The jurisdiction of this Court, under § 709 Rev.Stat., to review
the proceeding of state court is limited to specific instance of
denial of federal right specially set up in and denied by the state
court.
This court does not review, but accepts a conclusive, the
findings of fact made by the state court.
Although the state court may incorrectly charge as to certain
provisions of a statute, if the jury finds that defendant has
violated those provisions and also other provisions not involving
any federal question, and only one penalty is assessed, the
judgment rests on a nonfederal ground sufficient to sustain it, and
this Court has not jurisdiction to review it under 709
Rev.Stat.
Although an agreement to violate the antitrust law of a state
may be made outside of the state, if the parties thereto or their
agent execute it, or attempt so to do, within the state, they are
under the jurisdiction of the state, and their conviction for such
act is not without due process of law.
Page 212 U. S. 87
States having power to prevent unlawful combinations in
restraint of trade may provide the procedure for enforcing the
same, subject only to the qualification that such procedure must
not deny or conflict with fundamental or constitutional rights.
Even though it would be giving a penal statute a retroactive
effect to make it apply to an unlawful agreement executed prior to
the passage of the act by defendant's predecessor in interest,
defendant is subject to conviction for violating the act after its
enactment by making itself a party to and carrying out its illegal
provisions.
Where defendant has had a fair trial and the question of
liability has been submitted to a jury and the judgment reviewed
and sustained by an appellate court, this Court will not hold that
there has been a deprivation of due process of law because the
state statute permitted, and the court charged, that conviction
could be had not only for acts accomplishing, but also for those
tending or reasonably calculated to bring about, the things
prohibited.
The antitrust laws of Texas involved in this case are not
unconstitutional as depriving any one of due process of law because
vague and indefinite as prohibiting acts which "tend" or are
"reasonably calculated" to restrain trade and prevent
competition.
The fixing of punishment for crime and penalties for unlawful
acts is within the police power of the state, and this Court cannot
interfere with state legislation in fixing fines, or judicial
action in imposing them, unless so grossly excessive as to amount
to deprivation of property without due process of law.
Where a state antitrust law fixed penalties at $5,000 a day,
and, after verdict of guilty for over 300 days, a defendant
corporation was fined over $1,600,000, this Court will not hold
that the fine is so excessive as to amount to deprivation of
property without due process of law where it appears that the
business was extensive and profitable during the period of
violation, and that the corporation has over $40,000,000 of assets
and has declared dividends amounting to several hundred percent
106 S.W. 918 affirmed.
The facts are stated in the opinion.
Page 212 U. S. 96
MR. JUSTICE DAY delivered the opinion of the Court.
This case was begun in the state District Court of Travis
County, Texas, to forfeit the permit of the plaintiff in error, the
Waters-Pierce Oil Company, a corporation of the State of Missouri,
to conduct business in the State of Texas, and to assess penalties
against it for violation of the antitrust laws of that state. The
prosecution was under two laws of the state -- one of 1899 and one
of March 31, 1903. The proceeding was brought by the Attorney
General of Texas and the County Attorney of Travis County, to
recover penalties, under the act of 1899, from the thirty-first day
of May, 1900, until the thirty-first day of March, 1903 at the rate
of $5,000 per day, and under the act of 1903, from the thirty-first
of March, 1903, till the 29th of April, 1907, at the rate of $50
per day, and to cancel the permit of the defendant to do business,
other than interstate, in Texas.
The jury returned a verdict against the defendant, and
assessed
Page 212 U. S. 97
penalties under the act of 1899 from May 31, 1900, to March 31,
1903 -- 1,033 days. Such penalties were assessed at the rate of
$1,500 a day during that period, being the total sum of $1,549,500.
The jury also found against the defendant under the act of 1903,
and assessed the penalties for each day between April 1, 1903, and
April 29, 1907 -- 1,480 days -- at the rate of $50 per day, making
a total of $74,000. The jury further found that the permit of the
defendant to do business in the State of Texas should be cancelled.
Thereupon the court rendered a judgment for the State of Texas for
the sum of the penalties assessed, $1,623,500, and ordered a
cancellation of the defendant's permit to do business in the state
except as to its interstate commerce business. This judgment was
affirmed upon appeal to the court of civil appeals of Texas (106
S.W. 918) and, upon application to the Supreme Court of Texas, that
court refused to grant a writ of error, and the case was brought
here.
