Source: https://supreme.justia.com/cases/federal/us/236/165/
Timestamp: 2019-04-19 08:22:07+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 236 › Wilder Mfg. Co. v. Corn Products Refining Co.
Where the pleading of the plaintiff in error demurred to justified the inference that the transaction alleged to be in violation of the Anti-Trust Act was interstate, the court may assume that such was the case, and, if the decision turns on the construction of the act, a federal question is involved.
The general rule is that one who has dealt with a corporation as an existing concern having capacity to sell cannot assert, or escape liability, on the ground that such concern has no legal existence because it is an unlawful combination in violation of the Anti-Trust Act. Such a defense is a mere collateral attack on the organization of the corporation which cannot lawfully be made. Connolly v. Union Sewer Pipe Co., 184 U. S. 540.
Courts may not refuse to enforce an otherwise legal contract because it might afford some indirect benefit to a wrongdoer.
The contract in this case held not to be intrinsically illegal because the seller agreed to give a portion of its profits to the purchaser of goods provided such purchaser dealt exclusively with the seller for a specified period and also bought the goods exclusively for purchaser's own use, and also held that such contract was not illegal under the Anti-Trust Act. Continental Wall Paper Co. v. Voight, 212 U. S. 227, distinguished.
The Anti-Trust Act is founded on broad conceptions of public policy, and its prohibitions were enacted not only to prevent injury to the individual, but harm to the general public, and its prohibitions and the remedies it provides are coextensive with such conceptions.
Where a statute creates a new offense and denounces the penalty, or gives a new right and declares the remedy, the punishment or remedy given can be only that which the statute prescribes.
contract on which he is otherwise legally liable that the other party has no legal existence in contemplation of that act.
In Continental Wall Paper Co. v. Voight, 212 U. S. 227, the contract involved was not held illegal because a party thereto was an illegal combination under the Anti-Trust Act, but upon elements of illegality inhering in the contract itself. In this case, held that a party cannot assert as a defense to a suit for money otherwise due under a contract, not inherently illegal, the fact that the party otherwise admittedly entitled to recover is an illegal combination under the Anti-Trust Act.
The facts, which involve the construction of the federal Anti-Trust Act and the effect of a profit-sharing contract of a corporation and those dealing with it exclusively and the right of the corporation to recover for goods sold, are stated in the opinion.
continued to be made from it alone, and moreover because of the dread felt by purchasers that the independents would not be able to resist the overweening and controlling power of the combination. It was moreover alleged that all purchases made by the manufacturing company "contained the following clause in the contract of purchase: The goods herein sold are for your own consumption, and not for resale.'"
Charging that the condition which made the payment of the proposed profit-sharing percentage depend upon dealing alone with the combination was void, and should be disregarded, the answer asked not only that the prayer for judgment for the purchase price be rejected, but that, treating the failure of the manufacturing company to comply with the condition on which the offer of profit-sharing was made as immaterial, there should be a judgment for that company for the percentage of profits on the business for the year 1908.
On motion, the answer was stricken out as stating no defense. There was a judgment in the absence of further pleading against the manufacturing company for the price of the goods, as sued for, and rejecting its claim for the percentage of profits. This judgment was affirmed by the court below (11 Ga.App. 588), and, because of an assumed failure to give effect to the antitrust act of Congress, this writ of error was prosecuted.
act was irrelevant to the question of the liability of the manufacturing company to pay for the goods, since such defense was a mere collateral attack on the organization of the corporation, which could not be lawfully made. [Footnote 2] Besides, considered from the point of view of the alleged illegality of the corporation, the attack on its existence was absolutely immaterial, because the right to enforce the sale did not involve the question of combination, since, conceding the illegal existence of the corporation making the sale, the obligation to pay the price was indubitable, and the duty to enforce it not disputable. This is true because the sale and the obligations which arose from it depended upon a distinct contract, with reciprocal considerations moving between the parties -- the receipt of the goods, on the one hand, and the payment of the price, on the other. And this is but a form of stating the elementary proposition that courts may not refuse to enforce an otherwise legal contract because of some indirect benefit to a wrongdoer which would be afforded from doing so, or some remote aid to the accomplishment of a wrong which might possibly result -- doctrines of such universal acceptance that no citation of authority is needed to demonstrate their existence, especially in view of the express ruling in Connolly v. Union Sewer Pipe Co., 184 U. S. 540, applying them to the identical general question here involved.
answer as to the offer of a percentage of profits upon the condition of dealing exclusively with the refining company for the following year, and the clause to the effect that the goods were bought by the manufacturing company for its own use, and not for resale. But we can see no ground whatever for holding that the contract of sale was illegal because of these conditions. In fact, it is not so contended in argument, since substantially the proposition which is relied upon is that, although such stipulations were intrinsically legal, they become illegal as the result of the duty to consider them from the point of view that one of the parties was an illegal combination, interested in inserting such conditions as an efficient means of sustaining its continued wrongdoing, and therefore giving power to accomplish the baneful and prohibited results of its illegal organization -- a duty which, it is urged, results from reason, is commanded by the antitrust act and the obligation to enforce its provisions, and is required because of a previous decision of this Court enforcing that act (Continental Wall Paper Co. v. Voight, 212 U. S. 227), unless that decision is to be now qualified or overruled.
