Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

WHITELEY v. FOREMOST DAIRIES

June 19, 1957

J.H. WHITELEY AND WAYNE WHITELEY, PLAINTIFFS,
v.
FOREMOST DAIRIES, INC., GUY HORNER, AND KEITH SKELTON, DEFENDANTS.



The opinion of the court was delivered by: John E. Miller, District Judge.

That there had been for many years various milk routes throughout Washington County, Arkansas, on which the "owners gather, collect and transport whole milk from the farmers, dairymen and other producers, and which said whole milk is transported and delivered to various milk buyers, outlets, and consumers located outside the State of Arkansas". That under the long and well-established custom all of said milk routes, including the milk route herein involved, have become and are valuable property rights "belonging to the person who operates the trucks and other vehicles thereon for the gathering, collection, picking up and transportation of the whole milk from the farmers, dairymen and producers thereon".

Prior to November 1, 1954, Lloyd Sloan and O.J. Snyder owned and operated milk route No. 800, having purchased the same from the original operator of the route; that the said Sloan and Snyder throughout the period of their operation of the route delivered the Grade A milk collected thereon to the defendant dairy's place of business in Springdale, Arkansas.

That on or about November 1, 1954, the plaintiffs purchased the said route for a cash consideration of $6,000, which purchase by the plaintiffs and sale by Sloan and Snyder was well known and consented to by the defendant dairy.

During the latter part of 1955, one Carl Ishmael offered to pay plaintiffs $7,000 in cash for said route, and at the request of plaintiffs the defendant dairy gave its consent for the sale of said route to the said Ishmael, but the said Ishmael could not raise the necessary $7,000, and the contemplated sale was not consummated.

In the early part of January, 1956, the plaintiffs began negotiations with one Robert Oxford for the sale of the route for the sum of $7,500, whereupon all of the defendants refused to give their consent to the sale of the said route to the said Oxford, and by reason of the wrongful and unlawful conduct on the part of the defendants the plaintiffs lost the sale of the said route to the said Oxford. On or about January 9, 1956, the defendants orally notified plaintiffs that they "intended to take possession of and assume operation of said milk route themselves, beginning on the morning of January 10, 1956; and on January 10, 1956, the defendants did wrongfully and unlawfully take possession of said milk route and began the operation of their own milk trucks thereon and wrongfully and unlawfully ejected the plaintiffs from said milk route and prevented and prohibited the plaintiffs from operating their trucks on said milk route and from picking up the milk from same, and converted said milk route to their own use".

That the said Sloan and Snyder from whom plaintiffs acquired the route had acquired, encouraged, arranged, solicited, induced, and procured the business and good will of the producers on the said milk route, and had by reason of such efforts caused the producers to sell their milk to the defendant dairy.

"On and prior to January 9, 1955, the defendants, in violation of the Sherman Anti-Trust Act, Title 15, U.S.C. § 1, 2, 12, and 15, combined, confederated, and conspired among themselves and with other parties at present to the plaintiffs unknown, with the wrongful and unlawful intent and purpose to convert the said milk route No. 800 to their own use and thereby to hinder, burden, restrain, and interfere with the flow of and interstate commerce in said milk from the State of Arkansas to other states, and the actions of the said defendants in the conversion of said milk route to their own use and in depriving the plaintiffs of the benefits and enjoyment thereof has constituted and now constitutes a serious and material hindrance, burden, restraint, and interference with trade and commerce in said milk between the State of Arkansas and other states, and on account of said conversion the plaintiffs herein have been injured and damaged in their business and property in the sum of $7,500, which was the actual, fair market value of said milk route at the time of the wrongful conversion thereof by the defendants."

The plaintiffs pray for the recovery of $7,500 as their actual damages and for treble damages under Title 15, U.S.C.A. § 15, in the sum of $22,500.

On February 26, 1957, the plaintiffs filed an amendment to their complaint by adding thereto numbered paragraphs 12, 13, and 14.

