text:
Rau, D. Victoria & Hui-Huan Ann Chang. (in press). Chain shift of /ay/ and /aw/ in Yami on Orchid Island. Studies in Philippine Languages and Cultures.
*Rau, D. Victoria & Maa-Neu Dong. 2006. Yami Texts with Reference Grammar and Vocabulary. Language and Linguistics, Institute of Linguistics, Academia Sinica, Taipei, Monograph A-10.
*Rau, D. Victoria, Maa-Neu Dong, Hui-Huan Ann Chang, Daphne Lin & Yong-Chang Hsu. 2005. Multimedia Language Teaching Materials in Yami. Department of English Language, Literature, and Linguistics, Providence University, Taiwan.
Rau, D. Victoria & Maa-Neu Dong. 2005. Yami reduplication. Concentric: Studies in Linguistics 31.2: 57-87.
Rau, D. Victoria. 2005. Iconicity, tense, aspect, and mood morphology in Yami, Concentric: Studies in Linguistics 31.1: 65-94.
Rau, Der-Hwa V. 2004. Lexical similarity, sound change and intelligibility of Atayalic dialects, Papers on Austronesian Subgrouping and Dialectology, eds. by John Bowden & Nikolaus Himmelmann, Pacific Linguistics, Canberra, Australian National University. 37-96.
Rau, D. Victoria. 2002. Nominalization in Yami, Language and Linguistics 3.2: 164-195.
*Rau, D. Victoria, Flora Wang & Ying Cheng. 2002. Linguistics in Taiwan: Past and future (in Chinese), Language and Linguistics 3.1, special monograph.
Rau, D. Victoria. 2001. Needs analysis of elementary school EFL teachers’ training programs at Taichung County (in Chinese), Journal of Humanities, Providence University 13: 1-23.
*Dong, Maa-Neu & D. Victoria Rau. 2000. Ciriciring no Tao [Yami Textbook in Chinese]. Taipei: Crane Publishing Co.
Rau, Der-Hwa V. 2000. Phonological variation and sound change in Atayal, Oceanic Linguistics 39.1: 144-156.
Rau, Der-Hwa V. & Maa-Neu Dong. 1999. Analysis of Yami lexical counts and dictionary making (in Chinese), The Newsletter of the Form for Museum Ethnography of Taiwan 2.3: 30-58.
Rau, Der-Hwa V. 1999. Grammar proficiency test and writing assessment, The Proceedings of the Eighth International Symposium on English Teaching, Taipei: Crane. 507-516.
Rau, Der-Hwa V. 1999. Validity and reliability of grammar proficiency test and evaluation of the effectiveness of freshman English composition class, Journal of Humanities, Providence University 11: 155-184.
Rau, Der-Hwa V. 1997. Transitivity and discourse grounding in Atayal folk tales, Proceedings of the Seventh International Conference on Austronesian Linguistics, eds. by Cecilia Odd & Wim Stokhof. Amsterdam -Atlanta, GA: Rodopi. 497-511.
Rau, Der-Hwa V. 1996. Applications of variation studies to Chinese language teaching (in Chinese), Proceedings of Journées d'éetude internationales sur l'enseignement du chinois moderne, Association Francaise des Professeurs de Chinois, Paris: Librairie le Phoenix. 117-126.
Rau, Der-Hwa V., Jo Kuan & Cecilia Liu. 1995. Five Atayal folk tales (in Chinese), Field Materials, Institute of Ethnology, Academia Sinica, Occasional Series 10: 119-142.
Rau, Der-Hwa V. 1995. The scientific and social principles for orthography development: a case study of Atayal (in Chinese), Proceedings of Conference on Taiwan Austronesian Language Maintenance and Development, Ministry of Education of R.O.C., 31-47.
Rau, Der-Hwa V. 1995. Bilingualism and bilingual education (in Chinese), The World of Chinese Language, 77: 17-34.
Rau, Der-Hwa V. 1995. Language policy on Taiwan Southern Min dialect: lessons from Quebec (in Chinese), Proceedings of Conference on Taiwan Southern Min Dialect, Taipei: Crane Publishing Co. 307-318.
Rau, Der-Hwa V. 1994. Male and female languages (in Chinese), In Adjustment and Development, Chen-Wei Lu (ed.), Taichung: Provincial Library. 77-119.
Rau, Der-Hwa V. 1994. Lexical iconicity in Tagalog. Philippine Journal of Linguistics, 24. 2: 17-28.
Rau, Der-Hwa V. 1994. Linguistics and literature in English language teaching, (in Chinese), Proceedings of the 5th National Conference of English and American Literature, Taipei: Shulin. 499-513.
Rau, Der-Hwa V. 1994. The role of grammar in teaching Chinese as a foreign language, Proceedings of the 3rd International Conference on Teaching Chinese as a Foreign Language. Taipei: Student Book Co. 93-100.
*Rau, Der-Hwa V. 1992. A Grammar of Atayal, Taipei: Crane Publishing Co.
Rau, Der-Hwa V. 1992. Language contact in the Philippines. Philippine Journal of Linguistics 23. 1 & 2: 91-109.
Rau, Der-Hwa V. 1988. Sociolinguistic variable rule analysis of -nya in Indonesian", Linguistic Change & Contact: Proceedings of the 16th Annual Conference on New Ways of Analyzing Variation (NWAV), Kathleen Ferrara et al. eds. University of Texas, Austin. 293-297.

matches: V. V. V. V. V. V. V. V. V. V. V. V. V. V. V. V. V.


text:
Appeal from District Court, Tarrant County; Frank P. Culver, Jr., Judge.
Action by David Oscar Padgett, Jr., against the American Indemnity Company to recover on a guardian's general bond. Judgment for plaintiff, and defendant appeals.
Cantey, Hanger, McMahon, McKnight Johnson and Byron Scarborough, all of Fort Worth, for appellant.
Culbertson Morgan and M. Ward Bailey, all of Fort Worth, for appellee.
This suit was instituted by appellee, David Oscar Padgett, Jr., against appellant, American Indemnity Company, a corporation, to recover on a guardian's general bond.
On September 30th, 1930, D. O. Padgett, Sr., was appointed, by the Probate Court of Tarrant County, as guardian of the person and estate of appellee, then a minor. The guardian executed his general bond, in the sum of $7,000, but on his application, the Court, on January 30th, 1931, reduced the bond to $1,000. Appellant became surety on that bond.
In March, 1931, the guardian of appellee joined with others in a suit for partition of a landed estate in Parker County, in which his ward had an interest. By a judgment entered in the District Court of Parker County, it was determined that appellee owned and was entitled to an undivided one-fourth interest in about 40C acres of land in said County, inherited by him from his grandfather, J. H. Johnson, then deceased. The judgment further provided that the land was not susceptible to an equitable partition in kind, and found that it was necessary to sell the property and divide the proceeds arising therefrom. A receiver was appointed, with instructions to sell the land, making the usual and customary provisions for reports to and orders by the court.
A brief summary of the subsequent proceedings is that the receiver sold the land and received certain cash payments and accepted notes secured by vendor's lien for deferred payments. The guardian received for his ward, growing out of the partition suit, over $700 in cash and a vendor's lien note for $2,313.96, dated May 12th, 1932, due two years after date, bearing interest at six per cent per annum, payable to D. O. Padgett, Sr., guardian of the estate of D. O. Padgett, Jr.
The guardian was adjudged insane on March 10th, 1937, was insolvent and was not made a party defendant in this suit. Appellee reached his majority in December, 1937, and in 1939, filed his bill of review in the Probate Court of Tarrant County, to set aside the former order of that Court reducing the general bond of the guardian from $7,000 to $1,000. That relief was denied by an order of the Court entered on February 20th, 1939. In the judgment, it is recited that under the pleadings of the parties, the Court found and declared that the guardian had received for his ward (appellee) from the estate of J. H. Johnson, deceased (appellee's grandfather) $3,665.44, and had accounted to the court for $1,016.69; that said guardian had failed and refused to account for $2,648.75 of said funds so received by him. The general bond for $1,000, upon which the guardian was principal and the appellant was surety, was effective at all times after its execution until and including the trial date of this case.
The Probate Court of Tarrant County exercised no control or jurisdiction in said estate relating to the partition suit in Parker County by the guardian and others, wherein the estate of J. H. Johnson, deceased, was partitioned and from which the guardian received the interest of his ward. In this connection, the trial court, in his fact findings, says: "That the said guardian (D. O. Padgett, Sr.) did not make any application to the Probate Court of Tarrant County for an order authorizing a sale of the ward's interest in the property in Parker County, Texas, no order was entered approving such sale, no sale bond was required or given in connection with said sale, no application was made by the guardian in connection with the ward's estate for permission to file or participate in said partition suit, no order entered thereon seeking ratification of said partition sale and no order entered approving or confirming any partition, and that there has been no guardian's deed executed for and on behalf of the estate of said ward and no authorization from the Probate Court of Tarrant County to make such a deed, and that the Probate Court of Tarrant County, Texas, exercised no jurisdiction whatsoever over the sale of the ward's interest in and to the land in Parker County, Texas."
The cause was tried to the Court without the intervention of a jury. Judgment was entered in favor of appellee for $1,000 against appellant on the general bond of the guardian; hence this appeal by the surety on the bond.