In the first place, the contention cannot be sustained consistently with reason. It overthrows the general law. It admits the want of power to assail the existence of a corporate combination as a means of avoiding the duty to pay for goods bought from it, and concedes at the same time the legality of the condition in the sale, and yet proposes, by bringing the two together, to produce a new and strange result unsupported in any degree by the elements which are brought together to produce it, and conflicting with both.
against combinations or conspiracies in restraint of trade or commerce, the monopolization of trade or commerce, or attempts to monopolize the same. Standard Oil Co. v. United States, 221 U. S. 1; United States v. American Tobacco Co., 221 U. S. 106. In other words, founded upon broad conceptions of public policy, the prohibitions of the statute were enacted to prevent not the mere injury to an individual which would arise from the doing of the prohibited acts, but the harm to the general public which would be occasioned by the evils which it was contemplated would be prevented, and hence not only the prohibitions of the statute, but the remedies which it provided, were coextensive with such conceptions. Thus, the statute expressly cast upon the Attorney General of the United States the responsibility of enforcing its provisions, making it the duty of the district attorneys of the United States in their respective districts, under his authority and direction, to act concerning any violations of the law. And, in addition, evidently contemplating that the official unity of initiative which was thus created to give effect to the statute required a like unity of judicial authority, the statute in express terms vested the circuit court of the United States with "jurisdiction to prevent and restrain violations of this act," and besides expressly conferred the amplest discretion in such courts to join such parties as might be deemed necessary, and to exert such remedies as would fully accomplish the purposes intended. Act of July 2, 1890, c. 647, 26 Stat. 209.
can be only that which the statute prescribes."
from such finding. In the second place, because the possibility of the wrong to be brought about by allowing the property to be obtained under a contract of sale without enforcing the duty to pay for it, not upon the ground of the illegality of the contract of sale, but of the illegal organization of the seller, additionally points to the causes which may have operated to confine the right to question the legal existence of a corporation or combination to public authority sanctioned by the sense of public responsibility, and not to leave it to individual action, prompted, it may be, by purely selfish motives.
As, from these considerations, it results not only that there is no support afforded to the proposition that the antitrust act authorizes the direct or indirect suggestion of the illegal existence of a corporation as a means of defense to a suit brought by such corporation on an otherwise inherently legal and enforceable contract, but, on the contrary, that the provisions of the act add cogency to the principles of general law on the subject, and therefore make more imperative the duty not directly or indirectly to permit such a defense to a suit to enforce such a contract, we put that subject out of view, and come to the only remaining inquiry -- the alleged effect of the previous ruling in the Continental Wall Paper case, supra.
that there is no conflict between the Connolly case and the Continental Wall Paper case, but it also establishes that both cases, the first directly and the other by a negative pregnant, demonstrate the want of merit in the contentions here insisted upon.
"26 Broadway, New York, March 9, 1907"
"The D. R. Wilder Mfg. Co., Atlanta, Ga."
"Gentlemen: This company, recognizing the fact that its own prosperity, in a great measure, is interwoven with the goodwill and cooperation of its patrons, has decided to adopt a liberal plan of profit-sharing with you in case you shall in the future continue to give us your exclusive patronage."
"This company inaugurates such a policy of profit-sharing by announcing that it will set aside out of its profits from the manufacture and sale of glucose and grape sugar for the last six months of 1906 an amount equal to 10 cents per hundred pounds on all shipments of glucose and grape sugar (Warner's Anhydre and Bread Sugar excepted) which shall have been made to you by this company from July 1st to December 31, 1906."
"This amount will be paid to you or your successors on December 31, 1907, on condition that, for the remainder of the year 1906 and the entire year 1907, you or your successors shall have purchased exclusively from this company or its successors all the glucose and grape sugar required for use in your establishment."
"With the assurance of steadfast cooperation of its customers, given in reciprocation for the benefits conferred upon them, this company confidently anticipates a continuance of such profit-sharing distribution annually to the full extent that its earnings may warrant."
Finch v. Ullman, 105 Mo. 255; Taylor v. Portsmouth &c. Ry., 91 Me.193; Smith v. Mayfield, 163 Ill. 447; Detroit City Ry. v. Mills, 85 Mich. 634; Mackall v. Chesapeake &c. Canal Co., 94 U. S. 308; Connolly v. Union Sewer Pipe Co., 184 U. S. 540.

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