Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated, Ltd.

81 F. Supp. 301, 1948 U.S. Dist. LEXIS 1874
CourtDistrict Court, N.D. California
DecidedNovember 22, 1948
DocketNo. 27646
StatusPublished
Cited by5 cases

This text of 81 F. Supp. 301 (Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated, Ltd.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Suckow Borax Mines Consolidated, Inc. v. Borax Consolidated, Ltd., 81 F. Supp. 301, 1948 U.S. Dist. LEXIS 1874 (N.D. Cal. 1948).

Opinion

ROCHE, Chief Judge.

Plaintiffs bring this treble damage action under the Federal Anti-Trust Laws, 15 U.S.C.A. § 15 and 15 U.S.C.A. §§ 1 and 2, to recover $15,000,000.00 for damages alleged to have been sustained by them as a result of a general conspiracy on the part of the defendants, unlawfully and in violation of the Sherman and Clayton Acts, to monopolize and restrain trade in the borax industry. •

Plaintiffs allege that this said conspiracy came into existence in 1929 and continued in force up to and through the date of the commencement of this action, September 11, 1947. Plaintiffs complain that this conspiracy was a fraud upon them which resulted in the destruction of their businesses and that they, the plaintiffs, only acquired knowledge of the existence o,f such conspiracy iñ 1944 as a result of an action brought at that date by the United States against certain of the defendants for alleged violations of the Federal Anti-Trust Laws.

The complaint further alleges that certain overt acts in furtherance of the conspiracy took place from 1913 to 1942, with the following results. .

In 1913, John K. Suckow, whose estate is a party plaintiff; sold to the defendant United States Borax 'Company (hereafter referred .to as U.S.B.C.), for $4,500.00, all of his interest in a certain piece of .California property containing a deposit of colemanite, which is a source of borax. In 1917, John K. Suckow (hereafter referred to as Suckow) sold a 75% interest in a similar piece of property to defendant Stauffer Chemical Company for the sum of $60,000.00 and in consideration of the holding by him of the position of manager in the operating company that was to work the mineral deposit. In 1918, Suckow, the Stauffer Chemical Company and defendant Pacific Coast Borax Company (hereafter referred to as P.C.B.C.) entered into an agreement creating' the Suckow Chemical Company, with Suckow controlling the company, and owning certain shares of its [303]*303stock. Plaintiffs allege that Suckow was prevented from ever carrying on or operating the Suckow Chemical Company as had been, contemplated and that for this reason, Suckow," in 1925, sold all of his stock in the Suckow Chemical Company to defendant P.C.B.C. for $150,000.00. Suckow paid $10,000.00 as commission for such sale to one Victor C. Emden, in ignorance of the alleged fact that Emden was acting as agent for P.C.B.C. at the time of the sale.

In 1918, an agreement was entered into between Suckow and U.S.B.C. providing that each should have a full one half interest in certain mining locations (for which claims had been filed by Suckow in 1916) to which patents were to be acquired by U.S.B.C. (whose interest was derived from a third party who had made adverse claims to certain of the locations in 1917). This agreement of 1918 was performed in part, but subsequent events led to the declaration by each that the other was failing to perform according to the agreement. This led to an action which was instituted by the Borax Consolidated, Ltd. (hereafter referred to as B.C.L.) in 1927 in the Superior Courts of California, whereby an injunction was sought against mining operations by Suckow on certain of the property involved in the 1918 agreement, an accounting by Suckow to the plaintiff B.C.L. and a determination of the rights of B.C. L. This action was dismissed by B.C.L. in 1930. In 1929 Suckow brought action against U.S.B.C. and certain of the other defendants herein to compel the transfer to him of an interest in certain mining properties according to the 1918 agreement. Thi's action ended in a consent judgment being entered according to an agreement of 1934 as hereafter described.1

In 1929 the Suckow Borax Mines Consolidated, Inc. was created and John K. Suckow transferred all of his mining properties to such company (hereafter referred to as the Suckow Company).

In 1930 B.C.L. brought an action in the United States District Court, seeking an injunction restraining the Suckow Company from further mining operations, damages and an accounting from the Suckow Company. The injunction was denied but the plaintiffs allege that the Suckow Company was forced to cease its mining operations because of the allegedly exorbitant value placed upon the ore as a result of the trial upon this action in 1932. In 1931 P. C.B.C. and others of the defendants caused an involuntary petition in bankruptcy to be filed against the Suckow Company, causing the Suckow Company to be duly adjudged a bankrupt in 1933, with a trustee appointed to manage it. The Suckow Company made an appeal to the U. S. Circuit Court of Appeals for the Ninth Circuit, 72 F.2d 1020, but dismissed such appeal as a part of the agreement of 1934. In 1934, P.C.B.C. secured a lease of the mining properties of the bankrupt company for a period of five years. Plaintiffs then proceeded upon further litigation to contest this lease. In 1932, P.C.B.C. brought a patent infringement action against the Suckow Company and an injunction was issued by the U. S. District Court restraining the Suckow Company from using a particular method for calcining borax. An appeal was likewise taken from this order.

In 1934, an agreement was entered into between the plaintiffs and P.C.B.C. providing for the transfer of certain parcels of real property to P.C.B.C., the payment of $150,000.00 to Suckow, the release of all possible claims against any of the defendants, the mutual dismissal of all legal actions by each of the parties against any of the others and the granting of another lease from the trustee of the bankrupt company’s property. In 1938, the bankruptcy proceedings were terminated and the property restored to the Suckow Company, subject to the terms of the lease mentioned.. In Í942, the plaintiffs sold to the defendants all of the mining property that had been involved in the prior transactions, receiving therefor the sum of $350,000.00.

The plaintiffs further allege that the defendants caused a destruction of some of their mining properties during the period defendants were in possession under the lease and that the defendants also caused the destruction of the business possessed by the' plaintiffs with certain European companies, which offered the only outlet for plaintiff’s product.

[304]*304Plaintiffs claim that all of these events were caused or entered into by them only because of harassments, persecutions and threats on the part of the defendants and that plaintiffs were unaware of the general conspiracy among the defendants to monopolize the borax industry.

It is plaintiffs’ position that this action is brought upon the existence of the general conspiracy and the damages suffered therefrom. The above described affairs are presented by plaintiffs not as the basis of the cause of action for damages, but as evidence of overt acts on the part of the defendants for the purpose of proving the existence of such conspiracy.

To summarize, plaintiffs present their case according to the following points. This is an action in equity upon the continuing conspiracy, which originated in 1929, with overt acts shown only for the purpose of demonstrating such conspiracy. The statutes of limitation are not controlling, since this is not an action at law, but if they were controlling, they would be tolled by reason of a Federal moratorium statute running from 1942 to 1946. Act Oct. 10, 1942, 56 Stat. 781, as amended, Act June 30, 1945, 59 Stat. 306, 15 U.S.C.A. § 16 note.

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Bluebook (online)
81 F. Supp. 301, 1948 U.S. Dist. LEXIS 1874, Counsel Stack Legal Research, https://law.counselstack.com/opinion/suckow-borax-mines-consolidated-inc-v-borax-consolidated-ltd-cand-1948.