The appellant seeks a reversal of the judgment upon five propositions, and the assignments of error to which they relate. The first three of these propositions assert error by the trial court in entering judgment against appellant, as surety on the guardian's general bond, when all the facts show, (a) that the funds which came into the hands of the guardian resulted from a sale of the ward's interest in lands in Parker County, Texas, (b) the funds for which the guardian failed to account were indisputably those arising from that sale, and (c) no application to the Probate Court was made for the guardian to participate in a partition suit, no order therefor was made, no application was made to the Probate Court for the guardian to sell the interest of the ward in the land, no authority was given, no report of sale was made, no confirmation thereof and no sale bond was required of the guardian to make such a sale. It is therefore contended that there was no liability for the accounting of said funds as against the general bond and appellant as surety thereon, for funds arising from the sale.
In its brief, appellant treats this transaction as one in which a guardian has sold the land of his ward, in which event he is required by statute to execute a sale bond, as provided by Article 4216. It is further contended that the general bond, upon — which appellant was liable, was given in obedience to the requirements of Article 4141, R.C.S., which, in part, provides: "The bond of the guardian of the estate of a ward shall be in an amount equal to double the estimated value of the personal property belonging to such estate, plus a reasonable amount to be fixed at the discretion of the county judge, to cover rents, revenues and income derived from the renting or use of real estate belonging to such estate. * * * conditioned that such guardian will faithfully discharge the duties of guardian of the estate of such ward according to law. * * *"
This article further provides that the County Judge shall from time to time inquire into the sufficiency of the bond, and if found inadequate, shall require the guardian to execute another, providing ample security for the performance of his duties as guardian.
We think appellant's premise is wrong. This was not a sale of real estate by a guardian, as contemplated by the several provisions of the statute. It is well settled by the decisions of our courts that under the provisions of our statutes, as they existed when this transaction took place, that the sureties on a general bond of the guardian are not responsible for the accounting of funds acquired by a guardian from a sale of real estate belonging to his ward. Perhaps the leading case on that point is American Indemnity Co. v. Noble, Tex.Com.App., 235 S.W. 867. The rule there announced has since been followed several times by other courts in the State.
In the instant case, the Probate Court of Tarrant County did not assume to exercise any jurisdiction in the matter of acquiring by the guardian the estate of his ward in the land in Parker County. In fact, it is not made to appear from the record before us that the ward had any interest in his grandfather's estate in that county at the time the probate court set and approved the guardian's general bond, upon which appellant was surety. This interest or estate of the ward did not accrue until the death of his grandfather, J. H. Johnson. The record does not reveal when this occurred.
It was one of the general duties of the guardian to take into his possession all of the estate of his ward. He was obligated by the terms of his general bond to faithfully discharge his duties as such guardian. By the provisions of Article 4164, R.C.S., the guardian is entitled to the possession and management of all the property of his ward. By Article 4168, R.C.S., he is required to use due diligence to recover possession of all property to which the ward has a title or claim.
On March 17th, 1931, the guardian of appellee joined with others in a suit in the District Court of Parker County for partition of about 400 acres of land, in which it was claimed that appellee (the ward) had an interest. This action, as we construe it, was in keeping with the guardian's general duty to get into his possession property "to which his ward had a title or claim." Under and by virtue of the judgment entered in that cause on April 10th, 1931, the guardian recovered and took into his possession, not land representing the interest of his ward, but more than $3,000 consisting of cash and a vendor's lien note for $2,313.96. Of course, what he received for his ward was personal property. The judgment of the District Court of Parker County shows that the ward was entitled to an undivided one-fourth interest in the land, but that it could not be equitably set apart in kind to the guardian for his ward; that a necessity existed for a receiver to be appointed by the court with instructions to sell the land and divide the proceeds between the joint owners in the proportions their respective interests were found by the court to exist.
There is no doubt in our minds that the District Court of Parker County had jurisdiction of the parties and the subject matter, when it entered the judgment of partition. This record does not disclose that the guardian sought a sale of his ward's interest in the land by asking the court to decree such a sale; even if he had the action would have been nonetheless one of partition. Our District Courts from the date of their creation have possessed equitable powers, independent of a statutory provision, to effectuate a partition of land by ordering it sold and a division of the proceeds, when the court is convinced that the rights of the parties demand it. The fact that one interest in the land is owned by a minor does not defeat the jurisdiction of the court to partition, nor to administer equitable rules of procedure in consummating that end. Moore v. Blagge, 91 Tex. 151, 38 S.W. 979, 41 S.W. 465; Laird et al. v. Gulf Production Co., Tex. Civ. App. 64 S.W.2d 1080, writ dismissed.
The testimony shows that the vendor's lien note taken by the guardian in the transaction was paid in full by the son of the maker of the note. The judgment of the Probate Court in the bill of review proceeding shows that the guardian had not accounted to the court for $2,648.75 of the funds received from the Parker County suit. The ward testified that he had received no part of it since becoming of age.
One of the duties enjoined upon the guardian by the conditions of his general bond was to faithfully discharge his duties. That duty embraced reducing the property of the ward to his possession. When once in his possession, it was likewise a part of his general duty as such guardian to account for it.
In Sargent v. Wallis, 67 Tex. 483 at page 487, 3 S.W. 721, it was said: "The bond of the guardian bound him, not only to account for and pay over such money or other effects of his ward as came into his hands, but also to faithfully discharge the duties of guardian of the estate of his ward according to law."
We have found no case in which the courts of this State have had the precise question before them that now confronts us, nor have we one such cited in the briefs before us. We are cited by appellee to Hooks v. Evans et al., 68 Iowa 52, 25 N.W. 925, the reasoning in which we think is sound and applicable to the point before us. The opinion reveals that the statutes of that state provide very much as do those of this state in guardianship matters. There, as in this state, a general bond is required of a guardian. The conditions of that bond in Iowa is that the "guardian `shall, from time to time, whenever thereunto required by law, render and pay unto said minors all moneys, goods, chattels, title papers, and effects which may come into the hands or possession of such guardian'". It is also provided by statute in that state that the "guardian when about to sell real estate shall give a special bond as security for the proceeds of the sale, as a condition precedent to his right to sell." In the cited case, a suit was instituted by a ward against her guardian and his sureties on his general guardian's bond for proceeds of a sale of real estate by a referee in a partition suit. In drawing the distinction between the liability of sureties on a sale bond, and the sureties on the general bond, the court said: "When, however, real estate of the ward is sold, not at a guardian's sale, but at a referee's sale, made in proceedings for a partition, the case is different. There is no provision of statute that a special bond shall be given, and the sureties cannot be allowed to say that they had reason to suppose that there would be. Their liability, therefore, must be determined solely by the terms of their contract."
It was urged there by the sureties, as is done in the instant case, that the provisions of the statute only required the guardian to make a general bond in double the amount of personal property on hand plus a reasonable amount to cover rents and revenues arising from real estate that a personal estate not then in existence, such as the one there in controversy could not be contemplated by the parties to the contract and that the court should not construe the bond as security for such new property. Court further said: "But we cannot think that the intention was that the ward should be without security for such property. * * * This property having come into the hands of the guardian as the ward's personal estate, but not as the proceeds of a guardian's sale of real estate for which a special provision is made, we think we must treat it like other personal estate of the ward, and regard the bond in question as security for it."
In the instant case, we think it is clear that the funds coming into the hands of the guardian as a result of the receiver's sale of the land in Parker County, constituted additional personal property belonging to the ward, for the accounting of which the general bond was security, to the same extent as if it had been on hand when the bond was executed. Our statutes which provide for the giving of the general bond, do not expressly nor impliedly limit the liability of the signers of the bond to property then on hand or that may arise from rents and revenues from real estate. As has been seen, if the guardian should thereafter seek to sell real estate belonging to his ward, he was required to make a sales bond to secure the proceeds arising there from, and the makers of the general bond had a right to anticipate that this would be done; but the funds involved in this suit, coming into the guardian's hands, did not arise from that source. The general bond in this case is grossly inadequate in amount, but such as it is, must be held to secure the faithful performance of the guardian to the trust imposed upon him by law, to the extent of the amount contracted for.
We have reached the conclusion and so hold that, it was within the general duties of the guardian to recover possession of his ward's estate, consisting of the interest in the land in Parker County; that it being an undivided interest, he could and should institute a proper suit to reduce it to possession and segregate it from the joint interests of others, if it was to the best interest of his ward; the District Court of Parker County had jurisdiction of the parties and subject matter in the partition suit, without order or leave from the Probate Court of Tarrant County; that the District Court could, upon a determination that the land was not capable of an equitable partition, order it sold by a receiver and the proceeds arising therefrom be divided among the owners as their respective interests may appear; that when the guardian received in cash and notes the proportionate amount to which his ward was entitled, he and his sureties on his general bond became responsible for the accounting therefor, as a performance of the faithful discharge of his duties as guardian. The contentions of appellant to the contrary, raised by its propositions one to three, are overruled.
Appellant's fourth and fifth propositions raise the questions of the sufficiency of the pleadings of appellee to support the judgment rendered and vice versa the variance between the pleadings and proof offered. As we construe the petition upon which this case was tried, it is one against appellant as surety on the guardian's general bond, for a failure of the guardian to faithfully discharge his duties as guardian, according to law; in that the guardian received personal property in cash and a vendor's lien note, all amounting to more than $3,600, belonging to the estate of the ward; that he collected the note, reducing it to cash, and thereafter failed and refused to account for approximately $2,600 of it.
