Grenada Lumber Company v. Mississippi

This is a writ of error to the supreme court of the state of Mississippi to review a decree dissolving a voluntary association of retail lumber dealers as a combination in restraint of trade, under a statute of the state.

So such of the Mississippi act as is here involved is set out in the margin, being part of § 5002, Mississippi Code.

The proceeding under this statute was by a bill filed in a chancery court of the state, by the state, upon relation of its attorney general. The bill averred that the defendants, some seventy-seven individuals and corporations, were retail dealers in lumber, sash, doors, etc., doing business, some of them, in the state of Mississippi, and others in the state of Louisiana, and were competitors in business, each engaged in buying and selling again for profit, and in competition with each other for the business of consumers; that the defendants had entered into an agreement, compact, or combination for the purpose and with the intent to destroy, prevent, or sup-

5002. (4437) Definition of term; criminal conspiracy (Laws 1900, chap. 88).-A trust and combine is a combination, contract, understanding, or agreement, expressed or implied, between two or more persons, corporations, or firms, or associations of persons, or between one or more of either with one or more of the others:

(a) In restraint of trade.

(b) To limit, increase, or reduce the price of a commodity.

(c) To limit, increase, or reduce the production or output of a commodity.

(d) Intended to hinder competition in the production, importation, manufacture, transportation, sale, or purchase of a commodity.

(e) To engross or forestall a commodity.

(f) To issue, own, or hold the certificates of stock of any trust or combine.

(g) To place the control, to any extent, of business, or of the products and earnings thereof, in the power of trustees, by whatever name called.

(h) By which any other person than them-selves, their proper officers, agents, and employees, shall, or shall have the power to, dictate or control the management of business; or,

(i) To unite or pool interests in the importation, manufacture, production, transportation, or price of a commodity; and is inimical to the public welfare, unlawful, and a criminal conspiracy. press all competition between themselves, as retail dealers in the materials mentioned, and manufacturers, wholesale dealers, brokers or commission men, keeping no stock, from selling the like articles or commodities directly to consumers in competition with retailers. To accomplish this suppression of competition for the trade of consumers it was in substance averred that they had organized an association, and had obligated themselves not to purchase any of their stock or commodities from any wholesale dealer or manufacturer who sold such products direct to the consumers in competition with the members of their combination, and to carry out this end had adopted articles of agreement, called a constitution, and appointed a secretary to ascertain such sales and to see that the obligation of the members was respected. The material parts of the agreement under which the defendants combined consist of a preamble, called 'Declaration of Purpose,' the relevant part of which, together with articles 2, 3, and 7, are set out in the margin.

It was then averred that the necessary effect of such agreement among the defendants, who, it was said, composed a majority of all the retail lumber dealers in the states covered by their compact, was to limit or destroy competition between

Declaration of Purpose.

We recognize the right of the manufacturer and wholesale dealer in lumber products to sell lumber in whatever market, to whatever purchaser, and at whatever price, they may see fit.

We also recognize the disastrous consequences which result to the retail dealer from direct competition with wholesalers and manufacturers, and appreciate the importance to the retail dealer of accurate information as to the nature and extent of such competition, where any exists.

And recognizing that we, as retail dealers in lumber, sash, doors, and blinds, cannot meet competition from those from whom we buy, we are pledged as members of this association to buy only from manufacturers and wholesalers who do not sell direct to consumers, where there are retail lumber dealers who carry stock commensurate with the demands of their communities, and we are pledged not to buy from lumber commission merchants, agents, and broker who sell to the retailers and the wholesalers or manufacturers for the trade or business of the consumer, and that they constituted a combination or conspiracy in restraint of trade, etc.

The answer admitted the substantial facts, but denied that the object or purpose was to restrain trade or to suppress competition, or that such a result has ensued or would or could follow, or that the agreement had any other object than to 'conserve and advance their business interests as retailers.' That their agreement is defensive of, and not injurious to, public interests, is asserted by many paragraphs of the answer, upon economic considerations.

The chancery court, upon the pleadings and exhibits, held that the association and agreement among the members was 'a combination in restraint of trade, and intended to hinder competition in the sale and purchase of a commodity, and was inimical to the public welfare, and unlawful.' The dissolution of the association was adjudged, and an injunction against further operations granted. This decree was affirmed upon appeal to the supreme court of the state.

Messrs. Edward Mayes and C. D. Joslyn for plaintiffs in error.

Mr. J. B. Stirling for defendant in error.

Statement by Mr. Justice Lurton:

Mr. Justice Lurton, after making the above statement, delivered the opinion of the court: