The above-named petitioners have petitioned this court to review certain orders of the Federal Trade Commission, requiring them and their co-respondents to cease and desist from certain alleged unfair methods of competition in interstate commerce in dealings with the Los Angeles Grocery Company, in violation of the provisions of section 5 of the Federal Trade Commission Act approved September 26, 1914 ( 38 Stat. 717 [Comp. St. § 8836e]).

It appears from the record that the Southern California Grocers’ Exchange was incorporated under the laws of the state of California in July, 1911. By its certificate of incorporation it was authorized, among other things, “to conduct a general merchandise business, buy and sell foodstuffs, hardware, drugs, chemicals, tobacco, and other merchandise.” The stockholders of the corporation were retail grocers exclusively, and the corporation acted as a buying exchange for its stockholders. The name of the corporation was changed by the superior court of Los Angeles county on March 6, 1913, to “Los Angeles Grocery Company.” The business of the corporation was continued on a buying exchange basis until January 2, 1918. During this time goods were bought and afterwards sold or distributed to the stockholders of the corporation at approximately the purchase price. At the end of the month the expense of doing business was divided equally among those having purchased or received goods. On December 27, 1917, the board of directors of the corporation adopted a resolution providing that, commencing January 2, 1918, the corporation would discontinue its nlan of selling merchandise at cost coupled with an expense assessment, and in the future all merchandise would be sold at a jobbing profit and the business conducted as a jobbing business.

*728 On January 4, 1918, the corporation published in the Commercial Bulletin, a trade paper published in Los Angeles, the following notice:

The Southern California Grocers’ Exchange was incorporated with a capital stock of $50,000. The capital- stock of its successor, the Los Angeles Grocery Company, on August 1, 1919, was $250,000, of which $90,000 had been paid up. In the proceedings before the Federal Trade Commission Flavel Shurtleff, the manager of the latter corporation, testified that on July 1, 1919, the corporation carried a stock of goods valued at $280,000, and did business during the year 1919 estimated at $1,750,000; that the corporation sold only to retail grocers, having approximately 250 to 275 customers; that of this number 75 or 80 were stockholders of the corporation; the remaining number were not.

It appears from the record that prior to 1918 the Los Angeles Grocery Company had been purchasing from approximately 125 manufacturers and producers direct on regular wholesale terms and rates; that after January 2, 1918, this number gradually increased during the year 1918, but there still remained at the end of the year many standard articles of grocery merchandise, such as sugar, condensed milk, corn products, shredded wheat biscuits, Quaker Oats, baking powder, and other similar products always in demand, and which the wholesale grocer is expected to have for sale to retail dealers. The manufacturers and producers and their brokers, dealing in some of these standard products, did not sell such articles to the Los Angeles Grocery Company direct, upon wholesale rates and terms, even in carload lots, for the reason, as stated, that they did not consider the Los Angeles Grocery Company a regular wholesale dealer in groceries.

This situation was brought to the attention of the Federal Trade Commission, which proceeded to investigate the charge that certain of the manufacturers and producers, their brokers, wholesalers, and jobbers, were violating the statute in using unfair methods of competition in commerce in dealing with the Los Angeles Grocery Company. On Friday, February 20, 1919, the Federal Trade Commission issued its complaint against the petitioners and their co-respondents charging them with a violation of the Federal Trade Commission Act (Comp. St. §§ 8836a-8836k). To this complaint all the respondents cited before the *729 commission made answer, with such denials and averments as placed in is .me the material allegations of the complaint. Testimony was thererioou taken upon said issues, and the commission made its findings of fact and its conclusions and order thereon.

