Chicago, Wilmington & Vermilion Coal Co. v. People

73 N.E. 770, 214 Ill. 421

• Court: Illinois Supreme Court
• Decided: February 21, 1905
• Status: Published

Opinion

Mr. Justice Hand

delivered the opinion of the court:

It is first urged that the court erred in overruling the motion to quash the indictment. It will be remembered two of the counts (the second and fourth) charge a conspiracy as at common law, the first and third a violation of section 46 of the Criminal Code and the fifth a violation of section 1 of the Anti-trust act of 1891.'

The first point made against the indictment is, that the second and fourth counts do not charge a conspiracy at common law, in this: that the acts charged are not criminal or unlawful. Those counts charge that the object of the conspiracy was unlawful, and not that its object was lawful and the means for its accomplishment unlawful. It was therefore unnecessary to set out the means whereby the conspiracy was to be accomplished. (Thomas v. People, 113 Ill. 531.) Neither was it necessary that the object of the conspiracy constitute an offense against the criminal law for which an individual might be indicted and convicted; (Smith v. People, 25 Ill. 9;) but if the object, thereof was unlawful, said counts sufficiently charge a conspiracy at common law. The term “unlawful,” as here used, does not include every act which violates the rights of a private individual and for which the law affords a civil remedy, but is held to include those acts which, by reason of the combination, have a harmful effect upon society and the public; and a combination may amount to a conspiracy although its unaccomplished object be to do that which, if actually done by an individual, would not amount to an indictable offense, and in that sense a conspiracy may consist of a combination to do what is merely unlawful. The counts now under consideration charge the plaintiffs in error with having conspired together to do an illegal act injurious to the public trade,—that is to say, to regulate and fix the price at which coal should be sold. A combination between independent producers of coal to prevent competition in the sale of that article, which is a necessary of life, is an act inimical to trade and commerce and detrimental to the public and unlawful, and amounts to a common law conspiracy, regardless of what may be done in furtherance of the conspiracy.

The case of Smith v. People, supra, is a leading case. The defendants were indicted and convicted of having conspired together to seduce a female child of the age of sixteen years. The court said (p. 13) : “To attempt to define the limit or extent of the law of conspiracy, as deducible from the English decisions, would be a difficult, if not an impracticable, task. * * * We may safely assume that it is indictable to conspire to do an unlawful act by any means, and also that it is indictable to conspire to do any act by unlawful means. In the former case it is not necessary to set out the means used, while in the latter it is. * * * But the great uncertainty * * * is as to what constitutes an unlawful end, to conspire to accomplish which is indictable without regard to the means to be used in its accomplishment. * * * This indictment falls under the first class. * * * If the term ‘unlawful’ means criminal or an offense against the criminal law, and as such punishable, then the objection taken to this indictment is good, for seduction, by our law, is not indictable and punishable as a crime. But by the common law governing conspiracies the term is not so limited, and numerous cases are to be found where convictions have been sustained for conspiracy to do unlawful acts although those acts are not punishable as crimes. Nor yet would it be quite safe to say that the term ‘unlawful,’ as here used, includes every act which violates the legal rights of another, giving that other a right of action for a civil remedy. * * * It is sufficient for the present case to say that conspiracies to accomplish purposes which are not by law punishable as crimes, but which are unlawful as violative of- the rights of individuals and for which the civil law will afford a remedy to the injured party, and will at the same time and by the same process punish the offender for the wrong and outrage done to society by giving exemplary damages beyond the damages actually proved, have in numerous instances been sustained as common law offenses. The law does not punish criminally every unlawful act, although it may be a grievous offense to society; and in determining what sort of conspiracies may or may not be entered into without committing an offense punishable by the common law, regard must be had to the influence which the act, if done, would actually have upon society, without confining the inquiry to the question whether the act might itself subject the offender to criminal punishment.”

In People v. North River Sugar Reñning Co. 2 L. R. A. 33, the Supreme Court of New York, in speaking of a combination formed for the purpose of controlling the price of sugar, said: “All the cases, ancient and modern, agree that a combination, the tendency of which is to prevent general competition and to control prices, is detrimental to the public and consequently unlawful.”

And in Texas Standard Cotton Oil Co. v. Adoue, 15 L. R. A. 598, the Supreme Court of Texas held a combination to prevent competition and create fictitious prices, independently of the law of demand and supply, and to such an extent as injuriously to affect the interests of the public or any particular class of citizens who may be especially interested, either as producers or consumers, in the articles or staples affected by the contract, is void, as in restraint of trade.