The case was submitted upon oral arguments and elaborate briefs
and a voluminous record. It was argued in many aspects as though
this were a proceeding in error to review the weight of the
evidence adduced in the state courts, to reexamine the rulings of
the court upon the admissibility of testimony, and to determine the
effect of the statute of limitations in the state.
The jurisdiction of this Court to review the proceedings of the
state courts, as we have had frequent occasion to declare, is not
that of a general reviewing court in error, but is limited to the
specific instances of denials of federal rights, whether those
pertaining to the constitutionality of federal or state statutes,
or to certain rights, immunities, and privileges of federal origin,
specially set up in the state court, and denied by the rulings and
judgment of that court. Sec. 709, Rev.Stat. Nor does this Court sit
to review the finding of facts made in the state court, but accepts
the findings of the court of the state upon matters of fact as
conclusive, and is confined to a review of questions of federal law
within the jurisdiction conferred upon this Court.
Quinby v.
Boyd, 128 U. S. 489;
Egan v. Hart, 165 U. S. 188;
Downer v. Richards, 151 U. S. 658;
Thayer v.
Spratt, 189
Page 212 U. S. 98
U.S. 346. We shall not, therefore, undertake to follow counsel
in the consideration of all the questions argued, but shall limit
our review to questions of a federal nature which we deem to be
properly made in this record and essential to the decision of the
case.
Epitomizing the Texas antitrust statutes for the purposes of his
charge, the learned judge who presided in the district court,
speaking first of the act of 1899, stated them as follows:
"For the purposes of this charge, you are instructed that this
act made it unlawful for any corporation transacting or conducting
any kind of business in this state to enter into, or become a party
to, any agreement or understanding with any other corporation or
individual to fix or regulate the price in Texas of any article of
manufacture or merchandise, or to control or limit in Texas the
trade in any article of manufacture or merchandise."
"You are further instructed that said statute also made it
unlawful for any corporation transacting or conducting any kind of
business in this state to bring about or permit any union or
combination of its capital, property, trade, or acts with the
capital, property, trade, or acts of any other person or
corporation, whereby the price in Texas of any article of
manufacture or merchandise would be fixed or sought to be fixed,
regulated or sought to be regulated; or whereby the price in Texas
of any article of manufacture or merchandise would be reasonably
calculated to be fixed or regulated, or whereby the trade in such
article of manufacture or merchandise in Texas would be sought to
be controlled or limited, or would be reasonably calculated to be
controlled or limited."
"The statute known as the antitrust law of 1903 became effective
on March 31, 1903, and has since continued in force. For the
purposes of this charge, you are instructed that this statute
defines a trust to be a combination of capital, skill, or acts by
two or more persons, firms, corporations, or associations of
persons, or either two or more of them, for either, any, or all of
the following purposes,
viz.: "
Page 212 U. S. 99
"1. To create or which may tend to create or carry out
restrictions in trade or commerce in Texas, or to create or carry
out restrictions in the free pursuit in Texas of any business
authorized or permitted by the laws of this state."
"2. To fix, maintain, or increase the price of merchandise in
Texas."
"3. To prevent or lessen competition in Texas in the sale of
merchandise."
"4. To abstain from engaging in business or in the sale of
merchandise in Texas, or any portion thereof."
"Said statute of 1903 further defines a monopoly to be a
combination or consolidation of two or more corporations when
effected in any of the following methods,
viz:"
"1. When the direction of the affairs of two or more
corporations is in any manner brought under the same management or
control for the purpose of producing, or where such common
management or control tends to create, a trust, as above
defined."
"2. When any corporation acquires the shares or certificates of
stock, franchise, or other rights, or the physical properties or
any part thereof of any other corporation for the purpose of
preventing or lessening, or where the effect of such acquisition
tends to affect or lessen, competition, whether such acquisition is
accomplished directly or through the instrumentality of trustees or
otherwise."
