.. 14 i^Ot) rf ^;.^^^;^..^^^^^ ^^::^^^^^!^-^^^^ niuerBitt) of ^ (jlaliforuia • m^^^m^ MMtt^L^^MMIHMMMHMi r^ A TREATISE ON THE LAW OK MONOrOLIES INDUSTRIAL TRUSTS AS ADMIMSTKKKU IN ENGLAND AND IN THE UNITED STATES OF AMERICA. CHxVRLKS FISK BEACH, Sr., COUNSELLOU AT LAW. AUTHOR OF "COMMKNTAKIKS ON THK LAW OF TRUSTS AND TRU8TKK.S." ST. LOLTS: CENTRAL LAW JOURNAL COMPANY. 1898. ^tCKEi^ Copyright 1898, BY Central Law Journal Company *St. Louis. A.'o..- Printed by Central Lam Journal Company TO My Wife, HELENE LOUISE LEE, THIS VOLUME IS GRATEFULLY DEDICATED. CiiAuuKs FisK Beach. Sk. PREFAC^E. Thi-s work is un outirrowth of my "Conmientaries on the L:iw of Trusts and Trustees." It was my original inten- tion to write two or three chapters for that work on the subjects discussed in this volume. But the discussion of the law of trusts and trustees assumed such proportions, extending so far beyond the prescribed limits, that it was found altogether impracticable to include in that work even a satisfactory outline of the law of monopolies and iii(his- trial trusts. In offering this treatise to the pi-ofossion, I flatter my- self that there is no call for an apology. To a great extent the law relating to the subjects here treated is either quite new, or of comparatively recent origin, A short time only has elapsed since the decisions of the English courts, which now constitute the law for the British Empire, were ren- dered, and the most important decisions of the Supreme Court of the United States relating to monopolies and in- dustrial trusts, have been handed down during the past few months. Most of the statutes also of the States of this country have been enacted during a com{)aratively recent period, and some of them have become law since the writ- ing of this volume had its beginning. Fn view of these facts, it is not renuirkable that no adeciuate discussion of this subject has heretofore appeared. The only extant treatise relating, even in a general sense, to the subjects here discussed, contains about one-third of the matter of this volume, and it was pul)lish(>d before the recent English and American decisions which constitute the law of the VI PREFACE. present. So far us relates either to the decisions of the courts, or to the statutes of the Federal and State leofisla- tures, this work will be found up to date. It is believed that the chapter devoted to Anti-Trust Legislation will be found of special value. In the preparation of this work, as of its predecessor, I have had the assistance of Edward Franklin White, Esq., of the Indianapolis bar. In the main, the notes are the product of his labor. For this service Mr. White has quali- fications of a high order, and the evidence of his consci- entious industry appears on every page. The busy lawyer will find the legal and 0(iuitable j)rinciples expounded in the text very amply sustained, and very fully and pertinently illustrated by his copious and well chosen notes. Charles Fisk Beach, Sr. Indianapolis, Ind.. June 8th, 1898. TABLE OF CONTKMS INTRODUCTION. / § 1. A recent development 2. Origin of the term 3. A wider signiticance 4. Some early illustrations 5. Early English monopolies 6. Statutory enactments 7. The doctrine modified 8. An historical review 0. Sustained by popular sentiment 10. The American doctrine . 11. The adverse contention . 12. Ijabor organizations 13. Topnlar sentiment and public policy I'Hge. 1 2 4 4 9 12 1.') 17 27 2S M :y 3;-) CHAl'TKU I, IM'BMC I'OI.ICV AS KKI.ATKI) TO TJtADK ANI> 1NI>1 STKIAL TIU STS. § 14. Intrdductorv ...... 15. Public policy delined ..... 16. The effect of a change .... 17. Covenants inconsistent with morality IS. Services in inlliiencing legislation 19. The ground of the rule .... 20. Where such services may be employed 21. Services in influencing public ofticials 22. For services in procuring appointments to public oflice.-; 23. The sul)ject continued ..... 24. For withdrawal of opposing candidates 25. For i^ervices in procuring a pardon 26. For services which are in violation of public duty 27. For services in opposing a public enterprise 28. The subject continued .... 37 42 47 49 54 5S 62 64 68 71 80 82 VI 11 TABLK OF CONTENTS. § 29. Stipulations against liability . 30. The rule in New York 31. Contracts in contravention of law 32. For influencing the administration of justice 33. For changing the officers of corporations 34. For renouncing an executorship 35. For assignment of salary not yet due Page. 85 91 93 95 99 101 104 CHAPTER 11. CONTRACTS IN RESTKAINT OF TRADE. § 3(i. Introductory 37. The general rule 38. The rule in England 39. Partial distinguished from general restraint 40. Question of consideration 41. Limitations of time 42. The subject continued 43. Touching territorial limitations 44. The subject continued . 45. Territorial limits determined 4(j. Validity of contracts in restraint of their reasonableness 47. Divisibility of illegal contracts 48. The subject continued 49. Lijuitations in conveyances •oO. The subject continued 51. The grantee restrained by the terms 52. Contracts relating to trade secrets 53. Restraint of trade by patents 54. Where contracts relating to patents are not upheld 55. Restraint in the sale of a trade-mark .")(). Restraint in publication contract trade as affected bv of the convevance 107 110 115 116 121 123 120 128 131 139 142 147 151 153 157 159 lUO 165 169 171 174 CHAPTER III. CONTRACTS RP;LATIN(; to professions AM) TItADE? 57. Introductory ..... .58. Contract for the sale of a physician's practice jj9. The subject continued .... 60. The rule as applied to attorneys 61. The rule as applied to dentists 62. Application of the rule to the profession of teaching 63. Restraint upon the services of artists and actors Page. 179 183 185 187 190 193 194 TAHLK OF CONTENTS. IX § 04. As applied to trades and other occupations C5. In its application to travelinjif salesmen GO. Constraint of trade construed as a limited partnei'siiip rage. 197 202 204 CHAPTER IV rONTKACTS lJKI.ATIN7. Introductory ...... (5!S. Contracts granting an exclusive business privilege 09. Contracts relating to a particular article 70. Contracts under which the grantor retains an interest in the business .... 71. Contracts for the sale of a good will 72. The subject continued 73. Further application of the rule 74. Agreement not to buy or sell . 7."). Contract to maintain prices . 7(1. Statutory regulations I'dge. 20li 20(; 209 210 212 215 220 221 223 224 CHAPTER V. CONSriKACIES IN UESTUAINT OK TlJAl*!:. 77. Introductory ...... 78. Conspiracy defined ..... 79. The rule in England . • . 50. Consi)iracy by a corporation .... 51. Combination to monopolize a particulai- brancli of Imsi ness ....... 82. Combinations for regulating prices 83. Conspiracies under the federal anti-trust act 84., Combination to prevent competition at a judicial sale 8.">. Combination to destroy con)petition 80. Conspiracy for severing the relation of a minister to hi congregation ...... 87. Indictment for conspiracy .... 88. .Statutory re 2.50 2.-»9 CIIAI'IKK \ 1. THK CKKATING OF A COUNEK. § 89. Introductory 90. The corner defined 91. The nature of an option I'HgC. 202 204 207 TABLE OF CONTENTS. 92. Modification of the common law doctrine . 93. The creation of a corner in necessaries 94. The creation of a corner in stocks 95. Where contracts for future delivery are justifiable 96. Rights and liabilities of third parties 97. Statutory prohibitions . . . , 2S() •284 CHAPTER VU. TRADES INIONS AND l.AHOU 0U KOK THK SllM'ltKSSION OK COMPETITION. § 148. Introductory ....... 149. Combinations for the purpose of suppressingcompetition 150. The subject continued 151. Purchase of competing lines 152. Lease of competing lines 153. Consolidation of parallel lines 1.54. The subject continued 155. The rule in case of tratlic arrangement 1.56. Admission to depot grounds 157. General powers of railway corporations Page. 464 469 473 476 480 485 490 492 495 499 X tablf: of contents. CHAPTER XI. IMHSTHIAL TRUSTS. ^ Page. § 158. Introductory ....... 503 159. Cliissification of industrial trusts .... .o05 160. Legality of the "trust,'" — class first . . . .507 161. The subject continued ..... 513 162. The same subject ...... 517 163. The lethality of the ••trust" continued. — class second . 5-25 164. The rule in England ..... .53-J 165. Legality of the ''trust'' continued,— class third . . 5:{ii 166. The subject continued ..... 53y CH.APTER XII. TKIST COMBINATIONS. § 167. Introductory ..... 168. The purpose and scope of federal legislation 169. The subject continued 170. Pooling by railroads 171. The pooling of stocks 172. The ]tooling of products 173. The subject continued 174. Monopoly under patents 175. The subject continued 17ii. The voting trust 177. The subject continued 178. The same subject 179. Rebates on freight bills 180. The subject continued 181. Combinations of insurance companies 182. Rights of parties under trust combinations rage. 543 544 546 552 558 .561 565 568 572 576 580 583 585 589 591 595 CHAPTER XIII. ANTI-Tin ST I.K(;iSLAT!ON. § 183. Introductory . 184. The federal anti-trust act 185. .Vlabama insurance act 186. Arkansas anti-trust act 187. California cattle trust 188. Delaware life insurance law 189. Florida legislation relating to trusts and monopolies 190. Georgia anti-monoi)oly act .... Page. (;oo 601 603 605 606 608 609 611 TABLE OF CONTENTS. Xlll § 191. Illinois act prohibiting pools, trusts and combines 192. Indiana anti-tnist act .... 193. Iowa anti-pool and trust law 194. Kansas law jtrohibitin»j trusts 195. Kentucky law prohii)itinf; pools, trusts and conspiracies 19(]. Louisiana law for the prohibition of trusts and combina- tions in restraint of trade .... 197. Maine anti-trust law .... 198. Michigan anti-trust act .... 199. Minnesota law to prohibit pools and trusts 200. Mississippi law prohibiting trusts and combines 201. Misj-ouri anti- trust act .... 202. Montana statute against monopolies and trusts 203. Nebraska statute against trusts and conspiracies agaips trade and business ..... 204. New Mexico law declaring trust combinations illegal 205. New York law to prevent monopolies 206. North Carolina law for the prohibition of trusts • 207. North Dakota law declaring certain trusts and combina tions unlawful ..... 208. Oklahoma law. to prevent combinations in restraint o trade ...... 209. South Carolina piohibition of trusts and combinations 210. South Dakota anti-trust law 211. Tennessee law to prohibit conspiracies and trusts 212. Texas law for the suppression of trusts and the promo tion of true competition .... 213. Utah law prohibiting pools and trusts 214. Washington law forbidding trusts and monopolies 21."). ^Visconsin statute proiiibiling trusts and combinations in restraint of trade ...... I'age. 014 (;1G 018 022 020 028 031 (533 035 030 039 (540 048 053 054 057 859 ()G0 002 004 000 (•.70 074 078 CH.VrTEK XIV. KK.MKDIK.s UY qVO WAKHANTo AM> IN. II N< TION. § 210. Introductory ...... 217. The writ of quo warranto .... 218. Tlie subject continued .... 219. Ground of proceedings against monoiiolies and indii- trial combinations .... 220. What courts have jurisdiction 221. Who may tile an information 222. Pleadings and averments .... 223. .Iiidgment under proceedings in quo warranto . 224. Application of the rule to illegal combinations . 225. Remedy by injunction .... 226. The subject continued .... 227. runishment for contempt .... I'age. tiSO (WO 084 088 091 097 701 705 708 709 713 7n XIV TABLE OF CONTENTS. CHAPTEK XV. STATUTOUV KEGLLATIONS OK KATES OF TUANSl'OKTATION. I'age. § 228. Introductory . . . . . . .717 229. Statutory enactments subject to judicial investigation . 718 230. Right of railroad corporations to legal protection . 719 231. Right of railway companies to discriminate in rates of transportation ...... 721 232. Rule for determining what are reasonable rates . . 723 CHAPTER XVI. CONCLUDING KEFLECTIONS. TABLE OF CASES. [The references are to pages.] j^ Allegheny City v. McClurkan (14 Pa. St. 81), 501. Allegheny County v. McFveesport Diamond Market (123 Pa. St. 164), 40G. Allen V. Armstrong (10 Iowa, oOS), 427. Allen V. Farnsworth (0 Yerg. 187), 396. Allen V. Humphries (L. R. 8 P. D. 16), 102. Allen V. Tarlton (2.5 La. Ann. 427), 48. Allen V. Woonsockett Co. (11 R. I. 288). 523. Allis V. Stowell (IG Fed. Rep. 783), 571. Allison V. Iluhhell (17 Ind. 559), 501. Allison V. Ry. Co. (10 Hu.'sh, 1), 466. Allsopp V. WheatiTofl (L. L. 15 Eq. 59, 64). 26. 161. Altgclt V. San Antonio (SI Tex. 436). 386. Alvord V. Collin (20 Pick. 428), 99. Ambach v. Baltimore A Ohio B. Co. (30 Ohio L. J. Ill), 88. Amedon v. Gannon (6 Hun, 484), 132, 184. Abbott V. Am. Hard Rubber Co. (33 Barb. 578), 710. Abrams v. Milwaukee, etc. R. Co. (87Wis.485;58N.W.Rep.780), 86, 93. Adams v. Adams (25 Minn. 72), 97. Adams Co. v. Hunter (78 Iowa, 328; 43 X. AV. Rep. 208), 65. Adams Ex. Co. et al. v. L. & N. Ry. (117 U. S. 1, 23), 460, 461. Adams Ex. Co. v. Reagan (29 Ind. 21), 92. Ainsworth v. Bentlej- (14 W. R. 630,632), 175. 211. Albany Northern Ry.Co. v. Brown- ell (24 X. Y. 345, 351), 420. Albert v. Savings Bank (2 Maryl. Deo. 169). 235. Albright v. Teas (37 N. J. Eq. 171), 115. Alcock V. Giberton (5 Duer, 70), 161, 162, 193. Alderman v. People (4 Mich. 414; 51 Am. Dec. 75), 259. Aldnutt V. Inglis (12 East, 527), 415. Alexander v. Greer (7 Hill (N. Y.) 533). 92. Alexander v. Reife (74 Mo. 495). 94. Ames V. Kansas (111 V. S. 449), 695. Alger V. Thatcher (19 Pick. 51 ; 31 Am. Biscuit, etc. Co. v. Kiotz (44 Am. Dec. 119). 108, 115, 129, ; Fed. Rei». 721 ; 32 Am. & Eng. 138, 215, 218, 538. ' Corp. Cas. 510). 508, 595. TABLE OF CASES. [The references Am. Treservers" Trust v. Taylor Mfg. Co. (46 Fed. Hep. 152), 541, 595. Am. Union Tel. Co. v. Western Union Tel. Co. (67 Ala. 32; 42 Am. Rep. 90), 437. Am. Rapid Tel. Co. v. Hess (125 N. Y. 041, G46). 438. Amoskeas Mfo^. Co. v. Garner (54 How. Pr. 297), 173. Amoskeag Mfg. Co. v. Spear (2 Sandf. 607), 173. Anderson v. Dunn (6 Wheat. 204). 716. Anderson v. Jett (89 Ky. 375; 12 S. W. Kep. 670), 224.245. Angler v. Webber (14 Allen. 211) ; 92 Am. Dec. 748). 218, 565. Anheuser-Busch Brewing Assn. V. Houck (27 S. W. Rep. 692: 30 S. W. Rep. 869), 53. 261. 563. Appleman v. Fisher (34 Md. .540, .549). 268. 277. Appleton V. Campbell (2 C & P. 347). 51. Arbuckle v. Cowhan (3 Bas. & P. 328). 104. Archer v. Mar.«h (6 Ad. & E. 959; 2 Nev. & P. 562). 23. 24. 121. Armas v. Milwaukee, etc. R. Co. (67 AVis. 46), 86. Armstrong v. Chi., etc. R. Co. (53 Minn. 183; 54 X. W. Rep. 1059). 92. Armstrong v. Ex. Co. (1.59 Pa. St. 640). 87. Armstrong v. United States Ex- press Co. (159 Pa. St. 640; 28 Atl. Rep. 448), 86. Arnold v. Krentzer (67 Iowa. 214). 110. 129, 132. Arnot V. Pittston & Elmira Coal Co. (68 N. Y. 5,58, 565; 23 Am. Rep. 190). 243. 244, 568. .541. Arthur v. Oakes (63 Fed. Rep. 310. 318. 321. 324. 327: L. R. A. 414). 297. 301. 305. 322. 341. are to pages.] Asbestos Felting Co. v. U. S. li 1- . Salamander Felting Co. (13 Blatchf. 4.53). 570. Ash V. People (11 Mich. 349). 4.56. Ashburner v. Parrish (81 Pa. St. 52). 46. Ashton V. Dakin (4 H. & X. 867), 283. Aston's Estate (5 Whart. 228). 102. Asylum v. Xew Orleans (105 U. S. 362), 361. Atcheson v. Mallon (43 X. Y. 147: 3 Am. Rep. 706). 249. Atchison & Xeb. Ry. Co. v. Baty (6X'^eb. 37). 431. Atchison & X. R. Co. v. AVa. Kep. 037). 2{Jiu 2G7. Bigony V. Tyson (75 I'a. St. 157). 132, 184. Billings V. Ames (32 Mo. 205). 1(50. Billin«rs V. O'Brien (14 Abb. I'r. (X. 8.) 238). 100. Begcin v. Anderson (28 Ind. 79), j Billingsley v. Clelland (41 W. Va. 234; 23 S. K. Rep. 812), 53. Bird V. Breedlove (24 Ga. 023). 70. 402. Bedford R. R. Co. v. Bowser (48 Pa. St. 29). 502. Beelvuian v. Saratoga ct Schen. Birdsell v. llagerstown Agrl. Mfg. Ry. Co. (3 Paige. 45), 466,467, 409. Beer Co. v. Massachusetts (97 U. S. 25). 4.52. Beeman v. Rufford (1 Sim. (X.S.) .")50). .502. Belden v. Munger (5 Minn. 211), 97. Beiger v. Din.*more (51 X. Y. 100), 93. Bell V. C'.egg (25 Ark. 20), 392. Bell Telepb. Co. v. Com. (3 Atl. Rep. 825), 440. Bellsdvke. etc. Co. v. Xortli Brilisli Co. (1 Hughes. 64), 571. Birmingham, etc. Ry. Co, v. Bir- niingliam Ry. Co. (78 Ala. 465), 377. 380. Birfs Case (48 L. T. 07), U)2. Bishop V. Am. Preservers' Co. (157 111. 284.311; 51 Fed. Rep 272). 510. .VJ7. 598. Bishop V. Palmer (140 Mass. 409, 475; 16 X. K. Rep. 299), 138, 152. Bi-Spool Sewing Machine Co. v. Acme Mfg. Co. (15 Mass. 404). 542. R. W. Co. (2 Xev. iS: MeX. R. i Bissell v. Mich. So. it Xorih. Ind. W. Cas. 105). 588. Belmont liridge v. AVheeling Bridge (138 C S. 287. 084, 085), 491. Benton v. Hope (19 La. Ann. 403), 94. Benton v. Pratt (2 Wond. 385), 301 . Benwell v. Inns (24 Beav. 307). 101. Berlin Machine Works v. Perry (71 Wis. 495, 499, .501; 38 X. W. Rep. 82), 139, 109, 170. Berry v. Gates (24 Barb. 2(W). 527. Bestor v. Wathen (00 III. 138), 84. Betts- Appeal (10 W. X. C. 431), 132. 1S4. Botls V. Farmers.' etc. Trust Co. (21 Wis. 80), 80. 93. Beveridge v. Hewitt (8 111. .\pp. 407). 2i'.4. Ry. Co. (22 X. Y. 2.58. 299.305. 309). 235, 501. .520. Bixby V. Dunlap (.50 X. II. 4.50; 22 Am. Rep. 475). 348. Blackford v. Preston (8 T. R. 95). 10. Black V. Del., etc. Canal Co. (22 X. .1. E'|. 130; 24 X. .T. Eq. 455). .502. 710. Black V. (Joodrifh 'I'rans. Co. (55 Wis. 319; 13 N. W. R.-p. 244^. 80. Black V. Oliver (1 Ala. 449). 94. Blackstock v. X. Y.. etc. Ry. Co. (20 X. Y. 4S; 75 Am. Dec. 372. 373). 331. Blake V. Lay ton (6 T. R. 221),. 340. Blasdell V. Fowle (120 Mas,. 117 . 40, 94. Bliss V. Kraus (10 Ohio Si. 1.55). 401. XX TABLE OF CASES. [The references Bliss V. Lawrence (58 N. Y. 442. 445). 46, 105, lOG. Blisset V. Hart (Willes. 508), 392. Bloodgood V. Mohawk. etc» R, Co. (18 Wend. 9. 10), 235,460. Bloodgood V. Mohawk & Hudson R. R. Co. (18 Wend. 1). 467. Blossom V. Van Amringe (1 Phil. Eq. 133), 94. Board, etc. v. Cutler (6 Ind. 354). 501. Board of Railroad Commissioners V. Ore. Ry., etc. Co. (17 Ore. C5; 35 Am. & Eng. Ry. Cas. 542). 426. Board, etc. Tipp. Co. v. Lafayette, etc. Ry. Co. (50 Ind. 85. 108. 112), 501. Board v. Verbarg (63 Ind. 107), 471. Bodine v. Trenton (36 X. J. L. 198), 368. Boehl V. Chi.. M. & St. P, R. R. Co. (44 Minn. 191; 46 X. W. Rep. 333), 89. Boehm v. Mayor, etc. of Baltimore | (61 Md. 2.yj. 263). 403. | Bogert V. Ind. (13 Ind. 134), 402. I Bohn Mfg. Co. v. Hollis (.")4 Minn. 233; 21 L. R. A. 337; 40 Am. St. Rep. 319; 55 X. W. Rep. 1119), 24, 253. 304. Boies V. Blake (13 Me. 381), 94. Bolt V. Stennett (8 T. R. 606), 415. Booe V. Junction R. R. Co. (9 Ind. 358), .502. Booth V. Robinson (55 Md. 419. j 439), 488, 535, 536. ! Booth V. Seevers (19 Pat. Off. Gaz. I 1140), .571. ' Borda v. Phila., etc. R. Co. (141 Pa. St, 484; 21 Atl. Rep. 665), 589. Boston Cliam. of Com. v. Lake Shore, etc. Ry. Co. (32Am.& Eug. Ry. Cas. 618), 470. Boston Diatite Co. v. Florence Mfg. Co. (114 Mass. 09; 19 Am. Rep. 31). 352. are to pages.] Boston Glass Manufactory v. Bin- ney (4 Pick. 425), 295. 349. Boston & L. Ry..Co. v. Salem & L. Ry. Co. (2 Gray, 1), 361, 375, 501. Boston Water Power Co. v. B. & W. Ry. Co. (23 Pick. 360), 361. Boswortli V. Hearne (Andr. 91). 120. Boutelle v. Smith (116 Mass. 111). 110, 218. Bowen v. Buck (28 Vt. 308), 97. Bowen v. Hall (62 B. D. 333; 50 L. J. Q. B. 305; 44 L. S. 75; 29 W. R. 307), 254. 301, 318. 348. Bowen v. Masterson (14 Allen. 499) , 242, 295. Bowers v. Bowers (26 Pa. St. 74). 68. 101. 103. 104. Bowey v. Bennett (1 Camp. 348). 51. Bowling V. Taylor (40 Fed. Rep. 404), 161. Bowling Green v. Carson (10 Bush. 64). 450. Bowman v. Phillips (41 Kan. 304: 21 Pac. Rep. 230). 52. Bowman v. Waltham (2 McLean. 376), 398. Bowser V. Bliss (7 Blackf. 344. 346), 110, 115. 124, 125, 210. Boyce v. Tabb (18 Wall. 546), 48. Boyce v. Watson (52 111. App. 361). Boyle V. Adams (50 Minn. 255; 52 X. W. Rep. 860), 99. Brace v. Evans (3 Ry. & Corp. L. J. 561), 313. 322.324. Bradley v. Basley (1 Barb. Ch. 125), 194. Bradley v. Picrson (148 Pa. St. 502; 24 Atl. Rep. 6.5), 330. Bradley v. So. Xew Eng. Teleph. Co. (66 Conn. 559; 34 Atl.Rop. 499), 446. Brady v. N. AV. Ins. Co. (11 Mioh. 425), 4.55. ■ Breck v. Cole (4 Sandf. 83). 95. TABLE OF CASES. XXI [The references are to pages.] Brechbill v. Randall (102 Ind. 582; 52 Am. Rep. G95), 432, 452. Brewer v. Lamar (09 Ga. G5li), 171, 174. Brewer V. Marshall (11) X. J. Eq. 537, 540. .-)47), 115. 132, 155, 182, 180. Brick Presbyterian Church v. New York City (5 Cow. 538, ,540), 402,411. Bridge Prop'r v. Hoboken (1 Wall. 110), 384. Brisbane V. Adams (3 N. Y. 12t>), 249. Brown v. Langford (3 BibI). 497), 51. Brown v. I'ae. Mail .Steamship Co. (5 Blatchf. .•)25). .583, 584. Brown v. Rounsavell (78 111. 589), 207. Brown v. Steamship Co. (5 Hiatt-hf. 525; Fed. Cas. No. 2325), .582. Brown v. Stewart (4 Md. Ch. 308), ■ 102. Bruffet V. Gt. Western K. 11. Co. (25 111. 310). 501. Bruine v. Sasser (25 La. Ann. 224). 48. Brislin v. Brown (24 Ohio St. 505; j Brunner v. Boston (102 Mass. 19), 15 Am. Kep. 027), 249. Brittonv. Mayor (21 How. Pr. 251), 309. Broad V. Jollyfe (Cro. .Jnc. 596), 19, 118, 122. Brocaw v. Gibson Co. (73 Ind. 543), 460. Brokaw v. X. J. It. & Trans. Co. (32 N.J. L. 328, 329), 237. Brooklyn v. City Ry. Co. (49 N. Y. 475), 309. Brooks V. Cooper (50 N. J. Eq. 701 ; 20 Atl. Rep. 978, 981), 45, 06. Broome v. Telephone Co. (42 N. J. E. XXVll [The references are to pages | Commrs. v. Holyoke Water Co. (104 Mass. 446), 306. Commrs. v. Kailroad Co. (50 Ind. 85). 491. Compai^niu Francuise v. West. Union Co. (11 Fed. Kep. 842, 862). 491, 527. Commercial Union Telepb. Co. v. New Eng. Teleph. Co. (61 Vt. 241 ; 15 Am. St. Rep. 893). 446. Condeman v. Trenchard (58 Barb. 165). 79. Cone V. Russell (48 N. J. Eq. 208; 21 Atl. Rep. 847), 579. Cone's p:xrs. v. Russell (48 X. J. Eq. 208; 21 Atl. Rep. 847), 577. Conery v. X. O. Water Wks. Co. (41 La. Ann. 910; 7 So. Rep. 8), 386. Cono^er v. lludson Riv. Ry. Co. (6 Duer, 375), 331. Cong, of Israel v. Peres (2 Cold. 620), 2.")6. Conklin v. Wash. University (2 Md. Ch. 497), 520. Connell v. West. Union Tel. Co. (108 Mo. 459; 39 Am. & Eng. Corp Cas. 594). 437. Conner v. Robertson (37 La. Ann. 814; 55 Am. Rep. 521). 277. Connor v. Kent (L. R. 2 Q. B. 545), 323, 325. Conover v. Pac. Ex. Co. (40 Mo. App. 31), 86, 93. Consumers' Oil Co. v. Nunne- macher (142 Ind. 560, 567, 5G8; 41 N. E. Rep. 1048), 110, 153. Continental Ins. Co. y. Board of Underwriters (67 Fed. Rep. 310), 318. Conway v. Taylor (1 Black, 603), 396, 398. Cook V. Chi., R. I. & P. R. Co. (81 Iowa, .551 ; 46 X. W. Rep. 1080; 45 Am. it P:ng. Ry. Cas. 291), 591. Cook V. Johnson (47 Conn. 175; 3G Am. Rep. 64), 115, 142, 192. Cook V. Shipman r24 111. 614), 73. Cook V. West. & .\tl. Ry. Co. (72 Ga. 48), 79, 97. Cooke V. Davis (53 X. Y. 318), 277. Copes V. Charleston (10 Rich. L. 502), 401. Coppack V. Bower (4 Mees. iS: \V. 361), 46, 80. Corp. of Liverpool v. Wright (5 Jur. (X. S.) 1156, 1157; 28 L. J. Ch. 871), 104, 105. Costar v. Brush (25 Wend. 628), 369. Cothran v. Ellis (125 111. 496). 277. Cott v. Towle (L. R. 4 Ch. App. 654), 156. County of Allegheny v. Gibson (9 Pa. St. 397; 7 W. X. C. 441 ; 11 L. Bar. 81), 3.58. County of Moultrie v. Fairfield (105 U. S. 370), 466. Coupland v. Housatonic R. Co. (61 Conn. 531: 23 All. Rep. S70), 93. Covington, etc. Ry. Co. v. Coving- ton (9 Bush. 127). 368. Cowan V. Fairbrotber (118 X. Car. 406; 24 S. E. Rep. 212). 146, 178, 220. Cowles V. Mercer Co. (6 Wall. 118), 719. Cowley V. R. R. Co. (1.59 U. S. 5G9, 583; K; Sup. Ct. Rep. 127), 719. Crawford v. Gordon (11 Wkly. L. Bull. 121), 51. Crawford v. Spencer (92 Mo. 498). 264, 277. Craft V. McConoughy (79 111. 346, 350; 22 Am. Rep. 171), 240, 242, 538, 541. .565, 5(i7. Cravens v. Rogers (101 .Mo. •_'17, 252; 14 S. W. Rep. 10()). 497. Crescent Gas Co. v. X. O. Gas. Co. (27 I-a. Ann. 148), 383. Cronin t. People (82 X. Y. 318: 37 Am. Rep. 564), 401. Cross v. Cross (58 X. II. 373), 97. Cross v. W. Va., C. it P. Ry. Co (37 W. Va. 342), 488. X.W 111 TABLE OF CASES. [The references Cioton Turnpike Co. v. Kyder (1 Johns. Ch. Ull. (J15). 370. Crump V. Commonwealth (84 Va. 927, 941, 945; 10 Am. St. Kep. 89.5), 35, 318. 322. 323, 329. Crutwell V. Lye (17 Ves. 306, 335, 33G), 108. 213. 215. Crystal Ice Mfg. Co. v. San Antonio Brew. Assn. (8 Tex. Civ. App. 1; 27 S. W, Rep. 210). 210. 221. Cuddon V. Eastwick (Salk. 193), 108. Cumberland Val. Ry. Co. v. Get- tysburg & H. Ry. Co. (177 Pa. St. 5«4; 35 Atl. Rep. 952), 494. Cummins v. Barkalow (4 Keyes, 514). .55. Cummings v. Foss (40 111. App. 523, 530, 531 ; 149 111. 353, 3.59), 272, 273. Cummings v. Union Blue Stone Co. (44 N. Y. Supl. 787; 15 App. Div. 007), 500. Cunningham v. Cunningham (18 B. Mon. 24). 102, lOJ. Cunningham v. Nat. Bank of Au- gusta (71 Ga. 400). 205, 280. Currie v. N. J., etc. R. R. Co. (61 Miss. 725, 731). 83. Currier v. Concord Ry. Co. (66 X. H. 100; 20 Atl. Rep. 383; 8 Ry. & Corp. L. J. 443), 472. Currigan's Case (0 Jr. Jur. (N. S.) 116), 104. Curtis V. Allegheny (1 Phila. 237), 358. Curtis V. Aspinwall (114 Mass. 187), 100. 249, 252. 577. Curtis V. Ay mult (47 X. Y. 73), 1.54. Curtis V. Bryan (2 Daly. 312; 36 How. Pr. 33), 173. Curtis V. Gokey (68 X. Y. 300), 110. 219. Curtis V. Leavitt (15 X. Y. 9. 108), 597. Cusack V. White (2 Mills, Const. Rep. 279), 51. are to pages.] Cussan v. Galen (1.52 X. Y. 33: 46 X. E. Rep. 297. 298). 348. Cutting V. Fla., R. & X. Co. (48 Fed. Rep. 508), 555. D. Dakin v. AVilliains (11 Wend. 67), 178. 201. Darcy v. Allen (11 Coke. 84; Xoy, 173), 11. Darley v. The Queen (12 CI. & Fin. 520). 680. Darmoth v. Bennett (15 Barb. 601), 243. Dartsmouth College Case (4 Wheat. 518), 366. Dartsmouth College v. Woodward (4 AVheat. 518. 530), 488. Davidson v. Commrs. (18 Minn. 482), 406. Davies v. Davles (L. R. 36 Ch. D. 359,364,396, 397. 398; 35 W. R. 697). 27,44,45,129. 140, 145, 218. Davies v. Lowen (04 L. T. 655), 150. Davenport v. Kelley (7 Iowa. 102), 400. Davenport v. Kleinschmidt (6 Mont. 502, 528; 13 Pac. Rep. 249). 369, 383, 391. Davis v. Commonwealth (104 Mass. 241; 41 X. E. Rep. 292), 78. Davis v. Gray (10 Wall. 203. 221), 719. Davis V. Marlboro (1 Swanst. 79). 104. Davis V. Mason (5 T. R. 118), 22, 112, lis, 121, 124, 129. 184. Davis V. Mayor, etc. of Xew York (14 X. Y. 500, 526; 07 Am. Dec. 186), 377, 713. Davis V. State (08 Ala. 58), 432. Davison v. Seymour (1 Bosw. 88), 103. Dawson v. St. Louis, etc. R. Co. (70 Mo. 514). 92. Day V. Brownrigg (L. R. 10 Ch. D. 294), 352. TABLE OF CASES. XXIX [Tbe rbferences are to paKes. Dean v. Emerson (102 Mass. 480), 115, 201, 216, 218, De Begnis v. Armistead (10 Bing. 110). 45. De Groot v. Vanduzen (20 Wend. 390), 94. Delaplaine v. Cook (7 Wis. 54), 427. Del., L. & W. R. R. Co. v. Bow- ers (58 X. Y. 573, 582), 29, 333. Del., etc. Ry. Co. v. Cent. Stock Car Co. (45 X, J. Eq. aO, GO), 435, Del, Railroad Tax (18 Wall, 200. 225), 991, Del. & R, Canal Co, v, Raritan & Del, Bay Co, (16 X, J. Eq. 321, 378), 376, Delz V, Winfree (80 Tex, 400; 16 S, W. Rep. Ill), 252, 254, Deniarest v, Wickham (63 X. Y, 320), 698, De Melton v. Mello (12 Ea.st. 234). 94. Dendy v. Hender.son (11 Excbeq. 194; 24 L. .T. Excheq.). 129, 189, 324. Denny v. Lincoln (5 Mass. 385), 79. Denny v. Manhattan Co. (2 Denio, 115;5Denio. 639), 332. Dent V. Turpin (2 J. ct 11. 139), 172. Denton v. English (2 Mott. Sc M. 581), 51, Denver, etc. Ry. Co. v. Denver City Ry. Co. (2 Colo, 673). 377, Des Moines St, Ry, Co, v, Des De Witt Wire Cloth Co, v. X. J, Wire Cloth Co, (14 X, Y, Siipl. 777), 243, 562, Dexter v. Snow (12 Cash. 594). 94, 95, Diamond Match Co. v, Roeber (106 X. Y. 473), 113. 125, 132. 138, 139, 144, 208,211, 219. Dibble v, Xew Haven (56 Conn, 199; 20 Am. & Eng. Corp, Cas, 174), 3:12. Dick V, Cooper (24 l*a. St. 217). 249. Dick V. Foraker (155 U. S. 404, 415; 15 Siipt. Ct, Rep. 124), 718, Dickson v, Dickson (33 F.a. Ann. 1261), 349, Dickson v, Thomas (97 Pa, St, 278). 280, Dingledein v. Third Ave, R, R, Co, (9 Bosw. 79, 89), 81, Dingman v. People (51 III, 27I>). 369. Distilling it Cattle Feeding Co. v. The People (156 111, 4-18, 490; 41 X. E. Rep. 188), 510,692, 705. Dixon Crucible Co. v. Giiggon- heimer (1 Cox's Man, of Trade Mark. Cas, .559), 173, Dodge V. -Council Bluffs (57 iowa. 560), 386, Dolph V, Troy Laundry Maciiinery Co, (28 Fed. Ri-p. 553, 555), 211. 212, 542. Donaldson v. .lude (2 Bibl). .57), 49, Donohue v. County (2 Pa, St, 230), 3.58, Moines Bd, Gauge St, Ry. Co, j jy^^y^^ ^. ^y.^,^ (,; j^^„, ^.^^ 4,;, (73 Iowa. 513; 35 X, W. Rep, .,,jj 610), 374, 380, 3S3, 389, . ^ "* ' „ .^,,, ^ r. t3 , i-v T • * / . II .• I Doremusv, Hennessey (••2 III, App. De Sobry v, De Laistre (2 U. \ .h 191), 51, o.'i, 4U-;, z.^.;, Dethlefs v, Tomsen (7 Daly, 354), I Dorris v, Grace (24 Ark. 326). 219, 48, Devlin v, Devlin (67 Barb, 290; 25 Doty v. Martin (32 Mich, 462), 129. Am, Rep, 173), 173, 184. xxx TABLE OF CASES. [The references I)ONV V. Beidleman (J9 Ark. 455; 31 Am. itEpg. Ry. Cas. 14; 125 U. S. GSO, U89; 8 Sup. Ct. Rep. 1028). 421, 430. 720. Downing V. Mt. W. Road Co. (40 X. H. 230. 232). 48S. l)o\vning v.Ringe (7 Mo. 585). 94. Downs V. Lewis (11 Cusb. 7G). 94. Draining Co. v. State (43 Ind. 236). 704. Drake v. Dodsworth (4 Kan. 159), 201. Drake v. Siebold (81 Hun. 178). 5()7. Drennan v. Douglas (102 111. 341). 51. Drexler v. Tyrrell (15 Xeb. 114), 94. Dubois V. Augusta (Dudley. 30), 401. Dubowski V. Goldstein (65 L.J. Q. ! B. 397. 399), 149. 197. 199. j Dubuque ct Pac. Ry. v. Litchfield | (23 How. 66. 88). 491. Dudley V. Sudduth (91 Ala. 349: 8 So. Rep. 873). 166. Duffy V. Shockey (11 Ind. 70). j 201. I Dugger V. Mechanics' & Traders* \ Ins. Co. (95 Tenn. 245; 32 S. j W. Rep. 5). 593. j Duignan v. Walker (7 W.R. .562: 5 ' Jur. (X. S.) 976: 28 L. J. Ch. 867). 141. Dunkin v. Hodge (46 Ala. .523). 97. • Dunlap V. Gregory (10 X. Y. 241; 61 Am. Dec. 746). 129, 132. Dunn V. Bell (85 Tenn. .581 : 4 S. \V. Rep. 41). 283. Duntley v. Boston & Maine R. Co. (66 X. II. 263), 93. Dupre V. Thompson (4 Barb. 279), 194. Durant v. I'.urt (98 Mass. 161), 283. Durfee v. Moran (57 ^lo. 374), 249. Durgin v. Am. Ex. Co. (66 X. U. 277: 20 All. Rep. 328). SS. 92. Durkee v. City of .lamesville (28 Wis. 464). 431. are to pages.] Duvenick v. Mo. Pac. R. Co. (57 Mo. App. 5.50), 86. 93. Dwight V. Hamilton (113 Mass. 175). 115, 128. 132, 184, 187, 218. Dygert v. ScbencK (23 Wend. 446), 81. E. Earl V. Howell (14 Abb. X. Cas. 474), 283. Earl of .Shrewbury's Case (9 Rep. 50). 683. Earle v. Seattle. L. S. & E. Ry. Co. (.56 Fed. Rep. 909). 403. East Line & Red River Ry. Co. v. State (75 Tex. 434). 480. East St. Louis v. East St. Louis G. L. & C. Co. (38 HI. 424. 425). 392. Eastern Anglian R. W. Co. v. Eastern Counties R. W. Co. (11 C. B. 795). 502. Eastern Counties R. W- Co. v. Hawkes (35 Eng. L. & Eq. 32). .501. Easun v. Buckeye Brew. Co. (51 Fed. Rep. 156). 528. Eckstein v. Downing (64 X. H. 248; 9 Atl. Rep. 626). .579. Eclipsie Towboat Co. v. Pontchar- trainR. Co. (24 La. Ann. 1). 5.53. Eddings v. Long (10 Ala. 203, 208), 98. Eddyv. Gapron (4 R. I. 394), 68, 103. Edison El^c. Light Co. v. Sawyer- Mann Elec. Co. (3 C. C. A. 605: 53 Fed. Rep. 592). 166. Eels V. St. Louis. K. & X. W. R. Co. (52 Fed. Rep. 903). 88. Egerton v. Brownlow (4 H. L. Cas. 1). 26, 38. 43. Eichels v. Evansville St. Ky. Co. (78 Ind. 263; 5 Am. cV: Eng. R. Cas. 274; 21 Am. Rep. 562). 377. TABLK OF CASKS. XXXl [Tlu' references are to pages Eidman v. Bowman (r)S III. 444), r)02. Eilenbecker v. Plymouth County (134 U. S. 31. 3G). 71(5. Eisel V. Hoyt (141 Ind. 41; 40 N. E. Rep. 110). 124. Eldridjje v. Smith (34 Vt. 484), ■m . Elkhart Lodge v. Ciary (OS Ind. 238. 240), 65, 84. Elkins V. Camden & All. liy. Co. (36 X.J. Eq. 5), 491. Ellerman v. Chicao;o Junction, etc. Co. (49 N. J. Eq. 217; 23 Atl. Rep. 287), 180. Ellerman v. Stock Yds. Co. (49 X. J. Eq. 217: 23 Atl. Rep. 287), 219. Ellicott V. Chamberlain (38 X. J. Eq. 604). 46. 101. Elliott V. Fairhaven & Westville Ry. Co. (32 Conn. 579), 366. Elliott V. Richardson (L. R. 5 C. P. 744). 100, 577. Elliotfs Appeal (60 Pa. St. 161). Ellis V. Jones (56 Ga. 504). 129. Ellis V. Turner (8 T. R. 531). Ellis V. Zeilin (42 Ga. 91), 173. Ely V. Supervisors (36 X. Y. 299, 820), 570. Elysvilie Mfg. Co. v. Oskisko Co. (Md. Ch. Dec. 392; oMd. 152), 536. Emaek v. Kane (34 Fed. Rep. 47). 322. European, etc. R. W. Co. v. Pool (.59 Me. 277). 502. Evans V. Walton (L. R. 2 C. P. 615), 310. E. it A. R. R. Co. V. Greenwich (25 X. J. E(i. 565). 354. Evansville Sc Crawfordsvilie R. Co. V. Haum (2i"> Iiul. 70), 236. E. it H. R. R. Co. V. Hunt iJOIiid. 457). 501. Everhart v. Puckett (73 Ind. 409), 97. Ewing v. Johnson (34 llmv. Pr. 202), 132. Ex parte Clifford (20 Ind. 106), 501. Ex parte Keeney (84 Col. 304; 24 Pac. Rep. 34). 402. Ex parte O'Leary (65 Miss. 80), 401. Ex parte Perham (5 .lur. (N. S.) 1221). 345. Ex parte Rohiiison (\'.) Wall. .505), 71(i. £'xp«r^' Rogers (1,. R. 15 J Co. v. OM Erie it Pac. Dispatch v. Cecil (112 ! Colony, etc. R. R.Co. (5 Allen. III. 185). 580. 221). 502. Erwin v. Piiila. it Reading R. Co. ' Fanning v. Gregoire (16lIow..")34), (7 Ry. it Corp. I.. J. n7'. -V^H. :t''>^. XXXIl TABLE OF CASES. [The references Fargo V. Micb. (1-_>1 U.S. 230. 239). i 42G. I Fariera v. Campbell (S9 Pa. St. 89). 2G(). Farmers' Loau & Trust Co. v. X. Fac. Ry. Co. (60 Fed. Rep. 803). 240. Farrar v. Close (L. R. 4 Q. B. 602). 333. Fawcett v. Gee (3 Anst. 910), 95. Fawrie v. Morin's Syndics, (4 Mart. (La.) 39. 49), 71, 72. Fay. Petitioner (15 Pick. 243), 398. Fennessy v. Ross (5 App. Div. 342 ; 39 X. Y. Supl. 323). 579. Ferrenbacb v. Turner (80 Mo. 416; 56 Am. Rep. 439). 401. Ferris v. Adams (23 Vt. 136), 68. Fetcber v. Montgomeiy (33 Beav. 22). 195. Fidelity &. Casualty Co. v. Eick- boff (63 Minn. 170; 65 X. W. Rep. 351). 96. Field V. Cbipley (79 Ky. 260). 106. Filson V. Hines (5 Pa. St. 4.52), 62, 68. 69. Finger v. Habn (42 X. J. £(]. 606), 215. First Congl. Cbunih v. Henderson (4 Rob. (La.) 209). 94. First Xat. Bank v. Hendrie (49 Iowa. 402; 31 xVm. Rep. 1.53), 84. First Xat. Bank v. 0.skalool). 8(J. Hartford v. Hartford Bridge Co. (10 How. r)34; 17 Conn. 79), 390. Hartford Fire Ins. Co. v. Chi., M. 6 St. P. Ry. (70 Fed. Rep. 201 ; 17 C. C. A. 02). 91. Hazen v. Commonwealtb (23 Pa. St. 3(;3, 3G4). 22S. Hazlehurst v. Savannah, etc. Ry. Co. (43 Ga. 13). 240, 48S, .-)27. ri30. Health l)o|)t. V. Knoll (70 X. Y. .J30), 401. Hebblewaite v. Ilcpwurtli (iis 111. 120). 51. Hedge v. Lowe (47 Iowa. 137, 140), 110, 129, 132, 133, ISO. Heichew v. Hainilton (3G. Greene, 317, 590; 4 G. Greene, 317), ISO. 122. Harvey v. Improvement Co. (118 X. Car. 692, 098), 501. Harvey v. Railroad Co. (74 Mo. 538), 93. Haskins v. Royster (70 N. Car. 003; 10 Am. Rep. 780). 348. Hastings v. Whitely (2 Excheq. Oil), 124, 125, 129, 201. Hatch v. Douglas (48 Conn. 110; 40 Am. Rep. 154). 275. Hatch V. Mann (15 Wend. 44). 51. Havemeyer v. Havemeyer (43 X. Y. Super. Ct. 506, 1213; 80 X. Y. OlS). .583. 584. Hawkeye Ins. Co. v. Urainard (72 Iowa. 130; 33 X. W. Rep. 003), 98. Hawkins v. X. O. Printing Co. (29 La. Ann. 134). 235. Hawley v. Kan. & Tex. Coal Co. (48 Kan. 593; 30 Pac. Rep. 14), .580. Hartley V. Cummins (5 C. IJ. 247), j Heine v. Commoinveallh (01 Pa. St. 145), 2.50. Henderson v. Ogden City Ry. Co. (7 Utah. 100; 20 Pac. Rep. 286), 377. Henderson v. Palmer (71 111. 579), 70. 07. Hermits of St. Aug. v. County (Bright X. P. 116), 3.58. Hersh v. Xorthern Cent. Ry. Co. (74 Pa. St. 181), .589. Herreshoff v. Boutimeau (17 R. I. 3. 7), 145, 194. Hervey v. Smith (1 Kay Oc J. 302), 302. Hewett V. Pioneer Press Co. (23 Minn. 178), 235. Hewitt V. Swift (3 Allen, 420), 236. Hey wood v. Tilson (75 Me. 231), 2.53. Hibbard v. Western Union Tel. Co. (33 Wis. .558). 80. Higgins V. McCrea (IIG U.S. 671), 27^. Hayes v. Willis (11 Abb. Pr. (X. Hill v. Davies (L. R. 21 Ch. D. S.) 107). 190. I 708). 3.53. Hays v. Penna. Co. (12 Fed. Rep. Hill v. More (40 Mo. 515), 95. Rep. 309). .589. Hill v. Xisbet (100 Ind. 341). 527. H.ayward v. Davidson (41 Ind. Hill v. Paul (S CI. .t Fin. 307), 212). .501. Haywood v. Young (2 Chitty's R. 407). 112, 201. 104. miles v. Parrish (14 X. .F. Eq. 380). 583. Hazen v. Boston Bridge Co. (2 ^ Hills v. Mittson (8 Excheq. 758), Grav, 575), 235. ' 40,04. XXXVIII TABLE OF CASES. [Tbe references are to pages.] nilton V. Eckersley (0 E. & B. 47), 294,541. Hinde v. Gray (1 Scott X. R. 123), 21, 24, 26. Hiss V. Baltimore & Hampden Pass. Ry. (52 Md. 242: 3G Am. Rep. 371), 379. Hitchcock V. Coker (G Ad. it El. 43S. 439), 23. 24, 25, 118. 121, 122. 125, 145. 201. Hitt V. Ormsbeer (14 111. 235), 501. Hoagland v. Seque (38 X. J. L. 230), 110. ISO, 201. Hocker v. Gentry (3 Met. 463), 51. Hodge V. Sloan (107 X. Y. 244), 113, 144, 157. 208. 222, 500. Hodsdon v. Wilkin* (7 Greenl. 113), 79. Hockett V. State (105 Ind. 250, 257). 448, 449. 450. Holbrook v. Waters (9 How. Pr. 335), 129, 132, 184. 187. 189. Holladay v. Patterson (5 Ore. 176), S3. Holland v. Challen (110 U. S. 1524; 3 Slip. Ct. Rep. 495). 718. Holland v. Ilehn (7 Gratt. 245;, 105. Holnian v. Johnson (Cowp. 341. 343). 273. Holyoke Co. v. Lyman (15 Wall. 500). 366. Home V. Rouse (8 Wall. 430). 369. Honaker v. Board of Education (24 S. E. Rep. 544), 65. Hood V. Palm (8 Pa. St. 23S). 243. Hooker v. Vandewater (4 Denio, 349; 47 Am. Dec. 258), 243. 470, 538, 565, 568. - Horner v. Graves (7 Bing. 735), 44. Hoover v. Penna Ry. Co. (156 Pa. St. 220; 27 Ail. Rep. 282). 589. Hope V. Hope (8 De G., M. & G. 731). 97. Hopkins v. Oxley Stove Co. (25 Cent. L. J. 494). 317. Hopkins v. Prescott (4 C. B. 578), 68. Hoppin V. Buffnm (9 R. T. 513: 11 Am. Rep. 291). 583. Hornby v. Close (L. R. 2 Q. B. 153). 333. Horner v. Ashford (3 Bing. 319, 322. 326). 19. 22. 108. 114. 118. 182. Horner v. Graves (7 Bing. 735. 744; 5Moore&P. 768),112, 115. 125. 130, 139, 144, ISO, 191, 219. Houlton V. Dunn (00 Minn. 26: 61 X. W. Rep. 898), .55, 61. Houlton V. Xichol (Wis.). (67 X. W. Rep. 71.5). 63. Houston V. Xeuse River, etc. Co. (8 Jones. 467), 697. Howard v. Hodges (1 Sehv. X. P. 79), 51. Howard V. Hopkins (2 Atk. 371). 194. Howard v. Woodward (10 Jur. (X. ■ S.) 1123), 189. Howden v. Haigh (11 Ad. & El. 103S). 95. Howe v. Howe Machine Co. (50 Barb. 236). 173. Howe Machine Co. v. Louder (58 Ga. 64). 235. Hoyne v. McCliutock (76 Ind. 205), 318. Hoyt V. Holly (39 Conn. 326: 12 Am. Rep. 390), 132. Hozier v. Caledonian R. W. Co. (1 Xev. ct MeX. R. W. Ca.-^. 27), .588. Hubbard v. Miller (27 Mich. 15), 110. 114. 121, 122, 132, 219. Hudson v. State (46 Ga. 624), 349. Iluesing v. Rock Island (128 HI. 465; 27 Am. & Eng. Corp. Cas. 650), 401. Hull V. Chicago, etc. Ry. Co. (41 > Minn. 510; 43 X. W. Rep. 399) , 86. Humes v. Knoxville (1 Humph. 403). 235. Humphrey V. Pegues (16 Wall. 244), 361. TABLE OF CASES. XXXIX [The rtfcriMu-es are to piige?.] Hunlocke v. Blacklowe (2 Wins. Saund. 156t). 20. Hunter V. Gardner (G \Vils. it Shaw. 618). 104. Hunter v. Peiffer (lOS Ind. IDO), 2r)0, 470. Hunter v. Wolf (71 Pa. St. 282). 4G, 74. Uur.*en v. Gavin (1112 111.377; 44 X. E. Rep. 735). 208. Hurst V. Litchfield (39 X. Y. 377), 0.5. Hutchins v. Ilutchins (7 Hill. 101), 228. Hutton V. Parker (7 Doui. P. C. 739). 121. 123. ^ Hynds v. Hayt (25 Ind. 31. 30). 148. I. Ide V. Hall Hnj^ine Co. (31 Fed. Rep. 9U1). 571. 111., etc. Canal Co. v. St. Louis (2 l)ill.70).3S3. 111. Cent. Ry. Co. v. Crider (91 Tenn. 489; 56 Am. A: En>r. Ky. Cas. 157), 430. 111. Cent. Ry. Co. v. McLean Co. (17 111. 291), 501. 111., etc. R. Co. V. Reedy (17 111. .-)80), 235. Independent Refiners' Assn. v. W., X. Y. & P. Ry. Co. (5 Int. Com. Rep. 415; 4 Int. Com. Rep. 162),. 555. India Bago;inor As.-- •'•^•'>)i Davis (32 111. A|>p. 67), 586, /« re Tyler (149 U. S. 164, 190; 13 .590. Sup. Ct. Rep. 785). 719. Indianapolis, D. it S. Ry. Co. v. | /;» re Wab. Ry. Co. (24 Fed. Rep. Ervin (118 111. 250; 8 X. E. | 217). 320. Hep. 862; 27 Am. & Eng. Ry. \ Ingram v. Stiff (5 Jur. (X.S.)947), Cas. 8). 586, 590. 17(5. xl TABLE OF CASES. [The references In the Case of the Earl of Shaftes- buiy (2 St. Trials. Gl.'); 1 Mod. j U4),714. I In the Case of J. V. X. Yates (4 \ Johns. 314. 3(i0), 714. In Rex V. De Berenj^er (3 ^I. it S. 67). 244. Ins. Co. V. State (8(5 Tex. 250; 24 S. W. Rep. 397), .^94. International & G. X. R. Co. v. Folts (3 Tex. Civ. App. G44; 22 S. AV. Rep. r)41). Interstate Com. Com. v. B. & O. R. Co. (145 U. S. 2G3), 587. Interstate Com. Com. v. Brimson (154 U. S. 447; 14 Sup. Ct. Rep. 1125). 42G. 710. Interstate Com. Com. v. Cin. & C. Co. (G4 Fed. Rep. 981), 42G. Irwin V. Williar (110 U. S. 499; 4 Sup. Ct. Rep. IGO), 2G5. 278.280. Isaacs V. State (48 Miss. 234). 2.59, 260. Ives V. Smith (8 X. Y. Siipl. 4(5; 3 X". Y. Supl. ()45), .555. J. Jackson v. Bowman (39Mis>. ()71), 369. Jackson v. Davidson (4 Barn, t'v: Aid. G95), 46. 94. Jackson v. Foote (12 Fed. Rep. 37), 2S3. Jackson v. Lampshire (3 Pet. 289), 373. Jackson v. McLem (36 Fed. Rep. 213), 53. Jackson v. Walker (5 Hill, 27). 94. Jackson Co. Horse Ry. Co. v. Inter- state Rapid Transit Ry. Co. (24 Fed. Rep. 306, 308; 32 Am. c'c Eng. Ry. Cas. 216). 3()3, 369. Jacksonville, etc. Ry. Co. v. Prior (34 Fla. 272), 430. Jacksonville S. E, Ry. Co. v. Rab- bitt (29 HI. App. 288). 586. 590. Jacobs V. Tobiason (()5 Iowa, 245). 9(i. are to pages.] Jacoby v. Whitmore (49 L. T. 335; 32 W. R. 18). 124. 132.215. Janes v. Reynolds (2 Tex. 2.50), 431. Jarvis v. Peck (10 Paige. Ch. 118), 163. Jenkins v. Fink (30 Cal. 586), 249. Jenkins v. Fowler (24 Pa. St. 308), 81. Jenkins v. Temples (39 Ga. 655), 110, 129. 132, 189. Jenks V. Pawlowski (98 Mich. 110: 56 X. W. Rep. 1105). 1.58. Jennings v. Grand Trunk R. Co. (127 X^. Y. 438; 28 X. E. Rep. 394), 92. Jennings v. Throgmorton (Ry. ct M. 251), 51. Jersey City Gas Co. v. Dwight (29 X". J. Eq. 242). 376, 3S3. Jersey City Gas Light Co. v. Con- sumers' jras Co. (40 X. J. Eq. 427), 431, 694. Johnson v. Gwinn (100 Ind. 466), 115. 129. Johnson Harvester Co. v. Mein- hardt (9 Abb. X'. Cas. 393; 6 How. Pr. 168). 348. Johnson v. Kanne (21 Mo. App. 22), 21)4. Johnson v.Leonhard (Wash. T'er.) (20 Pac. Rep. 591), 95. Johnson v. Pensacola, etc. Ry. Co. (16 Fla. ()23; 26 Am. Rep. 731), 589. Johnson v. Phila. (). 4tJ. 343. Jones V. Easton, ete. li. W. Co. (1 Nev. & McN. K. W. Cas. 72), 5SS. Jones V. Heavens (L. It. 4 Ch. D. H33).194. Kelly V. Ypsiiiinti Dress Stay .Mfg. Co. (44 Fed. Rep. 19). 57. Kemp V. Western Union Tel. Co. (28 Neb. (5G1), 431). Kentiedy v. Lee (3 Meriv. 4:>2). 213. Kennedy v. I'helps (10 La. Ann. 227). 401. Kent V. Miltenberger (13 Mo. App. 503. 507), 2()!). Jones V. Lees (1 Hurl. & X. IS!); 2 Kentucky, etc. Co. v. Louisville, Jiir. (X. S.), t>45; 2U L. J. Exclieci. !)), 2t), 120, 13(>, lt)7, 211,212. Jones V. Parker (21) X. H. 31), 520. Jones V. Randal (Cowp. 3!)), 4(1. Jordan v. Dayton (4 Ohio, 295), 452. Judd V. Harrington (19 X. Y. Supl. [ 40(>; 1.39 X. Y. 105). 245. 5lJS. i Kalania/oo Hack & Bus Co. v. Sootsma (84 Mich. 19-1. 201), 496. 499. Kansas City, St. J. & C. B. R. R. Co. V. Simpson (30 Kan. G45), 89. Kansas Pac. Ry. Co. v. Mower (10 Kan. 573. 582), 431. Karst V. St. Paul, etc. Ry. Co. (22 Minn. 118), 309. Keating v. Hyde (23 M7), 42(1. Keppell V. Bailey (2 Myl. A: K. 517), 94. Kergivin v. Drainage Commission- ers (115 111. 347). 694. Kettle River Ry. Co. v. Eastern Ry. Co. (41 Minn. 461 ; 43 X. W. Rep. 469; 40 .Vui. iV Kng. Ry. Cas. 419). 470. Kick v. Merry (23 Mu. 72). 103. Kiff v. Atchison, T. iV: S. F. R. R. Co. (32 Kan. 2()3; J I'ac. Rep. 401). 88. Kilborn v. Held (78 I'a. St. 194), 97. Kilmer v. Xew York, etc. Ry. Co. (101) X. Y. 395), 589. Kimball v. Atchison. T. ifc S. F. Ry. Co. (46 Fed. Itep. 888. 85)0). 479. Kimball v. Ilarman (M Md. 407), 231. 349. Kin^brough v. Lane (11 Bush. 556), 79. King V. City of London (2 T. R. 522), 706. Kingv. Crosby (3 WiN. !».: 2 HI. Itej). 754), 715. Kellerman v. Kansas R. Co. (136 King v. Davenport (9S 111. 305; 38 Mo. 177; 34 S. W. Rej). 41). 86, 93. Kelleyv. Mfg. Co. (44 Fed. Kep. 19), 570. Kellogg V. Larkin (3 Pin. 123). 138. 139. Kelly V. Chicago, .Mil. \- St. Paul Ry. (93 Iowa, 436; 61 X. W. Itep. 962). 25 ». 255. Am. Rep. 89), 455. Kingsbury v. Kiswan (77 N. Y. (il2). 264. 277. Kirkpatrick v. Adams (20 Fed. Rep. 287), 277, 280. Kirkpatrick v. Bonsall (72 Pa. St. 158). 2(53. 267. Klinger v. Bickel (117 Pa. St.32(!). 455. xlii TAHLE OF CASES. [The referenc39 are to pages.] Knight V. Hunt (."> Binij. 433). 05. Lawson v. Bank of London (IS C. Knowlton v. Fitch (.ri \. Y. 288), B. S4). 172. 267, 283. Lawson v. Chicago, etc. Ry. Co. Koehler V. Fearbachei(2Mo.App. (G4AVis. 447; 24 X. W. Uep. 11). 110. CIS). 86. Kribben v. Haycraft (26 Mo. 396). Leather Cloth Co. v. Am. Leather 46. 77. 103. Cloth Co. (11 H. L. Cas. 538). Kreigh v. Sherman (105 HI.' 49). 173. 272. Leather Cloth Co. v. Lor^ont (L. R. 9 Eq. 345. 354: 39 L.J. Ch. 82; 21 L. T. 661 ; 18 W. R. .572). 24. 44. 114. 136, 140, 161. 182. 212. Leavenworth Co. v. Miller (7 Kan. 502). 695. Leavitt v. Palmer (3 X. Y. 19). 148. Le Claire v. Davenport (13 Iowa. 210). 406. 456. Ledsinger v. Cent. Line Steamers (75 Ga. 567) . 520. Lee V. West (47 Ga. 311). 349. 351. Lehigh Water Co.'s Appeal (102 Keiilevitz v. Eastern R. Co. (140 Mass. .573; 5 X'. E. Rep. 500), 235. li. Laboucherer V. Dawson (L. 11. 13 Eq. 322). 215. Laddv. Dillingham (34 Me. 316). 94. Ladd V. S.. C. P. & X". Co. (.53 Tex. 172. 188). 459. Lafever v. Hadel (21 La. Ann. 663). 48. Lakev. Butler (3 W. R. 4.58: 5 E. & B. 99). 142. Lake Eiie & Western Rv. Co. v. Pa. St. 515). 369. Bailey (61 Fed. Rep. 494. 496), 'Leicester v. Rose (4 East. 380). 298. 95. Lake Shore, etc. Ry. (?o. v. Ben- Leidersdorf v. Flint (8 Bi«>. 327). nett (89 Ind. 4.57), 333. 172. Lamoine Val., etc. Co. v. Bixby Leigh v. Hinde (9 Bar. iS: L'v. 774. (55 Vt. 235), 520. 779). Land v. Hoffman (12 Am. L. R. Leighton v. Wales (3 Mees. iIc W. (X. S.) 143), 501. 545, 045), 23, 24, 118. Landrigan v. State (31 Ark. .50). Leggett v. Hyde (58 X. Y'. 272). 499. ■ 523. Landringham V. State (49 Ind. 13r>). Leloup v. Port of Mobile (127 U. 259. 260. S. 640). 442. Lane v. Xewdigate (10 Yes. 192). Lender v. Caldwell (4 Kan. 339). 302. 94. Lange v. Werke (2 Ohio St. 519, Leonard v. Poole (114 X. Y. 371). 520). 110. 115, 138. 139. 149. Langley v. Boston, etc. Ry. (10 Gray. 103). 501. Langston v. Hughes (1 Maule & Selw. 596). 95. Laubenheimer v. ^laun (17 Wis. .542). 110. Lawrence v. Kidder (10 Barlj. 641). 110. 121. 128. 129. 565, 568. Leslie v. Lorillard (110 X. Y'. 519, .531; 18 X. E. Rep. 303), 113. 146. 222. 470. 690. Lewis v. Davidson (4 ^^ & W. 654; 1 II. Oc H. 426; 3 .lur. 387). 51. Lewis. V. Gollner (129 X. Y'. 227. 236: 29 X. E. Rep. 81), 159. KiO. TARLK OF (ASKS. [The references are to pages. 1 Lewis V. Knox (2 Bibb, 453). (58. Lewis V. Liidwick (6 Colo. 308; 98 Am. Dec. 454), 333. Lewisville Nat. Gas Co. v. State (135 Ind. 49), 40-2. Levi V. Levi (0 Car. ^: 1\ 239), 248. Levy V. Walker (L. R. 10 Cb. I). 430), 215. License Cases (5 How. 504, 582), 450. License Tax Cases (5 Wall. 402. 471), 47, 410, 452. Ledderdale v. Montrose (4 T. K. 24S), 104. Life & Fire Ins. Co. v. Moi'iinnics" Fire Ins. Co. (7 Wend. 31). 235, 501. Ligbtner v. Menzle (35 Cal. 468), 110. Lincoln Co. v. Liming (133 U. S. 529; 10 Sup. Ct. Hep. 3G3), 719. Lindsay v. Chicago, etc. Ky. Co. (30 Minn. 539; 33 X. W. Hep. 7), 85. Lindsay v. Sniitb (78 X. Car. 328), 79,97. Lindsey v. Attorney-General (33 Miss. 509). 084. Linn v. Sigsbee (07 111. 75), 110. 115. 121, 129, 184. Live StocK Assn. v. Levy (.")4X'. Y. Sup. Ct. Rep. 32), 210. Liverpool Steam Co. v. Pbd-nix Ins. Co. (129 U. S. 3!)7), 85, 91. Livingston and Fulton v. \'an Ingen et al. (9 Jobns. Rep. 507), 370. Livingston v. Peppin (31 Ala. 542), 380. Lloyd V. Johnson (1 IJ. \- I*. 3 40), 51. Lloyd V. Malone (23 111. 43). 249. Locke V. Fowlor (41 111. Api). 00), 272. Logan V. Musick (81 111. 415), 283. London, etc. Ry. Co. v. Commis- sioners (L. R. 20 Ch. I). 502, 570), 157. London & X. W. R. Co. v. Ever- shed (L. R. 3 App. Cas. 1029; 39 L. T. 300), 590. London ct X. W. Ry. Co. v. l.un- casbire tt Y. Ry. Co. (I.. \l. i Eq. 174), 302. Long V. Duluth (49 Minn. 280), 380. Long V. Fowl (42 Mo. 545), 113. 144. Longshore Printing Co. v. Howell (20 Ore. 527. 543; 38 Pac. Rep. 547). 303. 322. Loog V. Bean (L. R. 20 Cb. 1). 300), 353. Lord V. Uconto (47 Wis. 380), 308. Loiibenbeimer v. Mann (17 Wis. .501). 138. Louisville V. Bank (104 U. S. 47), 400. Louisville City Ry. Co. v. Louis- ville (8 Bush, 415), 308. Louisville Gas Co. v. Citizens" Gas Co. (115 U. S. 083. 094). 300, 301 . Louisville. X. A. ct C. R. Co. v. Faylor (1.50 Ind. 120; 25 X. E. Rep. 809). 88. 93. Louisville ct Xashville Ry. v. Ken- tucky (101 U. S. 077. 093). 491. 492. Louisville, etc. R. Co. v. Widman (9 Ind. App. 190; 37 N. E. Rep. .5.54). Louisville Transfer Co. v. Am. Dist. Telegraph Co. (24 Abb. L. .1. 283). 440. Louisville ct Portland Ry. Co. v. Louisville City Ry. Co. (2 Duv. 175), 377. Lovatt V. Wingard (1 .lac. ct Walk. 394). 104. Lowry v. Dillman (.59 Wis. 197), 205. Low v. Peers (Wilmot's Op. 304. 378), 41. Logan v. Pyne (43 Iowa. .524; 22 I Lucas v. Allen (80 Ky. 081). 40. Am. Rep. 201). 389. 398. 60. xliv TABLE OF CASES. [The reft-rences Liimley v. Gye (2 El. ct Bl. 216), 231, 301. 349. Lumlej' V. Wagner (5 De G. ct Sm. 485), 196. Lyon V. Culbertson (83 111. 33). 264, 272. Lyttle V. Whicher (21 La. Ann. • 182), 48. M. Mackinnon Pen Co. v. Fountain Ink Co. (48 X. Y. Sup. Ct. Rep. 442), 215. Madan v. Sherard (73 X. Y. 329), 93. Madison v. Smith (S3 Ind. .502). 392. Madison, etc. Plank Road Co. v. Watertown, etc. Plank Road Co. (7 Wis. 59), ,502. Madison, etc, Ry. Co. v. Wbiteneck (8 Ind. 217). 431. Maffet V. Ijams (103 Pa. St. 266). 249. 251. Magtiire v. Dinsmore (56 X. Y. 168). 92. Maguire v. Smock (42 Ind. 1), 471. Mahaska County Ry. Co. v. Des Moines Valley R}'. Co. (28 Iowa, 437), 502. Mallalien v. Hodgson (16 Ad. ct El. 678). 95. Mallon V. May (11 M. .t W. 6.52. 653; 7 Jur. 536; 12 L. .1. Escheq. 376), 23, 25, 119, 124. 125, 139, 148, 191. Mallory v. Hanaur Oil Wks. (Si; Tenn, .-)98, 798; 20 Am. ct Eng. Corp. Cas. 478), 517, 595, Mallory v. Oil Works (86 Tenn. 598), 510. Manchester it Lawrence Ry. Co. v. Concord Ry. Co. (66 X. H. 100, 127; 9 L. R. A. 689; 27 Atl. Rep. 3S3; 47 Am. & Eng. Ry. Cas. 359; 3 Int. Com. Rep. 319), 555. are to pages] Mandeville v. Ilarmau (42 X. J. Eq. 185, 194); 7 Atl. Rep. 37), 144. 183, 185, 186. Manhattan B. ct M. Co. v. Sears (45 X. Y. 799). .523. Manners v. Library Co. (93 Pa. St. 165, 172). .53. Manning v. Manning (1. Johns. Ch. 533), 103. Mapstrick v. Ramge (9 Xeb. 390 ; 31 Am. Rep. 415), 297, 349. March v. People (7 Barb. 391), 259. March v. Railroad Co. (40 X. H. 548), 95. Marine Bank v. Ogden (29 111. 248), 520. 523. Markham v. Brown (8 X. H. .523), 496. Markham v. .Jaudon (41 X. Y. 235), 282. Marriott v. Ry. Co. (1 C. B. (X. S.) 499), 490, Marsh v. Fairbury (64 111. 414), 84. Marsh v. Rujsell Hid X. Y. 292), 211. Marshall v. Ballimore it Ohio Ry. Co. (16 How. 314. 334. 335). 58, 70. 77, 100, 577. Marshall v. City Bayonne (34 Atl. Rep. 1080). 446. Marshall v. Grimes (41 Miss. 27), 39S. Martin v. Bartow Iron Works (35 Ga. 320), 94. Martin v. Mayor (1 Hill. .545), 3()9. Martin v. Murphy (129 Ind. 464: 28 X. E. Rep. 1118), 124, 132, 187. Martin v. Wade (37 Cal. 168), 69, Martinetti v. Maguire (Deady.216), 450. Master Stevedores' Assn. v. Walsh (2 Daly, 1),345. Matthews v. Alexandria (68 Mo. 115), 368. Matthews V. Associated Press (136 X. Y. 333. 340; 32 X. E. Rep. 981), 113. 146.219. 222. TAULK OF CASES. xlv [Tlie referenct'S are to patjea.] Maansell v. Midland, Gt. Wet^tcrn McClure v. Manchester, etc. Hy. R. Co. (1 II. i<: M. I(i4; 32 L. .1. Co. (13 Gray, 124), 501. Ch. 513), 5.^)."). McCliirg's Appeal (iiS Pa. St. 51). Maund v. Monmouthshire Canal 110. 121. 128. 1.^2. 184. Co. (4 Man. c't G. 4.")2). 23r>. McConihay v. Wright (121 U. S. 230. 201. 20."): 7 .Stip. ("t. lU'p. !t40), Maxini-Xordeufeldt Co. v.Xorden- 71'.). feldt (L. R. 1 Ch. 030. 051, 0.")4, McConnell v. I'eiiigo (9 Ky. 405; 050. 002. 073: App. Cas. 535, } IS «. W. Rep. 15; 5 Am. Ry. 549), 27. IKi. lilt. 121. 120. 128, 134. Maxton v. Gheen (75 Pa. St. 100), 207. 277, 283. . Maxwell v. Hogg (L. R. 2 Ch. App. 314), 172. May V. O'Xeill (44 L. .1. Ch. 000), 129. 190. Corp. Rep. 711), 499. McCormick V. Nichols (19111. App. 334), 280. McCulloch V. State of Maryland (4 Wheat. 310), 407. McCurry v. Gibson (108 Ala. 451 : IS So. Rep. 800, 807. 808). 123. 133. 184. Mayer V. Journeymen Stonecutters' McDonnell v. Rigncy (Mich.) (00 Assn. (47 X. J. Eq. 519: 20 X. AV. Rep. 52), .53. Atl. Rep. 492), 357. ; McDiiffee v. Portland, etc. R. R*. Mayor v. Cabot (28 Ga. 50), ' Co. (52 X. H. 430; 13 Am. 389. Rep. 72). .589. Mayor, etc. V. Colgate (2 Kcrnan. McElvain v. Miidd (44 Ala. 4S). 48. 140), 501. McFadden v. Missouri Pac. Ry. Co. Mayor v. Ilagan (9 Baxt. 495). (92 Mo. 343; 4 S. W. Rep. 089), 391. 80.93. Mayor V. Jersey City A; Bergen Ry. McGuire v. Corwine (101 U. S. " Co. (20 X.J. Eq. 300), 380. 108). 40, 02. Mayor v. Lacy (3 Ala. 018), 94. McGrew v. City Produce Exchange Mayor, etc. of Monroe V. Gerspach (S5 Tenn. 572, 578; 4 S. W. (33 La. Ann. 1011). 401. Rep. 38. 39), 2(i5. 283. Mayor of Xorwich v. Xorfolk Ry. McGunn v. Hanlin (29 Mich. 470), Co. (4 E. cS: B. 397). .534. 95. Mayor, etc. v. Ohio, etc. Ry. Co. Mcllvaine v. Egerton (2 Robi. (20 Pa. St. 3.55). 380. 422), 277. Mayi.r v. Rudecke (49 Md. 217). McKt-e v. Cheney (.52 How. Pr. 401. 144). 55. Mi-Allison V. Howell (42 Ind. 15), McLean v. Fleming (90 U. S. 245). 129.201. 172,173. McAndrews v. Bassett (4 Di- (J.. .T. McMahon v. Smith (47 <"onn. 221), iV: S. 3S0). 172. 97. MfBratney v. Chandler (22 Kan. McMillan v. Carson Min. Co. (12 092. 095), 50. Phila. 404), 527. McCaiiU V. Braham (10 Fed. P.p. McXutt v. McKlw.n (1 W. X. C. 37). 190. 5.52). 132. 184. McCaw V. Blewit (2 McCord Ch. Mc(^iilkin v. Doe (8 Blackf. 581), 90), 101. 501. McCloskey v. Kreling (70 Cal. McRoberts v. Washburnc (lOMinn. 511). 4.55. !>). 392. xlvi TA«LE OF CASES. [The references are to pages.] McWillianis v. Bryan (21 La. Ann. 211). 94. Meachain v. Dow (32 Vt. 721), 40, 71. Meadville Fuel Gas Co. v. Mead- ville Nat. Gas Co. (3 Cent. Kep. 921; 2 Dillon Municipal Corp. G93),3(!!», 383. Mechanics" Sav. Bank v. Meiiden, etc. Co. (24 Conn. ir)9), 527. Meguire v. Corwine (101 U. S. 108, 111), 09, 70. Mell V. Mooney (30 Ga. 413), 115. 132, 184. Memphis v. Memphis Water Co. (5 Heislv. 495), 380. Memphis City Ry. Co. v. Memphis (4Cold\v. 400),37S. Memphis, etc. Gas Co. v. AVilliams (9 Heisk. 314), 383. Meneehy v. Meneehy (02 X. Y. 427; 20 Am. Rep. 489). Mercantile Trust Co. v. Atl. & Pac. Ry. Co. (03 Fed. Rep. 513). 443. Mercer v. Irvinj; (El., B. & E. 503), 128. Merchants' Nat. Bank v. State Bank (10 Wall. 004, 050). 101. Meredith v. Ladd (2 X. H. 517), 08. Merrill v. Am. Ex. Co. (02 X. H. 514), 92. Merrill v. Carr (00 N. II. 114), 97. Merrill v. Tariff Mfg. Co. (10 Conn. 384), 23.-). Merritt v. Merritt (25 L;i. Ann. 257), 48. Merrivvether v. Nixon (2 Smith's Lead. Cas. 297), 81. Merz Capsule Co. v. U.-S. ('apsule Co. (07 Fed. Rep. 414), 508, 573. Midland R. Co. v. London A: N. W. R. Co. (L. R. 2 Eq. Cas. 524), 5.55. Middlesex Ry. Co. v. Boston & Chelsea Ry. Co. (115 Mass. 347), 710.- Mitllin V. Commonwealth (5 W. & S. 401), 243. Milbank v. New York, etc. Ry. Co. (04 How. Pr. 20), 527, 530. Milburn v. Byrne (1 Cranch C. C. 239), 349. Milhan v. Sharp (27 N. Y. Oil), 308, 377, 378, 389. Mill & Lumber Co. v. Hayes (70 Cal. 380, 393). 153. Miller v. Bjfynard (2 Houst. 5.59), 249. Miller v. Bensley (20 111. App. 528), 277. Miller v. Craig (11 X. J. Eq. 175), 455. Miller V. Elliott (1 Ind. 480,128, 132, 184. Miller V. Miller (78 Iowa, 177: 42 N. W. Rep. 041.) Miller v. Palermo (12 Kan. 14), 098. Miller v. R. & W. R. R. Co. (30 Vt. 490), 501. Millington v. Fox (3 Myl. i!c Cr. 338), 172. Mills V. County Com. (3 Scam. 53), 390. Mills V. Dunham (L. R. 1 Ch. 570. 