By these actions plaintiff seeks to recover triple damages from defendants under the Federal anti-trust laws, for alleged violation of Title 15 U.S.C.A. § 13(a), (c), (d) and (f).
The court submitted the case to the jury for a special verdict upon whether the plaintiff was damaged as the proximate result of the defendant’s violation of that section of the statute, and if so, the amount of such damage. The verdict was that plaintiff was not thus damaged.
At the close of plaintiff’s evidence, each', defendant moved for a directed verdict in its favor, which was denied. At the close of all the evidence the plaintiff and each defendant filed a separate motion for a directed verdict in its favor. These were overruled.
After verdict plaintiff filed a motion to set it aside, and alternatively for a judgment in its favor, non obstante veredicto, or for a new trial. This motion was sustained, and judgment for plaintiff was entered for triple damages in the sum of $17,666.10, plus an attorney fee of $2,500, upon a finding by the court that plaintiff had been damaged as a proximate result of the matters complained of in the sum of $5,888.70. Alternatively the court allowed the motion for a new trial in the event, upon appeal, the judgment entered should be reversed or set aside. Such procedure seems to be authorized by Rule 50(b), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Montgomery Ward and Co. v. Duncan, 311 U.S. 243, 61 S.Ct. 189, 85 L.Ed. 147.
The original complaint also sought to recover for loss of volume of plaintiff’s business and for its deprivation of a fair opportunity to increase such volume. At the close of plaintiff’s evidence, it, by the court’s permission, filed an amended complaint which omitted those two claims, and the case went to the jury on the proof relating to the allegations with respect to plaintiff’s damage proximately resulting from defendant’s unlawful acts in selling its competitive products at rates lower than those published by it, as required by law.
Plaintiff is an Iowa Cooperative Association, organized for the purpose of manufacturing and selling to its own members biologies used in the prevention and treatment of hog cholera. It succeeded to the business of the American Serum Company, which assigned its business, good will, and a portion of the cause of action here involved, and ceased the manufacture and sale of serum.
The Anchor Serum Company, referred to as Anchor, is a Missouri corporation engaged in the manufacture and sale of serum. Defendant, Illinois Farm Bureau Serum Association, referred to as the Association, is a cooperative, incorporated under the Agricultural Cooperative Act of Illinois, 32 Ill.R.S.1945, sec. 440 et seq. Its members are county farm bureaus or county or' state farm organizations whose membership is limited to Farm Bureau members. Its purpose is the dissemination of information relative to diseases of live stock and preventive biologies to be used in the treament of such diseases, and to act as agent for its members in collectively purchasing, handling and distributing such biologies and other supplies for its members.
Its stock consists of 1000 shares Class A preferred; 2500 Class B preferred; and 1000 common shares. The first and last classes, in approximately equal amounts of each, are owned by its membership, which consists of about 100 Farm Bureaus, or farm organizations located in the 102 counties of Illinois. The Class B preferred was issued to and owned by the Illinois Agricultural Association, in whose offices in Chicago, Serum Association merely has desk room. The sole purpose of the Serum Association, as stated in its charter and bylaws and in its contracts with the County Farm Bureaus, is to act as purchasing agent for all the County Farm Bureaus in Illinois. The relationship between the Association and its members, the Farm Bureaus, is set forth in that membership *910agreement, which has been in force at all times herein referred to.
That agreement recited that the Association was a state-wide organization formed to provide a central purchasing or manufacturing service for anti-hog cholera serum and virus and other biologies; that the member bureau was desirous of obtaining such central purchasing or manufacturing service and that the Association agreed to act as such purchasing agent; that the County Farm Bureau appointed and constituted the Association as its sole and exclusive agent to bargain for, purchase or manufacture and provide such quantities of serum as such member might require; that the member agreed that it would not purchase serum through or from any other person or persons while that contract remained in force and effect; that the member would buy only from the manufacturer selected by the Association, pay for such serum promptly, and maintain uniform retail prices for serum and other biologies or supplies with other members of the Association, such prices to be determined by the Association; and that in the event that serum was sold by the member to persons not members of a Farm Bureau, then the amount of business done with al-1 of such non-members during any such fiscal year should not exceed in value the amount of business done with members during the same period.