Its findings are in substance that the Los Angeles Grocery Company since January 2, 1918, had been and then was engaged in the business o'i purchasing in wholesale quantities goods and commodities, such as are generally carried by those engaged in business as a wholesale grocer, mid"selling the same in wholesale quantities for profit to its customers; that said company sells the goods and commodities dealt in by it to the retail grocery trade only, and docs not sell to consumers; that there are about 80 stockholders of said company, most of whom are retail grocers ; that said company sells to a large number of retail grocers who are not stockholders; that the business of said Los Angeles Grocery Company is separate and distinct from the business of any of its stockholders, and said company has never owned, controlled, or had an interest in any retail grocery or groceries, and has never conducted a retail business ; that the said Los Angeles Grocery Company and the respondent jobbers, namely, Haas, Baruch & Co., Stetson-Barret Company, 'R. L. Craig & Co., M. A. Newmark & Co., United Wholesale Grocery Company, Channel Commercial Company, and California Wholesale Grocery Company, are competitors in the business of buying and selling in wholesale quantities, in the usual course of wholesale trade, groceries, and food products, such as are bought and sold generally by persons, firms, and corporations engaged in the business generally known as that of a wholesale grocer; that the Los Angeles Grocery Company, in the course of its said business, purchases the goods and commodities dealt in by it in the various states and territories of the United States, and said goods and commodities are transported to the said Los Angeles Grocery Company in the state of California, where such goods and commodities are resold in the course of wholesale trade, and there is continuously, and has been at all times mentioned in the complaint, a constant current of

The commission also found other facts in detail supporting and elaborating the facts 'stated, and as conclusions that, under the conditions and circumstances set out in the findings of fact, the agreements, understandings, policies, and practices of the respondents, as described in the findings of fact, constituted a conspiracy or combination as alleged in the complaint; that under the conditions and circumstances set forth in the findings of fact, the acts, agreements, understandings, and practices of the respondents constituted an interference with the right of the Los Angeles Grocery Company and other persons, firms, and corporations, to buy and sell commodities in interstate commerce, *731 wherever, from and to whomsoever, and at whatsoever price such persons, firms, or corporations may agree upon among themselves, and that under the conditions and circumstances set forth in the findings of fact the acts, agreements, understandings, policies, and practices oC the respondents, the respondent jobbers, the respondent brokers, and respondent refiners, and each and all of them, constituted unfair methods of competition in interstate commerce, in violation of the provisions of section 5 of an act of Congress approved September 26, 1914, entitled “An act to create a Federal Trade Commission, to define its powers and. duties, and for other purposes.”

Thereupon the commission entered an order against the 28 parties named in the complaint, requiring them to cease and desist from directly or indirectly combining and conspiring among themselves to induce, coerce, or compel manufacturers or manufacturers’ agents to refuse to sell to the Los Angeles Grocery Company, or to refuse to sell to said company upon the terms and at the prices offered and charged to competitors of said company and others engaged in similar business. The order of the commission is also elaborated in detail with respect to the acts of each of the respondents. The matters in detail in the findings and in the conclusions and order of the commission need not be set out in determining the questions involved in this review of the order of the Commission.

The jurisdiction of this court is provided for in section 5 of the Act of September 26, 1914 ( 38 Stat. 717 ), as follows:

In a previous part of this section it was provided that:

Ten of the 28 respondents before the commission have petitioned the court for a review. The remaining 18 are described as brokers. These *732 accepted the order of the commission, either because they believed they had not violated the statute and had no intention of doing so, and the order imposed no restraint upon them that they cared to resist, or, having violated the statute, they would accept the order as directed.

In St. Louis, I. M. & S. Ry. Co. v. United States (D. C.) 217 Fed. 80 , a score of railroads attacked an order of the Interstate Commerce Commission finding that there was undue preference in railroad rates in favor of Cairo, 111., and undue discrimination in such rates against Metropolis. Two of the roads applied for an injunction against the order of the commission. The other roads acquiesced in the order. The application was heard by three judges under the provisions of the Act of October 22, 1913 ( 38 Stat. 220 ). In the course of his opinion, Circuit Judge Baker, speaking for the court, said:

[1, 2] We are of the opinion that this law is applicable to the statute in this case, and particularly in view of the charge against the respondents that they conspired and confederated together and with each other to deal with the Eos Angeles Grocery Company upon terms and conditions which the commission has found and concluded constituted unfair methods of competition in interstate commerce. Manifestly the order of the commission, based upon such a charge of conspiracy and upon the findings and conclusions sustaining the charge, must be supported by evidence which is sufficient to warrant a finding and conclusion separately against each respondent seeking a review of this order of the commission.