And in State v. Phipps, 18 L. R. A. 657, the Supreme Court of Kansas held that a combination between insurance companies to control and increase the rates of insurance was in violation of the anti-trust laws of that State declaring unlawful all trusts and agreements in restraint of trade.

And in Nester v. Continental Brewing Co. 24 L. R. A. 247, the Supreme Court of Pennsylvania held the true test of the illegality of a combination to restrict trade is its effect upon the interest of the public, and that a combination of brewers fixing a minimum price at which any of them should sell beer to the customers of another or to new trade was void, as against public policy.

And in United States v. Jellico Mountain Coke and Coal Co. 46 Fed. Rep. 432, (12 L. R. A. 753,) a combination between coal producers in one State and coal dealers in another, to regulate prices of coal in Nashville, Tenn., was held a violation of the act of Congress prohibiting conspiracies in restraint of trade and commerce.

And in People v. Sheldon, 139 N. Y. 251, (23 L. R. A. 221,) the court, in passing upon the legality of an organization of coal dealers intended to prevent competition, said: “The gravamen of the offense of conspiracy is the combination. Agreements to prevent competition in trade are, in contemplation of law, injurious to trade because they are liable to be injuriously used. * * * We are of opinion that the principle upon which the case was submitted to the jury is sanctioned by the decisions in this State, and that the jury were properly instructed that if the purpose of the agreement was to prevent competition in the price of coal between retail dealers it was illegal and justified the conviction of the defendants.”

And in Morris’ Run Coal Co. v. Barclay Coal Co. 68 Pa. St. 173, the question before the court was whether the contract was illegal, as being contrary to the statute of New York or at common law, as against public policy. The court said: “The referee found, as his conclusion upon the whole case, that the contract was void by the statute and void at common law, as against public policy. * * * The combination is wide in scope, general in its influence and injurious in effects. These being its features, the contract is against public policy, illegal, and therefore void.” After citing similar cases the court further said: “An important principle stated in these cases is, that as to contracts for a limited restraint the courts start with a presumption that they are illegal, unless shown to have been made upon adequate consideration and upon circumstances both reasonable and useful. This presumption is a necessary consequence of the general principle that the public interest is superior to private and that all restraints on trade are injurious to the public in some degree. The general rule * * * is, that all restraints of trade, if nothing more appear, are bad.”

In State v. Buchanan, 5 Harr. & J. 317, the defendants were indicted in one count for an executed conspiracy to cheat and defraud the president, directors and company of the Bank of the United States, and in a second count for a conspiracy only to cheat and defraud the same parties. The defendant’s demurrer was sustained by the trial court, whereupon the State took the case to the Court of Appeals by writ of error. Buchanan, J., after reviewing the English authorities, said: “From all which it results that every conspiracy to do an unlawful act, or to do a lawful act for an illegal, fraudulent, malicious or corrupt purpose, or for a purpose which has a tendency to prejudice the public in general, is at common law an indictable offense, though nothing be done in execution of it and no matter by what means the conspiracy was intended to be effected, which may be perfectly indifferent and makes no ingredient of the crime, and therefore need not be stated in the indictment.”

And in Ford, v. Chicago Milk Shippers’ Ass. 153 Ill. 166, this court, on page 179, said: “The purpose of the arrangement between this corporation and the stockholders thereof was to fix the price and control and limit the quantity of milk shipped. The purposes attempted to be accomplished through the corporation were illegal.”

The contention is also made that the common law on the subject of regulating and fixing prices in this State was repealed by sections 46 and 130 of the Criminal Code, and that for that reason the second and fourth counts of the indictment cannot be maintained. It is a common practice in the criminal courts to proceed against an offender either under the statute or at the common law, or under both. It is not claimed the common law upon the subject of regulating and fixing prices in this State is repealed by direct enactment. If repealed, therefore, it must be by implication. The courts do not favor repeals by implication. We have examined the sections of the statute pointed out and do not think they are so far repugnant to the common law as to work a repeal thereof, and section 46 recognizes in express terms the common law of conspiracy upon the subject under consideration to be in force in this State and provides for the punishment thereof. There being no repugnancy between the common law and the statute, the contention that the common law has been repealed is without force. In State v. Norton, 3 Zabr. 33, where a conspiracy statute did not contain a clause repealing the common law, it was held that the common law offense of conspiracy was not abolished by such statute, but that- every conspiracy which was indictable at common law before the passage of the act was still indictable.

