« ForrigeFortsett »
rect effect of an agreement or combination was not formed for pecuniary profits, and a must be in restraint of that trade or com- careful perusal of the whole agreement fails, merce which is among the several states, or as we think, to show that its purpose was with foreign nations. Where the subject- other than as stated in the preamble. In matter of the agreement does not directly re- other words, we think that the rules adopted late to and act upon and embrace interstate do not contradict the expressed purpose of commerce, and where the undisputeu facts the preanble, and that the result naturally clearly show that the purpose the agree to be expected from an enforcement of the ment was not to regulate, obstruct, or re- rules would not directly, if at all, affect instrain that commerce, but that it was en-terstate trade or commerce. The agreement tered into with the object of properly and now under discussion differs radically from fairly regulating the transaction of the busi: those of United States v. Jellico Mountain ness in which the parties to the agreement Coal & Coke Company, 46 Fed. Rep. 432 (3
were engaged, such agreement will be upheld Inters. Com. Rep. 626, 12 L. R. A. 753]; (616]as *not within the statute, where it can be United States v. Coal Dealers' Association,
seen that the character and terms of the 85 Fed. Rep. 252, and United States v. Adagreement are well calculated to attain the dyston Pipe & Stecl Company (54 U. S. App. purpose for which it was formed, and where 723), 85 Fed. Rep. 271. The agreement in the effect of its formation and enforcement all of these cases provided for fixing the upon interstate trade or commerce is in any prices of the articles dealt in by the different event but indirect and incidental, and not its companies, being in one case iron pipe for purpose or object. As is said in Smith v. gas, water, sewer, and other purposes, and Alabama, 124 U. S. 465, 473 [31; 508, 510, coal in the other two cases. If it were con. 1 Inters. Com. Rep. 804]: “There are many ceded that these cases were well decided, cases, however, where
the acknowledged they differ so materially and radically in
pose of thereby affecting or in any manner
tle dealt in by defendants. There is no tend-
them. Those who are selling the cattle have
is therefore furnished with a market at From very early times it has been the cus- which the competition of buyers has a broad tom for men engaged in the occupation of effect. All yard traders have the opportubuying and selling articles of a similar na- nity of becoming members of the exchange, ture at any particular place to associate and to thus obtain all the advantages there themselves together. The object of the
of. ciation has in many cases been to provide
The design of the defendants evidently is to for the ready transaction of the business of bring all the yard traders into the associathe associates by obtaining a general head. tion as members, so that they may become quarters for its conduct, and thus to insure subject to its jurisdiction and be compelled à quick and certain market for the sale or by its rules and regulations to transact busipurchase of the article dealt in. Another ness in the honest and straightforward manpurpose has been to provide a standard of ner provided for by them. If, while enforcbusiness integrity among the members by ing the rules, those members who use im. adopting rules for just and fair dealing proper methods or who fail to conduct their among them and enforcing the same by pen business transactions fairly and honestly are
alties for their violation. The agreements disciplined and expelled, and thereby the (617)have been voluntary, and the *penalties have number of members is reduced, and to that
been enforced under the supervision and by extent the number of competitors limited, members of the association. The preamble yet all this is done, not with the intent or adopted by the association in this case shows purpose of affecting in the slightest degree the ostensible purpose of its formation. It' interstate trade or commerce, and such trade
or commerce can be affected thereby only that reason. A claim that such refusal may most remotely and indirectly, and if, for the thereby lessen the number of active traders purpose of compelling this membership, the on the market, and thus possibly reduce the association refuse business relations with demand for and the prices of the cattle there those commission merchants who insist upon set up for sale, and so affect interstate trade, buying from or selling to yard traders who is entirely too remote and fanciful to be acare not members of the association, we see cepted as valid. nothing that can be said to affect the trade This case is unlike that of Hopkins v. 0.c. or commerce in question other than in the ley Stave Company (49 U. S. App. 709) 83 most roundabout and indirect manner. The Fed. Rep. 912, to which our attention has agreement relates to the action of the asso- been called. The case cited was decided with. ciates themselves, and it places in effect no out reference to the act of Congress *upon (620) tax upon any instrument or subject of com- which alone the case at bar is prosecuted, merce; it exacts no license from parties en- and the agreement was held void at common gaged in the commercial pursuits, and pre- law as a conspiracy to wrongfully deprive scribes no condition in accordance with the plaintiff of its right to manage its busiwhich commerce in particular articles or be- ness according to the dictates of its own tween particular places is required to be con- judgment. It was also said that the fact ducted. Sherlock v. Alling, 93 U. S. 99 [23: could not be overlooked that another object 819); Smith v. Alabama, 124 U. S. 465, 473 of the conspiracy was to deprive the public at [31: 508,510); Pittsburg & 8. Coal Company large of the benefits to be derived from a v. Louisiana, 156 U. S. 590, 598 [39: 544, labor-saving machine which seemed to the 548, 5 Inters. Com. Rep. 18].