587), 180. Mills V. Mills (40 X. Y. 543), 55, 00. Mills V. St. Clair Co. (7 Ills. 199), 397. Milne v. Huber (3 McLean. 212). 94. Messenger V.Pennsylvania R. Co. , Milton v. Iladen (32 Ala. 30), 94, (37 X.J. L. 531), 5!)0. Metropolitan lioard of Ih-alth v. Ileister (37 X. Y. 001), 401, 409. Meyer V. Estes (104 Mass.J57; 41 "X. E. Rep. 083), 140. 392. Minium v. Larue (23 How. 435). 309. Mississippi Mill v. Cohn (1.50 U.S. 202, 204; 14 Sup. Ct. Rep. 75), 719. TA15LK OF CASES. X 1 \ 1 i [The references Mississippi River Brido^e Co. v. Lonersan (9] 111. 513), 3i>2. Missouri, etc. R. Co. v. Harris (67 Tex. 1(;G; 2 S. W. Rep. 574), 80. Mo. Pae. Ry. Co. v. lliiines (115 U. S. 512). 430. Mitchell V. r.iuiiiiijton (4 Wall. 270). 400. Mitchell V. Reynolds (1 P. Wins. 181, 197), 19, 25, 37. 44. 110, 113. 114, 117, lis, 121. Mitchell V. Smith (1 Binn. 120), 40. Mitchell V. Smith (4 Dall. 209), 94. Mobile & Ohio R. R. Co. v. People (132 111. 559; 24 X. E. Rep. 043), 84. Mobile V. Yuille (3 Ala. 137. 141), 452, 453. Moenieh v. Fenestre (0 L. J. Ch. 737, 740). 199. Mogul Steamship Co. v.^IcGrej^or (L. R. 21 Q. B. D. 544; 23 q. B. D. 598; L. R. App.Cas.25), 16, 18, 28. 232, 235, 241, 242, 2.J3. 294. Mohawk Bridge Co. v. Utica & S. Ry. Co. (6 Paige, 554), 309. Mollyneaux v. Wittenberg (39 Xeb. .549; .58 X. W. Rep. 205), 1.55. Mont. Union Ry. Co. v. Langlois (9 Mont. 419; 24 Pac. Rep. 209), 498. Monroe v. ilaffman (29 La. Ann. 051; 29 Am. Rep. 345), 4.55. Montague v. Fiockton (L. R. 10 Eq. 189, 198), 195. Montrose v. State (01 Miss. 429), 694. Moore V. City of Eufaula (97 Ala. 670; 11 So. Rep. 921), 439. Moore v. Evans (14 Barb. 524), 92. Moore v. Fitchburg R. Co. (4 Gray. 465). 230. Moore iS: Handley Co. v. Towers Hardware Co. (87 Ala. 206), 130. 219. are to pages.] Moores v. Bricklayers' Union Xo. 1 (7Ry.& Corp. L.J. lOS; 23 AV. L. Bull. 48). 309, 347. More V. Bennett (140 111. 69; 29 X. E. Rep. 888), 224. 2.53, 573. More V. Bonnet (40 Cal. 251 ; 6 Am. Rep. 621. 622), 115, 1.52. Morgan v. Perhamus (36 Ohio St. 517 ; 38 Am. Rep. 607). 129, 200, 220. Morgan v. Struthers (131 U. S. 240), 501. Moriand v. Cook (L. R. 0Eii.2.">2), 157. Morrill v. Boston & M. R. Co. (55 X. H. 531, 537; 11 Ry. Rep. 484), 472, 555. Morris v. Coleman (18 Ves. 408), 108. Morris v. Tuscaloosa Mfg. Co. (83 Ala. 505), 154. Morris Run Coal Co. v. Barclay Coal Co. (08 Pa. St. 173. 186), 224. 238. 240. 244. 2.53. 294. 538, 541, 556, 558, 573. Morris v. Woodward (25 X. J. Eq. 32), 46. Morrison v. Moat (9 Hare, 241 : 21 L. J. Ch. 248), 164. Morrison v. Phillips' Construction Co. (44 Wis. 405), 88, 89, 93. Morse v. Morse (103 Mass. 73). 136. Morse Twist Co. v. Morse (103 Mass. 73, 77). 168, 175,212.216, 218. 219. Morton V. Metropolitan Life Ins. Co. (34 Hun, 307; 103 X. Y. 645). 235. Moses V. .Scott (84 Ala. 608; 4 So. Rep. 742), 582. Mott V. Molt (11 Barb. 127). 128, 132. 184. Moiillet V. Cole (21 W. K. 175; 27 L. T. 678: 42 L. .1. Excheci. 8; L. R. SExcheq. 32), 141. Mud Creek Draining Co. v. State (43 Ind. 236), 702. Mugler V. Kansas (123 U. S. 623, 672), 716. xl\ ill TABLE OF CASES. [Tlie references Mmnford v. Cietbing (7 C B. (X. S.) 305. 317. 319; G Jiir. (X.S.) 428). 24. 119, 130, 203. Municipality V. Cutting (4 La. Ann. 33(5). 4.iG. Munn V. Illinois (94 U. S. 12;-)), 414. 422. 432. 43.5, 437. 448. 4(iO, 4U1. Munn V. People (09 111. 80. 90), 458. Munnikbuysen v. Magiaw (5 Md. 557), 102. Murpby v. Farmers' Bank (20 Pa. St. 415). 088, 698. 701. Murray v. Reeves (8 Barn. & C. 425), 46, 94. Murray v. Vanderbilt (39 Barb. 140), 471. Murdock v. Walker (152 Pa. St. 595; 34 Am. St. Rep. 678). 318. Mutual Sav., etc. Co. v. ]Meriden Agency Co. (24 Conn. 1.59. 163),_ 529. Mutual Union Tel. Co. v. Cbicago (16 Fed. Rep. 309). 437. Myers v. Croft (13 Wall. 295), 501 . Mynard v. Syracuse, etc. R. Co. (71 X. Y. 180). 92. N. Nash V. Page (80 Ky. 539. 542). 433. Xat. Bank v. St. Josepb (31 Fed. Rep. 216). 309. Xat. Bank of Augusta v. Cunning- baui (75 Ga. 360). 280. X"^at. Ben. Co. v. Union Hospital Co. (45 Minn. 272; 47 X. W. Rep. 806), 130. 182. Nat. Cash. Register Co. v. Boston Cash Indicator Co. (41 Fed. Rep. 51), 571. Xat. Distilling Co. v. Cream City lMii)orting Co. (86 Wis. 353; 56 X. W. Rep. 864). 540. X^at. Ex. Co. V. Drew (32 Eng. L. .<: E.i. 1). 230. are to pages.] Xat. Harrow Co. v. Ilencb (76 Fed. Rep. 667, 609), 572, 573. 576. X'^at. Ilarrow Co. v. Quick (67 Fed. Rep. 130), 54(i. 575. Xat. Prov. Bank v. Marshall (L. R. 40 Ch. D. 112), 145. 181. Xellis V. Xellis (99 X. Y. 505. 510). 559. Xelson V. Vt.. etc. Ry. Co. (26 Vt. 717). 423. Xesier v. Continental Brew. Co. (161 Pa. St. 473, 483; 41 Am. St. Rep. 894; 29 Atl. Rep. 102: 34 W. X. C. 387). 144. 224. 573. Xessle V. Reese (29 IIow. Pr. 382). 194. Xeustadt V. 111. Cent. Ry. Co. (31 111. 434), ,501. Xewberry v. .Tames (2 Meriv.446). 163. Newberry Bank v. Stegill (41 Miss. 142). 148. Xewburgh Turnpike Co. v. Miller (5 Johns. Ch. 101). 388. Xewell V. :Meyendorff (9 .Mont. 254: 23 Pac. Rep. 333). 207. Xew England Ex. Co, v. Maine Central Ry. Co. (57 Me. 188), 589. New Jersey V. Wilson (7 Cranob. 164), 361. X'ew Jersey v. Yard (95 U. S. 104), 366, 379. Xew Orleans v. Stafford (27 La. .(nn. 417), 4.56. Xew Orleans City & L. Ry. Co. v. City of Xew Orleans (44 La. 728; 11 So. Rep. 78). 377. New Orleans Co. v. Ocean Dry Dock Co. (28 La. Ann. 173). 528. New Orleans C. R. Co. v. Crescent City R. Co. (12 Fed. Rep. 308), 309. Xew Orleans Gas Co. v. Louisiana Light Co. (115 U. S. 650; 6 Sup. Ct. 252). 306, 375, 385, 386. 387. 512. .5.52. TABLK OF CASKS. xlix [Tlie referencj* New Orleans Water Works Co. v. KiiuMS (llf) U. S.U74.US0).3(i0, 30(1. 888. Newton v. Ctibitt (12 C. B. (N. S.) 32; IH C. n. (N. S.) 8(!4). 3!)8. New York v. Second Ave.. el'\ Co.. (32 N. Y. 201). 3ti9. 389. New York Bank Note Co. v. Ham- ilton, etc. Co. (S3 lliin, 593; 31 N. Y. Siipl. lOaO). 210. New York C. K. v. Lockwood (17 Wall. 3.-)7. 381), 87. SS. New York it Md. Ky. Co. v. Winans (17 liow. 30. 39). 4"."). New York & N. H. U. R. Co. v. Scbuyler (3S B:irl). 034; 7 Tif- fany, 30; 34 N. Y. 30, 50). 23G. New York & S. C. Co. v. F. Bank (7 Wend. 412). 520. New York, etc. Ry. Co. v. Flynn (74 Oiin, 124; 26 N. Y. Supi. 8.-)9), 499. Nicol V. Mayor (9 Ilnn, 2GS). 386. Nicoll V. Besse (.")3 L. T. (N. S.) 659), 132. Nicbolas v. New Y'ork Cent. R. Co. (89 N. Y. 370). 92. Nicbolls V. Strelton (11 .lur. 1008), 149. Nicbols V. Mudgett (32 Vt. 546), 46. 71, 73. Nicbols V. Kuggles (3 Day, 145), 79. NicboIsoD V. Gt. Western Ry. Co. (7 C. B. (N. S.) 755; 1 Nev. & McN. R. W. Cas. 143), 588. Nigbiingale's Case (11 Pick. 168), 456. Niver v. Rossnian (18 Barb. 50), 132, 184. Nix V. BfU (66 (Ja. 664), 94. Noab V. Webb (1 f:dw. Ch. 603). 178. Noble V.Bates (7 Cow. 307), 110. Noble V. Vincennes (42 Ind. 125), 392. Noel V. Drake (28 Kan. 265), 46, 101,577. d B are to pagps.] Nordenfeldl v. Maxim-Nordenfeldt Co. (L. R. A pp. Cas. .->33, .■)35, 540. .554. 575). 27. i:6. 144. 211. Norris v. Beyea (13 N. Y. 273, 289), 559. Norris v. Moss (25 L. J. E1 U. S. 64t;, 070) , 48(). 490. Pearson v. Railroad ((>2X. II. 537). 488. Pedrick v. Ripon (73 Wis. (322; 24 All). & Eng. Corp. Cas. 422), 392. Peed V. McKee (42 Iowa. 689), 79, 97. Peik V. Chicago, etc. Ry. Co. (94 U. S. 1G4), 420. Peltz V. Eichell (62 Mo. 171), 148, 173. • Pemberton v. Vanghan (L. R. 10 Q. li. 87, 89), 120, 124. Pennoyer v. McConnaughy (140 U. S. 1, 10; 11 8up. Ct. Rep. 099), 719. Pennsylvania v. Whei'ling & Bel- mont Hridge Co. (18 How. 421, 432), 397. Pennsylvania Co. v. St. L., Alton, etc. Ry. Co. (118 U. S. 290, 291, 294), 481,491. Pennsylvania Ry. Co. v. Common- wealth (4 Cent. .501), 495. Penn.s.vlvania Ry. Co. v. Conn (29 Am. ik, Eng. Ry. Cas. 145; 7 All. R»>p. 368), 502. Pennsylvania Ry. Co. v. Nat. Ry. Co. (23 N. J. Eq. 441), 376. Pensacola Tel. Co. v. Western, etc. Tel. Co. (96 U. S. 1. 9), 441. 444. are 2).601. People V. Hud. River Telcph. Co. (19 Abb. N. Cas. 466), 446. People V. Jones (18 Wend. 604). 687. lii TABLK OF CASES. [The references People V. Ko.^tkii (4 N. Y. Crini. Rep. 434. 4-29). 304. 314. 321). People V. Lainbier (.">Denio.9). SI. People V. Manliuttan Co. (9 Wend. 351). GS4. People V. Mather (4 Wend. 229; 21 Am. Dec. 122). 259. People V. Mark (99 N. Y. 379).4.-).5. People V. Maynom (5 Mieb. 140), 703. People V. Melvin (Yate's Sel. Cas. Ill; 2 Wheat. Cr. Cas. 262), 288. People V. Milk Exchange (145 N. Y. 2()7). 5G7. 5(j8. People V. Miner (2 Lans. 390). 712. People V. Mitchell (35 N. Y. 551), 466. People V. Mulholland (82 N. Y". 324', 37 Am. Rep. 5G8). 401. People V. N. River Sng. Ref. Co. (.54 Hun. 354; 121 N. Y. 57, 582, 609. 622). 510, 525. 690. People V. O'Brien (111 X. Y. 1, 64; 36 Am. & Eng. Ry. Cas. 78), 379, 480. 501. People V. Perry (79 Cal. 106). 693. People V. Pres., etc. Manhattan Co. (9 Wend. 337), 687. People V. Rensselaer, etc. R. Co. (15 Wend. 113; 30 Am. Dec. 33,37). 705. 707. People V. Richardson (4 Cow. 113), 687. People V. Russell (49 Mich. 617; 43 Am. Rep. 478), 452. People V. Slieldun {\:Vd N. Y''. 251; 34 N. E. Rep. 785). 566, 568. People V. Smith (5 N. Y. Cr. Rep. 513), 347. People V. !S(iuire (145 U. S. 175; 107 N. Y. 593; 1 Am. St. Rep. 894), 437. People V. St. Louis (5 Oilman, 351). 713. People V. St. L., A. & T. 11. R. Co. (45 N. E. Rep. 824). 495. People V. Stanford (77 Cal. 360, 364; 19 Pac. Rep. 694), 703. are to pa^es.l People V. Stevens (71 N. Y. 527), 249. People V. Treijuier (1 Wheel. Cr. Cas. 142). 288. People V. Vandeibilt (28 X. Y. 396; 26 X. Y. 287). 354, 713. People V. W.irden (144 X. Y. 529; 39 X. E. Rep. 686), 357. People V. Wilzig (4 X. Y. Crim. Rep. 417. 403. 419, 423), 304, 314. 325. 349. People's Home Sav. Bank v. Su- perior Court (104 Cal. 649; 38 Pac. Rrp. 452), 579. People's Railioad v. Memphis Railroad (10 Wall. 38). 368. Peoria, etc. Ry. Co. v. Duggan (109 111. 537: 20 Am. & Eng. Ry. Cas. 489), 430. Perkins v. Clay (.58 X. H. 518), 110. Perkins v. Lyman (9 Ma7; 15 L.J. Excheq. 329), 119, 121. Piscataqua Bridge v. Xew llamp- shire Bridge (7 N. H. 35, 59, 69), 372. Pittsburgh Carbon Co. v. McMillan (119 N. Y. 4(), 53, 4()i;), .540, 573, .595, .597. 598. P. C. ct St. L. Ry. Co. V. Campbell (8G 111.443). 420. Pittsburgh, etc. Ry. Co. v. Hollo- well (05 Ind. 188). 333. Pittsburgh, etc. R. 14. Co. v. Kain (35 Ind. 291), .501. Pittsburgh, etc. Ky. Co. v. Keokuk, etc. Co. (131 U. S. 371), 470. Pittsburgh, Ft. W. & C. II v. Co. v. Ila/.en (84 111.30, 38). 333. Pixley V. Boyd (79 111. 351). 207. Pixley V. Boynton (79 111. 351), 277, 278. Place V. Min.ster (05 X. Y. 89, 95), 228. Plank Road Co. v. Douglass (9 N. Y. 444), 400. Plaster v. Burger (."i Ind. 232), 471. are to pages.] Polinsky v. People (73 N. Y. 05). 401. Pontchartrain li. K. Co. v. N. O. Ry. Co. (11 La. Ann. 253). 301. Pope V. llanke (155 111. 017), 277. 280. PopU'tt V. Stockdale (Ky. tt .M. 337; 2C. & P. 198), 51. 78. Porter v. Jones (52 Mo. 399, 402). 103. Porter v. Jones (0 Coldw. 313), 79. Porter V. WiHiams(9N.Y. 142),. 597. Postal Tel. Cable Co. v. Adams (1.55 U.S. 088; 15Sup.Ct. Kep. 208), 443. Postal Tel. Cable Co. v. City of Baltimore (79 Md. 502; 29 At!. Kep. 819), 440. Powell V. Daniel (23 La. Ann. 289), 49. Powell V. Pennsylvania (127 U. S. 678; 114 Pa. St. 205), 4.55. Power V. Village of Athens (99 N. Y. 592, .598; 10 Am. it Eng. Corp. Cas. .54). 400. Powers V. Skinner (34 Vt. 274. 270. 281), 55, 02. Powers V. Strout (67 Iowa. 341 ; 25 N. W. Kep. 273), 133. Pratt V. Draughon (2 La. .\nn. 194), 94. PrescDlt it A. C. K. K. v. Atchison. T. it S. F. Ky. (73 Fed. Rep. 438). .555, 003. President, etc. v. .Fackson (7 Blackf. 36), 501. Presbury v. Fisher (18 Mo. 50), 178, 201. Presbyterian Cliurcli v. Mayor, etc. (5 Cow. 538), 3tKS. Price V. Green (16 M. & VV. 346; 16 L.J. Kxche(i. 108), 148, 201, 215. Printing, etc. Co. v. Sampson (L. R. 19 Eq. 462, 464, 465), 135. 167, 168, 178, 542. Proctor V. Sargent (2 Man. ifc O. 20; 2 Scott, N. R. 289). 21. 23. 24. 119. 128. 198. liv TAHLE OF CASKS, I The reftrences are to pages ] Frosser v. Wiipello (18 Iowa. 327). 392, 393. Frost V. More (40 Cal. 347). 243. Frovidence Bank v. liillings (4 Fet. 514, .^G2),422. Providence Coal Co. v. Frovidence & W. R. Co. (1 Int. Com. Rep. 363; 1 Int. Com. Com. 107), 587. Prudential Assurance Co. v. Knott (L. R. 10 Ch. 142), 352. Pueblo & A. V. R. Co. v. Taylor (6 Colo. 1; 45 Am. Rep. 512; 6 Am. & Eng. R. Cas. 474), .502. Q. Queen v. Faty (2 Ld. Raym. 1105), 715. Queen's Ins. Co. v. State (86 Tex. 2.50; 24 S. W. Rep. 397), 261. Quincy v. White ((53 N. Y. 370), 5()0. B. Kackeman v. Riverbank Imp. Co. (167 Mass. 1 : 44 N. E. Rep. 990). 157. Racine, etc. R. R. Co. v. Farmers' Loan & Trust Co. (49 III. 331), 501. Ragan v. Aiken (9 Lea, 609; 42 Am. Rep. 684). 589. Railroad Commission Cases (116 U. S. 307, 325.331; 6 Sup. Ct. Rep. 334, 348, 349, 388, 391, 1191), 421, 426, 720. Railroad Co. v. Collins (48 Ga. 582), 528. Railroad Co. v. Davis (2 Dev. & Bat. 451, 468), 419. Railroad Co. v. Gibbes (142 U. S. 386, 391 ; 12 Sup. Ct. Rep. 255), 720. Railroad Co. v. Hinsdale (45 Ohio St. 556. 573), .528. Railroad Co. v. lloward (7 Wall. 413), 501. Railroad Co. v. Husen (95 U. S. 465), 4.52. Railroad Co. v. Maine (96 U. S. 499). 366. Railroad Co. v. Mayor (I Hill, .562), 369. Railroad Co. v. McDonald (53 Miss. 240). 466. Railroad Co. v. Xicliolas (93 Ala. 92; 12 So. Rep. 723). 579. Railroad Co. v. Railroad Co. (31 N. J. Eq. 475), 528. Railroad Co. v. Ryan (11 Kan. 602), 101. Railroad Co. v. Smith (62 111. 268), 266. Railway v. County of Otoe (16 Wall. 667), 466. Railway Co. v. Broom (6 Excheq. 314), 236. Railway Co. v. Ellis (165 U. S. 150, 154; 17 Sup. Ct. Rep. 255). 720. Railway Co. v. Gill (156 U. S. 649, 657; 15 Sup. Ct. Rep. 484), 721. Railway Co. v. Mayes (58 Ark. 397) , 86. Railway Co. v. Spangler (44 Ohio St. 471). 86. Railway Co. v. Wellman (143 U. S. 339. 344; 12 Sup. Ct. Rep. 400), 721. Railway Co. v. Wynn (88 Tenn. 320; 14 S. W. Rep. 311), 86. Raleigh v. Sorrel 1 (1 .Tones, 49), 455. Ramsdell v. Edgarton (8 Met. 227), 94. Randal v. C. & D. Canal Co. (1 Harr. 232), 95. Randall v. VanVechten (lOJohns. 60), 501. Ranger v. Great Western Ry. Co. (5 II. L. Cas. 72, 86), 237. Rannie v. Irvine (7 Man. it G. 676, 969). 23, 119. 161. Ransome v. Eastern, etc. R. W. Co. (1 C. B. (N". S.) 437), 588. TAI5I.K OF CASKS, Iv [The references are to pHgcs Kawson v. I'ratt (91 Ind. it. 10), 214. Raymond v. Leavitt (4G Mich. 447, 4.")0. 4.V2; 41 Am. Hep. 170). -jro. 272. 274. Keagiin v. Farmers" Ijoan tt Trust Co. (154 U. S. 'M-2; 14 Siip.Ct. Rep. 1047), 422, 423. 42i;. Reed v. Uome Savinjjs Bank (13 Mags. 443). 235. Reed v. Jone.s (li Wi.-. CSU), 583. Reed v. St. L.. K. C. & X. Ky. Co. ((50 Mo. 199). 333. Regan v. Trust Co. (154 U. S. 3U2, 391; 14 Sup. Ct. Rep. 1047), ^19, 721. Keg. V. Archdall (3 N. & V. (i9(>; 8 A. & E. 281), 084. Reg. V. Barrett (18 L. .F. 440), 314. Reg. V. Bauld (13 Cox Cr. Cas. 282), 323 Reg. V. Rowlands (17 Ad. A Kl. 670. 071,087), 294, 345. Reg. V. liowlands (5 Cox Cr. Ca». 40(i, 40). 307. Reg. V. Rowlands (17 Q. B. t;7I). 259. Reg. V. Saffron Walden (9 (^ B. 70). 142. Reg. V. Selby (5 Cox Cr. Cas. 495), 294. 323. Reg. V. Seward (\ Ad. & El. 700), 259. Reg. V. Sliepht-rd (11 Cox Cr'. Cas. 325). 323, 32(). 345. Reg. V. Train (2 B.&S.640; 110 E. C. I.. (i40), 377. Reife v. Com. [ns. Co. (5 Mo. .Vpp. 173), 94. Rensington v. Philadelpliia ( 13 I'a. yt. 70), 358. Rensselaer & Saratoga Ry. Co v. Davis (43 N. Y. 137), 487. Reg. V. Best (2 Ld. Kaym. 1107), ! Renwick v. Morris (3 Hill. 02; 7 259. Reg. V. Bunn(12CoxCr.<'as.310), 288. 294. Reg. V. Charleswortli (1(> il- B. 1012), 377. Reg. V. Druitt (10 Cox Cr. Cas. 592, 593), 2S8. 294, 318, 323, 325. Reg. V. Diitlield (5 Cox Cr. Cas. 404,432), 288. 318. Reg. V. Gompert/ (9 Q. B. 824), 259. Reg. V. Harris (1 Car. iV .M.OOl), 294. Reg. V.Hewitt (5CoxCr.Cas. 102), 345. Reg. V. Heymann (12 Cox Cr. ('as. 383), 2.")9. Reg. V. Hibbert (13Cox Cr. Cas. 82. 404). 288, 323. Reg. V. Longton fJas Co. (2 El. & El. 051). 377 Hill, 575), 81, Reynolds v. Bridge (0 El. iN: B. 528). 128. Reynolds v. Everett (144 N. V. 189; 39 \. E. liepi. 72), 304, 318. Rex V. Byerdike (1 M. it S. 179), 244. Rex V. Caruiarllien (2 Burr. S('.9). 098. Rex V. City uf London {'.i llav. Towns. St. Tr. 545;. 705. Rex V. Berenges (3 M. & S. (»7), 270, 27(). Rex V. Eedes (1 I.eacb Cr. Cas. 274), 294, 317. 320. Rex V. Harrison (3 Burr. 1323. 1328). 120. Rex V. Hiibers (2 ('bitty, 103), 270. Rex V. .Journeymen Tailors (8 Md. 10). 288. Rex V. Kinnersley (I Str. 193). 2.59. Reg. V. O'Connell (II CI. & F. [ Rex v. I.eigh (4 V.nvv. Jl HI. -jn:?), 234), 317. I 087. 702. 703. Reg. V. Farnell (14 Cox Cr. Cas. , Rex v. Mar.sdon (3 Burr. 1817).089. 474, 514), 317. 322. Rex v. Mawbey (ii T. R. 019). 294 Ivi TABLE OF CASKS. [The referf nces are to pages.] Kex V. Mmvot «& Aldcriiiiinof Hiirt- ford (1 Ld. Raym. 42G; 3 Siilk. 374). 707. Rex V. Mayor of London (1 Show. 27-1. 280), 707. Rex V. Newland (Sayres, 9«), G87, 702. Rex V. Trinity House (Gill, 8G), (584. Rex V. Waddinorton (1 East. 143, 1G7). IT), 270. Rex V. AVilliains (1 Burr. 402), G84. G99. Rhodes v. Neal (G4 Ga. 704), 97. Rhyniney Iron Co. v. Rhynmey A. Co. (G Ry. & T. Cas. GO), .^89, 590. Rice V. 51 an ley (GG N. Y. 82), 301. Rice V. Rockefeller (134 N. Y. 174). 517, 59G. Rice V. Rock Island, etc. Ry. Co. (21111. 93). 501. Rice V. Williams (32 P^ed. Rep. 437). 51. Rice V. Wood (113 Mass. 133), 250. Rich V. Braxton (158 U. S. 375, 405; 15 Sup. Ct. Rep. lOOG), 718. Richards v. Am. Desk & Seating Co. (87 Wis. 503; 58 N. W. Rep. 787, 789), 129. 138, 140. liichardson v. Buhl (77 Mich. G32, 635, G58; 27 Am. & Eng. Corp. Cas. 25G; 43 N. W. Rep. 1102), 510, 538, 541. 575. Richardson v. Chicago, etc. Ry. Co. (Gl Wis. 596; 21 N. W. Rep. 49), 8G. Richardson v. Crandall (38 How. I'r. 142). 243. Richardson v. Mellish (2 Bligh, 229, 242, 2.J2; 2 Bing. 125), 41. 43, 68. Richardson v. Peacock (26 N. J. E(i. 40; 28 N. J. Eci- 151; 33 N. J. Eq. 597), 125, 132, 215. Richardson v. Sihley (11 Allen. 65), .502. Richmond v. Dubuque & S. C. R. R. Co. (21) Iowa, 191. 201). 43. Richmond Gas Light Co. v. Mid- dleton (51>N. Y. 228), 383.389. Richmond County Gas Light Co. V. Middletown (.59 N. Y. 231), 368. Richmond, etc. Ry. Co. v. Louisa Ry. Co. (13 How. 71), 361. Richmond, etc. R. R. Co. v. Payne (SG Va. 481). 86. Richmond, etc. Ry. Co. v. Trammel (.53 Fed. Rnp. 1 90). 426. Richier v. Jour. Tailors' Union (24 W. L. Bull. 189), 323. Ricker v. Am. Loan & Trust Co. (140 5[ass. 346). 518. Ricketts V. Harvey (106 Ind. 564). 79. 97. Rider v. Kidder (10 V^es. 366). 51. Rider Life Raft Co. v. Roach (97 N. Y. 378). 523. Rio Grande R. R. Co. v. Browns- ville (45 Tex. 88), 354. Ringgold V. Tyson (3 H. & J. 172), 51. Rives V. Lawrence (41 Ga. 283). Road Co. V. Sanford (164 U. S. 578. 584. 594. 595. 597; 17 Sup. Ct. Rep. 198). 721. Robbins v. Webb (liS Ala. 393), 154. Robert v. Corning (89 N. Y. 226, 235), 5.59. Robert.son v. Parks (7G Md. 118; 3 Atl. Rep. 411, 413). 231. Robertson v. Robertson (65 Ala. 610), 68. Robinson v. Byron (1 Bro. Ch. 588). 302. Robinson v. Green (3 Met. 159, 161), 152. Robinson v. Jones (14 Fla. 250), 698. Rockford, R. I. & St. L. Ry. v. Rogers (62 111. 34(;). 42(J. Roderiquez v. Bienvenue (22 La. Ann. 300). 4H. TAHLK OF CASP:S. Ivii [The references Rogan V. Wabash Ry. Co. (51 Mo. App. Gii.")), 8(i, 93. Rogers v. liurlington (3 Wiill. 664), 4(JG. Rogers v. Evart (17 X. Y. Supl. 2(;4, 208), 304. 326. 3_>7, 3.->6. Rogers v. Kingston (10 Moore, 102; 2 IJing. 441), 46, 1)4. Rogers V. Matidoeks (I>. H. 3 ("b. 346), Rogers v. Perry (B. R. irin,; 11 Jac. 1 Rot, 223; 2 Bulst. 136), 10, 22, 118. Roll V. Raguet (4 Obio, 400), 79, hi. Roller V. Ott (14 Kan. (iO'.»), 215. Rool V. Long Island R. Co. (114 N. Y. 300; 21 N. K. Rep. -;03; | 40 Am. & Eng. R, Cas, 55; 4 i L. R. A, 331; 23 N, Y. S, R. j 226), 'iSfi, 589. Ropes V. Upton (125 Mass. 258), 129, 218. I Rosev. Truax (21 Harb. 361), 55. ' 60. Ross V. Sadgbeer (21 Wend. 116), 113. Roiindtree v. Baker (52 III. 241), 48. Roundtree v. Smith (108 U. S. 269), 278, 283. Ronsilion v. Roiisillon (L. R. 14 Cb. I). 351). -14, 25, 136, 140, 145, 198.204, 212, 215. Royal Bank of India's Case (L. R. 4 Cb. Ap|). 2.52. 257). 535. Rudolf V. Winters (7 Neb. 125). 267. Riiggles V. III. (108 U. S. 526, 538, 531), 456, 458. Ru.ssell V. De Grand (15 Mass. 35), 94. Ryder v. Alton, ete. Ky. Co. (13 111. 516), 583. 8. Saukett V. New Albany (88 Ind. 473; 2 Am. & Eng. Corp. Cas. 85; 45 Am. Kop. 467). 3;t2. are to p.iges.] Saginaw Gas Ligbt Co. v. City of Saginaw (28 Fed. Rep. 529), 369. St. Joseph & D. R. R. Co. v. Ryan (11 Kan. 602), 83. St. Joseph Tp. V. Rogers (16 Wall. 66-1). 466. St. Louis V. MeCoy (18 Mo. 238), •101. St. FiOuis V. Si. Louis Gas Light Co. (70 Mo. 69), .542. St. Louis, J, & C. R. R. Co. v. Mathers (104 III. 2.57). 83. St. Louis, etc. Ry. Co. v. Williams (49 Ark. 492). 431. St. L. Railroad v. Terre Haute Railroad (145 U. S. 393), 491. St. L. & San Fran. Ry. v. Gill (15(> U. S. 649, 6.57), 421. St., L. V. & T. II. R. R. Co. V. Funk (85 111. 460). }3t. Michael's Cb. v. Co. Bright (N. P. 121; 7 Pa. L.J. 181). 3.58. St. Tammany Water Works Co. v. New Orleans Water Works Co. (120 U. S. 6). 386. Sainter v. Ferguson (7 Cum. B. 716; 13 Jur. 828; 18 L. J. Com. P. 217), 121, 128, 132, 184. Salinas v. Stillman (66 Fed. Rep. 677; 14 C. C. A. 5), 64. Salt Co. V. Guihrie (35 Ohio St. 672, (>66). 538. 565. Sailer v. Howard (43 Ga. 601). 3J9. Sampson v. .Shaw (lOl Mass. 145, 105), 275, .565. Samuels v. Evening Mail Assn. (9 Him, 288), 235. Samuels v. Oliver (130 III. 73). 283. Sanderson v. (joodridi (46 Barb. 611), 94. San Diego Water Co. v. Flume Co. (108 Cal. 549). 390. Sandige v. Sanderson (21 La. .\nn. 757), 48. San Francisco Gas Light Co. v. Dunn (62 Cal. .5S0), 369. Iviii TAHLK OF CASKS, [Th« references Santa Clara Co. v. So. I'ac. Ky. Co. (118 U. S. 394. 396: Sup. Ct. Kep. 1132). 720. Santa Clara Val. Mill, etc. Co. v. Hayes (7(5 Cal. 387; 1) Am. St. Rep. 211), 541,503. Saratoga Co. Bank v. King (44 N. Y. 89. 87), 148. 243. 5G8. Sattertield v. Spurlock (21 La. Ann. 771). 48. Satterlee v. Jones (3 Diier. 102), 46. Sav. Fund v. Thila. (31 I'a. St. 175), 308, Sawyer v. Taggart (14 Bush. 727, 734), 269. Saxby v. Easterbrook (L. H. 3 C. P. D. 339), 352. Sayles v. Sayles (21 X. H. 312). 97. Schneider v. Turner (130 III. 28). 277. Schofield V. Lake Shore, etc. Ry. Co. (43 Ohio St. 571; 3 N. E. Rep. 907), 589. Schut V. Chicago, etc. Ry. Co. (70 Mich. 433), 431. Schwartz v. Tyson (4 II. & J. 288). 94. Schwenk v. Wyokhoff (46 X. J. Eq. 560; 20 Atl. Rep. 259). 46. Scott V. Brown (L. K. 2 Q. B.724). 52. Scott V. Donald (1C5 U. S. 58. 68; 17 Sup. Ct. Rep. 265), 719. Scott v.Neely (140 U. S. 106; 11 Sup. Ct. Rep. 712), 719. Scudder v. Andrews (2 McLean, 464), 94. Sedgwick v. Stanton (14 N. Y. 289), 62. Seeligson v. Lewis (05 Tex. 215; 57 Am. Rep. 593), 265, 277. Selby V. "Wilmington, etc. R. Co. (113 N. Car. 588; 18 S. E.Rep. 88). 92. Sewell V. Jones (1 W. & S. 129), 250. Seymour v. Creenwood ((i H. »& X. 359), 236. are to pages.] Shackle v. Baker (14 Ves. 468), 108, 201. 213. Sharp V. AVhitesides (19 Fed. Rep. 1.56. 160), 463. Sharpless v. Mayorof Philadelphia (21 Fa. St. 149). 466. 598. Shaw V. Reed (3 Me. 105, 109), 79, 90. Shaw V. Spooner (9 X. H. 197. 198), 79. 97. Shawmut Bank v. F. So M. R. R. Co. (31 Vt. 491). 222. Shepang Voting Trust Cases (66 Conn. 553; 24 Atl. Rep. 32), 579. Shepard v. Milwaukee Gas Co. (6 Wis. 539), 542. Shepherd v. Commissioners (59 Ga. 535), 4.50. Sherman v. Barrett (1 McMull. 147). 51. Sherman v. Wilder (106 Mass. .537), 94. Sherman, Hall & Co. v. Fa. Ry. Co. (3 Am.&Eng. R. R.Cas. 274), 333. Sherry V. Ferkins (147 Mass. 212; 9 Am. St. liep. 689; 17 X. E. Rep. 307), 322, 323, 352. Shiffner V. Gordon (12 East, 290). 94. Shorter v. Smith (9 Ga. 517). 371. Shrewsbury & Birmingham R. Co. V. London & X. W. R. C. (L. R. 17 Q. B. 652; 9 Eng. L. & Eq. 394). 553. Shriver V.Sioux City »& St. F. R. Co. (24 Minn. 500). 88. Siter V. Streets (7 ind. 132), 94. Skinner v. Ritch (10 Cox Cr. Cas. 493). 315. Skinner v. Oakes ( 1(» Mo. App. 45), 173. Slaughter House Cases (10 Wall. 36), 318,349, 364,407, 410. Sloan V. Mo. Fac. Ry. Co. (61 Mo. 24). 423. Slocum V. Wooley (43 N. J. Va\. 451 : 11 All. Rep. 204), 82. TAMI.K OK CASKS. IIX [The references tire to pages. | Sliddell V. (Jnindjean (111 U. S. 412). 401. Small V. Minneapolis Electro Ma- trix Co. (4.-) Minn. 2(i4. 2(i7), 710. SmuUey v. (Jreen ('rJ Iowa, 241 ; i}") Am. Kep. 2(;7). 12'.l, 132. KW. Smead v. Indianapolis, etc. K. \V . Co. (11 hid. 104). noi. Smith V. Applegate (23 N. J. L. 352, 3r)8),4(i. Smith V. Barrie (5U Mich. 314; 22 N. W. Hep. Sl«), 158. Snrith V. Birmingham & Stafford- shire Cas Light Co. (1 A. & E. 52(i), 230. Smith V. Boiibier (7 Ta. St. 325), 277, 283. Smith V. Bromley (2 Doug. G9()), 94. Smith V. City of Albany (7 Lans. 141). 94. Smith V. Cuff (li Maule & Sehv. 1«0). 95. Smith V. Everett (27 Beav. 440), 215. Smith V. Freeman (71 Ind. 85), 318. Smith V. Iluiiipbrcys (SS .Me. 345; 34 At!. Rep. 100), 78. Smith V. Louisville, etc. K. Co. (75 Ala. 449), 431. Smith V. Martin (s(» hid. 200). 215. Smith V. McWaters (25 ha. Ann. 431), 4S. Smith V. .Morse (2 Cul. 524), 309. Smith V. People (25 111. 17), 294. Smith V. San FranciiJCO& X. P. Rv. Smith V. Whyte (L. R. 1 Kij. 020; 35 L. J. Ch. 45; 14 W. R. 510; 14h. T. (X.S.) 350), 51. Smith V.Wilcox (19 Barb. 581). 94. Smitb"s .Vppeal (113 Pa. St. 579, 5!(()). 115, 150. Smitirs Case (4 Mod. 53). 705. Smitbson v. Dillon (10 Ind. 109), 501. Smyth V. Ames (18 Sup. Ct. Kep. 418,423), 718,719, 720.721.722, 723. 724, 725. Smyth V. GriHin (14 L..I.('b.2S: 12 L.J. Ch. 193), 51. Snider v. Willey (33 Midi. 183), 79. 97. Snow V, Wheeler (113 .Ma.xs. 179, 185. 180), 294. 309. 318, 345. Soda Fountain Co. v. (ireen (5 Ala. 193). 431. Southard v. Boyd (51 .\. V. 177), 55. Southern Expre.-s Co. v. Caperton (44 Ala. 101), 92. Southern Pacific Co. v. United States (28 Ct. CL 77). 598. Spaulding v. Phving (145 Pa. .^t. 375; 24 All. Kep. 219). .V.. t;(t. Spaulding V. Lowell (23 Pirk. 71), 4.55. Spicer V. Hoop (51 Ind. :{05. 305). 178.201. Spier V. Lambdin (45 Ga. 319). 193. Co. (115 Cal. .584: 47 Pac. Rep. Spies v. People (122 111. 1 ; 3 .\m. 582), 582. St. Rep. 320), 318, 345. Smith V. Sheeley (12 Wall. 3.5S), Spinks v. Davis (32 Miss. 1.52). 501. 102. Smith V. Smith (4 Wend. 40S), 132, Spofford v. Boston, eti-. Ry. (128 184. .Mass. 320). 5S8. Smith v.Townsend (109 Mass. 500), Sprague v. Mo. Pac. R. Co. (34 100, 579. Kan. 347; 8 Pac. Rep. 405). 92. Smith V. Ullman (58 Md. 183; 42 Springfield v. Connecticut River Am. Hop. 329. 331). 219, 2.50. R. R. (4 Ciish. 03), .354. Ix TAI5LE OF CASKS. (The references Springhead Spinnin<^ Co. v. Kiley (L. R. 6 Eq. 551), 294, 345, 352. Sprinfj Valley Water Works v. Sohotiier (110 U. S. 347, 354), 432. Squire v. Squire (3 Stew. Eq. 627), 102. Stack V. O'Hara (98 I'a. St. 213), 250. Stafford v. Shortweed (02 Iowa, 524; 17 N. W. Rep. 750), 132. Staines v. Wainwright (6 Bing. N. Cas. 174), 45. Stamford v. Stamford Horse R. R. Co. (50 Conn. 381), 3.54, 712. Stanley v. Davenport (54 Iowa, 403; 37 Am. Rep. 210), 379. Stanton v. Allen (5 Denio. 434), 243, 245. 470, 538. 508. Stanton v. Parker (19 Hun. 01), 103. Stanton v. Small (3 Sandf. 230). 277. Star Brewery Co. v. Primas (1(53 111. 052; 45 N. E. Rep. 145), 1.59. State V. Ah Chew (10 Nev. 50), 450. State V. Am. Cotton Oil Trust (40 La. Ann. 8; 19 Am. it Eng. Corp. Cas. 448), 595. State V. Ashley (1 Ark. 279), 084. State V. Atchison & Nebraska Ry. Co. (24 Neb. 143. 102; 32 Am. & Eng. Ry. Cas. 388). 480. State V. Bartlett (30 Me. 132, 134), 229, 259. State V. Baiighinnn (38 Ohio St. 455), 094. Stale V. Beecher (15 Ohio. 723). 703. State V. Bell (34 Ohio St. 194), 379. State V. Bell Telephone Co. . (30 Ohio St. 290; 38 Am. Rep. 584; 23 Fed. Rep. .539 ; 8 Am. & Eng. Corp. Cas. 7), 41(i. State V. Bieler (87 Ind. 320), 097. are to pages.] State V. Bishop (128 Mo. 373; 31 S. W. Rep. 9), 358. State V. Boston, etc. R. Co. (25 Vt. 433), 695. State V. Boyd (84 Mo. 19S, 201), 099. State V. Brown (5 R. I. 0), 099. State V. BiH-hanan (5 Har. & ,). 317), 2.57. State V. Biirnham (15 N. H. 396), 294,318. State V. Burnheim (15 N. H. 401), 321. State V. Cawood (3 Stew. 300), 200. State V. Chicago, etc. Ry. Co. (38 Minn. 281; 37 N. W. Rep. 782), 420, State V. Cincinnati Gas Light & Coke Co. (8 Ohio St. 202). 704, 383. State V. City of Cincinnati (23 Ohio St. 445. 405). 702. State V. Claggett (73 .Mo. 388 k 093. State V. Collier (72 .Mo. 13), 73. State v.CohimbusGasCo. (34 Ohio St. 572), 383. State V. Commercial Bank (10 Ohio, 535), 702. State V. Cook (38 Vt. 439), 209. State V. Crowley (41 Wis. 271). 318. State V. Cowan (29 Mo. 330), 401. State V. Dayton & S. E. Ry. Co. (30 Ohio St. 434), 354, 713. State V. Dehesseline (1 McCord, 52), 697. State V. Dent (129 U. S. lU; 25 W. Va. l),4.-»(;. State V. Divine (98 N. Car. 798), 431. State V. Donaldson (32 N. J. ],. 151, 155, 157 ; 90 Am. Dec. 049). 297. 318, 322, 348. State V. Douglas Co. Road Co. (10 Ore. 198, 200). 099. State V. Elting (29 Kan. 397. 401). 74. State V. Fisher (52 Mo. 174), 450. TAHLK OF CASES. ixi [The references State V. Fremont, etc. Ry. Co. (22 Neb. 313; 35 N. W. Rep. IIS; 23 Neb. 113; 3() N. W. Rep. 30S),42(i. State V. Gtis Co. (34 Ohio St. iu2), 383. State V. Gas Light Co. (18 Ohio St. 262, 201), 31)8. 704. State V. Gleason (12 Fla. 2U5). 703. State V. Gliddcn (55 Conn. 4t), 74. 77; 3 Atl. Rep. SOD), 230. 313, . 314, 315, 321. 322. 353. State V. Goodnight (70 Tex. ()S2), 355. State V. GrahfiiM (13 Kan. 130). 005. Slate V. HaunuT (42 N. J. L. 435). 697. State V. Hartford & N. H. Ry. Co. (20 Conn. 538, 5J7). 473. State V. Hurley (54 Me. 562), 426. State V. Ilolcomb (68 Iowa, 107; 56 Am. Rep. 852). 401. State V. Jenkins (25 Mo. 484), 607. State V. Johnson (52 Ind. 107). 46. State V. Jones (13 Iowa, 260). 250. State V. Jones (33 Vt. 443). 259. State V. Kupferie (44 Mo. 154), 703. State V. Leiber (11 Iowa, 407). 456. State V. London (91 Ind. 351). 698. State V. Lounger d Dev. ]j. 357), 259. State V. Lowry (49 N. J. L. 301). 401. State V. Mayberry (48 Me. 218), 257. State V. Marshall («U N. U. 540; 15 All. Rep. 210), 455. State V. McConneli (3 Lei, 332), 697, 609. State V. M. Daniel (22 Ohio St. 354, 360, 361), 687, 702. State V. Miller (3 Mo. 470). 392. State V. Milwaukee Gas Light Co. (29 Wis. 454), 366,383. State V. Minn. Thresher Mfg. Co. (40 Minn. 213, 224). 687. State V. Morris & E^aex R. Co. (3 Zab. 367), 236. Hru to puxea.] State V. Mott (61 Md. 207; 4 Am. iS: Kng. Corj). Cas. 334; 48 .\m. Rep. 105). 401. State V. Neb. Disiilling Co. (29 Neb. 700; 20 A in. it Kpg. Corp. Cas. 656), 510, 5-11. 542, 575, 708. Stale V. New Brunswick (30 N. .1. L. 305). 368. State V. Norton (33N.J. L. 40,46). 228. State V. Noyt'S (25 Vt. 415), 2.")7, 2.")0, 204, 318. State V. Olin (23 Wis. 300). State V. Orr (68 Conn. 101), 403. State V. Paul (5 Stew. & V. 40). 684. State V. I'hips (.■)0 Kan. 600; 31 I'uc. Rep. 1097), .")92. 594. State V. Portland, etc., R. Co. (58 N. H. 113). 684. State V. Potter (28 Iowa, 256, 5.54), 257, 2.58. State V. Pnrdy (36 Wis. 213, 222; 17 Am. Rep. 485). 73. 74. 90, State V. Real Estate Bank (5 Ark. .595; 41 Au>. Dec. 100). 684. State V. Rickey (9 N. J. L. 293), 260. State V. Kii)ley (31 Me. 380), 259. State V. Rowley (12 Conn. 112). 318. State V. Kuckley (2 Blackf. 210), 501. State V. Schneirle (5 Rich. 299), 697. State V. Standard Oil Co. (49 Ohio St. 137, 179, 181; 30 N. E. Rep. 279), 3. 4. 470, 508, 510. Stale V. St. Med. Ex. Bd. (32 Minn. 324). 456. State V. St. Paul Si Sioux City Ry. Co. (35 Minn. 222). 695. 607. State V. Stanley, (52 Ark. 17n; 12 S. W. Rep. 327). .52. Stale V. Stein (13 Neb. 529). 698. State V. Stewart (.59 Vt. 279, 285), 259, 289, 274, 208, 321, 322, 603. State V. Straw (42 N. U. 302), 260. Ixii TABLE OF CASES. [The references State V. Telepb. Co. (36 Ohio St. 290. 311; 38 Am. Rep. 583), 450, 452. State V. Tipton (109 Ind. 73), 698. State V. Town of Harrison (46 N. J. L. 79). 38G. State V. Vanderbilt (37 Ohio St. 590.643), 483. State V. Winston (66 Iowa), 143, 146), 257. State Bank v. Hasting (15 Wis. 78), 106. State Bank v. State (1 Bhickf. 267, 272, 280). 689, 706. State ex rel. Hequenabonrg (38 Mo. 535), 699. State ex rel. v. Jones (16 Fla. 306), 702. State ex rel. v. Standard Oil Co. (49 Ohio St. 137), 691. State ex rel. Stewart v. Mcllhany, (32 Mo. 382), 699. State ex rel. v. Townley (56 Mo. 107), 699. State fa; rel. v. Vail (.53 Mo. 97), 699. State ex rel. Young v. Biiskirk, (43 Mo. Ill), 693. State Freight-Tax Case (15 Wall. 232, 275), 548. Steanj Xav. Co. v. Weed (17 Barb. 378), 501. Stearns v. Barrett (1 Pick. 443), 110, 115, 116, 218. Stearns Co. v. St. Cloud. M. & A. Ry. (36 Minn. 425). 354. Steers v. Liverpool, etc. Steamship Co. (.57N. Y. 1),93. Stein V. Bienville Water Supply Co. (141 U. S. 67), 388. Steinfeld v. Levy (16 Abb. Pr. (N. S.)26),51. Steinweg v. Erie R. Co. (43 X. Y. 123), 92. Stephens v. Southern Pacific Co. (109 Cal. 86; 41 Pac. Rep. 783), 49. are to pages.] Sternberg v. O'Brien (48 N. J. Eq. 370, 372 ; 22 All. Rep. 348), 183, 198. Stewart v. Challacombe (11 111. App. 379), 129. Stewart v. Erie & W. Transp. Co. (17 Minn. 372), .5.55, 709. Stewart v. Lehigh, etc. R. R. Co. (38 N. J. L. 505), .589. Stewart V. Schall (65 Md. 299; 57 Am. Rep. 327). 280. Stewart v. Polk Co. (30 Iowa, 9), 466. Stewart v. Simpson (1 Wend. 376, 379), 349. Stewart's Appeal, (.56 Pa. St. 413). 502. Stiff V. Cassell (2 Jur. (X.S.)348), 177. Stiison V. Stilson (46 Conn. 1.5), 97. Stines v. Dorman (25 Ohio St. 580), 201. Stockdale v. Onwhyn (2 C. & P. 163), 52. Stockton V. Central R. R. Co. (.50 N. J. Eq. 52; 24 Atl. Rep. 964), 538, 712. Stokes V. Anderson (118 Ind. 533; 21 X. E. Rep. 331). 53. Stone V. Dennis (3 Port. 231). 95. Stone V. Farmers', etc. Co. (116 U. S. 307 ; 6Sup. Ct. Rep. 334). 423. Stone V. Lidderdale (2 Anst. 233). 104. Stone V. ^atchez, etc. Ry. Co. (62 Mis.«. 646; 21 Am. & Eng. Ry. Cas. 6), 426. Stone V. Yazoo, etc. Ry. Co. (62 Miss. 607; 21 Am. & Eng. Ry. Cas. 6; 52 Am. Rep. 193), 426. Story V. Solomon (6 Daly, 531). Stoutenbnrgh v. Lybrand (13 Ohio St. 228), 97. Strait V. Harrow Co. (51 Fed. Rep. 819; ISX. Y. Supl. 224), 166, 538. 569, 572, 575. Strait V. Xat. Harrow Co. (18 N. Y. Supl. 224), 596. TAHM-; ()!• CASKS. Ixin [Tlie referencea are to pH($e8 J Strange v. Hill, etc. Ry. Co. (54 I Tappan v. Albany Hn*s\ ing Co. (80 Iowa, G(!9), 377. Straus V. Eagle In.s. Co. (5 Ohio St. 59), 528. St. Ity. Co. V. West Side St. Ky. Co. (J8 Mich. 483), 37!». Studebaker v. White (31 Ind. 211), 129, 201. Sturgis V. Crowninshield (4 Wheat. 197), 373. Stuyvesant v. Mayor, etc. of New York (7 Cow. 588). 3G8. Siigden V. Crossland (3 Sm. & Gif. 193), 102. Snniinitt v. State (8 Lea. 413), 498. Sumner v. Marcy (3 W. & M. 105), 488, 527. Sumner v. Sunmer (54 Mo. 340), 79, 97. Sun Mut. Ins. Co. v. Mayor, etc. (8 N. Y. 253), 501. Sutton V. Head (5 S. W. Rep. 410). 158. Swanger v. Mayberry (59 Cal. 91), 94. Swansonv. Kirby (98 Ga. 58G; 2G S. E. Rep. 71), 209. Sweeney v. McLeod, (15 Ore. 330; 15 Pac. Rep. 275), 56. Swift V. Phila., etc. R. Co. (58 Fed. Rep. 59; 04 Fed. Rep. 59), 590. Sykesv. Sykes (3 B. & C. 541; 10 E. C. L. 17(j), 173. Syracuse Water Co. v. City of Syracuse (116 N. Y. 167, 178, 180). 389. T. Talcott V. lirackett (5 Bradw. 60). 110. Tallis V. Tallis, (1 El. & Bl. 391, 411), 21, 24, 25,119, 132. 178, 219. Talmage v. East River Bank (26 N. Y. 105), 154. Talmage v. Pell (7 N. Y. 348), 527. Cal. 570), 99. Tatum V. Arnold (42 X. J. Eq.60). 264. Taylor v. Blancliard (13 Allen. .370; 90 Am. Dec. 203), II."). IJ'.l, 132. 139, 165, 215, 217. Taylor v. Carpenter (2 Sandf. Ch. 604; 42 Am. Dec. 114), 172. Taylor v. Earle (8 Hun, 1), 491. " 527. Taylor V. .laiiiu's (106 Mas^. 291), 79, 9(). Taylor v. Wait. (.".4 Vt. 469), 249. Telegraph Co. v. Texas (10.") U. S. 460, 464), 442, 548. Tempertonv. Russell (4 Rep. 376, 383; L. R. 1 Q. B. 435), 254, 325. Texas Brewing Co. v. Meyer (38 S. W. Kep. 263), 226. Texas Brewing Co. v. Teinpleton (38 S. W.Rep. 27), 225. Texas & P. Ry. v. Int. Coui. Commrs. (162 U. S. 197), 712. Texas & P. Ry. Co. v. Marshall (136 U. S. 393), 84. Texas & P. R. Co. v. So. Pac. R. Co. (41 La. Ann. 970; 6 South. Rep. 888; 40 Am. & Eng. R. Cas. 475), 470, 5.V). Texas Standard Oil Co. v. Adone (83 Tex. 6.-)0, 6.59; 19 S. W. Rep. 274), 5()5, 566. Thacker V. Hardy (L. R. 4 Q. B. D. 685). 283. The Chas. F.. Wiswell, (74 Fed. Rep. 802). 603. The King V. fernery (2 T. R. 515), 705. The King v. Francis (2 T. R. 484), 689. The People v. Attorney- General (22 Barb. 117), 699. The People v. Fairfield (8 Hun, 334; 67 N. Y. 334), 699. The People v. North Chicago Ry. Co. (88 111. 537), 701. Ixiv TABLE OF CASES, [The referenc38 are to pages.] The People v. Tobacco Co. (42 How. Pr. 102). ()99. The Peoj)le v. Triistet^s of Geneva College (5 W»'nd. 219), 099. The Poulterer's Case (9 Coke. 55), 259. The State v. Allen (5 Kan. 213) . 695. The State v. Stewart (32 Mo. 379), 699. The State v. W. W. Ry. Co. (34 AVis. 197). 095. Third Nat. Bank v. Harrison (10 Fea. Rep. 243). 267. Thomas v. Cin.. X. O. & T. P. Ry. Co. (62 Fed. Rep. 803, 818, 821). 316, 319. 334. Thomas v. Edwards (2 Mees. & W. 21S), 46. Thomas V. Mills (3 Ohio St. 274). 110,149. Thomas v. Railway Co. (62 Fed. Rep. 822), 342. Thomas v. Railway Co. (101 U. S. 71. 83). 467. 483. Thomas V. West Jersey R. Co. (101 U. S. 71), 711. Thomas v. Williams (L. R. 14 Ch. D. 864). 3.52. Thompson v. Catholic Conj?. Soc. (7 Pick. 100). 2.50. Thompson v. Ciimmings (08 Ca. 124). 206. 280. Thompson v. Davies (13 Johns. 112, 115). 46, 249, 251. Thompson v. Lee Co. (3 Wall. 327). 466. Thompson v. Means (11 Sm. & M. 604). 132, 184. Thomp-on v. People (23 Wend. .538). 703. Thompson v. Simmons (25 La. Ann. 450). 48. Thompson v. Staats (15 Wend. 395), 452. Thompson v. Western LTnion Tel. Co. (64 Wis. 531; 25 N. W. Rep. 789), 86. Thompson v. Wharton (70 Ky. .563). Thorley's Food Co. v. Massam (L. R. 14 Ch. Div. 763). 352. Thorpe v. Rutland, etc. Ry. Co. (27 Vt. 140, 149), 410, 451. Thrupp V. Collett (26 Beav. 125), 77. Tilley v. Savannah, etc. Ry. Co. (5 Fed. Rep. 641). Tim merman v. Dever (52 Mich. 34; 50 Am. Rep. 240; 23 Am. L. Reg. .^0^ 115, 132, 141. 184. Tindal -v. Wesley (167 U. S. 204. 220; 17 Sup. Ct. Rep. 77u). 719. Tinsman v. Belvidere Delaware R. R. Co. (1 Dutch. 255). 236. Tode v. Gross (127 X. Y. 4S0. 485; 28 N. E. Rep. 469). 140, 165. Toledo, A., A. & N. M. Ry. v. Penna. Co. (54 Fed. Rep. 730, 740). 301, 322. 351, 350. Toledo, etc. Ry. Co. v. Elliott (76 111.67). 589. T.. W. & W. R. W. Co. V. Larmon (67 111. 68), 426. Tomblin v. Callen (69 Iowa, 229, 230) , 278. Tool Co. V. Norris (2 Wall. 45. 55), 46, 60. 64, 68, 100. Touro V. Cassin (1 Xot. & M. 172), 94. Town of Bennington v. Park (50 Vt. 192), 40(;. Town of Cromwell v. Conn. Brown Stpne Quarry Co. (50 Conn. 470). 81. Town of Lake View v. Letz (44 111. 181). 402. Town of Pine Grove v. Talcott (19 AVall. 600), .501. Town of Queensbury v. Culver (19 AVall.83).4i;0. Tracy v. Talmage (14 N. Y. 162), 148. Train v. Boston Disinfecting Co. (144 Mass. .523; 19 Am. & Eng. Corp. Cas. 548; 59 Am. Rep. 113). 401. Trans. Co. v. Pipe Line Co. (22 W. .■ Va. 600), 240. TABLK OF CASES. [The references are to pages.] Trist V. Child (21 Wall. 441), 4U. iu, 60, 70. Trollope v. London Bldg. Trades Federation (W. N. Orj; C. A. W. X. 45), 329. Trotter v. Harris (2 G. & J. 28')), 302. Trovinger v. McBiirney ("> Cow. 253). 51. True V. Houghton (6 Colo. 318), * 579. Truenick v. Smith (63 Pa. -.St. 18), 465. Trustees v. Lynch (70 X. Y. 440, 447, 450), 155,156. Trustees v. Peaslee (15 X. H. 317). 488. Tucker v. Aiker (7 X. II. 113). 73, 99. Tucker v. Finch {m Wis. 17), 318. Tulk V. Moxhay (2 Phila. 774), 156. Turner v. Adams (46 Mo. 95), 249. Turner v. Hoole (Dowl. & Ryl. X. P. 27), 95. Turner V. Johnson (7 Dana, 435), 110. Turner V. Phccnix Ins. Co. (21 X. W. Rep. 326), 235. Turner v. Schneider (27 111. App. 220), 276. Turnpike Co. v. Sanford (164 U. S. 578, 596, 597; 17 Sup. Ct. Kep. 198), 725. Tuttle V. Matthews (28 Fed. Kep. 98). 570, 571. Tyler v. Gates (3 Barb. 222), 243. V, Ulery v. Chicago Live Stock Ex- change (.54 111. App. 233, 240), 2.53. Union Bank v. Carr (15 Fed. Hep. 438), 267. Union Fi-riy Co., In re (98 X. Y. 1.50). 369. Union Fuel Co. v. A., T. &8. F. li. Co. (43 Pac. Rep. 701), 222. e Union Pac. Ry. v. Goodridge (149 U. S. 680; 13 Sup. Ct. Rep. 970). 589. Union Pac. Ry. Co. v. U. S. (117 U. S. 355), 589. U. S. V. Addystone Pipe & Steel Co. (78 Fed. Rep. 712, 718), 551. U. S. V. Cassidy ((;7 Fed. Itcp. 698, 703), 342. U.S. V. Debs (63 Fed. Rep. 436; 64 Fed. Rep. 724, 744, 745, 765), 297, 311, 336, 340, 3.53. U. S. V. De Witt (9 Wall. 41), 411, 452. U. S. V. Dustin (2 Bond C. C. 332), 2.59. U. S. V. E. C. Knight Co. (1.56 U. S. 1 ; 15 Sup. Ct. Rep. 249), 546, 548, 603. U. S. V. Elliott (62 Fed. Rep. 801 ; 64 led. Rep. 27, 30, 34), 334, 336. U. S. V. Greenhut (50 Fed. Rep. 462), 603. U. S. V. Hudson (7 Cranch. 32), 716. U. S. V. Jellico Mountain Coal & Coke Co. (46 Fed. Rep. 432), 247, 603. U. S. V. Kane (23 Fed. Rep. 748; 25 Am. & Eng. R. R. Cas. 608), 322, 323. U. S. V. Kirby (7 Wall. 485), 342. U. S. V. Martin (4 Cliff. 160, 162), 228. U. S. V. Patterson (59 Fed. Rep. 280, 283), 2.58. U. S. V. Trans- Missouri Freight Assn. (116 U. S. 290, 311. 313, 338, 343; 29 Sup. Ct. Rep. 540, 552, 558, 5.59; 53 Fed. Rep. 540, 545, 548, .5.52, 603), 31, 4<;, 147, 474, 476, .504, 709. U. S. V. Union Pac. Ry. (160 U. S. 1), 442. U. 8. V. Walsh (5 Dill. GO), 228. U. S. V. Woolten (29 Fed. Rep. 702), 318. Ixvi TABLE OF CASES. [The references are to pages.] U. S. V. AVoikingmen's Ainalfja- inated Council (")4 Fed. Rep. 994), 338. n^f), G03. U. S. Chemical Co. v. Providence, etc. Co. (64 Fed. Kep. 94li), 14;"), 547. U. S. Express Co. v. Bachnian (28 Ohio St. 144), 89. U. S. Express Co. v. Harris (.")] Ind. 127), 86, 92. Updegraffv. Commonwealth (11 S. & R. 394. 399). 54. Upton V. Haines (of) N. H. 283). 94. Urni.'ton v. Whitelegg (63 L. T. 4o5), 223, 245. Ushel V. McBratney (3 Dill. 385), 55. V. Valley Railway Co. v. Iron Co. (46 Ohio St. 44, 49j, 529. VaUey Railway Co. v. Lake Erie Ins. Co. (46 Ohio St. 44), 527. Valentine v. Stewart (15 Cal. 404), 243. Valparaiso v. Gardner (97 Ind. 1; 7 Am. & Eng. Corp. Cas. 626; 49 Am. Rep. 416), 392. Vance v. Erie Ry. Co. (32 N. J. L. 334). 236. Vanderbilt v. Bennett (2 Ry. & Corp. L. J. 409;, .■)61.584. Vandine, Petr. (6 Pick. 187: 7 xVm. Dec. 35), 403. 409. Van Dyck v. Van Biiren (1 Johns. 362). 148. Van Horn v. Van Horn (52 N. J. L. 2S4, 286), 230. Van Kiiren v. Trenton Co. (13 X. J. Eq 302). 520. Van Meter V. .lonos (2 (ireen Ch. 520). 102. Vannini v. Payne (1 llariington. 6.")). 4.V2. Vanover v. Thompson (4 Jones L. 485), 79. Van Zant v. VVaddell (2 Yeig. 260). 431. Vass V. Wales (129 Mass. 38), 95. Vegelahn v. Gnntner (167Mass.92; 44 N. E. Rep. 1077; 43 Cent. L. J. 464), 323. Vernon v. Hailam (56 L.J. Ch. 115; 35 W. R. 156). 132. Vickery v. Welch (19 Pick. .523), 162. 215. Vickroy v. Pratt (7 Kan. 238), 94. Vicksburg, S. & P. Co. v. Dennis (116 U. S. 665; 6 Sup. Ct. Rep. 625). 369. Village of Pine City v. Munch (42 Minn. 342). 354. Viser v. Bertrand (14Ark.267).96. Von Hoffman v. Quincy (4 Wall. 535). 366. Vulcan Powder Co. v. Hercules Powder Co. (96 Cal. 510; 31 Pac. Rep. 581), 225, 243. W. Wabash, etc. R. Co. v. Black (U 111. App. 465). 92. Wabash R. Co. v. Illinois (118 U. S. 557; 7 Sup. Ct. Rep. 4). 590. Wadleigh V. Oilman (12 Me. 403; 28 Am. Dec. 188). 455. Wagner V. Phillips (51 Mo. 117). 249. 250. Wainwriglit v. Bridges (19 La. Ann. 234). 48. Wales Ry. Co. v. Redmond (10 Com. B (X.S.) 674). 522. Waldo V.Martin (4 Barn. & C. 319). 100. .577. Walker v. City of Cincinnati (21 Ohio St. 14), 466. Walker V. Cronin (107 Mass. 555, .564), 228. 301. 349. 351. Walker v. Dncross (25 La. Ann. 257). 48. Walker v. Jameson (140 Ind. 591), 401. Wall V. State (23 Ind. 150), 501. Wallis V. D.iy ^2 Mees. & W. 273 976). 23. 24, 118. TAHLK OF CASES. Ixvii [The references are to paxecj Wally V. Kennedy (2 Yer Gill & J. 349), 102. Ward V. Vosbnrgh (31 Fed. Rep. 12, 15), 279. Wartield v. Booth (33 Md.G3). 124, 132, 184. 215,219. Wannel v. ChainlnMlain (1 Str. (575), 120. Watch Case Mfg. Co. v. E. Howard Watch &, Clock Co. ((56 Fed. Rep. (537; 14 C. C. A. 14). 546. Waterbury v. Newton (50 X. J. E(]. 534). 455. Waterhoiise v. Cornet (55 Fed. 429, 452), 264, 281. Webb V. Allington (27 Mo. App. 5.59). 1,">2. Webb V. Ridgely (38 Md. 3(54), 583. Webb V. Rice (6 Hill, 221). 501. Webber V. niunt (19 Wend. 188), 79. Webber v. Virginia ( 103 U. S. 344), 452. Webster v. I)enni«;on (25 Vt. 493), 249. Webster V. Dillon (:{ .hir. (S . S.) 432). 194. Webster v. French (11 111. 254. 208) , 252. Webster v. Sturges (7 111. A|»p. 500), 272. Webster's Telephone Case (17 Neb. 12(5, 134), 432, 44(i. Wedderburn v. Wedderbiirn (22 Beav. 84, 104). 213. Weed V. Black (2 :^lac.\rthiir. 208), 00. Weeks v. Hill (38 N. H. 199), 97. Wiel V. Ricord (24 N. .1. Eq. 1(59), 401. Welch V. rhillips. etc. Windmill Co. (89 Tex. 653; 30 S. W. Rep. 71), 242. Wellington v. Small (3 Ciish. 145), 242. Wells V. Atlanta (43 Ga. (57), 380. Rep. 149. 1.57, 1.58), 334, 337, Wells v. Foster (8 M. it W. 149), 339. Watertown v. Mayo (109 Mass. 315, 317), 409. Watertown Thermometer Co. v. Pool (51 Hun, 1.57; 4 N. Y. Siipl.861), 132. Washburn v. Dosch ((58 Wis. 43(5, 104. Wells V. McGe.och (71 Wis. 19(5; 35 N. W. Rep. 7(59), 272. Wells V. Steam Navigation Co. (8 N. Y. 375). 92. Welsh V. Pittsburgh, etc. li.R.Co. (10 Ohio St. (55). 88, 93. 440; 32 N. W. Rep. .551). 132, Werthcimer v. Pa. Ry. Co. (3 .\m. 139.207. Watson V. Williams (30 Miss. 331, 341), 715. ct Eng. R. R. Cas. 279; 1 Fed. Rep. 232; 17 Bhitchf. C. C. 421). 333. Watroiis V. Allen (57 Mich. 302; 24 West v. Camden (135 U. S. 507; 10 N. W. Rep. 104), 1.58, Sup. Ct. Rep. 838). .577. Ixviii TABLE OF CASES. [The references Westcott V. Fargo (01 X. Y. 542), ; 92. Western Di.st. Warehouse Co. v. Hobson (90 Ky. 550; 29 S. W. Rep. 308), 218. Western, etc. Assn. v. Starkey (84 Mich. 7G; 47 N. W. Rep. (504), 219. Western Xevvs Co. v. Witniarch (33 Kiin. 510; Pac. Rep. 7SG), 235. Western R. Co. v. Harwell ('.)1 Ala. 340; 8 So. Rep. G49), 92. Western Saving Fund Society v. City of I'hiladclphia (31 Pa. St. 175, 183, 18.5), .381, 382. Western Union Tel. Co. v. Ameri- can, etc. Co. r9Biss.72; 65 Ga. 100). 222, 470. ,541. Western Union Tel. Co. v. Atlantic & Pacific States Tel. Co. (5 Neb. 102, 109), 442. Western Union Tel. Co. v. Burling- ton, etc. R. Co. (11 Fed. Rep. 1),149. Western Union Tel. Co. v. Balto., etc. Tel. Co. (23 Fed. Rep. 12). 222. Western Union Tel. Co. v. B. & S. W. Ry. Co. (3 McCrary, 130), 222. Western Union Tel. Co. v. Jones (95 Ind. 228), 92. Western Union Tel. Co. v. Los Angeles Electric Co. (76 Fed. Rep. 178). 443. Western Union Tel. Co. v. National Tel. Co. (19 Fed. Rep. (KJO), 222. AVestern Union Tel. Co. v. New York (3S Fed. Rep. 5.52), 437. Western Union Tel. Co. v. Pendle- ton (122 U. S. 347; 18 Am. & Fng. Corp. Cas. 18), 437, 441, 452. Western I'nion Tel. Co. v. Rey- nolds (79 Va. 173), 440. AVestern Union 'J'el. Co. v. Scircle (103 Ind. 227), 92. are to pages.] Western Woodenware Assn. v. Starkey (84 Mich. 76; 47 N. W. Rep. 604), 210. West River Bridge Co. v. Dix (16 Vt. 466), 369. West Virginia Transfer Co. v. Ohio River Pipe Line Co. (22 W. Va. 600). 207. 222. 470. .542. Whatley v. Hughes (53 Miss. 268), 102. Wheaton v. Ansley (71 Ga. 35), 97. Wheeler v. McDermitt (36 111. App. 179), 272. Wheeler v. S. F. & A. Ry. Co. (31 Cal.46).522. Wheeling Bridge v. Wheeling & B. Bridge Co. (34 W. Va. 1.55), 400. Wheelock v. Looney (15 N. Y. Wkly. Dig. 126), 102. Whelchel v. State (76 Ga. 644, 648), 702. Whitaker v. Howe (3 Beav. 383. 384), 129, 136, 188, 189, 212, 219. Whitchurch V. Hide (2 Atk. 391). 376. White V. Barber (123 U. S. 392), 272. White V. Bullock (4 Abb. App. Dec. 578), 102. White v. Buss (3 Cush. 449), 148. White v. Howard (38 Conn. 342), 501. White v. Railroad Co. (135 Mass. 216), 95. White River T. Co. v. Vermont C. R. Co. (21 Vt. .590). 405. White V. Fire Co. (52 X. .1. Kq. 75), 579. Whitecar v. Michenor (37 X. J. Ecj. 6), 2.56, 302. Whitefield v. S. K. Ry. Co. (E. B. & E. 115). 236. Whitesides V. Hunt (97 Ind. 191; 49 Am. Rep. 441). 264. VVhitinore v. Fourth Cong. Soc. (2 Gray. 3iHi). 256. TABLE OF CASES. IXIX I The references are to pages.] Whitney v. Slayton (40 Me. 224, 231), 110, 121, 129. 132, 219. Whitney v. Union R. Co. (11 jray, 359), lo5, ir)G, l.")9. VVhittaker v. Howe (3 Beav. 383), 24, 2.'), 2l>. Whittenton Mills v. Upton (10 Williams v. Montgomery (148 N. Y. 519. 525; 118 Hun, 4U5). .-)(5n. 561. Williams v. Tiedman (G Mo. .App. 2(i9). 2(>4, 209. Williams v. Turner (7 Ga. 348), 392. Gray, 582, 595, 590), 510. 520, ^Williams v. Williams (3 Meriv. 157). 103. Williams v. Woodman (8 Pick. 77). 94. Williamson v. Chieaj^o. K. I. & Tac. Ry. Co. (53 Iowa, 120; 30 Am. Rep. 200), 84. Williamson v.*X. J. So. Ry. Co. (20 X. J. E(i. 398), 4S2. Willis V. Beard (0 Ind. 200), 148. Willis v. Jones (42 Md. 422), 102. 522. Wibert v. X. Y., etc. Ry. Co. (12 X. Y. 245), 331. Wichita, etc. R. Co. v. Koch (47 Kan. 753; 28 Pac. Rep. 1013), 92. Wicks V. Hatch (02 X. Y. 535), 283. Wick China Co. v. Bunn (104 Pa. St. 449), 323. Wickens v. Evans (3 Youngest Willis v. Halliburton (25 Ark. 173), •lervis. 318), 124. 48. Widoe V. Webb (20 Ohio St. 431), , Willoughby v. Chicago, J. R. i"c U. S. (50 X. J. Ec]. (i.-)0: 25 Atl. Rep, 277), 587. Wilstach V. Hawkins (14 Ind. 541). . 502. Winebrinner v. Weisiger (3 T. B. Mon. 32). 51. Winpenny v. French (18 Ohio St. 409. 475). 07. Winsmore v. Greenbank (Willes. 577). 349. Winsor Coal Co. v. Chicago, etc. R. Co. (.52 Fed. Rej). 710). 590. Wis. Cent. Ry. Co. v. Taylor Co. (52 Wis. 77; 1 Am. it Kng. Ry. Cas. 532), 423. Wolfe V. Frost (4 .Sandf. (h. 72), 150. Wolfe V. Matthews (L. R. 21 Ch. D. 194), 333. 148. Wiggins Ferry Co. v. East St. Louis (107 U. S. 30.5), 399. Wilbur V. Howe (8 Johns. 444), 243. Wildey v. Collin (7 Md. 273, 278), 02, 75. Wilder v. Chicago, etc. R. Co. (70 Mich. 382), 431. Wilder v. McKee (111 Pa. St. 335), 228. Wiley V. Baumgardner (97 Ind. 0(i, 09; 49 Am. Rep. 427). 115, 127, 129. 18'.». Wilkins v. State (113 Ind. 514), 450. Wilkinson v. Colley (104 Pa. St. 35; 30 Atl. Rep. 280), 184. Wilkinson v. Coot (44 Miss. 307), 48. Willemin v. Baleson (03 Mich. Wood v. Bowron (L. R. 2 (^ B. 309). 98. 21), 345. Williams V. Biilliuore ^37 I.. .1. < li. Wood v. McCann (0 Dana. 306, 401). 51. 309). 50. Williams v. Ger. Mut. Fire Ins. Wood v. Humphrey (114 Mass. Co. ((i8 111. 387), 427. 1><5), 95. Williams v. Johnson (2 Bosw. 1), Woodruff v. Berry (40 Ark. 251 172. 208), 251. Ixx TABLE OF CASES. [The references Woodruff V. Dubuque (30 Fed. I Rep. 91). 560. 5(11, 583. ' Woodruff V. Kailioad Co. (30 Fed. Kcp. 91), 582. Woods V. Hart (70 N. AV. Rep. 53), 209. Woodstock Iron Co. v. Richmond & D. Extension Co. (129 U. S. 643; 9 Sup. Ct. Rep. 402), 52, 55, 60, 470. Woodworth v. Bennett (43 X. Y. 273; 3 Am. Rep. 706). 249. Woodworth v. Wentworth (133 Mass. 309), 577. Worcester v. Ry. Corp. (4 Mete. 564). 466, 467. Wortman v. Kleinschmidt (12 Mont. 316). 430. Woodman v. Philadelphia (33 Pa. St. 202), 455. Wreford V. People (14 Mich. 41). 401. Wright V. Allen (2 Tex. l.")8), 697. Wright V. Crabbs (78 Ind. 487), 274. Wright V. Dunhani (13 Mich. 414), 427. Wright V. Nagle (101 U. S. 791), 369. are to pages.] Wright V. Rider (36 Cal. 342, 347), 115, 129. 207. 565. Wright V. Rindskopf (43 Wis. 344), 79, 97. Y. Yerkes V. Salmon (11 Ilun, 471), 279. York Teleph. Co. v. Keesey (5 Pa. Dist. Rep. 366), 446. Young V. Timmins (1 Tyrw. 226), 23, 118, 119. Z. Zabriskie v. C, C. & C. Ry. Co. (23 How. 381), 501. Zabriskie v. Hackensack & X. Y. R. Co. (18 X.J. Eq. 178), 710. Zanesville v. Gas Light Co. (47 Ohio, 1). 432. Zeisweiss v. James (63 Pa. St. 465, 471), 54. Ziegler v. South., etc. Ry. Co. (58 Ala. 594), 431. Zimmer v. N. Y. Cent., etc. R. Co. (137 X. Y. 460), 93. Zylstra v. Charleston (1 Bail. 382), 401. MONOPOLIES AND INDUSTRIAL TRUSTS. MONOPOLIES AND INDUSTRIAL TRUSTS. INTRODUCTION. THE ORIGIN AXD PROGRESS OF INDUSTRIAL "TRUSTS. 1. A Recent Development. 2. Origin of the Term. 3. A Wider Signiticance. 4. Some Early Illustrations. f>. Early English Monopolies. G. Statutory Enactments. 7. The Doctrine Modified. 8. An Historical Review. § 9. Sustained by Popular Senti- ment. 10. The American Doctrine. 11. The Adverse Contention. 12. Labor Organizations. 13. Popular Sentiment and Pub- lic Policy. § 1. A Recent Developinont. — C'oinhiiiatioiis in the form of business (H* trading and corporate "trusts'" arc a product of niodoni enterprise and progress. The idea under which they came into l)eing and have attained tlieir present proportions is not new. It is as ohl as civiii/.atiou, if not as old as the race. Before Greece and Konie, S(>h)mon, King of Israel, said: "He that withhohleth corn, the peo- ple shall curse him ; l)ut blessing shall l)e upon the head of him that selleth it."' It is apparent that even at this early (lav the thrifty Hebrew was familiar with the nxxlern de- vices for increasing the price of bread, and it is e(|ually apparent that, in the exeeution of schemes of this charac- ter, he was regarded, both by his countrymen and by the great monarch, with little favor. The motives which 1 Proverbs, 11 :2G. see also .Fob, 21):11-17; Amos, 8:4-10. 2 INTRODUCTION. [§ 2. l)i()ini)l to devices of this character have their springs in that corrupt inclination of human nature, under which men, in all ages, have sought to advance their own })ecuniarv in- terests by taking advantage of the necessities of their fel- lows. But while the motives and the ends sought in schemes of this character are not original with modern tinanciers, the capitalists of the later decades of the nine- teenth century have outstripped all the generations of the l)ast in devising new methods for the accomi)lishment of their purposes. And while their capacity in this direction may be of a higher order than that of the great financiers of earlier periods, the degree of their success is attril)uta- ble, doubtless, to the industrial conditions which are peculiar to the i)resent age. What they have accom})lished would not have been possible at any earlier period. § 2. Origin of the Term. — The term "trust," as a desig- nation of business or trading and corporate combinations, was first employed by the Standard Oil Trust. As em- })loyed by this organization it was a name, not for a cor- })orate ))ody, in the ordinary sense of that term, but for a business association of a new and })eculiar char- acter. The compact which was the charter or bond of the Standard Oil Trust was an ao;reement between the in- dividuals who constitute the association. Under this agree- ment stockholders in cori)orati()ns engaged in this branch of l)usiness placed their stock in the hands of trustees, for which they received the trust certificates of the new organi- zation. The individuals who held the stock constituted the association, and chose the trustees, each stockholder casting votes proportionate to the amount of his stock. As in the ordinary trust, the trustees hold the legal title to the stock and elect the officers, not only of the association, but, as well, of the coi'porat ions ])y which the stock was issued. They control the entire business. They receive the entire income in the form of dividends on the stock of the cor- porations, and pay the dividends on the stock certificates. The purpose of the "trust" is to reduce the cost of pro- duction, to prevent c()mp(>tition and to regulate the ])ricc of §^^] INTKOniCTKIN, 3 their products. Another form of "trust" is that of ;iu uu- int-orporated association of the nature of a joint stociv coni- })any, and still another is an organization in which a cor- l)()ration becomes the trustee of a "trust," consistiiiu: of a uuion of other corporations. In this oriranization the cor- poration which is vested with trustee powers holds the legal title to the co-partnership property.