"3. Oil, all other products of petroleum, and goods, wares, or
merchandise of any character which the defendant or its agents may
have purchased or acquired in any manner outside of the State of
Texas, and caused to be transported to its agents or others within
the state, are the subjects of interstate commerce when they enter
this state, and so remain until such commodities are removed from
the original tanks, vessels, or other packages in which they are
imported into the state and become mixed with the common mass of
property of similar character in this state. The antitrust laws of
Texas have no reference to agreements or pools or arrangements of
any character concerning subjects of interstate commerce, and no
agreement,
Page 212 U. S. 100
pool, or other arrangement, if any, which the defendant may have
entered into with reference to the sale of any subject of
interstate commerce can be considered by you as violating any
antitrust law of Texas. But neither oil purchased by the defendant
from the Corsicana Refinery or elsewhere in Texas, nor other
merchandise purchased by defendant at points in Texas, nor such oil
or other merchandise purchased by defendant at points outside of
the state, and transported into the state, and removed from the
original packages or vessels in which it was brought into the
state, and mingled with other property of similar character in the
state, is the subject of interstate commerce, but, on the contrary,
is the subject of local commerce, and any agreement or pool or
arrangement entered into by defendant with reference to such
property or the sale thereof, if any such sale there were, would be
unlawful, if in violation of the antitrust laws of this state."
The penalties denounced by the act of 1899 were not less than
$200 nor more than $5,000 for each day the defendant might be found
to have violated the law; under the act of 1903 the penalty was
fixed at $50 for each day, and a forfeiture of the right to do
business within the State of Texas was declared.
The complaint in the case is voluminous, and its averments
contain the history of the so-called conspiracy between the
Waters-Pierce Oil Company and a number of persons composing the
Standard Oil Company, beginning in January, 1870, for the purpose
of monopolizing and controlling the business of refining and
transporting and selling petroleum and similar products throughout
the United States and in the State of Texas. It charges that the
Waters-Pierce Oil Company, incorporated in 1878, and the
predecessor of the defendant company, was a party to that
conspiracy, and, for the purpose of carrying out the same, had
entered into contracts with corporations and individuals engaged in
the business of selling petroleum and similar products within the
state, and suppressed competition therein. It charges that the
Waters-Pierce Oil Company had entered into an agreement with the
Standard Oil Company of New Jersey
Page 212 U. S. 101
for the purpose of monopolizing the trade in petroleum and for
the purpose of carrying out certain contracts and conspiracies,
entered into for the purposes aforesaid, and permitted the Standard
Oil Company to acquire a majority of the shares of stock of the
Waters-Pierce Company.
The original Waters-Pierce Oil Company, it states, had been
dissolved, and the new company, the present defendant, organized on
May 29, 1900, had assumed all the contracts and agreements of its
predecessor, and it was averred that the dissolving of the old
Waters-Pierce Company and the forming of the new company, the
defendant in this case, was in further pursuance of the conspiracy
for the purpose of continuing the monopoly and control which had
been acquired by the old company, and for the purpose of rendering
ineffective the judgments of the state court and of this Court
(
Waters-Pierce Oil Co. v. Texas,177 U.S. 28) wherein the
right of the Waters-Pierce Company to do business in Texas was
forfeited.
It was further averred that the new corporation was of the same
name as the old one, with the same amount of stock, which was
distributed to the holders of stock in the new corporation in the
same proportion among the shareholders as it was in the old
corporation. It is charged that a major part of the capital stock,
although in fact owned by the Standard Oil Company of New Jersey,
stood for a time in the name of H. C. Pierce, but was in fact owned
by the Standard Oil Company. That the conduct of the business in
the new corporation was not changed, and that it was controlled by
the Standard Oil Company of New Jersey in the same manner as the
old company had been; that the old contract, whereby there was a
division of territory and the limitation of the operations of the
Waters-Pierce Oil Company to the State of Texas and some other
territory, was maintained and enforced. That other concerns had
been acquired in the carrying out of the scheme charged; that said
companies had been put out of business or were used in controlling
and monopolizing the trade and business aforesaid; that the
defendant, the new corporation, was a party to these
arrangements,
Page 212 U. S. 102
participated in them, and was engaged in carrying them out.
The things charged were alleged to have the effect to control
the defendant and a large number of other companies by the same
corporation and persons, with the acquiescence and consent of the
defendant; that all competition in Texas between companies was
destroyed; that certain sections and parts of the United States
were assigned to the various companies; that the defendant was
permitted to do business in Texas, and that, with its knowledge and
consent, upon its instance and demands, all other companies had
been excluded from doing business in the State of Texas; that, by
the agreement, the defendant was obliged to secure all the oil sold
by certain named refiners at prices determined by the Standard Oil
Company and those interested in it, with the effect of monopolizing
and controlling the business in oil and the production of petroleum
in Texas by fixing the prices of such products in that state.
