State v. Virginia-Carolina Chemical Co.

May 22, 1905. The opinion of the Court was delivered by This is an appeal from an order overruling a demurrer to the complaint, on the ground that it does not state facts sufficient to constitute a cause of action, in the particulars mentioned in the first, second and third exceptions, which, together with the other exceptions, the complaint, and the order of his Honor, the Circuit Judge, will be set out in the report of the case. The first question that will be considered is the construction of the statute of this State prohibiting certain trusts and combinations.

In the case of Northern Securities Co. v. United States,24 Sup. Ct. Rep., 436, 454, 466, 193 U.S. 197, the Court had under consideration the act of Congress entitled: "An act to protect trade and commerce against unlawful restraints and monopolies," which provides that "every contract combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce, among the several States, or with foreign nations, is hereby declared to be illegal." * * * Mr. Justice Harlan, who wrote the opinion of the Court, in which three other members concurred generally, and Mr. Justice Brewer in a separate opinion, announced the proposition: "That the act is not limited to restraints of interstate and international trade or commerce that are unreasonable in their nature, but embracesall direct restraints imposed by any combination, conspiracy or monopoly upon such trade or commerce."

Mr. Justice Brewer did not accept this proposition, except in so far as it was applicable to unreasonable restraints imposed upon trade or commerce, but, in speaking of former decisions of the Court, said: "Instead of holding that the anti-trust act includes all contracts, reasonable or unreasonable, in restraint of interstate trade, the ruling should have been that the contracts there presented were unreasonable restraints of interstate trade, and as such within the scope of the act. That act, as appears from its title, was leveled at only `unlawful restraints and monopolies.' Congress did not intend to reach and destroy those minor contracts in partial restraint of trade, which the long course of decisions at common law had affirmed were reasonable and ought to be upheld. The purpose was rather to place a statutory prohibition, with prescribed penalties and remedies, upon those contracts which were in direct restraint of trade, unreasonable and against public policy."

The opinion of Mr. Justice Harlan to the extent of Mr. Justice Brewer's concurrence, correctly stated the principles governing the construction of the act then under consideration. That principle is applicable to the statute of this State, and it must be construed as intending that the contracts, c., herein mentioned, were unlawful and against public policy only when made with a view to lessen or which tend to lessen full and free competition to an unreasonable extent.

The admitted substantive facts set forth in the decree of his Honor, the Circuit Judge, show beyond doubt that they lessened, or tended to lessen, full and free competition to an unreasonable degree. This was a natural consequence that might reasonably have been expected to result from them. Therefore, it must be presumed that such result was intended. 22 Enc. of Law, 1235.

What, then, was the effect of this intention upon the transactions set out in the complaint? In the case of Swift Co. v. United States, 25 Sup. Ct. Rep., 276, 279, the principle is thus stated: "The scheme as a whole seems to us to be within the reach of the law. The constituent elements, as we have stated them, are enough to give the scheme a body, and for all we can say, to accomplish it. Moreover, whatever we may think of them separately, when we take them up as distinct charges, they are alleged sufficiently as elements of the scheme. It is suggested that the several acts charged are lawful, and that intent can make no difference. But they are bound together as the parts of a single plan.The plan may make the parts unlawful. Aikens v. Wisconsin,195 U.S. 194, 206, ante, p. 3, Sup. Ct. Rep., 3. The statute gives this proceeding against combinations in restraint of commerce among the States and against attempts to monopolize the same. Intent is almost essential to such a combination, and is essential to such an attempt. Where acts are not sufficient in themselves to produce a result which the law seeks to prevent — for instance, the monopoly — but require further acts in addition to the mere forces of nature to bring that result to pass; an intent to bring it to pass is necessary in order to produce a dangerous probability that it will happen. Com. v. Peaslee, 177 Mass. 267, 272,59 N.E., 55. But when that intent and the consequent dangerousprobability exist, this statute, like many others, and like thecommon law in some cases, directs itself against that dangerousprobability as well as against the completed result" (italics ours). In Aikens v. Wisconsin, 25 Sup. Ct. Rep., 3, it is said: "No conduct has such an absolute privilege as to justify all possible schemes, of which it may be a part. The most innocent and constitutionally protected of acts or omissions, may be made a step in a criminal plot, and if it is a step in a plot, neither its innocence nor the Constitution is sufficient to prevent the punishment of the plot by law." See, also, the National Cotton Oil Co. v. State of Texas, 25 Sup. St. Rep., 379, and Gwynn v. Citizens Tel. Co., 69 S.C. 434. In 15 Enc. of Law, 934, it is said: "Where a contract belongs to a class which is reprobated by public policy, it will be declared illegal, though in that particular instance no actual injury may have resulted to the public, as the test is the evil tendency of the contract, and not its actual results."

The principles just stated show that the different acts alleged in the complaint, in combination with the intent to effect the result of lessening or tending to lessen full and free competition in an unreasonable manner, were unlawful and against the public policy of this State.

Upon all other questions in the case, this Court concurs in the rulings of his Honor, the Circuit Judge, for the reasons stated in his order.

It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.

JUDGE D.A. TOWNSEND sat in place of MR. JUSTICE WOODS, disqualified.