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(40 Sup.Ct.)

statute (chapter 478) of general application. [ sugar-bag cloth. Warren, Jones & Gratz, of Its highest court, in applying the law which St. Louis, are the Carnegie Company's sole it held to be constitutional, described the pro-agents for selling and distributing steel ties. hibited method as "unfair competition." They are also the American Manufacturing Commonwealth v. Strauss, 188 Mass. 229, 74 Company's sole agents for selling and distribN. E. 308; Id., 191 Mass. 545, 78 N. E. 136, uting jute bagging in the cotton-growing sec11 L. R. A. (N. S.) 968, 6 Ann. Cas. 842. Com- tion west of the Mississippi. By virtue of pare People v. Duke, 19 Misc. Rep. 292, 44 their selling agency for the Carnegie Company, N. Y. Supp. 336. The (Federal) Bureau of Warren, Jones & Gratz held a dominating Corporations held the practice, which it de- and controlling position in the sale and disscribed as "full-line forcing" to be highly rep-tribution of cotton ties in the entire cottonrehensible.11 Congress, by section 3 of the growing section of the country, and thereby it Clayton Act, specifically prohibited the prac- was in a position to force would-be purchastice in a limited field under certain circum-ers of ties to also buy from them bagging stances. An injunction against the practice manufactured by the American Manufacturhas been included in several decrees in favoring Company. A great many merchants, jobof the government entered in cases under the bers, and dealers in bagging and ties throughSherman Law.12 In the decree by which the out the cotton-growing states were many American Tobacco Company was disintegrat- times unable to procure ties from any other ed pursuant to the mandate of this court, firm than Warren, Jones & Gratz. In many each of the fourteen companies was enjoined instances Warren, Jones & Gratz refused to from "refusing to sell to any jobber any sell ties unless the purchaser would also buy brand of any tobacco product manufactured from them a corresponding amount of bagby it, except upon condition that such jobber ging, and such purchasers were oftentimes shall purchase from the vendor some other compelled to buy from them bagging manubrand or product also manufactured and sold factured by the American Manufacturing by it. * * United States v. American Company in order to procure a sufficient supTobacco Co. (C. C.) 191 Fed. 371, 429. The ply of steel ties. practice here in question is merely one form of the so-called "tying clauses" or "conditional requirements" which have been declared in a discerning study of the whole subject to be "perhaps the most interesting of any of the methods of unfair competition."13

The following facts found by the commission, and which the Circuit Court of Appeals held were supported by sufficient evidence,




*These are conditions closely resembling those under which "full-line forcing," "exclusive-dealing requirements" or "shutting off materials, supplies or machines from com- a petitors"-well-known methods of competition, have been held to be unfair, when practiced by concerne holding a preponderant position in the trade.14

"adopted and practiced the policy of refusing

Fourth. The Circuit Court of Appeals set show that the conditions in the *cotton tie and aside the order of the commission solely on bagging trade were in 1918 such that the Fed- the ground that it was without authority to eral Trade Commission could reasonably find determine the merits of specific individual that the tying clause here in question was an grievances, and that the evidence did not unfair method of competition: Cotton, Amer-support its finding that Warren, Jones & ica's chief staple, is marketed in bales. To Gratz hadbale cotton, steel ties and jute bagging are essential. The Carnegie Steel Company, a subsidiary of the United States Steel Corporation, manufactures so large a propertion of all such steel ties that it dominates the cotton tie situation in the United States and is able - to fix and control the price of such ties throughout the country. The American Manufacturing Company manufactures about 45 per cent. of all bagging used for cotton baling; one other company about 20 per cent.; and the remaining 35 per cent. is made up of second hand bagging and a material called

"Report of the (Federal) Bureau of Corporations on the International Harvester Company (March 3, 1913) p. 308.

12 See "Unfair Methods of Competition and their Prevention" by W. H. S. Stevens, Annals, American Academy of Political and Social Science (1916) pp. 42, 43. "Trust Laws and Unfair Competition" (Federal) Bureau of Corporations (March 15, 1915) pp. 484-486, 493.

to sell steel ties to those merchants and dealers who wished to buy from them unless such merchants and dealers would also buy from them a corresponding amount of jute bagging."

