Summary
In State v. Retail Gasoline Dealers Ass'n of Milwaukee, 256 Wis. 537, 41 N.W.2d 637, the court held that a combination to fix the retail price of gasoline in Milwaukee was a violation of Section 133.01.
Summary of this case from Henry G. Meigs, Inc. v. Empire Petroleum Co.Opinion
February, 10, 1950 —
March 7, 1950.
APPEAL from a judgment of the circuit court for Milwaukee county: CHARLES L. AARONS, Circuit Judge. Affirmed.
John C. McBride, attorney, and Ralph J. Drought of counsel, both of Milwaukee, for the appellants.
For the respondent there were briefs by the Attorney General, Leonard Bessman, assistant attorney general, and William J. McCauley, district attorney of Milwaukee county, and oral argument by Mr. Bessman.
A brief was also filed by W. H. Bender, Bender, Trump McIntyre of Milwaukee; Richard N. Hunter, Lowry Hunter of Waukesha; Howard Neitzert, Sidley, Austin, Burgess Smith of Chicago, Illinois; Steven E. Keane, Miller, Mack Fairchild of Milwaukee; John T. Chadwell, Victor P. Kayser, Snyder, Chadwell Fagerburg of Chicago, Illinois; Clifford A. Randall, Zimmers, Randall Zimmers of Milwaukee; Edwin J. Gross of Milwaukee; Clarence D. Steinhilber, Kleczka Steinhilber of Milwaukee; Delbert H. Schmahl of Milwaukee; Elmer A. Kletzien of Menomonee Falls; Raymond J. Moore of Milwaukee; John H. Regan of Milwaukee; and T. Fred Baker of Milwaukee, as amici curiae.
Action was begun March 29, 1948, by the state making complaint that defendants combined to restrain and prevent competition in the retail price of gasoline in Milwaukee county and that their combination and conspiracy did in fact control, raise, and fix such price contrary to the provisions of sec. 133.01, Stats. The complaint demanded cash forfeitures by numerous defendants, forfeiture of the corporate charter of the defendant association, and an injunction restraining these defendants and other retail dealers whom they were alleged to represent as a class from combining or conspiring to restrain trade or competition in the retail sale of gasoline in the state of Wisconsin.
The defendants answered, (1) that the action was not properly instituted because not begun by the district attorney of the county; (2) that sec. 133.04, Stats., gave the defendant association immunity from the provisions of sec. 133.01; and (3) denied that defendant had conspired or controlled the price of gasoline.
Trial was to the court. It had previously found on motion that the action was properly instituted and on June 8, 1949, it found and adjudged that the conspiracy existed and functioned effectively; that the defendant association is not immune; the forfeiture of its corporate charter is mandatory and it is indebted to the plaintiff for $2,000; certain individual defendants are immune because they were examined in the inquisitorial proceedings by the attorney general; certain others were not officers or directors of the association at the time of the offense and as to them the complaint should be dismissed; but the rest joined in or were responsible for the illegal acts and are indebted to the plaintiff for $200 each; that retail dealers against whom relief was demanded as a class but who are not members of the association are not adequately represented by the named defendants and that no judgment or injunction is granted against them; that the named defendants and all members of the association are enjoined from advising, etc., any person, etc., in the retail gasoline trade in Milwaukee county, of increases in the wholesale price of gasoline for the purpose of fixing, increasing, or maintaining prices, and from combining to establish, etc., such prices. Appeal has been taken by those defendants who are aggrieved by the judgment. Neither the forfeitures nor the injunction are questioned on the appeal. Appellants submit that the evidence does not establish a conspiracy, nor an intent to fix prices nor the actual fixing of prices; and in any event the defendant association has been exempted by statute from the application of sec. 133.01, Stats. The material part of sec. 133.01 is as follows:
"Unlawful contracts; conspiracies. (1) Every contract or combination in the nature of a trust or conspiracy in restraint of trade or commerce is hereby declared illegal. Every combination, conspiracy, trust, pool, agreement, or contract intended to restrain or prevent competition in the supply or price of any article or commodity in general use in this state, to be produced or sold therein or constituting a subject of trade or commerce therein, or which combination, conspiracy, trust, pool, agreement, or contract shall in any manner control the price of any such article or commodity, fix the price thereof, limit or fix the amount or quantity thereof to be manufactured, mined, produced, or sold in this state, or fix any standard or figure in which its price to the public shall be in any manner controlled or established, is hereby declared an illegal restraint of trade. Every person, corporation, copartnership, trustee, or association who shall either as principal or agent become a party to any contract, combination, conspiracy, trust, pool, or agreement herein declared unlawful or declared to be in restraint of trade, or who shall combine or conspire with any other person, corporation, copartnership, association, or trustee to monopolize or attempt to monopolize any part of the trade or commerce in this state shall forfeit for each such offense not less than $100 nor more than $5,000. Any such person, corporation, copartnership, trustee, or association shall also be liable to any person transacting or doing business in this state for all damages he may sustain by reason of the doing of anything forbidden by this section. . . ."
An examination of the evidence is convincing that the individual and corporate defendants unlawfully combined and conspired to fix the retail price of gasoline in Milwaukee county contrary to the provisions of sec. 133.01, Stats., and did in fact fix the price thereof. The principal acts were performed by Louis M. Faber, executive secretary of the defendant association, as a part of his job, under the direction and control of the officers and directors of the association and with their approval. The acts, in fact, are not denied but defendants deny, (1) that there was a conspiracy, (2) that the acts were performed for the purpose of price fixing, and (3) that they had that effect. An example of the defendants' procedure is taken from a bulletin issued by the association to its three hundred ninety-five members and a larger number of other retail gasoline dealers in the county. It is state's Exhibit 12 and contains the following:
"Every dealer is asked to sit tight at his present prices.
