Stockton v. Am. Tobacco Co.

McGILL, C.

(Syllabus by the Court.)

Bill by John P. Stockton, attorney general, on the relation of John R. and Frank W. Miller, and by John R. and Frank W. Miller against the American Tobacco Company and others. Motion to strike supplemental information and bill from the files. Granted.

The original bill and information was filed by the attorney general, in behalf of the state of New Jersey, and, by the relators, for themselves and other cigarette jobbers in New Jersey. The case presented by it is that five parties who have heretofore manufactured and sold 95 per cent. of the cigarettes manufactured and sold in the United States, and have competed with each other in that business, conspiring together to monopolize and control the entire business of manufacturing and selling paper cigarettes in the United States of America, and to crush out rivals and destroy and prevent competition among themselves and others engaged in that business, consolidated their respective businesses into one, and, under the laws of New Jersey, organized a corporation for the purpose of conducting that single business; and then, with the purpose stated, instead of selling outright to jobbers, they have made and yet make the jobbers, in the product of their manufactures, their agents, and have fixed prices at which cigarettes consigned to them shall be sold, reserving the right to withdraw the goods consigned and to terminate the agency if their cigarettes shall not be handled to their satisfaction,—the tendency of such combination and conduct being to prevent the jobbers who deal with the American Tobacco Company from handling the cigarettes manufactured by competing and rival manufacturers. The relators and complainants claim to be jobbers, doing business in Newark in this state, who, because of the conspiracy complained of, have been deprived of the advantage of a business with the American Tobacco Company because they sell cigarettes manufactured by the National Cigarette & Tobacco Company, and they suffer special injury from the combination complained of. The relief sought is a decree which will declare that the American Tobacco Company was organized for an unlawful purpose, and is without power to use its franchises for the purpose of destroying competition in the manufacture and sale of paper cigarettes, or for the purpose of destroying or injuring the business of the National Cigarette & Tobacco Company, or of the relators, or of any jobber customers of the National Cigarette & Tobacco Company; and which will restrain the defendants from using the corporate organization of the American Tobacco Company in promoting the manufacture and sale of paper cigarettes, and from transacting business in the name of that company, and from refusing to sell cigarettes to the relators, and from the use of the franchises of the American Tobacco Company to stifle competition in the business of manufacturing paper cigarettes, and to destroy the business of the relators, the business of the National Cigarette & Tobacco Company, or the business of any jobbers or dealers who may desire to be customers of the National Cigarette & Tobacco Company; and will grant to the attorney general or the relators other relief which may be just. The bill and information do not contemplate the prevention of any injury to the relators and complainants, or the state of New Jersey, by depreciation of the price of leaf tobacco in the states of Virginia and North Carolina, which may be consequent upon the consolidation of the businesses referred to. In February, 1895, after the cause was at issue and the testimony had been partially taken, the attorney general and the complainants, by their petition, presented upon notice to the defendants, represented to the chancellor that the alleged illegal combination was not only such as was mentioned and set forth in the Information and bill, but, in the language of the petition, it also operated very oppressively and injuriously upon a large number of persons in the states of North Carolina and Virginia, wherein wasthat the court grant leave to said petitioners to file a supplemental bill in said cause for the purpose of introducing into the information and complaint in said cause, by way of amendment, certain allegations in said petition set forth relating to the illegal and injurious effect alleged to be produced upon the business of growing, producing, and dealing in leaf or raw tobacco, in the states of North Carolina and Virginia, by the combination complained of in said original information and bill, as by the proposed amendment set forth in said petition (to which reference is hereby made) will more fully appear." The supplemental bill and information, which has been filed under authority of that order, purports to be by the attorney general on behalf of the state of New Jersey "and the public," and, by the complainants, "in behalf of themselves and the public," and it broadens its complaint so as to reach injury "to the public in that part of the country where such tobacco was grown," and, as well, to the public generally, and seeks relief accordingly.

Thomas N. McCarter, for complainants.

R. V. Lindabury and Gilbert Collins, for defendants.

McGILL, C. (after stating the facts). The present motion is based upon the objection that the supplemental bill and information is broader than the authority under which it was filed. The insistment is that the intention of the court was to grant permission to the informant and complainants to supplement their case by allegations which would show an injury to the state of New Jersey and to the complainants and other cigarette jobbers in New Jersey, through the effect of the combination charged, upon the growing, producing, and dealing in leaf or raw tobacco in Virginia and North Carolina, and not to extend the suit to the assistance of the persons who are engaged in such occupations. The chancellor's remarks upon the application to amend the original bill and information, when the complainants and attorney general were required to act by supplemental bill and information, expressly state his understanding that the complainants' object was in accordance with this insistment. The allegation sought to be introduced by the proposed new section (10 1/2) and the addition to section 15 undoubtedly charged grievances to tobacco growers, brokers, etc., in Virginia and North Carolina; but, as there was no suggestion that the limited range of the complaint in behalf of the state of New Jersey and cigarette jobbers of New Jersey should be broadened to include other affected parties, it was assumed that the allegations would in some way show injury to those who were then within the protection of the complaint. When leave to file the supplemental bill and information was asked, the request was avowedly made for the purpose of introducing the amendments thereto fore proposed, the expression of the petition being: "For the purpose of introducing into the information and complaint in this cause such allegations as those herein set forth by way of amendment, or such other allegations of that character as," etc. There was no suggestion that the scope of the bill and information was to be enlarged to the extent of the instrument now objected to. The order which gave authority to file the supplemental complaint recited its inducement to be to allow the introduction, by way of amendment, of allegations relating to matters indicated by proposed amendments set forth in the petition upon which the order was based. The change in the scope of the suit was a substantive matter, and not a mere incident to the proposed amendments, authority for which might be implied from their allowance. An allegation incidental to the amendment would rather have shown the applicability of the matter introduced to the existing scope of the suit. If the design was to reconstruct the suit by the introduction of an additional case, that design should have been clearly disclosed, so as not only to afford the defendants an opportunity to be heard as to the propriety of the change, but so that that object would have commanded the court's consideration. It is obvious, I think, as the complainants and informant have acted upon leave of the court, had upon notice to the defendants, which was intended by the court and understood by the defendants to authorize the presentation of an essentially different case from that which the supplemental bill and information makes, that the motion of the defendants should be granted. Buckingham v. Corning, 29 N. J. Eq. 238. I will therefore order that the supplemental bill and information be taken from the files.