In Federal Trade Commission v. Gratz, 253 U. S. 421, 427 , 40 Sup. Ct. 572, 574 ( 64 L. Ed. 993 ), the Supreme Court, referring to the proceedings and order under section 5 of the Federal Trade Commission Act, said:

It follows that the order of the commission must follow the charge in the complaint and that the charge in the complaint must be supported by evidence.

We have, then, before us the petitions of the two sugar refiners in San Francisco, the petitions of seven wholesalers or jobbers in Eos *733 Angeles, and the petition of one broker engaged in business in Los Angeles. These-* petitions raise substantially the same issues as were raised by their answers to the complaint before the commission, but our inquiry is limited by the statute to the question whether there is testimony in the record supporting the findings and conclusions of the commission, and to questions of law.

(1) Is there evidence in the record supporting the finding that the Los Angeles Grocery Company was engaged in wholesale grocery business in Los Angeles after January 2, 1918?

(2) Is there evidence in the record supporting the finding of the commission that the respondents, or any of them, agreed and conspired among themselves and with each other for the purpose of using any unfair method of competition in commerce in dealing with the Los Angeles Grocery Company?

[3, 4] With respect to the business of the Los Angeles Grocery Company since January 2, 1918, there is evidence tending to establish the character of its business as that of a wholesale dealer or jobber. We have already referred to the testimony of I'lavel Shurtleff, the manager of the company, on that subject. There is other testimony in the record to the same effect; but it is not necessary to pursue this question further, for, while respondents do not admit that the Los Angeles Grocery Company has become a wholesale dealer or jobber, they do not directly or specifically deny it either by their petition or other specification of error. They contend that the company continued after January 2, 1918, to have such characteristics of a buyers’ exchange for retail dealers that respondents were justified, acting separately and individually, in believing that the company was not a wholesale dealer in the sense in which that term is generally understood. If the finding of the commission upon this issue is supported by legal testimony, it is by the statute made conclusive, and we can go no further in this review.

The important question is the conduct of the respondents in dealing with the Los Angeles Grocery Company, and the first element to be considered in that question is the charge of a conspiracy on the part of the respondents in using unfair methods of competition in commerce in such dealings.

[5] It is the settled law that the individual dealer may select his own customers for reasons sufficient to himself, and he may refuse to deal with a proposed customer who he thinks is acting unfairly and is trying to undermine his trade. Eastern States Lumber Ass’n v. United States, 234 U. S. 614 , 34 Sup. Ct. 951, 58 L. Ed. 1490 , L. R. A. 1915A, 788. But, as was said by the Supreme Court in Grenada Lumber Co. v. Mississippi, 217 U. S. 433, 440 , 30 Sup. Ct. 535, 538 ( 54 L. Ed. 826 ):

*734 The evidence before the court was the evidence before the commission. Flavel Shurtleff, the manager of the Los Angeles Grocery Company, whose testimony has heretofore been referred to, testified that he had a telephone conversation with S. F. Brown about January 1, 1918. Brown was a member and manager of the brokerage firm of Parrott & Co., located in Los Angeles, engaged in selling sugar and other grocery commodities. This conversation Mr. Shurtleff reduced to writing at the time in the form of a memorandum, and when called as a witness he produced this memorandum and recalled the conversation he had with Mr. Brown as follows:

The witness testified that later on, after this telephone conversation, he called by appointment at the office of Parrott & Co. and spent an hour and a half with Mr. Brown going over the different lines that they had, and asking him to sell the Los Angeles Grocery Company the different lines direct. Shurtleff testified that it would be impossible for him to give the entire conversation, but he recalled it as follows:

Mr. Shurtleff testified further that he made application to the C. & H. Sugar Refining Company (California & Hawaiian Sugar Refining Company); that he had a conversation with Mr. W. R. K. Young, the assistant general manager of that company, as follows:

Mr. Shurtleff testified that he saw Mr. Young within 90 days in Los Angeles at the office of the Los Angeles Grocery Company, where he had a conversation with him; that he took Mr. Young around the place and Mr. Young said to him:

