Buffalo Gravel Corp. v. Moore

118 Misc. 61
CourtNew York Supreme Court
DecidedFebruary 15, 1922
StatusPublished
Cited by2 cases

This text of 118 Misc. 61 (Buffalo Gravel Corp. v. Moore) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buffalo Gravel Corp. v. Moore, 118 Misc. 61 (N.Y. Super. Ct. 1922).

Opinion

Pooley, J.

Issue of law raised by demurrer to the complaint in an action in equity to enjoin defendant from prosecuting indictments against the plaintiffs. The plaintiffs by their complaint allege that the companies are corporations and each of the individuals named is a director of one or more of said corporations, engaged in procuring sand and gravel and selling the same in Buffalo and vicinity; that the said companies, other than the Buffalo Gravel Corporation, are producing corporations and each has plant, equipment and yards for the handling of said material and delivering it to customers, involving a large investment; that by reason of the rising cost of labor following the commencement of the World War, the large increase of cost of coal and other fuel, the duplication of facilities to handle their products, the necessity of eliminating waste, etc., the said corporations came to the conclusion that a method of co-operation or integration, or unification of some or all of the business was necessary for the protection of their investments and to serve their customers and that a mere price-raising and price-fixing combination would not meet the situation; that they conferred together, engaged counsel of high standing and evolved a plan of operation by which a new corporation was organized (plaintiff, Buffalo Gravel Corporation) for the purpose of taking over the business of unloading, storing, marketing and distributing the entire output, under a contract or arrangement which would limit the cost plus upkeep, plus a fair profit; that this arrangement was consummated about March 21, 1919, the Buffalo Gravel Corporation took over the proposed business, took over leases of the producing corporations and purchased their equipment, and since April 1, 1919, has carried on the business, to wit, the purchase of all the gravel produced by the others, and [63]*63the sale and distribution thereof, and that the others have not since then engaged in the selling or distribution of their own product; that the resulting benefits and advantages have been a reduction in selling expenses, more efficient service and a consequent low price; that nevertheless a legislative committee spread upon its records the statement that the contract of March 21, 1919, constituted a combination in restraint of trade and recommended to the district attorney of Erie county (defendant herein) that these plaintiffs be prosecuted for such alleged offense; that upon application of defendant, the governor of the state directed the calling of an extraordinary term of this court, with a grand jury, beginning July 25, 1921; that said grand jury returned an indictment against these plaintiffs charging violation of law, by the making of said agreement of March 21, 1919, and the doing of any act in carrying out the same; that said acts carry penalties for each offense; that such action by the defendant is unauthorized and causes irreparable injury to the plaintiffs and their property rights, and they charge specifically that the statutes in question deny to these plaintiffs the equal protection of the laws in violation of amendment XIV of the Constitution of the United States, and deprive them of their liberty and property in violation of article I, section 6 of the Constitution of the state of New York.

They demand judgment restraining defendant from prosecuting the indictment and a determination that sections 340 and 341 of the General Business Law of the state are unconstitutional and void.

The demurrer of the defendant, admitting the facts and charging that they do not constitute a cause of action, presents two propositions for determination: First, whether or not this court of equity may entertain and determine the issues raised; and second, if it may so entertain and determine, whether or not the statutes in question are violative of the rights of the plaintiffs guaranteed to them by the National and State Constitutions.

Upon the first proposition, it is the settled law of this state that our courts of equity will not interfere in the prosecution of the criminal law (Delaney v. Flood, 183 N. Y. 323) nor intervene when there is adequate remedy at law.

But statutes have been in recent years enacted which involve restraints upon business methods and carrying penalties for violation, and in some instances declaring violations criminal acts punishable by fines and imprisonments. They are the outgrowth of the advancement of business, the combination of capital, the evolution from primitive to collective methods, and the law must follow and safeguard and protect all rightful acts and prevent [64]*64their infringement. So, in Municipal Gas Co. v. Public Service Comm., 225 N. Y. 89, our Court of Appeals reviews this proposition, and while recognizing the validity of the reasoning of former cases, including Delaney v. Flood, supra, declares the advanced thought that in a proper case equity will act, saying: Many of the most distinctive features of equity jurisdiction are present (Board of Supervisors Sar. Co. v. Deyoe, 77 N. Y. 219, 226; Nat. Park Bank v. Goddard, 131 N. Y. 494, 502; Emp. Eng. Corp. v. Mack, 217 N. Y. 85, 94). There is the avoidance of multiplicity of actions. There is the saving of waste and friction. There is the' opportunity to analyze accounts so complex and vast as to be unintelligible to juries (Ex parte Young, 209 U. S. 123, 163, 164). There is protection against penalties that crush and against losses that cripple. * * * Undoubtedly, the plaintiff has some remedy at law. The decisive point is that it is not as complete or efficient as the remedy in equity (Walla Walla City v. Walla Walla Water Co., 172 U. S. 1, 12).”

Thus is defined the meaning of the term adequate remedy at law. The plaintiffs here may, in the criminal prosecution, move to dismiss the indictment, they may stand trial and defeat it, but these remedies may be inadequate, and if followed, might result in vindication on the criminal charge, but in “ impairment, if not destruction to their business and property rights.”

The case of Municipal Gas Co. v. Public Service Comm., supra, was a civil action, and the court says (p. 102): This is no attempt by equity to restrain the enforcement of the criminal law, even if we were to assume that such an objection would invariably be fatal (Ex parte Young, at p. 162). The very purpose of the suit is a declaration of the plaintiffs’ rights which will enable it to shape its conduct in conformity to law. It is another answer, though a narrower one, that the penalties are civil (Consol. Gas Co. v. City of New York, 157 Fed. Rep. 849; Ten. House Dept. N. Y. v. McDevitt, 215 N. Y. 160, 168; Code Civ. Pro. sec. 1962).”

The question whether or not a criminal case may present such a situation as would justify the intervention of equity has not arisen in our state court heretofore, but from the reasoning of this latter case quoted from, as well as from the citation therein of many .cases in the federal courts, it is quite manifest that the Court of Appeals sanctions such intervention.

In Ex parte Young, 209 U. S. 123, the Minnesota legislature enacted a statute fixing freight and passenger rates of railroads.

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Related

Buffalo Gravel Corp. v. Moore
201 A.D. 242 (Appellate Division of the Supreme Court of New York, 1922)
Standard Engraving Co. v. Volz
200 A.D. 758 (Appellate Division of the Supreme Court of New York, 1922)

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