In numbered paragraph 12 of the amendment to the complaint the plaintiffs alleged that the defendants owned and operated a number of other milk routes in Washington County, Arkansas, from which they collected, acquired, and purchased whole milk; that the amount of milk so obtained by defendants constitutes a substantial and material amount of the whole milk produced in Washington County, Arkansas, and in Northwest Arkansas.

In numbered paragraph 13 the plaintiffs alleged that the 26 farmers, dairymen, and other producers on milk route No. 800 herein involved produced a material and substantial amount of all the whole milk produced in Washington County, Arkansas.

In numbered paragraph 14 the plaintiffs alleged that the conversion by the defendants of milk route No. 800 herein involved "was but part and parcel of the said combination, confederation, and conspiracy by the defendants hereinabove mentioned, and the said milk route No. 800 was so converted by the defendants to their own use with the wrongful, willful, arbitrary, capricious, and unlawful intent and purpose to cause and result in, and has caused and resulted in, all of the following, in violation of the provisions of the Sherman Anti-Trust Act:

    "(a) The creation and establishment by the
  defendants of a monopoly in the purchase,
  acquisition, picking up and transportation in
  interstate commerce of all of the whole milk produced
  by all of the farmers, dairymen, and other producers
  of whole milk in Washington County, Arkansas, and in
  Northwest Arkansas.
    "(b) The destruction of all competition with the
  defendants in the purchase, acquisition, picking up
  and transportation in interstate commerce of all of
  the whole milk produced by all of the farmers,
  dairymen, and other producers of whole milk in
  Washington County, Arkansas, and in Northwest
  Arkansas.
    "(c) The destruction of the said milk route No. 800
  belonging to the plaintiffs, and the denial of the
  right of the plaintiffs to acquire and pick up all of
  the whole milk produced by all of the producers
  situated thereon and to transport said milk, or to
  cause said milk to be transported, in interstate
  commerce by persons or firms other than the
  defendants.
    "(d) The narrowing and restraint of the market for
  all of the whole milk produced by all of the
  producers of whole milk located upon and along the
  said milk route No. 800.
    "(e) The narrowing and restraint upon the
  transportation in interstate commerce of all of the
  whole milk produced by all of the producers of whole
  milk located in Washington County, Arkansas, and
  Northwest Arkansas."

On April 25, 1957, the defendants, Foremost Dairies, Inc., and Guy Horner, filed their joint answer in which they admitted the residence of the parties and the presence of an amount in excess of $3,000, but denied that the Court has jurisdiction of the action under the provisions of Title 15 U.S.C.A. §§ 1, 2, 12, and 15. They denied that they had converted said alleged milk route or that they had done any act in contravention of the terms and provisions of the Sherman Anti-Trust Act.

They further alleged that the plaintiffs by verbal arrangement with the defendant began delivering Grade A milk to the defendant dairy on or about November 1, 1954; that the plaintiffs were to furnish a properly equipped truck for the transportation of said milk, and that such arrangement continued until about January 9, 1956, at which time the defendant dairy advised the plaintiffs that "it no longer could purchase milk which plaintiffs hauled on the route in question for the reason that at the instance of the producers on said route, Skelton Brothers would become a hauler of the milk on the route in question and the defendant, Foremost Dairies, Inc., would not receive and purchase any further milk hauled by the plaintiffs on said route".

During the period of operation by the plaintiffs the producers made many complaints with reference to the manner in which plaintiffs transported their milk, stating "that the truck operated by plaintiffs was kept in an unsanitary condition, that the driver thereof was likewise unsanitary in his operations, that plaintiffs carelessly and negligently spilled the milk of the producers, lost their containers filled with milk, and failed to pick up the milk at the time or times when it was necessary to do so in order to maintain the quality of the milk, and failed to deliver to producers weight records of their milk, and the producers advised the defendant that unless some other arrangement was made for transporting their milk that they, the producers, would sell their milk to other dairies and cause same to be transported in a proper manner. The complaints as set forth herein were made not only to the defendant, Foremost Dairies, Inc., but likewise to the plaintiffs herein on many occasions, and thereafter plaintiffs failed and refused to change their method of operation to the satisfaction of the said producers."

