Ex Parte Rice

61 So. 2d 7, 258 Ala. 132, 1952 Ala. LEXIS 338
CourtSupreme Court of Alabama
DecidedJune 19, 1952
Docket5 Div. 538
StatusPublished
Cited by17 cases

This text of 61 So. 2d 7 (Ex Parte Rice) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ex Parte Rice, 61 So. 2d 7, 258 Ala. 132, 1952 Ala. LEXIS 338 (Ala. 1952).

Opinion

FOSTER, Justice.

This is a petition directed to' this Court for a writ of mandamus to the circuit judge sitting in Lee County, Alabama, to require him to vacate his order overruling petitioner’s motion to require plaintiff in the case of Sinclair Refining Co. v. Rice, pending in that court, to answer certain interrogatories propounded under Equity Rule 39, Code 1940, Tit. 7 Appendix.

The equity of the bill has been sustained on demurrer. Rice v. Sinclair Refining Co., 256 Ala. 565, 56 So.2d 647. A reference to the report of that case shows that the bill was to specifically perform a contract which granted complainant an option to purchase certain property, and which option has been accepted within its terms so as to justify such relief according to the allegations of the bill. Briefly stated, the contract is alleged to have been made between them on *135 January 8, 1936, whereby defendants agreed to build a gasoline filling station on a certain lot owned by defendants in Auburn, Alabama, and to lease the same with the lot to the plaintiff for a period of ten years at a stipulated monthly rental, with an option to extend the term for another five years, and with another option that plaintiff, as lessee, would have the right to purchase the property for a specified sum at any time during the lease or any extension thereof. The bill alleges that plaintiff exercised the option and tendered payment of .the stipulated sum and demanded a conveyance. On defendants refusal, plaintiff filed this bill for specific performance and paid the money into court and offered to do equity. After its equity was upheld on appeal to this 'Court, defendants filed an answer and propounded interrogatories to plaintiff. Certain of those interrogatories the plaintiff declined to answer, and defendants filed a motion to require them to be answered. The 'court overruled the motion. This petition is to review that ruling. The trial judge has waived the issuance of a rule nisi, and demurred to the petition and also answered it. Submission is on the demurrer and answer. They present the same questions for decision by this Court.

It is shown by the record, a certified copy of which is attached to the petition, that the particular reason for not answering the interrogatories is that they call for a disclosure of matter immaterial to the issues made by the bill and answer. So that, we will first seek to determine whether the matter in the answer to which they relate is a good defense to the right of plaintiff to specific performance. That is the question argued by counsel.

The pleadings show that the parties operated under the contract until shortly before the expiration of the lease, when plaintiff undertook to exercise its option to purchase the property. The defense is that the execution of the contract containing the option right, now sought to be enforced, was made and entered into in 1936, as a feature of a nation wide scheme to create a monopoly; and that the Sinclair’s further unlawful plan or scheme to lease or sublease these gasoline filling stations to local dealers, either directly or through its region-' al commission agent for limited tei'ms or at-its will thereby placing such dealers under the control of Sinclair Refining Compan/ as to the products to be handled by them; and that by express or implied agreements these dealers were required to 'handle Sinclair’s products and its sponsored products exclusively and without deviation. The answer further alleged that the lease-option in the instant case was an integral part of said unlawful scheme for restraining and monopolizing commerce a'mong the states and within the State of Alabama, which could not be perpetuated successfully without the instant lease-option contract and others of like tenor; that as a’ part of its said plan or scheme the complainant had drafted or had had drafted the form of lease and option used in this case and had used the same on numerous occasions in furtherance of its said plan or scheme, and was regularly using the same, or substantially the same, at the time the instant lease-option was executed; that the lease-option contract that Sinclair Refining Company induced the present petitioners and others to enter into for the lease and option sale of their property were necessary links in the chain of contracts of Sinclair Refining Company to acquire, maintain and preserve an illegal restraint in commerce; that at the time of the execution of said lease-option in the instant case it was then and is now against the public policy of this State and of the Federal Government to aid in the enforcement of agreements made with intent to acquire a monopoly or in restraint of trade; that plaintiff was at that time engaged on a large and nation wide scale in every phase of the petroleum industry, and that the acquisition of the station i-n question, and additional stations throughout the land, would be a vital step in perfecting a virtual petroleum monopoly, and that the acquisition of the instant property was with the intent to control this retail outlet of petroleum to restrain a competitor from using the same.

Petitioners cite the case of Standard Oil Co. v. United States, 337 U.S. 293, 69 S.Ct. *136 1051, 93 L.Ed. 1371. That was a suit by the United States against Standard Oil Company for a declaratory judgment to the effect that its exclusive supply .contracts with independent dealers in petroleum products and automobile accessories are illegal, and sought an injunction. The court held that Standard Oil Company violated section 3 of the Clayton Act, 15 U.S.C.A. § 14, and therefore did not consider the application of the Sherman Act, 15 U.S.C.A. §§ 1, 2 and 3. It was there observed that the Clayton Act is narrower than the Sherman Act. The Sherman Act prohibits a contract in restraint of trade or commerce, and declares the same void. It also makes it a crime to monopolize or attempt to monopolize any part of trade or commerce between the states.

The Clayton Act, section 3, supra, applies to one engaged in commerce (interstate) and makes it unlawful for him to lease, sell or contract to sell goods, wares or merchandise, machinery, supplies or other commodities for use in consumption or resale in the United States on condition or understanding that the lessee or purchaser shall not use or deal in the goods of a competitor of the seller, “where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.”

There is no attempt to defend on the idea that the contract here in question is a lease, sale or contract to sell goods on condition that the lessee or purchaser shall not use or deal in goods of a competitor where the effect is to substantially lessen competition or tend to create a monopoly.

There is here involved no lease or sale of a commodity, nor exclusive supply contract as in the Standard Oil case, supra. The defense here is wholly outside the narrow limits of the Clayton Act. So we inquire whether it shows a contract in restraint of trade or commerce under the Sherman Act. Certainly, on its face the contract to sell to plaintiff the filling station to be built at Auburn is not in restraint of trade or commerce. The contract has no apparent effect as a restraint on commerce nor to lessen competition.

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Bluebook (online)
61 So. 2d 7, 258 Ala. 132, 1952 Ala. LEXIS 338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ex-parte-rice-ala-1952.