defendant along lines of restraint of trade and monoply, in the course of which injury might follow as a natural effect, or might be occasioned by intentional and malevolent acts of the defendant. In this state of the case, the origin and purpose of the injury became questions for the jury.

It is impracticable to rehearse even briefly the testimony of the case, but the theory upon which the court tried the case and submitted it to the jury runs through its most elaborate and carefully delivered charge and is disclosed by a few excerpts.1

1 As to the plaintiff's action the court said: "The plaintiff's case is based on an unlawful combination and unlawful contracts." This unlawful combination is the one made by stockholders of the plaintiff with the defendant, and the unlawful contracts are the two made between stockholders of the plaintiff and the defendant, and one made between the plaintiff and the defendant. Upon the subject of the defendant's unlawful acquisition of control and its intent to injure the plaintiff, the court said:

"In other words, to put it briefly, the plaintiff's claim is based on injury through the destruction of competition, which is alleged existed, and which ought to have existed, between it and the defendant, and the injuries are based or the damages for injuries are based on the losses which the plaintiff claims were caused by the destruction of that competition.

"All of these averments in the statement of claim set up unlawful acts, and the question then arises as to whether the plaintiff was a party to those unlawful acts. While the law prohibits unreasonable restraint of trade, it does not permit parties to take an unreasonable position with regard to acts in restraint of trade, and where two parties are equally guilty of a violation of the provisions of the Sherman Act, it does not permit one of the guilty parties to recover from the other. The policy of the law is that as between two wrongdoers, who are jointly responsible for the conditions of which one party complains, the law leaves them in the position in which it finds them, and the courts will not interfere to protect one wrongdoer against the other.

"I am outlining this at the outstart so that you may bear these principles in mind when you come to consider the evidence as to the circumstances under which the alleged unlawful combination was formed, the alleged unlawful contract was entered into, and the alleged unlawful use that was made of the control, which it is claimed the defendant exercised over the plaintiff. "If, under all the evidence, you find that the defendant did obtain a control of the plaintiff, and used that control in the restraint of interstate commerce, with the view of monopolization of the banana business in interstate trade and commerce, and did various unlawful acts which the plaintiff alleges it did, and did these things without the acquiescence or consent of the plaintiff, with the intent to injure the plaintiff, then it would be your duty to return a verdict in favor of the plaintiff for the amount of damages which it has suffered by reason of the injurious acts.

"If, however, you find that there were such unlawful acts, and there was such an unlawful combination, and the plaintiff through the unanimous consent of its stockholders, joined in forming the unlawful combination, joined in entering into the alleged unlawful contracts, and acquiesced in the use of alleged unlawful control, then the plaintiff cannot recover in this case, and it would be your duty to return a verdict for the defendant. And if you should find that there was an unlawful combination, an unlawful control, an unlawful use of the control, and you should fail to find that the plaintiff was injured thereby, even though the control was exercised, without consent, then your verdict should be for the defendant because the plaintiff cannot recover in this case unless it was injured.

"If from all the evidence you find that at that time it was the purpose, not only of the United Fruit Company, but also the Bluefields Steamship Company, through its direction, and with the unanimous consent of its stockholders, to make that combination, to destroy competition, or the arrangement by which

We must inquire whether the facts of the case justify these instructions upon the law. The facts have been established by the verdict. They are vast in number and cover a wide range. While we have given consideration to all, we shall repeat only those which because

this competition was destroyed between the two parties, and the contract with the Fruit Dispatch Company were entered into under the same circumstances, then you would be justified, and I instruct you to find in that case that both parties were equally guilty of a violation of the Sherman Act, if either was. "If the defendant was not guilty of a violation of the Sherman Act, it is not liable in this case. If by doing these acts with the consent of the plaintiff, it was guilty of a violation of the Sherman Act, it follows that the plaintiff was equally guilty of a violation of the Sherman Act in forming a combination and entering into contracts in restraint of trade, and for the destruction of competition between these two companies."

Upon the subject of the defendant's unlawful exercise of control lawfully acquired over the plaintiff, and of its intent to injure, the court said:

"The further question arises whether in case the contracts were not intended at that time to be contracts in violation of the Sherman Act, the defendant thereafter made an unlawful use of the combination, that is to say, exercised its control to do injurious acts, which had the purpose of destroying competition in this combination, and the monopolization of the banana business in the defendant. As to those acts, if you find from the evidence that they were done with the acquiescence of the board of directors and stockholders, of the Bluefields Steamship Company, then the Bluefields Steamship Company would be in exactly the same position as to the use of that control that it would be in in the entering into of this combination and the contracts with the Fruit Dispatch Company at the outstart. So that in either of these cases it would be your duty to return a verdict for the defendant without going into any question as to whether or not the plaintiff was injured. If, on the other hand, you find from the evidence that the defendant compelled the plaintiff to enter into this Fruit Dispatch Company contract by reason of the stock control obtained without the unanimous consent of the stockholders, and that through the exercise of power through the Fruit Dispatch Company and through control obtained by the ownership of stock, that it alone had the purpose of restraint of trade, and a destruction of competition between the two, and that in the exercise of the control and in the carrying out of the purpose, it injured the plaintiff in its business, then it would be your duty to return a verdict in favor of the plaintiff.