The plaintiff summarizes the unlawful results accomplished as
follows:
"(1) The plaintiff in error is dominated and controlled by, and
its business dictated by, the Standard Oil Company of New
Jersey."
"(2) A large number of individuals and corporations doing
business in the sale of petroleum products are excluded from doing
business in the state, and competition is lessened."
"(3) The price of oil had been maintained at an exorbitant
figure, being from ten to twenty-five percent higher than that of
oil sold in the territory not claimed by plaintiff in error."
"(4) Competition had been suppressed and business destroyed in
the state by unconscionable and unfair means."
"(5) A substantially complete monopoly in petroleum products had
been established, the plaintiff in error having sold, during the
period of ten years past at least ninety-five percent of all
petroleum products sold."
The defendant answered and filed a large number of special pleas
and exceptions, taking issue upon the charges made in the
Page 212 U. S. 103
petition, and alleging the unconstitutionality of the acts of
1899 and 1903, and alleging that, if the petition of the State of
Texas be granted, it would be denied the equal protection of the
laws, be subjected to
ex post facto laws, deprived of its
property without due process of law, and have the obligations of
its contracts impaired, contrary to the provisions of the
Constitution of the United States.
At the trial at the May term of the District Court of Travis
County, a verdict was rendered in favor of the state, and penalties
were assessed and the judgment rendered as herein before stated. In
the court of civil appeals of the State of Texas, that court found
the facts to be as found by the verdict in the trial court, and, in
concluding its opinion upon the question of fact, said:
"In appellant's motion for a new trial in the court below, and
in its presentation of the case here, the verdict of the jury has
been challenged, the contention being that the testimony fails to
show that appellant has violated any of the antitrust laws of this
state. The evidence is very voluminous, and it is not necessary
that it be set out or epitomized in this opinion. It is sufficient,
we think, to show that, from the date of its permit to do business
in this state, May 31, 1900, appellant has been a party to an
agreement or understanding with the Standard Oil Company of New
Jersey, one object of which was to create a monopoly and control
the price of petroleum oil and prevent competition in its sale in a
large and specified territory, including the State of Texas, and
that, to a large extent, such object has been accomplished. Insofar
as that agreement related to this state, appellant, acting by its
agents, performed it within this state, and such performance within
the limits of the state constitutes violations of Texas laws and
renders appellant amenable to such laws, although the agreement
between it and the Standard Oil Company may not have been made in
this state. To a large extent, the case rests upon circumstantial
evidence; but we cannot say that the jury were not warranted in the
conclusions drawn from it. Hence, we hold that the verdict is
supported
Page 212 U. S. 104
by testimony, and no error was committed in overruling the
motion for a new trial."
The court left the case to the jury upon a charge which
permitted them to find whether the defendant company, acting
through its duly authorized agents, had entered into or had become
a party to an agreement or understanding with the Standard Oil
Company of New Jersey on June 1, 1900, to fix or regulate the price
of oil in Texas, and whether the company remained or continued to
be a party to such agreement, and carried out the same in Texas on
dates subsequent to June 1, 1900, and prior to March 31, 1903, and
whether the oil, in reference to which such agreement was made and
carried out was the subject of local, as distinguished from
interstate, commerce.
And the court further charged that, if, within the time above
stated, the defendant had brought about or permitted any
combination or union of its capital with that of the Standard Oil
Company of New Jersey, whereby the price of such oil in Texas was
found to be controlled or limited, fixed or regulated, or whereby
such price would be reasonably calculated to be fixed or regulated,
or whereby the trade in such oil in Texas was sought to be
controlled or limited, they might return a verdict for the
state.
And the court charged that, if they should find that the
defendant, through its duly authorized agents, had entered into a
combination of its capital with the capital of the Standard Oil
Company of New Jersey for the purpose of creating in Texas, or
which tended to create in Texas, or carry out in Texas,
restrictions in the free pursuit of selling oil, or having the
effect of increasing the price of such oil in Texas, or to prevent
or lessen competition in selling the same in said state, and that
the defendant remained or was a party to and acted under such
combination, if such there was, on March 31, 1903, and thereafter
prior to April 29, 1907, they might return a verdict of guilty.