Shurtleff testified further:

Mr. S. F. Brown was called as a witness on behalf of the respondents. His attention was called to the testimony of Mr. Shurtleff, wherein he testified that Brown had said it would get them into trouble with the jobbers, referring to the matter of selling to the Los Angeles Grocery Company; that it was his policy to do business with the old-line jobbers, and that it would get them into trouble to disturb their business relations, and could not be done. He was asked if he ever made such a statement. His reply was: “I would say no.” On cross-examination Brown was asked about a telephone conversation with Shurtleff concerning placing an order for 600 bags of sugar in a car, to which Brown leplied:

— •and Mr, Brown testified that that was the substance of the conversation.

W. R. K. Young was also called as a witness for respondents. He contradicted Mr. Shurtleff’s testimony in the main, but admitted that the California & Hawaiian Sugar Refining Company declined to sell directly to the Los Angeles Grocery Company. On cross-examination he testified that the California & Hawaiian Sugar Refining Company had always distributed its products through the wholesale grocers of the United States and the manufacturers.

Mr. Shurtleff testified with respect to an application to the Western Sugar Refinery Company for sugar to be sold to the Los Angeles Grocery Company direct. He said he had negotiated with Cosmo Morgan during the first four months of 1918 in his office about being put on the *736 direct list on Western Sugar Refinery Company sugar. The witness testified:

A letter was introduced in evidence, dated at Los Angeles, January 7, 1918, addressed to the Western Sugar Refining Company, San Francisco, Cal., and signed by Cosmo Morgan Company. The letter reads as follows:

Mr. Morgan was called as a witness for the respondents. In the course of his testimony he said that he had been in the place of business of the Los Angeles Grocery Company; that he found it had an excellent establishment, most excellently conducted, fair in size, with a fair stock on hand. He did not know what they buy, because he did not sell to them; but, looking at their stock, he would say that in some cases they did buy in wholesale quantities. They tendered an order to one of his principals for what he would regard as a wholesale order, but the order was declined. He understood that all of their members •were retail grocers, but could not say that the company limited its sales *737 to its stockholders. He understood that the corporation sold to anybody who came in to buy, providing he was a retailer, but he never heard of the company owning or controlling a retail grocery.

A. A. Brown, the sales manager of the California & Hawaiian Sugar Refining Company, was called as a witness by the commission upon a subpoena to produce certain records. He produced a telegram dated July 2, 1918, addressed to the California & Hawaiian Sugar Refining Company at San Francisco, as follows:

To this telegram was attached a newspaper clipping, which was also introduced in evidence without objection. The clipping reads as follows :

A telegram dated at San Francisco, July 2, 1918, signed by the California & Hawaiian Sugar Refining Co., and addressed to Andrew A. Brown, Washington, D. C., was also introduced in evidence, as follows:

Mr. Brown testified that he received this telegram at Washington; that he was the direct representative of the California & Hawaiian Sugar Refining Company upon the American Finance Committee, and was representing general cane and beet arrainements. He testified that he went to the legal deparment of the Food Administration and found that the ruling did not apply to cane sugar at all.

Rollin W. Dole, a buyer for the Ros Angeles Grocery Company, called as a witness for the commission, testified to a conversation with Mr. Brown, of the California '& Hawaiian Sugar Refining Company, wherein Dole made application to have the Ros Angeles Grocery Company put on the direct list for sugar; that Mr. Brown, in denying the application, said:

*738 Dole testified that during this conversation he said to Brown:

. To which Brown answered;

Dole further testified to a conversation with Cosmo Morgan; that Morgan came down to look over the Dos Angeles Grocery Company, with a view to considering their application to get upon the direct list on sugar and other commodities represented by Morgan; that Morgan stated that he could not see any difference between the Dos Angeles Grocery Company and Ralph’s Grocery Company, or Albert Cohn, or Sam Seelig Company, or any of the big chain stores; that they were retailers, and that he did not believe they were entitled to buy sugar direct ; that Morgan said:

On Fébruary 20, 1919, Schiff-Dang Company, of Dos Angeles, one of the original respondents in this case before the Federal Trade Commission, addressed a letter to F. E. Booth Company, San Francisco, as follows:

On March 3, 1919, Schiff-Dang Company wrote F. E. Booth Company, correcting their former letter, as follows:

John J. Wattman, vice president of Johnson, Carvell & Murphy, one of the original respondents before the Federal Trade Commission, was called as a witness for the respondents. He testified that his house sold to the jobber and manufacturing trade, but that it did not sell the Dos Angeles Grocery Company; that whenever the question came up between him and his principals, he recommended practically in all instances that no sale be made direct to the Dos Angeles Grocery Company.

