Thomsen v. Cayser
243 U.S. 66 (1917)

Annotate this Case

U.S. Supreme Court

Thomsen v. Cayser, 243 U.S. 66 (1917)

Thomsen v. Cayser

No. 2

Argued April 28, 29, 1914

Restored to docket for reargument June 21, 1915

Reargued January 19, 22, 1917

Decided March 6, 1917

243 U.S. 66

Syllabus

For review in this Court of a final judgment of the circuit court of appeals directing that an action be dismissed, the writ of error should go to that court, and its efficacy is not impaired by the circumstances that, before allowance of the writ by that court, the trial court, obeying the mandate, has entered judgment of dismissal and has adjourned for the term before any application has been made to recall its action.

When parties in the circuit court of appeals, desiring to shorten the litigation by bringing the merits directly to this Court, consent that a final judgment may be made against them in lieu of one remanding the cause for a retrial, the consent is not a waiver of errors relied on, and a final judgment entered as requested is reviewable here.

Foreign owners of steamship lines, common carriers between New York and ports in South Africa, formed a combination, or "conference," to end competition among themselves and suppress it from without. They adopted uniform net tariff rates, and, for the purpose of constraining shippers to use their ships and avoid others, exacted deposits ("primage") of ten percent of and in addition to the net freight charges, to be repaid as rebates or "commissions" in each case upon the lapse of a period of many months, but then

Page 243 U. S. 67

only if the shipper, up to the date set for repayment, had used the vessels of the coalition to the exclusion of all competitors. In respect of particular consignments the shipper's right to the refund was made similarly dependent on the "loyalty" of his consignee to vessels of the combination. The hold thus gained on shippers through the accumulation of their deposits enabled the coalition to maintain its tariff and custom, in general, while cutting rates with competitors in particular cases by means of "fighting ships." Several important rivals were gathered into the combination from time to time, and a virtual monopoly was effected. Held that the combination violated the Sherman Act.

Common carriers are under a duty to compete, and are subject in a peculiar degree to the policy of the Sherman Act.

A combination is not excusable upon the ground that it was induced by good motives and produced good results.

The conduct of property embarked in the public service is subject to the policies of the law.

The fact that the participants might have withheld the commercial service they rendered -- i.e., stayed out of the business -- cannot justify an unlawful combination.

A combination affecting the foreign commerce of this country and put in operation here is within the act, although formed abroad, and

Those who actively participate in managing the affairs of the combination in this country are liable under § 7 although they are not the principals.

When more than a reasonable rate is exacted as a result of an unlawful combination, the excess over what was reasonable affords a basis for the damages recoverable under § 7, and whether and to what extent such rate was unreasonable are questions determinable by the jury on proper evidence and instructions.

When claims for damages for loss of custom are definitely stated, a charge advising the jury that the burden of proof is on the plaintiff, that they must not allow speculative damages, and that they are not required to guess at amounts, but should be able to calculate them from the evidence, sufficiently guards against the danger of supposititious profits' being considered as an element of the verdict.

Semble that a general verdict for an amount which equals a particular claim of damages and interest may be assumed to have been responsive to that claim alone, although there were others which were submitted to the jury.

Failure to give an instruction upon the burden of proving rates unreasonable

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held at most a harmless error in view of a painstaking trial and careful instructions upon the estimation of damages.

The trial court, in its sound discretion, may allow a new cause of action to be set up by amendment of the complaint.

190 F. 536 reversed.

Action, brought in the Circuit Court of the United States for the Southern District of New York, by plaintiffs in error against defendants in error and others under the Sherman Act to recover damages for injuries sustained as the result of a combination in restraint of foreign trade.

The defendants, it is charged, being common carriers between New York and South African ports, did, under certain company names, some time prior to December, 1898, enter into a combination and conspiracy in restraint of trade and commerce between New York and ports in South Africa, to be rendered effective by making certain discriminations in rates of freight to be charged which were calculated to coerce and prevent plaintiffs and other shippers and merchants similarly situated from employing such agencies and facilities of transportation as might be afforded them by other common carriers.

For such purpose, they united under the name of "The South African Steam Lines," and distributed a circular{|243 U.S. 661|1}

Page 243 U. S. 69

(Exhibit A) promising to pay shippers by their lines 10% upon the net amount of freight at tariff rates received on shipments from the United States to Africa, the commission to be computed every six months up to the 31st of January and the 31st of July in each year, and to be payable nine months after such respective dates, but only to shippers who shipped exclusively by their lines to certain African ports, and provided that the shippers directly or indirectly have not made or have not been interested in any shipments by other vessels.

The commission is not payable on the goods of any consignee who directly or indirectly imports goods by vessels other than those despatched by the combining lines.

These terms, it is charged, are against public policy, and in restraint of trade.

About the middle of the year 1901, the defendant Deutsche Dampschiffahrts Gesellschaft, Hansa, and the firm of Funch, Edye, & Company, as its agent, offered to transport

Page 243 U. S. 70

merchandise to South African ports at reasonable rates and lower than those imposed by the other defendants. Thereupon, the other defendants, for the purpose of avoiding the competition of those carriers, accepted them into the scheme and combination, and there was agreement between them to continue the monopoly, and another circular was issued like the first, including only the additional announcement that the Deutsche Dampschiffahrts Gesellschaft, Hansa, had been added as one of the parties to the first-named agreement. The circular is attached to the complaint as Exhibit B.

Subsequently, the defendants adopted a verbal agreement that altered the circulars to the effect that the so-called "loyal" consignees could collect the so-called rebates regardless of whether the shippers were also loyal, but on the condition that, where the shippers and consignees were both loyal, the rebates would be paid to the shippers, while if the consignee alone were loyal, the rebate would be paid by the defendants in London direct to the so-called loyal consignee.

Defendants have not despatched steamers to African ports at stated and regular dates, but have placed steamers on berth to receive general cargo only at such times and for such ports in South Africa as they deemed best for their private gain and profit.

By reason of the monopoly so created by defendants, shippers -- among whom are plaintiffs -- have been compelled to submit to hardships and inconvenience, and to pay unreasonable and higher rates to such extent as to leave at the present time in the possession of defendants collectively, as plaintiffs are informed, about one and one-half million dollars representing the extortion of their rates, and that of such amount

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