Trowbridge Farm Supply Co. v. W. R. Grace & Co.

403 N.E.2d 311, 82 Ill. App. 3d 1140, 38 Ill. Dec. 223, 1980 Ill. App. LEXIS 2657
CourtAppellate Court of Illinois
DecidedApril 11, 1980
Docket15580
StatusPublished
Cited by7 cases

This text of 403 N.E.2d 311 (Trowbridge Farm Supply Co. v. W. R. Grace & Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trowbridge Farm Supply Co. v. W. R. Grace & Co., 403 N.E.2d 311, 82 Ill. App. 3d 1140, 38 Ill. Dec. 223, 1980 Ill. App. LEXIS 2657 (Ill. Ct. App. 1980).

Opinion

Mr. JUSTICE GREEN

deliveréd the opinion of the court:

This case involves a civil suit brought under the Illinois Antitrust Act (Ill. Rev. Stat. 1977, ch. 38, par. 60 — 1 et seq.).

Plaintiff Trowbridge Farm Supply Co. (TFS) appeals from a judgment of the circuit court of Macon County entered on June 6,1978, on a verdict directed against it at the close of the presentation of its case. The judgment was entered in favor of defendants W. R. Grace and Co. (Grace), Allied Chemical Corporation (Allied), Olin Corporation (Olin), and several individual employees of those corporations. After entering the judgment, the trial court (1) granted a mistrial as to the remaining defendants to the suit, Occidental Petroleum Corporation (Occidental) and two of its employees, and (2) made a finding, pursuant to Supreme Court Rule 304(a) (73 Ill. 2d R. 304(a)) that no just reason existed to delay appeal of the judgment.

The complaint alleged that defendants damaged TFS by conspiring to fix prices, fix production levels, or unreasonably restrain trade as prohibited by sections 3(l)(a), 3(l)(b), and 3(2) of the Act (Ill. Rev. Stat., ch. 38, pars. 60 — 3(1)(a), 60 — 3(l)(b), 60 — 3(2)), respectively. TFS presented no evidence which can be accurately characterized as tending to prove that defendants engaged in price fixing or the fixing of production levels and plaintiff conceded as much in a post-trial motion to set aside the directed verdicts. The essence of TFS’ contention is that it presented sufficient evidence to go to the jury that defendants conspired to unreasonably restrain trade by their concerted efforts to interfere with and defeat a favorable sales contract it had with Sinclair Oil Corporation (Sinclair). The statutory basis for this ground is section 3(2) of the Act which provides:

“3. Every person shall be deemed to have committed a violation of this Act who shall:

(1) * 9 *;or

(2) By contract, combination, or conspiracy with one or more other persons unreasonably restrain trade or commerce.” Ill. Rev. Stat. 1977, ch. 38, par. 60-3(2).

Section 3(1) and (2) was modeled on section 1 of the Sherman Act (26 Stat. 209 (1890), 15 U.S.C.A. §1 (1975)).

Evidence presented by TFS but not concerning the defendants, in whose favor directed verdicts were granted, tended to establish the following set of facts.

TFS was incorporated in 1967 for the purpose of wholesale marketing of fertilizer. Anhydrous ammonia is an agricultural fertilizer widely used in the farm belt, but its sale was not a substantial part of plaintiff’s business in 1967 and 1968. In late 1968, Jack Shirley, a salesman for Sinclair, approached Robert Trowbridge, owner of TFS, attempting to sell a sizable tonnage of anhydrous ammonia to TFS. Sinclair had built a substantial production facility for this type of fertilizer at Fort Madison, Iowa, and was expecting to go into production on February 10,1969. The parties eventually orally agreed to a sale by Sinclair to TFS of 10,000 tons, with TFS to have the option of taking an additional 10,000 tons at the same price. That price was $30 per ton if delivered by rail and $31.50 if delivered by truck. Both required delivery only within the State of Illinois. Upon receiving confirmation of the sale from Shirley by telephone on February 4, 1969, Trowbridge contracted with TFS customers to furnish them with this fertilizer.

During the period in question, most anhydrous ammonia was sold and applied in the spring. Shirley told Trowbridge that Sinclair anticipated having enough of this fertilizer to meet contract commitments for the 1969 season because of the new plant. He also told Trowbridge that Sinclair was quoting low prices to wholesalers in order to try to corner this market. During the 1968 season the actual price for sale to wholesalers had ranged between $40 to $50 per ton with price lists from producers stating a purported price of from $45 to $60 per ton.

On February 12 and 13, 1969, a conference on fertilizer dealership and company operations, sponsored by the National Plant Food Institute, was held at the Palmer House in Chicago. During the conference, Dwayne Shanle, a TFS employee, was at his home office when he received a phone call from Jim Burfield of Occidental in which Burfield told him that the ammonia market was being “torn up” by the fact that the TFS contract price was so far below the price at which the major companies were selling ammonia. Burfield indicated that TFS was selling ammonia in the vicinity of $35 a ton and the major companies were selling at around $50 per ton. Burfield advised Shanle to get Trowbridge to leave the Palmer House conference.

A day or two after the conference, Sinclair phoned Trowbridge and told him that tonnages for one of TFS’ customers had been approved but a few days later Sinclair phoned again to say that Sinclair would not honor its commitment to TFS. A few days later Trowbridge had a phone conversation with Robert C. Moreau, a superior of Shirley’s at Sinclair, who also stated that Sinclair would not honor the contract. On February 26, 1969, and after Trowbridge had his attorney contact Sinclair, Moreau met with Trowbridge at Decatur and told Trowbridge that Sinclair was having trouble with production at the Fort Madison facility but that Sinclair would try to get TFS its fertilizer. Trowbridge then agreed to try to get its customers to reduce their orders. In early March 1969, Sinclair sent Trowbridge a document purporting to be a form to express their contract in writing but the document contained a price escalation clause which was not part of their oral agreement. In early April Trowbridge agreed to sign the document as presented, thus agreeing to the escalation clause.

On April 12, 1969, TFS obtained its first delivery under the contract when one of its customers who transported the fertilizer himself-was supplied with 2400 tons at a Sinclair distribution facility at Peru, Illinois. Although TFS had been informed that the fertilizer could be obtained there, the customer was given service only after phoning Sinclair’s Chicago office. Then the customer was required to wait in line with his trucks while other trucks arriving later were served first. Subsequently, Moreau informed Trowbridge by phone that no more ammonia would be available at the Peru facility and that, if possible, he would arrange for TFS to get the balance of the fertilizer contracted for from companies with which it had agreements to do this. Agreements were apparently common in the trade whereby one company would furnish fertilizer to customers of another company when the first company’s facilities were much closer to the company. Accounts between the companies would then be kept with the accounts being balanced by reciprocal furnishing of these services. For a while TFS was able to obtain some of the contracted fertilizer through an Apple River Company terminal at Niota, Illinois, but was cut off from that in June 1969 and told by an agent of Sinclair that it could not fulfill the balance of the contract.

Various witnesses testified to believing or having heard conversations among persons in the fertilizer business that the price under the Sinclair-TFS contract was very low.

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Bluebook (online)
403 N.E.2d 311, 82 Ill. App. 3d 1140, 38 Ill. Dec. 223, 1980 Ill. App. LEXIS 2657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trowbridge-farm-supply-co-v-w-r-grace-co-illappct-1980.