*

"The plaintiff cannot recover if, prior to the acquisition by Steele of his shares in the Bluefields Steamship Company, all the stockholders had acquiesced in the control of the United Fruit Company and in the various things now complained of by the plaintiff.

"I instruct you that acquiescence by all of the stockholders of the plaintiff in the exercise of the voting power by the defendant upon the shares held by it had the same legal effect as original consent to the formation of the illegal combination, and for any acts or omissions while such acquiescence continued the plaintiff cannot maintain this action."

In addition to what is found in these excerpts upon the element of intent, the court repeatedly charged in different phraseology what it said in affirming a point:

"If you are not satisfied by preponderance of evidence that the defendant in this case intentionally injured the plaintiff, then I charge you that your verdict must be for the defendant."

And again:

"In case you find that intentional injury has been done the plaintiff company by the exercise of control by the defendant, I instruct you that the proper measure of damage in this case is the difference between what the plaintiff company actually earned during the continuance of the control of the defendant, and the sum which it would have earned if there had been no control and if the plaintiff and defendant had been strictly competitive."

of their importance and prominence constitute the main structure of the case.

[10] The defendant maintained that a verdict should be directed in its favor for the reason, inter alia, that all the stockholders of the Bluefields Company (1) participated in forming the combination, and (2) acquiesced in the things done by the defendant in the exercise of the control conferred by the combination. As the question of its right to a directed verdict is not raised by writ of error, we are concerned with the contention only as it now presents the question, whether the evidence, if properly admitted, sustains the verdict.

It appears that the Bluefields Steamship Company was a corporation. engaged in the business of importing bananas into the United States. It was a small combination of one-time competing concerns having a rather close control of the banana business in Bluefields, Nicaragua. In June 1899, the United Fruit Company, a larger combination, engaged in the same business elsewhere in Central America, entered the Bluefields region in competition with the Bluefields Company. In August 1899, after two months' competition, the directors of the Bluefields Company sent a committee to New York or Boston for the purpose of coming to a trade understanding with the Fruit Company. The authority which the board of directors conferred upon the committee in its proposed dealings with the Fruit Company extended to the fixing of prices by a combination of fruit importers, the limitation of importations, the fixing of uniform freight and passenger rates, the regulation of prices at purchasing points, and division of territory. This committee was appointed upon the unanimous vote of the directors on motion made by one Simon Steinhardt, who figured conspicuously in the matters now in litigation. As a result of the negotiations three contracts were entered into on October 14 following. Of the three contracts signed on that date, one was between an officer of the Fruit Company acting for that company, and stockholders of the Bluefields Company, and was signed by the president of the Fruit Company and all stockholders of the Bluefields Company excepting Simon Steinhardt. After providing that the stockholders should not compete with the Bluefields Company in growing, importing or selling tropical fruit in Nicaragua, Honduras or New Orleans for ten years, the stockholders of the Bluefields Company agreed to sell five hundred shares or one-half of its capital stock to the Fruit Company. In pursuance of this undertaking, each shareholder of the Bluefields Company (excepting Simon Steinhardt) transferred one-half of his shares to a designated person for the Fruit Company. Simon Steinhardt did not sign the contract or assign one-half of his shares, it being testified that he stated he did not wish to sell his shares, but that, however, "onehalf the joint holdings of him and Emanuel Steinhardt would be covered by the contract." Emanuel assigned all his shares, sixty-two and one-half, and Simon retained the same number, sixty-two and one-half. By the assignment of one-half its stock and an arrangement by which the voting power of an additional share was conveyed, the Fruit Company acquired stock control over the Bluefields Company.

The second contract was between the Fruit Company and stockholders of the Bluefields Company, similarly signed by the stockhold

243 F.-2

ers. Its purpose, as indicated by preamble, was "to obtain for the Bluefields Company an assurance that its business shall not be impaired by interference of the United Fruit Company," and to that end fixed the amount of fruit which each company might import into the United States from Nicaragua and which the Bluefields Company might import from Honduras, with further restrictions on imports "upon a proportionate basis mutually agreed upon" by five importing companies, and provided that the classification of fruits and the fixation of rates for freight and passengers should be by agreement of the two companies.

The third contract was between the Bluefields Company and Fruit Dispatch Company (a subsidiary of the Fruit Company), made the Dispatch Company the sole selling agent of the Bluefields Company, and provided for the fixing of prices. This agreement was unanimously ratified by the board of directors of the Bluefields Company at a meeting at which Simon Steinhardt was present, there being testimony that Steinhardt urged and with the others approved the whole arrangement including the contracts of October 14, 1899.