^ 1 For the various aurreeiiients upon which the Standard Oil Trust is based, see State ex 7-el. V. Standard Oil Co.. 49 Ohio St. 137. '"That the nature of the agreement is such as to pre- clude the defendant from becoming a party to it. is, we think, too clear to require much consideration by us. In the first place, whether the agreement should be regarded as amounting to a partnership be- tween the several companies, lim- ited partnerships and individuals, who are parties to it, it is clear that its observance must subject the de- lendant to a control inconsistent with its character as a corporation. Under this agreement, all but seven of the shares of the capital stock of the company have been transferred by the real owners to the trustees of the trust, who hold them in trust for such owners; and l)eing en- joined by the terms of the agree- ment to endeavor to have "the affairs' of the several companies managed in a manner most con- ducive to the interest of tiie holders of the trust certificates issued by the trust, have the right, in virtue of their apparent legal ownership, and by the terms of the agreement, to select such directors of the com- pany as they may see tit; nay, more, may, in fact, select them- selves. The law requires that a corporation should be controlled and managed bv its directors in tbe interest of its own stockholders, and conformable to the purpose for which it was created by the laws of its State. By this agreement, in- directly it is true, but none the less effectually, the defendant is con- trolled and managed by the Stand- ard Oil Trust, an association with its principal place of business in New York City, and organized for a purpose contrary to the policy of our laws. Its object was to estab- lish a virtual monopoly of the busi- ness of producing petroleum, and of manufacturing, refining and dealing in it, and all its products, throughout the entire country, and by which it might not merely con- trol the production, but the price at its pleasure. All such contracts are contrary to the policy of our State and void. -The word "trust," says Mr. Cook, -was first used to mean an agreeuient between many stockholders in many corjxirations to place all their stock in tlie hands of trustees, and to receive therefor trust certificates from the trustees. The trustees own the stock, vote it, elect the ofllcers of the various cor- porations, control tlie business, re- ceive all the dividends on the stock, and use all these dividends to pay dividends on the trust certificates. Their lruste«'8 are periodically elected by the trust certificate holders. The purpose of the trust is to control prices, prevent com- petition, and cheapen the cost of 4 INTRODUCTION. [§§ 3-4. § 3. A Wider Significance. — In its later use the term "trust" has ac(]uired a broader and more general signitica- tion than that above given. It is used to dcsijjnate anv corporation, association or other combination, the object of which is to create a inonopol}', either complete or partial, with a view to increasing prices by suppressing competition and obtaining control of the market. It is the claim of combinations of this character, as a rule, that the effect of such "trusts" is to increase the profit of production with- out an increase of prices, and that, as a direct and necessary result, the public receives a benefit from it. In many in- stances there is an arrangement between individuals, firms or corporations for the purpose of controlling the nuirket and regulating prices, while the business is continued as it was originally established. Where the object is to maintain prices by limiting the production, a part of the individuals or companies included in the association suspend or close their business operations, and in consideration share the profits of the concerns that continue. Arrangements of this nature, while popularly denominated "trusts," are, strictly and properly, contracts in restraint of trade. § 4. Some Early Illustrations. — "Trusts" of the char- acter above noticed are not of recent origin. Combinations for increasing or maintaining prices make their appearance under some very ancient forms of civilization. Of the financiering and of the business methods of Assyria and of Egypt, we know little more than is inferable from the inclinations of fallen human nature. But in this form of industrial progress Greece and Rome were no moan rivals of the originators of the modern "trust." One of the prob- lems with which the governments of that period were con- fronted, was that of the equitable method of suppressing combinations for the control of production and of prices. An illustration of the summary manner in which this class of financiers were some times treated is presented by the following translation of an edict of Zono, Emperor of the production.' " State ex rel. v. 185. See also Cook on Stock and Standard Oil Co., 49 Ohio St. 137. Stockholders, § 503a. §4,] INTRODUCTION. 5 East, issued to the Pnvloriun Prefect of Constantinople, A. D. 483: "We command that no one may presume to exercise a monopoly of any kind of clothiiiir, or of lish, or of any other thinir servincr for food, or for any other use, whatever its nature inav l)e, either of his own authority, or under a rescript of an cinpcror ah"cad\' procured, or that may hereafter he })rocured, or under an Imperial decree, or under a rescript signed by Our ^Majesty ; nor may any per- sons combine or agree in unlawful meetings, that different kinds of merchandise may iu)t be sold at a less i)rice than they may have agreed upon among themselves. Workmen and contractors for buildings, and all who ])ractice other professions, and contractors for baths, are entirely pro- hibited from agreeing together that no one nuiy complete a work contracted for by another, or that a person may pre- vent one who has contracted for a work from tinishing it; full liberty is given to any one to finish a work begun and abandoned by another without a])prehensi{)n of loss, and to denounce all acts of this kind without fear aiul without costs, and if any one shall j)resume to practice a monopoly, let his property be forfeited and himself condemned to per- petual exile. And in regard to the principals of other pro- fessions, if they shall venture in the future to fix a price upon their merchandise, and to biiul themselves by agree- ments not to sell at a lower i)rice, let them be condemned to pay forty })()unds of gold. Your court shall be con- demned to pay fifty pounds of gold if it shall happen, through avarice, negligence, or any other misconduct, the provisions of this salutary ionstitution for the {)rt)hi- bition of monopolies and agreements among the differ- ent bodies of merchants, shall not be carried into effect."'' This form of "trust" became a >ul)ject of legislation in Kngland at an early |)erio(l. In tin- oth & (ith of Edward VI.. we tind "An Act agaiii>t Kegrators,^ Fore- 'Code IV., 59. The foregoini; - "Regrating. In old English tiiinsliitions of this edict is by A. law. the offense of buying or get- 11. Marsh. Q. C., and tirst appeared ting into one's hands at a fair or in S Cimadian Law Times, 290, 3(K1. market any provisions, corn, or See same also in 23 .Vm. L. Rev.2(jl. other dead victual, with the inten- INTRODUCTION. [§4. stallers,' iiiid Iiiiri-osstTs.'"'^ The first six sections of this act arc as f()lh)\vs: "Albeit divers good statutes here- tofore have been made against forestallers of merchan- dises and victuals, yet for that good laws and statutes against regrators and ingrossers of the same things have not been heretofore sufficiently made and provided, and also for that it halh not been i)erfectly known what })ers()n should be taken for a forestaller, regrator or ingrosser, the said statutes have not taken good effect, according to the minds of the nuikers thereof: Therefore I)e it enacted and declared by the King, our Sovereign Lord, with the assent of the Lords, spiritual and temporal, and the commons in this present parliament as- sembled, and by the authority of the same, that whatsoever person or persons, that after the first day of May next com- ing shall buy or cause to be bought any merchandise, victual, or any other thing whatsoever, coming by land or by water toward any market or fair to be sold in the same, or coming toward any city, port, haven, creek or road of tion of selling the same again in the same fair or market, or in some other within four miles thereof, at a higher price. The offender was termed a regrator."' Black. Law Dictionary. "Regrating. In crim- inal law. every practice or devise, by act. conspiracy, words or news, to enhance the price of victual or other merchandise, is so denomi- nated." Bouvier, Law Diction- ary. ' "Forestalling tlic iiiarkt-t. The actof buying or contracting for any mercliandise or provision on its way to the market with the inten- tion of selling it again at a higher price; or the dissuading persons from bringing their goods or pro- visions there; or persuading them to enliance the price when there. 4 Bhickstone's ( 'omm. ir)8. This was formerly an indictable offense, but is now abolished by St. 7 & 8 Vict., chap. 24." Black. Law Dictionary. See also Bouvier. tit. Forej-talling the ]\Iarket. 2 "Engross. In criminal law. to buy up such large quantities of any article as to obtain a monopoly of it for the purpose of selling at an unreasonable price. The tendency of modern English law is very de- cidedly to restrict the application of the law against engrossing; and it is very doubtful if it applies at all. except to obtaining a monopoly of provisions. 1 Piast. 143. And now the common law offense of the total engrossing of any commodity is abolished by St. 7 & 8 Vict., chap. 24. Merely buying for the purpose of selling again is not necessarily engrossing. 14 East. 400; If) East, oil. See 4 Blackstone Comm. IoOm, for the law upon this suljject." Bouvier. Law Diction- ary. •i.] INTRODUCTION. 7 this rciiliu or \\';iK's. from ;inv parts heNond the sea to lie sold, or make any hariraiii, contract or pi'omisc foi- the having or buyinj; of the same, or any part thereof, >o cominiJ: as is aforesaid, before the said merchandise, vict- uals, or other thiuus, shall he in the market, fair, cit\', i)ort, haven, creek or road, ready to be sold; or shall make any motion by word, letter, messnire or otherwise, to any per- son or persons, for the inhancini!: of the price or dearer sellinir of any thiuLi' or thin«rs above mentioned, or else dis- suade, move or stir any person or persons cominij to the market or the fair, to abstain or forbear to bring or convey any of the things above rehearsed, to any market, fair, city, port, haven, creek or road, to be sold, as is aforesaid, shall be deemed taken and adjudged a forestaller. II. Further, be it enacted and declared by the authority aforesaid: That whatsoever person or persons, that after the said tirst day of May shall l)y any means regrate, ol)tain, or get into his or their hands or possession, in any fair or market, any corn, wine, fish, l)utter, cheese, candles, tallow, sheep, lambs, calves, swine, pigs, geese, capons, hens, chickens, pigeons, covies or other dead victual whatsoever, that shall be brought to any fair or market within this realm or A\'ales to be sold, and do -^ell the same again in any fair or niai-ket holden or kept in the same place, or in any other fair or market within four miles thereof, shall be accej)ted, reputed and taken for a regrator or regrators. 111. And lie it also enacted and declared by the authority aforesaid, that what- soever ])erson or persons, that after the said tirst day of Mav shall ingross or get into lii'> or their hands by buying, contracting or promise taking, other than by demi>e. grant, or lease of land oi' title, any corn growing in the tield, or any other corn or grain, butter, cheese, fish, <»r other dead victual whatsoever, within the realm of l-jigland. to the in- tent to sell the same again, shall be accepted, reputi'd and taken for an unlawful ingrosser or ingrossers. I\". And if anv |)ers()n oi* jx'rsons shall at any lime aft<'r the said first (lav td' Mav offt'ud in any of the things before recited, and beins: thereof ring great distress upon the in- habitants of many parts of this kingdom, and in particular upon those of the cities of London and Westminster; be it therefore en- acted by the King's most excellent majesty. Ity and with the advice and consent of the Lords, spiritual and temporal, and commons in this present parliament assembled, and by the authority of the same, that an act made in the third and fourth year of King Edward the Sixth, entitled an act for the buying and selling of butter and cheese; and also an act made in the fifth and sixth year of King Edward the Sixth, entitled an act against re- grators. forestallers and engrossers, and also an act made in the third year of Phillip and Mary, entitled an act for keeping milch kine. and for breeding and rearing of calves: and also an act made in the fifth year of Queen Elizabeth, entitled an act touching badgers of corn and drovers of cattle to be licensed ; and also an act made in the fifteenth year of King Charles the Second, §5.] INTRODUCTION. § 5. Early Eni^rlisli Monopolitss. — II ;i|»|)c;irs tli:it :it (he time of Edward VI., and dmiiii:- the rciiriis hy wliicli his was iinniediatoly followed, tlu' sttvcrcii^ii was acciistoiiu'd to uraiit special i)i-ivilei2;es to his favorites, which constituted a practical monopoly. A nH)nopol\' is dctincd l»\ Lord ("oke, as follows: "A monopoly is an institution or allowance bv the king by his grant, commission or otherwise to any per- son or persons, l)odies ])olitic or eori)orate, of or for the sole buying, selling, making, working, or using of an\ thing, whereby any ]K>rson or |)ers()ns, bodies politic or corpoi-ate. entitUnl an act to prevent the sell- ing; of live, fat cattle by butchers, and so much of an act made in the fifth year of Queen Anne, entitled an act for continuing the laws therein mentioned relating to the poor, and to the buying and selling of cattle in Sniithfield, and for sup- pressing of piracy, as relates to butchers selling cattle alive or dead witliin the cities of London and Westminster, or within ten miles thereof; and all the acts made for the better enforcement of the same being detrimental to the supply of the laboring and manufacturing poor of this kingdom shall be. and the same are hereby declared to lie, repealed. And be it further enacted l)y the authority aforesaid, that all informations, indictments, suits or prosecutions, already commenced, for the inflicting any punishment. or for the recovery of any fine, penalty or forfeiture under the said former acts, or any of them, shall cease and determine, and no further proceedings shall be had thereon; and tliat no information, indict- ment, suit or prosecution shall be commenced or prosecuted against any person or persons whatsoever, imder or l)y virtue of the said acts, or any of them; l)ut that all such proceedings shall be void and of no effect, any law, statute or usage to the contrary notwithstanding." In this connection, see the following statute of 2S George III., chap. 53, § II : And whereas, a certain num- ber of coal buyers have formed themselves into a society and held private meetings at the coal ex- change in the city of London, pro- fessing to make regulations for the purpose of carrying on the trade in coals, which regulations may have a tendency to prevent the said trade from being free and open: be it further enacted by the autliority aforesaid, that from and after the first of June, one thousand seven liundred and eighty-eight, any number of persons united in cove- nants or partnerships, or in any way whatsoever, consisting of more than five persons, for the purchas- ing of coals for sale, or for making regulations with respect to the manner of carrying on tlie said trade in coals, shall be deemed and adjudged lo be an tmlawful oora- ))ination to advance the price of coals, and every person concerned therein sliall l»e liat)le to be pim- islied by tl>e indictment or informa- tion for tlie same in His Majesty's Court of King's Hench at West- minster. 10 INTliODUCTIOX. [§ 5- are sought to he restrained of any freedom or liberty that the}^ had before, or hindered in their lawful trade. "^ During the reign of Elizabeth monopolies of this character were granted with great frequency. Favors in this direc- tion were dispensed to her courtiers with a lavish hand. This feature of her administration is described by Hume, as follows: "The active reign of Elizabeth had enabled many persons to distinguish themselves in civil and military employments; and the queen, who was not able from her revenue to give them any rewards proportioned to their services, has made use of an expedient which had been em- ployed l)y her predecessors, but which had never been car- ried to such an extreme as under her administration. She granted her servants and courtiers })atents for m()n()i)olies, and these patents the}- sold to otliers, who were thereby enabled to raise commodities to what price the}^ pleased, and who put invincible restraints upon all commerce, industry and emulation in the arts. It is astonishing to con- sider the number and importance of those commodities which were thus assigned over to patentees. Currants, salt, iron, powder, cards, calfskins, fells, })()uldavies, ox- shinbones, train oil, lists of cloth, potashes, anise-seeds, vinegar, sea coals, steel, accjua vitffi, brushes, pots, bottles, saltpetre, lead, accidences, oil, calamine stone, oil of blub- ber, glasses, paper, starch, tin, sulphur, new drajierv, dried pilchards, transportation of iron ordnance, of beer, of horn, of leather, inqjortation of Spanish wool, of Irish yarn. These are but a i)art of the commodities which had been appropriated to monopolists. AA'heii this list was read in the house, a meinher cried : 'Is not bread in the number?' 'Bread!' said every one with astonishment. 'Yes, I assure you,' replied he, 'if affairs go on at this rate we shall have bread reduced to a monopoly before next parliament.' These iii(>n()i)()list> were so exorbitant in their demands th;il in some i)laces they raised the price of salt from sixteen ]>enee a l)iishel to fourteen or fifteen shillings. Such high profits naturalK' Ix-g.-it intruders iqxjii their coiuiiierci' : and in 1 Coke. :{ Inst. isl. §5.] INTRODUCTION. 11 order to secure Iheinst'lves ;ii:;iinst eiK roach iiicnt, the patentees were armed with hiiifh and arbitrary powers from the council, l)y which they were enabled to oppress the people at })leasure, and to exact money from such as they thought proper to accuse of interferinir with their }):itcnl. The patentees of saltpetre, havimr the power of enleriuir into every house, and of committing what havoc they pleased in stables, cellars or wherever they suspected salt- petre might be gathered, commonly extorted money from those who desired to free themselves from this damage or trouble. And while all domestic intercourse was thus re- stniincd, lest any scoi)e should remain for industry, almost every species of foreign commerce was confined to exclu sive companies, who bought and sold at any })rice that they themselves thought proper to offer or exact. "^ It will be observed that monopolies of this character were created, not by a combination of individuals, or of companies, but by royal patents. The legality of such patents was subse- quently questioned, and in 1()02, in the case of Darcy v. Allen,- they were declared void. In this case the court set forth the evils of monopolies in the following jiropositions, viz.: First. "The price of the same commodity will l)e raised, for he who has the sole selling of any commodity, may and will make the price as he pleases. * « * 'y\^Q second incident to a monopoly is, that after the iiiouo])oJy granted the commodity is not so good and iiicrchantaith' as it was before: for the patentee, having the sole trade, re- gards oidy his private benefit, and not the commonwealth. Third. It tends to the impoverishment of divers artificers and other>, who before, by the lal)or of theii- hands in their art or trade, had maintained themselves and their families, who now will of necessity l)e constrained to live in idleness and beggary."'^ ' Hiiiiic. History of Knijland is entitlod. ••'I'lic ('a>-f' <>f tin- Mo- (Iluiper's Ed.), 33r)-33(). nopolit's."" 'Vhv following is the 'Darcy v. Allen, 11 Coke, S4; i^tatciiu'nt of the case as it api)oars S. C, Noy, 173. in the (|iiaint lan<;na>re of tlir an- << Darcy V. Allen. 11 Coke, 84, 8G; i-ient reports, to-wit: --Edward s. c.Noy, 173. This case in Coke Darcy. Escinire. a o:rooni of the 12 IXTIiODUCTION, [§(>. § C. Statutory Enactments. — The position of the court in the case above noticed was subsequently confirmed by statute. An Act of 1(523, among other things, provided "tliat all inon()))()lies, and all conimissions, grants, licenses, {iriTv chamber to Queen Elizabeth, brought an action on the ease against T. Allein, haberdasher of London, and declared that Queen Elizabeth. 13 Junii Anno. 30 Eliz., intending that her subjects being able men to exercise husbandry, should apply themselves thereunto, and that they should not employ themselves in making playing cards, which had not been any ancient manual occupation within this realm, and that by making such a multitude of cards, card playing was become more frequent, and especially among servants and apprentices, and poor artificers; and to the end her subjects might employ themselves to more lawful and necessary trades, by her letters patent under the great seal of the same date granted to Ralph Bowles, Escjuire. full power, license and au- thority, by himself, his servants, factors and deputies, to provide and buy in any parts beyond the seas, all such playing cards as he thought good, and to import them into this realm, and to sell and utter them within the same, and that he. liis servants, factors and deputies should have and enjoy the whole trade, tratlic and merchan- dise of all playing cards; and by the same letters patent further granted, that the said Ralph Bowles, his servants, factors and de|)Uties, and none other, should have the making of playing cards within this realm, to have and to hold for twelve years; and by the same letters patent the queen charged and commanded, that no person or persons besides the said Ralph Bowles, etc.. should bring any cards within the realm during those twelve years, nor should they buy, sell or offer to be sold within the said realm, within the said term, any playingcards, nor should make or cause to be made any playing cards within the said realm, upon pain of the queen's highest displeasure and of such fine and ininisbuient as offenders, in the case of voluntary contempt, deserve. And afterwards the said queen. 11 Aug. Anno, 40 Eliz., by her letters patent reciting the former grants made to Ralph Bowles, granted the plaintiff, his executors and administrators, and their deputies, etc., the same priv- ileges, authorities and other, the said premises, for twenty-one years after the end of the former term, rendering to the queen 100 marks per annum; and further granted to him a seal to mark the cards. And further declared, that after the end of the said term of twelve years./. 30 Jjinii Anno. 42 J^liz., the plaint- iff caused to be made 400 grosses of cards for the necessary uses of the subjects, to be sold within this realm, and had expended in mak- ing them £5,000, and that the de- fendants, knowing of the said grant and prohibition in the plaintiff's letters patent, and other, the prem- ises. 15 Martii. Anno. 44 Eliz., without the (pieen's license, or the plaintiff's, etc., at Westminster, caused to be made 80 grosses of playing cards, and as well those, as 100 other grosses of playing §(;.] INTIlODrCTION, 13 c'hjirters, and letters patent heretofore iiuuU' or irranted, or horcaftt'r to bo made or irranted, to any per^^on or j)t'rson,s, l)odu's [)oliti(' or corixtratc whatsoever, (if or for the sole l)iiyiiiu;, selliui:", inakintr, workiiiir or usiuir of anythinir within this roahn, or the dominion of Wales, or of any otlier monopolies or [)ower, liberty or facnlty, to dispense with any others, or to give license or toleration to do, use or exercise anything against the tenor or purport of any law or statute; or to give or make any warrant for any su
  • t ionel<'y. Engagements of tliis sort himest contract, it ought to be between masters and servants are maintained." Ibid. 107. not injurious restraints of trade, * Chesman v. Xainby (1720). 2 Ld. but securities necessary for those Kuym. 1-1.")6 (4th Ed.), by Bayley. who are engaged in it. The effect * Clarke v. Comer (1734), Cas. t. of such contracts is to encourage llardwicke. r>3. rather than cramp theemployment " Homer v. .Vshford (1825). 'A of capital in trade .and the promo- Hing. H22. 32ti. -"But it may often lion of industry. For partial re- bappen (and the present is a strong strainls. howevrr, there must be case of it) that individual interest some consideration, otherwise they and general convenience render are impolitic and oppressive.'' engagements not to carrv on trade Ibid. 20 INTRODUCTION. [§ ^• his tiil(Mits, his industry or his c-ai)it:il. in any useful under- taking in the kin«:doni wouUl be void.' A note to Hun- locke V. Bhic'kU)\ve,^ sufficiently states the reason why a covenant does not cease to be in ofeneral restraint of trade merely because the time is limited. 'The i)rinciple,' savs the learned editor, 'on which restraints of trade, partial in point of space, have been supported, has not been ai)plied to restraints general in point of space, but partial in point of time; for that which the law does not allow is not to be tolerated because it is to last for a short time only.' A similar explanation is given by Mr. Baron Parke, in Ward v. Byrne,2 Avhere a covenant, indefinite as to the area of re- straint, but limited to nine months after the end of the covenantor's employment, was held void in law. 'When,' he says, 'a general restriction, limited only as to time, is imposed, the public are altogether losers, for that time, of the services of the individual, and do not derive any benefit whatever in return,' and looking at the authorities cited upon this sub- ject it does not appear that there is one clear authority in favor of a total restriction on trade limited only as to time.' An ambiguous expression as to limits in respect of time in the case of the Gunmakers Company v. Fell,^ is explained by Baron Parke, and is due probably to an oversight. Baron Rolfe's judgment is on the same lines as that of Baron Parke. 'Partial restrictions,' he says, 'have always left things in this state, that, wIkmi allowed, a jiortion of ' Hunlocke v. Blacklowe, 2 exactly as it did before tlie restric- Wms. Saund. (Gth Ed.) 156b. tion took place. But in this case 2 Ward V. Byrne. 5 Mees. & W. the whole of the jiublic is restrained 548, 562. "The general policy of durinf>; the period in question, and the law is against these restrictions, the only argument is, that this is to and it is only iu deference to the endure only for a short time; that convenience of the trading part of is to say, that what the law does the community that certain excep- not allow is to be tolerated because tions to the general rule have been it is of short duration. I see no allowed. These exceptions have principle in favor of such a con- always left things in this state; that, elusion: I do not think that is the when allowed, a portion of the pub- law." Rolfe. B.. in Ward v. Byrne, lie is not injured at all; that por- 5 Mees. «fc W. r)48. 503. tion of the public to which the re- ^ Gunmakers' Company v. Fell, striction does not extend remains Willes, 384, 388. § 8.] INTRODICTION. 21 the j)iil)lic is not injured ;it :ill ; that porticm of the public to which the rest i-ict ion (hx's not extend remains exaeth' as it did hff'di'e the restriction took pK-ici'. Hut in tliis case,' viz. : in a case of general restraint for a time certain, 'the whole of the public is restrained during the period in (|ue.s- tion.' Ward v. Bvrne,^ was followed in 1840 l)\ llinde v. (iray.- Chief Justice Tindal rejx'ats the proposition in Proctor V. Sargent.'^ 'Where we once hold a restriction to be unreasonable in })oint t>f s))ace, the shortness of the time for which it is imposed w ill not make it good.' The truth is that the classification which seems to distinguish restraints which are limited in })oint of space from restraints which are limited in respect of time is a cross division. The antithesis between time and space looks so plausible that some text books and more tlian one judge in the last few years have lajjsed into the mistake of supposing that it cor- responds in some wa}' to the line of cleavage upon wliich general restraints antl partial restraints are divided. 'In re- spect of space,' said Lord Camj)l)ell. in Tallis v. Tallis.^ 'there must be some limit.' Since the reign of Queen Elizabeth the common law authorities are reallv, — all of them, — one way. Scorqs of cases have proceeded on this basis; and those who dispute the rule can only do so, as it seems to me, by disregarding the judgments and opinions of an uncounted nund)er of unanimous common law judges. * * * In the history of the apj)lication to {)artial re- straints of this test, the courts of common law from time to time have l)een driven by good sense and \)\ altered social circumstances to make giadual advances in the direction of toleration and indulgence, fludges as far back possibly as the reign of Henry \'., and certaiidy during the reign of Queen Elizabeth, appear, as has been already stated, to have considered that even partial restraints of trade were uni- forndy bad in law. Hut as trade i)rogressed it was neces- ' "\V:iid V. Byrne, 5 Mees. \- W. s Proctor v. Sargent (18J0). 2 584. Man. A (i. 3H. * Hinde v. Gray, 1 Seott. X. K. < Tallis v. Tallis, 1 Ell. \- B. :WI, 123. 411. 22 INTRODUCTION. [§ 8. sarily discovered that a doctrine so riirid must be injurious to the State itself. In the same way and at about the same date, by laws which were in mere regulation of trade, came to be distinguished by the courts from those which were in unlimited restraint of it. Nevertheless, as late as the year 1()()1, in Colcgate v. Bacheler,^ the court held that it was airainst law to iJioiiibit or restrain 'any to use a lawful trade at any time or at any })lace." This severe view is recorded in a lUcluni of Justice Croke (1G13) in Rogers v. Parry ,'^ though it was repudiated by Chief Justice Coke and the re- mainder of the court. One reason for the adoption of a more elastic doctrine apjiears from a judgment delivered in Broad v. Jolyffe.-^ In London and other large towns it had become usual already for traders to let their shops and wares to their servants when they were out of their appren- ticeship, and for the servants to covenant that they would not use that trade in such a shop or in such a street. The courts, yielding to the progress of industry and commerce, finalh' decided that a man might restrain himself voluntarily and upon xaluahle consideration, from using his trade in a particular place. The oiiux, however, at this time still lay on the covenantee to show that the covenant on which he was insisting had been made for a good consideration, and that it was reasonable. The law is so expounded in Mitchell V. Reynolds,^ 'a [particular restraint is not good without just reason and consideration.' In 172(5^ the House of Lords aliirmed the doctrine and the (pialitication, and their decis- ion was followed in (Merke v. Comer,*' Davis v. M.-irsou." and Hunn v. Ciuy.'' The reason foi- favoring such partial restraints is enforced also in Homer v. A>lifor(l.'' *It may often happen." sa^"s Chief Justice Best, "tlint iii(livi(lu:il in- > Colgate V. Hatilu'lcr. Cm. Eli/.. « Gierke v. Coiner (1734). Cas. t. 872. Ilardw. r)3. 2 Rogers v. I'any. 11 Jac. 1: ' Davis v. Mason (1793). .') T. K. s. c. Biilstrode, 1315. 118. •■' Broad V. Jollyfe. Cro. .Fac. .-i!»(;. ** Hunn v. Guy (1803). 4 East. ^Mitfhell V. Reynolds (1711). I 100. r. Wins. ISl. "Homer v. Ashford (182.")). 3 "Chesinan v. Nainby. 1 liro. 1*. Hini;. 322, 32(>. C. 234: s. <•., 2 Ld. Rayiu. 145G. §8.] INTliOUlCI'ION. 23 tercst :ind ijcnoral ronveiiionce reiuU'r on aniendcul princii)les. By this date the idea wa-- fully recoirnized that all partial restraints of trade, which satisfied the conditions of the law as to reasonable- ness and orood considerations, were not an injury, l)ut a benefit to the public. Ward v. Byrne,'"' Proctor v. Sarirent," Kannie v. Irvine,*^ Mallan \'. May.'' A further proiiress in ' Young V. Tiiniirins (1831). 1 etc., in London, or any of the Tyrw. 226. towns or places in England or - Hitchcock V. Coker, G A. & E. Scotland, where the plaintiffs or 438. the defendant, on their account, 3 Wallis V. Day (1837). 2 Mees.it iniijlit liave Iteen practicing before W. 273. tluM'xpiration uf said service.' Ac- * Lcighton v. Wales (1838). 3 curding tn llic icnns of tliis cove- Mees. tt W. 545. nant. tiie defendant is proliihited * Archer v. Marsh (1837). 6 A. iV: from carrjing on his business, not E. 950. merely at such place or places as ^ Ward V. Byrne (1839), 5 Mt»s. the plaintiffs might be practicing & W. 548, 5.59. at the time of the expiration of the ' Proctor V. Sargent (1S40), 2 service, but at any place where Scott, X. K. 289. they might have been practicing ' Rannie v. Irvine (1844). 7 Man. before, tliough for even so short a & G. 9(i9. time. This covenant goes under * Mallan v. May (1S43). 11 Mees. beyond what the protection of any & W. t;53. ••The covenant is 'lliat interests of tlie plaintiffs would the defendant should not, without reasonably recjuire, and it puts into the plaintiffs' consent, carry on the their hands the power of prevent- profession of a surgeon dentist, ing the defendant from practicing 24 INTRODITTION. [§ ^. the views with which the hiw regarded jiarlial restraints was made in Taliis v. 'l\-illis.i It was there al hist resolved that the onus hiv upon the jjerson who attacked a eoveiiant in partial rotiaint of track' to (Usplace tlie considei-ation. — a ehaiiiie in the jjosition of the j)arties which is ilhistrated by the language of Chief Justice Karle in Muniford v. Gething,^ 'eontraets in partial restraint of trade are bene- fieial to the public as well as to the innnediate parties.' * * * Such is a resume of the history of the eonmion law doctrine as to restraint of trade. The first cloud upon the clear sky of the common la\v narrative conies in the ecjuity decision of Lord Langdale in Whittaker v. Howe," — a decision all the more inexplicable since it was given within three or four years of Hitchcock v. Coker,^ Wallis v. Day,^ Leighton v. Wales, •> Archer v. Marsh," Ward v. Byrne,^ Hinde v. Gray,-* and Proctor v. KSargent,^" from a careful study of which cases alone the broad doctrine of the law as I have above described it may be gathered with ])erfect ease. * * * In ISCil the case of the Leather Cloth Co. V. Lorsont^^ occurred before Vice-Chancellor James. To the soundness of the actual decision in that case of the illustrious equity lawyer who tried it I have no objection to urge, but his language seems calculated, in several passages, to confuse and not to throw light u])on our conceptions of the established common law Proctor v. Sargent. '2 Scott. \. Harris v. Parsons, 32 L. J. Ch. 247. R. 289. 3 Whittaker v. Hone (1841). 3 >' Leather Cloth Co. v. Lorsunt, Bear. 38:{. L. R. 9 Eq. 345. § 8.] INTRODUCTION. 25 the jiidirinent of Lord Laiiirduk' in Whittakcr v. Howe' * * * Some years later, in Konssillon v. Koussillon,-' Lord .lustiee (then Mr. Justiee) Fry, in one of the many strikinu- and brilliant judirments for which the profcs.-ion will loni; admire him, proclaimed his dishclief in the exist- enee of the rnle of the common law, and laid down the proposition that there is no ahsohitc doctriiu' that a coxc- nant in restraint of trade is void merely because it i> un- limited in regard to space. The (juestion in each case he held was whether the restraint extended further than was necessary for the reasonable .protection of the covenantee, and, if it did not do so, the performance of the covenant would be enforced even thouirh the restriction was unlim- ited as to space. This broad nciration of the rule ajipears to iiie to destroy the distinction (illustrated at leiiirth in Mitehel v. Keynolds),-^ which always has subsisted between general and partial restraints of trade. In destroyinsj it Lord .Justice Fry ajjpcars to me to overlook the importance of the principle which underlies the entire doctrine of the unlawfulness of ireneral restraints of trade, — that the inter- ests of the contracting' parties are not necessarily the same as the interests of the commonwealth. Rules which rest upon the foundation of j)ublic policy, not beiuir rules which belono; to the tixed or customary law, are capal)le, on proper occasion, of expansion or moditication. C'ircumstam-es may chanire and nnU^e a commercial prai-tice expedient which formerly was mischievous to connnerce. Hut it is one thing to say that an occasion has arisen upon which to adhere to the letter of the rule would be to neglect its spirit, and another to deny that the rule still exists. The dicta which Lord Justice Fry cites from Hitchcock \. Coker,^ fi-oni Tailis v, Talli>,'' and fi'oni Mallan v. May.*^ are all divta in cases of j)artial restraint, where the rea>(»n- ableness of the particular contract necessarily came under ' 'VVhittakor v. Hov\».\ 3 Heav. HS-l. < Hitchfuck v. (ukcr. <", A. iV K. 2 Roussillon v. Koussillon, L. R. 348. 14 Ch. D. 351. « Tailis v. Tailis. 1 K. & B. 3ttl. ••Mitchell V. Reynolds, 1 I'. « Mallan v. May, 11 Mees. & W. Wnos. 181. G53. 26 l\TI{()I>L'( TION. [§ ^. eonsidcrntioii. The Mcct'ssjirv i)r()tt'ction of the individual may, in siuh cases, he the proper measure of the reason- ableness of the harirain. ^^'hen Lord Justice Fry passes on to exaiiiiiie the (iiiesl ion of the existence of the common law rule, he assumes, as it appears to me, without sufficient iu>titicati()n, that c()m|)lete j)rotection of the individual is tile only reason which ouirht to lie at the root of the doc- trine. But the reasonableness of the le. trine as to these covenants laid Cas. 1. down in tbe earlier cases, but it has 2 Ward v. Byrne, 5 Moes. i>i; W. l)cen generally considered in the 548. later as well as in the earlier cases, 'Hinde v. Gray. 1 Scott, N. K. tliat a covenant not to carry on a 123. lawful trade, unlimited as to space, * Allsopp V. Wilcatcroft. L. K. 1.") is on the face of it void. * * * Eij. .50. "The (juestion in this case And the rule, if not ol)viously just, is purely legal, vi/. : as to the is at any rate simple and very con- validity of the covenant in restraint venient."' Ihid. (i4, of trade. There has been a natural ' Whittaker v. Howe, 3 Beav.383. inclination of the coints to bring ".Jones v. Lees, 1 U. «fc N. 189. within reasonable limits the doc- § i>.] INTKODICTION. 27 factiiri', 'I coiisider,' sjiys Lord .lusticc Fry in coiu'lusion, 'that tlu> c':i?;es in which an luiliinitcd proliihition has heoii spokt'ii of as void, relate oid\ to circunistances in wiiirh snoh a prohibition lias been unreasonabh'.' Is it not a truer view that the courts have never, as a rule, even enteied on the consideration of the circumstances of any pMrti( idar case where the prohibition has been unlimited as to area? In Davies v. Davies^ opposite opinions on the subject of the connnon law rule were expressed by Lord Justice Cotton and by Lord Justice Fry; but the matter did not call for decision."-' The case to which the ()})inion relates is a cause cehhre. In 18!>4 it went to the House of Lords and was afiirnied.-^ § 1>. Siistain<' Cli. lieon gradually losinff jjjiound in all D. 359. the courts. I do not think that. * Maxim-Nordenfeldt v. Xorden- between the courts of common law feldt, L. K. (1893) 1 Ch. ()30, (I.")], and equity, there has been much. ^ Nordenfeldt v. Maxim-Norden- if any, real difference of ojiinion. feldt Co., L. K. (1894) App. L'as. But I am Ijound to say that the 53."). at pajje 555, Lord Watson ob- lanujuaoje used by equity judfjes is serves: •• When the series of cases on the whole more in consonance from the earliest to the present with the commercial policy of the time are carefully considered, I country tlian some of the favorite think they will be found to record dicta of the common law courts. I the history of a protracted struggle purposely say some of the dicta. between the principle of common because I find in the opinions of honesty in private transactions on many common law judges of the the one hand, and the stern rule highest eminencea dear and lil)eral which forbade all restraints of recognition of the wider views of trade on the other. In my opin- policy which have intluenced your ion it does not admit of dispute Lordships in the decision of this that the ancient rule has had the appeal." worst of the encounter, and has 28 INTRODUCTION. [§ 10. engrossing, forestalling and regrating."' By later statutes there was an enlargement of "tiie power of eonil)inati(»n between workmen and workmen, and between master and master, for the purpose of Miaintaining and enforcing their respective intere>^ts and to remove the objection of being in restraint of trade, to which some of such combinations had been obnoxious. "^ § 1<>. The American Doctrine. — The law ou this >iil)- ject, as established and administered in England, is accepted in this country only in a general sense. As a rule it nniv be said that in the consideration of the legality of a combination or covenant ui restraint of trade, the decision will turn ui)on tlie reasonal)leness of the restraint. A court of e(iuity will inquire, not whether the restraint ex- tends to an entire State or to the nation, but whether it is a reasonable and proper protection of the party in whose favor the covenant is made, and whether it is preju- dicial to the public interest. At present there is a strong tendency to the restricting of the right of restraint. This appears from the latest decisions in ecjuity and from recent legislative enactments. In 1890 an anti-trust act was passed by the national legislature, and in most of the States anti-trust statutes have recently been enacted. In many of these enactments the penalty affixed to a violation of a statute is very severe, and in some instances an attempt to control the price of any connnodity or to limit its produc- tion is made a criminal conspiracy. The Federal statute nndvcs all contracts, combinations or conspiracies in re- straint of trade or commerce between the States, or with foreign nations, and, as well, every attempt to monopolize any ])art of such trade or commerce a crime. The follow- ing extract from the opinion of Mr. .Justice Peckham. of the United States Supreme Court, in the case of the United States v. The Trans-Missouri Freight Association, recently detided, is of interest as an indication of the trend ' 7 & 8 Vict., ebap. XXIV. 629. 630. See 34 & 35 Vict.. cliap>. 2 Mogul Steamship Co. v. Mc- 31 and 39. and 40 Vict., chap. H. Gregor, L. K. 23 Q. R. Div. 598, § 10.] INTROm'CTlON. 29 and scope of legal opinion in this country at the present time: "It is true the results of trusts or combinations of that nature may be different in different kinds of corpora- tions, and yet they all have an essential similarity and have been induced by motives of individual or cori)oratc a»rgran- dizement as against the public interest. In business or trading combinations they may even temporarily, or, per- haps, permanently, reduce the price of the article traded in or manufactured, by reducing the expense inseparable from the running of many different companies for the same pur- pose. Trade or connnerce under those circumstances may, nevertheless, be badly and unfortunately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein and who might be un- able to readjust themselves to their altered surroundings. Mere reduction in the price of the commodity dealt in might be dearly paid for by the ruin of such a class and the absorption of control over one commodity l)y an all power- ful combination of capital. In any great and extended change in the manner or method of doing business it seems to be an inevitable necessity that distress, and, perhaps, ruin, shall be its accompaniment, in regard to some of those who were engaged in the old methods. A change from stage coaches and canal boats to railroads threw at once a large nundier of men out of employment. Changes from hand labor to that of machinery, and from operating machinery by hand to the application of steam for such purpose, leave behind them, for the time, a nund)er of men who must seek other avenues of livelihood. These are mis- fortunes which seem to be the necessary accompaniment of all great industrial chanires. It takes time to effect a read- justment of imlu>trial lif«' so that those \vlio are tliiowii out of their (tld employment l)y reason of >uch changes as we have spoken of may tind opi)ortunities for labor in other de- partments than those to which they have been accustomed. It is a misfortune, but yet in such cases it seems to be the inevitable aination in restraint of trade or connnerce, when entered into by a manufacturing or trading company, such as above stated, while differing somewhat from those which nniy follow, a <-onti'act to keep up transportation rates by railroads are, ne\ crtheless, of the sanu' nature and kind, and the contracts tliemx'lves do not so far differ in 1 heir nalure that they may not all be treated alike and be con- deunied in connnon. It is entirely appropriate, generally. §n.J INTRODUCTION. 31 to subject corporations or persons engaged in trading or manufacturing to different rules from those applical)le to railroads in tlu'ir transjjortation business, but when the evil to l)e remedied is similar in both kinds of corporations, such as contracts which are un(|uestionablv in restraint of trade, we see no reason why similar rules should not be pronuil- gated in regard to both, and both l)e covered in the same statute by general language sutHciently broad to include them both. We see nothing either in contemjjoraneous history, in the legal situation at the time of the passage of the statute, in its legishitive history, or in any general difference in the nature or kind of these trading or manu- facturing companies from railroad companies, which would lead us to the conclusion that it cannot be supposed the legislature, in prohibiting the making of contracts in restraint of trade, intended to include railroads within the puiview of that act. "' § 11. The Adverse Contenthui. — The decision in the ca.-^e abt)ve noticed will serve to settle certain ([ucstions in regard to the riuht of the States to enact ant i-t rust laws. 1 United States v. 'I'rans- Mis- souri Freight Association, 1(50 U.S. 290; s.c, 17 Sup. Ct. Rep. 552. The report of tlic committee of the New Yiul< Lcirjsiatiire on the sn<;ar trust contains the fol- low in ^j: ■ There has been an enormous speculation in the cer- tificates of the trust and certificates of deposit issued by the Central Trust Company in exchanjje for the trust certificates. It was plainly one of the chief purposes of this trust to provide for the issue of these certificates, affordinj; thereby an opportunity for ijreat specula- tion in them, obviously to the ad- vantajje of the persons managing the trust, with whom was lodged full and accurate information of its plans and condition, but to the dis- advantage of the general public, who were ignorant of tiie secrets of the trust, its methods and plans, and of the actual value of the cer- tificates in which they dealt. The issue of S50.0()().000 of certificates was amply sufficient for a specula- tion of many hundreds of millions of dollars. It may well be (jues- tioned whether the trust was or- ganized more for the purpose of enormous speculations than for the advantages to be obtained ijy a coml)inaiion of refineries in the legitimate refining of sugar. That the chief object of the trust was for the purpose of speculation is cjuite plainly siiown t>y the iiifiated value placed upon the property of the constituent corporations upon which certificates were issued. Had the aim been solely a more economical and profitable refining 32 INTRODUCTION. [§11- which, ill their opcnitioii, oxtciid to interstate commerce. Some (juestioiis on points of this eharaeter have recently come before the Federal conrts, and it has heen the con- tention (^f the advocates of the ri^rhts of the irreat corpo- rations that the mixh-rn English rule nuist he upheld bv the American courts. The following extract from a leading law review illustrates this contention: "If some of the modern opinions of judges in trust cases are to be followed, we are relegated at once, by the statutes referred to, to the dark ages, when business was necessarily carried on in defi- ance of law. For instance, in the Sugar Trust Case in the General Term ((> H. & C. L. J. 142), the court, by Judge Daniels, re-asserted the old doctrines of the common law to their fullest extent.- The combination was held to be illegal for the reason, among others, that 'it was intended to bring about and secure ulterior advantages in the way of advanced ])rortts to the associates.' Its affairs 'were to be so managed and carriinl on as to promote the ))r()tit and gain of the associates,' and 'it is no more than just to infer that the control is to be used to avoid competition and enhance prices, and in that manner, as it is the ordinary expedient to that end, promote the interest and profit of the asso- ciates.' This is a repetition of the mistake of centuries ago, that business men may not adopt methods which pro- mote their interests and profits, because their desire for profit 'may cause them to use those methods imi)roperly, and because their advantages may tend to the disadvan- tage of others. There are four centuries of experience and wisdom between that idea and the language of the judges in Mogul Steamshii) Co. v. McGregor, to-wit : that 'the in- stinct of self-advancement and self-protection is the very incentive to all trade;' that 'to say that a man is to trade fairly, but that he is to stop short at any ai't which is cal- culated to harm other tradesmen, would be a strange and im- possible counsel of perfection ;' that 'it is jjcrfectly legiti- of snojar, this result would have erties of tho constituent corpora- been ot)tained without an increase tions.*" of the capitalization of the jnoii- § 11.] INTRODUCTION. 33 matr t(» c()iiil)iiu' ciipital for all llu- mere |)iii|i(tsc> df trade for wiiicli capital iiiav, a|)ai"t from coiiihiiiat ion, Ix' Ici^iti matciv u^cd in tradt';' that Mo limit coinWiiiatioii of capital wlicu usvd for ))urpos('> of competition, would l»c only another mdjiod of attempt inijf to set l)onndai'ie> to the tides;" that "the object of ac(|nisition of uaiii is lawful and coniMienchible,' antl tlial as 'e()nn)ctitit)n exists when two or more persons seek to j)ossess or to enjoy the siinie thing it follows that the success of one nuist he the failure of another.' "' ' S. C. T. Dodd in 7 Harvard Law Review, l.")7. 165. In this connec- tion we also (juote tbe lanujuage of •Justice Wliite in the dissenting opinion in United States v. Trans- Missoiui Freight Association, 160 I'. .S. "290, 3.").5. 8pealiing of intent of the Federal anti-trust law. he says : ••The plain intention of ttie law was to protect tiie liherty of eon- tract and the freedom of trade. Will iliis intention not he frustrated hy a construction which, if it dues not destroy, at least gravely im- pairs hoth the liherty of the indi- vidual to contract and the freedom of trade? If the rule of reason no longer determines tlie right ot the individual to contract, or secures the validity of contracts upon which trade depends and results, what he- comes of th<' lil)erty of the citi/en or of the freedom of trade? Se- cured no longer by the law of rea- son all these rights become sub- ject, when (juestioned. to the mere caprit-e of judicial authority. Tints, a law in favor of freedom of <'on- iract. it seems to u>e. is so inter- preted as to gravely impair that freedom. Trogress and not reac- tion was the purposi- of tlie act of Congress. The construction now given tbe act disregards the whole current of judicial authority, and tests the right to contract by the conceptions of that right enter- tained at the time of the Year Hooks, instead of by the light of reason and the necessity of modern society. To do this violates, as I see it. the plainest conception of public policy ; for, as said by Sir G. Jesscl. M. H.. in Printing Company v. Sampson. L. K. IK Eq. 46."): -If there is one thing which more than another juiblic policy requires, it is that men of full age and com- l)ctent understanding shall have the utmost liberty of contracting, and their contracts, when entered into freely and voluntarily, shall be held sacred, and shall l)e en- forced by courts of justice." The remedy intended to be accom- plished by the act of Congress was to shield against the danger of con- tract or combination by the few against the interest of the many, and to the detriment of freedom. Tlje construction now given. I tliink, strikes down the interests of the many to the advantage and benetit of the few. It has been held in a case involving a combina- tion among workingmen, that such combinati(ms are embraced in the act of Congress in question, and this view was not doubted by this court. The interpretation of the sUitute, therefore, which holds that reasonable agreements are within 34 INTROI>rN. [§ 12. § 12. Labor OrjLfanizations. — C'()iul)iiialions of work- nuMi for incrensing: or inaintainiiiir waijes heloiio: to the sub- ject of thi.s work, Tdoiigh of fompai :iti\ fly iccciit oriijin they have alreadj become exteiulcd aiul })o\\ci-riil oi-tjfaiiiza- tions, and miinorous cases involvinir the riirhts of such coni- biuatioiis lia\'c reached ihc hiiihcr courts. The followiuiif extract from the opinion in a h'adiuir case of this character is of interest as an indication of Ihe attitude of the courts at the present time: "The riirht of any hd)()rer or any number of hiborers to (|uit work was not chalU'nged. The scope and purpose of the bill was only to restrain forcible obstructions of the highways alonir which interstate com- merce travels and the mails arc (-arried, and the facts set forth at lenirth are only those facts which tended to show that the defendants were engatred in such ()l)structions. A most earnest and elotjuent appeal was madi' to us in eulogy of the heroic spirit of those who threw up their employment, and gave up theii- means of earning a liveli- hood, not in defense of their own i-ights. but in sympathy for and to assist others whom they believed to I)e wronged. We yield to none in our admiration of any act of heroism or self-sacritice, but we may be i)ermitted to add that it is a lesson which cannot be learned too soon or too thoroughly, that under this government of and by the people the means its ))urvie\v. inukt's it embrace every It follows that the constriietion peaceable or<;anization or coinbi- wblcli reads the rule of reason out nation of the hiborer to benefit his of the statute, embraces within its condition, either by obtaininp; nn inhibition every contract or corn- increase oLJkvages or dimininution bination by which workingmen of the hours of labor. Combina- seek to peaceably better their con- tions amont;: labor for tliis purpose dition. It is. therefore, as I see it, were treated as illeojal under the al)solutely true to say that the con- construction of tlie law whicli-in- struction now adopted, which eluded reasonable contracts within works out such results, not only the doctrine of the invalidity of frustrates the plain jiurpose in- contracts or coml)inations in re- tended to be a".complished l)v Con- straint of trade, and they were only gress, but also makes the statute held not to be embraced within tend to an end never contemplated, that doctrine, either by statutory and a»rainst the accomplishment exemption therefrom, or by the i»f wliicti its provisions were en- progress which made reason the acted." controlling factor on the sul)ject. § !