The jury was further instructed that, if they found from the
evidence that the direction of the affairs of the Standard Oil
Company of New Jersey and those of the defendant company
Page 212 U. S. 105
were under the same management or control after March 31, 1903,
and prior to April 29, 1907, and that they were placed under such
common management or control by their respectively authorized
officers, and if such management or control created or tended to
create or to carry out restrictions in the sale of oil in Texas, as
above stated, or to fix, maintain, or increase the prices of such
oil in said state, or to prevent or lessen competition in the sale
of such oil, they might return a verdict for the state. The jury
found each of the issues submitted against the defendant. The court
of civil appeals affirmed this finding of fact, and we must accept
the same as established for the purposes of this proceeding in
error.
Numerous exceptions were taken to the charge at the trial, and
are the subjects of assignments of error in the state court and in
this Court. We are concerned with such as relate to the federal
questions involved in this proceeding.
In the eleventh paragraph of the charge, the court instructed
the jury as follows:
"XI. If you find from a preponderance of the evidence that the
Standard Oil Company of New Jersey had, on March 31, 1903, or on
any date subsequent thereto and prior to April 29th, 1907, acquired
a majority of the capital stock of the defendant corporation, and
thereby effected a combination of said two corporations, and if you
further find from a preponderance of the evidence that said stock
was acquired and combination effected, if any, with the purpose and
intention on the part of the managing officers and directors of
said Standard Oil Company of New Jersey, of preventing or lessening
the competition in the sale in Texas of the character and kind of
oil above mentioned, or that the effect of said combination, if
such there were, tended to affect or lessen the competition in the
sale in Texas of said oil, you will return a verdict for the state,
and say by your verdict: 'We, the jury, find for the state on the
issues submitted for our consideration in paragraph eleven of the
court's charge.' In this connection, you are instructed that, if
the defendant entered into a monopoly of the character mentioned in
this paragraph
Page 212 U. S. 106
of the charge, each day between March 30, 1903 and April 29th,
1907, that it remained a party to such monopoly, if there were any
such days, constituted a separate violation of the antitrust laws
of Texas."
The judges of the court of civil appeals differed in their views
as to the correctness of this charge, the learned justice who wrote
the opinion holding the view that it was calculated to mislead the
jury to the belief that they might convict upon this issue
regardless of whether the defendant had any knowledge of,
participated in, or aided the Standard Oil Company in acquiring the
stock of the defendant for the purposes stated.
But the court agreed that, if wrong, this part of the charge
afforded no ground for reversal, because the jury found that the
appellant had violated other provisions of the act, and assessed
but one penalty for each day's violation, and therefore the
judgment would have been the same, and the error, if any, was
harmless.
In thus deciding, the court of civil appeals did not determine a
federal question, nor necessarily decide one adversely to the
plaintiff in error, controlling in character, if it appears upon
this record that the verdict and judgment can stand upon other
grounds free from objection, so far as federal rights are
concerned.
Much of the argument for plaintiff in error is predicated upon
the contention that the acquiring of the stock of the Waters-Pierce
Company by the Standard Oil Company and the making of the agreement
charged were not shown to have been acts done in Texas. It is
contended that such acquiring of stock, and agreement, if any, were
acts beyond the jurisdiction of the state. But an inspection of the
record discloses that the court charged that no agreement made by
the defendant outside of the State of Texas could be made the basis
of forfeiting its permit to do business in the state unless such
agreement was executed, or attempted to be executed, in the state,
by the duly authorized agents of the defendant. And, in the
findings which we have above quoted as to the evidence, the state
court has
Page 212 U. S. 107
found that the defendant has been, since May 31, 1900, a party
to an agreement with the Standard Oil Company of New Jersey, to
create a monopoly and to control prices and prevent competition in
Texas, and that, to a large extent, the object has been
accomplished. These findings of facts are conclusive upon us, and
show that the conviction was had for acts and transactions
committed and carried out within the State of Texas.
The argument to the effect that the rulings of the court as to
the admission of testimony, and upon questions of general law,
deprived the defendant of its property and rights without due
process of law requires us to notice the limitations upon the
authority of this Court when dealing with legislative acts and
proceedings to enforce the same in the state courts. That state
legislatures have the right to deal with the subject matter and to
prevent unlawful combinations to prevent competition and in
restraint of trade, and to prohibit and punish monopolies, is not
open to question.
National Cotton Oil Co. v. Texas,
197 U. S. 115;
Smiley v. Kansas, 196 U. S. 447.
Having the power to pass laws of this character, of course, the
state may provide for proceedings to enforce the same. The state,
keeping within constitutional limitations, may provide its own
method of procedure and determine the methods and means by which
such laws may be made effectual.