C. M. Gair, secretary and treasurer of Johnson, Caryell & Murphy, was called as a witness by the commission upon a subpoena to produce certain records. He produced a letter to the Royal Baking Powder Company, New York, dated January 17, 1918, and signed by Johnson, Carved & Murphy, which reads in part as follows:

it appears from the evidence that Fred Fear & Co., of New York, produced an article known as “My Wife’s Salad Dressing.” Their agent in Dos Angeles about August 1, 1918, was Mr. Crawford. He called upon Mr. Arthur Dee, a buyer for the Dos Angeles Grocery Company, and informed the latter that Fred Fear & Co. had placed the Dos Angeles Grocery Company on the direct list. The Dos Angeles Grocery Company had a letter from Fred Fear & Co. at that time, to the same effect. Crawford and Dee proceeded in the matter of price and quantity of the commodity to be purchased. The matter was continued until the next day, when Crawford informed Dee that the order from Fear & Co. had placed him in a peculiar predicament; that it was absolutely necessary for him to protect or take off the hands of the jobbers who had “My Wife’s Salad Dressing” all of that commodity they had on hand. Those who had the goods gave as reason that, inasmuch as the Dos Angeles Grocery Company was to receive that article direct, it would be impossible for them to handle the goods, and they would expect Crawford, as a broker, to relieve them of such goods. The negotiations resulted in the taking over by the Dos Angeles Grocery Com *740 pany of all the cases of this article in the hands of the jobbers in Dos Angeles—from Haas, Baruch & Co. 5 cases of small, 2 cases of medium, and 2 cases of large; from Stetson-Barret Company 10 cases of small, 10 of medium, and 5 of large; from the United Wholesale Grocery Company 10 cases of small, 10 of medium, and 5 of large—making a total of 25 small, 23 medium, and 12 large', or a total of 60 cases.

It further appears from the testimony of Arthur Dee that the Channel Commercial Company objected to “My Wife’s Salad Dressing” being sold direct to the Dos Angeles Grocery Company. Mr. Dee testified:

Flavel Shurtleff testified that the Dos Angeles Grocery Company bought direct certain cereal products sold by Colbert & Co. William Russell Walters, connected with Colbert & Co. from April, 1917, to June, 1917, as salesman, and until November, 1918, as manager, called as a witness by the commission, testified that he was the agent of Colbert & Co. at Dos Angeles, and that while he was such agent and representative of Colbert & Co. he told Shurtleff that he was afraid he was going to lose his job if he did not discontinue selling to the Grocery Company direct. Walters further testified to a conversation with Hunt, of Stetson-Barret Company, wherein Hunt said that he (Walters) would get in bad if he sold direct to the Dos Angeles Grocery Company.

Arthur C. Chase, manufacturers’ agent, selling breakfast food, health food, and canned goods, a witness for the commission, testified that Hunt said to him:

Walters also testified to a conversation with a representative of the Stetson-Barret Company, Mr. Gough; that Gough asked him if he sold the Dos Angeles Grocery Company direct, and he denied doing so. The denial he said was untrue, tie gave as a reason for the denial that he did not want the jobbers to know that he was selling the Dos Angeles Grocery Company direct. He (Walters) said his company could not afford to incur the jobbers’ displeasure.

Verne M. Osborne, a merchandise broker residing in Dos Angeles, a witness for the respondents, testified to a conversation with Mr. Tuttle, of R. D. Craig & Co.; that Tuttle asked him if he sold the Dos •Angeles Grocery Company, and that he replied he would sell, if he had anything to sell them.