The uncontradicted proof shows that the cash was received by the guardian from the receiver appointed by the District Court of Parker County to sell the land; that he also received the vendor's lien note from the purchaser of the land, representing the unpaid balance for which the receiver sold the ward's interest; that the son of the maker of the note paid it in full to the guardian. It further appears from the judgment of the Probate Court in which the guardianship proceedings were pending, entered on February 20th, 1939, that the guardian had not accounted to the court for $2,648.75 of the funds received by him, and that the guardian had not invested any part of that sum for the use and benefit of his ward under orders of the court, and further that the guardian had made no final account and had refused to do so, and that the guardian had failed and refused to account to the ward for said funds. The ward, the appellee here, more than twenty-one years of age when this suit was instituted, testified that his guardian had not accounted to him for any part of said fund. The trial court found from the facts before him, in findings of fact and conclusions of law, requested by appellant, at paragraph five, as follows: "That the said D. O. Padgett, Sr. (the guardian) did not account to or pay to the said David Oscar Padgett, Jr. (the ward) all or any part of the sum of $2,648.75, which the said Probate Court found that the said D. O. Padgett, Sr. was in default."
While the witness, J. J. Miles, was on the stand testifying as a witness, appellee had him identify the canceled checks issued by him to D. O. Padgett, by which the witness claimed he paid the vendor's lien note. The checks were put in evidence as exhibits. Each of those checks recites: "Pay to D. O. Padgett or order" so much, stating the amount. The checks were indorsed by D. O. Padgett. It is contended by appellant that because the checks were not payable to "D. O. Padgett, Sr., Guardian", or in some way to indicate that they were payable to him in his fiduciary capacity, they did not constitute proof of payment to the guardian as such. The witness who made payment by executing the several checks testified that they were delivered by him to D. O. Padgett, Sr.; that he saw that person indorse the checks; that when he had paid the whole note, it was delivered to him, with notation thereon that it was paid in full.
The judgment of the Probate Court, in which it was determined that the guardian had defaulted in the sum of $2,648.75, was well within the jurisdiction of that court. It being regular upon its face, was binding on all parties, including the guardian and the sureties on his bond. In this action by the ward on the bond, the judgment of the Probate Court was not subject to attack nor revision collaterally. Appellant was a party defendant in the bill of review action in the County Court, in which judgment the default was determined. That judgment was admissible in evidence in the instant case. 21 Tex.Jur., page 404, sect. 128, and cases there cited; also same text, page 411, sect. 132. In Whitfield v. Burrell, 54 Tex. Civ. App. 567, 118 S.W. 153, writ refused, it was held that the sureties on the bond need not be made parties to the probate proceedings, but that the judgment of that court was binding upon them and required no additional evidence of their liability to support a judgment against them in a suit on the bond. We see no deficiency in the pleadings of appellee and no lack of proof to support the judgment thereunder.
The judgment rendered by the trial court was for only $1,000, which was the extent of the liability assumed by the appellant. We see no error in the action of the trial court, for which the judgment should be disturbed. The propositions and the assignments of error to which they are germane are all overruled. The judgment should be affirmed. It is accordingly so ordered.

matches: v. v. v. v. v. v.


GENERAL DYNAMICS CORPORATION et al.
1. While the Government's statistical showing might have been sufficient to support a finding of 'undue concentration' in the absence of other considerations, the District Court was justified in finding that other pertinent factors affecting the coal industry and appellees' business mandated a conclusion that no substantial lessening of competition occurred or was threatened by the acquisition. Ample evidence showed that United Electric does not have sufficient reserves, which are a key factor in measuring a coal producer's market strength, to make it a significant competitive force. Thus, in terms of probable future ability to compete, rather than in terms of past production on which the Government relied, the court was warranted in concluding that the merger did not violate § 7 of the Act. Pp. 494—504.
2. The District Court was justified in considering postacquisition evidence relating to changes in the patterns and structure of the coal industry and in United Electric's reserve situation, since (unlike evidence showing only that no lessening of competition has yet occurred) the demonstration of weak coal resources necessarily implied that United Electric was not merely disinclined but unable to compete effectively for future contracts, such evidence going directly to the question whether future lessening of competition was probable. Pp. 504—506.
3. United Electric's weak reserves position, rather than establishing a 'failing company' defense by showing that the company would have gone out of business but for the merger, went to the heart of the Government's statistical prima facie case and substantiated the District Court's conclusion that United Electric, even if it remained in the market, did not have sufficient reserves to compete effectively for long-term contracts, and therefore appellees' failure to meet the prerequisites of a failing-company defense did not detract from the validity of the District Court's analysis. Pp. 506—508.
4. Under the 'clearly erroneous' standard of Fed.Rule Civ.Proc. 52(a), which governs as fully on direct appeal to this Court as on review by a court of appeals, the District Court's findings and conclusions are supported by the evidence and are not clearly erroneous. P. 508.
5. The District Court found new strip reserves unavailable, and the mere possibility that United Electric could some day acquire expertise to mine deep reserves does not depreciate the validity of the conclusion that United Electric at the time of trial did not have the power to compete effectively for long-term contracts, nor does it give the production statistics relied on by the Government more significance than the District Court ascribed to them. Pp. 508—510.
D.C., 341 F.Supp. 534, affirmed.
Reuben L. Hedlund, Chicago, Ill., for appellees.
On September 22, 1967, the Government commenced this suit in the United States District Court for the Northern District of Illinois, challenging as violative of § 7 of the Clayton Act, 38 Stat. 731, as amended, 15 U.S.C. § 18, the acquisition of the stock of United Electric Coal Companies by Material Service Corp. and its successor, General Dynamics Corp. After lengthy discovery proceedings, a trial was held from March 30 to April 22, 1970, and on April 13, 1972, the District Court issued an opinion and judgment finding no violation of the Clayton Act. 341 F.Supp. 534. The Government appealed directly to this Court pursuant to the Expediting Act, 15 U.S.C. § 29, and we noted probable jurisdiction. 409 U.S. 1058, 93 S.Ct. 553, 34 L.Ed.2d 510.
* At the time of the acquisition involved here, Material Service Corp. was a large midwest producer and supplier of building materials, concrete, limestone, and coal. All of its coal production was from deep-shaft mines operated by it or its affiliate, appellee Freeman Coal Mining Corp., and production from these operations amounted to 6.9 million tons of coal in 1959 and 8.4 million tons in 1967. In 1954, Material Service began to acquire the stock of United Electric Coal Companies. United Electric at all relevant times operated only strip or open-pit mines in Illinois and Kentucky; at the time of trial in 1970 a number of its mines had closed and its operations had been reduced to four mines in Illinois and none in Kentucky.1 In 1959, it produced 3.6 million tons of coal, and by 1967, it had increased this output to 5.7 million tons. Material Service's purchase of United Electric stock continued until 1959. At this point Material's holdings amounted to more than 34% of United Electric's outstanding shares and—all parties are now agreed on this point—Material had effective control of United Electric. The president of Freeman was elected chairman of United Electric's executive committee, and other changes in the corporate structure of United Electric were made at the behest of Material Service.
Some months after this takeover, Material Service was itself acquired by the appellee General Dynamics Corp. General Dynamics is a large diversified corporation, much of its revenues coming from sales of aircraft, communications, and marine products to Government agencies. The trial court found that its purchase of Material Service was part of a broad diversification program aimed at expanding General Dynamics into commercial, nondefense business. As a result of the purchase of Material Service, and through it, of Freeman and United Electric, General Dynamics became the Nation's fifth largest commercial coal producer. During the early 1960's General Dynamics increased its equity in United Electric by direct purchases of United Electric stock, and by 1966 it held or controlled 66.15% of United Electric's outstanding shares. In September 1966 the board of directors of General Dynamics authorized a tender offer to holders of the remaining United Electric stock. This offer was successful, and United Electric shortly thereafter became a wholly owned subsidiary of General Dynamics.
At trial controversy focused on three basic issues: the propriety of coal as a 'line of commerce,' the definition of Illinois or the Eastern Interior Coal Province Sales Area as a relevant 'section of the country,' and the probability of a lessening of competition within these or any other product and geographic markets resulting from the acquisition. The District Court decided against the Government on each of these issues.
As to the relevant product market, the court found that coal faced strong and direct competition from other sources of energy such as oil, natural gas, nuclear energy, and geothermal power which created a cross-elasticity of demand among those various fuels. As a result, it concluded that coal, by itself, was not a permissible product market and that the 'energy market' was the sole 'line of commerce' in which anticompetitive effects could properly be canvassed.
Similarly, the District Court rejected the Government's proposed geographic markets on the ground that they were 'based essentially on past and present production statistics and do not relate to actual coal consumption patterns.' 341 F.Supp., at 556. The court found that a realistic geographic market should be defined in terms of transportation arteries and freight charges that determine the cost of delivered coal to purchasers and thus the competitive position of various coal producers. In particular, it found that freight rate districts, designated by the Interstate Commerce Commission for determining rail transportation rates, of which there were four in the area served by the appellee companies, were the prime determinants for the geographic competitive patterns among coal producers. In addition, the court concluded that two large and specialized coal consumption units were sufficiently differentiable in their coal use patterns to be included as relevant geographic areas.4 In lieu of the State of Illinois or the Eastern Interior Coal Province Sales Area, the court accordingly found the relevant geographic market to be 10 smaller areas, comprising the two unique consumers together with four utility sales areas and four nonutility sales areas based on the ICC freight rate districts.