The reason assigned by the Circuit Court of Appeals for so holding was that the evidence failed to show that the practice complained of (although acted on in individual cases by respondents) had become their "general practice." But the power of the Trade Commission to prohibit an unfair method of competition found to have been used is not limited to cases where the practice had become general. What section 5 declares unlawful is not unfair competition. That had been unlawful before. What that section made unlawful were "unfair methods of competition"; that is, the method or means by which an unfair

14 See "Trust Laws and Unfair Competition" (Fed13 "Unfair Competition," by W. H. S. Stevens (1916) eral) Bureau of Corporations (March 15, 1915) pp. 319-323, 328.

D. 54.

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end might be accomplished. The commission | United States intervened. On first report of was directed to act, if it had reason to be- receiver. Order entered instructing receiver. lieve that an "unfair method of competition See, also, 40 Sup. Ct. 353, 64 L. Ed. in commerce has been or is being used." The 40 Sup. Ct. 394, 64 L. Ed. -; 40 Sup. Ct. purpose of Congress was to prevent any un- 580, 64 L. Ed. -; 40 Sup. Ct. 582, 64 L. fair method which may have been used by any concern in competition from becoming its general practice. It was only by stopping its



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Order Instructing Receiver.

use before it became a general practice, that PER CURIAM. Upon consideration of the the apprehended effect of an unfair method in first report of Frederic A. Delano, receiver, in suppressing competition by destroying rivals the above-entitled cause, and of the supplecould be averted. As the Circuit Court of Ap- mental report of June 3, 1920, and the varipeals found that the evidence was sufficient ous suggestions of the United States, interto support the facts set forth above, and vener, and of the state of Texas, and of the since on those facts the commission could several motions, applications, exceptions, and reasonably hold that the method of competi- suggestions heretofore filed by parties claimtion in question was unfair under the circum-ing an interest in the subject-matter of this stances, it had power under the act to issue suit, it is this 7th day of June, A. D. 1920, the order complained of.

In my opinion the judgment of the Circuit Court of Appeals should be reversed.

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adjudged and ordered that the action of said receiver in taking possession of and operating under his own management and control the property described in the order of this court of April 1, 1920, until the further order of this court, including the oil and gas wells and plants, toll bridges, water plants, tank wagons, pipe lines, storage tanks, and other property located thereon and therein; the arrangements made by said receiver for guarding and policing said property; the office and


field organization created by *him for the operation and development of the property and the resources thereof, and for collecting, conserving, and investing the proceeds of the sale of all oil, gas, gasoline, and other products taken therefrom since April 1, 1920, be, and they are hereby, ratified and approved.

2. So much of the land described in the order of this court of April 1, 1920, in range 14 west, as lies between the south edge of the present sand bed of the Red river (nrarked generally by the border line of vegetation

PER CURIAM. *The motions of the Jud-along the edge of the flood plain) and the foot sonia Developing Association, Burk Divide Oil Company No. 2 and others, Burk Divide Oil Company No. 3 and others, and Mellish Consolidated Placer Oil Company, for leave


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of the Texas bluff, as was on the 1st day of April, 1920, in the possession of persons claiming under patents from the state of Texas, and is not included in the river-bed lands, as hereinafter defined, shall be returned by the receiver to the several operators or claimants in possession on April 1, 1920, or their assigns, together with all wells, tanks, pipe lines, structures, equipment, and material, upon condition that such operator, claimant, or assigns account for, pay over to, and impound with the receiver, if not already done, three-sixteenths of the gross proceeds of all oil taken from the respective lands on and since April 1, 1920, and the royalty on commercial gas customary in the Burk-Burnett and Northwest Extension oil fields, and royalty on casing-head gas in accordance with the regulations and schedule of prices promulgated for Indian lands by the Secretary of the Interior August 10, 1917, the proceeds thereof to be either paid in cash, or the pay

(40 Sup.Ct.)

eral or office supervision; (2) to refund to those operators or drillers who have drilled and brought into production new wells in said area since April 1, 1920, a fair percentage of the entire actual cost of such work, including a reasonable allowance for

ment thereof within 90 days to be secured [ vision, but excluding any allowance for genby good and sufficient surety to be approved by the receiver, and upon the further condition that said operator or claimant shall enter into an agreement in writing with the receiver, by the terms of which the operator shall develop and operate said properties in a workmanlike and businesslike manner, sub-field supervision, but excluding any allowject to the supervision of the receiver and to the orders of this court, and shall impound with the receiver three-sixteenths of the gross amount of the proceeds from the sale of


ance for general or office supervision; (3) to pay the just claims of mechanics and materialmen for work done and materials furnished on wells in said area brought in since April 1, 1920, and the claims of persons, associations, and corporations for advancements made in good faith for drilling operations upon such wells, provided satisfactory evidence of the existence of all of such claims be furnished.