It is urged that the first and third counts of the indictment cannot be sustained, as it is said section 46 of the Criminal Code, under which those counts were framed, was repealed by the Anti-trust act of 1891. Said section 46 provides, if two or more persons conspire or agree together to do an illegal act injurious to the public trade they shall be guilty of conspiracy, while section 1 of the Anti-trust act provides, if any corporation shall create, enter into, become a member of or a party to any pool, trust, agreement, combination, confederation or understanding with any other corporation to regulate or fix the price of any article of merchandise or commodity manufactured, mined, produced or sold in this State, such corporation shall be deemed guilty of conspiracy. The legislature by those enactments created two offenses. By section 46 it is made a criminal offense to conspire to do an illegal act injurious to the public trade, whether any act is done to effect the object of the conspiracy or not, while by the Anti-trust act of 1891 it is made a criminal offense to enter into an agreement to regulate or fix the price of any article of merchandise or commodity manufactured, mined, produced or sold in this State. Manifestly there is a distinction between a conspiracy to do an illegal act, as provided by section 46, and the actual performance of the act, as provided by the Anti-trust act of 1891. The conspiracy to do the act is one crime, the doing of the act is another. There is therefore no repugnancy between the two enactments.

It is contended that the fifth count of the indictment is defective by reason of the fact that it fails to allege the plaintiffs in error were "incorporated under the laws of this or the laws of some other State or country “for transacting or conducting any kind of business in this State.” The indictment alleges that the plaintiffs in error were incorporated, which we think was all that was necessary. While the language, “if any corporation organized under the laws of this or any other State or country for transacting or conducting any kind of business in this State,” is found in section 1 of the act of 1891, it becomes apparent, when the entire statute is read, that the object thereof was to prevent the formation of combinations to regulate and fix prices or to limit the amount of production in this State by corporations or by individuals doing business in this State, and that it is a matter of indifference whether such corporations are organized for transacting or conducting business in this State or not. If a corporation doing business in this State violates the provisions of said statute it is amenable to the terms thereof, regardless of where it was organized and whether or not it was authorized to transact or conduct business in this State. To hold that before the statute would apply to a corporation it must be shown that it was organized to transact and conduct business in this State would be to nullify the statute. It is also urged that the plaintiffs in error cannot be prosecuted by indictment for a violation of the act of 1891 because, it is said, the remedy is by action of debt. Section 3 of said act provides for the punishment of violators thereof by fine, and section 7 provides that the fine imposed for a violation of said statute may be recovered by an action of debt in the name of the People. Section 1, however, provides that a violation of said statute shall subject the offender to a prosecution by indictment. The word “may,” in section 7, is used in a permissive sense, and the State has the right to prosecute by indictment or may bring an action of debt to recover the fine imposed for a violation of the statute.

It is said the first and third counts fail to allege a criminal intent. The charge is, the plaintiffs in error unlawfully, fraudulently, maliciously, wrongfully and wickedly conspired and agreed together to do an illegal act. The language of the statute is: “If any two or more persons conspire or agree together, * * * with the fraudulent or malicious intent wrongfully and wickedly * * * to do any illegal act, * * * they shall be deemed guilty of a conspiracy.” A charge that the conspiracy was formed unlawfully, fraudulently, maliciously, wrongfully and wickedly, while not in the language of the statute, in effect charges the conspiracy to have been formed with a fraudulent or malicious intent wrongfully and wickedly to do an illegal act injurious to the public, and is sufficient.

We think the indictment, and each count thereof, sufficient, and that the court did not err in overruling the motion to quash the indictment.

The plaintiffs in error submitted to the trial court twenty-two propositions in writing, and asked that court to hold said propositions to be the law which should govern it in its decision of this case. The court declined to consider said propositions or to mark them “held” or “refused,” and it is contended that the action of the court in that regard constituted reversible error. We are of the opinion section 42 of the Practice act, which provides for the submission of propositions of law to the court where a case is tried without a jury, does not apply to the trial of a criminal case before the court without a jury. In the trial of an action at law before the court without a jury, under the practice in force in this State, the only method of preserving for review questions of law in the Appellate and Supreme Courts is by the submission of propositions of law. Such is not the practice in criminal cases. All the questions discussed in plaintiffs in error’s brief were properly preserved for review by the motion to quash, the motion to exclude evidence, the motion for a new trial and the motion in arrest of judgment. It was not necessary to preserve the questions by propositions of law. The court did not err in declining to consider the said propositions.