Finally, and for purposes of this appeal most significantly, the District Court found that the evidence did not support the Government's contention that the 1959 acquisition of United Electric substantially lessened competition in any product or geographic market. This conclusion was based on four determinations made in the court's opinion, id., at 558—559. First, the court noted that while the number of coal producers in the Eastern Interior Coal Province declined from 144 to 39 during the period of 1957—1967, this reduction 'occurred not because small producers have been acquired by others, but as the inevitable result of the change in the nature of demand for coal.' Consequently, the court found, 'this litigation presents a very different situation from that in such cases as United States v. Philadelphia National Bank, 374 U.S. 321, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963), and United States v. Von's Grocery Co., 384 U.S. 270, 86 S.Ct. 1478, 16 L.Ed.2d 555 (1966) where the Supreme Court was concerned with 'preventing even slight increases in concentration.' 374 U.S., at 365, n. 2, 83 S.Ct., at 1742.' 341 F.Supp., at 558. Second, the court noted that United Electric and Freeman were 'predominantly complementary in nature' since 'United Electric is a strip mining company with no experience in deep mining nor likelihood of acquiring it (and) Freeman is a deep mining company with no experience or expertise in strip mining.' Ibid. Third, the court found that if Commonwealth Edison, a large investor-owned public utility, were excluded, 'none of the sales by United Electric in the period 1965 to 1967, the years chosen by the Government for analysis, would have or could have been competitive with Freeman, had the two companies been independent,' because of relative distances from potential consumers and the resultant impact on relative competitive position. Ibid. Finally, the court found that United Electric's coal reserves were so low that its potential to compete with other coal producers in the future was far weaker than the aggregate production statistics relied on by the Government might otherwise have indicated. In particular, the court found that virtually all of United Electric's proved coal reserves were either depleted or already committed by longterm contracts with large customers, and that United Electric's power to affect the price of coal was thus severely limited and steadily diminishing. On the basis of these considerations, the court concluded: 'Under these circumstances, continuation of the affiliation between United Electric and Freeman is not adverse to competition, nor would divestiture benefit competition even were this court to accept the Government's unrealistic produce and geographic market definitions.' Id., at 560.
The Government sought to prove a violation of § 7 of the Clayton Act principally through statistics showing that within certain geographic markets the coal industry was concentrated among a small number of large producers; that this concentration was increasing; and that the acquisition of United Electric would materially enlarge the market share of the acquiring company and thereby contribute to the trend toward concentration.
'This intense congressional concern with the trend toward concentration warrants dispensing, in certain cases, with elaborate proof of market structure, market behavior, or probable anticompetitive effects. Specifically, we think that a merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market, is so inherently likely to lessen competition substantially that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anticompetitive effects.' Id., at 363, 83 S.Ct., at 1741.
See also United States v. Continental Can Co., 378 U.S. 441, 458, 84 S.Ct. 1738, 1747, 12 L.Ed.2d 953; United States v. Von's Grocery Co., 384 U.S., at 277, 86 S.Ct., at 1482; United States v. Pabst Brewing Co., 384 U.S. 546, 550—552, 86 S.Ct. 1665, 1668 1669, 16 L.Ed.2d 765.
The effect of adopting this approach to a determination of a 'substantial' lessening of competition is to allow the Government to rest its case on a showing of even small increases of market share or market concentration in those industries or markets where concentration is already great or has been recently increasing, since 'if concentration is already great, the importance of preventing even slight increases in concentration and so preserving the possibility of eventual deconcentration is correspondingly great.' United States v. Aluminum Co. of America, 377 U.S. 271, 279, 84 S.Ct. 1283, 1289, 12 L.Ed.2d 314 citing United States v. Philadelphia National Bank, supra, 374 U.S., at 365 n. 42, 83 S.Ct., at 1742.
While the statistical showing proffered by the Government in this case, the accuracy of which was not discredited by the District Court or contested by the appellees, would under this approach have sufficed to support a finding of 'undue concentration' in the absence of other considerations, the question before us is whether the District Court was justified in finding that other pertinent factors affecting the coal industry and the business of the appellees mandated a conclusion that no substantial lessening of competition occurred or was threatened by the acquisition of United Electric. We are satisfied that the court's ultimate finding was not in error.
'Congress indicated plainly that a merger had to be functionally viewed, in the context of its particular industry.' 370 U.S., at 321—322, 82 S.Ct., at 1522.
'Statistics reflecting the shares of the market controlled by the industry leaders and the parties to the merger are, of course, the primary index of market power; but only a further examination of the particular market—its structure, history and probable future—can provide the appropriate setting for judging the probable anticompetitive effect of the merger.' Id., at 322 n. 38, 82 S.Ct., at 1522.
See also United States v. Continental Can Co., supra, 378 U.S., at 458, 84 S.Ct., at 1747. In this case, the District Court assessed the evidence of the 'structure, history and probable future' of the coal industry, and on the basis of this assessment found no substantial probability of anticompetitive effects from the merger.
Much of the District Court's opinion was devoted to a description of the changes that have affected the coal industry since World War II. On the basis of more than three weeks of testimony and a voluminous record, the court discerned a number of clear and significant developments in the industry. First, it found that coal had become increasingly less able to compete with other sources of energy in many segments of the energy market. Following the War the industry entirely lost its largest single purchaser of coal—the railroads and faced increasingly stiffer competition from oil and natural gas as sources of energy for industrial and residential uses. Because of these changes in consumption patterns, coal's share of the energy resources consumed in this country fell from 78.4% in 1920 to 21.4% in 1968. The court reviewed evidence attributing this decline not only to the changing relative economies of alternative fuels and to new distribution and consumption patterns, but also to more recent concern with the effect of coal use on the environment and consequent regulation of the extent and means of such coal consumption.
'This major investment (in electric utility equipment) can be jeopardized by a disruption in the supply of coal. Utilities are, therefore, concerned with assuring the supply of coal to such a plant over its life. In addition, utilities desire to establish in advance, as closely as possible, what fuel costs will be for the life of the plant. For these reasons, utilities typically arrange long-term contracts for all or at least a major portion of the total fuel requirements for the life of the plant. . . .
'The long-term contractual commitments are not only required from the consumer's standpoint, but are also necessary from the viewpoint of the coal supplier. Such commitments may require the development of new mining capacity. . . . Coal producers have been reluctant to invest in new mining capacity in the absence of long-term contractual commitments for the major portion of the mine's capacity. Furthermore, such long-term contractual commitments are often required before financing for the development of new capacity can be obtained by the producer.' 341 F.Supp., at 543 (footnote omitted).
These developments in the patterns of coal distribution and consumption, the District Court found, have limited the amounts of coal immediately available for 'spot' purchases on the open market, since '(t)he growing practice by coal producers of expanding mine capacity only to meet long-term contractual commitments and the gradual disappearance of the small truck mines has tended to limit the production capacity available for spot sales.' Ibid.
Because of these fundamental changes in the structure of the market for coal, the District Court was justified in viewing the statistics relied on by the Government as insufficient to sustain its case. Evidence of past production does not, as a matter of logic, necessarily give a proper picture of a company's future ability to compete. In most situations, of course, the unstated assumption is that a company that has maintained a certain share of a market in the recent past will be in a position to do so in the immediate future. Thus, companies that have controlled sufficiently large shares of a concentrated market are barred from merger by § 7, not because of their past acts, but because their past performances imply an ability to continue to dominate with at least equal vigor. In markets involving groceries or beer, as in Von's Grocery, supra, and Pabst, supra, statistics involving annual sales naturally indicate the power of each company to compete in the future. Evidence of the amount of annual sales is relevant as a prediction of future competitive strength, since in most markets distribution systems and brand recognition are such significant factors that one may reasonably suppose that a company which has attracted a given number of sales will retain that competitive strength.
In the coal market, as analyzed by the District Court, however, statistical evidence of coal production was of considerably less significance. The bulk of the coal produced is delivered under long-term requirements contracts, and such sales thus do not represent the exercise of competitive power but rather the obligation to fulfill previously negotiated contracts at a previously fixed price. The focus of competition in a given time frame is not on the disposition of coal already produced but on the procurement of new long-term supply contracts. In this situation, a company's past ability to produce is of limited significance, since it is in a position to offer for sale neither its past production nor the bulk of the coal it is presently capable of producing, which is typically already committed under a long-term supply contract. A more significant indicator of a company's power effectively to compete with other companies lies in the state of a company's uncommitted reserves of recoverable coal. A company with relatively large supplies of coal which are not already under contract to a consumer will have a more important influence upon competition in the contemporaneous negotiation of supply contracts than a firm with small reserves, even though the latter may presently produce a greater tonnage of coal. In a market where the availability and price of coal are set by long-term contracts rather than immediate or short-term purchases and sales, reserves rather than past production are the best measure of a company's ability to compete.