5. Said receiver is further authorized and

oil thereafter produced, and the royalty on gas and casing-head gas as hereinbefore specified. This agreement to contain such further stipulations as the receiver may deem proper for regulating the production of gas and oil and to prevent waste or the entrance of water to the oil sands or oil-bearing strata to the destruction or injury of the oil depos-directed to release and surrender to the lawits or the damage of wells in the possession of the receiver; and, provided further, that the receiver, in his discretion, may agree with any operator or claimant to operate for his benefit and at his expense the lands in said "Big Bend" area. Until the several operators or claimants comply with the foregoing conditions, the receiver shall retain possession of the respective properties and shall operate the same in accordance with the order of this court of April 1, 1920, as modified by this order.

ful owners thereof (1) all oil and gas stored within the receivership area which is shown by evidence satisfactory to him to have been produced by operations outside of said area; (2) all machinery, tools and other equipment stored within the receivership area when the receiver took possession and not actually used in the production, storage, transportation, etc., of the oil and gas products thereof, and such other machinery, tools, drilling rigs and similar apparatus found within the receivership area as may not be required for the receivership operations; (3) all oil, gas and the products thereof which are shown by

In the event of failure or refusal of any operator to operate the property as directed by the receiver, or if any operator shall vio-evidence satisfactory to the receiver to have late his agreement with the receiver, the receiver is authorized to take possession of and operate such property, impound three-sixteenths of the proceeds as provided by this order, and pay out of said proceeds the expenses of operation, keeping a separate account of the expense of production of each well as nearly as practicable.

3. The river-bed lands, for the purposes of this order, shall comprise all lands not hereinbefore excepted, being more specifically that part covered by the receivership of all the broad and approximately flat sandy stretch which extends from the foot of the bluff or the edge of the flood plain, as the case may be, on the south side of the river, to the midchannel of the river as defined in said or

der of April 1, 1920, and as it then existed including everything within the bounds just described.

been produced by operations outside of the receivership area, but which were mingled and stored with similar products produced within said area on and subsequent to April 1, 1920.

6. Said receiver is further authorized and directed (1) to arrange for the sale and dis


position of all oil, gas, gasoline, water, and other products of said property; (2) to take possession and license the operation of all toll bridges within the receivership area, and to regulate and limit the tolls chargeable thereon; (3) to sell at the best price obtain able, properly credit and account for, such derricks, tanks, pipe lines, tools, appliances and materials not claimed by the owners thereof and not required for the receiver's operations; (4) to purchase at the best price obtainable such tanks, machinery, appliances, tools, motor cars, and equipment, as may be necessary for the operation, protection, and development of the property in his charge; (5) to retain and employ whatever technical production of any well in the river-bed *area or other assistants he may require or may paid to him since April 1, 1920: (1) To pay deem necessary to satisfactorily operate, deto the operator or operators of any such well velop and protect the property in his charge, the actual cost of operating the same since fix the terms of employment and the rate of April 1, 1920, inclusive, including in such compensation; (6) to make such banking arcost a reasonable allowance for field super-rangements as he may deem necessary to

4. It is further ordered that said receiver be and he is hereby authorized and directed, out of the gross proceeds derived from the


(Decided June 7, 1920.)

No. 27.

In Equity.

properly conserve and safeguard the funds | STATE OF OKLAHOMA v. STATE OF TEXAS (UNITED STATES, Intervener). resulting from his operations and to invest the surplus funds in the United States treasury certificates; (7) to make such contracts for fire, tornado, employé and public liability insurance as may be deemed necessary or advisable and take whatever other reasonable Original suit by the State of Oklahoma precautions are customarily employed in the management, operation, development, and against the State of Texas, in which the Unitprotection of oil and gas properties of simi-ed States intervened. On motion of the United States and of complainant, requesting the lar magnitude. 7. The receiver is hereby further author-cause to be set down for hearing on questions ized and directed to drill in the river-bed of law. Motion granted. area described in paragraph 3 hereof, and bring into production whatever new wells he may be advised by his geologist and other experts are necessary for the conservation and development of the river-bed lands as a whole, pay the cost thereof out of the funds in his hands derived from the production of the wells in said river-bed area, keep separate accounts of the costs of drilling and operating and of the proceeds of the production of each well, and make a full report thereof, with his recommendations for the


equitable allocation and distribu*tion of such costs and proceeds, as soon after the court reconvenes in October next as may be practicable.

