Frey & Son v. Cudahy Packing Company/Opinion of the Court

Alleging the existence of an unlawful contract, combination or conspiracy between the Packing Company, manufacturer of 'Old Dutch Cleanser,' and various jobbers for the maintenance of resale prices, and relying upon the Sherman Act (chapter 647, 26 Stats. 209 [Comp. St. §§ 8820-8823, 8827-8830]), as interpreted in Dr. Miles Medical Co. v. Park & Sons Co., 220 U.S. 373, 31 Sup. Ct. 376, 55 L. Ed. 502. Frey & Son, Incorporated, instituted this action in the District Court of the United States for Maryland to recover threefold damages. Under an elaborate charge the issues were submitted to the jury for determination. Judgment for $2,139 entered (June 22, 1917) upon a verdict for plaintiff was reversed by the Circuit Court of Appeals July 16, 1919 (Cudahy Packing Co. v. Frey & Son, 261 Fed. 65, 171 C. C. A. 661), after decision of United States v. Colgate & Co. (June 2, 1919), 250 U.S. 300, 39 Sup. Ct. 465, 63 L. Ed. 992, 7 A. L. R. 443, and before United States v. Schrader's Son, Inc., 252 U.S. 85, 40 Sup. Ct. 251, 64 L. Ed. 471. Plaintiff in error reserved its right of review here, waived a new trial and consented to entry of final judgment for the Packing Company. Thomsen v. Cayser, 243 U.S. 66, 37 Sup. Ct. 353, 61 L. Ed. 597, Ann. Cas. 1917D, 322.

The court below concluded 'there was no formal written or oral agreement with jobbers for the maintenance of prices,' and that, considering the doctrine approved in United States v. Colgate & Co., the District Court should have directed a verdict for the defendant. Other errors by the trial court were assigned and relied upon. If any of them was well taken, we must affirm the final judgment, entered after waiver of new trial and upon consent, as above shown.

It is unnecessary to repeat what we said in United States v. Colgate & Co. and United States v. Schrader's Son, Inc. Apparently the former case was misapprehended. The latter opinion distinctly stated that the essential agreement, combination or conspiracy might be implied from a course of dealing or other circumstances. Having regard to the course of dealing and all the pertinent facts disclosed by the present record, we think whether there existed an unlawful combination or agreement between the manufacturer and jobbers was a question for the jury to decide, and that the Circuit Court of Appeals erred when it held otherwise.

Among other things the trial court charged:

'I can only say to you that if you shall find that the     defendant indicated a sales plan to the wholesalers and      jobbers, which plan fixed the price below which the      wholesalers and jobbers were not to sell to retailers, and      you find defendant called this particular feature of this      plan to their attention on very many different occasions, and you      find the great majority of them not only expressing no      dissent from such plan, but actually co-operating in carrying      it out by themselves selling at the prices named, you may      reasonably find from such fact that there was an agreement or      combination forbidden by the Sherman Anti-Trust Act.'

The recited facts, standing alone (there were other pregnant ones), did not suffice to establish an agreement or combination forbidden by the Sherman Act. This we pointed out in United States v. Colgate & Co. As given the instruction was erroneous and material.

Affirmed.

Mr. Justice PITNEY, with whom concurred Mr. Justice DAY and Mr. Justice CLARKE, dissenting.