The testimony and exhibits in the District Court revealed that United Electric's coal reserve prospects were 'unpromising.' 341 F.Supp., at 559. United's relative position of strength in reserves was considerably weaker than its past and current ability to produce. While United ranked fifth among Illinois coal producers in terms of annual production, it was 10th in reserve holdings, and controlled less than 1% of the reserves held by coal producers in Illinois, Indiana, and western Kentucky. Id., at 538. Many of the reserves held by United had already been depleted at the time of trial, forcing the closing of some of United's midwest mines.10 Even more significantly, the District Court found that of the 52,033,304 tons of currently mineable reserves in Illinois, Indiana, and Kentucky controlled by United, only four million tons had not already been committed under long-term contracts. United was found to be facing the future with relatively depleted resources at its disposal, and with the vast majority of those resources already committed under contracts allowing no further adjustment in price. In addition, the District Court found that 'United Electric has neither the possibility of acquiring more (reserves) nor the ability to develop deep coal reserves,' and thus was not in a position to increase its reserves to replace those already depleted or committed. Id., at 560.
Viewed in terms of present and future reserve prospects—and thus in terms of probable future ability to compete—rather than in terms of past production, the District Court held that United Electric was a far less significant factor in the coal market than the Government contended or the production statistics seemed to indicate. While the company had been and remained a 'highly profitable' and efficient producer of relatively large amounts of coal, its current and future power to compete for subsequent long-term contracts was severely limited by its scarce uncommitted resources.11 Irrespective of the company's size when viewed as a producer, its weakness as a competitor was properly analyzed by the District Court and fully substantiated that court's conclusion that its acquisition by Material Service would not 'substantially . . . lessen competition . . ..' The validity of this conclusion is not undermined, we think, by the three-faceted attack made upon it by the Government in this Court to which we now turn.
Furthermore, the fact that no concrete anticompetitive symptoms have occurred does not itself imply that competition has not already been affected, 'for once the two companies are united no one knows what the fate of the acquired company and its competitors would have been but for the merger.' FTC v. Consolidated Foods, supra, at 598, 85 S.Ct., at 1224. And, most significantly, § 7 deals in 'probabilities, not certainties,' Brown Shoe v. United States, 370 U.S., at 323, 82 S.Ct. at 1522, and the mere nonoccurrence of a substantial lessening of competition in the interval between acquisition and trial does not mean that no substantial lessening will develop thereafter; the essential question remains whether the probability of such future impact exists at the time of trial.
In this case, the District Court relied on evidence relating to changes in the patterns and structure of the coal industry and in United Electric's coal reserve situation after the time of acquisition in 1959. Such evidence could not reflect a positive decision on the part of the merged companies to deliberately but temporarily refrain from anticompetitive actions, nor could it reasonably be thought to reflect less active competition than that which might have occurred had there not been an acquisition in 1959. As the District Court convincingly found, the trend toward increased dependence on utilities as consumers of coal and toward the near-exclusive use of long-term contracts was the product of inevitable pressures on the coal industry in all parts of the country. And, unlike evidence showing only that no lessening of competition has yet occurred, the demonstration of weak coal resources necessarily and logically implied that United Electric was not merely disinclined but unable to compete effectively for future contracts. Such evidence went directly to the question of whether future lessening of competition was probable, and the District Court was fully justified in using it.
Second, the Government contends that reliance on depleted and committed resources is essentially a 'failing company' defense which must meet the strict limits placed on that defense by this Court's decisions in United States v. Third National Bank in Nashville, 390 U.S. 171, 88 S.Ct. 882, 19 L.Ed.2d 1015; Citizen Publishing Co. v. United States, 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148; and United States v. Greater Buffalo Press, Inc., 402 U.S. 549, 91 S.Ct. 1692, 29 L.Ed.2d 170. The failing-company doctrine, recognized as a valid defense to a § 7 suit in Brown Shoe, supra, 370 U.S., at 346, 82 S.Ct., at 1535, was first announced by this Court in International Shoe Co. v. FTC, 280 U.S. 291, 50 S.Ct. 89, 74 L.Ed. 431, and was preserved by explicit references in the legislative history of the modern amendments to § 7. H.R.Rep. No. 1191, 81st Cong., 1st Sess., 6 (1949); S.Rep. No. 1775, 81st Cong., 2d Sess., 7 (1950), U.S.Code Cong. Service, 1950, p. 4293. A company invoking the defense has the burden14 of showing that its 'resources (were) so depleted and the prospect of rehabilitation so remote that it faced the grave probability of a business failure . . .,' International Shoe, supra, at 302, 50 S.Ct., at 93, and further that it tried and failed to merge with a company other than the acquiring one, Citizen Publishing Co., supra, 394 U.S., at 138, 89 S.Ct., at 931; Greater Buffalo Press, supra, 402 U.S., at 555, 91 S.Ct., at 1696.
The Government asserts that United Electric was a healthy and thriving company at the time of the acquisition and could not be considered on the brink of failure, and also that the appellees have not shown that Material Service was the only available acquiring company. These considerations would be significant if the District Court had found no violation of § 7 by reason of United Electric's being a failing company, but the District Court's conclusion was not, as the Government suggests, identical with or even analogous to such a finding. The failing-company defense presupposes that the effect on competition and the 'loss to (the company's) stockholders and injury to the communities where its plants were operated,' International Shoe, supra 280 U.S., at 302, 50 S.Ct., at 93, will be less if a company continues to exist even as a party to a merger than if it disappears entirely from the market. It is, in a sense, a 'lesser of two evils' approach, in which the possible threat to competition resulting from an acquisition is deemed preferable to the adverse impact on competition and other losses if the company goes out of business.15 The appellees' demonstration of United's weak reserves position, however, proved an entirely different point. Rather than showing that United would have gone out of business but for the merger with Material Service, the finding of inadequate reserves went to the heart of the Government's statistical prima facie case based on production figures and substantiated the District Court's conclusion that United Electric, even if it remained in the market, did not have sufficient reserves to compete effectively for long-term contracts. The failing-company defense is simply inapposite to this finding and the failure of the appellees to meet the prerequisites of that doctrine did not detract from the validity of the court's analysis.
Finally, the Government contends that the factual underpinning of the District Court's opinion was not supported by the evidence contained in the record, and should be re-evaluated by this Court. The findings and conclusions of the District Court are, of course, governed by the 'clearly erroneous' standard of Fed.Rule Civ.Proc. 52(a) just as fully on direct appeal to this Court as when a civil case is being reviewed by a court of appeals. The record in this case contains thousands of pages of transcript and hundreds of exhibits. Little purpose would be served by discussing in detail each of the Government's specific factual contentions. Suffice it to say that we find the controlling findings and conclusions contained in the District Court's careful and lengthy opinion to be supported by the evidence in the record and not clearly erroneous.
One factual claim by the Government, however, goes to the heart of the reasoning of the District Court and thus is worthy of explicit note here. The Government asserts that the paucity of United Electric's coal reserves could not have the significance perceived by the District Court, since all companies engaged in extracting minerals at some point deplete their reserves and then acquire new reserves or the new technology required to extract more minerals from their existing holdings. United Electric, the Government suggests, could at any point either purchase new strip reserves or acquire the expertise to recover currently held deep reserves.
But the District Court specifically found new strip reserves not to be available: 'Evidence was presented at trial by experts, by state officials, by industry witnesses and by the Government itself indicating that economically mineable strip reserves that would permit United Electric to continue operations beyond the life of its present mines are not available. The Government failed to come forward with any evidence that such reserves are presently available.' 341 F.Supp., at 559. In addition, there was considerable testimony at trial, apparently credited by the District Court, indicating that United Electric and others had tried to find additional strip reserves not already held for coal production, and had been largely unable to do so.
Moreover, the hypothetical possibility that United Electric might in the future acquire the expertise to mine deep reserves proves nothing—or too much. As the Government pointed out in its brief and at oral argument, in recent years a number of companies with no prior experience in extracting coal have purchased coal reserves and entered the coal production business in order to diversity and complement their current operations. The mere possibility that United Electric, in common with all other companies with the inclination and the corporate treasury to do so, could some day expand into an essentially new line of business does not depreciate the validity of the conclusion that United Electric at the time of the trial did not have the power to compete on a significant scale for the procurement of future long-term contracts, nor does it vest in the production statistics relied on by the Government more significance than ascribed to them by the District Court.
In addition to contending that the District Court erred in finding that the acquisition of United Electric would not substantially lessen competition, the Government urges us to review the court's determinations of the proper product and geographic markets. The Government suggests that while the 'energy market' might have been an appropriate 'line of commerce,' coal also had sufficient 'practical indicia' as a separate 'line of commerce' to qualify as an independent and consistent submarket. Cf. United States v. Continental Can Co., 378 U.S., at 456—457, 84 S.Ct., 1746—1747. It also suggests that irrespective of the validity of the criteria adopted by the District Court in selecting its 10 geographic markets, competition between United Electric and Material Service within the larger alternative geographic markets claimed by the Government establish those areas as a permissible 'section of the country' within the meaning of § 7.