8. In addition to the specific powers herein contained, the receiver, until the further order of this court, is hereby given whatever additional administrative powers may be found to be necessary to properly protect, operate, manage and develop the property within the receivership area and the oil and gas deposits therein.

9. The receiver is directed to report to the court, for such action as it may deem necessary and proper any interference with the property or operations in his charge and any violation of the orders and directions given by him in the performance of his official duties; and he may apply in vacation to the Chief Justice or any Associate Justice of this court for a writ of injunction in any case where an injunction might be granted by the court.

10. Nothing in the order of this court of April 1, 1920, or in this order shall be construed to prevent or in anywise obstruct the duly constituted authorities of the United States and of the states of Texas and Oklahoma in the exercise of their several and respective jurisdictions, as heretofore, in the prevention, detection and punishment of crime within the area embraced within the orders of this court.

The parties hereto and their respective officers and agents are requested to afford to the receiver and his agents all reasonable and appropriate assistance in guarding, protecting and conserving the property within said area.

See, also, 40 Sup. Ct. 353, 64 L. Ed. -; 253 U. S. 465, 40 Sup. Ct. 394, 64 L. Ed. -; 40 Sup. Ct. 40 Sup. Ct. 580, 64 L. Ed. 580, 64 L. Ed.

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PER CURIAM. *On consideration of the motion of the United States and the state of Oklahoma, requesting that this cause be set down for hearing at an early day upon certain questions of law, and of the response of the state of Texas to said motion, this day presented:

It is ordered that this cause be and it is

hereby set down for hearing on the 15th day of November, 1920, upon the following questions of law, to wit:

(1) Is the decree of this court in United States v. State of Texas, 162 U. S. 1, 16 Sup. Ct. 725, 40 L. Ed. 867, final and conclusive upon the parties to this cause, in so far as it declares that the treaty of 1819 between the United States and Spain (8 Stat. 252) fixed the boundary along the south bank of Red river?

(2) If said decree is not conclusive, then did the treaty of 1819, construed in the light of pertinent public documents and acts, fix the boundary along the mid-channel of Red river or along the south bank of said river?

It is further ordered that the parties be permitted to take and present testimony in respect of the governmental practice on the part of all governments and states, concerned at the time, bearing upon the construction and effect of said treaty as to the second question above stated.

The evidence in chief of the United States and the state of Oklahoma shall be taken and closed on or before August 15, 1920; the evi


dence in chief of the state of Texas *shall be taken and closed on or before October 1, 1920; and rebuttal testimony on the part of the United States and the state of Oklahoma shall be taken and closed on or before October 15, 1920. The evidence in each case to be taken on 7 days' notice, unless notice is waived.

Ernest Knaebel, Esq., of the District of Columbia, is hereby appointed as commissioner to take the said evidence and report the same to the court, without findings or conclusions.

(40 Sup.Ct.)



(251 U. S. 542)

No. 128. OHIO VALLEY WATER COMPANY, plaintiff in error, v. BEN AVON BOR·OUGH, et al. Jan. 12, 1920. In error to the Supreme Court of the State of Pennsylvania. See, also, 253 U. S. 287, 40 Sup. Ct. 527, 64 L. Ed. -; 260 Pa. 289, 103 Atl. 744. Messrs. George B. Gordon, William Watson Smith, and John G. Buchanan, all of Pittsburgh, Pa., for plaintiff in error. Messrs. Berne H. Evans, of Harrisburg, Pa., and Leonard K. Guiler, David L. Starr, and Albert G. Liddell, all of Pittsburgh, Pa., for defendant in error.

PER CURIAM. Restored to the docket for reargument. The attention of counsel is directed to the question of whether under the State law the right to review the action of the commission was limited by the State statutes to the particular remedy which was here resorted to, or whether such statutes left open the right to invoke judicial power by way of independent suit for the purpose of redressing wrongs deemed to have resulted from action taken by the commission.

