Patterson v. Southern Railway Co.

DeviN, J.,

dissenting: 1. I find myself unable to agree with the majority opinion that the allegations in the answers of the defendants, that the reduction in freight rates has resulted in lowering the price of gasoline to consumers, should be stricken out as irrelevant. The basis for the court’s ruling is that evidence of that fact would be inadmissible in the trial.

The gravamen of the charge in the complaint is that the defendants entered into an unlawful conspiracy in restraint of trade and for the promotion of a monopoly in the transportation of gasoline, with the purpose and intention of injuring the business of the plaintiff. By this action plaintiff seeks to recover compensation for losses sustained, and for treble damages, under the punitive provisions of the statute. Is it then improper for the defendants in the denial of an unlawful conspiracy, and in support of allegations of proper exercise of legal rights, to allege, in further defense, the establishment of competitive rates and the favorable result of such competition to the public? Are not all the circumstances relating to and attendant upon the wrongful acts complained of competent to be shown in evidence?

*49Tbe acts alleged in tbe complaint and relied npon to sbow an unlawful conspiracy in restraint of trade, under tbe statute, C. S., 2563 (3), must have been willfully done and with tbe purpose and intention of injuring tbe business of a competitor. While tbe plaintiff in tbis action is not concerned witb tbe public policy of monopoly statutes, it must not be overlooked that in tbe interpretation of these statutes and their enforcement tbe public interest is necessarily to some extent involved. Tbe main purpose of these laws is to protect tbe public from monopolies and contracts in restraint of trade. Individual action is incidental. It was held in Standard Oil Co. v. U. S., 221 U. S., 1, that tbe prevention of injury to tbe public by undue restraint on trade or commerce is tbe foundation upon which tbe prohibitions of tbe statute rests. Tbe basis of every monopoly statute and of every monopoly suit is tbe welfare of tbe public. Hence, tbe nature of tbe restraint and its effects are to be considered as bearing on tbe legality of tbe contract alleged to have been entered into witb tbe intent to injure tbe business of tbe complainant.

Tbe rule laid down by tbe Supreme Court of tbe United States in construing similar Federal statutes on tbis subject is “that only such contracts and combinations are within tbe act as, by reason of intent or tbe inherent nature of tbe contemplated act, prejudice tbe public interest by unduly restricting competition or unduly obstructing tbe course of trade.” Nash v. U. S., 229 U. S., 373. Tbis statement was quoted witb approval in tbe recent case of Appalachian Coals, Inc., v. U. S., 288 U. S., 344.

While these statements by tbe Court were made witb reference to criminal prosecutions’ under tbe Federal statutes, in Mar-Hof Co. v. Rosenbacker, 176 N. C., 330, 97 S. E., 169, Holes, J., states tbe rule under tbe North Carolina statute as follows: “Originally at common law, agreements in restraint of trade were held void as being against public policy. Tbe position, however, has been more and more modified by tbe decisions of tbe courts until it has come to be tbe very generally accepted principle that agreements in partial restraint of trade will be upheld when they are ‘founded on valuable considerations, are reasonably necessary to protect tbe interests of tbe parties in whose favor they are imposed, and do not unduly prejudice tbe public interest/ ” And there is tbe further statement in tbe opinion in tbe Mar-Hof Co. case, supra, that tbe purpose of tbe Legislature in these statutes was “to subject agreements coming under tbe provisions of tbis section to tbe standard of their reasonableness, to be determined by tbe character of tbe transaction and tbe purpose of tbe parties concerning it as disclosed in tbe.contract and tbe facts and circumstances permissible and relevant to its proper interpretation.” See Shoe Co. v. Department Store, 212 N. C.. 75; S. v. Coal Co.. 210 N. C., 742, 188 S. E., 412.

*50Can it be said, in a case instituted under our monopoly statutes, that under no circumstances and in no view of the case would the effect of the alleged unlawful combination between the defendants to lower freight rates on gasoline be admissible in evidence. If not, then there was error in striking out the pertinent allegations of the answers.

2. I am unable to agree with the majority opinion that the allegations in the answers, to the effect that the plaintiff in the conduct of his business was operating trucks improperly licensed and in violation of law, should be stricken out as irrelevant and in no view of the case admissible in evidence.

It is fundamental that an action will not lie when the plaintiff must base his claim in whole or in part upon his own wrongful or unlawful conduct or on a violation by himself of the criminal laws of the State. Lloyd v. R. R., 151 N. C., 536, 66 S. E., 604; Brown v. Brown, 213 N. C., 347. The established rule is that to constitute a defense on this ground, the illegality with which plaintiff is chargeable must have a causative connection with the particular transaction out of which the action arose, that is, when the illegality relied on is inherent in the cause of action, and directly connected with the relief sought. Laughran v. Laughran, 292 U. S., 216; 1 Corp. Jur. Secundum, 1000.

Here, the complaint alleges a cause of action for damages for injury to plaintiff’s business which consisted in the operation of motor trucks on the State Highway in the transportation of gasoline. In the answer it is alleged that plaintiff, in the conduct of the very business which he claims was injured, was operating unlicensed or improperly licensed trucks in violation of the law, and that each time he used a truck in his business of transporting gasoline he committed a misdemeanor, and that his business, which he alleges was wrongfully injured by the acts of the defendants, consisted in operations forbidden by law. It would seem that the illegality alleged in the answers has direct relation to the transactions out of which the alleged cause of action arose, and hence may properly be set up in the answer as a defense. If, as alleged, plaintiff was using only unlicensed trucks, in violation of the penal provisions of the motor vehicle law, he could not lawfully operate them on the highway, whether loaded with gasoline or not, and loss of profits therefrom would not constitute a legitimate element of damages.

While the several answers in setting out this defense may be subject to the criticism of prolixity and redundancy, the material allegations of violation of law in the use of plaintiff’s trucks on the highway should not be stricken out as irrelevant and as containing matters incompetent to be shown in evidence.

Relative to motions to strike out, it has been well said in several recent decisions of this Court that “the questions involved could be better determined by rulings upon the competency of the evidence, if and when *51offered, than by undertaking to chart the course of the trial by passing upon allegations as yet undenied.” Pemberton v. Greensboro, 205 N. C., 599, 172 S. E., 196; Hardy v. Dahl, 209 N. C., 746, 184 S. E., 480; Scott v. Bryan, 210 N. C., 478, 187 S. E., 756; Poovey v. Hickory, 210 N. C., 630, 188 S. E., 78.

The plaintiff’s suggestion that the matters asked to be stricken out might prove unduly prejudicial to the plaintiff, a resident of Alamance County, before an Alamance County jury, when read from the answers of the several railroad companies, defendants, does not afford serious ground of apprehension.

BaeNHILL, J., concurs in dissent.