"We are watching this situation very carefully and hope that no dealer will make any price move until he is informed by this association on what to do.
"For your own salvation, don't make any move, regardless of what any oil company tells you until you hear from us."
Other bulletins were of like tenor and there was undisputed testimony that when the recommendations of the bulletins suggesting prices were not followed they were supplemented by personal solicitation of the dealers by individual defendants. The proof also was that the prices in the county changed promptly in accord with the recommendations of the association's bulletins and when a preliminary injunction brought the bulletins to an end the price fluctuations ceased and were not resumed. Appellants have objected to the admission of evidence of price stability after the injunction since that was later than the time when the state charges the conspiracy functioned, but we consider the evidence was competent and material to prove the effect of the defendants' acts by offering a comparison of the market during defendants' activity and when it was not subject to defendants' operations. The findings of conspiracy involving all named defendants (other than Lester Kleinmann against whom no such finding was made) and of the conspiracy being effective to fix prices must be sustained.
Appellants submit that sec. 133.04, Stats., grants the defendant association exemption from the provisions of sec. 133.01. The material part of the subsection reads: "provided, that nothing therein [in the three preceding sections of the chapter] shall be construed to affect . . . associations or organizations intended to legitimately promote the interests of trade, commerce, or manufacturing in this state." They say that the intent which the statute refers to is the intent expressed by the organization's charter. It may be conceded that the expressed intent is legitimate. If it appeared to be illegitimate the state would hardly have granted a charter. But we cannot concede that inquiry must stop there. The legislature has determined that combinations to fix prices and restrain competition are evils to be severely dealt with, but appellants imply that if conspirators organize a corporation whose purpose is piously professed, under its cloak they may thereafter do with impunity what previously was forbidden. We do not agree. We hold that the intent of the association can be determined from its actions and if such actions show an intent to promote by illegitimate means the interests of their trade, commerce, or manufacturing, the statute (sec. 133.04) provides no shield behind which they may conspire by methods and for ends prohibited to others. The printed and oral evidence shows the attempt to fix, establish, and maintain prices, and restrain competition was so frequent and regular as to establish the conclusion that price fixing was a principal purpose of the association if not the principal one. Therefore, we sustain the conclusion of the trial court that defendant association has no exemption under sec. 133.04, from the liabilities elsewhere provided by ch. 133, Stats.
The trial court's decision states that the court is without discretion in the matter of declaring forfeit the corporate charter of the offending association. Its judgment decreed the charter canceled and annulled. Appellants have not contested this part of the decision or judgment but a number of amici curiae have favored us with a brief by which they hope to show that the court erred in its belief that forfeit of the charter was mandatory. The brief advances two arguments:
"(1) The court erred in holding that the entry of the judgment of cancellation and annulment of the charter was mandatory and in entering such judgment without considering the relevant facts and circumstances bearing upon the propriety of such judgment.
"(2) The trial court erred in ordering such cancellation and annulment because the statutes upon which the order is based are unconstitutional as denying equal protection of the laws."
Concerning proposition (1), amici curiae differ with the trial court in its interpretation of the word "shall" where it appears in secs. 133.21 and 133.23, Stats. Those sections are:
"133.21. Domestic corporations; cancellation of charters for restraining trade; affidavit. Any corporation organized under the laws of this state which shall enter into any combination, conspiracy, trust, pool, agreement, or contract intended to restrain or prevent competition in the supply or price of any article or commodity in general use in this state, or constituting a subject of trade or commerce therein, or which shall in any manner control the price of any such article or commodity, fix the price thereof, limit or fix the amount or quantity thereof to be manufactured, mined, produced, or sold in this state, or fix any standard or figure by which its price to the public shall be in any manner controlled or established, shall, upon proof thereof, in any court of competent jurisdiction, have its charter or authority to do business in this state canceled and annulled. . . ."
"133.23. Ouster. Upon complaint being made to the attorney general and evidence produced to him which shall satisfy him that any such corporation has violated any of the conditions specified in sections 133.21 and 133.22, he shall forthwith bring an action in the name of the state in any circuit court of this state to have the charter of such corporation forfeited, canceled, and annulled, and upon due proof being made thereof to the satisfaction of the court, judgment shall be entered therefor. . . ."
It is urged that where "shall" appears it should be converted to "may" by judicial construction. The argument is that if the literal construction leads to absurd, unreasonable, or unjust results a construction not subject to such infirmities will be adopted in order to carry out the true purpose and intent of the legislature. We do not question the statement of principle; only its application. We find no obscurity in the sections referred to. The words and meaning are plain and explicit. Whether or not dissolution is too severe a penalty to impose on a corporation which engages in a conspiracy to fix prices only the legislature can say. It depends on how serious the legislature thought the offense is and what means it thought would be an effective deterrent and appropriate punishment. There is no indication, which we have been able to discover, that the legislature considered the offense to be trivial. We cannot say that the penalty provided is unjust or unreasonable or that a literal interpretation of "shall" produces any result so absurd or incongruous that we must assume the legislature by oversight or mistake failed to express its will. Accordingly, there is no ground on which we can find, or even suppose, that the legislature did not mean exactly what it said and we have no justification to import a different meaning into the word "shall" to accomplish the supposed legislative purpose. We agree with the learned trial court's interpretation of the statute and hold that when the defendant association has been adjudged a violator of sec. 133.01, Stats., judgment decreeing the forfeiture of its corporate charter is mandatory.
Remembering that this is a court of review, we must dispose of amici curiae's proposition (2) by stating that the constitutionality of the statutes under which this action is prosecuted was not questioned or considered in the trial court and cannot be raised for the first time upon the appeal.
By the Court. — Judgment affirmed.
MARTIN and BROADFOOT, JJ., took no part.