(253 U. S. 476)

No. 708. J. D. PURCELL et al., plaintiffs in error, v. The CITY OF LEXINGTON on relation of Thomas E. COYNE, back tax assessor. June 1, 1920. In error to the Court of Appeals of the State of Kentucky. For opinion below, see 186 Ky. 381, 216 S. W. 599. Messrs. George C. Webb, George R. Hunt, and James R. Bush, all of Lexington, Ky., for plaintiffs in error. Messrs. Jesse I. Miller, H. E. Ross, and Harry B. Miller, all of Lexington, Ky., for defendant in error.

PER CURIAM. Dismissed for want of jurisdiction upon the authority of (1) New Orleans Water Works v. Louisiana Sugar Co., 125 U. S. 18, 38, 39, 8 Sup. Ct. 741, 31 L. Ed. 607; Central Land Co. v. Laidley, 159 U. S. 103, 111, 16 Sup. Ct. 80, 40 L. Ed. 91; Bacon v. Texas, 163 U. S. 207, 216, 16 Sup. Ct. 1023, 41 L. Ed. 132; McCullough v. Virginia, 172 U. S. 102, 116, 19 Sup. Ct. 134, 43 L. Ed. 382; Hubert v. New Orleans, 215 U. S. 170, 175, 30 Sup. Ct. 40, 54 L. Ed. 144; Missouri & Kansas Interurban Ry. Co. v. Olathe, 222 U. S. 187, 32 Sup. Ct. 47, 56 L. Ed. 156; (2) (253 U. S. 477) Farrell v. O'Brien, 199 U. S. 89, 100, 25 Sup. No. -. John W. DAVIDGE v. Leo SIM- Ct. 727, 50 L. Ed. 101; Empire State-Idaho MONS. June 1, 1920. Petition for a writ of Mining & Developing Co. v. Hanley, 205 U. S. error in this case to the Court of Appeals of 225, 232, 27 Sup. Ct. 476, 51 L. Ed. 779; the District of Columbia allowed upon petition-Goodrich v. Ferris, 214 U. S. 71, 79, 29 Sup. er giving bond in the sum of one thousand dollars.

(253 U. S. 499)

No. 14. The UNITED STATES, appellant, v. The QUAKER OATS COMPANY et al. June 1, 1920. Appeal from the District Court of the United States for the Northern District

of Illinois. For opinion below, see 232 Fed. 499. Mr. Assistant Attorney General for the United States. Dismissed, on motion of Mr. Assistant to the Attorney General Ames for the appellant.

(253 U. S. 476)

No. 570. John F. DONAHUE, appellant, v. Helen May DONAHUE, alias Helen May Huskey. June 1, 1920. Appeal from the District Court of the United States for the District of Nevada. Mr. George C. Otto, of Chicago, Ill., for appellant. Mr. H. W. Huskey, of Reno, Nev., for appellee.

PER CURIAM. Dismissed for want of jurisdiction upon the authority of Farrell v. O'Brien, 199 U. S. 89, 100, 25 Sup. Ct. 727, 50 L. Ed. 101; Empire State-Idaho Mining & Developing Co. v. Hanley, 205 U. S. 225, 232, 27 Sup. Ct. 476, 51 L. Ed. 779; Goodrich v. Ferris, 214 U. S. 71, 79, 29 Sup. Ct. 580, 53 L. Ed. 914; Brolan v. United States, 236 U. S. 216, 218, 35 Sup. Ct. 285, 59 L. Ed. 544; Sugarman v. United States, 249 U. S. 182, 184, 39 Sup. Ct. 191, 63 L. Ed. 550.

Ct. 580, 53 L. Ed. 914; Brolan v. United
States, 236 U. S. 216, 218, 35 Sup. Ct. 285, 59
L. Ed. 544; Sugarman v. United States, 249 U.
S. 182, 184, 39 Sup. Ct. 191, 63 L. Ed. 550.

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No. 851. NATIONAL SURETY COMPANY, petitioner, v. LEFLORE COUNTY, IN THE STATE OF MISSISSIPPI. June 1, 1920. For opinion below, see 262 Fed. 325. Mr. Jno. R. Tyson, of Montgomery, Ala., for petitioner. Mr. R. C. McBee, of Greenwood, Miss. (Messrs. Gardner, McBee & Gardner, of Greenwood, Miss., of counsel), for respondent. Petition for a writ of certiorari to the United States Circuit Court of Appeals for the Fifth Circuit denied.

No. 862. Hannah T. WILLSON, plaintiff in error, v. Curtis C. MCDONNELL. June 1, 1920. Motion to dismiss denied.

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