The production and distribution of this serum is regulated by the Federal Serum and Virus Act of 1913, 21 U.S.C.A. §§ 151— 158; the Anti-Hog-Cholera Serum and Iiog-Cholera Virus Act of 1935, 7 U.S. C.A. §§ 851-855;» and the Marketing Agreement executed in December 1936, by and between handlers of serum, including Anchor, and the Secretary of Agriculture, pursuant to the last-named Act. This Agreement classified buyers of biologies as consumers, dealers, wholesalers, and volume contract purchasers, and provided for the appointment of a Control Agency to be composed of members of the industry to supervise operation of the Agreement. Plaintiff’s president and Anchor’% vice-president were original members of the Control Agency. The Agreement required each serum handler to file with the Secretary of Agriculture and the Agency a list of its selling prices to each class of buyers as defined by the Agreement and the Control Agency, including terms of sale and discounts, and it prohibited any sales unless such prices were so posted, and also prohibited any deviation from such posted prices. The Serum and Virus Act, 7 U.S. C.A. § 852, provided that the making of such agreement should not be held in violation of any of the anti-trust laws. Anchor and plaintiff each signed the Agreement and filed a list of its selling prices in compliance therewith.
The Control Agency defined a volume contract purchaser as one who had bought 15,000,000 cubic centimeters of the serum during the previous year, and in early 1937, the Association qualified as such by furnishing pertinent data to the Agency and was thereupon so bulletined to the trade.
Pursuant to the mandate of the Agreement, Anchor posted its prices for serum on December 14, 1936, as follows:
To Consumers, 750 per 100 ccs,
To Dealers, 630 per 100 ccs,
To Wholesalers, 510 per 100 ccs,
To Volume Contract Purchasers, 490 per 100 ccs.
The following legend appeared below its signature to its price list:
"We prepay forwarding charges. We also spend liberal allowances for advertising and sales promotion work.”
A like price list was posted by Anchor in January 1938. On July 13, 1939, this list was changed by Anchor with respect to only the following category:
“Volume Contract Purchasers (where no local distribution is required) contracting for at least 35,000,000 ccs of serum and virus to be taken within a period of one year where no local distribution service is required — serum 360 per 100 ccs
if
The legend as to the allowances for advertising and sales promotion was omitted.
July 31, 1939, this posting was again changed by Anchor, reducing the price of serum to consumers, from 750 to 700; to dealers, from 630 to 570; to wholesalers, from 510 to 450; to volume contract purchasers, as follows:
15.000. 000 ccs 420 per 100 ccs,
20.000. 000 ccs 410 per 100 ccs,
25.000. 000 ccs 400 per 100 ccs,
30.000. 000 ccs 390 per 100 ccs,
34.000. 000 ccs 380 per 100 ccs,
37.000. 000 ccs 370 per 100 ccs,
40.000. 000 ccs 360 per 100 ccs,
During the year 1936, Anchor made an oral agreement with the Association *911whereby the latter might spend a certain amount of money for advertising, sales promotion and educational work for the period from December 1936 until July 1, 1937, for which the Association would receive from Anchor, 4$ per 100 ccs on serum sold. From July 1, 1937, until March 25, 1938, that allowance was increased to &$; and from March 1938, until July 15, 1939, it was increased to \2>$.
All orders for serum were made by the several Farm Bureaus for their respective members, and the shipments were made directly by Anchor to the Farm Bureau ordering them. They were charged, however, to the defendant Association which paid for them and collected the amount from the Farm Bureau which gave the order, and it in turn collected it from the Farm Bureau member to whom the serum was finally delivered. The Farm Bureaus who purchased serum from the Association, were rebated by the latter, by cash or credit, out of the funds received by it from Anchor, which in turn were passed on by the Bureaus to their respective members by credit on their serum accounts, or otherwise, in proportion to the amount of serum purchased and received by them.
Anchor also had one wholesaler and several drugstore dealers to whom it sold its product in Illinois. The Association was the only volume contract purchaser with whom Anchor did any business before 1941. All serum 'thus sold by Anchor to the Association bore the label showing it to be processed and tested by Anchor and distributed by the Association, and gave the directions for its care and dosage. The Association had no refrigerating facilities for handling the serum from its own office.
With respect to the allowances for advertising, promotional and educational work, Association’s books disclose that it received from Anchor by rebate in the way of credits or checks the following amounts in the several periods set forth, together with the actual amounts expended by the Association for said purposes during the same periods:
1-1-39 to 1937 1938 7-15-39 Rebate ...$8,666.83 $39,044.30 $32,188.35 Expenditure ... 648.53 611.77 3,527.24
It was plaintiff’s theory, and the court sustained it, that the difference between the rebates and the actual expenditures for the purposes contemplated constituted unearned advertising and were allowances which amounted to secret rebates from Anchor to the Association, which were discriminative and violative of the statute.