It is further contended that the facts found in the agreed statement o.f facts submitted to the trial court do not show the guilt of the plaintiffs in error, as it is said those facts may all be admitted to be true and the plaintiffs in error be innocent. It appears that the association of which the plaintiffs' in error were members was a voluntary association formed many years ago; that the plaintiffs in error, with one exception, were engaged in mining coal; that the association had an acting president and secretary; that in 1897 it assumed the name of “The Northern Illinois Soft Coal Association that its expenses were paid out of assessments made upon its members; that subsequent to 1897 its meetings were held in the city of Chicago; that its meetings were called by its secretary; that a copy of the minutes 'of its proceedings at each meeting was sent to its several members; that the association held meetings on March 26, 1900, September 26, 1902, October 13, 1902, and December 13, 1902, at which the price at which the members of the association should sell coal in northern Illinois was discussed and fixed; that each of the plaintiffs in error was represented at one or more of the meetings held in 1902; that circulars showing the price at which coal was to be sold by the members =of the association in numerous towns and cities of northern Illinois were prepared at the meetings held on September 26 and October 13 and sent to the members of the association, and by several of the members of the association sent to the trade in the territory in which the members of the association sold coal. The trial court held,—and we think properly, in view of those facts and other admitted facts found in this record, —that the members of said association had entered into a combination to regulate and fix the price at which coal should be sold in northern Illinois. That it is unlawful to enter into such a combination at common law and under the statutes of this State there can be no doubt. Craft v. McConoughy, 79, Ill. 346; More v. Bennett, 140 id. 69; Foss v. Cummings, 149 id. 353; Ford v. Chicago Milk Shippers’ Ass. supra; Harding v. American Glucose Co. 182 id. 551; People v. Sheldon, supra; Morris’ Run Coal Co. v. Barclay Coal Co. supra; State v. Buchanan, supra.

In Craft v. McConoughy, supra, a contract was entered into by the grain dealers of Rochelle, which, on its face, indicated they had formed a partnership for the purpose of dealing in grain, but the true object of which was to form a secret combination which would stifle all competition and enable the parties, by secret and fraudulent means, to control the price of grain, cost of storage and expense of shipment at such town. The court, on page 350, said: “While these parties were in business, in competition with each other, they had the undoubted right to establish their own rates for grain stored and commissions for shipment and sale. They could pay as high or low a price for grain as they saw proper and as they could make contracts with the producer. So long as competition was free the interest of the public was safe. The laws of trade, in connection with the rigor of competition, was all the guaranty the public required, but the secret combination created by the contract destroyed all competition and created a monopoly against which the public interest had no protection,”

In More v. Bennett, supra, the plaintiffs and defendants were members of the Chicago Law Stenographers’ Association, and the suit was brought to recover damages claimed to have resulted from an alleged breach of certain of the rules and by-laws of said association. The court, after an exhaustive review of the authorities, on page 79, said: “The doctrine of the foregoing decisions may, in our opinion, be fairly applied to the facts in the present case. While some of the cases cited involve elements not present here, the determining circumstance in all of them seems to have been a combination oi" conspiracy among a number of persons engaged in a particular business to stifle or prevent competition, and thereby to enhance or diminish prices to a point above or below what they would have been if left to the influence of unrestricted competition. All such combinations are held to be contrary to public policy, and the courts, therefore, will refuse to lend their aid to the enforcement of the contracts by whidh such combinations are sought to be effected.”

In Boss v. Cummings, supra, a combination was formed to force up the price of corn upon the Chicago markets. The venture proved to be a losing one. The appellants brought assumpsit against the others in the combination to recover moneys paid out in the transaction. On page 359 the court said: “It was an attempt to advance the price of corn beyond the natural market by a combination between the parties, and that the law condemns, as against public right, and void, and forbids the courts to lend their aid to those engaged therein. 'All compacts between merchants, speculators or any class of men to elevate or depress the market are injurious to the public interest and in restraint of trade. When such a purpose is apparent in a contract it strikes the agreement with nullity. Such a combination of dealers is nothing less than a conspiracy against trade, entered into for selfish purposes and tending to make the poor poorer and the rich richer. Whether the design is to bring the price of any commodity to a point below its value in a fair and open market or to raise it above its true worth, the illegality of the combination is the same. Such design will not be furthered by the courts, though there may be circumstances under which the object of such a contract does not sufficiently appear to expose the illegality. If the true character is known the contract will be held Void.’ * * * It makes no difference that the agreement is 'only in partial restraint of trade. If the public is injuriously affected (and that is necessarily so when the combination tends to increase the price of a commodity of general use) it is illegal.”

In Morris’ Run Coal Co. v. Barclay Coal Co. supra„ five coal companies in Pennsylvania entered into an agreement in New York to divide two coal regions of which they had control, to appoint a committee to take charge of their interests and decide all questions, and appoint an agent at a certain point in the State of New York, the coal mined to be delivered through him, each company to deliver its proportion at its own cost at the different markets, at such time and to such persons as the committee should'direct, the committee to adjust all prices, rates of freight, etc., and settlements to be made between the several companies monthly, and it was held in a suit brought by one of said companies against another to enforce a liability arising under said contract, that the contract was in violation of a statute of New York making it a misdemeanor to conspire to commit any act injurious to trade or commerce, and was also against public policy, and therefore illegal and void. The court laid down the rule, among other things, that every association formed to raise or depress prices beyond what they would be if left without aid or stimulus was criminal.