*741 Harry A. Pierce, representing Bixby & Co., of Los Angeles, a witness for the commission, testified that he sold the- Los Angeles Grocery Company direct, and that he had received a letter from R. L. Craig & Co., asking if he had sold the Grocery Company direct; that later he had a conversation with Mr. Hartford, of R. L. Craig & Co., wherein Mr. Hartford explained to him that the Los Angeles Grocery Company were retailers, and not wholesalers, and that he did not think retailers ought to buy on the wholesale list.

Arthur C. Chase also testified to a conversation with Mr. Robert New-mark, of M. A. Newmark & Company, one of the original respondents, and that Mr. Newmark inquired of him if he were selling the Los Angeles Grocery Company direct. That was the end of the conversation.

C. H. Snead, a merchandise broker residing, at Alhambra, representing Kelley Clarke Company, testified that Mr. Robert Newmark inquired of him if he were selling the Los Angeles Grocery Company direct.

Henry A. Sloss, salesman for Woodman Packing Company and their agent, a witness for the commission, testified • that he sold the Los Angeles Grocery Company direct, and that Mr. Sprouse, of the California Wholesale Grocery Company, said to him he had heard—-the rumor had been spread—that he (Mr. Sloss) was selling the Los Angeles Groceiy Company direct.

The Western Sugar Refinery Company and the California & Hawaiian Sugar Refining Company sold their sugar to the Los Angeles jobbers, and they, in turn, sold or would sell to the Los Angeles Grocery Company as to a retail dealer, but the refiners would not sell direct to the Los Angeles Grocery Company at the usual rates and terms to jobbers, for the reason, as stated by them, that they did not regard the Los Angeles Grocery Company as a wholesale dealer or jobber. There is no testimony in the record that this course of. action on the part of the two sugar refiners arose from any actual understanding or agreement between them or with the Los Angeles jobbers. The testimony proves that it was a concurrence of opinion as to the classification to be given to the Los Angeles Grocery Company, but we do not find anything more in the testimony. This classification appears from the testimony fo have been erroneous, but as long as it was the individual opinion and action of the refiners, it could not be made the basis of a finding of conspiracy or combination between the two refiners, or between them and the jobbers, or between them and the brokers.

f 61 The difficulty has long been recognized of drawing a definite line between the innocent act of an individual and the same act made unlawful by reason of its being the joint or combined act of two or more; but whenever this question arises there must he some legal evidence to establish the unlawful combination or conspiracy, or facts from which that inference may be legally drawn, or the charge must fail. We do not find such evidence in this record with respect to the two sugar refiners.

[7] With respect to the Los Angeles jobbers, we think the testimony is more definite and clear, and does tend to support the finding of a *742 combination or conspiracy between them to prevent manufacturers and producers from selling directly to the Los Angeles Groceiy Company as to a wholesale dealer or jobber. This conclusion relates to the respondents Haas, Baruch & Co., Stetson-Barret Company, R. L. Craig & Co., M. A. Newmark & Co., United Wholesale Grocery Company, Channel Commercial Company, and California Wholesale Grocery Company.

[8] With respect to the acts of Mailliard & Schmiedell, the only brokers seeking a review of the order of the Commission, we do not find that the testimony supports the finding that they combined or conspired with other brokers, or with the refiners, or with the jobbers, or that they were' induced by coercion, persuasion, boycott, or threats, to prevent the Los Angeles Grocery Company from purchasing direct from the manufacturers and producers at jobbers’ rates and terms.

The order of the court will be to affirm the order of the Federal Trade Commission with respect to the finding and conclusion that the Los Angeles Grocery Company has been a wholesale dealer or jobber since January 2, 1918. The order will also provide for the affirmance of the order of the Federal Trade Commission with respect to the seven jobbers, namely, Haas, Baruch & Co., Stetson-Barret Company, R. L. Craig & Co., M. A. Newmark & Co., United Wholesale Grocery Company, Channel Commercial Company, and California Wholesale Grocery Company, and to reverse it as to the Western Sugar Refinery Company, the California & Hawaiian Sugar Refining Company, and Mailliard'& Schmiedell.