. Seeley, all of Chicago, Ill. (Messrs. Sidley, McPherson, Austin & Burgess and Mayer, Meyer, Austrian & Platt, all of Chicago, Ill., of counsel), for appellees Borden Co. et al.

Messrs. Louis E. Hart, Irving Herriott and L. Edward Hart, Jr., all of Chicago, Ill. (Messrs. Montgomery Hart, Pritchard & Herriott, of Chicago, Ill., of counsel), for Bowman Dairy Co. and others.

Messrs. Isidore Fried, Herbert B. Fried, and Bernard A. Stol, all of Chicago, Ill., for Capital Dairy Co. and another.

Mr. Daniel D. Carmell, of Chicago, Ill., for appellee Leslie G. Goudie.

Messrs. Charles S. Deneen, Roy Massena, and Donald N. Schaffer, all of Chicago, Ill., for appellees Hunding Dairy Co. et al.

Messrs. Ben H. Matthews and James P. Dillie, both of Chicago, Ill., for appellee Leland Spencer.

Mr. Louis M. Mantynband, of Chicago, Ill., for appellees Western United Dairy Co. et al., upon and by their adoption of the brief filed on behalf of appellees Sidney Wanzer & Sons, Inc., et al.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

The Government appeals from a judgment of the District Court sustaining demurrers and dismissing an indictment charging combination and conspiracy in violation of Section one of the Sherman Anti-Trust Act, 15 U.S.C.A. § 1. 28 F.Supp. 177.

The trade and commerce alleged to be involved is the transportation to the Chicago market of fluid milk produced on dairy farms in Illinois, Indiana, Michigan and Wisconsin and the distribution of the milk in that market. The Government divides the defendants into five groups,—(1) distributors and allied groups which include a number of corporations described as major distributors and their officers and agents, the Associated Milk Dealers, Inc., a trade association of milk distributors, and its officers and agents, and the Milk Dealers Bottle Exchange, a corporation controlled by the major distributors; (2) the Pure Milk Association, a cooperative association of milk producers incorporated in Illinois, and its officers and agents; (3) the Milk Wagon Drivers Union, Local 753, engaged in the distribution of milk in Chicago, and certain labor officials; (4) municipal officials, including the president of the Board of Health of Chicago and certain subordinate officials; (5) two persons who arbitrated a dispute between the major distributors and the Pure Milk Association, fixing the price of milk to be paid to the members of the association.

The indictment, which was filed in November, 1938, contains four counts. The several defendants challenged it by demurrers and motions to quash on various grounds. The District Court held with respect to counts one, two and four, that the production and marketing of agricultural products, including milk, are removed from the purview of the Sherman Act by the Agricultural Marketing Agreement Act of 1937, 50 Stat. 246, 7 U.S.C.A. § 671 et seq.; also with respect to all four counts, according to the formal terms of its judgment, that the Pure Milk Association, as an agricultural cooperative association, its officers and agents, are exempt from prosecution under Section one of the Sherman Act by Section 6 of the Clayton Act, 15 U.S.C. § 17, 15 U.S.C.A. § 17. Sections one and two of the Capper-Volstead Act, 7 U.S.C. §§ 291, 292, 7 U.S.C.A. §§ 291, 292, and the Agricultural Marketing Agreement Act. With respect to count three, the District Court held that it was duplicitous, in the view that it charged several separate conspiracies and also that it did not definitely charge a restraint of interstate commerce.

The judgment expressly overruled the demurrers and motions to quash so far as they challenged the constitutionality of the Sherman Act or the sufficiency of the allegations of unlawful conspiracy, and also so far as it was contended that interstate commerce was not involved in counts one, two and four. The court added that it overruled all the defendants' contentions which it had not specifically overruled or sustained. The judgment ends by dismissing the indictment as to all defendants.

The first question presented concerns our jurisdiction. The exceptional right of appeal given to the Government by the Criminal Appeals Act is strictly limited to the instances specified.1 The provision invoked here is the one which permits review where a decision quashing or sustaining a demurrer to an indictment or any of its counts is based upon the 'construction of the statute upon which the indictment is founded'. The decision below was not predicated upon invalidity of the statute.

