Texas Supreme Court, 1895

Houck & Dieter v. Anheuser-Busch Brewing Ass'n

Texas Supreme Court · Decided April 18, 1895 · Gaines

30 S.W. 869; 88 Tex. 184; 1895 Tex. LEXIS 454 (South Western Reporter)

Counsel

W.M. Coldwell, Edwards Neill, and Hague, Falvey Davis, for plaintiffs in error. — 1. A manufacturer may lawfully contract to sell during a limited time his product to one person or firm only in a particular city or district; such contracts are not in restraint of trade, and the court did not err in overruling appellant's demurrer, based upon the supposition that they are. Watkins v. Morely, 2 Ct. App. C. C., secs. 723-728; Welsh v. Morris, 81 Tex. 159 ; Clark v. Pierce, 37 Vt. 187 ; Roller v. Ott, 14 Kan. 609 ; Live Stock Assn. v. Levy, 54 N.Y. 32 ; Newell v. Myendorf, 23 Pac. Rep., 333. 2. Whether or not appellees were members of a trust or pool in violation of law and public policy, was a mixed question of law and of fact; and having been properly submitted to the jury under correct instructions as to the law, and the jury having found against the existence of such illegal trust or pool, and their verdict being supported by the weight of the testimony, their verdict should not be disturbed by the appellate court. Seeligson v. Lewis, 65 Tex. 216 ; Ladd v. Cotton Press and Mfg. Co., 53 Tex. 172 ; Oil Co. v. Adoue, 83 Tex. 650 ; Welsh v. Morris, 81 Tex. 159 [ 81 Tex. 159 ]; Benj. on Sales, sec. 512; 1 Lind. on Part., 2 Am. ed., secs. 91, 92; Dolf v. Machine Co., 28 Fed. Rep., 553; Sharp v. Whiteside, 19 Fed. Rep., 157; Match Co. v. Roeber, 13 N.E. Rep., 419; Roller Co. v. Cushman, 9 N.E. Rep., 629; Glue Co. v. Cement Co., 27 N.E. Rep., 1005; Fairbank v. Leary, 40 Wis. 637 . Davis, Beall Kemp, for defendant in error. — The evidence established the fact, that on or about the 19th of March, 1890, the defendants entered into a pool, combination, and conspiracy, with A. Schloss and E.B. Howley, to control the sale of keg or bulk beer in the market of El Paso, Texas, and its prices, and to stifle competition therein, both as between themselves and others, to an extent not permitted by law; that if in truth and in fact defendants had and made with plaintiff the contract or understanding pleaded in reconvention, the same was had or made in aid and furtherance of their unlawful objects in so entering into such pool, combination, and conspiracy with said A. Schloss and E.B. Howley, and was in contravention of public policy, the statutes of Texas relating to trusts and conspiracies against trade, and was illegal and void, and nonenforceable in law. Const. 1876, art. 1, sec. 26; Laws 21st Leg. (1889), chap. 117; City of Brenham v. Water Co., 67 Tex. 561 ; Oil Co. v. Adoue, 19 S.W. Rep., 276; 1 W. W., secs. 1243, 1244; Railway v. The State, 72 Tex. 408 ; Slaughterhouse cases, 83 U.S. 36 ; Oregon S. N. Co. v. Winsor, 87 U.S. 64 -72; Anderson's Law Dic., p. 1062; Craft v. McConoughy, 79 Ill. 350 ; Salt Co. v. Guthrie, 35 Ohio St. 672 ; Fairbank v. Leary, 40 Wis. 642 ; Lovejoy v. Michels (Mich.), 13 Law. Rep. Ann., 770; Richardson v. Buhl (Mich.), 6 Law. Rep. Ann., 464; The People v. Railway (N.Y.), 2 Law. Rep. Ann., 33; Hooker Woodard v. Vandewater, 4 Denio, 349; Stanton v. Allen, 5 Denio, 435; Chaplin v. Brown (Iowa), 12 Law. Rep. Ann., 428; 9 Am. and Eng. Encyc. of Law, 894, 895; 3 Id., 882; "Trusts," by Wm. W. Cook, 53 Fed. Rep., 446.

Opinion of the Court

GAINES, Chief Justice.

—We concur in the conclusions of the Court of Civil Appeals in this case, except in one particular; and in view of the well considered opinion of that court, we deem it unnecessary to discuss any of the questions involved except that upon which we differ.

We think the contract between the plaintiffs in error, Houck & Dieter and.Howley and Schlpss, shows upon.its face a combination such as is prohibited by the act to define trusts, etc., approved March 30, 1889. For the reasons given by the Court of Civil Appeals, we also *190 agree with them in holding that the act is not in violation of the Constitution. It follows, that the trial court erred in not instructing the jury that the combination was unlawful, and that Houck & Dieter could not recover of the plaintiff, on their cross-action, for a breach of a contract the performance of which would have aided them in carrying out the unlawful enterprise.

It may be that the decisions of this court establish the proposition, that mere knowledge on the part of the seller that the goods sold are to be used for an unlawful purpose will not prevent his recovering their price. As we view the case before us, it is not necessary to decide that question. The contract between the brewing company and Houck & Dieter bound the company to sell to the latter, and to sell to no other dealer in the city of El Paso. It is clear, we think, that these stipulations were well calculated to aid Houck & Dieter and their associates in effecting the purpose of the unlawful combination. They gave the combination a monopoly of the sale in the city of El Paso of the product of the plaintiff’s brewery, and materially assisted the parties to the illegal contract in carrying out their object of controlling the market for the sale of beer in bulk in that city. Therefore, in our opinion, the case of the plaintiff, if in fact its agent renewed its contract, knowing of the existence of the combination, is not that of a seller who merely knows that the subject of the sale may be used in the furtherance of an unlawful design; but it is that of one who sells under a contract which, by reasons of its special terms, is calculated materially to aid the purchasers in effecting that design. • We are therefore of the opinion, that should it be proved upon another trial that plaintiff, through its agent duly authorized for that purpose, renewed the contract with Houck & Dieter, by which it bound itself to sell to them and to no other parties in El Paso, and that at the time such contract was renewed such agent knew of the existence of the unlawful combination between the defendants and their associates, Schloss and Howley, then we are of the opinion that the plaintiff should not recover. If, however, as claimed by the plaintiff, the agent had no authority to make such contract, and if after it was made, plaintiff, with a knowledge of the facts, did not ratify the act of its agent, then the plaintiff should recover.

It is a question, whether the alleged contract between the plaintiff and defendant was not itself prohibited by the Act of March 30, 1889. The act denounces combinations in restraint of trade, and makes no distinction between restrictions which are reasonable and those which are unreasonable. If it should be held, that the contract constituted a combination within the terms of the statute, if the transaction had been one wholly within the State, then we would have the further question, whether, it being a transaction of interstate commerce, the act could affect it. But so far as we now see, it is necessary to decide neither question.

*191 Delivered April 18, 1895.

The judgment of the District Court is reversed and the cause remanded. The plaintiffs in error will pay the costs of the appeal to the Court of Civil Appeals, and the defendant in error the costs of the writ of error.

Reversed and remanded.

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