While under normal circumstances a delineation of proper geographic and product markets is a necessary precondition to assessment of the probabilities of a substantial effect on competition within them, in this case we nevertheless affirm the District Court's judgment without reaching these questions. By determining that the amount and availability of usable reserves, and not the past annual production figures relied on by the Government, were the proper indicators of future ability to compete, the District Court wholly rejected the Government's prima facie case. Irrespective of the markets within which the acquiring and the acquired company might be viewed as competitors for purposes of this § 7 suit, the Government's statistical presentation simply did not establish that a substantial lessening of competition was likely to occur in any market. By concluding that 'divestiture (would not) benefit competition even were this court to accept the Government's unrealistic product and geographic market definitions,' 341 F.Supp., at 560, the District Court rendered superfluous its further determinations that the Government also erred in its choice of relevant markets. Since we agree with the District Court that the Government's reliance on production statistics in the context of this case was insufficient, it follows that the judgment before us may be affirmed without reaching the issues of geographic and product markets.
In this case the United States appeals from a District Court decision1 upholding the acquisition of stock in United Electric Coal Companies by Material Service Corp. and its successor, General Dynamics Corp., against a challenge that the acquisition violated § 7 of the Clayton Act, 15 U.S.C. § 18.2 The United States instituted this civil antitrust action on the claim that the acquisition may substantially lessen competition in the Illinois and Eastern Interior Coal Province (EICP) sales area coal markets. After trial on the merits the District Court rejected the Government's proposed product and geographic markets and dismissed the action, concluding that the Government had failed to show a substantial lessening of competition in the markets the court deemed relevant.
* The combination here challenged is the union of two major Illinois coal producers—Freeman Coal Mining Corp. and United Electric Coal Companies—under the ultimate corporate control of General Dynamics Corp. Material Service Corp. acquired all the stock of Freeman Coal in 1942 and began to acquire United Electric stock in 1954. By 1959, holdings in United reached 34%, and Material Service requested and received representation on United's board of directors. As a result, Freeman's president was elected chairman of United's executive committee. 'With the affiliation of Freeman and United Electric thus formalized in 1959, common control of the two coal companies was achieved.' 341 F.Supp. 534, 537 (1972).
General Dynamics acquired Material Service Corp. in 1959 and moved to solidify the union of Freeman and United by engaging in continued purchases of United's stock throughout the early 1960's. By 1966 it held nearly two-thirds of United's outstanding shares and a successful tender offer increased the holdings to over 90%. In early 1967 United became a wholly owned subsidiary of General Dynamics. With the 1959 union of Freeman and United Electric thus completed, the Government filed this action challenging the legality of the combination which produced in General Dynamics the Nation's fifth largest coal producer with total annual production of over 14 million tons.
Section 7 of the Clayton Act, the standard against which his combination must be tested, proscribes such combinations 'where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition . . ..'3 'Determination of the relevant market is a necessary predicate to a finding of a violation of the Clayton Act . . ..' United States v. E. I. du Pont de Nemours & Co., 353 U.S. 586, 593, 77 S.Ct. 872, 877, 1 L.Ed.2d 1057 (1957). The court below concluded that 'the energy market is the appropriate line of commerce for testing the competitive effect of the United Electric-Freeman combination.' 341 F.Supp., at 555. The court rejected the Government's hypothesis of coal as a submarket for antitrust purposes as 'untenable,' finding that United States v. Continental Can Co., 378 U.S. 441, 84 S.Ct. 1738, 12 L.Ed.2d 953 (1964), 'compel(s) this court to conclude that since coal competes with gas, oil, uranium and other forms of energy, the relevant line of commerce must encompass interfuel competion.' 341 F.Supp., at 556.
I read Continental Can to import no such compulsion. That case involved the acquisition of the Nation's third largest producer of glass containers, Hazel-Atlas Glass Co., by Continental Can, the country's second largest producer of metal containers. The District Court found interindustry competition an insufficient predicate for finding a § 7 line of commerce embracing both cans and bottles. We reversed, finding that interindustry competition mandated 'treating as a relevant product market the combined glass and metal container industries and all end uses for which they compete.' 378 U.S., at 457, 84 S.Ct., at 1747 (emphasis added). But that interindustry market was only one of several lines of commerce in that case. Both parties conceded that 'the can industry and the glass container industry were relevant lines of commerce.' Id., at 447, 84 S.Ct., at 1742. Since § 7 proscribes acquisitions which may involve a substantial lessening of competition in any line of commerce, the absence of anticompetitive effects in either the bottle or can markets could not sustain the acquisition since there existed a market—the glass/metal container market given recognition in this Court—in which the prohibited effect was present.
The District Court here found an energy market in which the combination did not work the prohibited effect. Whatever the correctness of that finding, Continental Can teaches us that it is of no help to appellees if there exist other lines of commerce in which the effect is present. Any combination may involve myriad lines of commerce; the existence of an energy market is not inconsistent with and does not negate the existence of a narrower coal market for 'within this broad market, well-defined submarkets may exist which, in themselves, constitute product markets for antitrust purposes.' Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1524, 8 L.Ed.2d 510 (1962).
In rejecting the Government's proposed geographic markets the court below adopted much narrower markets which, for the most part, followed ICC freight rate districts (FRD's).13 The justification was that, since ordinary rail rates are the same for all mines in any particular FRD and since transportation costs are the principal competitive factor in coal marketing, mines in one FRD cannot effectively compete for the same customers with mines in other FRD's. Since United Electric's mines are located in the Belleville and Fulton-Peoria FRD's and Freeman's mines are located in the Springfield and Southern Illinois FRD's, the combination of the two companies was found to present no risk of anticompetitive effects.
The error of the District Court in drawing the § 7 sections of the country 'so narrowly as to place appellees in different markets'14 is amply demonstrated by the overlapping distribution patterns of Freeman and United Electric. Though located in different FRD's and thus supposedly not competitive, they sold one-half their output to the same customers at the same facilities. Lack of competition between FRD's is further refuted by the existence of reciprocal selling patterns. For example, while United's Belleville FRD mine was selling 25% of its output to customers in the Southern Illinois FRD sales area, Freeman was selling 20% of its Southern Illinois FRD coal to Belleville sales area customers.
The inability of the lower court's narrow markets to "correspond to the commercial realities"15 of the distribution patterns displayed in the record is explained by the undue weight given ordinary rail rates. While transportation costs are significant, ordinary rail rates are not the single controlling element of transportation costs. First, not all rail shipments are governed by FRD rates; many of the most significant shipments are transported via 'unit trains' carrying only coal from a particular producer to a particular customer pursuant to a negotiated rate. Thus Freeman ships Southern Illinois FRD sales area customer to a Belleville FRD sales area customer at a cost lower than any Belleville FRD rate to that location. Second, not all coal transportation proceeds by rail. United transports most of its coal by barge, and in 1967 only one-half of all the coal sold in the five States which receive coal from Illinois was transported by all-rail shipments.
Normal rail rates are thus not so limiting as to eliminate substantial competition between FRD sales areas. Coal producers may constitute strong competitive factors in areas up to 500 miles from the nime. Thus in 1967 Freeman's Southern Illinois FRD Orient Mine shipped over 1.5 million tons of coal to customers 300 to 500 miles away. At the same time, United's Fidelity Mine, only 40 miles from to Orient, shipped more than one million tons, over half its total production, to equally distant locations. Both Freeman and United Electric have mines which are capable of supplying any point in the EICP sales area.
Further, even assuming the existence of FRD markets, I think the court below erred in rejecting the Government's proposed markets. As with product markets, § 7 does not necessitate an anticompetitive effect in any particular geographic market; its proscription reaches combinations which may substantially lessen competition in any section of the country. Thus, whatever the correctness of the District Court in finding FRD markets, the lack of anticompetitive effect in those markets is of no help to General Dynamics if competition may be lessened substantially in other geographic markets. And, as with product markets, the existence of FRD markets is not inconsistent with the existence of a myriad of other sometimes overlapping markets. Thus, in United States v. Pabst Brewing Co., 384 U.S. 546, 86 S.Ct. 1665, 16 L.Ed.2d 765 (1966), we found Wisconsin, the Wisconsin-Michigan-Illinois tristate area, and the entire United States all to be relevant § 7 sections of the country in which to assess anticompetitive impact.
While existing sales patterns show that transportation costs are not as restrictive as the District Court found, long-range transportation costs and the national distribution of coal deposits serve to divide the country into regionally significant coal markets. Both Freeman and United Electric are located in the EICP, consisting of Central and Southern Illinois, Southwestern Indiana, and Western Kentucky, and parts of other nearby areas. The region overlies a geologically united coal-bearing rock sequence which is estimated to contain 36% of the Nation's total coal resources. Because of the separation of the region from other major producing regions,16 EICP producers enjoy a substantial competitive edge with respect to sales in an area composed of Illinois, Indiana, Western Kentucky, parts of Tennessee, Eastern Iowa, Southeastern Minnesota, Southern Wisconsin, and extreme Eastern Missouri. In 1967, 82% of EICP coal was sold in this area. Freeman sold over 93% of its coal and United Electric sold over 97% of its coal in this area.
The court further found that United Electric, standing alone, would not contribute meaningfully to further competition since virtually all its economically mineable strip reserves were committed under long-term contracts and it possessed neither the capability to obtain more strip reserves nor the expertise to develop its deep reserves. Although the doctrine was not invoked by name, this appears to be an application of the 'failing company' defense. See Citizen Publishing Co. v. United States, 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148 (1969). If it is, the court proceeded on an analysis made at the wrong time and failed to discuss the legal standards employed in finding the defense to be established. The finding that 48 of United's 52 million tons of strip reserves were committed related to the time of trial. But, since the rationale of the failing-company defense is the lack of anticompetitive consequence if one of the combining companies was about to disappear from the market at any rate, the viability of the 'failing company' must be assessed as of the time of the merger. United States v. Greater Buffalo Press, Inc., 402 U.S. 549, 555, 91 S.Ct. 1692, 1696, 29 L.Ed.2d 170 (1971); Citizen Publishing Co. v. United States, supra, 394 U.S., at 138, 89 S.Ct., at 931.