[11] We are of opinion that upon this testimony the jury might have found that the combination effected by the three contracts was an unlawful combination in restraint of trade; that in its formation the plaintiff company participated, and to the control thereby conferred upon the Fruit Company the Bluefields Company consented. Therefore the court's instructions upon the law as to the plaintiff's participation in the defendant's acquisition of control was, in our opinion, manifestly correct. If the Sherman Act was violated by the combination in which the Bluefields Company participated, and injury to that company was a natural consequence, then the case comes within the well settled principle that where a criminal combination is made or a criminal enterprise is undertaken by two parties and either party violates the agreement with injury to the other, the law will afford the injured party no redress but will leave him as it finds him. In pari delicto potior est conditio defendantis. Daniels v. Tearney, 102 U. S. 415, 26 L. Ed. 187; McMullen v. Hoffman, 174 U. S. 639, 19 Sup. Ct. 839, 43 L. Ed. 1117; Pittsburgh Dredging & Construction Co. v. Monongahela & Western Dredging Co. (C. C.) 139 Fed. 780; Chicago, M. & St. P. Ry. Co. v. Wabash, St. L. & T. Ry. Co., 61 Fed. 993, 9 C. C. A. 659; Bishop v. American Preserves Co. (C. C.) 105 Fed. 845; Continental Wall Paper Co. v. Voight, 212 U. S. 227, 262, 29 Sup. Ct. 280, 53 L. Ed. 486.

[12] So also were correct the court's rulings and instructions as to the plaintiff's acquiescence in the defendant's exercise of its control. If, upon evidence which we think abundantly sufficient, the jury found that all the stockholders of the Bluefields Company joined in forming the alleged unlawful combination and in placing their company in it; acquiesced for a long term of years in the part their company played in that combination and in the manner it played it or was caused to play it; and accepted and enjoyed the profits which sprang from it, we are of opinion that the corporation itself was bound by their acts and was precluded from asserting a right of action based upon them. Morawetz on Corporations, § 262; Wells v. Northern Trust Co., 195

Ill. 288, 63 N. E. 136; Hotel Co. v. Wade, 97 U. S. 13, 24 L. Ed. 917. The rights of its two new and innocent stockholders are not superior to the rights of the corporation. It is urged, however, that even if the corporation is precluded from maintaining an action for the benefit of its stockholders, the corporation might later repudiate their acts and recover for the benefit of its creditors. But there is in this case no question of creditors other than such as may always technically be present in cases in which corporate action is involved. The litigation had its rise on a stockholder's bill, and though now prosecuted by a receiver in an action at law, the rights involved are obviously those which exist between the corporation and its stockholders.

[13] The jury were next required to determine whether the defendant's control, if lawfully acquired, was lawfully exercised, and as one interpretation of the verdict may be that they found a lawful exercise, we must inquire whether there is evidence to sustain that finding. We lay aside any question as to whether the Sherman Act recognizes the lawful exercise of control unlawfully acquired as not raised by this writ of error, and restrict our inquiry to the question, as stated by the plaintiff, whether "by reason of said unlawful control and contracts and by reason of the unlawful use of said control" the defendant violated the Sherman Act and inflicted injuries for which recovery may be had. Assuming that the court was correct in its fundamental theory of the case arising out of the plaintiff's grant of control to the defendant and its acquiescence in the manner of its exercise, the question whether its exercise was lawful or unlawful is one purely of fact. This question was sharply controverted by a great mass of testimony as to conduct covering a period of ten years, from which it appears that the affairs of the Bluefields Company, as administered by the Fruit Company, prospered greatly or suffered much according as the testimony is read and believed. This testimony raised kindred questions, vigorously contested, as to whether the acts done and omitted by the Fruit Company in the administration of the affairs of the Bluefields Company were in pursuance merely of wrong business policy, in consequence of incompetent or indifferent managers, or in furtherance of a design on the part of the Fruit Company to injure the Bluefields Company; whether to the acts done or omitted the Bluefields Company gave its consent or made protest; and whether in consequence thereof any injury was inflicted.

It would add nothing to the discussion to repeat the evidence upon which these questions were submitted to the jury. The point for our consideration is whether they were properly submitted. As they were submitted on the theory of the law which we have found the trial court properly applied to the peculiar facts of this case, we find that they were determined by the verdict of the jury upon evidence which was sufficient to sustain it.

[14-16] The remaining question is what statute of limitations, if any, applied to the case. The plaintiff maintained that no statute of limitations was applicable, because no right of action accrued to the Bluefields Company so long as it was under the repressive control of the Fruit Company, and that until it got from under its control the statute did not begin to run against it. We are not persuaded to this