•>•] IN TKODrcTION 35 of ri'drcss of nil w roiiirs jirc throuuli the courts iiiid at I lie ballot box, aiul that no wroiiu-, real or fancied, canic- willi it Iciral warrant to invite as a means of redress the <()-o|)era- tion of a mob with its accompanyinir acts of violence.""' vj 1,'J. Popular SeiitiiiUMit jiihI Publie Policy. — l-"n»n» the forciToinu" it is a|)i)arent thai ihe 'Mrusl,"" as a con- spiracv or combination for the jjurpose of creatini!; a monoj)- olv in restraint of trade, for the sni)j)ression of competi- tion, for the limitation of production, or for the increase or for the niaintaininsr of prices, or of wages, is in contraven- tion of ])ublic policy and illegal. Though the courts of this countrv are not in full accord with those of England, and thousfh the decisions of the State courts are in a degri'e ^ In re Debs, 15S U. S. r)lJ4 ; s. c, 15 Sup. Ct. Rep. 900, 911. '"It matters little what are the means adopted by combina- tions formed to intimidate em- ployers, or to coerce other joiu-ney- men, if the design or the effect of them is to interfere with the rights or to control the free action of others. No one has a right to be. hedged in and protected from com- petition in business; but he has a right to be free from wanton, malicious and insolent interfer- ence, disturbance or annoyance. Every man has the right to work for whom he pleases, and for any price he can obtain; and lie has the right to deal with and associate with whom he chooses; or. to let severely alone, arbitrarily and con- temptuously, if he will, anybody and everv body upon e.irlh. Hut this freedom of Jinconl rolled and unchallenged self-will does not give or imply a right, either l)y himself or in comltination with others, to disturb, injure or ob- struct another, either directly or indirectly, in his lawful business or occupation, or in his peace and security of life. Every attempt by force, threat or intimidation, to deter or control an employer in the determination of whom he will employ, or what wages he will pay. is an act of wrong and oppression; and any and every combination fur such a purpose is an unlawful con- spiracy. The law will protect ihe victim and punish the movers of any siich combination. In law the offense is the combination for the unlawful ])urpose,and no overt act is necessary to constitute it. * * * A wanioi, un|)rovoked interference by a combination of many with the business of another for the purpose of constraining that other to dis- charge faithful and long tried servants, or to employ whom he does not wish or will to employ (an interference intended to pro- duce, and likely to produce, annoy- ance and los'S to that business), will be restrained and punished by the criminal law as op|)ri'ssive to- the individual, injurious to the prosperity of tlie community, and subversive of the |)eace and good order of society." Crump v. Com- monwealth, 84 Va. 9J7, 941. o() INTKODrCTIOX. [§ 13. divcrircnt, yet on the whole there is a jiood desrree of unanim- ity in holding that the "trust" is an unlawful ori^aniza- tion, and as such void. Moreover, the deeisions of the courts have been followed by viuforous and positive statutory enaetnients. Notwithstandintr these facts, however, the "trust" <(intinues to live and prosper. Hitherto it has proved to be stronger than the legislature and the courts. By means of one device or another it has managed to elude the penalties of the law. It has been able to esca^JC the forfeiture (»f its corporate privileges and the confiscation of its estates. This is (hie, however, not more to the great strength of these organizations than to the indifference and inertia of the public. When the people of this country are aroused they are stronger than any individual ; stronger than any and all business combinations. This is not a prophecy in regard to the future of "trusts," or a discus- sion of their merits. This work has to do with the law to which these organizations are subject. It will appear in the progress of the discussion that the law is adeipiate to the control of the "trust," as well as of the individual, and that the remedy for any and all existing evils of this nature, at least, in most of the States, is in an unl)iased and faithful administration of the law. CIIAPTEK I. PUBLIC POLICY AS RELATED TO TRADE AXI> INDTsriUAL "TRUSTS." § 14. 15. IC. 17. 18. 19. 20. 21. 22. 23. 24. 2."). Introdmnory. [ <; 2(i. Public I'olicy Defined. ! The Effect of a Change. 27. Covenants Inconsistent with Morality. 28. Services in Influencing Leg- 29. islation. The Ground of the Rule. 30. Where such Services may 31. be Employed. Services in Influencing Pub- 32. lie Otticials. For Services in Procuring : ;{3. Appointments. The Subject Continued. 34. The Withdrawal of Oppos ing Candidate. 3." For .Services in Procuring a Pardon. For Services which arc in Violation of Public Duty. For Services in Opposing a Public Enterprise. The Subject Continued. Stipulations against Lia- bility. The Rule in New York. Contracts In Contravention of Law. For Influencing the Admin- istration of Justice. I'or Clianging the Otlices of Corporations. For Renouncing an Kxi'cu- torship. For Assignment of Salary not vet Due. § 14. Introductory. — PiiMic policy. :i^ ;i rule. I'dillic giiidaiuo of courts of (Mjiiity, is of ;iii imcicni ori<_nii. \\^ vjilitlity and its claini to ronsiik'iatioii wcic i('ni case lias Lccn nioditied in a dcLM'fc to adapt it to the cliaML''«'d iiidii-li-ial conditions of later tinio, l»iit the l>asai principle i- a- fnllv > Mitchell v. Reynolds. 1 P. Wm-. isi. 3« ITIU.K- POLICY. [§ 14. recoLnii/t'd at tlic present as at aiiv time in the past. A\'illi regard to the applieation of this ruk' there is not entire harmony between the courts of Enghmd and of the United States. Hut while the eourts of the two countries are not in full a. In the case of Egeiton v. Brownlow, in 4 11. L. Cas.. at page 237, Lord St. Leonards said : '"My Lords, there are just a few remarks that I wish to make upon public policy. I will not add a word to what has been already said by m\' noble and learned fiicnds. but I will call your attention to what fell from one of the learned judges (Mr. .Justice Cresswell). as regards the restraint of trade. That learned judge says that with n'gard to the restraint of trade, there is a msixim in common law. and he refers to a ease in the Year Books to prove it; but the learned judge did not tell your Lordships upon what that maxim Was founded. Xol)ody supposes that there was any statute upon the subject in those times. Upon what, then, was the maxim founded? Why. upon public policy for the good of the realm. It was not good for the realm that men should be prevented from ex- ercising their trades. Xow, let us see what this particular case is; it lies in a few words, and remarkable consequences have resulted froui it. It was an obligation with a condition that if a man did not ex- ercise his craft of a dyer within a certain town, — that is. where he carried on his business for six months, — then the obligation was to be void; and it was averred that he had used his art there within the time limited; upon which Mr. 14.] in lu.ic I'oi.icv. 39 may appear an i'xIitiuc >lati'iiicnl, l)ut it i> a pcili- lUMil suofirestit)!! of the liability to tlu' iiiisai)i)licti- tion of tlu- iloc'trine. This (lanofor has lon.'). Lord r.roiiglKiin says : ""In considering the (juestion of the legality of the |)roviso. and the inexpediency of unnecessary restrictions ufxtn the free disposition of property by will or by any other means known to the law, it cannot be denied that such dispositions are subject to some limits and restraints, and that the law will not uphold such as have a tendency prejudicial to the public weal ; every man is restricted against using his property to the prejudice of others. * * * It must be superlluous in this House to cite authorities to prove the existence of such a general law. * * * It has been acted upon in a great variety of cases, such as those of marriage brokage bonds, restrictions upon trade, disability of sailors to insure their wages, and sale of oflices not within any statute. A case of this last sort was Hanington v. Duchatel, 1 liro. Ch. 124. That was a case of security given as a consideration for having procured an otlice in the king's household, and Lord Thur- low expressed himself to the effect that it was "a matter of |)ul»lic policy similar to marriage brokage bonds, where, tiiough the parties are private, the practice is publicly detrimental." The same principle has been applied incasesof wagers resi)ecting the public revenue, and numerous other instances. This principle has been expressed in different language. l>ut in all cases to the same import as applying to matters contrary to law because against the public good." In 40 ruuLic roLiCY [§ 14. Justice Sir William Drai)er Bell, in (leliveriuu the opinion of the court, said: "I am not nuich disposed to yield to ai'iriinients of |)iil)li<- policy: I thiid< the' courts « » » have irone nuu-h further than they were warranted in jjfoinif Walsh V. Fiissell. G Hirig. Kiil KV.i, Tindal, C. J., observes: ••Itis not contended that the covenant is illf'wal on the o;ronnd of the breach of any direct rule of law, or the direct violation of any statute; and we think to hold it to be void on the ground of its impolicy or in- convenience, we ought to be clearly satistied that the performance of it would be necessarily attended with injury or inconvenience to the pub- lic. But such is not the case.'" In Printing Company v. Sampson, Jessel, M. R., says: "Now, it is said on the part of the defendant, that such a contract as that wliich I iiave mentioned, a contract by wliich an inventor agrees to sell what he may invent or acquire a patent for before he has invented it. is against public policy, and it was said to be against public policy, because it would discourage in- ventions; that if a man knows that he cannot obtain any pecuniary benefit from his invention, having already received the price for it. he will not invent, or if he does invent will keep it secret, and will not take out a patent. It must not be forgotten that jou are not to extend arbitrarily those rules which say that a given contract is void as against public poll(;y. because if there is one thing which more than another public policy requires, is that men of full age and competent imderstanding shall have the ut- most liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be lield sacred, and shall be en- forced by courts of justice. There- fore, you have this paramount pub- lic policy to consider, that you are not likely to interfere with this freedom of contract. Now, there is no doubt public policy may say that a contract to commit a crime is necessarily void. The decisions have gone further, and contracts to commit an immoral offense, or to give money or reward to another to commit an immoral offense, or to induce another to do something against the general rules of moral- ity, though far more indefinite than the previous class, have always been held to be void. I should be sorry to extend the doctrine nuich further. I do not say there are no other cases to which it does apply, but I should be sorry to extend it much further. However. I am satistied there is no reason for so extending it in this case. In the first place it is assumed that a man will not invent without pecuniary reward. Experience shows us that that must not be taken as an abso- lute truth. Some of the greatest inventions which have been of the most benefit to mankind iiave been invented by those who have given their inventions freely to the world. Again, it is suppoiied that a man who has obtained money for the future products of iiis brain will not be ready to produce these products. That must not be as- sumed. * * * .\ man who is a needy and struggling inventor may well agreeeitlier fora present pay- ment in money down, or for an annual payment, to put his intel- § 14.] I'UiiLic roLicv. 41 ill (luestions of policy: llicy have taken on llieinsel\e>, soinetinies, to decide douhtfnl (jnestions of policy, and they are al\vn\s in danger of so doiiiu". Ix-rau^c couii> of law look onl\ at the particular case and have not means of hrintjiiii!: before them all those considerat ions which out;iiciiieiit must commend it.H'lf to the conscientious and unbiased jurist, it is to lie adnitted, not only that courts of the highest charaf the individual must ever be held subordinate to the inihic welfare. The citizen nuist i)e restrained from any ict which is adapted, whether directly or indirectly, to infict an injury upon the pul)lic. But while it is sufficiently pain that what is in conflict with the jiublic weal anil, in coise- quence, in contravention of public policy, is illegal and to be suppressed by courts of equity, the precise requirenents of })ublic policy and the extent to which courts are to ^o in enforcing its requirements, if is not a simi)le thing to indi- cate. The following, which is an attempt at explaiation rather than at giving a definition, is from Mr, aistice § 15.] ri Mi.K I'oi.icv. 43 Storv : ••Pul)lic policy is in its nature so uncfitaiii and rtiu'tuatinir. varyini; with the hal)its and fashions id' the daA', with the urowth of eomnieree and theusaires of trade, that it is ditli( idt to (hiennine it> linnts with any (h-ui-ee cd' exaetness. It has never been (k'tined hy the courts, hut has been hd't h)ose and free of (h'tinition in the same man- ner as fraud. This ride may, howcxcr, he safely laid down that, wherever any coidraet eonthets with the morals t)f the time and contravenes any estal)lished iiderest of so- ciety, it is void, as heinir against public policy,"' In a ' 1 SlDi-y on Contracts. § (J?"). tor a monopoly of bundling all ••Some criticism has been made in tbe tbroiijib jjrain Ijiougbt on the relation to the language in which road of defendants. ♦ ♦ * But the principle has l)een expressed ; further than tliis. tlie power of exceptions have tieen tnade to tt)e courts to declare a contract void expression of 'putjlic policy.' and for being in contravention of sound it has been confounded with what public policy is a very delicate and may be called political policy, such undetined |)0wer. and, like the as whether it is politically wise to power to declare a statute uncon- have a sinking fund or a paper cir- stitutional. should be exercised culation. or the degree and nature only in cases free from doubt.'' of interference with foreign States, Richmond v. Dut>uque & S. C. R. with all which, as applied to the R. Co.. 2(5 Iowa. 191, 201. All au- present sul)ject, it has nothing tborities. from first to last, concur whatever to do. I'ublic policy, in in one thing, viz. : tliat the doctrine relation to tl)is (juestion. is that on tliis subject is founded on pub- principle of the law which holds lii- jiolicy. and I cannot but regard that no sut)jcct can lawfully do that the jarring opinions as excniplify- whidi has a tendency to be in- ing the well-known dictum of Mr. jurious to the public or against the Justice Burrough in Richardson v. public good, which may be termed, Mellisb (2 Hing. 229, 2.V2), that as it sometimes has been, the policy public policy -is a very unruly of the law. or jjublii; policy in re- horse, and when once you get lation to ttie administration of the astride it you can never know law." bord Hrougtiam in ?]gerton wi)ere it will carry you.' Public V. Brownlow. 4 H. I.. Cas.. at page policy does not admit of definition, 19(5: "It is argued by defendant's and is not easily explained. If that counsel that tliis construction of stateujent re(|uircs authiuity turn the contract will render it void l)v to Kgerton v. Hrownlow (supra), reason of being, when thus con- and consult the argumentsof coun- strued. in contravention of sound sel and the opinions of judges pul)lic policy: that sound public covering the whole subject, in- policy, as also the law maintaining eluding, in some passages to which and enforcing it. abhors a monop- I will presently call attention, that oly; and that the construction, as part of it which concerns restraints above set fortli. gives to the eleva- of trade. One thing I take to be 44 PIMLIC POLICY [§ 1^ recent leatliiiji; case hofore the Coiiil of Knois aiul Appeals of New Jersey, the court, l)v Mr. Justice Lippincott, dis- cussed the subject of public policy in the following well considered words: "Turniuii- to the judicial decisions ui)on this subject, we find them so numerous and of such variety that a consideration of them at any length is not })racti- cable. The general })rinciples governing the matter are well established by a long liiu' of authorities, and in the {^ase now before the court they do not appear to be of dilti- cult application. It has been declared thai public policy is a varial)le (piantity, but the j)riuciples to be applied have always remained unchanged and unchangeable; and ))ublic policy is only variable in so far as the habits, cai)acities and opportunities of the public have become more varied and complex. The rehitions of society become from time to time more complex: statutes defining and declaring public and i)rivate rights multiply rapidly, and public policy clear, and it is this, that public policy is a variable quantity ; that itmust vary and does vary with the habits, capacities and opportuni- ties of the public; that it cannot have been the same when Chief Justice Tindal decided Homer v. Graves (7 Bing. 735) in 1831, as it was when Chief Justice Parker de- cided Mitcliell v. Reynolds (1 P. Wnis. 181) in 1711; that it must have changed and did change be- tween 1831 and 18G9. when Vice- Chancellor James decided Leather Cloth Co. V. I.orsont (L. K. Eq. 35); and if tliere had not been a further change before Lord Justice Fry decided Koussillon v. Koiissil- lon (.L. R. 14 Ch. D. 351) in 1880, it must have occurred ere now. There are many circumstances familiar to us all, and some of tlicm connected with politics rather than with policy, which have materially altered the rela- tive position of rivals in trade and of the public whom traders supply. Railways, electric telegraphs and telephones have all exercised an influence, and quite recently the l)arcels post to say nothing of many other novelties, have intro- duced new elements into competi- tion. I make tbese remarks be- cause to my mind they go a long way to explain the difference between the earlier and later decisions. Judges have been bound to recog- nize not merel.v the old decisions, but the principles on which they were founded, and yet regarding public policy as the i)rinciple over- riding all, they have struggled to adopt these older decisions to the changed circumstances of the day. There lias. I think, been a steady though irregular progress from the stricter rules of the last century, and perhaps it has not yet reached its limit." Kekewich in Davies v. Davies, L. R. 30 Ch. D. 359. 364. § 1.").] ITIW.IC POLICY. I.") often rli:iiiu'('?^ Mslhi' la\v> cliaiiar, and, therefore, new a[)- plicntions of old principles are re(|iiired.' \N'liatever tends to injustice or o{)pression, restraint of liberty, restraint of leir.ll riulit : whatever tends to the obstruction of justice, a \iiiIation of a statute, or the ol»>truction or perscrsion of the administration of the law ; whatever tends to interfere with or control the administration of the law, as to execu- tive, legislative or other othcial action, — whenever embodied in, and made the subject of, a contract, the contract is aiiainst public j)olicy and therefore void, and not suscep- tibk' of enforcement: all contracts prejudicial to the inter- est (»f till' i)ublic. >uch as contracts tendiuir to pre\ent comi)etition, whenever the statute or any known rule of law reiiuir(>s it, are void."- But, as has already appeared, ' Davies v. Davies. L. R. Mi Ch. there might as well have been no I). 31)4. existence of any such selecting - Brooks V. Cooper, 50 X. J. Eq. power, or any statute on the sub- 7«1 ; s. c, 2G Atl. Rep. 978. 981. ject. This contract was substituted '•A contract may be illegal, al- in the place of the statute, and. so though not in contravention of the far as the contract is to be consid- speclflc directions of a statute, if it eied and interpreted, the statute be opposed to the general policy no longer had any force or effect, and intent thereof. Staines v. The contract was a subversion of Wainwright. (» Bing. N. Cas. 174; thestalute. Regardless of the rea- rhilpott V. St. George's Hospital, son of the statute, and the public H II. L. Cas. 338. 347; Collins v. benefit to be derived from its ad- Blantern. 1 Smith Lead. Cas., pt. 1. ministration, for the purpose of p. liMO. It is not necessary that the allaying a personal antagonism be- statuie should contain words of tween themselves by their agrec- positive jirohlbition. I>e Begnis ment. they dictated to the public v. Armistead, 10 Bing. 110. The body i)rovided by law to administer contract here in (piestion between this statute, a course of action the appellants and respondent, on without reference to those pro- its face a.ssumes control of the dis- visions which designate the ob- position of the selection to publish jects, purposes and policy of the the laws. It was not within their legislature in its enactment. No intention, as appears by the con- grosser form of a contract in con- tract and the evidence, that eitlier travenlion of the provisions and one of the members of tlu* puitlic policy of the statute could be body designated t»y law to make demonstrated. The contract itself this selection should have the and its tendency are the tests of its slightest voice in the performance illegality. The results which are of their duty under the statute, produced are not the proper tests, So far as this contract is concerned although here the results are thoii^ 4(1 rriu.ic roLicv. [§ 1'^. tlu' public pdlicy of one coiiutrv iiiny difTcr from thai of jinothor, and in the United .states liic iiilc established l)y one court is not necessarily accepted by all others. More- oNcr, the rule of the same court, at the jiresent time, may differ from that which it ^u.-taiiicd at an earlier period. The method of determininu- what pul)lic policy re<]uires at a i)articular time and place may be of practical imi)ortance. But the ap[)lication of the rule in this retjard is well estal)- lished. Where the pul)lie })olicv of a nation or of a State has been indieated by the fundamental law or by statutor}' enaetments, that is the rule to the eourt.s. In the aljsence of such a iiuide the latest decisions in eqnity will be fol- low(>d. In a ieadinir case before the Suju'eme Court of the Unitetl States, the rule was stated by Chief Justice Chase, as follows: "The court can know nothing of })ublic i)oliey which are also interdicted by sound public policy. Its tendency was, and the result was. to influence of- ficial action, regardless of the plain provisions of the statute.''' Ibid. See also foUowintj cases cited by the court: Gulicke v. Ward. 10 X. J. L. 87; Jones v. Jlandal. Cowp. 39; Mitchell v. Smith. 1 Binn. 120; Blachford v. I*reston, ST. R. flo; Coppock v. Bower, 4 Mees. & W. 301 ; Meachain v. Dow, 32 Vt. 721 ; Parsons v. Thompson. 1 H. Bl. 322; Jones v. Caswell. 3 Johns. Cas. 29; Doolin v. Ward. (5 Johns. 194; Thompson v. Davies. 13 Johns. 112: Bank v. Spraj^ue. 20 N. J. Eq. IGO; Morris v. Wood- ward, 25 X. J. E(i, 32; Thomas v. Edwards, 2 Mees. & W. 218; Hatz- field V. Gulden. 7 Watts.li")3; Krib- ben V. llaycraft. 2G Mo. 39(): State V. Johnson, ')2 Ind. 197; Haines v. Lewis. 54 Iowa. 301 ; s. r.. (» N. "W. Ke)). 495; Trist v. Child. 21 Wall. 441; McGuire v. Corwine. 101 U. S. 108; Keating v. Hyde. 23 Mo. .\pp. 555; Nichols v. Miidgett. 32 Vr. 5-t(;; (iucrnscv v. Cook. 120 Mass. 501; Noel v. Drake. 28 Kan. 205; Forbes V. McDonald. 54 Cal. 98; Bliss v. Lawrence. 58 N. Y. 442; Schwenk v. Wyckoff, 40 N. J. Eq. 500; s. C, 20 Atl. Rep. 259; EUicott V. Chamberlain. 38 N. J. Eq. 004; Smith v. Applegate. 23 N. J. L. 352; Jackson v. David- son, 4 Barn. & Aid. 095; Rogers v. Kingston. 10 Moore, 102; s. C, 2 Bing. 441 ; Murray v. Reeves, 8 Barn. & C. 425; Hall v. Dyson. 10 Jur. 270; s. c. L. J. 21 Q. B. 224; Hills v. Mitson. 8 Excheq. 758; Cannon v. Cannon, 20 N. J. Eq. 310; Blasdell v. Fowle. 120 Mass. 4-47; Ayer V. Hutchinson. 4 Mass. 370; Lucas v. Allen, 80 Ky. 081; O'Hara v. Carpenter, 23 Mich. 410; Caton V. Stewart. 70 N. Car. 357; Tool Co. V. Norris, 2 Wall. 45; Oscanyan v. Arms Co.. 103 U. S. 2(il; Gray v. Hook. 4 X. Y. 449; Hunter v. Wolf. 71 I'a. Si. 282; Oslioriie v. Williams, 18 Yes. 379; .Vshburner v. I'arrish. 81 Pa. St. 52; Gordon v. I)all)y. 30 Iowa. 223; Satteriee v. Jones. 3 Duer, 102. § 1(5.] rriu.ic roucv 47 except fi'oin tlic (•()ii>tit iit ion .-md the l;i\\>. .-iiid the <'()in'.se of admiiiistration and dci-isioii. It lias no k-trislativi' |)()\v- ers. It cannot amend or modify any leirislative acts. It cannot examine (|Uestions as expedient or inexpedient, as politic or impolitic; considerations of that sort must, in ireneral, be addressed to the legislature. Questions of pol- icy determined there are concluded here. There are cases, it is true, in which ai'iruments (h'awn I'roni puhlic policy nuist have larire intlnence; hut there are cases in which the course of legislation and administration do not leave any doubt upon the question what the public policy is and in wiiieh what would otherwise be obscure or of doubtful interpreta- tion, may l)e cleared and resolved by reference to what is already received and established."' In the recent case of The Ignited States v. The Trans-Missouri Freight Associa- tion, we have the following re-statement of the doctrine b}' Mr. Justice Peckham : "The })ublic policy of the govern- ment is to be found in its statutes, and when they have not directly spoken, then in the decisions of the courts and the constant practice of the government officials: but when the law-making power speaks ujion a ))articular sul)ject, over which it has constitutional power to legislate. j)ublic policy in such a case is what the statute enacts. If the law pro- hibit any contract or combination in restraint of trade or commerce, a contract or c()ml)inati()n made in xiolation of such law is void, whatever may have been theretofore de- cided by the courts to have been the public policy of the counti'y on that subject." -' § KJ. The Effect of a Chanjje. — It is well e>tal»li>he(l that where a covenant, or agreement of any sort, is con- formed to public policy at the time at which it is entered into, it will not be invalidated I)y any subse(|uent chaiige of public policy. ( )n the oilier hand, where a covenant is void, on the gi'ound of |)ulilii' policy, at the time at which it is executed, a change of piiltjic ]»oli(y may render such ' License Tax Cu^es. ."> Wall. 4ti_', ^ U. .S. v. Trans - M is.^ouii Fn'ight 469. Association, 17 Sup. Ct. Itep. 540. 48 PUBLIC POLICY [§ i«:. covenant Milid, pioN idecl tho i)arties renew it siil)se(iuently to the change. In a ease before the Supreme Court of the I'^nited States it was held that it i> no defense to a suit broutrht on a promissory note executed in Louisiana, in February, 18(51, by the holder against the maker, to allege and prove that such note was given as the price of slaves sold to the maker. That such sale was at the time lawful in the said State was a sufficient consideration for a note, and the obligation could not be impaired by laws of the State i)assed subsecjuently to the date thereof. No law of the United States has impaired such obligation.^ In a very recent case in California this doctrine was sustained. It 1 Boyce v. Tabb. 18 Wall, 546. See also Wilkinson v. Coot, 44 Miss. 367; Harrel v. Watson. 63 N. Car. 454; Osborn v. Xicholson. 13 Wall. G54: McEIvain v. Mudd. 44 Ala. 48; Roderi(]iiez v. Bienvenu. 22 La. Ann. 300: Hall v. Keese, 31 Tex. .504; Willis v. Halliburton, -i.") Ark. 173; Dorris v. Grace. 24 Ark. 326: Roundtree v. Baker, 52 111. 241; Atkins v. Busby, 25 Ark. 176: Wainwright v. Bridges, 19 La. Ann. 234; Austin v. Sandel, 19 La. Ann. 309: Hailey v. Hoeffner. 19 La. Ann. 518; Lyttle v. Wbicher. 21 La. Ann. 182: Gosselin v. Wo- mack, 21 La. Ann. 193: Sandige v. Sanderson. 21 La. Ann. 757: Sat- terfield v. Spurlock. 21 La. Ann. 771 ; Lafever v. Haydel. 21 La. Ann. 663; Brou v. Becnel. 22 La. Ann. 189; Bniin v. Sasser, 25 La. Ann. 224; Allen v. Tarlton. 25 La. Ann. 427: Thompson v. Simmons, 25 La. Ann. 4.")0; Walker v. Ducros, 25 La. Ann. 214; Merritt v. Merritt. 25 La. Ann. 2.57: Smith v. Mc- Waters, 25 La. Ann. 431 ; Castile v. Offutt, 25 La. Ann. 430. -What- ever we may think of the institu- tion of slavery, viewed in the light of religion, morals, humanity or a sound political economy, as the obligation here in question was valid when executed, sitting as a court of justice, we have no choice but to give it effect. We cannot regard it as differing in its legal eflicacy from any other unexe- cuted contract to pay money made upon a sufficient consideration at the same time and place, neither in the precedents and principles of the common law. nor in its associ- cated system of equity jurispru- dence, nor in the older system known as the civil law is there anything to warrant the result contended for bv defendant in error. Neither the rights nor the in- terests of those of the colored race lately in bondage are affected by the conclusions we have reai-hed." Osborne v. Nicholson, 13 Wall. 6.54, 663. "In April, 1864, the plaintiff, as administrator, in the county of Hertford which was not within the lines or under the con- trol of the army of the United States, offers for sale, according to tlie laws of the State, and does sell at auction, a negro man slave. The defendant becomes the pur- chaser, pays a part of the price, takes the slave and executes his bond for the balance of the price. In what point of view can this transaction be considered against § !'•] ITIU.IC POLICY 49 wjLs held that if a contract conforms to the public policy of the State when made, a change in public policy will not avoid it; and a sul)se(iuent statute makini; it a misdemeanor to start tires in certain localities without lii'st takiuir ci-rtain precautions, whereby the jjroperty of an adjoiniuij: or con- tiguous owner is injured, danuiged or destroyed, cannot ren- der invalid a covenant in a lease made before its passage ex- empting t}ie lessor from responsibility for any danuige caused bv tire.^ In a case before the Court of Appeals of Ken- tucky, in 1^<10, it was held that a writing executed to eman- cipate slaves before it was lawful to do so would be valid upon re-acknowledgment, after the statute permitting eman- cipation.'^ § 17. Covenants Inconsistent with Morality. — It is not the policy of the law to ui)hold morality by legal sanctions. In the administration of the law courts do not assume any prerogative of omnipotence. Moral obligations consid- public policy, or as violating good morals, as to authorize a court of justice to refuse to enforce tlie con- tract. ♦ * * It was not against the public policy of the State of Xorth Carolina, according to the laws then existing and recngnized both by the wrongful governiiKMit then in power, and the rigbtfiil government which was for tlit^ time deprived of its power. It was not against the policy of the act of congress of 1S(!2, nor of the proclamation of the president; for, as we have seen, it would not affect that policy, in localities not under the control of the armies of the United Slates, whetiier a person was held as a slave by A or B pro- vided, under the circumstances, he was to be the slave of some per- sons. So far as good morals are Involved, the matter is not to be viewed, as we conceive, from a standpoint, where the institution of slavery is deemed wicked and in 4 violation of the laws of God and of the rights of man, but from a stand- point where the institution was considered hs established Jind made lawful by the laws of the State, and recognized and proteced by the constitution of the United States, .md had been handed down and iu'ted upon from father to son iiiiiong our people, from the first settlement of the colony of Caro- lina." Ilarrell v. "Wiitson. (JS N. Car. 454. 4G0. A contract to re- move slaves and other property to Texas and take care I'f tbem. diu'- ing tlie late war and betoie eman- cipiticm by the soveieign power, the United Slates, was legal at the time it was made, and is. tiieiefore, binding on tbe parlies by and be- tween wliom it was made. I'owell v. Daniel. 2:1 La. Ann. 289. ' Stephens v. Southern I'aciflc Co., lU'.) C.il. S(); s. C.,41 I'ac.Rep- 78:{. * Donaldson v. Jude. 2 liibb, 57. 50 I'lULir POLICY, [§ 17. ered as such arc not enforceable by statute or by courts of law or of e(iuity. It is not the prov- ince of any letjal tribunal to decide <|Ucstions of mo- rality, per Ke, not simply because such tribunals have no jurisdiction in cases of this character, but, as well, be- cause the decision of such (juestions, whatever it might be, would deprive the citizen of that freedom of action which is secured by the fundamental law. The obligations of the individual, which are simply moral, are not to any human authority, but to the Sovereign Ruler of the universe. But while this is to be borne in mind it is well established that covenants that are in violation of morality or that relate to transactions which are contra bonos mores, will not be enforced by courts of law or of equity. There is an essen- tial and palpable distinction between what is to be tolerated or what is to be left to the retributions of eternity and what is to be upheld by the decisions of courts. An agreement, the fultillment of which involves a violation of the law of God, or tends to the dissemination of any form of immoral- it}^ and, in consequence, is adapted to corrupt the public mind and lower the standard of public morals, is illegal and void. This position was upheld by the civil law. The rule was as follows: ''Pacta qiioi contra leges constitution- esque, vel contra bonos mores fiunt, nuUani vim habere, indabitate juris est.^ This rule is an expression of the natural sense of justice and of the fitness of things enter- tained by a Pagan court. But the rule, as upheld by the courts of England and of the United States, is a doctrine of the common law, and has its basis in the religion of the Holy Scriptures. The theory of this rule is that the Christian religion is the foundation and the only substantial founda- tion of public morality. On this ground it is held that any covenant, relating to a business transaction, the effect of which is to corrujit the public morals, or to subvtnt the Christian religion, is in contravention of public poli(T and, in consequence, illegal and void.'^ In a late case in Penn- ' Cod. Lib. II.. tit. 3, 1, (5. 32, p. 4G9, c f, seq. Thu.s of contracts *Ne\vland on Contracts, chap, for illicit sexual intercourse: § 17.] PUIiLlC POLICY 51 sylvunia, the court said: "It may be regarded as settled in Pennsylvania that a court of e(juity will not enforce a trust wh(M-o its object is the propagation of atheism, infidelity, immorality or hostility to the existin*^ form of government. A man may do many things while living which the hiw will Goodale v. 'I'lmrman, 1 Head, 209; Baldy v. Stratton, 11 Pa. St, 31G; Hanks v. Najjlee, 54 Cal. ol ; Stein- feld V. Levy, IG Abb. Pr, (N. S.) 26; Crawford v. Gordon, 11 Wkly. L. Bull. 121; Trovin^er v. Mc- Biirney, 5 Cow. 25;^; Denton v. Knj^lish, 2 Nott. & M. 581; Friend V. Harrison, 2 C. & P. 584; Rider V. Kidder, 10 Ves, 3GG; De Sobry V. De Laistre, 2 H. & J. 191 ; Ring- gold V. Tyson, 3 H. ct. J. 172; For- sytbe V. State. 6 Ohio, 19; Williams V. Biillmore, 33 L. J. Ch. 4G1 ; Franco v. Bolton, 3 Ves. 3G8; Smyth V. GriOin, 14 L. J. Ch. 28; s. c 12 L. J. Ch. 193; Winebrin- ner v. Weisiger, 3 T. B. Mon. 32; Sherman V. Barrett, 1 McMiill. 147; Gray v. Mathias, 5 Ves. 28G; Brown V. Langford. 3 Bibb, 497; Ciisack V. White, 2 Mills, Const. Rep. 279; Greenwood v. Curtis, 6 Mass. 358, 379. So as to the profits of prosti- tion and leases of houses for the piirj)Ose: Bowry v. Bennet, 1 Camp. N. P. 3-lS; Burns v. Seep, 8 Am. Law Ree. (Ohio) 425; Girardy V. Richardson. 1 Esp. 13; s. (;., 1 B. & P. 341 n.; Appleton v. Camp- bell. 2 C. & P. 347; Howard v. Hodges, 1 Selw. N. P. 79; Lloyd V. Johnson, 1 B. & P. 340; Jen- nings V. Throgmorton. Ry. & M. 251; Smith v. Whyte. L. R. 1 Kq. «52(i; s. c, 35 L. J. Ch. 45; 14 VV. R. 510; 14 I>. T. (N. S.) 350. Sous to recovery for printing an im- moral book : Poplelt v. Stockdale, Ry. it M. 337; s. c, 2 C. & P. 19S. Likewise, contracts which contem- plates the commission of a crime: Hocker v. Gentry, 3 Met. 4t;3: Lewis V. Davidson, 4 M. & W. 654; s. c, 1 H. & H. 426; 3 Jur. 387; Hatch v. Mann, 15 Wend. 44; Drennan v. Douglas, 102 111. 341 ; Hebblewaite v. Hepworth, 98 HI. 126. ''Another case may be stated, as within this second exception, in an action on a contract made in a foreign State by a prostitute, to recover the wages of her prostitu- tion. This contract, if lawful wliere it was made, could not be the legal ground of an action here; for the consideration is confessedly immoral, and a judgment in suj)- port of it would be pernicious from its example. And perhaps all cases may be considered as within this second exception, which are founded on moral turpitude, in re- spect either of the consideration or the stipulation." Greenwood v. Curtis, 6 Mass. 358, 379. A con- tract by an advertising solicitor tO' sell to a '"specialist"' letters written by persons afllicted with diseases, to another person who advertised articles and instruments that if was claimed would cure them, in order that such specialist might send his advertisements to them, is contrary to good morals and void. Rice v. Williams, 32 Ved. Rep. 437. No- a(;tion can be maintained for pi- rating a work which professes to be the amours of a courtesan, and it is no answer to the objection that the defendant is also a wrongdoer in publishing them, and that he therefore ought not to set up their immorality. Semble, that a person ;")2 iniu.ic I'oLicv. [§ 17. not do for him .-ifter lie is dead. lie may deny the exist- ence of a God and employ his fortune in the dissemination of infidel views, but should he leave his fortune in trust for such |)urj)oses the law will strike down the trust as contra being seen correcting the MS. is not sutticient evidence tiiat a copy- right of a worlv is bis. Stockdale V. Onwbyn, 2 C. «& P. 163. A contract Ijy which a sheriff hires out to another the labor of a con- vict for twenty-four months to satisfy a fine and costs amounting to $283.90. is contrary to public policy and void. State v. Stanley, 52 Ark. 178; s. c, 12 S. W. Rep. 327. An extension company which had a contract with a railroad company to locate and construct the road '"by the nearest, cheapest and most suitable route," between two points, for $20,000 per mile, agreed to locate the road through the town of A in consideration of being paid a bonus by defendant. In locating the road through A it was necessary to dcllect from the nearest, cheapest and most natural route a distance of five miles, at an additional cost of $100,000. Held, that the contract between the ex- tension company and defendant being an agreement by an em- ploye to violate bis obligation to his employer, was against public policy and void. Woodstock Iron Co. V. Richuiond & I). Extension Co., 129 U. S. G43; s. c, 9 Sup.Ct. Rep. 402. A conU'act between cer- tain attorneys and persons engaged in the illegal sale of intoxicating liquors, providing that the attor- neys shall, for one year, for tiie monthly compensation of $80, de- fend all cases against such persons for violaiions of the licjuor laws, is against public policy and void. Bowman v. Phillips, 41 Kan. 304: s. c, 21 Pac. Rep. 230. An agree- ment between two or more to pur- chase shares in a company in order to induce persons who uiight there- after purchase shares in such com- pany to believe contrary to the fact, that there was a bona fide market for its shares, and that the shares were at a real piemiutu, is an illegal transaction, and no ac- tion can be maintained in respect of such agreement or purchase of shares. Scoit v. Brown, L. R. (1892) 2 Q. B. 724. A contract between husband and wife, whereby it was agreed to drop all matters of dispute, to refrain from scolding, fault finding and anger, and live together as husband and wife; that the wife should keep her home in a comfoitable condition, and that the husband should provide all the necessary expenses of the family, and pay the wife in addition a certain sum per month — is contrary to public policy. Miller V. Miller, 78 Iowa, 177; s. c.,42 X. W. Rep. (141. J and M formed a partnership to build a railroad and to that end caused a corporation to be foruied under the general laws of Illinois. .1 w.is one director and the clerks of M were the others. It was averred that all the directors acted at the dictation of J and M. and were, in fact, merely their agents. Tbe board awarded the contract for building the road to certain |>er- sons. uominally, but in fact, for the benefit of J & M. agieeing to give theiu all the stock and first miutgage bonds of the company. § 1'.] I'llU.lC POLICY 53 bo)ios mo;v'.s"' In .-mother Icadiiiir cast' in tin* same Stale, the court said: "It is in entire consistency with this sacred cruarantee of the rights of conscience and reliirious liberty to hold that even if Christianity is no ])art of the law of the land, it is the popular reliirion of the count i\, an insidt to wliich would he indictal)le as directly tendiun- to distuihthe public j)cace. The laws and in>tit utioiis nf this State are. built on the foundation of reverence for Christianit v. To this extent, at least, it must certainly be considered as well settled that the reliirion revealed in the Bible is not to be opeidy reviled, ridiculed or blasphemed, to the annoyance of sincere l)elievers, who com))ose the irrcat nKis> of the issued at the rate of $15,000 a mile. On a bill tiled by J against the legal repre.-eniatives of M. to ob- tain an account of the profits of the pailneiship growing out of a par- tial exeiMition of the contract for constructing the road, held, that the contract was fraudulent and against public policy, and that equity would not entertain the suit for an accounting, even as to the profits actually realized by M up to the time he abandoned the en- terprise. Jackson V. McLean, 3(5 Fed. Kep. 2V.i. A tru^t deed, tlie consideration fur which is. that the centiti fjue trust will abandon her real ground of divorce from the grantor, and will attempt to pro- cure the divorce on anoiherground. in the exisience of which she does not, in fact, believe, and that the grantor will make no resistance but will pay her costs and attorney fees, is contrary to public policy and void. Stokes v. Anderson. 118 Ind. 533; s. c, 21 N. K. liep. 331. A note given to a woman in <'om- promi>e of a bastardy proceeding is binding and valid, and on sufli- cient consideration, and the pay- ment thereof cannot be avoided on the ground that the compromise of sucli proceeding is contrary to public policy, or public morals. Billingsley v. Clelland. 41 W. Va. 234; .s. c, 23 S. E. Hep. 8 '.2. A combination of persons and firms in a city for the control of the sale of beer and the cessation of com- petition inter se is not void at com- mon law as against public policy, although in restraint of trade, since beer is not an article of prime necessity and its sale is closely re- stricied by public policy. An- heuser Busch Brewing Ass'n v. llouck (Tex. Civ. App.), 27 S. W. Itep. t)!)2. A contract, whereby one party, for certain commissions, is to attend meetings of persons solicited to buy real estate from the other party, and persuade them to become purchasers, representing himself to them as a purchaser by subscribing for lots, which the owner is to take off his hands if he does not wisli to retain them — ctm- cealing from the iniemling buyers his arrangement with sucli owner — is against public policy, and can- not be enforced. McDonnell v. Itigney (Mich.) (1896), 66 N. W. Kep. 52. ' Manners v. Library Compiuiy. (•3 Pa. St. Iive "all the aid in his power, spend such reasonable time as may be necessary, and, irenerally. use his utmost influence and exertions to pro- cure the passage into a law" of a bill introduced into the legislature, is void, as against public policy, and will not be enforced. Such contracts tend to subject the legislature to secret, improper and corrupt influences. • In a recent case ' Mills V. Mills, 40 N. Y. 543; services in securing additional Frost V. Belmont. 6 Allen, 152; compensation fordefend.mt as i)Ost- Bryan v. Reynolds. 5 Wis. 200; master, where such services con- Usher V. McFiratney, 3 Dill. 385; sisted in secnrinfj special lesisla- Gil V. Uavis. 12 La. Ann. 210; tion to compel the post otHce de- Cli|)penf;er v. llephaiitrh, 5 W. & parlment to pay a claim which had S. 315; Power- v. Skinnt-r. .34 Vt. been rej»'cted, is contrary lo public 274; Harris V. Roof. 10 Barl». 480; policy and cannot be enforced. Rose v.l'ruax, 21 Barb. 3U1; ripald- Spaulding v. Ewing. 149 Pa. St. ini; V. Kwino^, 149 Pa.St.375; s. C, 375; s. C. 24 All. Rep. 219; 30 W. 24 Atl. Rep. 219; Wood-tock Iron N. Cas. 215. Any aj^reenient which Co. V. Richmond & D. Exten-ion contemplates the use of private in- Co., 129 U. S. (iJ3; s. c, 9 Sup. fluence to secuielejjislauon is void. Ct. Rep. 402; .M«Kee v. Cheney, Burney's Ilt-irs v. Lndelinj;. 47 La. 52 How. Pr. 144; Cuni'nins v. B;nk- Ann. 73; s. C. K! So. Rep. 507. "The alow, 4 K»'yes, 514; Southard v. contract of an attorney fcr s«'rvices Boyd. 51 N. Y. 177; Brown v. as such, whether the services are Brown. 34 Barb. 533. A contract to be rendered before a court, a by which one aofreed to procure department of the jjovernment, or the |)a8-l N. W. Rep. 898. A traeted for and rendered are par- contract to pay for professional tially those of an attorney and 56 viwiAc ]'<)\.i(\. [§ 1«. in Oregon it was held that it is against public policy for a person to hire himself out to |)erforni "lobby service" with nieiubcrs of the Iciiislature, anil a contract for such services is illegal and invalid.' In a leading case before the Suj)renje Court of the United States, the i-ule is stated, by Mr. Jus- tice Swayne, as follows: "The theory of our government is that all public stations are trusts, and that those clothed with them are to be aninuited in the discharge of their duties solely by considerations of right, justice and the pub- lic good. They are never to descend to a lower plane. But there is a correlative dut\' resting upon the eiti/en. In his intercourse with those in authority, whether executive or legislative, touching the performance of their functions, he is bound to exhibit truth, frankness and integrity. Any departure from the line of rectitude in such cases is not p;iiti:illy lliose of Ji lobbyist, and vitinf; the aid of otliers. by enforc- blendeii together as part and parcel ino; contract.-; for coinpensatioti for of a siiijrle einpioynient. the entire their influence, exerted not from contract is vitiated — "that which is patriotic or public motives, bift bad destroys that which is jrood, from those which are altogether and they perish together.' There mercenary and selfish, and cer- is no presumption tliat a contract tainly the law should not help to is illegal. He who denies his lia- compel the payment of a fee to any bility under a contract, which he man, whether great or of little in- admits having made, must make tluence. for his personal solicita- the fact of its illegality apparent, tions in favor of the enactment of The burden of showing it wrong is any l:^w whatever. Nothing could on him who seeks to deny his be more suicidal or unwise than obligation thereon. The presump- a contrary doctrine. A lawyer tion i.- in favor of innocence, and may be entitled to compensation the taint of wrong is matter of de- for writing a petition, or even for fense." McBr.ituey v. Chandler, making a public argument before 22 Kan. 692. U'J."). "It is certainly the legislatiue, or a committee all important to just and wise leg- thereof, but the law should not islation, and therefore to the most help him or any other person, to essential interests of the pnl)lic. recover a fee for exerting any per- that the legislature slioiild be per- sonal influence, in any way, in any feclly fice fiom any extraneous in- act of legislation. In such a case fluence which may eitlier corrupt he must rely on tlie honorary or deceive the members or any of obligation alone." Wood v. Mc- tbem, and doubtless there may be Cann, G Dana. 3(j0, 3(59. among the members themselves ' Sweeney v. McLeod, 15 Ore. enough of personal influences by 330; s. c. If) Tac. Rep. 275. and upon each other, wiiliout in- § 18.] PUBLIC POLICY, 57 only bad in morals, l)ut involves a piihlii^ wronir. No people can have any hiirlicr public interest, exce|)tthe i)i-eservation of their lil)erties, than inteirrity in the preservalion of their goveniniciit in all its (IcpMiinicnls. Tiie ap and puts the seal of its repi'oltatiou upon the untlertaking.""' In another .leading case before the same court, Mr. flustice Grier said: "Legislators should act with a single eye to the true interest of the whole peo- ple, and courts of justice can give no couuteiiaucc to the use of means which may subject them to be misled by the pertinacious importunity and indirect inlluences of inter- ested and unscrupulous agents or solicitors, Inlluences secretly urged under false and covert ])retenses must neces- sarily operate deleteriously on legislative action, whether it be employed to obtain the passage of private or public acts. Bril)cs. in the sli.-ipc of high contingent compens;il ion. must necessarily lead to the use of imjjropcr means and the exer- cise of uiulue iuHuence, Their necessary conse(|uence is the demorali/ation of the agent who covenants foi-thcm; he is soon brought to believe that any means which will produce so l)e1»eti(ial a result to himself are 'j)r()per means;' and that a share of these profits may have the same effect of (|uickening the perceptions and w.nining the zeal of in- fluential or 'careless' members in favor of his bill. The use of such agents will have the effect to sul)ject the State government to the i-ombined capital of wealthy corpora- tions, and produce universal corruption, commencing with the representative and ending with the elector. Speculators ' Trist V, Cliild. 21 W;ill. 441. 4r)0. 58 ITRLir POLICY. [§ 19. in legislation, public and private, a compact corps of venal solicitors, vending their secret influences, will infest the capital of the Union and of every State, till corruption shall become the normal condition of the body politic, and it will be said of us as of Rome — '■omne Romoe venule.' "' § 19. The Ground <)f the Rule. — It is not held that the citizens of the States or of the nation are prohibited from making any effort to influence legislation. Such an influence nuiy be for the public good and not in contraven- tion of public policy. Where there is nothing in the end sought or in the methods employed that is illegal, a cove- nant relating to the considerMtion for services of this char- acter will be sustained. The ground of the rule, as stated in the preceding section, is the secret and corrupt character of the influence exerted. The end sought is inconsistent with public morality and is in contravention of j^ublic policy, and the means employed are in keeping with the object to be accomplished. In a case in Massachusetts, the court said: "The business of 'lobby members' is not to go fairly and ojienly before the committees and })resent state- ments, proofs and arguments that the other side has an op- {)()rtunity to meet and refute, if they are wrong, but to go secretly to the members and ply them with statements and arguments that the other side cannot openly meet, however erroneous they may be, and to bring illegitimate influences to bear upon them. If the 'lobby meml)er' is selected be- cause of his political or personal influence, it aggravates the wrong. If his business is to unite various interests by means of projects that are called 'log rolling,' it is still worse. The practice of procuring members of the legisla- ture to act under the influence of what they have eaten and drunk at houses of entertainment, tends to render those of them who yield to such influences wholly unfit to act in such cases. They are disciualified from acting fairly to- wards interested parties, or towards the public. The tend- ency and object of these influences are to obtain l)y cor- 1 Marshall v. Balto. &. Oliio R. Co.. If. How. 314. IWa. § 19.] I'l'KLK POLK V 59 luption what it is sii|)j)()s(>(l cannot be obtained fairly. "' In un important and instinctive case before the Supreme Court of Vermont the principle is stated by the court, as ' Frost V. lU'lniont, (i Allen, LVi, 1 ;")'■•. '"These reinurks are not to be understood as havingany relation to the case in hand, for no suspicion is entertained that anything out of the ordinary course took place in respect to this bill. Yet. it cannot escape observation, that even here an inducement was not wanting to an improper or at least personal intluence, or deceptive acts, to pro- cure the success of the measure. The temptation may be small here, but it has not always been confined within such narrow limits, as there is great reason to fear. We do not say. it is not necessary to the case to say tliat a certain compensation for such services may not be re- covered; but we are clearly of opinion that it would be against sound policy to sanction a practice which may lead to secret, im- proper and corrupt tampering with legislative action. It is not re- quired that it tends to corruption; if its effect is to mislead, it is de- cisive against the claim; and that such is its tendency no human be- ing can reasonably doubt. ♦ ♦ » It is, therefore, most erroneous to assume, as is done by plaintiff's counsel, that a practice, leading to such consecpiences. is not contrary to private interests and public morals. Tlie reverse is too true; for alre:idy has a class of persons arisen, at the seat of the general government and elsewhere, wlio make it a business to push through private claims, for u compensa- tion, greatly, if not entirely de- pendent on success. How demor- alizing this may be it needs not the gift of prophecy to foretell. Nay, more, we feel its effects, for it is impossible to shut our eyes at the conse(|uences of this, with other causes daily developing themselves in the decline of justice and public morals. How easy the transition from private individuals to the members themselves it would not be ditlicult to divine; but we arc not left to conjecture, for we are not without examples, which it would be invidious to mention, but which are too well known. Whatever abuses may ex- ist elsewhere, we hope the judicial tribunals of the country may be kept pure, without susjiicion even, that they may never be induced under a pretense to countenance vice, or lend their sanction to a principle, the inevitable effect of which will be to increase, if it does not create fraud and misrepresen- tation. In the face of many pain- ful examples to the contrary, it is idle to say that individual, ex- traneous intluence. acting secretly, upon the menibers of the legisla- ture, is not pernicious to the best interests of society. Its direct tend- ency is to sap ihe foundations of all morality." Clippenger v. Hep- baugh. .') W. tS: S. 31.