"The limit of the full control which the state has in the
proceedings of its courts, both in civil and criminal cases, is
subject only to the qualification that such procedure must not work
a denial of fundamental rights or conflict with specific and
applicable provisions of the federal Constitution."
West v. Louisiana, 194 U. S. 258,
194 U. S. 263,
and see Davis v. Texas, 139 U. S. 651;
Brown v. New Jersey, 175 U. S. 172,
175 U. S. 175;
Allen v. Georgia, 166 U. S. 138,
166 U. S. 140;
In re Converse, 137 U. S. 624,
137 U. S. 632, and
Twining v. New Jersey, 211 U. S. 78,
decided at this term of court, where the subject is fully
discussed, and previous cases in this Court cited.
It is contended that the acts in this case were given a
retroactive effect, in violation of the federal Constitution. Art.
I, § 10. This argument is predicated largely upon the
contention
Page 212 U. S. 108
that the conviction in this case was because of the old
agreement of the former Waters-Pierce Oil Company, made long before
the passage of the present statute at a time when it was legal, and
before the creation of the defendant company. But, in view of the
facts found in the state court, to which we have already referred,
there was ground for conviction not because of the making of the
old agreement for the division of the territory and the suppression
of competition while the old company was in existence, but because
the new company was found to have carried out the old agreement and
made itself a party thereto, and, by continuing the old arrangement
after the passage of the law, had brought itself within its terms.
Of a similar contention, this Court said in
Trans-Missouri
Traffic Association Case, 166 U. S. 290:
"It is said that to grant the injunction prayed for in this case
is to give the statute a retroactive effect; that the contract at
the time it was entered into, was not prohibited or declared
illegal by the statute, as it had not then been passed, and to now
enjoin the doing of an act which was legal at the time it was done
would be improper. We give to the law no retroactive effect. The
agreement in question is a continuing one. The parties to it adopt
certain machinery, and agree to certain methods for the purpose of
establishing and maintaining in the future reasonable rates for
transportation. Assuming such action to have been legal at the time
the agreement was first entered into, the continuation of the
agreement, after it has been declared to be illegal, becomes a
violation of the act. The statute prohibits the continuing or
entering into such an agreement for the future, and, if the
agreement be continued, it then becomes a violation of the
act."
It is further insisted that the acts in question are so vague,
indefinite, and uncertain as to deprive them of their
constitutionality, in that they punish by forfeiture of the right
to do business, and the imposition of penalties, under provisions
of an act which do not advise a citizen or corporation prosecuted
under them, of the nature and character of the acts
constituting
Page 212 U. S. 109
a violation of the law. These objections are found in the words
of the act of 1899, denouncing contracts and arrangements
"reasonably calculated" to fix and regulate the price of
commodities, etc. And, in the act of 1903, acts are prohibited
which "tend" to accomplish the prohibited results. It is insisted
that these laws are so indefinite that no one can tell what acts
are embraced within their provisions. In support of this
contention, it is argued that laws of this nature ought to be so
explicit that all persons subject to their penalties may know what
they can do and what it is their duty to avoid. And reference is
made to decisions which have held that criminal statutes should be
so definite as to enable those included in its terms to know in
advance whether an act is criminal or not. Among others,
Tozer
v. United States, 52 F. 917, is cited, in which the opinion
was by MR. JUSTICE BREWER, then judge of the circuit court, in
which it was held that the criminality of an act cannot depend upon
whether a jury may think it reasonable or unreasonable. To the same
effect is
Railway Co. v. Dey, 35 F. 866, also decided by
Judge Brewer at circuit. And also the case of
Louisville &
Nashville Railway v. Commonwealth, 99 Ky. 132, is relied upon,
in which a railroad was indicted for charging more than a just and
reasonable rate, in which it was held that the law was
unconstitutional, for, under such an act, it rests with the jury to
say whether a rate is reasonable, and makes guilt depend not upon
standards fixed by law, but upon what a jury might think as to the
reasonableness of the rate in controversy. But the Texas statutes
in question do not give the broad power to a court or jury to
determine the criminal character of the act in accordance with
their belief as to whether it is reasonable or unreasonable, as do
the statutes condemned in the cases cited.
Take the act of 1903, which denounces acts which "tend" to bring
about the prohibited results. It is not uncommon in criminal law to
punish not only a completed act, but also acts which attempt to
bring about the prohibited result. In
United States v.