Plaintiff’s only posted price was 75$ for sales to consumers. This was done on December 16, 1936. Its charter only authorized it to manufacture for and sell serum to its own members. In making these sales it acted through druggists who acted as warehousemen who received the serum on consignment. Sometimes, however, the shipments were made to the druggists c. o. d. The druggists held the serum for sale to plaintiff’s members, who became such, by signing an application for membership and paying 25$ for membership dues. These dues Were not paid in cash but were deducted from the patronage dividends to which the purchasers became entitled as members. Blanks were furnished to the druggists, and when a farmer wished to purchase serum, he signed an application for it and also for membership, and left it with the druggist. The members received their share of a patronage dividend at the end of the appropriate fiscal year. This was the only method for plaintiff obtaining its members in Illinois, where it had 56 druggist-warehousemen in 1937, 49 in 1938, 46 in 1939, and 41 in 1940. By way of contrast defendants became the sellers of practically all serum in Illinois.
In January 1937, plaintiff received complaints from its druggist-warehousemen to the effect that they could not sell plaintiff’s serum at 75$ to its consuméis because the County Farm Bureaus who were members of Serum Association were selling the Anchor serum to consumers at 65^. Thereupon, plaintiff instructed its warehousemen to reduce its consumer price in order to meet that competition. Plaintiff did not reduce its price throughout the state but only in those areas where it was necessary to meet the Farm Bureau competition in order to prevent the destruction of its Illinois business. In some places in Illinois it was able to and did sell the serum at 75$ because in those areas plaintiff’s warehouseman was located where there was no Farm Bureau office or, if there were one, its sales organization was ineffective. A recovery is sought for the sales where plaintiff was compelled to sell its product, *912as it alleged and testified, at 650 instead of 750 by reason of the defendant’s competition in violation of its marketing agreement.
Defendants contend that the- court erred in permitting plaintiff’s witnesses to testify as to the reasons given to the plaintiff by their druggists why the -latter could not sell plaintiff’s serum at 750, which resulted in plaintiff’s reduction in price. They urge that such evidence is hearsay, self-serving and thus incompetent. This was not error. Such evidence is an exception to the hearsay rule and is well recognized. Lawlor v. Loewe, 235 U.S. 522, 35 S.Ct. 170, 59 L.Ed. 341; Wigmore on Evidence, 3d Ed., Vol. 6, sec. 1729; Greater New York Live Poultry Chamber of Commerce v. United States, 2 Cir., 47 F.2d 156; Kimm v. Steketee, 48 Mich. 322, 12 N.W. 177; Plubbard v. Allyn, 200 Mass. 166, 86 N.E. 356; Brannen v. Bouley, 272 Mass. 67, 172 N.E. 104.
It is further contended that the evidence does not disclose that the defendants’ price cutting was the cause of plaintiff’s inability to sell its product. We can conceive of no fact which would more surely cause such inability than a cut in price by one’s competitor. Here the parties stipulate that the serum produced by plaintiff and Anchor was of like grade and quality. Under these circumstances, coupled with the facts that the defendants did indirectly cut their prices, regardless of the Marketing Agreement, a prima facie case was made and plaintiff was not required in the first instance to prove the absence of all other conceivable causes. Under this statute when a prima facie case is made, the burden shifts to the defendant, if it can do so, to show that the damage, if any, was otherwise caused. 15 U.S.C.A. § 13(b).
It is further claimed by the defendants that they are exempt from the operations of the Anti-Trust Laws because of the immunity created under the Anti-Hog-Cholera Serum and Virus Act, 7 U.S.C.A. § 852. We think this is not a correct interpretation of that section. It is clear that the exemption only refers to the Marketing Agreement. A reading of the Act and its legislative history convinces us that Congress did not intend to authorize either party to the Marketing Agreement to violate its terms. Otherwise such Agreement would be ineffectual. See United States v. Borden Co., 308 U.S. 188, 60 S.Ct. 182, 84 L.Ed. 181.
Defendants further urge that plaintiff was guilty of unclean hands because it likewise violated the Act in cutting its prices in order to meet their competitive prices. “The rule that a complainant must come into equity with clean hands means that he must do equity as respects the defendant’s rights in the particular matter of the suit. * * * If he is not guilty of inequitable conduct toward the defendant in that transaction, his hands are as clean as the court can require.” Carpenters’ Union v. Citizens Committee, 333 Ill. 225, 164 N.E. 393, 402, 63 A.L.R. 157.