->, 31H, "The question here involved is a very important one. and we regret thit we did not have the benelit of an oral argument by the very able counsel for the ])laintiff. If there were services rendered and ex- penditures incurred by the plaintiff for the defendant, as he alleges, entirely disconnected with the services rendered in procuring »>() I'llU.ir I'OLICY [§ 1^. follows: ••'riic principle of tlic decisions li;is no respect to the Ciiuities between the parties, hiil is controlled solely by the tendency of the contract, and it matters not that nothinof improper was done under it. The law will not conj^re*.sion!il legislation, they would fon. Watts & S. 31."); Har- ris v. Koof, 10 liar!). 48!); Rose v. Truax. 21 Barb. 3(>1 ; Mills v. Mills. 3U Barb. 474; Trist v. Cliild, 21 Wall. 441 ; Spalding v. Ewing. 140 Pa. St. 375; s. c. 24 Atl. Kep.219; Oscanyan v. Arms (^o., 103 U. S. 2151, 274; Tool Co. v. Norris. 2 Wall. 45; Woodstock Iron Co. v. Kichmond & D. Extension Co.. 129 U. S. (i43; S. c, 9 Sup. Ct. Rep. 402. In the case of Clip- pinger v. Hepbaugh, 5 Watts & S. 315. it was said by the court: 'It matters not that nothing improper was done or was expected to be done i)y the plaintiff. It is enough that sucii is the tendency of the contract; that it is contrary to sound morality and pultlic policy, leading, necessarily, in the hands of designing and corrupt mnn to imjjroper tampering with members and the use of an extraneous, secret intluence over an important branch of government. It m.iy not cor- rupt all. but if it corrupts oi- tends to corrupt some, or if it deceives or tends to deceive or mislead some, that is suffi(-ient to stamp its char- acter with the seal of reprobation, before a judicial tribunal." In the case of Rose v. Truax. 21 Barb. 361, the agreement was Mo use his influence, efforts and labor in pro- curing the passage of a law by the legislature, and the agreement was held void, as against public policy, and that as the contract was entire it was wholly void, and that no re- covery could be had for even legit- imate services performed under the agreement. In the case of Weed V. Black, 2 MacArthur. 2(;8, the court uses the following lan- guage: 'If the terms of the con- tract be broad enough to cover services of any kind, whether secret or open, honest or dishonest, the law pronounces a ban upon the paper itself." * * * 'It will be observed that many of the decis- ions are based upon the corruj)! tendency of such contracts, rather than llie particular wording of the contract itself. ♦ ♦ * \Ve do § 15!.] iMMi-ic roi.ic^ . 61 concede to any man, however honest he may \n'. {\iv privi- lege of nniUini; a contract which il woiihl not recognize, when made by designing and corrupt men. A person may, witiiout donht, he emph)\ed to conchiet an application to the h'gishitnre as well as to conduct a suit at law, and nniy contract for, and receive, pay for his services in preparing and presenting a petition or other documents, in collecting evidence, in making a statement or cx|)osition of facts, or in preparing and making an oral oi- written argument, pro- vitled all these are used, or designed to he i.sed, either he- fore the legislature itself or some eommittee thereof as a body ; but he cannot wMth })roi)riety be employed to exert his personal influence, whether it be great or little, w ith in- dividual members, or to hibor privately in any form with them, out of the legislative hall, in favor of or against any not condemn the attempts to se- cure leo;islalion for lejjitimate pur- poses and in a legitimate manner. Many laws are passed solely for tbe public good by reason of the presentation of the proper evidence and arguments addressed to legis- lative bodies or the proper com- mittees by outsiders, done openly, and without corrupting intliiences having been exercised. Freipiently our educational, charitalde and humane laws are thus procured. There are also many just and meritorious private claims when, through the neglect or wrongful acts of the government, it would not be improper to present tliem for allowance and payment aner recogni- tion, while corrupt legislation has enabled the lobbyist to succeed, to the injury of tiie |>ui)lic welfare and deleterious to private morals. Id the language of our constitution each t)erson -ought to obtain jus- tice fieely and without pureh:ise, completely and without denial; promptly and without delay, con- forujably to the laws' (article 1, § 8); but hiring an agent to lobby a large portion of the year dining several years, in procuring legis- lation securing to an individual government lands for a i-ompara- tively small sum. worth more tiian $12,000, does not come within that class of contracts which is sanc- tioned by the law and does not meet with our a|)proval. The prevalent ini(iuitious system of lobbying with members of our legislaiiv<' bodies and i)ublic ofll- cials is fast becoming a menace to our capacity for self-government. Courts can do but little to stop this most perniciou* vice, because it is seldom that such cases come before them, but when they do appear there should go forth from the judicial forum only rebuke and the ban of disapproval." Buck, J., in Uoulton v. Dimn, (JO Minn. •2(1. '2.>; s. C, 01 N. W. Hep. «y8. 62 PUBLIC POLICY. [§ 2(». act or subject of legislation. The |)ers()iial and private nature of the services to be rendered is the point of illegal- ity in this class of cases."' § *20. Where such Services may be Employed. — While it is well established that any attempt to intluence legislation by private and personal solicitation of the indi- vidual nienil)ers of a legislative body is illegal, and that any covenant relating to services of that character will be treated as opposed to public policy and void, a public ad- dress or argument before a legislature or before a commit- tee of such body, if permitted, is not opposed to public policy. This is regarded as a legitimate and proper method of exerting, or of attempting to exert, an influence upon a legislative body. It is presumed that a legislature will not be corrui)ted or led astray by a public discussion of a bill or measure under consideration, while secret, personal so- licitation is presumed to be for an improper and illegal purpose. It is the presumption, also, that the object and effect of such services are not in accord w^th the public » welfare. In Wisconsin it has been held that an agreement to prosecute and superintend, in the capacity of agent and attorney, a private claim before the legislature, is against public policy and void, and no action can be maintained thereon, or for services thus rendered. A peison may lawfully make a public argument before a committee of (he legislature itself, if jiermitted to do so, in favor of or against a public or ))rivate act, and an agreement by wiiich he was promised to be paid for such service would be en- forced.'' In a recent case })laintiff, a person of large ex- ' Powers V. Skinner. 34 Vt. 270. '^ IJryiin v. Reynolds, .5 Wis. 200. 281. See also Sedfjwick v. Stan- See also Chesebrough v. Conover, ton. 14 N. Y. 289; Bryan v. Key- 140 X. \. 382; s. c, 35 N. E. Rep. nolds, .5 Wis. 200; Filson v. Himes, 033; Wildey v. Collier, 7 Md. 273; ."> Pa. St. 452; Orinerod v. Dear- Sedgwick v. Stanton, 14 N. Y. 289; man, 100 Pa. St. 501; s. c, 45 Am. Brown v. Brown, 34 Barb. 333. Rep. 391 ; McGuire v. Corwine, "The jury could tind from tbe evi- 101 U. S. 108; Chippewa Valley dence that he was employed by & D. R. Co. V. Chicago, St. P. R. the defendant to draw legislative Co.. 76 Wis. 274; s. c, 44 N. VV. bills and to explain them to mem- Rep. 17. bers of the legislature, and to pro- § -^0.] ITIU.IC I'OLICY. 63 perience in regard to Fedrral i)iil)lic lands, because satisfied that a certain class of lands that had been kept ont of the market on account of a supposed claim under certain rail- road srants could be lesrallv thrown open to settlement, entered into an agreement with defendant, who was desir- ous of acquiring such lands, to instruct the latter in regard to the manner of i)rocuring the same, and to do all that was necessary to have such lands thrown open to settlement, in consideration of a certain j)roportion of the value of the land acquired by defendant. It was held that the contract was not per se invalid as against public policy as a lobbying contract.^ In a recent case in Michigan a prominent mem- ber and local leader of the political party in control of the ireneral government, contenq)lating the erection of a costly Imilding, secured from an adjacent property owner a pioiii- isc of a bonus, conditioned upon the location in the build- ing of the city post office, which was then and had l)een for fifteen years past on the next street. The promisee went to Washington and induced the United States govern- ment to transfer the post office to his building, but there was no testiiuonv tending to show that he used any im- proper means to gain his point, or that he iiitlucnced any senator or representative in congress or any other ofHcer of the irovernment to interfere in his behalf. It was held that thecontract was valid, being founded upon a valuable consid- eration, and according to the evidence in the case not nec- essarily contrai'v to ])ublic ])()licy.'- In a cas(> relating to cure ttifir introdiictiDii into the jihiiii it to any incnihor of a com- lej^isialme anil nolliini^ iiiorc It niittce or of tbr li'^rislatiiie. fairly does not appear that be asked or so- and openly, and ask to have it in- llciled any ineniher of the leijisla- trodiieed; and contraels which do tiire to vole for the bills or that be not provide for more, and the did anything except to explain services which do not go farther, them and reque^it their introdiic- in our judgment violate no princi- tion; and so much he could do pie of law or public policy." without violating any public pol- Chesebrough v. Conover, 140 N. icy. It must be the right of every Y. '282; s. c, 3r» N. E. Kep. G33. citizen who is interested in any ' Houlton v. Nichol. 93 Wis. 393; proposed legislation to emj)loy an s. c. (i7 X. W. Itep. 71."). agent, for compensation payable ^ Beal v. I'olhemus. fw Mich, to him, to diaft his bill and ex- 337; s. c.. 34 N. W. Kep. 532. 64 PUBLIC POLICY. [§21. tlic coiisidcralioii for services of this cliMrMctcr, not bins: will he presiiiiKMl in rci^ard to the hiufiihic'ss or titiie.s.s of the transaction. In a recent case before tlie Circuit Court of Appeals for the Fifth Circuit, it was held that in the absence of averments to that effect it will not be presumed that services of an airent in securiniif leirislation were of an illegal character, or that there is anv objection to a con- tract to ])ny them.' § '21, Services in fnfluencinj? Public Officials. — The principles and rules relating to the employment of attorneys or other agents for the purpose of inliuencing legislation are applicable to all covenants relating to services, the object of M'hich is to secure especial favors from public officials. It is w^ell established that all agreements relating to pecuni- ary consideration for controlling or influencing the business operations of the government, in its administration of jus- tice, and without reference to the character of the means employed, are in contravention of public policy and void. In the case of The Tool Company v. Norris, before the Supreme Court of the United States, Mr. Justice Field, in delivering the o|)ini()n of the court, said: "There is no real difference in principle between agreements to procure favors from legislative bodies and agreements to procure favors in the shape of contracts from the heads of de))artments. The introduction of improper elements to control the action of both is tlic direct and inevitable result of all such arrangements.'"- In a leading case before the same court, it ' S:iliii;is v. .Stillni;in, (Wi Kcd. United StatPS army, airainsl the Rep. (577; s. c, 14 C C. A. .">. late rebellion, within three years 2 Tool Co. V. Norri^i, 2 Wall. 45. fioiii the date of the eoniraet. to 5.'>. See Aver V. IIiitcliin«, 4 Mass. "|)ro(Mire for him a substitute or 370. A contract in wii I injj, whereby oilierwise clear him from said a parly, in consideration of five draft, and thus save liim harmless hundred dollars, undertook, under from any cost or expense in con- a penalty of two ihousand dollars, sequ'-nee of the same."' is against in case one O'Hara, who was an public policy and void. O'Hara enrolled citizen of the United v. Carpenter, 23 Mich. 410. A States, liable to be drafted into school commissioner of a district the military service, should be was noiilied to attend an adjourned drafted so as to do diUy in the meeiin>; of the board of education, § ^1.] PUBLIC POLICY, 65 was said: "Iiulependently «>f the otticial relation of the plaintiff to his i^oveiMinient the personal influence which lie stipulated to exert upon another ollii'i'r of that ifoverninent was not the subject of bar^rain and ^ale. Personal inlluenee, to be exercised over un otlicer of o;overninent in the pro- curement of eontrjicts, as justly observed by counsel, is not a vendible article in our system of laws and morals, and the courts of the United States will not lend their aid to collect the price of the article. Numerous adjudications to this effect are to be found in the State; and Federal courts. This is true when the vendor holds no ofHcial relations with the set to pass upon a proposed con- tract for the purehiise of certain charts for the public schools of their district at the price of $7M. He refused to go until the agent selling the charts handed him $2.50 in money to pay him for his time and reimburse him for loss sus- tained by closing his place of busi- ness. Then he attended the meet- ing of the board at the time and place fixed, and he and the presi- dent of the board voted for making the purchase, and signed the con- tract; but ihe third commis.oioner voted against it. and refused to sign the contract. Held, that such contract is against public policy and void for want of the sanction of a competent majority of the board. Honaker v. Board of Edu- cation. 42 VV. Va. 170; s. c. 24 .S. E. Kep. r)44. An owner of adjacent property entered into a combina- tion with others, and agreed with the owners of a building in a city, if they would offer their building to the government for a nominal rent, to be used as a post office for ten years, and use their personal influence and ''proper persuasion" to secure its acceptance. Ihe former would, in case of success, pay llie latter a certain sum annually for 6 ten years. The location was chosen and leased accordingly, one of the owners of the building, who was a personal friend of the jiostmaster general, having truthfully repre- sented to him that the location was suitable, and their notes were given for the annual instalments. Held, that the consideration of the notes was illegal, the agreement being against public policy, and therefore void. Elkhart County Lodge v. Ciary. 08 Ind. 238. Where a store- keeper (under the U. S. Kevtnue Jjaws), in charge of a distillery belonging to A, promised to give A a certain sum per month as long as he '•ctmtinued to carry on the distillery:" Held, in an action by A upon the promise, that the con- tract was against the policy of the law, and A was not entitled to re- cover. Caton V. Stewart, 7(1 X. Car. 357. A contract by a l)oard of supervisors with «me who is county treasurer, whereby he is to collect all delinquent personal property taxes, and receive as compensation therefor a certain per «'ent. of the interest and penal- ties on such taxes, is against pub- lic |)olicy and void. Adams County V. Hunter. 78 Iowa. 328; s. c. 43 N. W. Hep. 208. 66 PUBLIC I'OLICY [§21 government, thoujjli the turpitude of tlic trunsaction hc- comes more glaring when he is also its otiicer."^ In an im- portant case in Kentucky, the doctrine is stated, as follows: "It is clear that a contract to induce |)ul)lic officers to act partially or c()rrui)tly. or to bias them in the discharge of their official duties, is against pul)lic policy, and principle, analogy, and authority unite in declaring contracts which have an apparent tendency to corrupt, bias, tempt or draw away public officials from the honest discharge of their duties as void because in contravention of public polic}', and we are of the opinion that L, who was an official of the city charged with the custody and power to copy and attest the very ordinance on the authority of which the illegal assess- ments against the citizens were made, was forbidden by public policy to make the contract whereby, if enforced, he would receive money for the disclosures he made, and the services he rendered against the interest of the city whose employment he was in. and to which the law recpiires him to l)e loyal and true so long, at least, as in that employment and in so far as it furnished him, in the course of his duties, information by which he sought or may seek to profit himself, "^ But while the doctrine, as above stated, is established beyond a question, there are circumstances under which a covenant for the employment of an agent to negotiate a contract with the government will be upheld. But there must be a 1 Oscanyan v. Aim.s Co., 103 U. S. 261,273. "In the ease of Giilick V. Bailey. 10 N. .1. L. S7. the a«;iee- inent was that Bailey agreed to give Giilick iSl.OOO, on condition that Gulick would forbear to pro- pose or offer himself to the post- master general to carry the mail on a certain mail route. There was no public auction of a con- tract, nor was the postmaster general, as the case appeared, bound by statute except, perhaps, by implication, to award the con- tract to the lowest bidder. He was bound to advertise for bids, and did so. Bailey and anotiier bid in opi)osition to each otlier. and the contract was awarded to Bailey. The agreement was held void as contravening the statute of the United States, and against pub- lic jiolicy. Any contracts which liave for their object the influenc- ing the action of public oHicials are void as against public policy." Brooks v. Cooper, 50 N. J. Eq. 7(»1 ; s. C, 2(5 Atl. Rep. 978. 982. » Lucas V. Allen. 80 Kv. G81, (582. § 21.] PUBLIC POLICY 67 reason for the act Ihal :i court will accept, and the piocui- inir of the contract must bi" a fair, an open and an h(»ncst business transaction. The entire procedure must be of such a character as to bear investigation by the court. In a case before the Supreme Court of Ohio, Mr. Justice Welch, in deliverinir the opinion of the court, said: "We know of no law forl)idding tlie employment of a<;ents to negotiate con- tracts with the government. It is an employment wliicli is, in many cases, peculiarly liabh' to abuse, and which, there- fore, should be narrowly watched, but it is not necessarih illegal or against public policy. If fairly and honestly con- ducted it is in harmony with the public interest and of benefit to both contracting parties. In many cases such agents are indispensable to the contractor on account of his absence or incompetency to transact the business. In such cases they are of benetit t(» the government also by increas- ing the number of competitors for its contracts, and by en- abling its otficials to dispatch public business without un- necessary delay and trouble."^ ' Winpenny v. French, 18 Ohio St. 4(i9, 47."). >-It is not shown by the finding-i or the evidence in the case that he nsed any improper means to gain his point, or even that he intluenced any senator or representative in congress, or any officer of the government, to inter- fere in his behalf. lie went to Washington personally, and, while there, secured th(' locati(jn of the oHice where he wanted it; butihere is not the slightest testimony that he used any undue means to accom- plish ills end. We cannot presume that he used his personal power, which is said to have been very great, in a corrupt or unseemly manner, or in violation of any pub- lic policy. For aught we know, he |ippeared, asany citizen might and has a right to do. before the proper office at Washington, and stated the merits of his claim so convinc- ingly and conclusively that the location desired seemed to be most proper and available one. Cer- tainly there could be nothing wrong in this. It is true there is evidence in relation to some of the contracts not in suit, that B boasted that he could control the senators from his yUite, and that he must have money to go to Washington to do so, but there is no testimony that either one of them lifted a hand or said a word in his behalf, and there is nothing to show that in the present case he made any such representations to obtain the contract. The defendant agreed to pay a certain sum upon the ac- complishment of an object in which he saw a future benefit to his prop- erty. That object was attained, and he has had tlie bcnelit desired. There is no valid reason why he should not fulfill the contract on 68 PUBLIC POLICY. [§ 22. § 22. For Services in Procuring Appointments to Public Offices. — The principles and rules relating to the employment of atjcnts for the purpose of influoncinff legis- lation or of procuring })er.sonul favors or advantages from the government, as expounded in the foregoing sections, are applicable to all agreements relating to services for pro- curing any public office. In the case of The Tool Comi)any V. Norris, the rule was stated by Mr. Justice Field with great clearness and force, as follows: "The same principle has also been applied in numerous instances to agreements for compensation to j)rocure appointments to public offices. These offices are trusts held solely for the public good, and should be conferred from considerations of the ability, in- tegrity, tidelit}' and fitness for the position of the appointee. No other consideration can properly be regarded by the appointing power. Whatever introduces other elements to control this power must necessarily lower the character of the appointments to the great detriment of the public. Agreements for compensation to procure these appoint- ments tend directly and necessarily to introduce such ele- ments. The law, therefore, from this tendency alone adjudges these agreements inconsistent with sound morals and public policy."' In Marshall v. The Baltimore & Ohio his part. IJeal v. I'olhemus. (i7 inent by which a ciindidate for Mich. 337; s. c. 34 N. W. Rep. otfice receives from anotlu^r person 532. tr^oney to aid iiiiii in seeiuinfj his •Tool Company v. Norris. 2 election, and in consideration Wall. 45, 55. See also Harrinj^ton thereof agrees to share witli such V. Dn Chastel, 1 Bro. Ch. 124; s. c. other person a jiortion of the pro- 2 Dick. 581 ; Groton v. VVald- ceeds and emoluments of the of- horough, 11 Me. 30(]; Robertson v. fice when elected, is immoral, Robinson, 65 Ala. GIO; Bowers v. against public policy, mrthnn in Bowers, 20 Pa. St. 74; Filson v. se. and is totally void. Whether Uines, 5 Pa. St. 452; Lewis v. a contract against pnlilic policy be Knox. 2 Bibb. 41^3; Outen v. executory or executed, no action Riiodes, 3 A. K. Marsh. 432; can be brought, either on the con- Carleton v. Whitcher. 5 N. 11. IflG; tract or to recover back the con- Mt redith v. Ladd. 2 N. 11. 517; sidenition. or to rect»ver judgment Eddy v. Capron, 4 R. 1. 394; Hop- on a promissory note made in con- kins v. Prescott, 4 C. B. 57S; Ferris sideration of a cancellation of V. Adams, 23 Vt. 136; Richardson such contract. There can be no v. Mellish. 2 Bing. 125. An agree- rescission of a contract against § 22.] I'UHLK; I'OLIC^. H9 Railroad Coiiipaiiv, the vn\v is «tatetl by Mr. Justice (irier, as follows: "It is tho inlcrost of the State that all places of public trust should Ix' tilled by nu^n of capacity aud integ- rity, and that the api)oiMtiu«r powei- should be shielded public policy. Such contract is void at. its inception and tliere is nothing to rescind. Martin v. Wade. 37 Cal. 108. "So far as piainiiff was concerned the incen tive that moved hiui was self-inter- est and not the general good ; and, too. he was induced to do what he did do by the fact that he was to share the proliis, and that defend- ant's election would increase their business. So in this case, at least, the tendency of the contract stated in the couiplaitit was to induce plaintiff to use all his influence for defendant's election, even though he did not agree to do so, as found by the court, and such was its nat- ural tendency. This arrangement may have induced him to influence ten men, or a hundred, to vote for defendant in opposition to precon- ceived political principles and fixed ideas of right and duty; and, too, when they may have preferred his opponent as an incumbent of the office. Such a contract cannot be upheld. Its tendency was to corrupt the people upon whose in- tegrity and intelligence the safety of I lie Suite and nation depends — to lead voters to work for individ- ual interests rather than the pub- lic welfare. * * If there are any contracts upon which courts should 'put the stamp of their disappro- bation' it is those curtailing or tending to curtail a free exercise of the elective franchise. Tlie con- tract slated in the c.)mi)laint. as well as that found by the court, were of that character and neither can be upheld or enforced." Gas- ton V. Drake, 14 Nev. 175, 188. On a covenant for a gross sum stated to guarantee on the part of the vendor tliat a post office should be removed from a neighboring vil- lage to tiie place of business of the vendee, and that he should be ap- pointed to it as postmaster, it was held that the bargain was one, the consideration was one, the covenant was one, and that as the procurement of an appoint- ment to oiWro by private influence was part of the indivisible consid- eration, and illegal and void on the ground of public policy, the whole was void. Filson v. Himes, .5 Pa. St. 452. "Public offices in this country are created solely for the Dublic good and not for private emolument or benefit, and the tenure of them can in no case be considered or treated as the private property of the incumbent to be bargained for and sold as such, and such being the theory and spirit and constitution of our gov- ernment, such an agreement as this is incompatible with it and against pul)lic policy, and as such no action at law can be maintained upon it.'' Stroud v. Smith, 4 Houst, (Del.) 448. A contract is contrary to public policy and void, whereby, in consideration of A's procuring B's appointment as special counsel in certain causes against the United States, and aid- ing him in managing the defense of them, li agrees that he will pay A one- half of the fee wbicii he may receive from the government. Me- guire V. Corwine. 101 U. S. 108. In 70 ITHLIC I'OLICV, [§ i^2. from infiuences which may prevent llic best selection; hence the hiw annuls every contract for procuring the appointniont or election of any person to an office.^ In a case in Vorniont, where the defendant heini)^ indebted to the plaintiff, who was a candidate for the office of town repre- sentative, the parties agreed that tin; defendant should use his influence for the plaintiff's election, and do what he could for that purpose, and that if the plaintiff was elected that should be a satisfaction of the plaintiff's claim. The plaintiff was elected, but in violation of his agreement l)rouii:ht suit against the defendant for his debt. The law governing the case was stated by the court, as follows: "The bargain was not only the sale of the defendant's vote, but also his influence and exertions against his convictions and opinions. The defendant, generally', voted for the candidate of the other party, and but for this agreement would not have voted for the plaintiff nor favored his elec- tion. This, also, was immoral and against pul)lic policy. Every voter is bound to use his influence to promote the this case. ;it page 111, the court says: '"The law touching contracts like the one here in question has been often considered by this court and is well settled by our adjudi- cations. It cannot be necessary to go over the same ground again. To do so would be a waste of time. The object of this opinion is rather to vindicate the application of our former rulings to this record than to give them new support. They do not need it. Frauds of the class to which the one here disclosed belongs are an unmixed evil. Whether fori)idden by a statute or condemned by public policy, the result is the same. No legal right can spring from such :i source. They are the sappers and miners of the public welfare and of free government as well. The latter depends for its vitality upon the virtue and good faith of those for whom it exists and of those by whom it is administered. Cor- ruption is always the forerunner of despotism. In Trist v. Child, 21 Wall. 441. while recognizing the validity of an honest claim for services honestly rendered, this court said: 'But they are blended and confused with tliose which are forbiddtMi; the whole is a unit and indivisible. That which is bad destroys that which is good and they perish together. * * * Where tlie taint exists it affects fatally in all its parts the entire body of the contract. In all such cases potior conditio dffendnUis. Where there is turpitude, the law will help neither party.'" Me- guire V. Corwine. 101 U. S. 108, 111. See abo Coppell v. Hall, 7 Wall. 542. ' Marshall v. Balto. & Ohio K. Co.. 16 How. 314. § -iii.] rtni.ic rdLicv. 71 public gjood, accordino; to his own honest opinions jind con- victions of duty. If for money or other personal profit he airrees to exert his intluence aijainst what he believes to be for the public good, he is corrupt, and the agreement void, even though in the actual exercise of his influence against his conscience lie resorts to no unlawful means. Such bar- gains cannot be enforced in law. And the reason why they cannot be enforced is not merely because they are made crimi- nal acts by statute or are opposed to the provisions of the constitution, but because of their own inherent turpitude, because they arc corrupt and corrupting, because they are destructive to public virtue and the welfare of the com- munity. In republican governments, especially, whatever tends to destroy the purity of elections should be guarded against with the strictest watchfulness and pursued with the most prompt condemnation by courts and legislators."^ § '2'.i. The Subject Continued. — While the rule as above stated is well established, it will not apply to any f)roper expenditures in the conduct of an election. While all contracts relating to the purchase of votes or of polit- ical intluence will be held void, as plainly in <-ontravcntion of j)ublic policy, covenants for services in setting forth the claims of candidates to the confidence and support of the voter, and all contracts for compensation for printing and distributing the announcements of candidates, or for the discussion of the issues of the election, either by the press or by public addresses, or for the circulation of literature devoted to a discussion of the merits of a candidate, or to the support of the political j)rining of the fact that one is, or desires to be, a candidate, and the purchase of service to be employed in advocating his j)cculiar merits ' Nichols V. Miulgett. 32 Vt. r>4(;. Dow. 32 Vt. 721 ; Keating v. Hyde, See also Fawrie v. Mo.in's Syndics, 23 Mu. App. 55r». 4 Mart. (La.) 30: Meachani v. 72 PI HLIC POLICY. [§ 24. and eligibility, «o as to influence the ciioice of the voter. No public policy foi-bids the making of compensation, un- der agreement or otherwise, for printing or distributing announcements, or for the employment of any proper agency which may bring the fact of a person's candidacy more prominently before the public eye. The information thus disseminated is essential to the intelligent determination of the voter's choice. But it becomes a very diiferent thing when money is paid or promised for efforts to con- trol the voter's free agency in selecting the object of his suffrage. In the present case, the promise or agreement shown in the testimony and remarked upon in the instruc- tion belongs to the hist mentioned class. The defendant was to 'work for' the [)laintiff's nomination; not as an ad- vertiser only, but as an advocate. We think that the cir- cuit court committed no error in holding that the agree- ment was void, as against public policy."' § 24. For Withdrawal of Opposing Candidate. — Where two persons are applicants to the president, to a governor, or to any other constitutional ap})ointing power for an office, and the}' enter into an agreement by which one is to withdraw and to aid the other in securing the ap- pointment, the covenant is not enforceable. In a leading case it was held that: Where two ])ersons apply to the governor of the State to be appointed to the same office, 1 Keating v. Hyde. 28 Mo. App. in the power of the grantor to 555, 500. A promise, in consider- lessen the eiuoliunents which the ation of the governor l)eing pre- law has aflixed to the discharge of vailed on by the i)romisee to ap- ollu^ial duties; it matters not to point ihe promisor to the olHi-e, is what use the share of the emolii- not binding. Fawrie v. Morin's inenl thus carried out is applied. Syndics. 4 Mart. (La.) (O. S.) 30. at The pui)lic will be ill served, if the page 49, the court says: "From circle, within which an ollicer is to the instrument itself, it is manifest be selected, is narrowed by a re- that the only consideration on duction of the legal emoluments, which it rests is the illegal condi- If these are withdrawn from the tion on which it is stated that the incumbent he may be placed im- otHce was obtained. This conditi »n der the temptation of compensat- is contrary to sound policy. Of- ing himself by speculation, extor- fices are to be granted absolutely tion and fraud." without an}^ condition. It is not §24.] PURLIC POLICY 73 and it is us^reed that one of them shall withdraw his appli- cation and aid the other in procurintr the api)()intinent, in consideration of which the fees and enioUinients of the office are to be divided between them, such contract is il- Icirai and void. Such an airreement, it seems, is not within the statute respecting the sale of offices, but is void by the common law.^ In the opinion in this case the court said: > Gray v. Hook. 4 Coinst. 449. A promise by a candidate to perform the duties of the otiice for less than the lei;al salary will avoid the elec- tion. State V. Pnrdy, 30 Wis. 213; State V. Collier, 72 Mo. 13 ; Carroth- ers V. Russell. 53 Iowa, 3r)(); Nirh- ols V. Mudgett, 32 Vt. r)4(>; Cook V. Shipinan. 24 III. 614; Tucker v. Aikin, 7 N. H. 113; State v. Olin. 23 Wis. 3U9. -The doctrine which we think is established by theforegoingauthoriliesand which we believe to be souud in princi- ple, is, that a vote given for a candidate for a public oHice in consideration of his promise, in case he shall be elected, to donate a sum of money or other valuable thing to a third party, whether such party be an individual, a county or any other corporation, is void. The power to reject such vote is not vested in the election canvassers, but is vested in the court which is called upon to de- termine judicially the result of the election. The grounds upon which this doctrine is ba>ed are so clearly and fully .-tated in the above authorities that it seems un- necessaiy to repeat them. Indeed, every intelligent person knows that free, unbiased and Cin tlie language of .some of the books) in- different elections are absolutely essential to the existence of free institutions. ♦ • • Promises made to the people by candidates for publii; office that, if elected, they will practice a rigid economy in the expenditures of their several departu)ents, are unobjeclionable; and if the successful candidate ful- fills his pledges in that behalf he is entitled to commendation. In such case, the candidate only promises to perform a legal and moial duty. For example, should a candidate for governor promise that, if elected, he would discharge all persons employed by the State whose .services are not needed, or that he would prevent all unneces- sary expenditures of public funds, so far as he may have powsr to do so. this is only a promise that, if elected, he will, in those respects, faithfully perform the duties of his office. In other words, it is a promise that he will not violate his official oath. But should such candidate propose to the voters and tax payers of the estate, that if they will elect him to the office of governor he will serve the State therein gratuitously or for one-half of the salary allowed by the con- stitution, and pay the rent of an executive office, and the expenses of fuel, statii)j)osed to i)ul)lic policy.' In a rase before the Supreme Court of the United StMt<'s, the court said: "Tlie partloniuii |)ONver, couiinitted to tlie executive, should be exercised as free from any improper hias or influence as the trial of the convict before the (^ourt ; consequently the law will not enforce a contract to pay money for soliciting petitions, or usinij influence to obtain a pardon.'"^ This rule will not be inoperative, and its application will m)t be in any dcirree modified where the service is for the j)urpose of procuriui; a comumtation of a criminal sentence. In Kribben v. Haycraft, the court said: "It is a principle of law dictated by the soundest policy that an agreement can- not be enforced by which one person promises to pay an- other for obtaining or trying to obtain a pardon. The cases are founded on the obvious reason that such contracts are illegal, inasmuch as they tend to encourage the use of improper means tS accomplish the object, and are in con- flict with the intelligent and proper exercise of the pardon- ing power. But it is insisted that the promise in this case is not to obtain a pardon but a commutation of the punish- ment, and that there is nothing in the contract obnoxious to pul)lic policy. The distinction is nominal, foi- the prin- ciple is the same in both cases, and all the considerations that uphold the propriety and wisdom of the rule in the one case apply to the other. "^ § 12<>, For Services whieli are in Violation of Public Duty. — All agreements to perform any act which is punish- able in a criminal sense, or to prevent a criminal prosecu- tion, or to suppress evidence in relation to it, are illegal and void. In Kiiglaiid it lias been held that a priiitei' < aiinot recover against a publisher for print iiig a work which con- pay him for his services and to re- ' Thnipp v. Uoliett. 2(> IJeav. pay him liis expense,s. Such a 12"). contract, if the parties conlem- * Marshall v. Balto. Poplett V. Stockdale, 2 Cair. & P. 198. A covenant in a deed not to convey or lease land to a China- man is void, as contrary to the public policy of the government, in contravention of its treaty with China, and in violation of the fourteenth amendment of the con- stitution, and is not enforceable in e; S5; Fivaz V. Nicbolls. 2 C. li. noi ; Kickett-s v. Uaivt-y, lUiUnd. M4; Porter v. Jones, G Coldw. 313; McMahon v. Smith, 47 Conn. 221; Gorham v. Keyes, 137 Mass. r)S3; Ex parte Wolvevhmupton Banking Kiml.roujjh v. Lane. 11 Bush, 55«; Co., L. R. 14 Q. B. Div. 32; Cook Lindsay v. Smith. 78 X. Car. 328: v. West & Atl. Ky. Co.. 72 Ga. 48. Baker V. Fanis. (U Mo. 380; Shaw ^ Couderman v. Trenohard. 58 V. Keed, 30 Me. 105; Shaw v. Harh. Iti"). Spooner, N. H. 107; Badjjer v. ^ Ilodsdun v. Wilkins, 7 Green!. Williams. 1 I). Chip. 137 ; (iood- 1 13; .\yer v. Iliitchiiis, 4 Mass. 370; win V. Crowell. 5ti Ga. 5t>ti; .Snider Churchill v. Perkins. 5 Mass. 541 ; V. Willey, 33 Mich. 483; Sinnner V. Denny v. Lincoln, 5 Mass. 385; Stunner, 54 Mo. 340; Wright v. Webber v. Blunt. 10 Wend. 188; Rindskopf, 43 Wis. 344; Roll v. Clark v. Foxcroft, G Greenl. 296. Raguet, 4 Ohio. 400; Vanover v. A contract to reprint a book In vi- Thunjpson, 4 Jones L. 485: Halt- elation of a copyright belonging haus V. Kuntz. 17 111. App. 434; to a third parly is void. Nichols Henderson v. Palmer, 71 111. 570; v. Ruggles, 3 Day. 145. Taylor v. Jaques, lOG Mass. 291; 80 PUBLIC POLICY. [§27. agreement was illegnl. It was lu'ld, also, that the written agi'coinent was admissible in evidence, for the ))iirj)()se of insisting on the illegality of the transaction, in answer to an action for the sum so agreed to be paid, without its being stam})ed.^ In Vermont it has been held that the considera- tion of a contract must not only be valuable, but lawful ; hence there can be no recovery by one for his time and service, the purpose and tendency of whose employment was to obstruct the administration of justice, by influencing State witnesses, and by inducing the State's attorney to hold back in the discharge of his official duty in prosecut- ing the defendant charged with adulterv.^ § 27. For Services in Opposing a Public Enterprise. — It is well established that all covenants that have as their object the defeat or obstruction of any public enterprise are in contravention of public policy and void. The courts will not lend their aid to the enforcement of any agreement of this nature, and they will not afford relief to any person Avlio has put his property in peril for any purpose of this character. Among cases that fall under this rule are those relating to the oj)ening of a street, or of a public road. In Smith V. A]ii)legate, it was held that a promissory note given by the applicants for a pul)lic road to a caveator against such road, in consideration of the caveator's with- drawing his opj)osition to the road, and permitting the re- turn to be recorded, is void, being founded on an illegal consideration. A contract on the part of the caveator to withdraw his opjjosition to the laying out of a highway, is against the jjolicy of the law, and, therefore, void. In the opinion in this case, the court said: "The same considera- tions api)ly with increased force to a controversy touching the la} ing out of a })ul)lic highway. Any one aggrieved is at liberty to caveat against the road. lie is under no obli- gation to do so. He may, at his pleasure, al)and()n his opi)osition. But he may not lawfully bind himself to with- draw his opposition, nor may he contract to receive a price • Coppack V. Bower, 4 Mees. & « Barron v. Tucker, 53 Vt. 338. W. 3G1. § 27.] ITHLIC POLICY. Si for so (loiiiij:. riu' obvious and iiiiavoi(lal)li' tciKicncv of siu-h a prac'tiot' to unjust litii:;ation, tlie lure it would liold out to private t-upiditv, to tlu' irr<'at detriment of j)ul)rK' in- terests, render it neee>sarilv repugnant to t he |)orK\ , and subversive of the benetieent desiirns and ])rovisi<)ns of the statute."*' In a reeent ease before the Court of Chaneery of New Jersey, eoniphiinant eonveyed property to ids father- ' Smitli V. Applegiite. 23 X. .1. Law, 352. 358. "It is very clear that the contract in question never could have been enforced against the caveator. If the caveator having agreed to withdraw his opposition, and having received a price for so doing, had refused to comply with his contract, and per- sisted in his opposition to the road, this court surely never could have enforced a compliance wiili the contract on his part, nor awarded damages for his non-compliance. The contract upon him would have not been obligatory. This consid- eration, alone, demonstrates that the contract is illegal, as against public policy. The contract, more- over, to be valid, must be binding upon both parties. If not binding upon one it is binding upon neither, and if the contract of the caveator is illegal, and by reason of its illegality forms no valid con- sideration for the contract of the applicants, the execution of the illegal contract constitutes no bet- ter consideration. When the note in question was given there was no consideration for tlie promise on the part of the maivers, but a prom- ise on the part of the payee, ille- gal, inoperative and not binding upon him. The contract was void. The fact that it had been executed by one of the parties will not au- thorize the enforcement of an il- legal contract as against the other." Ibid. .\ town h.is no power (> to agree, for a valuable considera- tion, to discontinue a highway. The mode of discontinuing high- ways is fixed by statute with a pro- vision for an appeal by any party aggrieved, and a town cannot, at its mere pleasure, discontinue them. And a town cannot enforce a prom- ise of the other party of which its own promise to destroy a public right was the consideration. Town of Cromwell v. Conn. Brown !5tone Quarry Co.. 50 Conn. 470. The commission of a lawful act is not actionable though it proceeded from a malicious motive. A pub- lic road was laid out along the di- vision line of the unimproved lands of two persons, and the land was afterwards cleared and sown. To save expense, they agreed each to fence to the middle of the road. Held, that the agreement to enclose the land was illegal, and either one had the right to remove his por- tion of the feni-e. and was not liable for injury sustained by the other in his crop, then ready for harvesting, whether the motive for the removal of llie fence was ma- licious or otherwise. .Jenkins v. Fowler, 24 Pa. St. 30S. See also Dingledein v. Third Ave. R. K. Co., 9 Bosw. 7!>, 89; Dygert v. Schenck. 23 Wend. 441); People v. Cunningham, 1 Denio, 524; People v. Lambier. 5 Denio, 9: Kenwich v. Morris. 3 Hill, 62; s. c, 7 Hill. 575; Merri wether v. Nixon, 2 Smith's Lead. Cas. 297. 82 iTiu.ir roLirv. [§ 28. ill-law for no other coiisidcratioii than that the Latter was to use his iiitlueiice in o))i)ositioii to an extension of a street across the property, with an uiulerstandinof that it was to l)e reeonveyed to the oriijfinal owner. The influence was used successfully, hut the father-in-law died heforc tiie projx'rty was reeonveyed. It was held that, as the object of the conti-act was the defeat of a public enter|)rise, the court would not enforce it.' § lis. Tlie Subject Coiitimielic. Kailway compaides. though private corporations, are engaged in a business in which the |)ublic have an interest, and in which such com- panies are pul)lic ser\ants and anicual)le as >nch. Tliis doctrine has been repeatedly announced by this and othi'r courts. * » « ji is in i-ecogintion of the paramont duty *>f railway companies t(» establish and maintain their dejiots at such points and in such manner as to sid)serve the i)ub- lic necessities and comcniciice. that it has been held }n- all ' .Sloi'imi V. Woolt-y. 4:{N. .1. K<\. a:>\ : s. c. 11 All. I{.'|.. 2iU. § 2S.] rUBLIC I'OLK "4 s:i foiirts, with \vv\ t\'\v ('\(('|)ti()iis, that coiitrncts niMtcri.-illy limiting" tlit'ii' power to loc.-itc .-md rclocalc their (h'|»t)ts arc airaiii>t piihHe |)oli(\', and. therefore, xoid." "' In a no! her ease ' IVople V. C. i<: A. li. It. U<>.. 130 III. 175, 182. 184. II iM'inj,' u director and president of the Ore- jjoii cV: California K. K. Co.. and tbe owner of a controlling interest in the stock of said company, agreed with 1* that, in consideration of a certain sum of money, lie would cause the line of said rail- road to be located on a certain route and a depot to he built at a certain place, instead of adopting .mother route then surveyed, which was shorter and over which said road could be constructed at less expense. Held, that such a con- tract is contrary to public policy, a railroad being a ijuasi pui)lic corporation, and the public has an interest in the location of their lines of road and depots. Holla- day v. Patterson, 5 Ore. 17G. '-With regard to the change of the loca- tion in the depot, we would remark that the railroad authorities have unlimited power to tlx them for the best interests of the enterprise, even though a money <'onsideration be received therefor, but they can- not make a matter of commerce of them as a punishment to a non- ■»ubsciil)ing town, nor establish them for any other piirpo-e that tlie best interests of the commimity and of the road.'' Cin-rie v. N. .1. .V: C. K. K. Co.. CI Miss. 725. 7H1. A agreed with the Pacitic Railroad Company to deed it a certain lot of gmund for purposes of speculation in consideration that the company would locate a freight and passen- ger depot on his land. There was no evidence that the land was to be used for the general business of locating, constructing, managing and using tlie road. Held, that al- though in one sense llie comjiany was a private corporation, yet its chartered privileges were granted, in part, to subserve great public interests; that such an agreement might be superinduced by pros- pects of mere gain, and thus the general welfare and good of the public might be sacrificed in sub- serve mere private interest: llial for this reason such an agreement was void, as against public policy. Pacitic R. R. Co. v. Seeley. 45 Mo. 212. It is the duty of a railroad corporation to furnish reasonable depot facilities for the accommoda- tion of the public in the matter of transportation and travel. A con- tract in contravention of this duty of furnishing reasonable depot fa- cilities is against jmblic policy and void, and a contract not to have or use a depot within three miles of a given point is such a contract. St. Joseph it D. R. R. Co. v. Ryan, 11 Kan. (!()2. See also St. L., .1. & C. R. R. Co. V. Mathers, 104 HI. 257. The city of Marshall agreed to give to the Texas ifc Pacitic Rail- way $300,000 in county l)onds and sixty-six acres of land within the city limits, for shops and depots; and '"in consideration of the dona- lion'' agreed '"to permanently es- tablish its eastern terminus and Texas olUces at tlie city of Mar- shall" and '"to tstjiblish and con- struct at said city tlie main ma- chine shops and car works of said railway comj)any." The city per- formed its agreement and the com- pany, on its part, made Marshall its eastern terminus and built de- pots and shops, and established its 84 ITIJLIC POLICY. [§2S. ill Illinois, the (((Uil said: '-We camiot admit that an indi- vidual is entitled to call for the interference of a court of ecjuity to compel a railroad company to locate unchanire- ablj its depot at a particular spot to .subserve the private advantage of such individual. Railroad companies, in order to fulfill one of the ends of their creation, — the promotion of the public welfare, — should be left free to establish and re-establish their depots wheresoever the accommodation of the wants of the j)ublic may riMiuirc,"' In California it has been held that a written airreement that one party shall purchase a tract of land, and that another party shall share in the jirotits of the land, and allow the purchaser ten per cent. ui)on his advances, which agreement is based upon principal offices there. After the expiration of a few years Marshall ceased to be the eastern terminus of the road and some of the shops were removed. The city filed this bill in oquitv to enforce the agree- ment, both as to the terminus and as to the shops. Held (1). that the contract on the part of the railway was satisfied and performed when the company had established and kept a depot and offices at Mar- shall, and had set in operation car work.* and machine shops there, and had kept them going for eight years and imtil the interests of the railway company and of the pub- lic demanded the removal of some or all of these subjects of contract to some other place. (2) That the word '•permanent," in the con- tract, was to be construed with ref- erence to the subject-matter of the contract, and that under the cir- cumstances of this case it was complied with by the establish- ment of the terminus, and the offi- ces and shops contracted for. with no intention at the time of remov- ing or abandoning them. (3) That if the contract were to be in- terpreted as one to forever main- tain the eastern terminus, and the shops and Texas offices at M;ir- shall without regard to the con- venience of the public, it would become a contract that could not be enforced in equity Texas 6c P. Ky. Co. V. Marshall. 13(5 U. S. 393. Contracts undertaking to obligate a railroad company to establish its depot exclusively at a particular point are void as against public policy. Such companies should be left free to establish and re-estab- lish their depots wherever the public welfare or wants of the public may recjuire. Florida Cent. li. K. Co. V. State. 31 Kla. 482. See, generally. Marsh v. Kaiibiny, 64 111. 414; Fuller V. Dame. 18 Pick. 472; Mobile & Ohio R. R. Co. v. People, 132 111. 5.59; s. C, 24 X. E. Rep. 043; Bestor v. Wathen. CO III. 138; AVilliamson v. Chicago. R. I. & Pac. R. Co.. 53 Iowa. 12(i; S. C, 36 Am. Rep. 206; First Nat. Bank v. Hendrie, 49 Iowa. 402; s. C, 31 Am. Rep. 153; Klkhart Lodge V. Crary. 98 Ind. 238, 240; C. B. R. R. Co. V. Baab. 9 Watts, 458. ' Marsh v. Fairbury. etc. R. Co.. 64 111. 414. § 2JI.J ri'Huc POLICY. 85 the consideration of information to he jriven as to the h)ea- tion of a raihoatl depot, making the investment protitahle, creates a trust in the hind in favor of the party furnishing; the information, is founded upon a suthcient consideration and is not void as against pubhc policy, if it docs not a|)j)car that any rigiits of the raih'oad conn)an\' were affected l»y the giving of such infoniml ion, oi- tiiat it was obtained through a relation to them of trust (»r conti(U'nce, or given in viohition of such trust or contidence.' In a recent case in Louisiana, it was held that a raih'oad corporation is a quasi j)ubnc agent, and it is its duty independent of any agreement to secure an advantage to the corporation to estahlisli its stations most convenient for the public inter- ests. An agrecuu'ut, therefore, by the corporation for a part of the land to estal)lisli its depots and hotels at ])articu- lar j)oints is illegal. - § 29. StipulatioiLs Agaiust Liability. — The rule in re- gard to the liability of common carriers, and to their stipu- lations for e.