Knight, 156 U. S. 1, this
Court said:
"Again, all the authorities
Page 212 U. S. 110
agree that, in order to vitiate a contract or combination, it is
not essential that its result 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."
This language was quoted with approval in
Addyston Pipe Co.
v. United States, 175 U. S. 237.
And in
Northern Securities Co. v. United States,
193 U. S. 197,
while the Sherman act directly condemned conspiracies and
combinations in restraint of trade or monopolizing or attempting to
monopolize the same, this Court said (page
193 U. S.
332):
"That to vitiate a combination such as the act of Congress
condemns, it need not be shown that the combination in fact
results, or will result, in a total suppression of trade, or in a
complete monopoly, but it is only essential to show that, by its
necessary operation, it tends to restrain interstate or
international trade or commerce, or tends to create a monopoly in
such trade or commerce, and to deprive the public of the advantages
that flow from free competition."
As to the phrase, "reasonably calculated," what does it include
less than acts which, when fairly considered, tend to accomplish
the prohibited thing, or which make it highly probable that the
given result will be accomplished? Again, speaking of the Sherman
act, this Court said in
Swift & Co. v. United States,
196 U. S. 375.
"The statute gives this proceeding against combinations in
restraint of commerce among the states and against attempts to
monopolize the same. Intent is almost essential to such a
combination and is essential to such an attempt. Where acts are not
sufficient in themselves to produce a result which the law seeks to
prevent -- for instance, the monopoly -- but require further acts
in addition to the mere forces of nature to bring that result to
pass, an intent to bring it to pass is necessary in order to
produce a dangerous probability that it will happen.
Commonwealth v. Peaslee, 177 Mass. 267, 272. But, when
that intent and the consequent dangerous probability exist, this
statute, like many others, and like the common law
Page 212 U. S. 111
in some cases, directs itself against that dangerous probability
as well as against the completed result."
It is true that the decisions quoted are in civil cases
involving contracts and arrangements held invalid when attacked in
proceedings in equity, and did not involve penalties such as were
imposed in the case now under consideration.
And it is to be remembered that we are dealing with an act of
the legislature, sustained in courts of the state, with reference
to its validity in view of the prohibitions of the federal
Constitution against deprivation by state action of liberty or
property without due process of law. In this case, the defendant
has had a trial in a court of justice duly established under the
laws of the state; the question of its liability has been submitted
to a jury. The judgment has been reviewed in an appellate court,
and the correctness of the findings of fact and rulings of law in
the lower court affirmed. We are not prepared to say that there was
a deprivation of due process of law because the statute permitted,
and the court charged, that there might be a conviction not only
for acts which accomplished the prohibited result, but also for
those which tend or are reasonably calculated to bring about the
things forbidden.
Again, it is contended that the fines imposed are so excessive
as to constitute a taking of the defendant's property without due
process of law. It is not contended in this connection that the
prohibition of the Eighth Amendment to the federal Constitution
against excessive fines operates to control the legislation of the
states. The fixing of punishment for crime or penalties for
unlawful acts against its laws is within the police power of the
state. We can only interfere with such legislation and judicial
action of the states enforcing it if the fines imposed are so
grossly excessive as to amount to a deprivation of property without
due process of law.
Coffey v. Harlan County, 204 U.
S. 659.
The business carried on by the defendant corporation in Texas
was very extensive and highly profitable, as the record discloses.
The property of the defendant amounted to more
Page 212 U. S. 112
than forty millions of dollars, as testified by its president.
It dividends had been as high as 700 percent per annum. It was the
theory of the state, sustained by the verdict and judgment, that
the former course of business was continued, notwithstanding the
judgment of ouster in the former case. Within the bounds of the
statute, the penalties were left to the discretion of the jury
trying the case. While the penalties imposed are large, they are
within the terms of the statute. Under the act of 1899, the jury
imposed a penalty at the rate of $1,500 a day; under the act of
1903, at the rate of $50 per day. Assuming for this purpose that
the defendant was guilty of a violation of the laws over a period
of years, and in transacting business upon so large a scale, as
shown in this case, we are not prepared to say, after confirmation
of the verdict and judgment in courts of the state, that there was
want of due process of law in the penalties assessed.
Remembering, as we have had frequent occasion to say, that our
province in this case is limited to an examination of objections
arising under the federal Constitution, we are unable to find in
this record any ground for reversing the judgment of the state
court.
Affirmed.