The established principles governing our review are these: (1) Appeal does not lie from a judgment which rests on the mere deficiencies of the indictment as a pleading, as distinguished from a construction of the statute which underlies the indictment. (2) Nor will an appeal lie in a case where the District Court has considered the construction of the statute but has also rested its decision upon the independent ground of a defect in pleading which is not subject to our examination. In that case we cannot disturb the judgment and the question of construction becomes abstract. (3) This Court must accept the construction given to the indictment by the District Court as that is a matter we are not authorized to review. (4) When the District Court holds that the indictment, not merely because of some deficiency in pleading but with respect to the substance of the charge, does not allege a violation of the statute upon which the indictment is founded, that is necessarily a construction of that statute. (5) When the District Court has rested its decision upon the construction of the underlying statute this Court is not at liberty to go beyond the question of the correctness of that construction and consider other objections to the indictment. The Government's appeal does not open the whole case.

First. The first two of these principles, as the Government concedes, preclude our review of the decision below as to count three. For that count was held bad upon the independent ground that it is defective as a pleading, being duplicitous and also lacking in definiteness. United States v. Keitel, 211 U.S. 370, 397—399, 29 S.Ct. 123, 131—132, 53 L.Ed. 230; United States v Carter, 231 U.S. 492, 493, 34 S.Ct. 173, 174, 58 L.Ed. 330; United States v. Hastings, 296 U.S. 188, 192—194, 56 S.Ct. 218, 219, 220, 80 L.Ed. 148. The appeal as to count three must be dismissed.

Second. After a general description of the averments of the indictment, which was explicitly founded on Section one of the Sherman Act, the District Court construed counts one, two and four as follows (28 F.Supp. 180):

'Count 1 charges a conspiracy 'to arbitrarily fix, maintain and control artificial and non-competitive prices to be paid to all producers by all distributors for all fluid milk produced on approved dairy famrs located in the states of Illinois, Indiana, Michigan and Wisconsin', and shipped to Chicago.

'Count 2 charges a conspiracy 'to fix and maintain by common and concerted action, uniform, arbitrary and non-competitive prices for the sale by the distributors in the city of Chicago of fluid milk shipped into the said city from the states of Illinois, Indiana, Michigan and Wisconsin.'

'Count 4 charges a conspiracy 'to restrict, limit and control and to restrain and obstruct the supply of fluid milk moving in the channels of interstate commerce into the city of Chicago from the states of Illinois, Indiana, Michigan and Wisconsin."

The District Court further summarized the allegations in these counts as to the methods by which the alleged conspiracies were intended to be effected. 28 F.Supp. at pages 179—181. This construction of the indictment is binding upon this Court on this appeal. United States v. Patten, 226 U.S. 525, 535, 540, 33 S.Ct. 141, 142, 144, 57 L.Ed. 333, 44 L.R.A.,N.S., 325; United States v. Colgate & Co., 250 U.S. 300, 301, 39 S.Ct. 465, 466, 63 L.Ed. 992, 7 A.L.R. 443; United States v. A. Schrader's Son, 252 U.S. 85, 98, 40 S.Ct. 251, 253, 64 L.Ed. 471; United States v. Yuginovich, 256 U.S. 450, 461, 41 S.Ct. 551, 553, 65 L.Ed. 1043; United States v. Hastings, supra, 296 U.S. at page 192, 56 S.Ct. at page 219, 80 L.Ed. 148.

Third. The District Court, thus construing counts one, two and four, held as a matter of substance that, because of the effect of the later statutes, these counts did not charge an offense under Section one of the Sherman Act. This was necessarily a construction of the Sherman Act. United States v. Patten, supra; United States v. Birdsall, 233 U.S. 223, 230, 34 S.Ct. 512, 514, 58 L.Ed. 930; United States v. Kapp, 302 U.S. 214, 217, 58 S.Ct. 182, 184, 82 L.Ed. 205. We are not impressed with the argument that the court simply construed the later statutes. The effect of those statutes was considered in determining whether the Sherman Act has been so modified and limited that it no longer applies to such combinations and conspiracies as are charged in counts one, two and four. Thus the Sherman Act was not the less construed because it was construed in the light of the subsequent legislation.

We have jurisdiction under the Criminal Appeals Act to determine whether the construction thus placed upon the Sherman Act is correct.

Fourth. In reaching its conclusion, the District Court...

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