\emj)tion from liability in case of loss or injury to property in transit, through tlie carelessness or lu'gli- gcMce of their employes, is not uniform. Undoubtedly, the weight of authority favors the rule that a comnu)n car- rier cannot free himself from res})onsibility for the faithful discharge of his duty as a public servant. This is the rule of the Supreme Court of the United States, and it is main- taiiic(l without regard to [\\v lex loci coiih-acfns of the par- ticular State from which the action may arise. In the lead- ing case of The Liv<'rpool Steam Company \ . The I'lucnix Insurance C'om|)any, it was held that upon a (jucstioii of the effect of a stipulation exempting a common carrier from re- sponsibility for the negligence of his servants, the courts of the United States are not bound by decisions of the courts of the State in which the contract i^ made.' In thi> ' (Jreen v. Bruoks. 81 Cal. ;{_*s. Ins. Co.. 12U I'. S. 3!t7: (Jrogaii v. '•' Burney v. Ludeling. 47 La. Kxpres.** Co., 114 Ph. St. .">23; 8. C, Ann. 73; s. c, 16 So. Rep. r.07: 47 7 .\tl. Rep. 134; Buck v. Pa. R. R. La. Ann. 1434; 17 So. Rep. 877. Co.. l.^iO Ph. St. 170; s. c. 24 Atl. '^ Liverpool St«'ani Co. V. Ptiocnix Rep. fJ7S; Lindsiey v. Chicago. 8fj ITHMf POLICY [§ :^J>. case the rule hv which thr Fcih'Tal courts arc ufovcnicd is stated l)v Mr. .lusticc (iray, as foHows: "Hy the coiuiiion hiw of Eiiiilaiul and Aiucrica. hoforo the Declaration of In- dei)endeiice. recouiii/.ed \n the weiirht of Eiiirlish authoritv etc. U. Co.. Mi Minn, 'id',); s. C, 33 \. W. Kep. 7; Hull v. Chicago, etc. liy. Co.. 41 Minn. 510; S. C. 43 X. W. Rep. 399; Canfield v. Baltimore, etc. R. Co.. 93 N. Y. 'S'>2: Railway Co. v. Wynn, 88 Tcnn. 320: s. C..14S. \V. Rep. 311; McFiiddcn v. Missouri Pac. Ry. Co.. 92 Mo. 343; s. c. 4 S. W. Rep. 689; Gait V. Adams Express Co.. MacArth. & M. 124; s. (\. 48 Am. Rep. 742; Abrams v. Milwaukee, etc. R. Co.. 87 Wis. 48;'); .s. c. 58 X. VV. Rep. 780; Annas v. Mil- waukee, etc. R. Co.. 67 Wis. 46; Armstrong v. United States Ex- press Co.. 159 Pa. St. 640; s. C, 28 All. Rep. 448; AtcLison. etc. R. Co. V. Grant. 6 Tex. Civ. App. 674; s. ('.. 26 S. W. Rep. 286: Mis- souri, etc. R. Co. V. Harris. 67 Tex. 16(); s. c, 2 S. W. Rep. 574; Rich- ardson V. Chi(;ago. etc. Ry. Co.. 61 Wis. 5!)(i: .s. c. 21 X. W. Rep. 49; Ayers v. Chicago, etc. Ry. Co.. 71 Wis. 372; s. c. 37 X. W. Rep. 432; Black v. Goodrich Transportation Co.. 55 Wis. 319; s. (;., 13 X. W. Rep. 244; Lawson V. Chicago, etc. Ry. Co.. 64 Wis. 447; s. C. 24 N. W. Rep. 618; Thompson v. Western Union Tel- egraph Co.. (M Wis. 531 : s. c. 25 X. W. Rep. 7S9: Hibhard v. West- ern Union Telegraph Co.. 33 Wis. 55S: Candee v. Wi'stern I'liion Telegraph Co.. 34 Wis. 471 : Rail- way Co. V. .Spanglci. 1 1 Oliid Si. 471 ; Baltimore, etc. R. Co. v. Ragsdale. 14 Ind. .\i)p. 406; s. c. 42 X. E. Rep. 1106; Ohio. etc. Ry. Co. V. Selby, 47 Ind. 471; Hart v. Railroad Co.. 112 V. S. 331 : K:iil- way Co. V. Mayes. 5s Ark. 397; Xew York. etc. R. Co.. 98 Ma.«s. 239; Richmond, etc. R. R. Co. v. Payne. 86 Va. 481 ; United States Express Co. v. Harris. 51 Ind. 127; McFadden v. Missouri Pacitic Ry. Co., 92 Mo. 343; Kellerman v. Kansas City. etc. R. Co.. 136 Mo. 177; s. c. 34 S. W. Rep. 41; Ro- gan V. AVabash Ry. Co.. 51 Mo. App. 665: Diivenick v. Missouri Pac. R. Co.. 57 Mo. App. 550; Conover v. Pacific Express Co.. 40 Mo. .App. 31; Betts v. Farmers", etc. Trust Co.. 21 Wis. 80. --Con- ceding. therefore, that special con- tracts, made by common carriers with their customers, limiting their liability, are good and valid so far as they are just and reason- able, to the extent, for example, of excusing them for all losses hap- pening by accident without any negligence or fraud on their jtart; when they ask to go still further, and to be excused for negligence — an excuse so repugnant to the law of their foundation and to the | wjis substantialh a rctiini to the rule of the common Ijiw. The only inipoitanl iiioditication by the Conirress of the Tnited States of the preNioiislv existinhi|t (tuners,' and that act U'avt'stheni liahU' witliout limit for thi'ir own neijli^enct', antl iiahk' to the extent of tlie sliip and freisrht for the netjliirence or misconchut of their master and crew. The employment of a common carrier is a public one, chaririniT him with the duty of accommodatinir the public in the line of his emplo\inent. A connnon carrier is such by vii'tue of his occupation, not by \irtue of the responsibili- ties under which he rests. Even if the extent of these re sponsibilities is restricted by law or by contract the nature of his occupjition makes him a common carrier still. A common carrier may become a ))rivate carrier, or a bailee for hire, when, as a matter of accommodation or sp(>cial entratrement, he undertakes to carry sonu'thinir which it i> not his business to carry. Hut when a carrier has a ri'Lni- Uii the subject of limUation as to by itsown nejiliirence. That would the amount of damages, it is said be accomplished indirectly what it in the foiej^oing opinion: -It is could not lawfully do directly. The claimed that the limitation in the proof fully .*how.< that the horse, contract, as to the amount of dam- when shijiped. was worth not less ages in case of loss or injury, does than $400, and to hold that tlje not tend to exempt the carrier from owner could only recover one- liability for negligt^nce. The an- fourth that sum would be to ex- thorities cited in brief of plaintiff empt the carrier from a part of the in error so hold, but we are unable liability assumed by it ft)r injuries to draw such a distinction. If a resulting from its own negligence, carrier cannot, by stipulation, be This the law will not sanction.* relieved from liability for its neg- citing Morrison v. IMiillips Con- ligence, it is ecjually clear, for the struction Co.. 44 Wis. 40.">; Kansas same reason, that it cannot. I)y con- City. St. .1. \- C. H. K. H. Co. v. tract with the shijiper. limit the .Simpson. 30 Kan. 04."): Chicago, amount of damages resulting front .St. L. A: N. O. II. Co. v. Abels, 60 such negligence. If the plaintiff Miss. 1017: United States Express in error can lawfully stipulate tliat Co. v. Hackman. 28 Ohio St. U4: the damages shall not exceed $100. Hoehl v. Chicago. M. & St. V. K. it could likewise contract that it K. Co.. 44 Minn. 101; s. (■..40 X. should not be more than $2.">. or W. Kep. 3:W." Harrison. J., in any smaller sum. thereby practi- .\tchison. T. A S. F. R. Co. v. cally relieving itself from all re- Lawler, 40 Nel). MaO. 374. sponsibility for injuries occasiODed ' Rev. Slat.. §§ 4282-428.^. i)0 IM HLir POLICY. [§ 29. larly est;iI)li>lH'(l husincss for <';irrviii<: m11 or ccitaiii ait ides, iiiul, espec'i;illy, if tlial carrier is a corporation created for tl^e inirpose of the carryiiii:" trader, :iii(l the carriaiic of t lie art icies is eiiihraced within tiie scope of it s chart ei'cd powers, it is a e(nninoii carrier, and a special contract ahont its responsil)ility does not divest it of that character. Tlie fniKhiniental i)rincij)les upon wiiich tlie law of common car- riers was established was to secure the utmost care and dili- gence in the performance of their duties. That end was effected, in reuard to aoods, hv charijiii": the common car- rier as an insurer, and. in reuard to passengers, by exact- ing the highest degree of carefulness and diligence. A car- rier who stipulates not to he bound to the exercise of care and diligence seeks to put off the essential duties of his em- ))l()yineiit . Nor can thosf duties be waived in respect to his agents or servants, especially where the carrier is an artificial being, incapable of acting excei)t I)v agents and servants. The law demands of the carrier carefulness and diligence in performing the service; not merely an abstract carefulness and diligence in proprietors and stockholders, who take no active part in the business. To admit such a distinction in the law of common carriers, as the business is now carried on, would be subversive of the very object of the law. The carrier and his customer do not staiul upon a footing of e(|uality. The indix idiial customer has no real freedom of choice. lie cannot afford to higgle or stand out and seek redress in the courts. lie j)refers rather to accept any bill of lading, or sign any paper, that the car- rier presents; and. in most cases, he has no alternative but to tlo this, or to abandon his business. Special contracts between the carrier and the customer, the terms of which are just and reasonable and not contrar\' to public policy, are u|)hel(l : suili a> those exempting the carrier from i"e- s[)onsibility for los>e> lia])pening from accident, or from dangers of navigation that no human skill or diligence can guard against : or for money or other valuable articles liable to be stolen or damaged, unless informed ot" t heir character or value: or for perishable articles or live animals, when in- § 80.] IHHLIC rol.lCY. ".'I jured without (U'fault ov lu'irliirt'iicc of tlic carrier, liut the law does not allow a puMic carrier to ahandoii altoiretlier his ohliiratious to the puldic. and to >-ti|»nlalc for exemp- tions which are unreasonable and improper. amounliuL; to an ahneuation of the essential tluties of his employment . it heinir aiiainst the policy of the law to allow stipulation> which will I'elicN (' t he railroad c()m|)an\' from 1 he exercise of care or diliu'ence, or which, in other words, will excuse it for neiJ:lijience in tlie performance of its duty, the com- pan\- remains liable for such noii^liijence. The analy>i- of tlie opinion in Railroad Company y. LocUwood shows thai it attirms and rests ujion the doctrine that an express sti})ula- tion l)y any common carrier for hire, in a contract of car- riaire. that he >hall be exempt from liability for losses caused by the neirliil't'iice of himself or his seryants, is un- reasonable and contrary to public poli<;y, and, consecjuently, void. And such has always been the understanding of this court, ex})ressed in several later cases."* § 30. The Rule in N«-av York. — In New York the rule of the Supreme Court of the I'nited States has not been fully ui)held. It is settled in that State, as the result of numerous deci>ions, that a <'ommon carrier may limit his liability by contract, and his contract may provide \'ov immunity from the conse(|uences of his own negligence oi- carelessness, and from that of his agents or servants, lint. in order to ucconij)lish this end, the terms of the coiitiact nuist be definite and une<|ui\()c;il. While the decisions on this point are uniform, it i> a|>parent that the conscience of the eminent juri-t> of that Slate i> not in full accord with the ride, and, in con>i't|Uencc. all contracts of this charact«'r are rigidly construed, and no presump- tions are entertained in favoi' (»f the cairier. In Mynard ' Ij\erpool Steam Co. v. I'lmnix iniinicatod from locomotives, or Ins. Co.. 129 U. S. 307. 4;?0. .V resiiltinjj from ne^li^jence of its lease by a railroad company ot employes, is not void as against part of its right of way. on c(mdi- public policy. Hartford Fire Ins. tion that the company shall not be Co. v. Chicago, M. A: St. I'. Ky.. liable for damage to property situ- 70 Fed. Rep. 201 ; s. <".. 17 C. C. A. ated thereon caused bv tire com- <>2. 92 PUKLIC POLICY [§30. V. Syracuse Haili-o.-id Coiiipauy, tlu' <-()url said: "Where trciicral words may opcrati' without inchidiiiir the negli- tjt'Mcc of the carrier or his servauts it will not l)e presumed that it was inteM(h'(l to iiichide it. Every i)resumi)tion is against an intention to contract for immunity for not exer- cising ordinary diligence in the transaction of any business, and hence the general rule is that contracts will not be so con- strued unless expressed in une(juivo( al terms. "^ A stipula- tion on the part of the carrier tliat the goods are to be transported at the risk of the shipper will not release the carrier from liability for loss, resulting from his failure, or the failure of his servants, to exercise reasonable care and prudence.'"^ In a recent case it was held that where a ' Mynard v. Syracuse, etc. K. Co., 71 X. Y. 180: Wells v. Steam Xav. Co.. 8 N. Y. 375; Steinweg v. Erie R. Co., 43 N. Y. 123: Maguire V. Dinsmore, r)0 X. Y. 168: Alex- ander V.Greer. 7 UlU (X. Y.),533; Xicliolas V. New York Cent. R. Co.. 89 N. Y. 370; Ilolsapple v. Rome, etc. R. Co., 86 X. Y. 276. A carrier may lawfully stipulate a time within which claim for dam- ages must be presented, ('ase v. Cleveland, etc. R. Co.. 11 Ind. App. 517; s. c.,39 X. E. Rep. 426; United States Express Co. v. Har- ris. 51 Ind. 127; Louisville, etc. R. Co. V. Widman, !i Ind. App. 190: s. C, 37 X. E. Kep. 554; VVestcott V. Fargo, 61 X. Y. 542; Western Union Tel. Co. v. Jones, 95 Ind. 228; Western Union Tel. Co. v. Scircle. 103 Ind. 227; Jennings v. Grank Trunk K. Co., 127 X. Y. 438; s. o., 28 X. E. Rep. 394: Glenn v. Southern Express Co.. 86 Tenn. .594; s. c, 8 S. W. Rep. 152; Armstrong v. Chicago, etc. R. Co., 53 Minn. 183; s. c, 54 X. W. Rep. 1059; Sprague v. Missouri Pac. R. Co., 34 Kan. 347; s. c, 8 Pac. Rep. 465; Western R. Co. v. Harwell. 91 Ala. 340: s. c. S So. Rep. (149; Selby V. Wilmington, etc. R. Co., 113 X. Car. 588; s. C, 18 S. E. Rep. 88: Wichita, etc. R. Co. v. Koch. 47 Kan. 753: s. c, 28 Pac. Rep. 1013; Owen v. Louisville, etc. R. Co., 87 Ky. 629; .s. c, 9 S. W. Rep. 698; Dawson v. St. Louis, etc. R. Co., 76 Mo. 514; Wabash, etc. R. Co. V. Black, 11 111. App. 465; Adams Express Co. v. Reagan. 29 Ind. 21; Southern Express Co. v. Caperton, 44 Ala. 101 : Western I^nion Tel. Co. v. .Fones, 95 Ind. 228; Merrill v. American Express Co.. 62 X. H. 514. 2 Canlield v. Baltimore, etc. R. Co.. 93 X. Y. 532: French v. J{uffalo. etc. R. Co., 4 Keyes, 108; Moore v. Evans. 14 Barb. 524. Common carriers may limit their common law liability by express contract against risks not arising from their own negligence. The acceptance, without objection by a shipper, of a receipt for the goods, wherein such limitation is declared, may constitute a contract whereby he will be bound. Durgin v. American Express Co., 66 X. H. 277. Common carriers may, by reasonable regulation, make their notes for transporting live animals ^ ;U.] PUBLIC POLICY. it3 sliippci" of |)r(>|)('rt N' t'lili'i's into a coiilract uilli a ••oiniiioii carrier, Nvhcrchy, in consideration of an atirciMncnt of tlic latter to transjjort the property at reduced rates, it is stipulated that in the cNcnt of loss or injury resultinoj from causes which wouhl make the carrier liable, the liahility shall he limited tit an amount not exceedinir a valuation specified, the shipper, in case of loss or injury, is not en- titled to recover moi-e than the sum spci-itied. It is in- cumbent ui)()n a sliij)per to acijuaint himself with the contents of the contract executed by him, and althou»i:h he fails to do so, he will be held chargeable with knowledge thereof.' In the main the New York rule is sustained in Missouri.'-' In a number of States the common law rule, as upheld by the Supreme Court of the United States, is accepted.^ § .'51. Contracts in Contravention of l^aw. — It is well estal)lished that all agreements in contraventU)n of a statute are void, and anv en":ai;ement to render a service or to depend on the v;ilue of the ani- Rep. 151. See also MeFadden v. inals as given by the shipper, and Missouri Pacific Ry. Co., 92 Mo. may limit their liability in case of 348; Rogan v. Wabash Ry. Co.. 51 loss to the valuation so given to Mo. App. GG5; Duvenick v. Mis- establish the rates. Duntley v. souri Pacific R. Co., 57 Mo. App. Boston & Elaine R. R. Co., GO X. 5,")U; Conover v. Pacific Express II. -if.a. Co., 40 Mo. App. 31. ' Zimmer v. New York Central. ^ Abrams v. Milwaukee, etc. R. etc. R. Co., 137 X. Y. 4G0; Belger Co., 87 Wis. 485; S. C, 56 N. Y. V. Dinsmore, 51 X. Y. lUt;; Steers 780; IJetts v. Farmers', etc. Trust V. Liverpool, eti-. Steamship Co., ('o., 21 Wis. 80; Atchison, etc. R. 57 X. Y. 1; Madan v. Sherard, 73 Co. v. Lawler. 40 Xeb. 3.")(>; s. c., X. Y. 329; Gros.^nian v. I)odd.l37 58 X. W. Rep. 908; Welsh v. Pitts- X. Y. 599. See also Kellerinan v. burg. etc. R. Co.. 10 Ohio St. 05; Kansas City R. Co., 130 Mo. 177; Morrison v. Phillips, etc. Con- S. c, 34 S. W. Rep. 41 ; Harvey v. struction Co., 44 Wis. 405; Haugh- Railroad Co., 74 Mo. 538; liallou man v. Louisville, etc. R. Co.. !»4 V. Earle, 17 R. I. 441; s. c, 22 Atl. Ky. 150; s. C, 21 S. W. Rep. 757; Rep. 1113; Coupland v. Housatonic Johnstone v. Richmond, etc. R. R. Co., 61 Conn. 531; t*. c, 23 Atl. Co.. 39 S. Car. 55; s. c, 17 S. E. Rep. 870. Rep. 512; Louisville, etc. R. Co. v. -' Kellerman v. Kansas City, etc. Kaylor, )2t> Ind. 126; s. c, 25 X'. R. Co., 130 Mo. 177; s. c, 34 S. W. E. Rep. 809. See general note 1 to Rep. 41 ; Hart v. Pennsylvania R. section 29, ante. Co., 112 U. S. 331 : s. c, 5 Sup. Ct. Ui riHijc roLHv [§ '^l. to perform ;m net wliidi is in coiilravciitioii of tlu' |)orK'\' of Mil lift of a Icirislaturc. lliouuli it may not Ix' a literal viola- tion of any of its r(M|uii"(Mn('nts, will he held illciral, as in contravention of public policy.' All instruments made for the jnirpose of ^riving effect to an illeoriil agreement are tainted with the illegality, and cannot be enforced in a court of equity.-' In a case in Massachusetts, it was held that an agreement by an insolvent debtor to pay some of his creditors a portion of their claims, in consideration that they would not "trouble or ojjpose his discharge, and would say a good word to other creditors to induce them not to oppose a discharge," is void, as contravening the ' .lac'ksun V. havisoii, 4 Bitrn. tt Aid. 69.5: Rogers v. Kingston. 10 Moore. 102; s. C 2 Bing. 441; Murray v. Reeves, 8 Barn. & Cr. 425: Hall v. Dyson, 16 Jur. 270: S. €., 21 L. .1. ii. B. 224; Hills v. Mittson. 8 Excliecj. 758; Cannon v. Cannon. 26 X. J. Eq. 316: Keppell V. Bailey, 2 Myl. ct K. .517; Smith V. City of Alhany. 7 Lans. 14: Philpotts V. Philpotts. 10 C. B. 8.5: Barn^II v. Hanrick, 42 Ala. 60: Blossom V. Van Amringe, 1 I'liil. Eq. 133; Black v. Oliver. 1 Ahi. 449; Jackson v. Walker. .5 Hill. 27; Cantnr v. Bennett. 39 Tex. 303: I'ratt V. Draiigbon. 21 La. Ann. li.'4: McWilliams V. Bryan. 21 La. .Vnn. 211; Oveiby v. Ovorby, 21 La. Ann. 493; Svvanger v. May- berry, .59 Cal. 91; .Sciulder v. Andrews. 2 McLean. 464: Downing V. Itinger. 7 Mo. aS.j; Boies v. Blake, 13 Me. 381 ; Russell v. De Grand, 1.5 Mass. 3.5: Touro v. Cassin. 1 Xott & M. 172; Gray v. Swiss, 3 W:tsli. ('. C. 276: Benton V. Hope, 19 La. .\nn. 463; Schwartz V. Tyson. 4 H. A: J. 288; Shiffner V. Gordon. 12 East. 29(): Williams v. Woodujan, 8 Pick. 77; Ui)ton v. Haines. .5.5 X. H. 283; Milton v. Haden. 32 Ala. 30: De (Jroot v. \'aiulu/,en. 20 Wend. 390: .Mayor V. Lacy. 3 Ala. 618; Bank v. Stegall, 41 Miss. 142; Sanderson v. Goodrich. 46 Barb. 611; Ladd v. Dillingham, 34 Me. 316: Smith v. Wilcox, 19 Barb. 581; Bernard v. Lupping. 32 Mo. 341; Smith v. Foster. 41 X. H. 215; Mitchell v. Smith. 4 Dall. 269: Vickroy v. Pratt. 7 Kan. 238: Xix v. Bell, 66 Ga. 664; Sherman v. Wilder, 106 Mass. .537; Lender v. Caldwell. 4 Kan. 339: Martin v. Bartow Iron Works. 35 Ga. 320: Drexler V. Tyrrell, 15 Xev. 114: .Siiei- v. Streets. 7 Ind. 132; First Cong. Church V. Henderson. 4 Rob. (La.) 209; Reife v. Com. Ins. Co.. 5 Mo. App. 173; Alexander v. Reife. 74 .Mo. 495: Milne v. Huhcr. 3 Mc- Lean. 212: Ilannay v. ?]ve. 3 Cr. 241 : De .Melton v. M.'Uo. 12 East. 234. 2 Blasdell v. Fowle. 120 Mass. 447. See also Cockshott v. Bennett. 2 T. R. 763: Phelps v. Thomas, 6 Gray. 327: Case v. Gerrish. 15 Pick. 49; Coates V. Blush.- 1 Cush. 564; Pariiidge v. Messer. 14 Gray, 180; Dexter v. Snow. 12 Cush. .594; Downs v. Lewis, 11 Cush. 76; Ramsdell v. Edgarton. 8 Met. 227: .*^milli V. Bromlev. 2 Douff. 6Il(>. § 32.] PUBLIC roi.icv. !•.") j)<>li(\ of the iiisohciil laws.' In a cax- in New Jersey, it hu.s l)eeii hekl that a coiilract wliicli coiitras cues either the jn'ovisions or policy of a piildie law is void; hut a ti-aiisae- tion to be void in law. as a conlract. must lii->t ha\e life as * a coMjpletod treaty between the parties.-' In an Kn»jlish ease. Lord Ellenl)or()Uij:li said : '"It may be taUeii as a received rule of law that what is done in contravention of the \)H)- vi>ions of an act of Parliament cannot be maul)jecl- mat tcr of an action." '' § '.1'2. For Iiitliieiieiii}; the Adiiiinistratioii «»f Jiistiee. — Coxcnants relatinii' to any service or to any acts the object of which is to intlueiice the administration of justice by the courts are in contravention of pid)lic policy and \<)id. It i> not necessary tliat there should be a ))ositi\e attempt to c-orrupt the court, or that any actual subvcision of justice should result. In a recent ca>e in Indiana, it was held that all a«rreements for pecuniary consideration to control the resrular administration of justice are void as against public j)olicy, reirardless of the ijood faith of the parties, and without reference to the (juestion as to whether improper means are contemplated or used in theii' execution.^ In ' Dexter v. Snow, 12 L'usli. .V.M. son v. I.i'unliaid (Wash. I'er.j.'itt - Cannon v. Cannon, '2V> X. J. K!»!. :SIt;. * Brown V. First Nafl l^ank. \M •^ Laiifijfiton V. llii>;bc's. 1 Maiile Ind. (jr)5; Wood v. Ilinnplirev. 1 14 & Selw. .")J)(;. See also Smith v. Mass. 185: Pearl v. Harris. IJl Cuff, i; MauIeA Selw. ItiO; Leices- Mass. 300; V.nss v. Wales. 12!( ter V. Kose. 4 East, 380; Fawcett Mass. 38: Wliile v. Railroad Co., V. Gee. 3 .\n>l. '.MO; Ex parte Sad- 13;") .Mas.s. 21ii: Hill v. More, 40 ler. ir> Ves. 52: Hreck v. Cole. 4 Me. 515; . Canal Co.. 433; Ilowden v. Hal;:!!. 11 .Vd. iV: 1 llarr. 233: Stone v. Dt'imis. 3 El. 1038; Mallaheii v. Ilodi^son. ItJ I'orl. (.Via.) 231; llai;f,'art v. Mor- Ad. & El. ti78; Turner v. Hooie. >;an. 5 N. Y. 422; lliii>t v. I.itch- Dowl. & Ryl. N. I'. 27. Wlwn a field. 3!i \. Y. 377: Mc(;imn v. person has entered as iiuich coal Hanlin. 2W Mich. 47ti; .March v. land as the statutes of the I'nited Railroad Co., 40 N. II. 548. .\n States permit, a contract, whereby ajjreement between a fidelity in- another person is to enter addi- siirance comi)any and the employe tional coal land, obtain the title, whosi' honesty is <;ii.iranteed that and then convey it to the first, is the voucher showinj; payment by .coiitiarv ti> public policy. .lohn- thei;ompany to the employer of 96 ITIUJC rOLIfV [§ ;^2. the opinion in t his cax'. 1 he court said: "All aui'ccnuMits for pecuniary consitleralion to control llic regular administra- tion of justice are void, as airain^t ))ul)li(! policy, without reference to the (juestion whether iniin-()j)er means are con- templated or used in their execution. Tlic law looks to the loss occasioned througli the em- ploye's dishonesty should be con- clusive evidence against the em- ploye as to the fact and extent of his liability to the company was void as against public policy. Fidelity & Casualty Co. v. Eick- hoff. (>3 Minn. 170; s. C., 05 N. W. Rep. 3.")1. Money advanced to the husband at the request of the wife in consideration of his making no opposition to a bill for divorce — being for an illegal and innnoral consideration, cannot be recovered against her on her express promise to pay. Viser v. Bertrand, 14 Ark. 267. "If it be the duty of every man it is more especially the duty of persons injured, who have caused luiminal prosecutions to be commenced, to appear against of- fenders, and not to make bargains to allow them to escape conviction, if they or their friends will pay a sum of money to repair the injury. To decide that such bargains migbt be lawfully made, would be to lend a helping band to make public justice venal. To procure a compensation to be made to the person injured, is a subordinate object to the State, in causing crimes to be punished. It causes crimes to be punished that they may not be committed with im- punity, and, therefore, become more frequent; that the rights of proi)erty and the inviolability of the person may not become less secure; that persons may depend upon the execution of the laws, rather than resort to physical force for the preservation and protection of their rights.'' Shaw v. Heed. 3U Me. 10."). lOii. Proceedings for the establishment of public high- ways are essentially public in their character, and are for the benefit of the whole people; and while such proceedings are begun volun- tarily by private persons, and while also such persons may not be compelled to prosecute such proceedings to a final result, yet an agreement to abandon such prosecution in consideration of money to be paid for such aban- donment, is against public policy, and void in law, and cannot be en- forced. Jacobs V. Toblason. G5 Iowa. 24'). The threat of a crimi- nal prosecution, used to compel the giving of a promisorv note, may constitute duress, although the amount for which the cote is given is actually due to the payee from the maker. A promissory note in settlement of a claim may be void as given under an agree- ment to suppress a criminal prose- cution, although no threats of prosecution are made at the time of the settlement, if they have been made a few days before and not been retracted. Taylor v. Jaques, 100 Mass. 291. Where a note was given in consideration of a promise made by the payee to cause a prosecution for a felony, then pending in the State of Tennessee against the son of the u)aker of the note to be discontinued, and a mortgage was executed to secure the payment of the note, it was § ;J2.] ri I'.i.K' I'oi.icv. :•: ii'ciKMal tciidi'iicN (if >ii(li .-iLi'ri'cmcut > : audit cld^cv^ 1 he door to tciuptat ion l)\' r('fii>iiiu' t lu-iii iccouuit ioii in an\ of the courts in llu' comitrv. ( iiccnliood on Piihiic I'olicv, p, i3, thus lays down the rule : ''riic (|U('stioM of the \alidityof tlu' contract doi's not (lc|)cn(l upon tlic circinn>tanc(' whether it can lie sliown that the pid)lic has in fact suffered any ch'tiiment , l)ut whelhei' the contract is in its nature such as niiulit be injurious to the public. It inatter> not that any pai'ticular contract is free from any taint of actual fraud, oppression or corruption. The law loolo to the i>eii«-'n»l tendency of vsuch t-ontracts.' The evil tendenc\ of the contract in suit is clearly ap|)arent. The mere statement of it >hock> the sense of ju>tice and fair play. I>\ held that tlie consideration was illegal and that both note and niortgajje could be avoided. Hen- derson V. Palmer. 71 111. .">79. An employe of a railroad company may. by contract, waive his rijjjht to sue for injuries not arisinij from criuiinal neirlijjence on the part of the company, or its other em- ployes: but any negligence, either of omission or commission, on the part of other employes of the road, in connection with their business, from which serious injury results, constitutes criminal negligence. and a contract waiving the right to sue for injuries resulting thcrcfiom is contrary to public [)olicy and void. Cook v. Western & Atlantic R. R.. 72 Ga. 48. An agreement to procure witnesses to testify to a certain state of facts, is immoral and against put)lic policy. Tatter- son V. Donner. 48 C"al, 3(l!t. .See generally as to agreements forshift- ing criminal prosi'cutions : (ior- ham V. Keyes. i:i7 Mass. 583: Lind- say V. Smith. 78 X. Car. 328; Baker V. Farris. 01 Mo. 38t>; 8baw v. Spooner, 9 N. H. 198: Chandler v. Johnson, 39 Ga. 85: Goodwin v. Crowell, 50 Ga. 5t»G: Snider v. Wiliey. 33 Mich. •ls3; Summer v. Summer. 54 Mo. 34U: Wright v. Rindskopf. 43 Wis. 344; Roll v. Raguet, 4 Ohio. 400: Ricketts v. Harvey. IOC Ind. 5(J4 ; Teed v. Mc- Kee. 42 Iowa. (J89; McMahon v. Suiith, 47 Conn. 221: Pearce v. Wilson. Ill Pa. St. 14; s. c. 56 Am. Rej). 243; Wheaton v. Ansley. 71 Ga. 35; Ormerod v. Dearman. 100 Pa. St. 561 ; Rhodes v. Xeal. 64 Ga. 704; Averbeck v. Hall. 14 Bush. 505; Baehr v. Wolff, 59 111. 470; Dunkin v. Hodge, 46 Ala. 523; Merrill v. Carr, 60 N. H. 114; Buck V. Bank. 27 Mich. 293: Bowen v. Buck, 28 Vt. 308. As to collusion in divorce cases see Stoutenburgh V. Lybrand. 13 Ohio St. 228; Kil- born V. Field, 78 Pa. Si. 194 ; Sayles V. Sayles, 21 N. II. 312; Cross v. Cross. 58 N. H. 373; Goodwin v. (loodwin. 4 Day, 343: Stilson v. Stilson. 4() Conn. 15: Belden v. Miinger. 5 Minn. 211; Adams v. .Vdams. 25 Minn. 72: Kverhart v. Puckclt. 73 Ind. 409: Phillips v. Thorp, 10 Ore. 494; Mope v. Hope. 8 l)e (;.. M. ct (J. 731; Weeks v. Hill. 38 N. H. 199: Brown v. Brine. L. R. 1 Kxcher]. D. 5. 98 iTiii.ic roi.icY, [§ '^'2. virtue of llu' contriKt Mppcllaiit a^smiicd a position where seltish motives mio;ht have iiiipeUetl him to saeritiee tlie puli- lic ii'ood for private iraiii : for there is no «>reater ))iililie irood than the ritjht of everv person eharired with tlie com- niission of a eriine to have a fail" and iin})artial hearinjr; '111(1 there is no hiirher security for that riii:ht than the preserva- tion of the courts free from corruptinii; influences."*' In a recent case it was held tliat a contract whereby a justice of the j)eaci' airrees to chariic smaUer fees in suits to hr hrousiht before him by a certain corporation than prescribetl l)y statute, and that such fees shall not be collected unless paid over l)y the defendants to the corporation, is contrary to public policy and void.- In a case in Michiiran. a justice of the peace agreed with an attorney to charire no fees in cer- tain suits broiiirht before him unless the judii"mciit> rendered therein were collected. It was held a ])alpal>le violation of judicial duty and void as against public policy : and that the justice could not recover from the })laintiff for services actuaUy rendered, the whole transaction being be- yond the in'otection of courts of justice.^ In a recent case in California, it was held that a contract between the ' Brown v. First Xafl Bank. i;^7 valid, and it follows, necessarily, Ind. 055. OGS. that a promise to coinpensat*' a - Ilawkeye Ins. Co. v. Brainard. witness for his attendance cannot 72 Iowa. 130; s. C, 33 N. W. Kep. he enforced, which, if known. 603. "Hen' the amount of com- would have excluded him fiDm pensation was to depend upon tlie Iteing a witness: as it would 1>'' a success of the i)arty to the suit, in fraud upon the administration of whose favor the witness was to justice. Such contracts are airain>l testify, and although there may sound policy, because tlieir incvii- have been no agreement, or expec- able tendency would be if not to tation, that the witness would give invite to i)erjury. at least to sway falsetestimony, the inevitable tend- the mind of the witness l>y giving ency of the contract was to give him the interest of a party to the liim a bias in favor of the party eause and thus contaminate the calling him as a witness, as the stream of justice at its source. It promised rt'ward was to be reduced can neither admit of doubt or onc-lialf. if tlie party in whose cpiestion. that both morality and favor he was to testify was not sue- sound i)olicy forbid the toleration cessful in the suit. This i-reated of such contracts as this."' VA- such an interest in the event of the dings v. bong. 10 Ala. 203. 208. suit, as would have prevented him •' Willemin v. Bateson, 03 Mich. *rom testifying if the contract was 30!). piirrliM^cr at a paililioii >ak' and (tiiu of llif parties to the partition -nit, who was al)ont tocontol tiic confinuution of" till' sail' for inadi'tpiafy of tlii' j)ri('0 l)i(l, to the effect that said ))arty. in consideration of a s|)ecitied snin to l)e j)aid in addition for her interest in the pro|)ert\. wonUI refrain from contestinii' said contirniation. is a contract for the conceal- ment of a material fact from the court and the other parties to the partition snit. which it was the dutv of the coiitraet- inii' party to make known, and is xoid as against public policy, and neither party should receive the aid of the courts to enforce it.' In a case in Missouri, it was held that it i- unlawful for a (aiididate for public ottice to make offers to the \(»ti'is to perform the duties of the otHce, if elected, for less than the leaul fees. An election secured })V means of such offers is void.- In Kansas it has been held that an aiirccmenl to withdraw the plea of usur\' i> airainst j)ublic policy and cannot be sustained.'' In his o))in- ion in this case, Mr. Justici^ Brewei- said: "The aureemenl to \sitlidraw the plea of u-ury cannot be sustained. It is no better than an aiireement not to plead it, and surely if such an agreement could be sustained a usurious loan would ahvays be accompanied by an agreement not to plead the usury, a wvy simple if not effectual way of evading the law.--' § '.Hi. For Clian^in^ tlie Otlicer.s of Corporations. — The a])|)ointment and rcmo\al of the directors and otlicci-- of a <(irporation cannot be made .1 matter of bargain and >ale. l'erson> occu|)ying t hcM' positions sustain, towai'ds ' 'I'appan V. Alhiiiiy Hrcwingro.. at private sale. Boyle v. Adams so (Jal. .')70. An a«jrecinfnl to ")() Minn. 2r)."»; s. c.. .Vi N. \V. Hop. withdraw an offer or l»id for prop- stjO. «'rty of the State offered for sale. - Attorn»'y-< Jeneral v. Collin. 72 to enaldo one of the parties thereto. Mo. i:{. See also Alvord v. ("ollin. l)y the removal of competition, ti) "20 I'iok. 42S; Tucker v. Aiken, buy it cheaper than he otherwise 7 N. II. 140: State v. I'lirdy. :{•; could, is a«;ainst piil)lic jiolicy, and Wis. 21H; s. c, 17 Am. Itep. 48."». not enforceable, and it is inima- ^ Clark v. Spencer. 14 Kan. 390. terial whether property is offered M'l:irk v. Spencer. 14 Kan. 'M'.). at public auction or by inviting 404. liids or proposals for its purchase 1(>(> rir.i.K roMc^. [§ ;>,■). the sl()cUli(»l(lcrs. the rcliitioii of trii>t aiul coiitidciicc. niul tlicv arc Ixiiiiid to act willi Nii|)rciiic rcfcrcMcc lo llic inter- ests of tlio>t' whom tlicv rcprcM'iil. \\\\ aarcciiicnt into which thc\ inav enter, the object of which is to a- saehusetts. it was held that a contract. 1)\ which a >iiare- holder in a corporation, in consideration of the purchase of a part of his stock at a price named, aurees to secure to the purchaser the otHce of treasurer of the cor|)oration. with a fixed salar\'. and in case of hi> renu»val to re])urcha>e the stock at par. is void as auainst public i)olicv and as a fraud on the other members of the corporation, in the ali- sence of evidence that the transaction was not for the i)ri- vate benefit of the shareholder, or that it was t-onsented to by the other members of the corporation.' In the opinion in this case the court said: "It was the purpo>e and effect of the contract to inHueiuc the defendant in the deci>ion of a (|uestion affectiui:' tlie jjrivate riahts of others l»y c(msid- erations foreii>n to those rii>hts. The promisee was placed under direct inducement to disri'uard his tlulio to other members of the cori)oration. who had a liuht to ilcmand his disinterested action in the seleclit)n of suitable othcers. He was in a relation of trust and eontidence which re(|uired him to look onh' to the best interests of the whole, unin- Huenced by private iiaiu. The i-cuitract operali'd as a fraud upon his associates.'"-' In California it has been held that an agreement of a trustee of a corporation for a pecuniary recompense to resign liis trust, is cou/ra honos ntorcs, and a contract based, either wholly or in part, on such an agree- ment as a consideration, is void. ■ In a ca>e in Kansas \ ' (JiK'insi'y V. (.'ook. I'Jd Mass. (_'. ;{l'.»; Marshall v. Halliiiiore i^t 501. See also Fuller v. Daiiu-. IS Ohio K. K. Co.. IG ilow. :{14: Pick, 472; Case v. (Jenish, Ifi Elliott v. Kichardson. L. U. ."> ('. Pick. 4'J; Smith v. Townscnd. lOit P. 744. Mass. oOU; Phippen v. Stickney. ii - (iiiern.-t'y v. Cook. IJ(I .Mass. Met. 384; Gibljs v. Smith, 115 Mass. 501, 502. 5!»:>; Ciutis V. Aspinwall. 1 14 Mass. •" Forbes v. McDonald. 54 Cal. US. 1S7: "Waldo v. .Martin. 4 Barn. i<: § .■)4.J rriu.ic i'omcy. 1'>1 t'litt'i-cd into ;i \crl»al coiit r.ift willi I), -a (lir('hare. upon the condition tiiat he >lionld l)e made cashier of the haid<. Snl)se(|uent l\ l) notilie(| N that he could not and would not fulfill the contract. 'I'hei-eupon X hiounht an action for dainaii'es for the hreadi thereof. It \va- held that t he con>iderat ion of t he cont ract Ix'ini:' aiiainst puhlic policy tlu' contrad wa-- \itid, and ihal N wa^ not entitled to recover daniaiic^.' § 154. For Keuoiiiiciiij4 an K\eeiitor".lii|>. — A c(t\cnant under which an executor euii'aijes to retire from his execu- torship for a consideration, i> in contravention of puhlic policy and void. An executor cannot nudiiion. Fremont v. national t)ank ought not to be Stone. 42 Barb. Ifi'.i. made a matter of l^argain and sale -' Ellicoti v. ( 'hami)erlain. lis \. t)etween applicants and members .1. E<|. (;04 : Mc('aw v. BlewU. 2 of the board."' Xoel v. Drake. McCord Ch. ItO: Bate v. Bate. 11 suprn. The defendants made an Bush. tilW; Bowers v. Bowers. 2<> agreement willi the plaintiff, by I'a. Si. 74; Owing- v. Owings. 1 102 PUBLIC I'OI.UV r§ '--i- ;in <»f \i\- will. l)ul 1)\- a ((((licij lu- cxcliKlcd tliciii aiul appointed two otlicr persons. ( )ne of tlieiii retired in consideration of £".'». paid to him hy one of the e.\ehi(h'd trustees, and execnted a deed apixiiutinu the excluded trus- tee to act as trustee in \u> room. 'I'he c(»nrt chrected the new trustee to he remo\('d and the (U'vd to l)e cancelled : Hair. i!c <;. 484: L'iiniiin<;li:iiii v. Cunningluiin. 18 B. Mon. 24: Ilar- greavcs v. Wood, *2 Sw. tfc 'I'r. (iOiJ: Van Meter v. Jones. 2 Green Cli. 520; Clark v. Constantine. H Bush. 652; Wheelock v. TiOoney. 1") X. Y. Wkly. Dig. 12G; Sugden v. Cross- land. 3 Sni. & Gif. 193: Whatley v. Hughes. 53 Miss. 268; ypinks v. Davis. 32 Miss. 152: Page's Estate. 57 Cal. 238: Birfs Case. 48 L. T. 67; Foote v. Emerson. 10 N't. 338: Brown V. Stewart. 4 Md. Ch. 3C)8: Squier V. Squier. 3 Stew. Eii- 627: Aston's Estate. 5 Whart. 22S: White V. Bullock. 4 Abb. A [.p. Dec. 578; Allen v. Humphries. L. R. 8 P. D. 16: Willis v. .lones. 42 Md. 422; Ward v. Thorn pscm. 6 (Jill & .J. 349. On the 14th of October. 1873. the orphan's court of Cecil county i)assed an order setting aside the alleged will of E W M. and revoking the letters tes- tamentary previously granted to A R M. On the 1st day of November. 1880. H M filed his petition seeking to have the aforesaid order of the orphan's court >et aside and an- nulled. The jtetilioiier alleged "that large i>roperty. real and pei- sonal. was left to him in trust under the will." and claimed that as trustee under the will he had ihe right to impeach the validity of said order. The evidence showed that for a pecuniary consideration which he afterwards received. Ihe petitioner agreed to renounce his otHce of trustee, as well as that of execuioi'. In pmxiaiice thereof be tiled a petition in the orphan's court, resigning his oHice as ex- ecutor, and praying to be relieved therefrou). and an order was passed by the court accepting his resigna- tion and discharging him from the oflice of executor. The oflice of trustee he never, in fact, accepted, except as such acceptance was im- plied by his assuming the office of executor. It was also in proof thai while the petitioner had actual notice in Sejjtember. 1874. that the will of E W M had been set aside, yet he took no steps to impeach the judgment until the 1st of Novem- ber. 1880. when he filed his petition. On an appeal from an order of the oiphan's court, dismissing his petition, it was held that, in the face of his express agreement to surrendei- his office as tiustee. and after having received and retained a large consideration for entering into the agreement, the petitioner, as trustee, had no interest, under the will, entitling him to maintain his suit, or to impeach the judg- ment of the orphan's court. Mun- nikhuysen v. Magraw. 58 Md. ^u>7 . •I'arties have no right, by agree- luent. to attempt to control the discretion of the jirobate court or the clerk in the exercise of this discretion. The law is that tlie clerk or court, in the contingency named, shall grant letters to any person who shall be considered most suitable. * • » 'I'he main purpose of till' agiecment was to secure the appointment <>f an § H4.] ITULIC I'DI.K '^ . lO;*) . It was held farther that a prctHt (U'riNcd bv a trustee, either from the trust propei'ty or froiu his office of trustee. l)eh»Uiis t o t he re.s' the undoubted riuht to renounce, of liis own motion, if he desires. Hut a renunciation f(U' a consi(h'ration. — a I'cuun- <-iati()n purchased in anv manner without t he concnrrem-e of the testator, and durintr his lifetinu'. i> a very different matter. If ai£roenients of this nature are to he enforced, then, sureh. testators may well doubt, not only as to who will carr\- out their will>. but whether they will l)e carried oiU at all. * * ' The principle is the sanu' whether the difference is small or urea t : and if the will may be varied bv airreement in tlu' lifetinu- of the testator, in a minor respect in thi> case, it uui\' l>e \-aried in an important one in the next, and the door would l>e thrown wide o|)en to fi-aud and corruption on the part of desjo^ning men and intri»ruiuir descendants, and im|)osition upon confidinu" te>- tators."-' This rule apjilies to administrators. A contract adininisUiitur. 'I'lji^ af^it'emcnt antborilit-.s (see Bowei!; v. Itoweis. amounts to a tiattictiinj; in this 2(! Pa. St. 74; Davison v. Seyinoiu-. important trust. AUboiij^li it is not 1 Bosw. 88; Eddy v. Capron. 4 It. .1 piililic ottice. it is. neverttieless. I. 394: Foreman v. Bcrijliaii<. i;{ a private trust just as sacred, and La. Ann. 201); Gray v. Hook. \ arises from an ajjpointment to l»e Comst. 44H; Kiel; v. Merry. '28 Mo. made l)y a i)iibiic court or ofticcr. 72: Kriblien v. Ilaycraft. 2(i Md. An aj^reement to procure an ap- H'.MI: Comyns. Contracts. HO: Cbnk pointment to office is against public v. (.'onstantine. ;{ Busb, l>r)2). wbicti policy and void. 'I'be trust de- seems to intimate a contrary rule volved upon an administrator in a ca.se .somewliat similar to tbe through the appointment of a one under review, does not seem to public functionary, ougiit to have have been well considered, and is the sanie safeguards thrown around opposed to the principles decided it as if it were a |)ubru' olliee. in the very autlioritie> referred iiy The note sued on in this case, and the judge who delivered tbe opin- the agreement iipcui which it was ion." Porter v. Jones, .")2 Mo. :{!•'.). based, must be taken together and 402. viewed as one instrument, .\sthev ' Sugden v. (rossland, :i Sm. \ .amounted to a trading in the ap- (iif. 102. pointmentof an administrator they ^ ^.^tanton v. I'arker. I'.t Hun. til; are void as against pul)lic policy. Manning v. Manning. 1 .F(»!ins. Ch. This seems to be well settled t)V the .")3:t. 104 rriu.H i'olhv. [§ .■).'). uiKler which an a(hiiiiiistr:i(()r onjj^aires to reliiu|uish the right of adniiiiistratioii upon the estate of an intestate for a valuable considenition. is in contravention of public policy and void.' But in Ireland a contraet of that eharaeter was held valid and bindiuir.- In a case where the guardian of C made an agreement with C's grandfather bv which he was to resign his position as guardian and jx-rmit the grand- father to assume it, the consideration l)eing that tiu* grandfather should give C a child's share of his estate, it was held that the contiact eould not be enforeed in etjuity."^ § 35. For Assignment of Salary not yet Due. — It is well settled, both in England and in the United States, that a public officer cannot legally make an assignment of his salary. Such an assignment will be treated as in contra- vention of })ublic ])olicy and void. In the leading case an agreement between a municipal corporation and its town clerk thai he should receive a fixed salary in lieu of the fees to which he was entitled under the statute, and that, to carry out such agreement, he should j)ay over to the borough fund so much of the amount received for fees as should be in excess of that salary, was held contrary to public ])olicy and invalid.^ In his t)pinion in this case Vice-Chancellor Wood said: "It seems to me that there are two plain grounds of j)ublic policy which render >uch 'Bower* V. Bowers. 2() Pii. St. •* Ciinninjjhaiii v. Ciuininijliaiii. 74; Owinos v. Owings. I Harr. \- 18 B. Mon. :i4. G. 484. * Corponition of Liverpool v. 2 Ciirrigiin"s C:ise, (J Ir. .lur. (N. Wright, 5 .Jur. (X. S.) liru!; s. c. S.) 110: Bassett v. Miller, 8 Ind. 28 L. .J. Ch. 871 ; Flarty v. Odiam. 548. "While such contracts sboiild S T. R. 681; Stone v. Lidderdale. not be encouraged, it is far better. '2 Anst. 233; Davis v. Marlboro. 1 in view of public policy and sound Swanst. 79; T/idderdale v. Mont- morality, that they should be sus- rose. 4 T. R. 248; Barwick v. Read, tained. than that conduct should 1 II. Bl. t)27; Arbuckle v. Cowhan, be tolerated l>y this court by which 3 Bos. 4?t V. 328: Wells v. Foster, S solemn engagements may be re- M. i<: W. 14t»: Hunter v. Uardner. pudiated, and fraud and deception ti Wils. iS: Shaw, t>18; Hill v. I'aiil. l)er|)etrated with impunity." Bas- 8 CI. i^ Fin. 307; Palmer v. Bate. sett V. Miller. st(prn. 2 Brod. iV; Bing. G73; Parsons v. Thompson. 1 U. Bl. 322. :iii .•iirr»n'iM('iit ilU'i»;il. * * » 'PIkmc i< tir^l llic whole cla-^s of ^ImIiiIcs. Mirrcciiii:- to ;i u'l'^'nt cxtciil with the coiii- iiioii law ill that r('s|K'ct. althonnh iiiakiiiu," the i-oiiiiiioii law more forcible and e"i\ iiiii' alatiile law ii--es the word 'corrupt." I apj)rchend it does not dep<"ii(l on whether the per>oii doe-. it with a corrupt mot i\ c or not . or whether the per-on havinu' the appointment is a |)ul)lic l)o(|\ or not. hut it is fonsjtlered a corrupt act on the part of" such i)orsoii, how- ever oxcollent his intention may he. * » * That i> the first iri'ound of pul)lic policy. 'I'he second ground of piihlic policy i< tlii--: That, independent ly of any corrupt hareain with the appointor, nobody can deal with the fe«'- (d' a per- son who holds an office of tlii> de>criplioii. I)ecau>e the law |)resunie>, with reference to an oiiice of trust, that he re- i(uires the erant. whiih the law has assigned him. for the purpose of upholdinu the dignity, and ])erforiiiinu' properly tiie duties of that (dfice. Ilciice it will not allow the holder of the office to part with any portion of the U'i-s. either to the a|)pointor (U- to ainlxxh' else. He is not allowed to eharge or incumlier theiii."' In a leadiiiii" casein New York it was held that an a<-iLi'iinieiit 1»\ a pidtlii' otliccr of the future salarx' of hi- otlice is contraiw to public polic\' and i^ \oi(|.- In his opinion in this ca>c Mr. .lu-tii-c doliii- ' ( 'orporation of Liverpool v. in part, is •;iven as a compensation Wright, ") .Itir. (N. S.) lir»(;. ll.")7: for past services, and in part witli s. c, 28 L. J. Ch. S7l. a view to fiitin-e services. I'pon a ^ Bliss v. I.awience. .')S X. Y. review f»f the English cases, it will 44'J; Heal v. McVict:-{. "Some ices miglit l)e assigned. Tlicdouljt. misapprehension as to the doctrine and the only douljt. in the case of involved seems to liave arisen from half pay oflicers. was to which the fact that the modern adjudged class they were to be taken to cases have often related to the pay l^elong. It was decided that, inas- of half i)ay arm}' oflicer-. wliicli. mucli a- tJieir pav was in i)ait in lOfi riHLIC I'OLICV [§ ;;; 8(tns;ii(l: ''The |)ul)lic s('r> ice is inotccted by protoftiiijr those ciiofMjriHl ill pcrforiiiiiiL^ piihlic duties, and this, not upon the iri'ound of their private interests, hut upon that of the neeessity of seeiirinir the ettieieiicv of the pnhlie serv- ice, by seeinir to it that the funds provided for its main- tenance should be received by those who are to perform tht' work, at such periods as the hiw has a|)poiiited for their l)aymeiit .'■' view of future seiviocs. it \va> un- assigniible.'" lilies v. Lawrence. r)8 N. Y. 442. 445. -Eaeh of cer- tain deputies and copyists in tlie otticc of the clerk of tlie city and county of San Francisco (in the early part of the month of .Uily. 1881, or before the commencement of that month), delivered to the clerk a writing purporting to be a demand upon the treasury of said city for his compensation or salary as for said July, and having in- dorsed thereon the words -received payment.' subscribed with the name of such deputy or copyist. The writing was immediately, and before the salary was due, delivered by the clerk to the petitioner for a valuable consideration. ♦ * * But the plaintiff received the de- mands Mn the early part of .luly." and before the respective salaries for that month were earned. He thus took part in a tiansaction con- trary to public policy, and must be held to have knowingly contra- vened the law." Hangs v. Dunn (1884). 6(i'Cal, ll; s. c., 18 Re- porter. 752. A contract l)y which the clerk of the Louisville chancery court transfers and assigns to a trustee foi' the benefit of a|)pellant. in consideration of a dei)t due him. all the fees and emoluments of liis otlice in the future, until the dei)t is paid, with conditions to pay deputies, etc.. is void. It is again>t public jiolicy that such contracts be enforced. Field v. Chii)ley. 7'.» Ivy. 2(10. Defendant, a public ofti- cer. verbally assigned a share of his pay. to accrue for a certain month, to plaintiff, bui >ubse- (juently collected the whole, and only paid orer to plaintiff a part of the .share he had assigned. Held, that the sale was void under the statute of frauds. The sale by a public ofticer of his salary, as such, before it is earned, is void as against public policy. Billings v. O'Brien, 14 Abb. I'r. (N'. S.) 238. In AVisconsin. in marked contrast with the foregoing, the court, in State Bank v. Hastings. 15 Wis. 78. says: •"We are referred to some Knglish cases which hold that the assignment of the pay of officers in tlie public service, judges" salaries, pensions, etc.. was void as being against public [lolicy; but it was not contended that the doctrine of those cases was applicable to the condition of society, or to the prin- ciples of law or i)ublic policy in this country. For certainly we can see no possible objection to permitfing a judge to assign his salary before it becomes due. if he can tind any person willing to take the risk of his living and being en- titled to it when it becomes pay- able.'" ' Hliss V. Lawrence. 5S X. V.442. 445. ( IIAPTKIJ II. (OX'I'liACTS IN IJKSli;. MNT oF IKADK. $ ;{i;. Iiiirudiictory. >j 4S. 'i'he Subject Continued. 37. 'riie (Jeneriil Itiilr. j 4'.t. I. imitations in ( 'onveyance<. 3S. The Kiilo in En<,d:ind. \ .")0. 'I'he Siil)ject ( 'ontiniicd. ■.i'.i. I'aitial I)istini. Contracts lieiatinu- to Trade 4-2. Tlie Siibji'ct Continued. Secrets. 4S. Tuueliinii Territorial l/im- .">H. Restraint of Trade by I'at- ilation>. ents. 44. Tiie Subject Continued. .'i4. Where Contracts Reiatini!; 4.'i. 'I'crritorial I.imits Deter- to Patents are not I'p- mined. held. 4ii. \alidity of Contracts in lie- .">.">. Restraint in tlic Sale of a straint of 'I'rade as \i- Trade-Mark. fecled by their Ifeason- .')(;. Restraint in l'iil)lieation ablene^s. \ Contract. 17. Divisibility of llle. ill rotiaiiit of tfadc 1im\c Ix-cii held to be in coii- tfa\ciiti«>ii t'f |ml»lic |»(>li<\-. .•iiid. in consccjiiciu-c. void, is that it !.■> the diitv of the law -iiiakiiiL' powcf to scettrc to ('V('f\- citi/.iMi the fiirht to piifsiic his ordiiiafy axocatioii and to di^|»o>c td' hi- lalxif, of of thr |ifo(hi of kiih'(l laliof. 'riic law ha> fcirard, on the one hand, ti» tin- intcfcsts of the |)»'f-«on rotfainod from lal)of of tfadr, |ifot«'(tiM l)af\nieiit . In a east' before the Su))roiiie Judicial Court of Massachusetts, the principle was stated by the court, as follows: "The unreasonableness of <'ontracts in restraint of trade and business is very ap]>areiit from se\'eral ()b\ ious considerations: I. Such eoiitraets injure the ))artics uiakinu- them, because th(\\" diminish their means of procuring; lixclihoods and a <'o!npetency for their families. They tempt improvident persons, for the sake of j)resent irain, to deprive themselves of the power to make future acf|uisiti()ns, and they expose such i)ersons to imposi- tion and ()t)pression. i\ They tend to depri\'e the jiublie of the services of iiu'ii in the employments and capacities in wliich they may be most useful to the i-ommunity as well as to themselves. .). They discourage industry and enterpris<'. and diminish the products of inorenuity and skill. 4. They prevent competition aiul enhance prices. ."). They expose the public to all the evils of monopolies. And this especially is applicable to wealthy companies and larire corporations who have (he means, uidess restrained l)y law. to exclude lixalry. monopolize business and engross the market. Against evils like these wise laws ])rotect individuals and the pid)lic by declaring all such c(jntracts void."' The rule under which ' Alger V. 'I'liiitchcr, 19 I'ick. oj. and tiis own intcie.st leqiiiic Iliat r)4. See also Gierke V. Comer. Cas. he should do. Any deed, iheie- t. Ilaidw. r)8; Chesnian v. Xainby. fore, Ijy which a person binds iiini- 2 Ld. Itayin. 1456; s. <".. :{ Rro. 1*. self not to eniploy his talenis. his C. :{4!t: Kreeinantle v. Company of industry or his capital in any use- Silk Throwsters, 1 Lev. 22'.): ("iid- ful undertaking in the kingdom, don v. Eastwick. Salk. 11)8: Hani- would be void, because no good son v. Goduian. 1 IJiirr. 12; Pierce reason can bo imagined for any v. Hartrain. Cowp. 21)0 ; (iunmak- jxTson imposing such a restraint ers V. Fell, Willes, 3.S4; Harrison on himself. Hut it may often hap- V. (iardner. 2 Madd. 15)8; Shackle pen that individual interest and v. Baker. 14 Ves. 4(>S; Morris v. general convenience may render Coleman, is \'es. 4(58: Crutwcll v. engagements not to carry on trade, bye. 17 Ves. ;WG. "The law will or to act in a profession in a i)ar- not permit any one to restrain a ticular place, proper." IJest. ('. ]terson from doing what the public .1., in Homer v. A^hford. A Hing. § .it!.] CONTKAfTS IN KKSIItAlNT Ol' lUA 1 )r.. 1 ( H) (•(mtr:i(t> in rest mint tif" tratlc wvrv held to he ;iii:iin-l pnlt- lic ))(>h»v and Noid was cstahhslu'd in Knirhmd at an carlN da\'. and. with some ni(i(HHcati<)n>, h\ which it ha> hccn 31'.'. ••In :icc'(»r(hiiu-«' witli ilu-se dllitT parly Ik* not prcvenled from principles, it is woll settled that a piirsiiinj; his calling, and the coun- slipiilalion by a vendee of any try be not deprivfd of the benefit trade. biisipe.