The Court urges that United's weak reserve position, rather than establishing a failing-company defense, 'went to the heart of the Government's statistical prima facie case based on production figures.' Under this view United's weak reserve position at the time of trial constitutes postacquisition evidence which diminishes the possibility of anticompetitive impact and thus directly affects the strength of time-of-acquisition findings. The problem with this analysis is that the District Court made no time-of-acquisition findings which such postacquisition evidence could affect. The majority concedes the obvious need for a limitation on the weight given post-acquisition evidence and notes that we have reversed cases where 'too much weight' has been given. Here the post-acquisition events were given all the weight because all the District Court's findings were made as of the time of the trial. While findings made as of the time of the merger could concededly be tempered to a limited degree by post-acquisition events, no such findings were ever made.
While it is true that United is a stripmining company which has not extracted deep reserves since 1954, this does not mean that United would not develop deep-mining expertise if deep reserves were all it had left or that it could not sell the reserves to some company which poses less of a threat to increased concentration in the coal market than does Freeman. United Electric was not, as the Court suggests, merely one of many companies with the possible 'inclination and the corporate treasury' to allow expansion into 'an essentially new line of business.' United was a coal company with a thriving coal-marketing structure. At the time of the merger it had access to at least 27 million tons of deep reserves and it had operated a deep mine only five years previously. While deepcoal mining may have been an essentially new line of business for many, it was for United merely a matter of regaining the expertise it once had to extract reserves it already owned for sale in a market where it already had a good name.
On the basis of a record so devoid of findings based on correct legal standards, the judgment may not be affirmed except on a deep-seated judicial bias against § 7 of the Clayton Act. We should remand the case to the District Court with directions to assess the impact of the Freeman-United Electric combination on the Illinois and EICP sales area coal markets as of 1959.24 We should direct the court to make findings of respective market shares, and further to evaluate United Electric's viability as an independent producer or as the possible 'acquiree' of a company other than General Dynamics as of 1959, in light of the strict standards applicable to the failing-company defense. Since we abdicate our duty for responsible review and accept the mere conclusion that no § 7 violation is established on the basis of a record with none of these necessary findings, I dissent from the affirmance of the District Court's judgment.
United Electric also had coal-mining operations in Utah and other Western States. The Government has not contended, however, that these holdings are of any relevance in this case.
Testimony at trial indicated that the Eastern Interior Coal Province—the area of coal production upon which the Eastern Coal Province Sales Area was based—was originally named by United States Geological Survey maps of the coalfields in the United States and described one portion of a sequence of coal-bearing rock formations known geologically as the Pennsylvania System. The Sales Area of the Eastern Interior Coal Province was derived from the assumption, acknowledged in the trial court's opinion, that the high costs of transporting coal—which may amount to 40% of the price of delivered coal—will inevitably give producers of coal a clear competitive advantage in sales in the immediate areas of the mines.
The trial court found that Commonwealth Edison, a large private electric utility with generation facilities in many parts of Illinois, and the Metropolitan Chicago Interstate Air Quality Control Region constituted separate and unique geographic regions. Commonwealth Edison was found to have unique attributes because of the great size of its coal consumption requirements, its distinctive distribution patterns, and its extensive commitment to air pollution programs and the development of nuclear energy. The Chicago Control Region, a congressionally designated area consisting of six counties in Illinois and two in Indiana, was distinguished from other geographic markets because of the impact of existing and anticipated air pollution regulations which would create special problems in the competition for coal sales contracts. 341 F.Supp. 534, 557.
The figures for 1967 reflect the impact on market concentration of the acquisition involved here.
The figures demonstrating the degree of concentration in the two coal markets chosen by the Government were roughly comparable to those in United States v. Von's Grocery Co., 384 U.S. 270, 86 S.Ct. 1478, 16 L.Ed.2d 555, where the top four firms in the market controlled 24.4% of the sales, the top eight 40.9%, and the top 12 48.8%. See, id., at 281, 86 S.Ct., at 1484 (White, J., concurring). See also United States v. Pabst Brewing Co., 384 U.S. 546, 551, 86 S.Ct. 1665, 1668, 16 L.Ed.2d 765, where the top four producers of beer in Wisconsin were found to control 47.74% of the market, and the top 10 in the Nation and the local three-state area to control 45.06% and 58.93% respectively. The statistics in the present case appear to represent a less advanced state of concentration than those involved in United States v. Aluminum Co. of America, 377 U.S. 271, 279, 84 S.Ct. 1283, 1288, 12 L.Ed.2d 314, where the two largest firms held 50% of the market, and the top five and the top nine controlled, respectively, 76% and 95.7%; and in United States v. Philadelphia National Bank, 374 U.S. 321, 365, 83 S.Ct. 1715, 1742, 10 L.Ed.2d 915, where the two largest banks controlled 44% of the pre-merger market.
The percentage increase in concentration asserted here was thus analogous to that found in Von's Grocery, supra, where the concentration among the top four, eight, and 12 firms was increased, respectively, by 18.0%, 7.6%, and 2.5% as a result of the merger invalidated there. In Philadelphia Bank, supra, the 34% increase in concentration in the two largest firms from 44% to 59% was found to be clearly significant, 374 U.S., at 365, 83 S.Ct., at 1742.
The 1959 Illinois figure of 23.2% was asserted by the Government to be comparable to the 23.94% share of the Wisconsin beer market found to be significant in Pabst, supra, and the 25% share controlled by the merged company in United States v. Continental Can Co., 378 U.S. 441, 461, 84 S.Ct. 1738, 1749, 12 L.Ed.2d 953. The Province figure of 12.4% was compared with the shares held by the merged companies in Von's Grocery (7.5%), and in the Pabst national (4.49%) and three-state (11.32%) markets.
In 1968, electric utilities accounted for 59.09% of United States coal consumption, coke plants 18.20%, cement mills 1.88%, other manufacturing (including steel and rolling mills) 17.70%, and retail and miscellaneous consumers 3.14%.
The District Court found that while United Electric held six mines operating in the midwest in 1948, ir had opened only three new ones since then and four had closed because of exhaustion of reserves. The court found that the evidence showed that reserves in two other mines would soon be depleted, and appellees inform us in their briefs that these events have already occurred.
As an example of the impact of depleted or committed reserves on a company's ability to compete for long-term contracts, the District Court noted that a number of requirements contracts signed by United Electric to supply coal to electric utilities were backed up by reserves belonging to Freeman and 'could not have been obtained without that guarantee' because of the utilities' fear that the contract obligation could not otherwise be fulfilled. 341 F.Supp., at 559 (emphasis in original).
The court's reliance on such facts and the absence of specific findings of fact concerning the competitive situation in 1959, at which point both sides now agree the acquisition took place, may have been engendered by the Government's apparent inconsistency in its position concerning the critical date. Certain of the appellees' proposed findings of fact concerning United Electric's resources in 1959 and its attempts to increase its depleted holdings were termed 'irrelevant' by the Government at the trial.
Alternative rationales for the failing-company defense are discussed in Bok, Section 7 of the Clayton Act and the Merging of Law and Economics, 74 Harv.L.Rev. 226, 339—347 (1960); Comment, 'Substantially to Lessen Competition . . .': Current Problems of Horizontal Mergers, 68 Yale L.J. 1627, 1662—1668 (1959).
Similarly, in United States v. Philadelphia National Bank, 374 U.S. 321, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963), we held commercial banking a § 7 line of commerce even though banks compete with other institutions with respect to some services such as the making of small loans.
See Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1523, 8 L.Ed.2d 510 (1962).
The only other significant use for coal is metallurgical in nature. Metallurgical coal is used as a product in the manufacture of steel. The use of such coal as a product sets it off in a separate market from nonmetallurgical coal which is used as an energy source.
Although nuclear and geothermal power may draw some utility consumers from the coal market in the future, nuclear fuel is not consumable in existing fossil-fuel plants nor is nuclear fuel presently an alternative for nonutility coal consumers. Thus, whatever the future inroads of alternative fuels, there remains a significant class of energy consumers which looks ony to coal.
Interruptible gas is sold at a lower rate and is available only when it is not required by firm-rate customers which are supplied according to their needs and which always have priority.
Oil is used by some coal consumers for purposes to which coal is not suited such as starting up boilers or kilns.
Even the court below gave some recognition to coal as a separate market in its discussion of the relevant geographic markets. The geographic markets were delineated along 'the distributive patterns of . . . coal,' separating out those 'mines to which coal consumers can practicably turn for supplies.' 341 F.Supp., at 556 (emphasis added).
