Page images
PDF
EPUB
[blocks in formation]

of them with various other persons, firms and corporations, whose names are to the defendant in error unknown, and the said corporations "became members of and parties to a pool, trust, agreement, confederation and understanding with each of the other of said corporations, firms and persons, whereby they did each for itself and with each other and all together agree to regulate and fix, and did regulate and fix, the price at which they would buy cotton seed; that they especially regulated and fixed the price of cotton seed throughout the State of Texas at $14.00 per ton, and agreed amongst and with each other that they would not give more than said $14.00 per ton for cotton seed in any of the towns and communities of the State of Texas." Whereby, "and by maintaining the agreement to regulate and fix the price of cotton seed aforesaid, the defendant (the National Cotton Oil Company) was guilty of a violation of the laws of the State of Texas," and in consequence has forfeited its permit to transact business in the State. The cancellation and forfeiture of the permit was prayed, and that the oil company be enjoined from transacting business in the State.

A demurrer was filed to the petition for insufficiency in law to entitle the State to any relief, and alleged against each of the Anti-Trust Acts of the State and the provisions of the Penal Code based thereon, that they violated section 1, Art. XIV, of the Amendments to the Constitution of the United States, in that the act of March 30, 1889, and the code provisions based thereon, deprived the company of the equal protection of the laws, because it was provided by section thirteen of said act and article 988 of the Penal Code that the said statutes "shall not apply to agricultural products or live stock while in the hands of the producer or raiser." And that the act of April 30, 1895, and certain sections of the Revised Statutes of Texas and of the Penal Code were likewise discriminatory because of the same exceptions, and the further exception that said statutes should not be held to "be understood or construed to prevent the organization of laborers for the

Argument for Plaintiff in Error.

197 U. S.

purpose of maintaining any standard of wages;" and the act of May 25, 1899, because it was cumulative and a mere supplement to the others, and carried, therefore, the same unconstitutional discriminations.

All of the acts and code provisions are charged with depriving the oil company of its property without due process of law and in violation of the Fourteenth Amendment, in that the penalties are excessive and their provisions so vague and uncertain that the company is denied a resort to the tribunals of the country to defend its rights except on the condition that, if not successful, it shall subject its property to confiscation and forfeit its right to do business in the State.

It is also urged as a ground of demurrer that the act of 1895 violated a provision of the constitution of the State which prohibited a bill to contain more than one subject.

The demurrer was overruled. The company declined to answer further, and judgment was entered forfeiting the license or permit of the company, and enjoining the company from transacting any business in the State "except such business as may be and constitute interstate commerce." The judgment was affirmed by the Court of Civil Appeals. A rehearing was denied and a writ of error from the Supreme Court of the State refused. This writ of error was then granted.

Mr. William V. Rowe and Mr. R. S. Lovett, with whom Mr. Ralph Oakley and Mr. James A. Baker were on the brief, for plaintiff in error in this case and in No. 38 argued simultaneously herewith.1

The acts of 1889 and 1895 are in contravention of section 1, Article XIV, of the Amendments of the Constitution of the United States, and therefore .void, because of the provisions. permitting agriculturists, live stock raisers and laborers to form combinations denounced by the acts when formed by others. Connolly v. Union Sewer Pipe Co., 184 U. S. 540. By the acts of 1889 and 1895, which were carried into the

1 Southern Cotton Oil Co. v. Texas, p. 134, post.

197 U.S.

Argument for Plaintiff in Error.

Revised Statutes and Penal Code, the legislature exempted certain classes from punishment for the same offense charged in this case, and, such discriminating provisions being unrepealed and unaffected by the Anti-Trust Act of 1899, the whole system of statutes is, as a consequence, unconstitutional. The decisions of the Texas Supreme Court and the legislative enactments show that the legislature intended that the exemption of agriculturists, stock raisers and laborers should remain unimpaired by the Anti-Trust Act of 1897. Texas v. Laredo Ice Co., 96 Texas, 461; State v. Shippers C. & W. Co., 67 S. W. Rep. 1049; Waters-Pierce Oil Co. v. State, 19 T. C. A. 1; Houck v. Anheuser &c., 88 Texas, 184.

Taking all the statutes together the act of 1899 is a mere addition to the previous acts and a part of them. The acts being clearly in pari materia, they must of course be read together and treated as parts of one system. Potter's Dwarris, 189; Alexander v. Mayor, 5 Cranch, 1; Patterson v. Winn, 11 Wheat. 380; Ryan v. Carter, 93 U. S. 78, 84; Pearce v. Atwood, 13 Massachusetts, 324, 344; Regina v. Tonbridge Overseers, L. R. 13 Q. B. Div. 339; Sutherland Stat. Con. § 288.

The rule has been recognized in Texas. Cain v. State, 20 Texas, 355, 362; Shelby v. Johnson, Dallam, 597; Bryan v. Sundberg, 5 Texas, 418; Selman v. Wolfe, 27 Texas, 68; Hanrick v. Hanrick, 54 Texas, 101.