«s or establishment of his exertions." liradiey. -I., in that the vendor shall not exercise Oreijon Steam. N'av.L'o. v. Winsor, the sanie trade or business, or erect "JO Wall. M. (is. ••!! appears, and a similar establishment within a is conceded liy appellant, that the reasonable distance, so as not to particular business or trade in interfere with the value of the which ai)pellee was engat^ed at trade, business or tliinji; purchased, the time he sold out and executed is reasonable and valid. In like the contract in controversy was manner a stipulation by the vendor confined to the limits of the city of of an article to be used in a bnsi- Ilannuond. There is no contention ness or trade in which he is him- that it extended to any other parts self enujaojed. that it shall not be of the State beyond these limits, used within a reasonable reijion or Xeither from the nature of the distance so as not to interfere with business nor otherwise, does it ap- his said business or trade, is also pear that it was necess-.iry for the valid and binding. The point of protection of the appellant that the dilJiculty in these cases is to deter- appellee should be prohibiicd from mine what is a reasonable distance engaging therein at any and all within which the prohibitory stip- places in the State other tlian the ulation may lawfully have effect, city of Indianapolis. It is a matter And it is obvious, at first glance, of general knowledge that there that this must depend upon the are numerous consumers of oil for circumstances of the particular fuel and illuminating purposes in case: although, from the uncertain this great and growing State, and character of the subject, much it is nnnifestly to their interest latitude must be allowed to judg- that there should l)e competition ment and discretion of the parties, in the selling of the same, at least. It is clear that a stipulation that that the price thereof may be rea- another shall not pursue his trade sonable. The enlarged covenant or employment at such a distance of restraint as to territory, it is from the business of the person to olivious. was unnece.s.>>ary under be protected, as that it could not the circumstances. It could server possibly affect or injiM-c him. would no pmpose. except as a tendency i)e unreasonable and atisurd. On towards the monopoly of the busi- tlie other hand, a sti|»ulation i> nn- ness. If appellant could buy out objectionable and binding which appellee and restrict him in this imposes the restraint to only such manner, it might jiroceed to do so an extent of territory as may be to every other person in the whole necessary for the protection of the Stale engaged in a similar business, party making the stipulation, pro- and eventually reduce the sale of vided it does not violate the two oils in the State to comparatively indispensable conditions, that the few hands, or possibly to its own 11" CONTKACTS IN KKSTUAINT OK TKADK. [§ o7, ;ul:i))l('(l to the cliaiiiicd iiit rial coiidit ioi)> of later tiiiu's, it foiitiiiuc- to Ik- tln' (loctiiiic of the KiilHi>1i and American court >. \} :{7. The General Rule. — The u'enera! doctrine, as ostahlislicd bv veiv ninnerous decisions. throM«h a lonu' series of years is. that contracts in resti'aint of tiade are in contravention of public policy antl in conse(|uence \oid. In every case this is the presuui))tion. and the burden (d' proof is upon the partv seekiuir relief. But this rule i^ subject to nuxlitication by the force of <'ircunistances. A contract in restraint of trade will be held \ali(l where it is limited in its oi)eration, is founded upon a \aluable consideration and is reasonable in its provisions. It must not l)e opprc>>ive to the party restrained from lakino- an adxantaire of his necessities; it nuist not involve a sacritice of his interests as the I'esuit of an injudicious surrender of his risihts. and it must not be prejudieial to the interests of the pul)lic. All covenants in oeneral restraint of trade, that is. all con- tracts which restrain a man from carixinjz on business, or absolute t'outrol. and ttiiis virtually v. Lo\\(\ 47 Iowa. 187: Arnold v. stitlc legitimate competition. The Kreiitzei'. ti7 Iowa. "214: Lauhen- l;iw has always l)een hostile to the hcimer v. Mann. 17 Wis. '\42: Fair- creation of monopolies when they hank v. Leary. 40 Wis. (IHT; Iveeler tend to impair the interest of the v. Taylor. r)3I'a. St. 4(57 : McClurg's public. It is elementary that what- Appeal. r)8 Pa. 8t. .")! : Koehler v. ever is injurious to or against the Fearbacber. 2 Mo. App. 11: IJoii- publif good, is void on the ground telle v. l^mitb. 11(1 ^lass. Ill: of public policy. This policy un- Ligbtncr v. Men/.cl. .?."> Cal. 41!): sunier as cheaply as possible, and (iuerand v. handelct. ;^2 Md. 7\{\] : is opposed to monoijolies which .Fenkins v. Temples. 31t (Ja. iWut: tend to adyance prices to the in- Iloagland v. .Segur. HS X. .1. L. jury of the public in general." 230: (urlis v. (Jokey. (IS N. Y. •Fordan. .1.. In Consumers" Oil Co. :?()(): (happcl! v. Urockway. 21 v. Nimnemacher. 142 Ind. .")H0. 507. Wend. I."i7: Lawrence v. Kidder. See generally the following cases: 10 Marl). (141: Howser v. Hliss. 7 Mitchell V. Itcynolds. 1 P. Wms. jJlackf. 844: Talcott v. Hrackett. .". ISl: Whitney v. Slayton. 40 Me. Hradw. (iO: Linn v. Sigsbee. (17 111. 224: Perkins v.Clay.oS N. II. .")18: 7"); Stearns v. Barrett. 1 Pick. 443: Clark V. Crosbv. ;{7 \t. ISS; Hcdo-e 'i'urner v. .lohnson. 7 Dana. 43.'). § O?.] CONTRACTS IN ItKSTKAINT Ol" rUADK. Ill from till' |)i*:ict ict' of his profession or trndc without miin limil of time or spjui", or without a xaliiahlc coiisicU'ratioii, arc \(»i(l. But all aurt'cnuMits in particular or partial ic- straint of trade, that i>. all agreements which are >ul»jec| id propi'r limitations of time and space, if not unreasonable oi- j)rejudicial to the public welfare, will he upheld. In a lead- ing i-ase before the Supreuu' Court of Judicature of the State of New York, the rule is stated bv Mr. .lustice Hron- son, as follows: "-The common law will not permit indi- viduals to obliire themselves by a contract where the thinii- to l)e done or omitted is injurious to the ))ublic. Contracts in restraint of trade are for the nu)st part contrary to sound |>olicy. and are, eonsecjuently, held \'oi(l. This i> the ireneral rule. There may be cases where the contract is neither injurious to the jjublic nor to the obligor, and then- the law nuikes an exception, and declares the agreement valid. The general presumption is against all con- tracts in restraint of trade, and, c()nsc(jncntly. it is upon him who seeks to enforce such an obligation to >how that it is free from objection. Contracts which go to the total restraint of trade, as that a man will not pursue his occupation or carry on business anywhere in the State, are void u|)on whatexcr consideration they may be made. They must be injurious to the ))ublic, and no good reason traint, as that a man will not »'xi'rcise his trade oi' carry (Ui l>usiness in a particulai" place, and where such reasons are shown, the conti'aci will Ite upheM and enforced. The connnon law on this subjei-t undoubtedly had its origin at a time when there w«'re c(»mparative|y xcry few mechanics and tradesmen, and when thcic wa- much more reason for guarding again>t re>traint> of tlii- kind than there can be at i>re>enl. Still, I am unable to say that the reason of the rule has soentirelv c«'ased that the rule itself is at an Ill' TON TRACTS IN KKSTKAINT OK TIJADK. [§ 37. end. Il iiiii>t Ix' :i(liiiiltt'(l. Iniw cv cr. that (• at the })rc.">i('iit (lav look iijxni (•()iilra(i> of tlii> (!(•>( riptioii with much K'>s jcahmsv tliaii thcv did at a foriiK-r period. At one tiiiu' tilt' contract, however free from ohjection in other re>|)ect>. wouhl ha\c l)een held xoid if made in the form of a penal oldiuat ion. I>ut there i> no loiiiicr an\' donht that the partv may hind himself to the performance (d' such a contract under a penalty, a^ well as hy the covenant or Ijromiso. The modern decisions have also alhtwed a lartrer restraint than would formerly have been sanctioned, and one or two of the recent cases have jrone nearly, if not (|uite, far enouirh to iii\'e uj) the i)riiiciple upon whicji the court-- oriii'imdly acted, t houiih without |)rofessini:' to do so."' 'Cliappell v. Urockway, ■JMVend. imieasonable. lie added what is 157. loS. "But it is said that a re- etiuaily applieal)h' in the case at straint from Kochester to Buffalo. l)ai-: -neither are the public likely a distance of about 100 uiiles. is to be injined by an agreement of too largo — that it is not confined this kind, since every other person to a particular place. The objec- is at liberty to practice as a surgeon tion seems to take it for granted in this town.' In Xolile v. Bates, that a valid restraint cannot ex- 7 Cow. ;JU7. the restraint extended tend beyond a particular town or over a circle of forty miles diam- city. That is not the rule. A man eter. and was held good; and in cannot, for money alone, where he Haywood v. Young, 2 Chitty's R. has no other interest in the matter. 407, a restraint of tiie like extent l)urchase a valid contract in re- was upheld. In IMeree v. Fuller, straint of trade, however limited 8 Mass. 223. an agreement nut to may be the circle of its operation, run a stage between Boston and But when a good reason appears Providence, and in Perkins v. for allowing the parties to con- Lyman. Mass. 522. a contract not tract, the restraint may extend far to trade from Boston to the north- enough to afford a fair protection west coast of .\merica for the pe- to the obligee. IIow far this will liod of seven years, were severally l»e. must dei)end in a great degree held unobjectionable. In Bunn v. upon the nature of the trade or (iuy, 4 East. 11)0, a i)racticing at- l)usiness to which the contract re- torney agreed to relinquish his lates. In Davis v. Mason, n Dnvn.Si business and reconnnend his clients East. lis. the defendant agreed not to two other attorneys, and that he to exercise the business of a sur- would not i)ractice within a circle geon. ai)othecary and man midwife of :{0n miles diameter, having Lon- within ten miles of Thetford. and don for its center. This, thougli it judgment was given for the plaint- certainly was a very large restraint, iff on a breach of the agreement, including a good deal of sea as Lord Kenyon said, he did not see well as land. was. nevertheless, held that the limits were necessarilv valid. In llonier v. (Iravcs. 7 § H7.] roXTRACTS IN RESTRAINT OK TKADK IIH In the case of the Oregon Steam Navii^ation Coinj)any v. Winsor, the rule is stated by Mr. Justice Bradley, as follows : "Cases must be iudijed accordiuix to their , the defendant aj^reed not to practice as a surj^eon dentist within 100 miles of the city of York, where the phiintiff carried on that business; and this was held an un- reasonable restraint, because it was larger than was necessary to afford a fair protection to the plaintiff in the enjoyment of his trade. The last case to which I have referred gives the true rule on this subject, and is decisive of the question un- der consideration. The defendant sold out his business of running packet boats between Rochester and Buffalo; and that cannot be an unreasonable restraint, which is only co-extensive with the busi- ness which the defendant agreed to relinquish and the purchaser expected to acijuire. Ibid. lt)2. "In the celebrated case of Mitchell v. Reynolds. 1 P. Wms. 181, Chief Justice Parker (concludes his elab- orate argument in these words : •In all restraints of trade, lohere nothing more appears, the law pre- sumes them bad, but if the circum- stances are set forth, that pre- sumption is excluded, and the court is to judge of those circinn- stances, and determine accordingly. and if upon them it appears to be a just and honest contract, it ought to be maintained.^ In this I fully concur. The law starts with the presumption that the contract is void; and it is only by showing that there was an adequate consid- eration or good reason for entering into it, that the presumption can be destroyed. The rule is, not 8 that a limited restraint is good, but that it may be good. It is valid when the restraint is reason- able; and the restraint is reasona- ble when it imposes no shackles upon one party which is not bene- ficial to the other. The facts which prove the restraint reasona- ble must in some way be made to appear; and as the presumption is against the party setting up the contract, it lies on him to remove the ditliculty." Ross v. Sadgbeer, 21 Wend. 166. But see Diamond Match Co. V. Roeber, 106 N. Y. 473. ''The latest decisions of courts in this country and in England show a strong tendency to very greatly circumscribe and narrow the doctrine of avoiding contracts in restraint of trade. The courts do not go to the length of saying that contracts which they now would say are in restraint of trade are, nevertheless, valid contracts and to be enforced; they do. how- ever, now hold many contracts not open to the objection that they are in restraint of trade which a few years back would have been avoided on that sole groimd both here and in England. The cases in this court which are the latest matii- feetations of the turn in the tide are cited in the opinion in this case at general term, and are Diamcmd Match Co. v. Roeber, 106 N. V. 473; Hodge v. .Sloan, 107 N. Y. 244: Leslie V. Lorillard. 107 X. Y. .■jIK." Peckham. .1.. in .Matthews V. Associated Press. 136 N. Y. 333,. 340. lU CONTRACTSvIX RESTRAINT OF TRADE. [§ ^^7. lipal unrounds on which the doctrine is founded that a con- tract in restraint of trade is void as against public policy. One is the injury to the public by being de])rived of the re- stricted party's industry; the other is the injury to the party himself by Ix'ing precluded from pursuing his occu- pation, and thus being prevented from supi)orting himself and his family. It is evident that both these evils occur %vhere the contract is general, not to pursue one's trade at all, or not to pursue it in the entire realm or country. The country suffers the loss in both cases, and the party is deprived of his occupation, or is obliged to expatriate him- self in order to follow it. A contract that is open to such grave objections is clearly against public policy. But if neither of these evils ensue, and if the contract is founded on a valid consideration and a reasonable ground of benefit to the other party, it is free from o])jection and may be en- forced."! 1 Oregon Steam Nav. Co. v. Winsor, 20 Wall. G4. G8. See also Leather Cloth Co. v. Lorsont, L. R. 9 Eq. 349; Hubbard v. Miller. 27 Mich. 15; Long v. Towl. 42 Mo. .545; Gilman v. Dwight, 13 Gray. 356; Grasselii v. Lowden. 11 Ohio St. 349. '"In the second place, it seems to me that this covenant, on which this suit rests, is illegal in itself, and absolutely void. The substance of this covenant is. that neither the former owner of these premises, nor his assigns, shall sell by the quantity any marl taken from these lands. This is not a restriction on the use of the land, for the marl can be dug up and used upon the land: but the r«^- striction is on the sale of the marl after it shall have been dug up. Miirl of course is an article of mer- chandise, and the covenant re- strains traflic iu that article. It prohibits the sale of it at any time, in any market, either by the owner of the lands or bv his assijrns. Now, it seems to me. that this is a plain contract -against trade and traffic, and bargaining and con- tracting between man and man.' That it is the rule that all general restraints of trade are illegal has never been doubted since the famous opinion of Lord Maccles- field in Mitchel v. lieynolds, re- ported in 1 P. Wms. 181. And the development in this rule, and its application under a variety of con- ditions, can be traced in the series of decisions which have been care- fully collected and intelligently commented on in the notes to the case just cited in 1 Smith's L. Cas. 182. The reason upon which this rule is founded is thus expressed by Mr. .Justice Best in Homer v. Ashford. 3 liing. 32G : "The law will not perujit any one to restrain a person from doing what his own interest and the public welfare re- quire that he should do. Any deed, therefore, by which a person binds himself not to employ his talent. §38.] CONTRACTS IN UKiSTUAINT OF TKAUK. IV) § 38. The Rule in England. — The rule as upheld by the Auiericau courts is based upon the earlier English de- cisions as they have Ween modified l)V those of later times, in adapting the law to the changed industrial conditions of the country at the present day. Similar changes have been effected by the English courts, but they have gone some- what farther in abrogating or nuxlifying the early doctrine than the courts of this country. There is not entire una- nimity in the decisions of the English courts, but they agree in upholding a more liberal rule than that of the courts of the United States. In a recent leading case before the Chancery Division of the Supreme Court of Judicature, which was subsecpiently sustained by the House of Lords, his industry, or his capital, in any useful undertaking in the kingdom, would be void.* And so far has this principle been carried, that even in cases in which the restraint sought to be imposed is only par- tial, it has been repeatedly held that such agreement will be void, unless it be reasonable, and that no such agreement can be reason- able in which the restraint imposed on the one party is larger than is necessary for the protection of the other. Horner v. Graves. 7 Bing. 737. Tested by these principles the covenant in question appears to be destitute of all the essentials of a legal agreement. The restraint it imposes is general both as to time, place and persons. It tran- scends by far the limits of utility to the covenantee. I cannot say that this covenant it legal, any more than I can say that a covenant on the part of a farmer not to sell, nor permit any of the future owners of his farm to sell, any grain to be grown on his farm, would be U'gal. I think all such agreements are nugatory as opposed to the valua- ble rule of law just referred to, and which is designed, and is so well adapted, to promote conunerce by preventing the imposition of all unnecessary trammels either on labor or on property." Beasley, C. J., in Brewer v. Marshall, 19 X. J. Eq. r)37, 546. See also Alger v. Thatcher, 19 Pick. 51 ; Albright v. Teas. 37 X. J. E(j. 171 ; Lange v. Werk, 2 Ohio St. 520; Hank v. King. 44 N. Y. 87; Callahan v. Donnolly, 45 Cal. 152; Taylor v. Blanchard, 13 Allen, 370; More v. Bonnet, 40 Cal. 251: Wright v. Ryder, 3G Cal. 342; Stearns v. Barrett. 1 Tick. 443; Gill v. Ferris, 82 Mo. 156; Wiley v. Baumgardner, 97 Ind. 66; s. c, 49 Am. Kf]t. 427; •lohnson v. Gwinn. 100 Ind. 466; Beal V. Chase. 31 Mich. 490; Dean v. Emerson, 102 Mass. 480; Smith's Appeal, 113 Pa. St. 579; Bowser v. Bliss. 7 Blackf. 344; Goodman v. Henderson. 58 Ga. 567; Cook v. .Johnson. 47 Conn. 175; Tinnner- man v. Dever, 52 Mich. 34; s. c, 50 Am. Rep. 240; 23 Am. Law Reg. .50; Butler v. Burleson, 16 Vt. 176; Linn v. Sigsbee, 67 111. 75; Mell v. .Mooney. 30 (ia. 413; Dwight v. Hamilton, 113 Mass. 175. 116 CONTRACTS IX RESTRAINT OF TRADE. [§ 39. Lord Justice I^owen stated the rule, as follows: "Contracts in general restraint of trade may be defined as those bv which a person restrains himself from all exercise of his trade in any part of Kuirland. A mere limit in time has never been held to convert a covenant in oreneral restraint of trade into a covenant of particular or partial restraint of trade. It is necessary to insist on this distinction, which is imbedded in the reports and text books of the last three centuries, since it is through not preserving the exact mean- ing of the term 'in general restraint of trade,' that some confusion has, apparently, at times arisen. The common law is as precise as it can be on the point. Contracts un- limited in area, although they may be limited in time, are. as a rule, held l>ad on the ground of pul)lic policy."^ § 30. Partial Distinguished from Greneral Restraint. — The distinction between general and partial restraint of ^ Maxim-Nordenfeldt v. Norden- feldt, L. R. (1893) 1 Ch. 651. In the House of Lords on appeal in Nordenfeldt v. Maxim-Xordenfeldt Co.. L. R. (1894) App. Cas. .-)35. 575. Lord Morris said: "My Lords, I entirely concur in the jiidj^ment and the reasons for it given by the Lord Chancellor. But I desire to express my opinion that without going through the numerous cases which have been so exhaustively dealt with in the court of appeal and by your Lordships, the weight of authority up to the present lime is with the proposition that gen- eral restraints of trade were nec- essarily void. It appears, however, to me that the time for a new de- parture has arisen, and that it should be now authoritatively de- cided that there should be no dif- ference in the legal considerations which would invalidate an agree- ment whether in general or partial restraint of trading. These con- siderations, I consider, are whether the restraint is reasonable and is not against the public interest. In olden times all restraints of trading were considered prima facie void. An exception was introduced when the agreement only to restrain from trading in a particular place and upon reasonable consideration, leaving still invalid agreements to restrain trading at all. Such a general restraint was in the then state of things considered to be of no benefit even to the covenantee himself; but we have now reached a period when it may be said that science and invention have almost annihilated both time and space. Consequently, there should no longer exist any cast iron rule making void any agreement not to carry on a trade anywhere. The generality of time and space must always be a most important factor in the consideration of reasonable- ness though not per se a decisive test. If the consideration of rea- sonableness or of public interest is the rule, the appellant, in my opinion, has no case." § 3i».] CONTRACTS IN UK8TUA1NT OF TKADK. 117 trade is recojrnizod hv the EiiHish courts. The followiiijj statement of the ruU* in relation to this point, as sustained in Euirland, is from the opinion of Lord Justice Bowen, as cited in the preceding section, viz.: "Distinguished from tiiese general restraints, which the English law dis- coniitenances, are partial or limited restraints, or, as they arc sometimes termed, particular restraints, which, upon certain conditions, the English law permits and enforces. An agreement in 'particular' or 'partial' restraint of trade may be defined as one in which the area of restriction is not absolute, but in which the covenantor retains for himself the right still to carry on his trade, either in some place, or for the l)enetit of some persons, or in some limited or pre- scribed mainier. Particular restraints, according to the language employed in Mitchell v. Reynolds,^ are those in which there is some limitation in respect of places or per- sons short of an absolute and total restriction. But there is also a third kind of limitation which the law will sanc- tion under reasonal)le conditions, namely, a limitation in rcsj)ect of the mode or manner in which a trade is to be carried on. The above are the three kinds of partial re- straint recognized by the law. The English rule, which strikes indifferently at all general restraints in trade, nuikes the validity of a partial restraint depend on the circumstances of each case. A partial restraint will be binding in law if made on irood consideration and if it is reasonable.^ » « » 1 Mitchell V.Reynolds, 1 1'. Wins. 181. 2 Collins V. Locke, L. R. 4 App. Ciis. «>74, 686. "In the history of the appliciition to partial restraints of this test, the courts of common law from time to time have been driven by good sense and l)y altered social circumstances to make grad- ual advances in the direction of toleration and indulgence. Judges as far back possibly as the reign of Henry V., and certainly during the reign of Queen Elizabeth, ap- pear, as has been already stated, to have considered that even partial restraints of trade were uniformly bad in law. But as trade pro- gressed it was necessarily discov- ered that a doctrine so rigid must be injurious to the State itself. In the same way and at about the same date by-laws which were in mere regulation of trade came to be distinguished by the «'ourts from those which were in tmlimited re- straint of it. Nevertheless, as late as the year 1601, in Colgate v. Bacheler (Cro. Eliz. 872), the court held that it was against law to 118 CONTRACTS IN KF>TkAINT OK THADK. [§ •>!' Cases where tlu- rontnict still leaves t(» the cox I'luintor a ritjht to trade with paiticiilar |)er>()iis fall, as has been |)ointe(l out. iiiuler the same head as those where the re- straint is |)artial in respect of space. In both instances prohibit or restrain "any to use a lawful trade at any time or at any place.' This severe view is re- corded in a dictum of Justice Croke (1613) in Rogers v. Parry (B. K. trin.; s. C. 11 Jac. 1 Rot. 223; 2 Bulst. 136), though it was repudi- ated by Justice Coke and the re- mainder of the court. One reason for the adoption of a more elastic doc- trine appears from a judgment de- livered in Broad v. Jollyffe ri62U) (Cro. Jac. 596). In London and other large towns it had become usual already for traders to let their shops and wares to their servants when they were out of their apprenticeship; and for the servants to covenant that they would not use that trade in such a shop or in such a street. The courts yielding to the progress of industry and commerce, finally decided that a man might restrain himself vol- untarily, and upon valuable con- sideration from using his trade in a particular place. The onus, how- ever, at this time, still lay on the covenantee to show that the cov- enant on which he was insisting had been made for good consideration and that it was reasonable. The law is so expounded in Mitchel v. Reynolds (1711) (1 P. Wins. 181). "A particular restraint is not good without just reason and considera- tion.'" In 1726, Chesmanv. Xainby (2 Ld. Raym. 1-J56; s. c, 1 Bro. P. C. 234), the House of Lords af- firmed the doctrine and the quali- fication, and their decision was followed in Gierke v. Comer (1734) (Cas. t. Hardw. i/S) ; Davis v. Mason (1793) (5T. R. 118), and Bunn v. Guy (1803) (4 East, 190). The reason for favoring such partial restraints is enforced also in Homer V. Ashford (1825) (3 Bing. 3J2, 326). 'It may often happen" says Chief Justice Best, 'that individual interest and general convenience, render engagements not to carry on trade or act in a profession in a particular place, proper.' Down to as recent a period as Young v. Timmins (1831) (1 Tyrw. 226). it was still, however, considered to be for the person propounding a contract in partial restraint of trade to satisfy the court of the adequacy of the consideration. It was only in 1837, in Hitchcock v. Coker (6 A. & E. 438), that a fresh step for- ward was taken in reference to partial restraints of trade. The exchequer chamber there for the first time decided that in cases of partial restraint, the examination of the adequacy of the considera- tion was not properly for the court, but for the parties, although the burden remained as before upon the covenantee to show that there was some good and valuable con- sideration. The cases of Wallis v. Day (1837) (2M.&W.273), Leigh- ton v. Wales (1S38) (3 M. & W. 64.")), and Archer v. M.irsii (1837) (6 A. A: K. 959), were determined on the amended prinoij)le. By this date the idea was fully recognized, that all partial restraints of trade which satisfied the conditions of the law as to reasonableness and good consideration were not an injury, but a benefit to the public. § .'V.).] CONTRACTS IN KKSTRAINT OF TKADK. 1 1 !> ;ilil\«'. llif rot rictidii upon the tfiidc is not ^(■iicr.-il l>nt liiii- iti'cl in area, and sucli oontiarls, if reasonable and for «i;ooliil left open to him, "Where one party," says I^ord Lyndhurst. ni Vouuir V. 'rinimins.' 'airrees to employ another in the way of his trade, and the other undertakes to work exclusively for him, that is a particular restraint of trade which nniy be sup|)orted by proof of ackMjnate consideration/ Tin* covenant in A\'allis \. l);iy,- was of this description, and was pr()in)unccd uood b\ the court, althouiih its validit\ was nut in fact a necessary coiulition to the plaintiff's success in that description of a»'t ion. 'It canmtt be said,' accordinir to Lord Abinger,-^ 'to be a contract in ab>olutc restraint f observed," say> C'liief .lustiic Tindal.'' 'that this is not a general restraint of trade, but only restricts the defendant from trading with a Ncry limited number of persons.* So also Pilkington v. Scott.'' Lastly, a covenant cesises to b(^ referable to the class of general restraints of trade when it Ward V. Byrne (ISIW) (:» M. it W. 305, 310). •Contracls in partial 548, oSO) ; rroctor V. Sarj^ent (1840) restraint of trade are beneficial to (2 Scott, \. R. 28(») ; Rannie v. the public as well as to the iinnne- Irvine (1844) (7 Man. & (i. »<)!»), diatc parlies.' .Sue also Harms v. per Maiile, J. ; .Mallan v. May (1843) Parsons. 32 L. J. ( 'h. 247.'' Bowen, (11 M. i\i: W. 0.")3). A fiullicr profj- .1., in Maxiiu-Xordonfelt Co. v. res?< in the views with which the Xordenfelt. L. U. (18!)3) 1 ('h. at law rt'ufarded partial restraints was patje (>54. made in Tallis v. Tallis (1853) (1 ' Yoiui;^ v. Tiininins, 1 Tyrw. E. &B. 391). It was then at last 22(i. 23(). resolved that the onus lay upon the ^ Wallis v. I>ay. 2 M. iV W. 273. person who attached a covenant in "* Ihid., 07ti. partial resUaint of trade to dis- * Rannie v. Irviiif. 7 Man. & G. place the consideration — a change it'l'.i. in the position of the partit's which ' //. ^ Freeniantle v. Silk Throwsters 782; Pemberton v. Vaugban. L. K. Company,! Lev. 229; Wannel v. 10 Q. B. 87, 89. Chamberlain of London. 1 Str. 075; § 40.] CONTRACTS IN RESTRAINT OF TRADK. 121 of exceptions. Partial restraints, or, in other words, re- straints whioh involve only a limit of places at which, of persons with whom, or of modes in which the trade is to be carried on, arc valid when made for a good consideration, and where they do not extend further than is necessary for the reasonable protection of the covenantee. A limit in time docs not, by itself, convert a general restraint into a partial one. 'That which the law does not allow is not to be tolerated because it is to last for a short time only.' In considering, however, the reasonableness of a partial re- straint, the time for which it is to be imposed may i)e a material element to consider."^ § 40. Questions of Consideration. — It is well estab- lished that a contract in restraint of trade is valid only as it is based on a valuable consideration. Moreover, the con- sideration must not be a mere form intended simply to answer the demands of the law. Where there is no con- sideration, or it appears that the consideration named is of no real value, the contract will be treated either as a fraud upon the rights of the party restrained or as a mere \-olun- taiv~;igreement, nudum pactum, and, inconscMiucncc, invalid. But where it is in evidence that the contract was a bona fide transaction the court will not in(|uire into the adequacy of the consideration. The (piestion whether the party re- strained made an injudicious bargain will not be con- sidered.'^ But while the court will not consider the ques- ' Maxim -Xordonfelt Co. v. Nor- v. Barnard. L. R. IS p>j. 518; s. c, denfcli. L. K. (isy:^) 1 Ch. C.HO, 47 I.. .1. Ch. (JaO: 80 L. T. 863; »;ri4. t>r)G, mi. Collins V. Locke. I.. It. 4 App. Cas. -' Hitchcock v.Coker, (! .Vd. iV: El. ti74; s. c. 48 L. .1. 1*. C. GS; 41 L. 438; .Mitchel v. Reynolds, 1 V. T. 292; 28 W. R. 189; Linn v. Slgs- ■VVins. 181; Davis v. Mason, 5 T. li. bee. (i7 111. 7'); Hubbard v. Miller. US; Hutton V. I'arker. 7 Dowl. I'. 27 Micli. 1.*.. Jl ; s. c.,15 Am. Rep. C. 739; Gale v. Reed, 8 East, 80; ir)3; Lawrence v. Kidder. 10 Barb. .-Vrcher v. Marsh, « Ad. & E. 959: 041 ; McCliirg's Appeal, ."»8 Pa. St. s. c, 2 Nev. it r. 502; I'ilkington 51 ; Perkins v. Lyman. 9 Ma.s.s.522; V. Scott, 15 M. it W. 057; .s. c. 15 Palmer v. Stehbins. 3 Pick. 188; L. J. Exchefj. 329; Sainter v. per- Whitney v. Slayton. 40 Me. 231; gnson, 7 Com. B. 710; s. ('.. 13 .Jiir. (Jreen v. Price, 13 M. & W. 095; 828; IS L. .L ( oni. P. 217; Gravelly Pierce v. Woodward. Pick. 206; 122 CONTI{A( IS IN KKSTHAINT OF THADK. [§ 4(». tioii of the ;i(lc'(|u;icy of the coii^idcrat ion. a bona fide considei-ation imist he shown. It niiist appear on the face of the contract. This has been held to be an exception, and the only excejjtion to the rule that a seal ini|)orts a con- Hartley V. Cummins, a C. B. 247. "The circumstances of the present, the nature of tlie bu^iness, the situation, objects and interests of the parties, are precisely of the character which brings the case within these i)rlnclples as recog- nized by all the authorities for the last one hundred and tlfty years at least. The fact that complainant paid no more than the cost of the articles at Grand Haven can make no difference. Where a considera- tion, recognized by law as being valuable, is paid, the law very properly allows the parties to judge for themselves of the sutli- ciency in value of such considera- tion for their contracts. We can- not, therefore, enter into the question whether the consideration was commensurate in value with the restraint imposed." Hubbard v. Miller, 27 Mich. If); s. c. 15 Am. Rep. 153, 158. ••.Such con- tract must be, like contracts gen- erally, upon a consideration; but that the parties may agree upon what it shall be, so that it is legal; and that the mere purchase of the stock in trade of a party, is a sutli- cient consideration for that party's agreement to abstain from carrying on the particular trade in the i)lace where the purchaser is to engage in it."' Beard v. Dennis. (> Ind. 200; s. c. t;8 .Am. Dec. 380, 3S:i. "The consideration of one dollar is, in law, a valuable consideration. It would be sufHcient to pass by sale the defendant's stage and stage horses, where no fraud or imposi- tion was practiced. The parties have considered it as reasonable and adequate, and the defendant, by honestly fulfilling his agree- ment, migiit have protected him- self from tiie forfeiture. But he has i)roken it. and lie shall not be admitted to say. that although the contract was fairly and honestly made, and for a valuable considera- tion, to which he consented, the consideration was inadequate; that he made a bad bargain, and that, when the plaintiff has suffered by the breach of it, he shall be relieved from the terms to which he had volimtarily submitted. There is an old case determined when con- tracts in restraint of trade were confined to narrow limits, in which tlie apparent consideration was as inadequate as that in the present case is supposed to be. It is the case of Bragg v. Turner, cited in Broiid V. Jollyffe. in Cro. .lac. 597. There the defendant, in considera- tion of ten shillings, promised the l)laintiff to pay liim a hundred pounds if thenceforward he kept any draper's shop in Newgate Market, and the contract was ad - judged good, and the plaintiff had judgment." i'ierce v. Fuller, 8 Mass. 223; s. c, 5 Am. Dec. 102, 104. "It was, at an early day. sup- posed that the consid(M'ation in such cases must be adequate — that is, equal in value to the restraint imposed; but this idea has been exjiloded ever since the decision in Hitchcock V. Coker, (! Adol. i?i K. 438, which has been repeatedly approved and followed, and in which Chief Justice Tindal said: § 41.] CONTRACTS IN KKSTKAINT Ol' TKADK. \'2-^ sideration.' Contracts rostra in in «:• the exorcise of a trade or branch of business, in a tlesignated h)cality, where ther*' is u valid consideration, will be sustained. The restraint , however, must not i;o beyond a reasonable limit. - § 41. LiiiiitatioiiM of Time. — Where the conditions of a contract in restraint of trade are such as not to be in con- travention of i)ul)lic policy the duration of the restraint is immaterial. A contract bindinj^ a person not to follow a tratli'. to pursue a branch of business or to practice a pro- fession within detiuitely prescribed limits will not be held void on the around that the duration of the restraint is not limited. But where the restraint is s^^neral, and, on that ground, invalid, as against public policy, it will not be rendered valid by any limitations of time. What is, in itself, bad, will not be legalized by limiting its duration. The ground of this rule is stated by Sii- James Parke, in Ward V. Byrne, as follows: "Now, where a limit as to space is imposed, the public, on the one hand, do not lose altogether the services of the party in the particular trade, he will carry it on in the same way elsewhere; nor within the limited space will they l)e deprived of the benetit of the 'If, by adequacy of consideration, * Giierand v. Dandelet, 32 Md. more i? intended, and that the court 562. A cattle broker, havinj; rc- nuist wi'igh whether the considera- ceived cattle at certain stock yards, tion is* efjual in value to that which and then charged fees by the pro- the party gives up or loses by the prietors. made out an account of restraint under which he places the fees and demanded them back, himself, we feel ourselves bound to on the ground tliai the proprietors differ from that doctrine. A duty had furnished him nothing, and tlie would thereby be imposed upon landing place was the railroad's. the court in every particular case, The same day he bought of them which it has no means whatever to cattle, and offered his account in execute. It is impossible for the part payment. .V settlement was court to say whether, in any par- made by which said offer was ac- ticular case, the j)arty restrained cepted. the broker agreeing, and has made an improvident bargain giving his bond, to do his business or not." "' .McCurry v. Gibson for a year through said yards. (1895). 108 Ala. 451; s. c, 18 So. Held, that the restraint of trade Rep. .SOri, 808. was not unreasonable nor without ' Gompers v. Rochester, 56 Pa. consideration. F'uller v. Hope. 163 St. 194; Ilutton v. I»arker, Howl. Pa. St. 62,29 .\ti. R.>|>. 779. P. C. 739. 24 CONTRACTS IN RESTRAINT OF TRADE. [§41. tnidc Ix'iiiir M. & W. r)48, oGl. See also French v. Parker. 10 R. I. 219; Wartield v. Booth. 33 Md. 63; Mell v. Moouey. 30 Ga. 414; Goodman v. Henderson. 58 Ga. 567; Martin v. Murphy, 129 Ind. 464; s. C, 28 N. E. Rep. 1118; Hastings v. Whitely, 2 Excheq. 611 ; Jacoby v. Whilniore. 49 L. T. 335; S. C, 32 W. R. 18; Pemberton V. Vaiighan. 10 Q. B. 87; Catt v. Towle. L. R. 4 Ch. App. 054; s. c, 38 L. J. Ch. 665; 21 L. T. 188; Bunn V. Guy. 4 East, 190; Davis v. Mason, 5 T. R. 118; Mallon v. May, 11 M. & W. 652; Butler v. Burle- son. 16 Vt. 176. A contract not to engage in a certain business in a certain town while another carries on the same business there, is not invalid as indetinite as to its dura- tion. Eisel V. Hays, 141 Ind. 41: S. c, 40 N". E. Rep. 119. -'Thf circumstance that the restraint is indetinite in point of time, does not invalidate the contract. This ob- jection, — the want of limit as to time, — has been recently very fully discussed in the English courts. In the King's Bench tlie objection was sustained, but the decision was reversed in the excheijuer cham- ber. In the last named court Tin- dai. C J., said that in many of the cases cited, the restriction had been held good, though it continued for the life of the party restrained. On the other hand, no case had been referred to where the con- trary doctrine had been laid down. He cited the cases of Bunn v. Guy. 4 East. 190; Chesman v. Nainby, 2 Str. 739, and Wickens v. Evans, 3 Younge & Jervis, 318, to support the position that the agreement was not void merely on the ground that the restriction was indetinite as to duration, the same in other respects being a reasonable restric- tion." Bowser v. Bliss, 7 Blackf. 344, 346. "I am equally well satis- tied that the insistment that the restraint is indetinite as to time, and therefore unreasonable, ought not to i)revail. I think a careful study of the case of Mitchel v. Rey- nolds, reported in 1 Smith, Lead. Cas. (9th Ed.) 694, et sruch matters the public welfare which the law regards is an essen- tial element of consideration; but the interest of the individual in his own welfare is infinitely more efti- cacious and potential in securing the public good, although that may not be in his mind. He who has energy and integrity enough to establish a business wiiich is worthy of the name, and for which others will bid a fair price, will not wait for the protection of the paternal hand to make his foot- prints in other quarters. In the following cases there was no limit as to time, and it will be observed that in many of them resistance was made to their enforcement on this account, but without success: Richardson v. I'eacock, *2(i X. .1. Eq. 40; s. c, 28 N. J. Eq. ir,l; 33 N. .1. Eq. 597; Hitchcocli v. Coker. 6 Ad.ct El. 439; Hastings v. White- ley, 2 Exchefj. fill ; Mallan v. May, 11 M. Jt W. (553; Bowser v. Bliss. 7 Blackf. 344; Pierce v. Fuller. 8 Mass. 223; Talmer v. Stebbins. 3 rick. 188; Diamond Match C<». v. Hoeber, 10<; X. Y. 473: .s. c, 13 X. E. Hep. 419, 423." Bird, V. C, in Carll V. Snyder (X. J. Eq.). 2 it docs not seem to me that the age of the covenantor is the matter to be considered, but what is the fair protection of the covenantee; and I may say that my own opinion is that if the limit here had been the covenantor's life, in the special circumstances of the case, it would not have been unreasonable."^ § 42. The Subject Continued. — While it is well settled, as above shown, that where a contract in restraint of trade is properly limited in regard to space, indetinitcncss of time is not material, it does not follow that a contract in general restraint of trade is rendered valid by a limitation in time. In the leading case of Wiley v. Baumgardner, the rule on this point is stated by Mr. Justice Black, as follows: "A contract in restraint of trade is void, if the restraint be un- reasonable, and the (juestion as to the reasonableness of the restriction is one of law, to be determined by the court, and the contract is sup])ortcd or avoided on grounds of pub- lic policy. 'Whatever restraint is larger than the neces- sary protection of the party with whom the contract is made is unreasonable and void, as being injurious to the interests of the public, on the ground of j)ublic policy.' In the contracts now before us the transaction was not ex- pressed as a sale of the good will of the business, or as a sale of the business. Bui it would have made no difference if there had been an express sale of the good will. Where M jxTson carr\ing on any business sells his stock in trade, ' Maxiin-Xordeiifelt v. Xorden- per A. L. buiilb. 1^. .) . felt. L. K. (isna) 1 Cb. U30. G73. 4.^] CONTRACTS IN RKSTRAINT OF TRADK. lL>7 or his business and his good will, and in the tninsaction agrees not to carry on the same business with a limitation as to the time, but none as to space, the agreement as to siuh restraint is wholly yoid. This must be so if the test be that the contract is to be supported or ayoided on the ground of public policy. If it be prejudicial to the ])ublic interests for a citizen to be debarred from pursuing any- wlicre the calling in which he has ac(juired skill or proficiency, or to encourage the establisliment of monopo- lies ])y preyenting (•om})etition, it must l)e for definite as well as indefinite periods of time. A contract that would put it in the power of one party to preyent the other from carryino: on his callinof anywhere whateyer is unreason- able."^ In an English case the rule is stated, as follows: 1 Wiley V. Baiimgjirdner. 07 Ind. 6G; s. C, 49 Am. Hep. 427. 429. As this is the leading case on this point in this country, the following statement of the case, taken from the opinion, may be of interest: ••The action was upon a contract in writing by which the appellant sold to the appellees the former's entire stock of dry goods, boots and shoes, merchandise and fixt- ures in his store in Bluffton at cost, less a certain per cent., and agreed to transfer to them his lease on the building occupied by him for his storeroom, and his unex- pired insurance on said stock, and agreed •not to engage in the dry goods business for a term of tive years froui' the date of the agree- ment, being the 29th day of De- cember, 18S1. the appellees agree- ing on their part, by way of payment, to transfer to the appel- lant a certain farm, which was to represent $().0()(). to execute to him their promissory note for $1,000, and for the balance to execute their promissory notes, secured by mortgage on certain lands of one of the appellees. And it was agreed by all the parties, that 'for the faithful performance of the above contract, we hereby bind ourselves to each other in the sum of $1,000 li(iuidated damages.' It was alleged that the appellees in- tending to engage in the dry goods business in said town, the contract was entered into by them and the appellant for such purpose; that immediately after the purchase the appellees engaged in said business in said town, and that they were still continuing the same. The breach alleged was that in Septem- ber. 1882, the api)ellant purchased a large stock of dry goods of the value of $10,000. and with them opened a dry goods store in said town within a few doors of the place of business of the appellees, and engaged in the dry goods business in said town and still con- tinued the same; that during the time he had been thus engaged In business he had sold a large amount of dry goods in said town, the amount of $10,000. thereby taking away from the appellees 128 CONTRACTS IN RESTRAINT OF TRADE. [§ 43. "A limit ill time does not bv itself convert a ireneral restraint into a partial one. 'That which tiie law does not allow is not to be tolerated because it is to last for a short time only.' In considering, however, the reasonal)leness of a i)artial restraint, the time for which it is to imposed iiiav be a material element to consider."^ § 43. Toucliinj? Territorial Liimitations. — It is the rule that a contract in restraint of trade is valid only as it is limited as to space. If it is without limit it must be show n. in order to render it valid, that the peculiar circumstances render it a fit and reasonable agreement. Where this (pies- tion is raised it will be settled bv the court, not according- to aii}'^ hard and fast rule, but bv an investigation of all the circumstances of the case, and by what, in view of the cir- cumstances, appears to be reasonable and just. In a case before the Supreme Court of California, it was held that a contract in restraint of trade to be upheld must be re- stricted as to territory, and it must appear to the court in considering the nature of the business in connection with the territorial limits assigned that the limits desigrnated are not unreasonable in extent. ^ In the oi)inion in this case the said trade, to their damage, Sl.nOU. for which they demanded judg- ment." See also Ward v. Byrne. 5 M. & W. 548; s. c, 3 Jur. 1175; Lawrence v. Kidder, 10 Barb. 647. However, in Proctor v. Sargent. 2 Man. & G. 20; s. c, 2 Scott, N. R. 289, Tindal, C. J., uses this lan- guage : '-J think that when we are deciding upon the unreasonable- ness of a contract of this kind, wo cannot leave out of consideration the duration of the restraint; for although I admit that where we once hold a restriction to be un- reasonable in point of space, the shortness of time for which it is imposed will not make it good, yet where the question is whether the restraint is unreasonable or not in point of space. tli;it wliicli would be unreasonable, were it to con- tinue for any length of time, may not be so when it is to last only for a day or two.'' ' Maxim-Nordenfelt Co. v. Xor- denfelt, L. R. (1893) 1 Ch. G30.0H2. 2 Callahan v. Donnolly. 45 Cal. 152. See also generally the follow- ing cases involving questions of space where contracts were upheld : Butler V. Burleson, 10 Vt. 170; Miller v. Elliott. 1 Ind. 484; Mc- Clurg's .\ppeal. 58 Pa. St. 51 ; Mott v. Mott. 11 Barb. 127; Dwight v. Hamilton. 118 Mass. 175; Gravelly v. Barnard. L. R. 18 Eq. 518: s. c. 43 L. J. Ch. 049: 30 L. T. 803: Mercer v. Irving. El., B. tJi E. 5(i3; Reynolds v. Bridge, El. tt B. 528: Sainter v. Ferguson. 7 Com. B. 710: s. ('.. 13 Jur. 828; 18 L. J. §4;i.j CONTRACTS IN RESTRAINT OF TRADK 12H court said: "A contract in restraint of trade and w liic h is not by its terms limited as to tlie territory embraced in its operation is not to be sup{)orted. 'It is to be remembered, however (said Tindal, C »!.. in Horner Com. F. 217; Hastinj^s v. White- ley, 2 P^xchecj. 611 ; Davis v. Mason, .'» T. K. IIS; Whittaker v. Howe, 3 Beav. 3S3; Dendy v. Henderson, 11 Excheq. 104 ; s. c 24 L. J. Excheci- 324; May v. O'Neill, 44 L. J. Ch. 6»)0; Galsworthy v. Striitt. 1 Exeheq. tJ59; Snialley v. Green. 52 Iowa. 241 ; s. c, 35 Am. Rep. 207; Doty v. Martin, 32 Mich. 402; Linn v. Sigsbee, 07 HI. 75; Holbrook v. Waters, 9 How. Pr. 335; Harms v. Parsons, 32 Beav. 328; s. c. 9 Jnr. (N. S.) 145; 32 L. J. Ch. 247; 7 L. T. 815; 11 W. R. 250; Whitney v. Slay ton. 40 Me. 224; Gill v. Ferris. 82 Mo. 1.50; Stewart v. Chalhi- combe. 11 HI. App. 379; Beard v. Dennis, Ind. 200; s. c, 63 Am. Dec. 380; Hedge v. Lowe, 47 Iowa, 137; Ropes v. Upton, 125 Mass. 258; Johnson v. Gwinn, 100 Ind. 466; Baumgarten v. Broadaway. 77 N. Car. 8; Arnold v. Kreut/er, 07 Iowa, 214; S. C. 25 N. W. Rep. 139; Morgan v. Perhamns.30 Oliio St. 517; s. C, 38 Am. Rep. t)07; Harrison v. Lockhart, 25 Ind. 112; McAllister v. Howell. 42 Ind. 15; Stiidebaker v. White, 31 Ind. 211; Pierce v. Woodward. 6 Pick. 200; Jenkins v. Temples. 39 Ga. 655; Ellis V. Jones, 56 Ga. 504; Dunlop V. Gregory, 10 N. Y. 241 ; s. c, 61 Am. Dec. 740; Perkins v. Lyman, 9 Mass. 522. Contra: Horner v. Graves. 7 Bing. 735; s. c, 5 Moore & P. 708; Taylor v. Blanchard. 13 Allen, 370; s. c, 90 Am. Dec. 203; Lawrence v. Kidder, 10 Barb. »>41 ; Alger V. Thacher. 19 Pick. 51; S. C. 31 Am. Dec. 119; Wiley v. Baumgardner, 97 Ind. 6(;; Wright 9 V. Ryder, 30 Cal. 347. A covenant in restraint of trade which is un- limited in regard to space, except by the words "'so far as the law allows,'" is not void either as being against public policy or as being too uncertain in its terms to be capable of being enforced. Such a covenant is to be construed as providing for a restraint to the full extent that the doctrine of law as interpreted by the courts will allow a person to contract himself out of the privilege of trading in a par- ticular business, and will be en- forced so as to secure to the cove- nantee the full benefit of that which he has purchased from the cove- nantor. Davies v. Davies. 50 L. J. Ch. 481; S. C, 35 W. R. 697. De- fendant agreed to purchase $200,000 worth of goods from plaintiff, who agreed not to sell like articles in some thirty States and territories of the United States. In an action for goods sold and delivered, de- fendant set up this contract, and alleged breaches of it as a counter- claim. There was nothing to show the ordinary amount of manufact- ure and sale by either party, or that defendant had established a trade in more than one Stale out of the thirty. Held, that tiie pleading was demurrable in not adirmatively showing that the restraint was rea- sonably necessary to protect de- fendant's interest under the con- tract. Richards V. American Desk& Seating Co.. 87 Wis. .503. .58 N. W. Rep. 787. Plaintiff and defendant were corporations engaged in sell- ing '-benefit certificates" entitling i;^(i (•<)NTKA(Vrs IN KKSTKAINT OF TRADE. [§43. V. (iravt's),' tliMt coiitrMcts in restraint of trade are in themselves, if nothino- more appears to show them reasonahU', had in the eye of the hiw.' A contract in re- straint of tra(h» must desiofnate the space within which it is to operate and must not he unreasonably extended. Such contracts, when u))held, are oidy in cases where the })arties have restricted the territory' in which they are to operate, and where the court, in considering the nature of the busi- ness in connection with the territorial limits assigned, is of opinion that the designated limits are not unreasonable in extent, ""'' In a case in Alabama the rule is stated, as fol- lows: "It is true that such contracts must be limited as to the space they are intended to cover, or they cannot be sui)ported. The meaning of a contract of this character is not to be found solely from a consideration of its expressed terms. Courts h)()k lo all the circumstances surrounding the parties and attendant upon the transaction, and from a consideration of these circumstances in connection with the expressions of the undertaking, they will first construe the contract and then proceed to ))ass u))on its reasonableness as thus construed."'^ This rule, so far as it can be termed a rule, relating to territorial limitations, is stated by the Supreme Court of the United States, in the case of the Oregon Steam Navigation Company, as follows: "In ac- cordance with these principles it is well settled that a stipu- lation by a vendee of any trade, business or establishment, that the vendor shall not exercise the same trade or busi- tbe holders, in caseof sickness or in- jury, to muintenanoe and tieatincnt in hospitals provided by the com- pany. The plaintiff had estab- lished a lucrative business in Wis- consin. Minnesota and the northern peninsula of Michigan, and had acquired valuable hospital con- tracts. The ])laintiff au;reed to re- frain for three years from selling certificates in the territory named, except to railroad emi»loyes, and to turn over its hospital contracts, in consideration of whicli the de- fendant promised to make certain payments, and also to refiain for three years from selling certificates to railroad employes within said territory. Held, that the contract was not void as an unreasonable restraint of trade. Nat'l Ben. Co. v. Union Hospital Co.. 4ii Minn. 272; s. c. 47 N. W. Hep. 806. ' Horner v. Graves. 7 Bing. 744. 2 Callahan v. Donnolly, 45 Cal. 152. 3 Moore & Hand ley Co. v. Towers Hardware Co.. 87 Ala. 206. § 44. , CONTKAC IS IN UKSriiAINT OK TliAJ)K. IHl ness, or crrcl :i siinil:ir i'st:il)lishiiieiil within a icasoiiabU' distance, so as not to interfere with tiic vahie of the trade, business or tliini:- purchased, is reas()nal)k' and valid. In hke manner a stipuhition l)v the vendor of an article to be used in a business or trade in which he is himself ens^aged, that it shall not be used within a i-easonable region or dis- tance so as not to interfere with his said business or trade, is also valid and binding. The point of difliculty in these cases is to determine what is a reasonable distance within which the statutory ))rohibition may lawfully have effect, and it is obvious at first glance, that this must depend upon the circumstances of the [)articular case, although, from the uncertain character of the subject, much latitude must be allowed to the judgment and discretion of the parties. It is clear that a stipulation that another shall not pursue his trade or employment at such a distance from the busi- ness of the person to t)e protected, as that it could not j)0s- sibly affect or injure him, would be absurd. On the other hand, a stipulation is unobjectionable and binding which imposes the restraint to only such extent of territory as may be necessary for the protection of the party making the stipulation, provided it does not violate the two indis- pensable conditions, that the other party be not prevented froin pursuing his calling, and that the country be not de- j)rived of the benefit of his exertions."' § 44. The Hiibjeet Continued. — In some of the States the courts have manifested a disposition to relax, or to modify, in some degree, the rule in regard to territorial limitations as set forth in the foregoing section. In the leading case of the Diamond Match Company v. Roeber, the court said: "In the present state of the authorities we think it cannot l)c >ai(l that the cai'h doctrine that con- tracts in general restraint of trade are void without regard to circumstances has been abrogated. But it is manifest that it has been much weakened and that the foundation upon which it was originally placed has, to a considerable ' Oregon SteHin Xavigation Co. v. Winsor, 20 Wall. G4, 68. 