court to be one of great utility. No question If for the purpose of enlarging the mem- as to interstate commerce arose and none was bership of the exchange, and of thus procur. decided. ing the transaction of their business upon From what has already been said regard. a proper and fair basis by all who are en ing rule 10, it would seem to follow that the gaged therein, the defendants refuse to do other rules (11, 12, and 13) are of equal vabusiness with those commission men who sell lidity as rule 10, and for the same reasons. to or purchase from yard traders who are the rules are evidently of a character to en.
not members of the exchange, the possible force the purpose and object of the exchange (619 Jeffect of such a course *of conduct upon in as set forth in the preamble, and we think
terstate commerce is quite remote, not in that for such purpose they are reasonable tended, and too small to be taken into account. and fair. They can possibly affect interstate
The agreement lacks, too, every ingredient trade or commerce in but a remote way, and of a monopoly. Everyone can become a are not void as violations of the act of Conmember of the association, and the natural gress. desire of each member to do as much busi- We are of opinion, therefore, that the ness as he could would not be in the least order in this case should be reversed and the diminished by reason of membership, while case remanded to the Circuit Court of the the business done would still be the individ. United States for the Western Division of ual and private business of each member, the Western District of Missouri with direcand each would be in direct and immediate tions to dismiss the complainants’ bill with competition with each and all of the other costs. members. If all engaged in the business were to become members of the association, Mr. Justice Harlan dissented. yet, as the association itself does no business, it can and does monopolize none. The Mr. Justice McKenna took no part in the amount and value of interstate trade is not decision of this case. at all directly affected by such membership; the competition among the members and with others who are seeking purchasers NORTHWESTERN NATIONAL BANK, would be as large as it would otherwise have
Riordan Mercantile Company, and Ari. been, and the only result of the agreement zona Lumber & Timber Company, Appts., would be that no yard traders would remain who were not members of the association. B. N. FREEMAN, F. L. Kimball, and J. H. It has no tendency, so far as can be gathered from its object or from the language of its
Hoskins, Copartners, as the Arizona Cen
tral Bank, and John Vories. rules and regulations, to limit the extent of the demand for cattle or to limit the number (See S. C. Reporter's ed. 620-631.) of cattle marketed or to limit or reduce their price or to place any impediment or obstacle Chattel mortgage; when valid-notice to in the course of the commercial stream which
subsequent assignee-mortgage of domesflows into the Kansas City cattle market.
tic animals. While in case all the yard traders are not 1. A cbattel mortgage of a given number of induced to become members of the associa- articles out of a larger number is valid as tion, and those who are such members re- against those who know the facts. fuse to recognize the others in business, we 2. The record of a chattel mortgage to other can see no such direct, necessary or natural mortgagees is not notice to an assignee of a connection between that fact and the re
subsequent mortgage ; but he is chargeable
with notice of the record of a prior mortgage straint of interstate commerce as to render
on the same property by the same mortgagor the agreement not to recognize them void for to his assignor.
8. A mortgage of domestic animals covers thereof, nor were any of said sheep or the in.
their Increase, although it is silent as to such crease thereof ever by anyone identified,
designated, or in any way segregated, ap.
portioned or substituted to the or on account Argued April 15, 18, 1898. Decided October of the said pretended mortgages, or of either
thereof. From date of said mortgages (July 24, 1898.
10, 1890) to January 4, 1893, said Fulton PPEAL from the Supreme Court of the froin time to time sold of said sheep as folment of that Court affirming a judgment of by said Fulton accounted for, and the prothe District Court of that Territory in favor ceeds of which he deposited with the apof the appellees, B. N. Freeman et al., decid pellee Arizona Central Bank; that both of ing the priority of mortgages, etc.
