DUEBER WATCH CASE MANUF'G CO. fl. E. HOWARD WATCH & C. CO.
8·1)1
Accepting for the present purpose this presentation of the facts, we have an express statement by the president of the Keystone Bank that a fund was provided for payment of the draft; but between a draft taken in reliance upon such a statement and an assi1,'1lment of the particular fund, the distinction is obvious, and of the latter, or of any intent that the transaction should be in effect anything different from what it was in form, I perceive no indication whatever. It seems, too, that Marsh's statement that the Keystone Bank bad between $2H,000 and $27,000 with the Tradesmen's Bank was not true, and that the general ledger sheet of the Keystone Bank, to which reference has been made, was not correct; but inasmuch as, irrespective of these matters, the fundamental proposition upon which the case of the complainant rests cannot be sustained, no other question need be discussed. The bill is dismissed, with costs.
DtSEBER WATCH CASE
CO. v. E. HOWARD WATCH & CLOCK CO. et aI.
(Circuit Court, S. D. Xew York. May 22, 1893.)
1.
An action to recover damag"s to been caused by acts in violation of the statute prohibiting monopolies and combinations in restraint of trade (26 Stat. 209) cannot be maintained when the complaint fails to show that plaintiff is engaged in interstate commerce, and no such showing is made by an averment that plaintiff is engaged in "manufacturing watch cases throughout all the states of the United States and in foreign countries." SAME-CONSTRUCTION OF STATUTE.
TN HICSTHATNT OF THADE -ACTION FOR DAMAGES-PLEADTNG.
2.
An agreement by a number of manufacturers and dealers in watch cases to fix an arbitrary price on their goods, and not to sell the same to any persons buying watch cases of plaintiff, is not in violation of the statute; and a complaint whi:h, on the last analysis, avers only these facts, without averring the absorption or the intention to absorb or control the entire market, or a large part thereof, states no cause of action.
At Law. Action by the Dueber Watch Case Manufacturing Company against the E. Howard 'Watch & Clock Company and others to recover damages alleged to result from an illegal conspiracy to destroy plaintiff's trade. Defendants demur to the complaint. Demurrer sustained. Statement by COXE, District Judge: The complaint alleges tItnt prior to November 16, 1887, the plaintiff was engaged in watch ('nses throu;!hout nIl the stntes of tllP United States and in foreign countries, employing a large number of skilled artisans who were and are able to produce 25,000 watch cases per month. That prier to said date the plnintiff had a ready market for its good,; throughout the United States .and Canada, and realized a profit of, at least, $lTi,OOO per anmun. TlJat on November 16, lS87, the defendants, who were and are engaged in selling watches and watch cases, mutually agr,o;ed, and notified the watch dealers throughout the United States and Canada, including some of the plaintiff's customers, "that they would not t.hereafter sell manufactured by them to any person, firm, associaticn. or corporation whatsoewr who thereafter should buy or sell any goods manufactured by
852
FEDERAL REPORTEE,
vol. 55.