Where the question is merely one of the construction of a state statute, which does not necessarily involve a Federal question the determination of the state court is conclusive upon this court. Osborne v. Florida, 164 U. S. 650, 656. But this court is not bound by state court decisions construing state statutes, where a Federal question is involved. See as to Federal citizenship: Boyd v. Nebraska, 143 U. S. 135. As to rights of Federal corporations: Roberts v. Northern Pacific R. R. Co., 158 U. S. 1. As to impairing a contract: Ohio Ins. & Tr. Co. v. Debolt, 16 How. 416; Bridge Proprietors v. Hoboken Co., 1 Wall. 116, 145; Wright v. Nagle, 101 U. S. 791; Douglas v. Kentucky, 168 U. S. 488, 501; Bacon v Texas, 163 U. S. 207;

Argument for Plaintiff in Error.

197 U. S.

Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 683; McGahey v. Virginia, 135 U. S. 662; Mobile & Ohio R. R. v. Tennessee, 153 U. S. 486; Chicago &c. R. R. v. Nebraska, 170 U. S. 57; McCullough v. Virginia, 172 U. S. 102; Vicksburg &c. R. R. Co. v. Dennis, 116 U. S. 665; Bryan v. Board of Education, 151 U. S. 639; L. & N. R. R. v. Palmes, 109 U. S. 244. As to due process of law: Scott v. McNeal, 154 U. S. 34, 45. As to full faith and credit: Huntington v. Attrill, 146 U. S. 657, 683. And generally whether a Federal right is violated: Yick Wo v. Hopkins, 118 U. S. 356, 366; Atchison &c. R. R. Co. v. Matthews, 174 U. S. 96; Gulf, Colo. &c. Ry. Co. v. Ellis, 165 U. S. 150; Norton v, Shelby County, 118 U. S. 425, 439; Gormley v. Clark, 134 U. S. 338, 348; Stutsman County v. Wallace, 142 U. S. 293, 306; Osborne v. Missouri Pacific Ry., 147 U. S. 248, 258. Jefferson Bank v. Skelly, 1 Black, 436, distinguished.

This case comes within the principle of these exceptions. This court cannot accept as conclusive the decision of the state court as to the scope, meaning and effect of this admitted exemption clause, effecting, when construed with the other statutes of the State, in pari materia, what is claimed to be an arbitrary classification of persons, in respect to the offense in question, in violation of the rights guaranteed by the Fourteenth Amendment. That, like the questions of due process of law, full faith and credit to which state judgments are entitled, and of the impairment of contract obligations is, essentially and necessarily, a question for the final and independent determination of this court.

Plaintiff in error is really asking this court not to controvert, but rather to lean towards, and follow, the state court on this subject.

Since the Anti-Trust Statutes are in contravention of the Federal Constitution they are absolutely void; and are ineffectual for any purpose against corporations as well as individuals. Cooley's Const. Lim., 5th ed., 224; Reagan v. Trust Co., 154 U. S. 362; West. Un. Tel. Co. v. State, 62 Texas, 630.

197 U. S.

Argument for Plaintiff in Error.

The Supreme Court of Texas has refused to follow this court in Connolly v. Union Sewer Pipe Co., 184 U. S. 540, nor does Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, support its decision. See N. Y. Life Ins. Co. v. Cravens, 178 U. S. 389. The right of the State to forfeit defendant's license depends upon the conditions annexed expressly or by implication to the grant made by the license. If the Anti-Trust Statutes were a part of the contract and have been violated, the forfeiture may be enforced, but if they were not, then they do not enter into the contract at all, but are mere statutes, not contracts, and their validity may be contested by this defendant, as well as by an individual.

[ocr errors]

While corporations are not "citizens," within the meaning of § 2, Art. IV, of the Federal Constitution, Paul v. Virginia, 8 Wall. 168; Blake v. McClung, 172 U. S. 239, yet they are persons" within the meaning of the Fourteenth Amendment, and may invoke that provision against the taking of their property without due process of law, and the denial of the equal protection of the laws, Santa Clara County v. Southern Pacific Ry. Co., 118 U. S. 394; Covington Turnpike Co. v. Sandford, 164 U. S. 578, 592; Smythe v. Ames, 169 U. S. 466, 522; and this is true of a foreign corporation which has obtained a license to transact business in the State.

A state statute which violates the Federal Constitution is not binding upon a corporation nor is it valid in any respect. Dayton C. & I. Co. v. Barton, 183 U. S. 23; W. W. Cargill Co. v. Minnesota, 180 U. S. 452; Cable v. U. S. Life Ins. Co., 191 U. S. 288; O'Brien v. Wheelock, 184 U. S. 450; South Ottawa v. Perkins, 94 U. S. 267; Doyle v. Insurance Co., 94 U. S. 535, distinguished, and see Baron v. Burnside, 121 U. S. 186.

While state legislation has been sustained against foreign corporations none of the cases are based on the ground that the only remedy sought by the State is forfeiture of corporate grants. Fidelity Mutual Life Assn. v. Mettler, 185 U.S. 308; Iowa Ins. Co. v. Lewis, 187 U. S. 335; Farmers &c. Ins. Co. v. Dobney, 189 U. S. 301; Hale v. Lewis, 181 U. S. 473; Knox

« PreviousContinue »