Furthermore, 15 U.S.C.A. § 13(b) provides that the alleged inequitable conduct of plaintiff, here relied upon, is not a violation of that Act on the part of the plaintiff.
Moreover, on the theory of plaintiff’s unclean hands, defendants unsuccessfully attempted to prove the manner in which plaintiff came to be organized under the laws of Iowa; how it acquired its property; the amount of its indebtedness and to whom it was owed. It seems to be well settled that if plaintiff did anything unlawful in connection with its organization or the administration of its financial affairs since that time, it can only be inquired into, in a quo warranto proceedings, by the State which granted its charter. Such matters are not permitted to be collaterally attacked. National Bank v. Matthews, 98 U.S. 621, 25 L.Ed. 188; Steckler v. Pennroad Corp., 3 Cir., 136 F.2d 197; Iowa Federation v. Dilley, 234 Iowa 417, 12 N.W.2d 815; Pittman v. Tobacco Growers Co-op. Assn., 187 N.C. 340, 121 S.E. 634.
Defendants further urge that the court erred in rejecting their plea that plaintiff cannot maintain this action because it is one to be asserted by plaintiff’s members rather than by itself, because, as they say, any amount recovered in such action would not be the property of plaintiff but of its members. We think the court did not err in this respect. It seems clear that the amount recoverable in this action, if any, would have been in the first instance the property of the corporate entity, would have belonged to its treasury, and would have been subject to its corporate purposes and available for the payment of its creditors, if any; and that the individual members would acquire no right or in*913terest therein until in due course the action of plaintiff’s board of directors had fixed the amount of the patronage dividend and there had been a separation of funds from the corporate treasury. The plaintiff is a corporate entity and we find no authority which prevents it from suing in its name on its contracts or for a violation thereof, notwithstanding the fact that a portion of the amount recovered, if any, would eventually go to and belong to its members. Kansas Wheat Growers Assn. v. Sedgwick County, 119 Kan. 877, 241 P. 466; California Canning Peach Growers v. Downey, 76 Calif.App. 1, 243 P. 679.
Defendants argue that it would be anomalous to grant immunity to the making of a contract and not extend the same immunity to the parties in performing it. That, of course, is true, but that is not the case here. Plaintiff’s theory is that damage resulted to it, not from defendants’ performance but from their lack of performance. It is fair to say, however, that, in this connection Anchor says that it sold its serum to Serum Association as a volume contract purchaser at the prices named in its posted price list and that the Control Agency approved those sales as did also the Secretary of Agriculture in the following manner. On July 25, 1939, the Control Agency filed a complaint with the Secretary of Agriculture objecting to Anchor’s postings and filings, particularly that part of it which provided in effect that they spend liberal allowances for advertising, educational and promotional work. This complaint was in two paragraphs. On September 12, 1939, the Secretary replied to these complaints substantially in the following manner: With respect to the first complaint, he noted that it charged that certain items in Anchor’s price list of July 13, 1939, were inequitable as measured by the regulation in effect December 7, 1936, and should be suspended. He said that Anchor had filed a price list on July 29, 1939, which superseded the price filing referred to by the Control Agency. With respect to the second complaint he further stated that it referred to Anchor’s spending liberal allowances for advertising and sales promotion work; that Anchor had revised its price list in which it had withdrawn that provision. He further stated that since Anchor was permitted to operate for approximately two and one-half years under that provision without objection and that the same practice had been indulged in by other members of the industry without complaint, he thought it was impractical to ask the courts to enjoin the practice or punish Anchor for indulging in it. He further called attention to the fact that Anchor had not done this secretly, but had published it in its list of prices, and when objection was offered by the Control Agency, it had eliminated it from its published price list. Under these circumstances the Secretary of Agriculture dismissed the complaints.
The District Court refused defendants’ offer to introduce these facts in evidence, and exceptions were saved. We think the offer did not present matter material to the issue here. There the issue was first, whether Anchor’s price list of July 13, 1939, was equitable as measured by its former price list which had been withdrawn; and second, whether its offer of liberal allowances was still objectionable after the Control Agency had acquiesced in it for over two years, and after it had been withdrawn. There was no question raised there as to whether there were rebates in excess of the amount actually used by the purchaser for advertising and promotional work, and Anchor had withdrawn the offer of such allowances when it found they were objectionable to the Control Agency. It was under these circumstances that the Secretary thought it was impractical to ask the courts to enjoin the practice or punish Anchor for indulging in it. Certainly the Secretary’s letter cannot be construed as authorizing rebates which were not used for such purposes as published. It is quite doubtful whether the Secretary would have authority to do so even if such facts were before him.