That prior to the time plaintiffs purchased the equipment from Sloan and Snyder, they were advised that the said Sloan and Snyder did not own a route and that all plaintiffs would acquire would be the equipment for hauling milk.

"That the plaintiffs had no contract, either written or oral, with the producers for hauling said milk, and the producers could at any time they saw fit haul their milk with their own equipment or employ anyone else other than plaintiffs to haul it, and the defendant, Foremost Dairies, Inc., further states that the plaintiffs had no route which they could sell and none which the defendants could convert, and this defendant denies that it ever converted any route as alleged in the complaint."

The defendant dairy further alleged:

"That at the time plaintiffs herein ceased to serve the route of the producers in question in a satisfactory manner to said producers that Skelton Brothers took over and began the hauling of milk on the route in question at the instance of the producers, and on the same terms and conditions as had been in effect with the plaintiffs and the defendant, Foremost Dairies, Inc., during the period in which the plaintiffs served said route, and that the defendant, Foremost Dairies, Inc., had no interest in the matter other than that the producers be properly served to the end that it, the defendant, would receive Grade A milk in a proper manner and in such condition as to meet the inspection and approval of the health inspectors of said products."

That the plaintiffs breached the terms of the contract with the defendant by failing to perform thereunder, and as a result of said breach said contract was terminated by the defendant on the 9th day of January, 1956.

The defendant, Guy Horner, alleged that at all times during the period in question he was an employee of the defendant, Foremost Dairies, Inc., and that his efforts on behalf of the defendant, Foremost Dairies, Inc., "was attempting to aid the producers and the haulers of their milk to the end that the highest quality of milk would be produced, maintained by said producers and delivered to Foremost Dairies, Inc., in Dallas, Texas, in a manner that would meet inspection of the health authorities and that producers would receive therefrom proper compensation for their products".

Upon the issues as joined by the pleadings, the case proceeded to trial on May 14 and 15, 1957, to the Court without a jury. At the conclusion of the introduction of all the evidence, the plaintiffs dismissed their complaint and amendment thereto as against the defendant, Keith Skelton, leaving only before the Court the claims of plaintiffs as against the defendants, Foremost Dairies, Inc., and its employee, Guy Horner. The Court took the case under advisement pending receipt of briefs from the parties in support of their respective contentions. The briefs have been received and considered along with the pleadings and evidence, and the Court now makes and files herein its Findings of Fact and Conclusions of Law, separately stated.

Findings of Fact

1.

Plaintiffs are citizens and residents of the State of Oklahoma. The defendant, Guy Horner, is a citizen and resident of the State of Arkansas, and the defendant, Foremost Dairies, Inc., (hereinafter referred to as defendant dairy) is a New York corporation doing business in the State of Arkansas.

2.

In the spring of 1951 the defendant dairy explored the possibility of opening a milk route in Washington County, Arkansas, to obtain Grade A milk for sale in the City of Dallas, Texas. Various producers were contacted, and several meetings were held with producers and prospective producers of Grade A milk in the area. At these meetings various things were discussed, such as how the milk would be hauled, and what requirements would have to be met by the producers in order that their milk might meet the specifications of Grade A milk. These requirements included, in many instances, major changes in dairy barns and equipment. It was decided that the milk route would be feasible, and in the spring or summer of 1951 such a route was initiated.

The first milk hauler was a man named Ross Reed. Subsequently he sold whatever rights he had to Lloyd Sloan and O.J. Snyder. These two men operated the route until November 1, 1954, on which date they sold their equipment used on the route to plaintiffs herein, Wayne Whiteley and J.H. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.