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Williamson v. Columbia Gas & Electric Corporation.

December 21, 1939

WILLIAMSON
v.
COLUMBIA GAS & ELECTRIC CORPORATION.



Appeal from the District Court of the United States for the District of Delaware; John P. Nields, Judge.

Author: Maris

Before MARKS, BIDDLE, and JONES, Circuit Judges.

MARIS, Circuit Judge.

This is an appeal by Ben Williamson, Jr., Trustee of Inland Gas Corporation, from an order of the District Court for the District of Delaware dismissing his complaint against Columbia Gas & Electric Corporation. The plaintiff was appointed trustee of Inland under Sec. 77B of the Bankruptcy Act, 11 U.S.C.A. § 207, and filed his complaint September 16, 1938. The allegations of the complaint are fully stated in the opinion of the district court, 27 F.Supp. 198, and need not be repeated here. It is sufficient to say that the acts of Columbia complained of are alleged to be in violation of section 7 of the Clayton Act, 15 U.S.C. § 18, 15 U.S.C.A. § 18, which provides in part: "No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital of another corporation engaged also in commerce, where the effect of such acquisition may be to substantially lessen competition between the corporation whose stock is so acquired and the corporation making the acquisition, or to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce. * * * " The plaintiff claims threefold damages in accordance with the provisions of section 4 of the Clayton Act, 15 U.S.C. § 15, 15 U.S.C.A. § 15, which provides: "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."

Columbia moved to dismiss the complaint for failure to state a claim upon which relief could be granted. Its motion was based on the ground that the plaintiff's cause of action did not accrue within a period of three years prior to the commencement of the action. The parties agreed by a stipulation which accompanied the motion to dismiss that the right of action accrued not later than January 1, 1931. The motion was sustained and the complaint dismissed by the district court.

To determine the applicable period of limitation we must resort, as the district court did, to the laws of Delaware, for the rule is well established that where an act of Congress does not fix a limitation of time for commencing actions to enforce it the state statute of limitations is applicable.*fn1

The Delaware statute of limitations, Revised Code of Delaware, 1935, § 5129, provides in part: "No action of trespass, no action of replevin, no action of detinue, no action of debt not found upon a record or specialty, no action of account, no action of assumpsit, and no action upon the case shall be brought after the expiration of three years from the accruing of the cause of such action; * * * ."

It is apparent that the statute does not apply to actions of debt on a record or specialty. As to such actions the courts of Delaware have said that the only limitation is the presumption of satisfaction after twenty years.*fn2

It is the contention of the plaintiff that his action is in the nature of an action of debt on a specialty and is therefore not barred, having been brought within twenty years. Columbia argues, however, that the complaint set forth a cause in tort for which an action of trespass on the case was the only remedy, and that, since the suit was brought more than three years after the cause of action had accrued, recovery was barred by the statute. we are, therefore, called upon to determine whether an action in the nature of debt on a specialty at common law may be brought to recover damages for injuries to business resulting from acts forbidden by section 7 of the Clayton Act; or whether an action in the nature of common law trespass on the case is the sole remedy of the aggrieved party. The answer to this question obviously depends upon the nature of the cause of action granted by the statute and asserted in the complaint.

The purchase of stock control by one corporation in another so as to lessen competition, restrain trade and effect a monopoly would have been a wrong to the public at common law as is shown by the fact that the courts early declared agreements having such results against public policy and unenforceable.*fn3 The anti-trust legislation extended this protection to the individual, and gave him a right of action for injuries sustained by him which up to that time had received no judicial recognition. An analogous situation arises in cases in which a right of action is given for death by wrongful act by a statute such as § 4638, Revised Code of Delaware, 1935. No such right existed at common law. The Delaware courts have determined that the cause of action sounds in tort. So in Homiewicz v. Orlowski, 4 W.W. Harr. 66, 34 Del. 66, 143 A. 250, 252, the court said: "If the injured person dies as a result of his injuries, there springs into being by virtue of the cited statute, a new right of action on behalf of the statutory parties. This new right of action is based upon the same cause of action the injured person had, viz. the original tort * * * ." In Hazzard v. Alexander, 6 W.W.Harr. 212, 36 Del. 212, 173 A. 517, the court determined that the right given by the statute was for a tort.We are of the opinion that the cause of action given by Section 7 of the Clayton Act fits into that broad field of tort law which protects a man's business from wrongful interference. Restatement, Torts, vols. 3 and 4, Division 9, §§ 708 - 816. The statute simply makes an addition to this group of recognized torts. Our analysis leads to the conclusion that the allegations of the complaint are that Columbia committed a tort and that Inland was harmed thereby.

At common law one injured by a tort for which there was no customary remedy could resort to an action upon the case, for, as was stated by Blackstone, "This action of trespass, or transgression, on the case, is a universal remedy, given for all personal wrongs and injuries without force * * * ."*fn4 And in Stephen on Pleading, Sec. 17, it is said: "The action of trespass upon the case lies where a party sues for damages for any wrong or cause of complaint to which * * * trespass will not apply."*fn5 Thus trespass on the case was held the proper action in Bowen v. Hall, 6 Q.B.D. 333, for recovery of damages sustained by the plaintiff by reason of a breach of contract by a third person to manufacture glazed bricks for the plaintiff, the breach having been caused by the defendant. The court said: "That wherever a man does an act which in law and in fact is a wrongful act, and such an act as may, as a natural and probable consequence of it, produce injury to another, and which in the particular case does produce such an injury an action on the case will lie * * * ."

So also it appears that the common law an action on the case might be brought even though the right to damages was given by statute. It is stated in 1 Chitty on Pleading 148 that "Actions on the case are founded on the common law or upon acts of parliament, and lie generally to recover damages for torts not committed with force, actual or implied."

This principle of the common law was given application by the Superior Court of Delaware as far back as 1840 in the case of Ross v. Horsey, 3 Har. 60, 3 Del. 60, in ruling upon the right to the recovery of double damages and costs allowed by the Delaware act of February 1, 1819 (5 Del.Laws 389), for the preservation of mill property. The relevant portion of the act, which is codified as Sec. 4220 of the Revised Code of Delaware 1935, provides: " * * * and for omitting or neglecting to give such due and reasonable notice, the offender shall, on due proof thereof being made, forfeit and pay double the amount of all damages, with costs of suit, which may be sustained by the owner, possessor or keeper of any such lower mill as aforesaid; to be recovered as debts of a like amount are or may be recoverable by the laws of this State." In spite of this reference to an action for the recovery of debt the court ruled that trespass on the case was the proper form of action for recovery of the double damages and costs allowed by the statute.

Our conclusion that the cause of action sounds in tort and the appropriate form of action is trespass on the case is fully supported by our recent decision in H. J. Jaeger Research Laboratories v. Radio Corporation, 3 Cir., 90 F.2d 826 in which we affirmed a decision of the district Court of New Jersey holding that violations ...


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