In the facts before us, the rebates by Anchor to Serum Association were so greatly in excess of what the latter used for the purpose of advertising and promotion work that we feel compelled to agree with the District Court’s holding that such rebates were merely for the purpose of reducing the purchase price to Serum Association and its members, which, in the absence of any other explanation, seems to be a clear violation of the statutes.
Anchor further urges that it was not in competition with plaintiff because plaintiffs sales in Illinois were to consumers, while Anchor’s sales in Illinois were to a volume contract purchaser for which it had filed its selling price as required by the *914Secretary’s regulation. We think the arrangement here disclosed does not destroy the competitive relationship between Anchor and plaintiff. Anchor was selling its product directly to the agent of the Farm Bureaus who in turn were selling direct to their members who were consumers. The facts are that all but a small amount of these rebates to the Serum Association by Anchor were passed on to the Farm Bureaus who in turn, aside from .their expenses, passed them on to the consumers. It is barely possible that Anchor did not know that any part of the rebates finally reached the consumers, but by the exercise of a very small amount of reasonable diligence they could have known it, and that in a very real sense a very harmful competition was established as against plaintiff in the disposition of its products. Moreover, Anchor’s rebates to Serum Association were clearly in violation of the statute, and Anchor cannot avoid that liability by saying that it did not know Serum Association was using such rebates for unwarranted purposes. It would seem from this evidence that Anchor did not care for what purposes they were used. Evidently they asked for no information on the subject. It is quite evident that they could have easily ascertained the facts, for Serum Association’s books showed all the facts.
Serum Association further contends that it did not know the prices at which Anchor was selling to its other customers. We cannot see that this would make any difference. The question here is whether Anchor violated its own published price list with respect to Serum Association. The District Court held that it did, and we think rightly so. It is possible that Anchor never dictated to Serum Association what price it should charge its members, or the price at which those members should sell to the consumers. However, it must have known that it was dealing with a cooperative which was acting as .agent for the many Farm Bureaus who were its members, and that whatever Anchor paid to this cooperative in the way of rebates was in violation of the statute, and that such fund, less expenses, would eventually go to the Farm Bureaus, which in turn would be distributed to the consumers, thus in effect reducing the price which they liad paid for their serum. The books of account of both defendants reflect this method of treatment of the allowances, and it is abundantly substantiated by the minutes and records of Serum Association.
The District Court based its judgment upon the evidence of a certified public accountant, who tabulated each of plaintiff’s sales made in Illinois at 65{S during the period from January 1, 1937, to March 27, 1940. He also calculated the amount of each item if it had been sold at 75^ per 100 cc. The difference between these totals is the amount upon which the judgment is based. We think this is the correct method of computation. However, we are convinced that the total amount covers a longer period than that to which plaintiff is entitled. It is agreed that on March 27, 1940, all manufacturers of serum, including plaintiff and Anchor, posted the price to Volume Contract Purchasers at 36^ per 100 cc, and no claim is here made for damages after that date. However, on July 13, 1939, Anchor abandoned its rebates and filed with the Secretary of Agriculture its amended price list to Volume Contract Purchasers at 36^. Under the statute that rate became effective on July 16, 1939, and as we read the statute its validity did not depend upon others accepting it. True, the Secretary of Agriculture could refuse to accept it if he so de.sired and thus defer its effectiveness for further examination. However, the Secretary did not refuse to accept it, but he recognized it as valid and he referred to its validity in his ruling in the Control Agency’s .complaint above referred to. Plaintiff, however, urges that inasmuch as Anchor’s price of 36^ had originated in and pursuant to its former illicit practice that had brought about the discriminatory price, the defendants should be held liable for the entire amount up until March 27, 1940. We do not agree with that conclusion. In other words, we think plaintiff is not entitled to recover for any alleged damage after July IS, 1939.
We think the uncontradicted evidence discloses damage to plaintiff, and the jury should have so found. Indeed, the District Court would have been warranted in sustaining plaintiff’s motion for a directed verdict at the close of all the evidence for actual damage sustained in the sum of $4,449.31 upon which a judgment should have been rendered for $13,347.93. The former amount represents the uncontradicted amount of damage to plaintiff during the period from and including January 1, 1937, to July 16, 1939. After verdict the *915District Court was of the same opinion, and accomplished the correct result, except as to the amount. In so doing we think there was no error, nor was there a violation of defendants’ right of trial by jury. As to $13,347.93 of the verdict we affirm. As to the remainder we reverse and remand for further proceedings not inconsistent with this opinion.