said appellees knew of these sales and con
sented to them. Statement by Mr. Justice McKenna:
“On January 4,1893, said Fulton executed (621) *The appellees recovered judgment in the Lumber & Timber Company, one of ap
a mortgage for $8,885 in favor of Arizona district court, which was affirmed on appeal to the supreme court of the territory, from pellants herein and one of the defendant's
in the court below, covering, among other which an appeal has been taken to this
property, the following described sheep:
*About 3,000 ewes, 1.000 wethers, and 2,000
by mortgagor, and including all wool and
Central Bank, and one on 1,000 head, and
mortgage of January 4, 1893, namely, that
the appellees should forbear' *to foreclose( 623 ) another alleged mortgage for $4,000, pay claim on the wool clip of 1893, the wool at able in ninety days, in favor of John Vories, that time not having been shorn. one of the appellees herein and one of the defendants in the court below; that the de
"That to August 30, 1893, $3,000 of the
amount claimed to be due on the mortgage
proceeds, and that on said day said Fulton,
on said mortgage of January 4, 1893, exe-
cuted his promissory negotiable note, pay.
"That said mortgage was a conveyance, as
a security for the payment of said note, of
scribed as follows, namely: ‘About 3,200 the other on 1,000 head, 200 head * not being less, being all the sheep now owned by mort. alleged mortgages, the one on 5,000 head and ewes, more or less; about 1,300 wethers,
more or less; about 1,400 lambs, more or
“That in said last-mentioned mortgage no
recital or reference was made in any way, from any of the others.
“That said Fulton continued in the owner. nor in any manner, to the existence of any ship and possession of all of said sheep, save other mortgage or mortgages whatsoever. only such as died, were sold by him, con- "That on the 29th day of September, 1893, sumed, or lost, until the 18th December, and prior to the maturity of said last-men1893. “At no time did appellees, or either of tioned note of $6,000, said appellant Arizona them, ever take or ever have possession of | Lumber & Timber Company, representing said sheep, or any of them, or of the increase that said mortgage was a first and prior lien
on said described sheep, and by means there asking for a foreclosure of its said alleged
the said mortgage dated January 4, 1893, of “That on December 18, 1893, said Fulton, said Arizona Lumber & Timber Company and being then indebted to Riordan Mercantile the mortgage owned by said Northwestern Company, one of the appellants herein and National Bank as aforesaid, in which said a defendant in the court below, in the sum of judgment said court adjudged that appelleeg $810.91, it brought its action in said district have a prior and first lien on said property, court against said Fulton whereby to collect viz., the Arizona Central Bank upon 5,000 the same, and at the same time caused to be sheep of the Fulton mark by reason of its issued out of the clerk's office of said court a said mortgage and the said Vories on 1,000
writ of attachment, which was then levied sheep of the Fulton mark by reason of his (624]on the property following, *namely: 'All the said mortgage; and said court decreed and
right, title, and interest of the defendant ordered that an order of sale issue for the
should be applied to the payment of the judg.
There are seveateen assignments of errors,
They are by virtue of and pursuant to said judgment, grouped and presented by counsel under sold said property and delivered the same to
seven heads as follows:
"First. In the first assignment of error
adjudging, and the territorial supreme court
"That' by virtue of said writ of attach- mortgages of the appellees were prior liens ment the sheriff attached all the sheep then ton at the time of the execution of said mort
on all of the sheep owned by defendant Fulowned by said Fulton, and that on said day, to wit, on the 18th day of December, 1893, gages, even though said mortgages had been there were of said sheep only 1,000 bead of good and prior liens on the sheep specified
therein. ewes remaining out of all the sheep that existed on July 10, 1890, the date of said al. eighth assignments of error it is set forth
“Second. In the second, third, fifth, and leged mortgages to appellees; that the re, that the trial court, and the territorial su. mainder of said ewes, all the male sheep and the lambs, had by that time died, been con- preme court in sustaining its holding, erred sumed, sold, or lost.
in admitting in evidence the mortgages from "That subsequent to the making of said al- defendant Fulton *to the appellees, marked  leged mortgages to said appellees, an oral Exhibit 'A' and 'B,' against the objections of agreement between them and the said Fulton the appellants, and in overruling motion of was made that the securities of appellees said mortgages, and in holding that said
appellants to strike out of the evidence the were to be kept good out of the increase by substitution, the consideration therefor be. mortgages were valid and subsisting liens ing that said Fulton might sell and dispose
on all of said property, and in holding and of the said sheep without interference from deciding that the description of said property appellees.
in appellees' said mortgages was a sufficient “That Sisson, a witness for appellants in description. this case, is and was during all of said trans
“Third. In the fourth and seventh assignactions the trcasurer of both the Riordan ments it is set forth that the court erred in Mercantile Company and the Arizona Lum- admitting, over the objection of the appelber & Timber Company, appellants berein, lants, testimony concerning a conversation and that these two corporations have prac- between J. H. Hoskins, John Vories, F. W. tically the same officers.