It is urged that the evidence does not show that the several plaintiffs in error entered into the said combination. The evidence does, however, show that the plaintiffs in error were all members of said association; that one of the objects of said association, viz., to regulate and fix the price at which coal should be sold by the members of said association in northern Illinois, was unlawful, and that at one or more of the meetings of the association at which the representatives of the several plaintiffs in error were present the price at which coal should be sold in northern Illinois by the members of the association was discussed, and that the price at which coal should be sold by the members of the association in northern Illinois was actually fixed at said meetings. The offense was committed so soon as the combination was formed, (Commonzvealth v. Hunt, 4 Mete, 111,) and after an unlawful combination is formed the acts of the different parties to the combination which tend to further its purposes bind all parties to the combination. In Lasher v. Littell, 202 Ill. 551, on page 555, the court said: “The conspiracy being established, everything said, written or done by either of the conspirators in execution or furtherance of the common purpose is' deemed to have been said, done or written by every one of them and may be proved against each.”

The fact that the effect of the action of the association was not to give the plaintiffs in error a complete monopoly of the coal trade in the territory in which they sold coal will not relieve plaintiffs in error from the criminal effect of forming said combination. (More v. Bennett, supra; Foss v. Cummings, supra; Texas Standard Cotton Oil Co. v. Adoue, supra.) In the last case it was held, to render the contract void it is not necessary that it should create a pure monopoly. And in United States v. Knight, 156 U. S. 1, it was said: “All the authorities agree that in order to vitiate a contract or combination it is not essential that its results should be a complete monopoly. It is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition.” And in More v. Bennett, supra, it was said (p. 80) : “True, the restraint is not so far-reaching as it would have been if all the stenographers in the city had joined the association, but so far as it goes it is precisely of the same character, produces the same results and is subject to the same legal objection. * * * We can see no legal difference between the restraint upon competition which it now exercises and that which it will exercise when it is in a position to dictate terms to all who are engaged in the business and to all who may wish to obtain the services of law stenographic reporters.”

The object of the association being against public policy and illegal, the individual members thereof are liable for the combined acts of all, (Ford v. Chicago, Milk Shippers’ Ass. supra,) and the plaintiffs in error cannot be relieved from the legal effect of their acts by reason of the fact that the organization was voluntary and that no articles of association were reduced to writing. (Harding v. American Glucose Co. supra; Patnode v. Westenhaver, 114 Wis. 460.) In the American Glucose case, supra, on page 617, the court said: “It makes no difference that the agreement for the illegal combination is not a formal written agreement. It may be a verbal agreement or understanding, or a scheme not embodied in writing but evidenced by the action of the parties.” In Patnode v. Westenhaver, supra, it was said: “An agreement expressly entered into was not necessary. A mere tacit understanding between conspirators to work to a common purpose is all that is essential to a guilty, actionable combination. Individual intent by two or more persons to do an unlawful act or a lawful act by unlawful means is the first step in that regard. Next follows concurrence between such individuals,—not concurrence of action, merely, (United States v. Barrett, (C. C.) 65 Fed. Rep. 62,) but concurrence in -mental intent to effect the common purpose, each to aid the others in that regard. Mutuality in the undertaking may be secured without any express agreement, and without a spoken or written word between the conspirators or a meeting of the members of the combine, or their even all knowing each other, or the precise thing to be accomplished or plans for its accomplishment, either in a general way or in detail, being distinctly stated by any member of the combine to any other member. If there is a meeting of minds, brought about in any way, to accomplish the common purpose, the essentials of a guilty combination are all satisfied.”

Nor can the plaintiffs in error be relieved by reason of the passage of the proviso of 1897 to the Anti-trust act of 1891. That proviso was unconstitutional, (People v. Butter Street Foundry and Iron Co. 201 Ill. 236,) and no right can be predicated upon an unconstitutional law. In Norton v. Shelby County, 118 U. S. 425, on page 442, it was said: “An unconstitutional act is not a law. It confers no rights; it imposes no duties; it affords no protection; it creates no office. It is, in legal contemplation, as inoperative as though it had never been passed.”

We find in this record no reasons for disturbing the judgments of the lower courts. The judgment of the Appellate Court will therefore be affirmed.

Judgment affirmed.