Freight rate districts are producing areas grouped for ICC rate-making purposes; all mines within each producing area are accorded the same rates to the same consuming destinations. See Ayrshire Collieries Corp. v. United States, 335 U.S. 573, 576, 69 S.Ct. 278, 280, 93 L.Ed. 243 (1949). The other markets accepted by the District Court are Commonwealth Edison and the Metropolitan Chicago Interstate Air Quality Control Region. Commonwealth Edison was found to be unique in light of its massive coal requirements, its purchasing patterns which are 'quite distinct from (those) followed by other consumers,' and its singularly extensive commitment to nuclear energy. The MCIAQC, consisting of six Northeastern Illinois counties and two Northwestern Indiana counties, was found unique because of its singular access, through water and rail arteries, to almost all FRD's in the Midwest.
See United States v. Philadelphia National Bank, 374 U.S., at 361, 83 S.Ct., at 1740.
See Brown Shoe Co. v. United States, 370 U.S., at 336, 82 S.Ct., at 1529.
The Nation's other major coal producing regions are: (1) the Eastern Coal Province of Western Pennsylvania, West Virginia, Eastern Kentucky, and parts of Ohio, Tennessee, and Alabama; (2) the Western Interior Coal Province comprised of Central Iowa, Northern and Western Missouri, and Eastern Oklahoma; and (3) scattered deposits in Montana, Wyoming, Colorado, and Utah. Jurisdictional Statement 5.
United Electric also controls some coal deposits in Colorado and Oklahoma which are not in issue in this case. 341 F.Supp., at 538 n. 8.
The lack of competition from United for a mere 8% of Freeman's business is simply irrelevant. In United States v. Aluminum Co. of America, 377 U.S. 271, 84 S.Ct. 1283, 12 L.Ed.2d 314 (1964), we struck down a combination which affected competition in the aluminum conductor market, and that result was not affected by the irrelevant fact that one of the companies, Rome Cable, also engaged in the production of copper conductor.
See Brief for United States 71.
Research into new methods of extraction or a rise in the price of coal could make reserves which are uneconomical to mine at any given time economically mineable in the future.
To the contrary, United Electric acquired substantial new deep reserves after the time of the acquisition since it now owns about 44 million tons of deep reserves and controls by location another 40 to 50 million tons. Reserves are controlled by location if, in order to be mined at all, they must be mined by those who control, by ownership, lease, or option, the contiguous reserves.
If that conclusion is to lend support to the combination on the ground that United 'standing alone, cannot contribute meaningfully to competition,' it must be made in light of the stringent standards applicable to the failing-company defense. In Citizen Publishing Co. v. United States, 394 U.S. 131, 138—139, 89 S.Ct. 927, 931, 22 L.Ed.2d 148 (1969), we said that the defense is one of 'narrow scope' and that the burden of proving the defense is 'on those who seek refuge under it.' We also stated that the prospects of continued independent existence must be 'dim or nonexistent' and that it must be established that the acquiring company is the only available purchaser. See also United States v. Greater Buffalo Press, Inc., 402 U.S. 549, 555—556, 91 S.Ct. 1692, 1696—1697, 29 L.Ed.2d 170 (1971), and United States v. Third National Bank in Nashville, 390 U.S. 171, 189, 88 S.Ct. 882, 893, 19 L.Ed.2d 1015 (1968).
The District Court did find that, as of 1968, Freeman controlled 6.5% of the total coal reserves dedicated to existing mines in the EICP. At the same time, United Electric controlled 2.5% of that total, but almost all of this was contractually committed. If market shares are to be determined by percentage of total reserves, what is necessary is a finding as to each company's 1959 share of uncommitted Illinois and EICP reserves including reserves which were economically mineable or which might have become so in the reasonably near future and further including an estimate as to uncontrolled reserves which might have been acquired by either company in the reasonably near future.
The District Court also found that, as of 1968, the two companies together accounted for 10.9% of the EICP coal production, and that this figure represented more than a 10% decrease from the combined production for 1959. Combined 1959 production by the companies was thus at least 12.1% of the EICP total. If market shares are to be determined by percentage of industry sales, this figure is in excess of percentages found illegal in markets with a trend toward concentration (see, e.g., United States v. Von's Grocery Co., 384 U.S. 270, 86 S.Ct. 1478, 16 L.Ed.2d 555 (1966) (7.5%), and United States v. Pabst Brewing Co., 384 U.S. 546, 86 S.Ct. 1665, 16 L.Ed.2d 765 (1966) (4.49%)), and the court below recognized an increase in concentration in the coal market. It might be argued, however, that, if market share is to be determined by sales, the production figures found by the court below are not the relevant ones for they include production which goes to meet obligations incurred in long-term contracts entered into in prior years. In terms of competition, if sales are the relevant criteria, what is needed is a finding of 'new' sales (sales of previously uncommitted coal) as a percentage of total industry new sales in Illinois and the EICP at the time of the acquisition.
Common control of the two companies was achieved in 1959 and the combination was completed in 1967; at oral argument both parties conceded that the merger 'took place' in 1959.


text:
Following are the cases released by the Alabama Supreme Court and Court of Civil Appeals on April 29, 2011.
Bailey v. Progressive Speciality Insurance Co.
Mobile Attic, Inc. v. Kiddin’ Around of Alabama, Inc.
Following are the cases released by the Alabama Supreme Court and Court of Civil Appeals on April 15, 2011.
Radetic v. Murphy and The Eufaula Agency, Inc.
Roberts v. Lanier et al.
Susan Schein Chrysler Dodge, Inc. v. Rushing, Jr.
D. M. and M. M. v. M. E. et al.
Following are the cases released by the Alabama Supreme Court and Court of Civil Appeals on April 8, 2011.
Gunn and Gunn v. KFC U.S. Properties, Inc.
B. A. N. v. G. T. B.
A. S. v. C. M.
B. E. H. v. State of Alabama ex rel. M. E. C.
Following are the cases released by the Alabama Supreme Court and Court of Civil Appeals on April 1, 2011.
T. K. v. M. G.

matches: v. v. v. v. v. v. v. v. v. v. v.


Insurers have the right, seldom exercised, to limit their risk by placing warranties in their policies that state if the warranty is breached the policy is void as of the breach. They are not used, it appears, because modern insurers do not understand the effect of warranties or the ability of a warranty to protect the insurer from risks it is not willing to take.
§ 440. A warranty is either express or implied.
§ 441. A statement in a policy of a matter relating to the person or thing insured, or to the risk, as a fact, is an express warranty thereof.
§ 442. A particular form of words is not necessary to create a warranty.
§ 443. Every express warranty made at or before the execution of a policy shall be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy, as making a part of it.
§ 444. A warranty may relate to the past, the present, the future, or to any or all of these.
§ 445. A statement in a policy, which imports that there is an intention to do or not to do a thing which materially affects the risk, is a warranty that such act or omission will take place.
§ 446. When, before the time arrives for the performance of a warranty relating to the future, a loss insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the omission to fulfill the warranty does not avoid the policy.
§ 447. The violation of a material warranty or other material provision of a policy, on the part of either party thereto, entitles the other to rescind.
§ 448. Unless the policy declares that a violation of specified provisions thereof shall avoid it, the breach of an immaterial provision does not avoid the policy.
§ 449. A breach of warranty without fraud merely exonerates an insurer from the time that it occurs, or where the warranty is broken in its inception, prevents the policy from attaching to the risk.
In a case where the plaintiff, accepting the policy where the plaintiff made the warranties specified in the policy wording when the warranty was broken at the inception date of the policy was held to prevent the policy from attaching to the risk (Emery v. Pacific Emp. Ins. Co., 8 Cal. 2d 663, 669 [67 P.2d 1046]).
Warranties are, for reasons know only to insurance sales and underwriting personnel, are fairly rare in property and casualty policies and more common in a marine policy and some inland marine policies like a jewelers block or furriers block policy.
Two of the more common warranties found in property policies relate to theft, namely Burglary Alarm Warranty and Locked Vehicle Warranty. Theft is a typical covered peril.
The Burglar Alarm Warranty requires that the insured must maintain a fully connected , operational and certified alarm system during off-hours. If the system fails to meet all these conditions and there is a break-in, the policy warranty has been breached. There is no theft coverage.
The Locked Vehicle Warranty requires that insured property left in an unattended vehicle must be locked. If the vehicle is not locked and there are no visible signs of forced entry, there will be no theft coverage.
The insured hereby warrants and agrees that while the insured automobile is in use but is left unattended all openings thereto shall be locked by means of the manufacturers’ approved devices, and where the automobile is fitted with an alarm, that alarm must be activated. The insured also warrants that to establish compliance with the warranty the insured shall submit to the insurer evidence that there are visible signs of forcible entry into the vehicle.
The insured agrees that the warranty made is material to the decision of the insurer to insure against risks of loss to the vehicle or its contents and that failure on the part of the insured, or any person in charge of the insured automobile, to fulfill the requirements of this warranty shall cause the policy to be void.
Failure on the part of the insured, or any person in charge of the insured automobile, to fulfill the requirements of this warranty shall cause the policy to be void.
(B) During the entire night, except that such watch service need not be maintained in those portions of buildings or yard areas that are in actual operation and in which employees are at work.
A breach of this warranty suspends this insurance during such brief and the insurer, at its option, may declare the policy void from the moment of the breach.
Warranties in an insurance policy can also include all statements of fact contained in an application or proposal for insurance as long as the application is attached to and forms a part of the policy and is stated to be grounds for voidance if any of the facts warranted on the application or proposal for insurance are false.