thi.s plaintiff." 'rhatupon being informed of said agreement a large number of dealers who had prl'viously purchased plaintiff's goods withdrew tl1('ir patronage and ceased to deal in plaintiff's goods. Tlw.t the defendnnts rt'fust'd to sell their goods to plaintiff's customel's, giving as a reason that the said customers dealt in plaintiff's goods and clPfpudfllltS declined to have auy business relatious with them unless they would agree not to deal in the plaintiff's goods. That prior to November 16, 1SS7, the defendants agreed among themselves that they would maintain an arbitrllJ·.v fixe,l price for their goods, and pursuant therl'to tIlIey have fixed aud maintained an arbitrary price which the public pay for thcir goods. That said agTl'ement of November 1G, 1887, was for the sole purpose ')1' comlwIling plaintiff to join Witil the defendants in their previons agreement to fix amI maintain arbitrary priees for watch cases, 'fhat all of said acts of the defendants W('re for the purpose of esta1)lishing a monopoly in watch cast's, their o1Jjt'ct bping to crnsh competition anI! drive the plaintiff from tht' business, unll'ss he joined tht' conspiracy. That the defendants by their agn'emt'nts intendt'd to injure and impoverish till' plaintiff and deplive it of all profits and break up its business. '1'hat tht' defl'lldants havt' used the extended influ('nct' acquired by reason of the combination formed between tht'm to pre'vt'ut pprsons who naturally would purchase plaintiff's watch casps from (l(':,ling witlt tlll' plaintiff and have thl'l'at('lwd said persons Iha t if they bought plaintiff's goods they would sell tIll'm no goods and l,oive them no That such conduct and threats a complete boycott :llld resulted in the ostracism of plaintiff from the tr:ull', lll't'venting the lawful and ordinary cOlllptetition in busiut'ss whieh plaintiff had a light to enjoy. That after the passage of the act of .July 2, 1890, en, titled, "An act to protect trade and commt'rce ag'ninst unlawful restraints and monopolies," the plaintiff 'would have regnined its customers and 1'('t'stablished its business had not the defendants since that date ratified, COIl.. tinned, renewed and continut'd in force the said contracts, agret'mpnts and eombinatiolls and served notice thereof upon all the dt'alers in plaintHl"s goods, 'fhat by rt'ason of said rpncwals and continued threats saitt dealers have been eompelled to refuse to purchast' plaintiff's goods to its damnge in the sum of $150,000. .Judgmpnt is demanded for thret' times this sum, pursuant to section 7 of said act. The dpfendnnt nbove named demm's on tht' ground that the eourt has no jUl'is(liction of the defendant or the subject-matter of the action, and, on tIll' further ground, that the complaint dOt'S not state facts sufficient to eonstitute a cause of action. '.rIll' sections of the act of .July 2, 1890, which drawn in question, so far as it is necessary to qnote thcm, art' as follows: "Sectiou 1. gypry contra.ct, combinatiou in the form of trust or otherwiSE', or eonspiraey, in restraint of trade or commerce among the st'vernl states, or with foreign nntions, is hpreby deelared to be illpgaL Sec. 2, Every person who shall monopoIiz(', or attempt to monopolize, or combine or eonspirp with any other person or 1)('1'sons, to monopolize any part of the tradC' or conunerce among the spvt'ral s ta tps, or with foreign nations, shall be det'mt'd guilty of a misdemt'anor," etc. "Spc. 7, Any person who shall be injured in his busin('ss or property by any other person or corporation by reason of anything forbidden or declarl'(i to b(' unlawful by this act, may sue tlll'refor in anJT circuit court of tIw UniIPli States in the district in which ttll' defendant reshlt's or is fonnd, without reto th(' amount in eontrovt'rsy, and shall rpeovl'l' threpfold tIll' (LlIlIHg'P" by him sustaint'd, and the costs of suit, including a r('asonable attol'llt'y's fe'·..·
Wilber & Oldham and Robert Sewell, for plaintiff. Sullivan & Cromwell, W. J. Curtis, and Edward B. Hill, for defendants. COXE, District Judge, (after stating' the facts as above.) An examination of the complaint, in the light of the provisions of the act of July 2, 1890, and the decisions construing that act, leads to the conclusion that the complaint, in its present form at least, cannot be sustained. The statute makes it illegal to enter into
DUEBER WATCH CASE MAN1:F'G
co.
