American Export Door Corp. v. Gauger Co. , 154 Wash. 514 ( 1929 )

Having personally made an exhaustive study of the record in this case and of the law applying, I am unable to concur in much that is said in the prevailing opinion both as to the facts and the law.

To begin with, I am unable to yield my assent to the statement that the finding of fact quoted in the opinion has the effect of limiting production in this state in the constitutional sense. Again there is a mistake in the statement as to what was held in the Washington CranberryGrowers Ass'n v. Moore, 117 Wash. 430, 201 P. 773, where it is said that the cooperative association in question controlled only about two per cent of the product, while here it is undenied that respondent's control, if its contracts be enforced, is practically total. What was said in the Cranberry Growers Ass'n case, supra, was that it controlled about two per cent of the berries produced in the United States. As a matter of fact it was admitted to control practically the entire production in the state of Washington as to the marketing thereof. That is not the case here. This association does not control practically all the output of the door manufacturers as to the marketing thereof. The contract specifically excepts the sale of doors in the domestic trade and it was organized under the Webb-Pomerene Act for the purpose only of effecting the betterment of sales and prices in foreign markets. It is not as much of a monopoly within this state as was the Cranberry Growers Association.

However, the argument of the majority is unsound under their own interpretation of the law. It is monopolies that are forbidden by our constitution and if they are unlawful at all they are unlawful regardless of the degree to which they may be effective in restraining trade.

The case of Manson v. Hunt, 82 Wash. 291, 144 P. 45, differed widely from this case. In that case there was a contract deliberately entered into by the parties which was known to be illegal and unconstitutional, designated by them as a "gentlemen's agreement," for the purpose of limiting transportation in public waters by public carriers between Tacoma and Quartermaster Harbor. It was a contract affecting local or domestic transportation exclusively, and was void under Article 12, § 22, of the constitution as being a contract for the purpose of fixing the price or limiting the transportation of any commodity.

All our cooperative marketing cases sustain this organization. They are too numerous to mention.

Although there is nothing set forth in the opinion to so show, a reading of the entire contract involved herein positively discloses that the contract contained nothing preventing sales to competing exporters. The record shows that there have been sales to competing exporters.

However, the chief question is whether the contract with this corporation, organized for the purpose of deriving the benefits of the Webb-Pomerene Act exclusively, is contrary to the provisions of our state constitution above cited. In considering such questions the dominant consideration always is the welfare of the public (Fisher Flouring Mills Co. v. Swanson, 76 Wash. 649,137 P. 144, 51 L.R.A. [N.S.] 522), and whether, under the circumstances of the particular case, they are reasonable in reference to the interest of the public. United States v.Addyston Pipe Steel Co., 85 Fed. 271. Not every monopoly or combination in restraint of trade is illegal or void, but only such as is undue or unreasonable or injurious to the public interest. Washington Cranberry Growers Ass'n v. Moore; FisherFlouring Mills Co. v. Swanson; United States v. Addyston Pipe Steel Co., supra; Standard Oil Co. of New Jersey v. UnitedStates, 221 U.S. 1; United States v. American Tobacco Co.,221 U.S. 106; United States v. International Harvester Co.,274 U.S. 693.

It may be pointed out that the public is not here complaining. No one is complaining but one of the parties to the contract, and it is permitted to escape from its solemn contract in violation of that principle of law that public policy is as much concerned in holding persons to their contracts as in prohibiting contracts in restraint of trade. Lumbermen's Trust Co. v. Title Insurance Investment Co.of Tacoma, 248 Fed. 212; Inter City Auto Stage Co. v. BothellBus Co., 139 Wash. 674, 247 P. 1040.

Our constitutional ban on monopolies can only apply to monopolies existing entirely within the state. It cannot apply to corporations organized for the purpose of engaging solely in export trade as this one was, under the Webb-Pomerene act. The construction by the majority of the proviso in § 2 of the Webb-Pomerene Act implies that that section contains its own death clause. If that be true, the Webb-Pomerene Act is utterly inoperative. However, no other state or Federal court is likely to give it that construction. Other states will enjoy the benefits of the Webb-Pomerene Act by sustaining their exporting corporations, while ours will be cut off from its benefits, and utterly impotent. It is a Federal field of legislation, and the law was meant to supplant Federal and state restrictions for the promotion of foreign trade and commerce. The decision in this case is quite dissimilar to the statesmanlike utterance of President Wilson in his message to Congress on December 5, 1916, in which he referred to the Webb-Pomerene bill then pending, as a measure of capital importance and as one

". . . which seeks to extend greater freedom of combination to those engaged in promoting the foreign commerce of the country that is now thought by some to be illegal under the terms of the law against monopoly."

For the foregoing reasons, and others more specific which, had I the time, I would express, I dissent.

FULLERTON, J., concurs with HOLCOMB, J.