Sisson, and Harry Fulton, and evidence rela“That in said district court said Arizona tive to an alleged agreement, and evidence Central Bank brought its suit as plaintiff tending to prove a breach of contract between against said Fulton, Vories, Donahue as sher- the appellees and appellant Arizona Lumber
iff, the Arizona Lumber & Timber Company, & Timber Company. (625]the *Riordan Mercantile Company, and the "Fourth. The trial court erred, as set forth
Northwestern National Bank, as defendants, in the fifteenth and sixteenth assigninents,
in adjudging that on the date of its decree of description that will serve to distinguish
out of a larger lot on hand, such mortgage
Conn. 157; Newell v. Warner, 44 Barb. 258; "Sixth. The trial court erred, as set forth Payne v. Wilson, 74 N. Y. 348. in the seventeenth assignment, in adjudging There can be no agreement by the parties, that appellant Northwestern National Bank which will bind others, that there shall was bound by said pretended agreement of be a substitution of other property for that substitution or was bound by said pretended first specified. mortgages of appellees, or that said mort. Hutton v. Arnett, 51 Ill. 198; Elliott v. gages were prior liens on said property, or on Long, 77 Tex. 467. any of it, to the mortgage owned by said ap-cut of the increase by substitution, the con
That the mortgages were to be kept good pellant.
"Seventh. In the sixth, ninth, tenth, sideration therefor being that Fulton might twelfth, thirteenth, "and fourteenth assign- sell and dispose of the sheep without inter.
ments it is set forth that the court erred in ference from appellees, would of itself ren-
Peiser v. Peticolas, 50 Tex. 638, 32 Am.
T'he increase of the sheep attempted to be head of sheep, marked: ewes with hole in mortgaged, if there were increase, would left ear and split in right, wethers with hole therefore not be covered thereby. in right ear and split in left ear, and that Winter v. Landphere, 42 Iowa, 471; En. a thousand more of said sheep were conveyed right v. Dodge, 64 yt. 502; Darling v. Wil by mortgage to said appellee Vories, with the son, 60 N. H. 59, 49 Am. Rep. 305; Rogers v. same marks; and in adjudging that the prop. Gage, 59 Mo. App. 107. erty included in the said attachment lien of Substituted property is not held by virtue the said Riordan Mercantile Company and of the mortgage, but by virtue of the agree. sold and delivered to said company thereun- ment of the parties, whereby an equitable der was the same property that is conveyed, lien, cognizable only in a court of equity, or attempted to be conveyed, by the mort arises in favor of the mortgagee. gages of said appellees; and in adjudging
Pom. Eq. Jur. § 1235; Simmons v. Jenthat the rights, title, and interests obtained kins, 76 III. 479. by said Riordan Mercantile Company, by
There can be no substitution or exchange virtue of said attachment lien and sale, was of property by the parties to the mortgage, subject to the alleged rights of said appellees that will bind third parties, unless the mort. by virtue of their said pretended mortgages; gagee takes actual possession of the suband in adjudging that appellants Riordan stituted articles before the rights of third Mercantilc Company and Arizona Lumber & parties intervene. Timber Company had actual notice of the
Pom. Eq. Jur. § 726; Hunt v. Bullock, 23 property conveyed by the said alleged mort- 1... 320; Powers v. Freeman, 2 Lans. 127; gages of said 'appellees; and in adjudging Titus v. Mabbe, 25 Ill. 257; Rhines v. Phelps, that F. W. Sisson, as the treasurer of 8 nl. 455. said Riordan Mercantile Company, agreed
Where an equitable mortgage is claimed with said appellees that the number of sheep as the result of an agreement, there must be, in said mortgages of appellees should be at the time such agreement is made, such kept good out of the increase of said identification of the property that the equit. sheep, and that the wool released able mortgagee may see with a reasonable by said agreement to said company, and that degree of certainty what property it is that the consideration thereof was an alleged for- is subject to his lien. bearance to foreclose said mortgages of said Payne v. Wilson, 74 N. Y. 352; Newell v. appellees.”
Warner, 44 Barb. 258.
To be held in equity, the description of Messrs. A. B. Browne, E. E. Ellenwood, the property mortgaged must be certain. and 4. T. Britton, for appellants :
Hughes v. Menefee, 29 Mo. App. 192; Mor.