United States v. Colgate Co

• Court: U.S. Supreme Court
• Writing for the Court: McREYNOLDS
• Citation: United States v. Colgate Co, 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992, 7 A. L. R. 443 (1919)
• Decision Date: 02 June 1919
• Docket Number: No. 828,828
• Parties: UNITED STATES v. COLGATE & CO

250 U.S. 300

39 S.Ct. 465

63 L.Ed. 992

UNITED STATES

v COLGATE & CO.

No. 828.

Argued March 10, 1919.

Decided June 2, 1919.

Mr. G. Carroll Todd, Asst. Atty. Gen., for the United States.

Mr. Charles E. Hughes, of New York City, for defendant in error.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

Writs of error from Districts Courts directly here may be taken by the United States 'from a decision or judgment quashing, setting aside, or sustaining a demurrer to, any indictment, or any count thereof, where such decision or judgment is based upon the invalidity, or construction of the statute upon which the indictment is founded.' Act March 2, 1907, c. 2564, 34 Stat. 1246 (Comp. St. § 1704). Upon such a writ 'we have no authority to revise the mere interpretation of an indictment and are confined to ascertaining whether the court in a case under review erroneously construed the statute.' 'We must accept that court's interpretation of the indictments and confine our review to the question of the construction of the statute involved in its decision.' United States v. Carter, 231 U. S. 492, 493, 34 Sup. Ct. 173, 174 (58 L. Ed. 330); United States v. Miller, 223 U. S. 599, 602, 32 Sup. Ct. 323, 324 (56 L. Ed. 568).

Being of opinion that 'the indictment should set forth such a state of facts as to make it clear that a manufacturer, engaged in what was believed to be the lawful conduct of its business, has violated some known law before it can be haled into court to answer the charge of a commission of a crime,' and holding that it 'fails to charge any offense under the Sherman Act [Act July 2, 1890, c. 647, 26 Stat. 209) or any other law of the United States, that is to say, as to the substance of the indictment and the conduct and act charged therein,' the trial court sustained a demurrer to the one before us. Its reasoning and conclusions are set out in a written opinion. 253 Fed. 522.

We are confronted by an uncertain interpretation of an indictment itself couched in rather vague and general language. Counsel differ radically concerning the meaning of the opinion below and there is much room for the controversy between them.

The indictment runs only against Colgate & Co., a corporation engaged in manufacturing soap and toilet articles and selling them throughout the Union. It makes no reference to monopoly, and proceeds solely upon the theory of an unlawful combination. After setting out defendant's organization, place and character of business, and general methods of selling and distributing products through wholesale and retail merchants, it alleges:

'During the aforesaid period of time, within the said Eastern district of Virginia and throughout the United States, the defendant knowingly and unlawfully created and engaged in a combination with said wholesale and retail dealers, in the Eastern district of Virginia and throughout the United States, for the purpose and with the effect of procuring adherence on the part of such dealers (in reselling such products sold to them aforesaid) to resale prices fixed by the defendant, and of preventing such dealers from reselling such products at lower prices, thus suppressing competition amongst such wholesale dealers, and amongst such retail dealers, in restraint of the aforesaid trade and commerce among the several States, in violation of the act entitled 'An act to protect trade and commerce against unlawful restraints and monopolies,' approved July 2, 1890.'

Following this is a summary of things done to carry out the purposes of the combination: Distribution among dealers of letters, telegrams, circulars and lists showing uniform prices to be charged; urging them to adhere to such prices and notices, stating that no sales would be made to those who did not; requests, often complied with, for information concerning dealers who had departed from specified prices; investigation and discovery of those not adhering thereto and placing their names upon 'suspended lists;' requests to offending dealers for assurances and promises of future adherence to prices, which were often given; uniform refusals to sell to any who failed to give the same; sales to those who did; similar assurances and promises required of, and given by, other dealers followed by sales to them; unrestricted sales to dealers with established accounts who had observed specified prices, etc.

Immediately thereafter comes this paragraph:

'By reason of the foregoing, wholesale dealers in the aforesaid products of the defendant in the Eastern district of Virginia and throughout the United States, with few exceptions, resold, at uniform prices fixed by the defendant, the aforesaid products, sold to them by the defendant, and refused to resell such products at lower prices to retail dealers in the state where the respective wholesale dealers did business and in other states. For the same reason retail dealers in the aforesaid products of the defendant in the Eastern district of Virginia and throughout the United States resold, at uniform prices fixed by the defendant, the aforesaid products, sold to them by the defendant and by the aforesaid wholesale dealers, and refused to sell such products at lower prices to the consuming public in the states where the respective retail dealers did business and in other states. Thus competition in the sale of such products, by wholesale dealers to retail dealers, and by retail dealers to the consuming public, was suppressed, and the prices of such products to the retail dealers and to the consuming public in the Eastern district of Virginia and throughout the United States were maintained and enhanced.'

In the course of its opinion the trial court said:

'No charge is made that any contract was entered into by and on the part of the defendant, and any of its retail customers, in restraint of interstate trade and commerce, the averment being, in effect, that it knowingly and unlawfully created and engaged in a combination with...