V. E. HOWARD WATCH & C. CO.
853
u contract or conspiracy in restraint of interstate trade and also to monopolize, or attempt to monopolize, or combine {II' conspire \yith others to monopolize, such trade. '1'here is no allegation in the complaint that the plaintiff is engaged, or has at any time, since the passage of the aet, been engaged in interstate trade and commerce. There is an aBegation that the plaintHI' is engaged in the business of manufacturing watch cases throughout all the states of the United States and in foreign countries. 'rhis allegation is probably a mistake of the pleader, but if it were true it would not be a compliance with the requisites of the law. A corporation may have an operating manufactory in every state of the Union and yet not be engaged in interstate commelTP. '1'here is no allegation that the defendants are, or that any of them is, or was, engaged in interstate trade, or that the artieles made by them are used in such trade, or that the rights of the general public have been invaded, or interstate commerce injuriously affected by any of the acts of the defendants as described in the complaint. There is no allegation that the defendants absorbed or intended to a bSOl'b the entire trade in watch cases, or that they controlled the market, or any considerable part thereof, or that they were even a majority of the watch manufacturers of the United States, or that the prices fixed by them were more than the goods were worth or in any respect unfair. There is no statement that the goods made by the defendants were made by them exclusively, or that sueh goods were indispensable to plaintiff's customers; non constat, sueh goods could have been furnished by the plaintiff or dealers other than the defendants. "'nat, then, is the accusation? When analyzed it will be found that the illegal acts charged against the defendants are, first, that they agreed to maintain an arbitrary fixed price for their goods; second, that they agreed not to sell their goods to plaintiff's customers; and, third, that they notified plaintiff's customers of their determination. It is onlv necessary to examine first and second of these allegations, for it is that if the agreements made by the defendants were lawful it could not be unlawful to notify the world of their existence. Both of the alleged agreements were made before July 2, 1890, the result being that the plaintiff, before the passage of that act, lost its customers. The only acts of the defendants which by any possibility can be construed as a violation of the statute were the ratification and renewal of these agreements after its passage. 'l'he complaint al· leges that but for sueh renewal the plaintiff would have regained all its old customers. The first question then is, does it constitute a violation of the statute for two or more dealers to fix an arbitrary price for their goods? No authority has gone to the extent of holding that such a transaction, in the absence of other facts, is illegal. The second question is: Is it an illegal act, within the provision8 of the law in question, for two or more traders to agree among themselves that they will not deal with those who prefer
854
FEDERAL REPORTER,
to purchase the goods of another designated trader in the same business? Many perfectly legitimate reasons might be suggested for such an agreement. It is not a combination to monopolize; 'at least there is no statement of facts tending to show that it produced a monopoly in the present case. Indeed, it would seem that it must have had a contrary effect. There was surely nothing to prevent the plaintiff from supplying its customers with those things which the defendants declined to sell them, and thus enlarge its trade and stimulate competition. The plaintiff was perfectly free to engage in every branch of the watchmaking business. So were all others. The plaintiff's customers were free to purchase of the plaintiff, of the defendants, or of any other manufacturer. The contract of 1887 was not one in restraint of trade within any of the definitions or authorities which have been examined, and it is thought that the defendants' acts are not I'(-'-lclled by any section of the law in question. The construction contended for by the plaintiff would render each of the defendants liable to an indictment not only, but would make unlawful almost every combination by which trade and commerce Seek to extend their influence and enlarge their profits. It would extend to every agreement where A. and B. agree that they will not sell goods to those who buy of C. It would strike at all <tgl'eements by which honest enterprise attempts to protect itself against rninous and dishonest competition. . It is thought that these views are in conformity with the decisions of the courts construing the act of 1890. [n re Greene. 52' Fed. Rep. 104; U. S. v. Nelson, Id. 646; U. S. v. Trans-Missouri Freight Ass'n, 53 Fed. Rep. 440; In re Corning, 51 Fed. Rep. 205; In re Terrell, Id. 213. The demurrer is sustained.
PAINE LUMBER CO., Limited, v. UNITED STATES. (Oircuit Court, E. D. Wisconsin. January 9, 1893.) 1. EMINENT DOMAIN-RIGRT TO RECOVER DAMAGES SUSTAINED BY GRANTOR.
A proceeding was begun against the United states to ascertain the damages caused to a sawmill, etc., by the flooding thereof through the raising of a dam for the purpose of improving the navigation of a river. The plaintiff corporation was organized in May, 1883, succeeding to a flrm which had owned the premises from about 1855. Plaintiff offered to show damages to both real and personal property accruing between 1874 and May, 1883. Held that, as plaintiff had not owned the premises prior to its ip.corporation, it could not recover damages which had happened to its predecessor. Sweaney v. U. S., 22 N. 'V. Rep. 609, 62 Wis. 1 m6, disapproved. .
UNITED STATES-CONSEN'l' TO BE SUED-REPEAL OF STATUTE.
If the national authorizes the commencement of suit against it to recover damages ram;ed by Its Ilcts, and SUbsequently, but after suit brought, repeals the statute authorizing suit against it, the recovery in such suit .is limited to the time during which the consent to sue existed, and cannot include damages sustained after the enactment of thl3' repealing statute.