182 CONTRACTS IN RESTRAINT OF TRADE. [§44. extent at least, by the change of ciixuinstances, been re- moved."* It will be observed that it is here conceded that ' Diamond Match Co. v. Koeber, 106 N. Y. 478. 484. See also Hub- bard V. Miller, 27 Mich. 15; Guer- and V. Dandelet. 32 Md. 562; Beal V. Chase. 31 Mich. 490; Ewing v. Johnson, 34 How. Pr. 202; Pierce V. Woodward, 6 Pick. 206; Hedge V. Lowe, 47 Iowa. 137, 140 ; Chappel V. Brockway. 21 Wend. 157; Jen- kins V. Temples. 39 Ga. 655; Smalley v. Greene, 52 Iowa. 241 ; Arnold v. Krentzer, 67 Iowa. 214; Baumgarten v. Broadaway, 77 N. Car. 8; Tallis v. Tallis. 1 El. & Bl. 391; Dunlop v. Gregory, 10 N. Y. 241 ; Washburn v. Dosch. 68 Wis. 436; Keith v. Hirschberg Optical Co., 48 Ark. 138; Richardson v. Peacock, 33 X. J. Eq. 597; Brewer V. Marshall, 19 N. J. Eq. 537; Taylor v. Blanchard, 13 Allen, 370; Vernon v. Ha I lam. 56 L. J. Ch. 115; s. c. 35 W. K. 156; Nicoll V. Beere.53 L. T. (N.S.) 659; Hare V. Whitmore. 49 L. T. (N. S.) 335; Jacoby v. Whitmore. 40 L. J. (N. S.) 335; Palmer v. Stebbins. 3 Pick. 188; s. C 15 Am. Dec. 204; Grundy V. Edwards. 7 J. J. Marsh. 368; s. c. 23 Am. Dec. 409; McChirg's Appeal. 58 Pa. St. 51 ; Haldeman V. Simonton. 55 Iowa, 144; Amedon V. Gannon, 6 Ilun, 384; Wartield V. Booth, 33 Md. 63; Iloyt v. Holly. 39 Conn. 326; s. c. 12 An). Rep. 390; Smith v. Smith, 4 Wend. 468; Dwight v. Hamilton, 113 Mass. 175; Whitney v. Slay ton, 40 Me. 224; McXutt v. McEwen, 1 W. N. C. 552; Stafford v. Shortreed. 62 Iowa. 524; s. c. 17 N. VV. Rep. 756; Timmenii.in v. Dever. 52 Mich. 34; Th()m|)sun v. Means, 11 Sm. & M. 604; Mott v. Mott, 11 Barb. 127; Niver v. Rossman, 18 Barb. 50; Higony v. Tyson. 75 Pa. St. 157; Belts' Appeal. 10 W. N. C. 431; Martin v. Murphy, 129 Ind. 464; Sainter v. Ferguson, 7 C. B. 716; Atkyns v. Kinnier. 4 Excheq. 776; Fox v. Scard. 33 Beav. 327; Mell V. Mooney, 30 Ga. 413; Miller V. Elliott. 1 Ind. 484; Holbrook v. Waters, 9 How. Pr. 335: Whitney V. Slayton, 40 Me. 224. An agree- ment -'not to engage in the manu- facture of any thermometers of any kind or description, nor of any storm glasses, at any place within the United States at any time within a period of ten years from date," is not a general restriction of trade, and is not void on the ground of public policy. Water- town Thennometer Co. v. Pool, 51 Hun, 157; s. c. 4 N. Y. Supl. 861. In this case, at page 163, the court says: ''The cases cited seem to sustain the doctrine that a restric- tion which is no greater than the interest of the vendee requires, and by giving which the vendor has obtained an increased price for what he sold, is valid, though it extended through the whole king- dom or country. In this case the defendants. l)y their deniurrer. ad- mit that the business of the plaintiff in the manufacture and sale of thermometers and storm glasses required for its full and proper de- velopment the entire territory em- braced within the United States, and that one of the considerations that induced the jilaintiff to make such purciiase and pav the consid- eration named was such restriction, wliicli would enable it to fully de- velop its business throughout the whole United States, without in- terference on the part of the de- fendant. Assuming this, as we §44.] CONTRACTS IN RESTRAINT OF TRADE. 133 what is teriiiocl "tlu' early (loctiiiic"' has not: Ijccii al)roga- ted, and that under that ruk' "eoiitracts in general restraint ■of trade are void, without re- ciety in the one case and lu t in the other? Indeed, what public policy rc(|uires is often a vague and difficult iiuiuiry. It is clear that public policy and the interests of society favor the utmost freedom of contract, within the law, and require that business transactions should not be trammeled bv unnecessary restrictions. 'If,' says Sir George Jessell. or even 200 miles has not been held certain limits, is not void simply too much in some cases. For the because the duration of the re- saine reason I think a restriction straint is not limited. French v. applyinj; to the entire kingdom Parker (K. I.) (18SS). 14 Ati. may in other cases be requisite Kep. 870. An agreement not to and justifiable."' Maxim-Norden- practice a particular trade in a felt Co. V. Nordenfelt, L. R. (1S04) particular place for a limited time App. Cas. 535, 549. A contract is valid. Boyce v. Watson, 52 111. not to practice medicine witliin App. 3t;i. § 44.] CONTRACTS IN KKSTKAIN'r OK rUADK. IH.*) in Printing Company v. Sampson,' 'llu're is one thing more than any other which public policy rc(|uires, it is that men of full aire and competent uiulerstandiny; shall have the ut- most liberty of contracting, and that contracts, when entered into freely and voluntarily, shall be held gootl and shall be enforced by courts of justice.' It has been sometimes sug- gested that the doctrine that contracts in general restraint of trade are void, is foundetl in j)art upon lln' policy of pre- venting monopolies, which are opposed to the liberty of the subject, and the granting of which l)y the king, under claim of royal prerogati\ c led to conflicts memorable in Knglish history. Hut covenants of the chara(;tcr of the one now in (piestion. operate simply to prevent the i-oven.-intor from engaging in the business which he sells so as to protect the purchaser in the enjoyment of what he has j)urchasc(I. To the extent that the contract })revents the vendor from carrying on the |)articular trade, it deprives the comnumity of any benetit it might derive from his entering into com- petition. l?ut the business is open to all others, and there is little danger that the public will suffer harm from lack of persons to engage in a profitable industry. Such contracts tlo not ci-eate monopolies. They confer no special or exclu- sive privilege. If contracts in general icstraint of trade, where the trade is general, are void as tending to monop- olies, contracts in partial restraint where the ti'ade is local are subject to the same objection, because they deprive the local comnmnity of the services of the covenantor in the particular trad<' or calling, and prevent his becoming a com- petitor with the cn\ cnrinlee. We are not awai-e of an\ rule of law which makes the motive of the coM-nantec the test of the \alidity of such a contract. ( )n the conliary, we suppose a part\ ma\ legalh purchase the trade and l»usi- ness of another for the very purpose of preventing comp<'- tition, and the validity of the contract, if supported by a consideration, will depend upon its reasonab|(>ness as between the parties. Combinations between producers to limit pro- du<'tion and to enhance prices are oi" ma\ l)e unlawful. I»iit ' I'rintini; Co. v. .Samp^im. I,. |{. !!• V.(\. Ml'. 13illon. L. H. 383; Jones V. Lees. 1 Iliirl. it N. 14Ch. D. 351. 189; Roiisillon v. Rousillon. L. ■• .Tones v. Lees. 1 Ilml. A \. 189. R. 14 Ch. D. 3.=)1 ; Leather Co. v. ^ Oregon Steam Nav. Co. v. Win- lyorsont. L. R. 9 E(i. 34."); Collins sor, 20 Wall. G4. V. Locke. L. R. 4 Apj). Cas. (174; « Ward v. Byrne. ."> M. & W. 548; Oregon Steam Xav. Co. v. Winsor. Mimiford v. Gething. 7 C. B. (N. 20 Wall. >>4: Morse v. Morse. 103 S.) 30."). 317. Mass. 73. ^ Ctiappell v. Brockway, 21 Ward. -' Whittaker v. Howe. 3 Beav. \'>7. 3S3. § 44.] CONTRACTS IN KKSTKAINT OF TKADK. 137 ^contracts wliicli ijo to (lio total restraint of trade, as that a man will not pursue his occupation anywhere in the State, are void,' The contract under consideration in that case was one hy which the defendant ajj:reed not to run or be inter- ested ill a line of packet l)oats on the canal Ix'lween Kocli- •ester and Buffalo. The attention of the (H)urt was not called to the point whether a contract was partial, wliich related to a business extending over the whole countrv, and which restrained the carrying on of business in the State of New York, but excepted other States from its operation. The remark relied upon was obiter, and in reason cannot be considered a decision upon the ))()int suggested. We are of the ojiinion that the contention of the defendant is not tiound in principle and should not be sustained. The boundaries of the States are not those of trade and com- merce, and business is restrained within no such limit. The countrv as a whole is that of which we are citizens, and our duty and allegiance are due both to the State and nation. Nor is it true, as a general rule, that a business established here cannot extend l)eyond the State, or that it may not be successfully established outside of the State. There are trades and em[)lovments which, from their nature, are localized; but this is not true of manufacturing industries in general. We are unwilling to say that the doctrine as to what is a general restiauit of trade dei)ends upon State lines, and we cannot say that the excej)tions of Nevada and Mont^ma was coloral)le merely. The rule itself is arbitrary, and we are not disposed to put such a construction upon this contract as will nuike it a contract in general restraint of trade, when ujxin its face it is only i)ailial. The case of the Oregon Steam Nav. C^). v. \N'insor.' supports the view that a restraint is not necessarily general which enil)racesan entire State. The defendant entered into theco\enant as a con- sideration in part of the purchase of his property by Swift & Courtney & Hea Cal. 152; s. c, 13 Am. Hep. 172: Mallan v. May. 11 Mees. A W. 8.")3; Lange v. Werke, 2 Ohio St. .")r»; Kellogg v. r.arkin.3 I'in. 123; Berlin Machine Works v. Pcrrv. 71 Wis. 4115. 499. .-)01 : s. c. iS N. W. Rep. 82. It is held, in substance, in these cases, that the pleading will be bad on demiu'rer if it does not appear from the con- tract or averments of extrinsic facts that the restraint was reason- able. TKis is in accordance with the great weight of authority and seems to be the necessary result of the rule as to the validity of such restraint. The great diffusion of wealth, the wonderful advances made in the methods and facilities for nia'nufacturing and carrying on commerce, the manifold improve- ments in machinery and in the adaptation of steam and electricity as motive power, have enlarged or opened numerous tields of industry and wrought marvelous chapges, and the tendency of the later cases has been in relaxation of the earlier rule in relation to contracts in re- straint of trade. Tiie most liberal and advanced doctrine on the sub- ject in this country is found in the case of the Diamond Match Co. v. Roeber, lOt; X. Y. 473; s. c 13 X. E. Rep. 419, in which the history of the law is elaborately consid- ered, and a covenant excluding a manufacturer of matches, who had sold his properly, stock, etc.. from engaging in the rhanufacture and sale of matches for a period of ninety-nine years within any of the States and territories except Xevada and Montana, was sus- tained; but it appeared in that case that before such sale he had carried on the l»usiness of manu- facturing friction matches, -and of selling the same in the several 140 CONTRACTS IN RKSTRAINT OF TRADK. [§45. physicians that one would not practice in a specified city and vicinity, was construed as excluding him from all terri- tory within ten miles of the city limits. In the opinion, the court said : "The decree restrains the defendant from practicing his profession 'in the city of Hastings and vicinity.' This clause of the decree is somewhat indefinite as to the extent of the territory to which it applies, and may give rise to further misunderstanding between the parties. For the purpose of obviating any difficulty of this kind, the decree made by the circuit judge should be so modified as to make certain the limits of its o})eration. Of course, the extent of territory included in the term 'vicinity of the cit}'' must necessarily depend in a great measure States and territories of the United States, and in tbe District of Co- iumbiii,' and so the case really came within the rule under con- sideration, and the restraint was reasonably necessary to protect the other party in his purchase. Tode V. Gross, 127 N. Y. 485; s. c, 28 N. E. Rep. 469, was in relation to a restraint imposed upon the ven- dor of a business founded on a secret process, but it recognizes and sustains the general rule. A manufacturing business founded upon tlie use of a secret process, or the use of patented processes or means, is not understood to be within the rule. The cases of Leather Cloth Co. v. Larsont, L. R. 9 Eq. 345, and Rousillon v. Rousillon. L. K. 14 Cli. Div. 351. are understood to represent the more modern views of the law on this subject. In the former case it was said : 'All restraints upon trade are bad as being in violation of public policy, unless they are actu- ally and not unreasonably for the protection of parties in dealing legally with some subject-matter of contract.' The same subject was considered in the somewhat recent case of Davies v. Davies. L. R. 36 Ch. D. 359, in which Cotton. L. J., held the law to be *that a limited restraint may be good, provided the restraint is reasonable and such as was recpiired for the protection of parties with whom the covenant is entered into; and that the rule ought not to be altered but by the House of Lords; and IJowen, L. J., held substantially the same view, and notices that in that case the court had no material for deciding that the covenant in question was beneficial to the public or reasona- bly necessary for the protection of the covenantee, and in substance, that to sustain it would be 'leaping into the dark.' while Fry, L. J., was inclined to adhere to liis de- cision in Rousillon v. Rousillon, supra, and to hold that the burden of proof as to (\\e validity of the restraint is shifted by showing that it has been entered into for the l)rotection of the interests of one of the contracting parties.'" Pin- ney, J., in Richards v. American Desk & Seating Co. (1894). 87 Wis. 503 s. c, .58 N. W. Rep. 787, 789. § 45.] CONTRACTS IN RKSTIiAINT OF TIJADK. Ul upon tlu' size of the citv, its locution uiul pint iciihii- sur- roundings; and under all the circumstances as they appear upon this record, I think the territory surrounding the city for the distance of ten miles from its corporate' boundaries a reasonable limitation, and one which may be safely regarded within the contemplation of the partii's when they made the contract."^ In a case in Connecticut, the plaint- ' Timmerman v. Dever. 52 Mich. 34; s. C, 60 Am. Rep. 240; 23 Am. Law Reg. 50. A declaration in covenaut. after stating tliat the defendant and the plaintiff had agreed to enter into partnership as surgeons, etc.. stated that the defendant covenanted that he would not, at any time, practice in the profession of a surgeon at No. 28 Dorset Cresent, or within the distance of two miles and a half thereof, measuring by the usual streets or ways of approach thereto, nor reside within the dis- tance of two miles and a half of No. 28 Dorset Cresent, without the plaintiff's consent, nor would at- tempt to prevail on any of the patients of the defendant or of the partnership to withdraw from the plaintiff, or to employ any other medical attendant in prejudice of the plaintiff, but would in all things endeavor to promote the i)usiness and advantage of the plaintiff in the profe-sion of a sur- geon as far as it was in the power of the defendant, and he could reasonably and properly be re- quired to do, and that if the de- fendant should, in any respect, break or infringe this stipulation he should pay the plaintiff £1,(HJ0 as licpiidated damages and not l»y way of penalty. Ileld^ tirst, that the distance was to l)e measured not by the most fre(|uented public ways, but by any of the usual pub- lic ways; secondly, that the stip- ulation as to residence was not void as being in restraint of trade or contrary to public policy. At- kyns V, Kinnier, 4 Excheq. lHi\ s. c, 19 L. J. Excheq. 132. Under an agreement not to carry on busi- ness within seven miles of a certain place, the distance must be meas- ured in a straight line, upon a horizontal plane, and not by the nearest practicable mode of access. Duignan v. Walker, 7 VV. R. r)(J2; s. C.oJur. (N. S.) 976; 28 L. J. Ch. 807. The defendant having covenanted with the plaintiff not to carry on the business of a publi- can within the distance of half a mile from a certain tavern, after- wards carried on such business in premises distant from the tavern less than half a mile in a straight line, but more by the nearest mode of access. Held, that the defendant had committed a breach of his covenant, and that the right way of measuring tlic distance was on a map. Moullet v. Cole, 21 W. \{. 175; s. r.. 27 L. T. (!7S; 42 L. .1. Excheq. 8; L. R. 8 Exchecj, 32. In Leigh v. Hinde. 9 Bar. & Cr. 774, 779, Parke, J., says: "Lshould have thought that the proper mode of admeasuring the distance would be to take a straight line from house to house, in common par- lance, as the crow llies. The de- fendant agrees not to keep a public house within the distance of half a 142 CONTRACTS IN RKSTRAINT OK TKADK. [§ 4«). iff, for a sufiiciciit coiisidciation, bouirht of the dof ondaiit his l)ii.siness as a dentist, and the hitter executed a contract not to practice dentistry "within a radius of ten miles of Litchfield." The town of Litchfield has an extensive terri- tory and an irregular outline, and contains the village of Litchfield, in which the defendant dwelt and had his office at the time, and where the contract was drawn and executed. It was held that the above expression meant "within ten miles of the center of the village of Litch- field.'" § 4(>. Validity of Contracts in Restraint of Trade as Affected by Their Reasonableness. — A contract providing for a general restraint of trade is contrary to public policy and, in consequence, void. The ground of this rule is that the restraint being greater than is necessary for the ade- quate protection of the covenantee is unreasonaole, and that what is palpably unreasonable is not to be upheld by a court of equity. But where a contract is basctl on a valu- able consideration and is limited by time or space, then the question whether it is valid is simph' the question whether it is reasonable. The court will consider the (juestion of the reasonableness of the limitation in time or space. It will inquire whether the restraint imposed is greater than is essential to the i)roper protection of the covenantee, and where this appears the contract will be held unreasonable and invalid. In deciding this <|ucsti()n the nature and ex- tent of the business or occupation will conu' under consid- eration. This examination will extend to all the circum- stances of the case, and it must include the (juestion whether the restraint imposed is of such an extent as to conflict with the interests of the public. In a leading English case it mile; the plain and ordinary sense raises no siioh inference." See also of these words is, the actual dis- Lake v. Butler. 3 W. R. 4r)8; s. C tance, and I think they ought to '>!<:.& B. 99; Reg. v. Saffron Wal- be so understood unless we can den. 9 Q. B. 7(>- collect from the context that they ' Cook v. Johnson, 47 Conn. 17n: were meant to be used in a differ- s. c, 36 Am. Rep. (54. ent sense; and here the context § -t«5.] CONTHAC^TS IN UKSTRAINT rv TKADK. was held tluit wlu'i'o ;i coveiumt in restraint of trade i> ucit- eral, that is. without (lualitioation, it is bad, us heiiia^ uii- reasonahle and contrary to puhlic policy. Whore it is partial, that is. subject to some (lualification either as to time or space, tluMi the (|uestion is whether it is reasonable, and if it is reasonable, it is good in law. In considering the question of reasonableness, the points to which the at- tention of the court is especially directed are the limits of time and space, and the protection required for the trade of the covenantee, this latter point involvinjr the examina- tion of the nature and extent of the trade. The leason- ableness depends on all the circumstances, which must be duly weijrhed in each case. If the restraint is ofreater than can be possibly required for the protection of the cov- enantee, the covenant is unreasonable; but, if the restraint is not orreater than can possibly be required for the protec- tion of the covenantee, it is not unroasona))le ; and where the covenant is (jualitied as to time the burden lies on the covenantee of showiuir that the restraint is unreasonable.* ' Badische Anilin und .Soda Fa- brik V. Scholt. L. R. (1892) 3 Ch. 447. -'The circumstances which may be legitimately inquired into on this question of reasonableness appear to me to include the gen- eral circumstances under which the trade is cariied on at the time when the covenant is entered into. The improvements in the means of communication which have taken place in recent times by reason of railways, steamships, postal facili- ties, the telegraph, and the tele- phone, are. I think, within the scope of the inciuiry. and bear particularly on the question of space; they are relevant more or less in proportion to the greater or lesser area within which the trade sought to be protected is carried on and to the varying nature of the trade itself. Such matters would have little or no relevancy if the (|uestion related to the protection of a sujall local business siu-h as that of a village baker or cobbler, and if the restraint sought to be imposed on a journeyman baker or cobbler, though limited as to time, extended to the whole of England — such restramt would be unrea- sonable and vexatious. Hut they would be relevant in reference to the large trade of a merchant and a widely extended news collecting agency, or to any trade covering a great portion of the globe. What might in former ages have been considered an unreasonal)le re- striction would not necessarily be so held in the altered circum- stances of the present time." Ibid.. 452. "We do not see how a better test can be applied to the . Validily <»f Contracts in Restraint of Trade as Affected by Tlieir Reasonableness. — A contract providing for a general restraint of trade is contrary to })ublic policy and, in consequence, void. The ground of this rule is that the restraint being greater than is necessary for th(» ade- quate protection of the covenantee is unreasonaolc, and that what is pali)al)ly unreasonable is not to l)c upheld by a court of equity. But where a contract is based on a vahi- able consideration and is limited by time or space, then the question Nvhether it is valid is sim})ly the question whether it is reasonable. The court will consider the (piestion of the reasonableness of the limitation in time or space. It will inquire whether the restraint imposed is greater than is essential to the projier protection of the covenantee, and where this appears the contract will be held unreasonable and invalid. In deciding this (piestion the nature and ex- tent of the business or occupation will come under consid- eration. This examination will extend to all the circum- stances of the case, and it must include the (juestion whether the restraint imposed is of such an extent as to conflict with the interests of the public. In a leading English case it mile; the plain and ordinary sense raises no such inference. " See also of these words is. the actual dis- Lake v. Butler. 3 W. R. 4r)8: s. c. tance, and I think tliey ought to 5E.«!k B.99; Reg. v. Saffron Wal- be so understood unless we can den. 9 Q. B. 7 ircii- cral. that is. without divisihle as to place. .">, defendant would rn)l act as partuer. clerk or assistant with or to any person who should interfere or in- termeddle as aforesaid ; and in case defendant should commit any breach of his said covenants, lie shiiuld forfeit £100 for every such breach. Held, that the covenant was divisible, and that an action was maintainable against the de- fendant for being concerned as attorney for persons who were clients of the plaintiff at the date of the deed. Xicholls v. Stretton, 11 Jur. 1008. A and B entered into an indenture in which B covenanted not to be interested in a certain business within a certain county, and also covenanted not to be in- terested, for five years, in the same business within the United States. Held, that B was liable for a lireach of the first covenant, although the second covenant might be void as in restraint of trade. Dean v. Kmerson, 102 Mass. 480. -Where a contract in restraint of trade em- braces several distinct provisions, and is divisible in its nature, the illegality of one provision, which is capable of being construed di- visibly. will not necessarily make the entile contract null and void. Western Union Tel. Co. v. Bur- lington, etc. H. Co.. 11 Fed. Kep. 1. L covenanted with W that he would not. for a specified time, be connected, either directly or in- directly, with the manufacture of stearin or star candles in the county of Hamilton, in the State of Ohio, or at any other place in the (^nited States, or give his assistance or conuiuinicate his knowledge of his said business to any i)erson what- ever, under forfeiture of four thou- sand dollars as liquidated dam- ages." Held, first, that all that part of the covenant which bound L not to pursue the busyiess. or give his assistance, at any other place in the United States, was void, being in general restraint of trade. Second, that it was divi.-ible, and if attended wUh other neces- sary reijuisites, might be good for Hamilton county. Lange v. Werk, 2 Ohio St. r)l'.>. Followed in Thomas V. Miles. 3 Ohio St. 274. The de- fendant entered into an agreement to serve the plaintiff in his business of dairyman as a milk carrier. By the agreement the defendant agreed that he would not. during the continuance of the .service, nor at any time thereafter, serve for his own benefit, or for the benefit of any other person, or solicit, or in any way interfere with any of the customers who should at any time be served by the plaintiff in his business. Held, that the clause was severable, and that an injunc- tion could projirrly be granted re- straining the defendant from serv- ing persons who were customers of the plaintiff during the employ- ment of the defendant by the plaintiff. Dubowski v. Goldstein (1S9G). ti5 L. .1. Q. B. Div. S97. !.")(» coNrKArTs in kkstkaint oi tijadk, I § 47. That an injiUR-tion wasllio proper rcnu'dv to enforce it.' In the opinion in this ease, the court said : "The covenant as to place, 'in the county of Lehigh or elsewhere,' is divisi))le. and valid as to the county; for the present it is conceded to be void elsewhere. * * • Where a county or city or borough is named as a limit, and an unreasonable extent of territory in addition is also named, the covenant is divisi- ble and may be valid as to the particular j)lace, which is a reasonable limit."- In an English case, L was engaged as clerk by D & Co. of London, foreign carriers, by agree- ment containing the following covenant : "L agrees that he will not within twelve calendar months after the termina- tion of this agreement, from whatever cause, carry on, or be engaged in, or intei-ested directly or indirectly in the cities of" London, Birmiuiiham, Liver{)ool and New York, "or within fifty miles thereof of each of the above named l)laces, either as princi[)al, clerk, agent or otherwise, in any business similar to the business now or hereafter to l)e carried on by the employers." Defendant, on leaving plaintiff's service, entered into the service of a rival (Irm in London. Plaintiff had not any trade with Ijirmingham. but a considerable business with the other places mentioned. It was held that the limit of time was reasonable; also, that of space, with the e.xception of Birmingham; that the words "principal, clerk, agent or otherwise" were not too wide; that the words "now or hereafter" were not reason- able.-^ In a recent case in Massachusetts, it was held that a stipulation by a manufacturer of tire alarm and telegraph apparatus, on a sab' of all his machinery, stock, letters patent and inventions, that he will not for ten years engage in the manufacture and sale of such apparatus, or enter into competition with the j)urchaser, while valid in so far as the patents and inventions agreed to be sold are concerned, is void, as against public |)oIicy, in so far as it prohibits the seller from engaging in the maiuifactuic and sale of ' Sinitirs Appeal. 113 P:i. St. .•)7(». '^ Davies v. F.owen. tU ].. V. * Smith's Appi^al. 113 I'a. St. Tu'.K (i")."!. 590. §4H.] rONTKAC rs IN KKSriiAIN'I- Ol IIIADK. i:)i such ;i|)|):ir;it u> under other patents, or under no patents at all.' § 4H. Tlio Subject CoiitiniK'd. — In oifU'i" that a con c- nant in restraint of IracU' may l>e hehl divisihh", and that one paii ot" it ina\' l>e u|)hehl, the aui'eeinent must l)i' of such a charactiM' that the |)art tliat would otherwise hare been valid is not \itiated by tliat which is void. In a case in Massachusetts, a purchaser |)romiscd to pay in install- ments for a l)usiness plant and property, in consideration of its sale and tleliverv, and the performance of three par- ticular covenants and aureements by the seller, the Hrst of which was a ueneral aureement. without any limitation of space, that for and during the period of five 3'ear.s he would not either directly or indirectly continue in, carry on or engaire in that l)usiness or any business of which that might form any part: it was held that the covenant was void as Ix'ing in restraint of trade, and that, not being sev- erable from the rest of the consideration, no action would lie on the promise for instjillments of the price.'- In the ' Gumewell Fire Alarm Tel. Co. V. Crane. HiO Mas.*. 50; s. c. :^5 X. K. Hop. 98. 2 Palmer v. Bishop. 14<; Ma.ss. 401). --It is contended tbat the contract restniin.s the exercise of the t)iisiness within two di-stinct areas. — that the contract is sever- at)le. The one part resiraininjj the exercise of the business williin the city and county of San Francisco, and the other i)art restiainiuf; its exercise within the State, and tliat. while the latter is void, the former is valid, because the linnls are not unreasonable. But we are of the opinion that the contract is, in that respect, entire. No precise rule can be laid down for the solution of the question, whether u contract is entire or separable: but it must l)e solved by considcrini; both the lanf^uajje and the subject-matter of the contract. There were not two distinct areas, for the one in- cluded the other. The defendant's business was not carried on in the two distinct areas as two separate occupations, l)ut the complaint avers that the defendant was carry- ing on the business in the State, and that he sold such business to the plaintiff. When the price is expressly apportioned l)y the con- tract, or the apportionment may be implied by law to each item to be performed, the contract will generally l)e held to l>e severable, but no such apportionment can be made of this contract. When the contract provides for the restraint of the t)usiness within the State, if the mention of any subdivision of the State will make the contract severable, then it would l)e easy to defeat tlie rule i)riihil>iting con- \:)-J CONTKACTS IN KKsrUAIN'l' OK THADK. [§ 4«. ()|)iiii(iii in Ihiscasc thccourt said: "It is coiitciided that the (Icfciidaiits. I)\ bciiii;- uiial)l(' to (Mifoi'cc the stipulation in (jiu'stion. only lose what they knew or were bound to know was loofally nidi; that they have all that they suj)- j)os('d liiey were irettiui;, namely, a promise which miirhl l)e kept, though incapable of legal enforcement; and that if they were content to accept such promise, and if there is another good and sufficient consideration, they may I)e held upon their promise. But this argument cannot properly extend to a case where a part of an entire and inseparable considei-ation is positively vicious, however it might be where it was simply invalid as in Parish v. Stone. ^ The law \ isits a contract founded on such a consideration with a positive condemnation, which it makes effectual by re- fusing to support it, in whole or in part, where the consid- eration cannot be severed."'^ In a leading case before the Supreme Court of Indiana it was held that a contract by tiiu-ts in total restraint of trade by nuMitioning in the contract each subdivision of the State; and when it is objected that the limits are iinieasonable, it will be answered that the plaintiff seeks to enjoin the defendant from pursuintj the business in only one of the cities or towns mentioned in tlie contract." More V. lionnet, 40 Oal. 2;")! ; s. c. (; Am. Rep. (;21. (;22. ••Where an entire promise is made on one en- tire consideration, and i)art nf Uiat consideration is illepil. it may avoid the entire contract." Itoh- inson v. Green. iJ Met. ]')U. lUl. Wiiere ttiere are several considera- tions recited as the N rKAcrs in ijksiuain r ok tkadk. loH which oiK' forincflv dc.-iliiiu' in oil in the citv of II. ;iad enters into and permeates the whole i-ontract so that noiu' of it can be said to l)e good. and. therefore, the subject of an acti(»n."-^ 5) 41>. I^iiiiitations in Conveyances. — It is will eslal)- lislH'd that a stipulation in a dvv^X that the land conveyed shall not l)e used for a specilied purpose or |)urposes, or ' CoMsiiiiHM*' Oil Co. V. Nuniio- machcr. 1-42 Ind. ."ttiO. .")GS; s. c.. 4! inH«-»ier. 142 lii.i. .".(id: s. «■.. II \. X. ¥.. Hep. 1048. K. Rep. 104S. •■' Mill it LnmtxT Co. v, IImv.'<. 7<; - ConsiimPi!!' Oil Co. v. N urine- Cal. 3S6. .393. 154 CONTHACTS IN KKSTKAINT OK TIJADK, [§ 4t». tliMt it >h:ill he used oiilv for llic pait iciil:ir |)ur|)()s(' spi'.ci- tied, is valid, aiid will he iiplidd in equity. In a U'adinjr case ill Al.-ihaiua. it was held that an express stipulation and reservation in a conveyance of land, |)ait of a larirer tract owned in fee by the vendor, that it shall he n>{H\ as a resi- dence only, and not for carrying on any trading or mercan- tile business, is not contrary to ))ul)lic i)olicy, nor otherwise illegal; and a court of e(|uity will enforce it against the purchaser, or a sul)i)ur(haser with notice, in favor of the vendor, or of a i)rivate corporation which has succeeded to his estate, although it may have no power to engage in a mercantile business. ^ In a tase before the New York ' Morris v. Tuscaloosa Mfg. Co.. 83 Alii. .565. See also Curtis v. Ay rail It. 47 N. Y. 73; Talmaore v. East River Bank. 26 X. Y. 105; Gihert v. I'eteler, 38 Barb. 488. affirmed 38 X. Y. 165. Contracts restraining the exercise of any trade, profession or business are legal when they are confined to a limited locality, not unreasonably large or extensive, and there is a fair and reasonable ground for the restriction. Where the owner and proprietor of a public warehouse on a navigable river conveys a tract of land adjoining that on which his warehouse is situated, taking from the purchaser a penal bond containing a covenant not to allow or permit a warehouse or place for shipping or receiving goods upon the conveyed premises, such cove- nant is not void as against public policy. Robbins v. Webb. 68 Ala. 393. "The i)urpose of inserting them in the deed is manifest. It was to prevent siicli a use of the premises by the grantee, and those claiming under him. as might diminish the value of the residue of the land belonging to the grantor, or impair its eligibility as sites for private residences. That such a purpose is a legitimate one. and may be carried out, consist- ently with the rules of law, by rea- sonable and proper covenants, con- ditions or restrictions, cannot be doubted. Every owner of real property has the right so to deal with it as to restrain its use by his grantees within such limits as to prevent its aj)propriation to pur- poses which will impair the value or diminish the pleasure of the en- joyment of the land which he retains. The only restriction on this right is, that it shall be exer- cised reasonably, with a due re- gard to public policy, and without creating any unlawful restraint of tiade. Xor can there be any doul)t that in wiiatever form sucli a re- straint is placed on real estate by the terms of a grant, whether it is in the technical form of a condition or covenant, or of a reservation or exception in the deed, or by words which give to the acceptance of the deed i)y tlie grantee the force and effect of a parol agreement, it is binding as between the grantor and the innnediate grantee, and can be enforced against him by suitable process, both in law and equity." Bigelow. .t., in Whitney § 4S».] ('ONTRACTS IN liKSTKAINT Ol" IJIADK. !:>;> Court of Aj)j)t';ils, tlu- court said: ••Tlu' right souglit to Im- enforced hero is an easement, or, as it is sonietiuics cnlicd, an anienitv, and consists in restraining the owner from doing that with and upon his |)roi)erty whicli- he might law- fully have done, and hence is called a tiegative easement, as distinguished from that class of easements which compels the owner to suffer something to be done upon his proi)ertv bv another. Easements of all kinds may he created and exist in favor of any third person, irrespective of any privity of estate or comuiunity of interest between the parties, and in this respect there is no distinction between negative easements and those rights that arc more generally known as easements, as a wav, etc."' It is the rule also V. Union Uy. Co.. II (ir.iy. ;^r>'.t. G & G, as partners, owned and operated a livery stable in the town of K. a.s did H and also .1 Bros. The last named sold for merely the value thereof the personal property used in the business, a part to G & G and the remainder to H, but did not sell or lease the stable, and. •n consideration of the purchase. Dinde a written contract with them, agreeing not to engage in the busi- ness in the stable of J Bros., nor to permit others to do so, for a period of five years, and that !?2..")()0 should be paid as rKpiidated damages for breach of the contract. There was a breach by act of one of the sellers, J)Ut H. having (piit the business, refused to join G & G as plaintiffs, and, therefore, they made him a defendant. Held, that the written contract was upon sufficient con- sideration, and was valid. Johnson V. (.Jwin. KM) Ind.4t!ti. When- real estate, consisting of certain lot'* and the buildings thereon, is sold, and in the granting portion of the deed conveying the same a clause is in- serted, staling that the property is not to be used for hotel purpo-ses for two years, it was held that such lestriction as to use of the prop- erty, being a limited one. was valid, and not an unreasonable re- straint of trade. Mollyneaux v. Wittenberg, 39 Neb. 'A7 : s. c. 5H N. VV. Rep. 20."). A covenant made l)y a vendor of real estate, that neither he nor his assigns will sell any marl from off the premises ad- joining the tract conveyed, will not be enforced in ecjuity against the alienee of the land intended to Ik- burthenedby such covenant. Siicli covenant should not be sustained on the ground that the principle on which alone it could rest would sanction the annexation to the land of any stipulation which liuman caprice might contrive. SucIj covenant is also illegal and void as being in general restraint of trade. Equity will enforce cove- nants connected with land in the hands of alienees, in some cases in which there is no legal remedy against such alienees; but such cases should not be unnecessarily multiplied. Brewer v. Marshall, m N. J. Eq. 537. ' Trustees v. Lynch. 70 N. Y. 440,447. "It would be unreason- able and unconscientious to bold l.")t) CONTKACTS IN KKSTRAINT OF TKADK. [§ 4H. that where a limitation in a conveyaiK-e is valid, as between the original parties, the covenant is bindinij iijjon a grantor of tlie covenantor, who has taken the title with notice of the r^^striction, and this will hold, although the assignees of the covenantor are not mentioned in the con- veyance. It is not necessary that tlie agreement should be a covenant, technically, running with the land ; it is sutti- cient that the purchaser has notice of it. In the leading and instructive case of Hodge v. Sloan, the court said: ''Many other instances of restraint might be referred to, and where it is of such a nature as concerns the mode of occupying or dealing with the ' property purchased in the way of business operations, or even the omission of all busi- ness or certain kinds of business, or the erection or non- erection of buildings upon the property, we see no reason to doubt the validity of an agreement fair and valid in other the {rrantees iibsolved from the itudes. The nih' ami its applica- coven.int in e(]iiitv for the tcchni- tion decs not depesid upon the Ciil reason assigned, that it did run character or classification of the with the land so as to give an ac- equities chiinied. but upon tlie tion at law. A distinguished judge position and equitable obligation answered a like objection in a of the purchaser. The langmiffe similar case by saying, in sub- of courts and of judges has been stance, that if an action at law very uniform and very decided could not bt maintained, that was upon this subject, and all agree an additional reason for entertain - that whoever purchases lands upon ing jurisdiction in eijuity and pre- which the owner has imposed an venting injustice. The action can easement of any kind, or created a be maintained for the establish- charge wiiich would be enforced inent and enforcement of a nega- in etjuity against him, takes the live basement, created l)y the deed title subject to all easements. of the original proprietor, affecting equities and charges, however cre- the use of the premises now owned ated.of which he has notice. Ibid., and occupied by the defendants. 450; citing I'arker v. Xightingale. of which they had notice, and sub- Allen. 341 ; Cott v. Tnwlc. L. K. ject to which they took title. 4 Oh. App.(;r)4; Carter v. Williams, There is no equity or reason for 18 W. U. '>i)'S. befoie V. ('. James; makinga servitude of thecharacter Wolfe v. Frost. 4 Sandf. Ch. 72; of that claimed by the plaintiffs in Tulk v. Moxhay. 2 Phil. 774; Wiiit- the lands of the defendant, an ex- ing v. I'nion U. Co.. 11 (iray. 3r)i»; ception to the general rule which Gilbert v. I'eteler. 38 Barb. 488; charges lands in the hands of a Barrou v. IJirliard. s Taige. 3.")1 : purchaser with notice with all ex- (Jreene v. Cieightdii. 7 K. I. 1; isting equities, easements and serv- I{r<>uwer v. .Jones. _>:! Itarl). l.">;{. § .')(). 1 CONTRACTS IN KKSTi; MNT DI" TIJADr.. l')7 respects, which stTurcs that restraint. Indeed, it seems well settled l)y authority that a i)ers()nal ()l)liu:ati()ii so insisted upon hv a irrantor. and assumed by a urantee, which is a restriction as to the use of the land, may he enforced in e(|nit \' auainsl the grantee and sul»sc(|ueiit |)ure held valid. In a (.-oe in Mi<'higan, it was held that the right of a grantor to convey land on condition that the grantee shall not sell li(|Uor upon tlu^ premises, coupled with a |)r()- visidii ih.ii ill case of such sale the land -hall revert In the ' llodjjc V. Sloan, 107 N. Y. 244. hfinMil of sin-h iiiiaiillioii/.cil i>roiii- •J.M. See also Hiiibank v. IMlls- ise for nearly a year, will not pre- bury. 48 N. U. -ITrj; Morland v. vent him from rescinding t be sale Cook. L. K. i> K<|. •-'•■>2: Hrosvn v. for uon-performance of the prom- Great Eastern li. ('o.. L. K. "2 t^. IJ. ise. An a^reenumt by a vendor Div. 40(5; I.ondon, etc. Ry. Co. v. not to sell other lots in the same Coinrs.. I.. U. 20 ('h. I). r>(;2. iu*t. plat at a less price than that paid Where an a^ent procures a sale of l)y the vendee for his lot, will be land l)y proinisinjj. without au- construed as limited to a reasonable thority, that ihe vendor will not time, and as such Is not a<;ainst sell adjoininor lots at a lei;s price, public policy. Uackeman v. Kiver- the mere fact tbat the vendee takes bank Imp. Co. (18»fi), H>7 Mass. 1 ; possession of the land, and has the s. c. 44 N. E. Rep. 090. 1,-)S CONTKACTS IN ItKSTHA I N T OF TltADK. [§ 50. irraiitor. who sliall :il once l.-iUc j)().ssc's.si()n thei'cof, cannot be denied, and is within the publie policy of this State, but <'<>nrts will not enforce such condition if inserted for a dis- honest purpose, and to enabh' the irrantor to obtain a nionoi)ol\ of the prohibiti'd busin(»ss.' In d('ni-c> \ . Paw- lowski. it was h<'hl that restrictions in a di'cd upon the ri^rht t)f the tri'lutee to sell intoxicatinof licpiors on the premises are sustained upon the tiieorv that a part}' has the right in disposing of his profjerty to prevent such a use by the i>rantee as miirht diminish the value (jf remainini; land, or imj)air its eligibility for other uses.'- In a case where a deed contained the clause '-no intoxicating licjuors are to be sold on said premises in less (piantities than five gallons," it was held that the restriction was not such a restraint on trade as to make it invalid.-^ ' Chipju'wa Fulls Lmnlter Co. v. Treinper. 75 Mich. 3<>. ••T,l; .">!. TIh' Grantor KostraiiuMl Its tin- 'INtiiin of tlw Conveyance. — WluTc n i2:r:iiit(»r. I)\ tlic coiulitions of tlic sale Mild conveviincc of hmd. is i-('stri(t<*(l in the i)iirsiiit of his husjiu'ss, tho covonMiit will l)c upheld. mikI if xiolatcd will Im' enforced 1)\- injunction. In the citxof Brooklyn, (J ohtained a contract for the purchase of a h)t situated in a section of the cit\' occupied 1)\ resicU'Uces of people of wealth and social standing", and in which there were no teii- i'uu'nt houses. ( )n his aniiouncenient of his intention to erect a scven-storv tiat in close proximity to plaintiff's resi- dence, plaintiff houirht his contract and obtained possession of the lot. One of the conditions of the purchase was that (i should not "construct or erect any flats in plaintiff's im- mediate neiahl)orh<)od." Soon after the sale (i com- menced the erection of a Hat opjjosite the lot sold, hut before the completion of the work sold the lot to his wife, who had knowledije of the contract with plaintiff, for about one-third of its value, and continued the building of the Hat as her airent. Il was held that the erection of the flat would be enjoined, inasmuch as the wife bouulit the land subject to the j)laintiff's e(|uities. which attached as soon as he ac(|uired title to the same.' In the o))inion in this case, the <'ourl said: ''It is true and should be noted, that in that ttu' prtMiiises conveyed ••are to the existing »'(|iiity. and .mote not to lie used for saloon or drain- especially when he i»uys for the shop purijoses." merely prevents express purpose of defeatinj^ and the use of a particular i)iece of evadinjj that eipiity. It has heen property in a certain way, and is held thai the equity resiiltinjj from not void as in restraint of trade, a valid ajijreeinent, altlioiij^h the Star Jirewery Co. V. Priinas. 1(!3 III. latter was not a covenant running ♦i.V2: s. <;., 4.") X. K. Hep. 14."). with the land, or a lej^al exception ' Lewis v. GoUner. I'iO N. Y. "227; or reservation out of it, hut stood s. c 29 N. E. Rep. 81. "If the solely upon the ground of a per- contract remains technically a per- sonal contract, dictating the mode sonal one, I think the reasonable of a user, would, nevertheless, go and settled doctrine i.-4 that the con- with the land into the hands of a tract equity is so attached to the purchaser, with notice, and who use of the land, which is the suh- did not buy innocently or in good ject-matter. as to follow the land faith." Ibid., p. '2'M'>. See also itself into the hands of a purchaser Whitney v. Union Ky. < 'o., 1 1 Gray, with a full knowledge of all the 3<)3. facts, who buys with bis eyes open 1<)0 ('ON'riiAC'is IN ijKsriiAi.Nr or tkadf.. [§ ')2. these cases the restrictions followed t he line of title .-ukI were imposed l)v the oriirin.ii owners and \'endors of the land, while here tliey were not so imposed, hut came from one never an owner of the land, hut derivini; his right from a contract with one who did hecome such owner. But win' should that difference change the result? The original owners right rests upon one consideration and that of the stranger to the title upon another, hut each are eipially good and worthy of equitable regard. In Parker v. Night- ingale,^ it is declared not to be in the least material that the restrictive stipulations should be binding at law, or that any pii\ ity of estate should subsist between parties in order to render them obligatory and to warrant ecjuitable relief in case of their infraction. [ think that doctrine is sound and just. The source of the restriction would seem to be im- material if itself binding and founded ui)on sufficient con- sideration, and a breach is no greater wrong to a priv} in estate than to a stranger validly contracting al)out its use. Nor can the vendee in bad faith stand upon such a differ- ence. Ecjuity has no c()mi)assi()n for a fraud, and he who buys in aid of one with full kiu)wledge of what is right, l)ut with purpose to defeat it, should not escape the hand of efpiity bv a criticism upon the origin of the restriction \ io- lated.""- § 5ii. Contracts Kelatinj'' to Trade Secrets. — It i> a well established |)rincii)le of ))idjlic i)olicy that useful and valu- able discoveries and in\'ention> are to be encouraged. They are afforded all necessary j)rotection by tlu' law on the ground that the discoverer or inventor is (Mditled to a proper recompense for the labor and expense incurred in bringing his discovery or invention to perfection, and for the farther reason that it is for the jiublic interest that work of this character should be done. In other words, the protection afforded is a matter of justice and for the promotion of the pul)lic welfare. \ valuable discovery, before it is divulged, is the property of the discoverer. It ' I'arlver v. Nigbtingalc. c Allen. ^ Lewis v. Gollner. ]2U N. Y.'i27. 344. •2H(). § 52.] CONTRACrS IN RESTRAINT OF TRADK. l'»l is his privileofe to keep his secret and to avail himself, as far as {jracticahle, of its benefits; or, if that promises a larijer measure of profit, to dispose of it. Since the sale of the secret is, presumptively, not in restraint of trade but for its extension, it is not in contravention of pul)lic policy, and any contract relating to it will be enforced. In a re- cent leading case before the Supreme Court of the United States, relating to a proprietary medicine, the court said: "Relating as these contracts did to a compound involving a secret in its preparation; based as they were upon a valu- able consideration, and limited as to the space within which, though unlimited as to the time for which, the restraint was to operate, we are unable to perceive how they could be regarded as so unreasonal)le as to justify the court in decliniuir to enforce them. The vendors were entitled to sell to the best advantage, and in so doing to exercise the right to preclude themselves from entering into competi- tion with those who purchased, and to prevent competition between purchasers ; and the purchasers were entitled to such protection as was reasonably necessary for their ben- efit. W had and transferred property in the secret process of manufacturinj^ the article he had discovered, and he and his grantees could claim relief as against breaches of trust in respect to it. The policy of» the law is to encourage useful discoveries by securing their fruits to those who make them. If the i)ul)lie found the balsam efficacious, tiiev were interested in not being (le])rived of its use, l)ut 1)\' whom it was sold was iiMim|)ortaiit .""' In a recent case > Fowle V. Parke. 131 U. S. 88. Alls(»i)p v. Wii.-.ilcrofl, I,. R. \'> 97. See ulfso Bryson v. White- Eq. 59. Under a bond to convey bead, 1 Sim. & St. 74, and cases to the obligee the oljiifjor's cited; Ijcather Cloth Co. v. Lor- chocolate mill, ••toojelhcr with sent. L. R. 9 Eq. 345; s. c, 39 L. his exclusive rifjht and art or J. Ch. 82; 21 L. T. (>(>1 ; 18 W. K. secret manner of niakinj; chocolate 572; Alcock v. (iiberton. 5 Ducr. and all information pertaining to 76; GlUis V. Ilall. 2 IJrewst. 341; his said manner of making choco- Bowling V. Taylor. 40 Fed. Kep. late," it is incumbent on the 404; Benwell v. Inns. 24 Beav. 307; obligor, to convey such exclusive Harms v. Tarsons, 32 Beav. 328; right, with a covenant that he will Rannie v. Irvine. 7 Man. & G. 969; comuiimicate all the information 11 162 CONTRACTS IN RKSTKAINT OK TRADK, [§ '>'-i rehiting to tliis })()iiit, before the Court of Appeals of llie State of New York, the court said: "The business carried on by the defendant was founded on a secret process known only to herself and her assents. She had the right to con- tinue the business and, by keeping her secret, to enjoy its necessary to enable tlie oblij^ee to use the right or secret art. and that he will not divulge the secret to any other person. Such a con- tract is not in restraint of trade. Vickery v. Welch. 10 Pick. 523. An instrument under seal was executed, upon a sale made by the plaintiff to the defendants, by which the former sold to the latter all his interest in the manufacture of p(>rcolain teeth in the city of New York, with his stock on hand, and the good will of the business. The plaintiff covenanted to instruct one of the defendants in the art of manufacturing porcelain and in- corruptible teeth, and to furnish him with his recipes therefor. The agreement also contained the following clause -•and the party of the first part will not carry on or cause to be carried on by any per- son with whom he shall be inter- ested, the manufacture of porcelain teeth, or impart the knowledge of manufacturing the same to any person, other than as aforesaid." It was alleged in the complaint, that the said art of manufacturing porcelain teeth, in which the de- fendant was to be instructed, was a secret of the plaintiff, and known to be such by the defendant. It was held on demurrer, that the covenant in question was valid, and not one in restraint of trade. Al- cock V. Giberton. 5 Duer. 7<>. The defendant sold to the plaintiff a business of manufacturing and selling the "Government Carbolic Disinfectants." the process of man- ufacturing which was a secret in his possession, and covenanted not to carry on the business of a man- ufacturer or seller of the "'Govern- ment Carbolic Disinfectants" or of any other article or thing of a dis- infectant nature for fourteen years, and not to disclose the secret for the same period. The plaintiff brought this action, alleging that the defendant was infringing those covenants and seeking to restrain him. The defendant delivered a statement of defense, whereby he specifically denied that he was in- fringing the covenants, and further demurred on the ground that the covenant not to carry on such business was in restraint of trade and too general in its provisions. Held, that having regard to the subject-matter the covenant was not too general, and that the de- murrer must be overruled. Hagg V. Darley. 47 L. J. Ch. 5G7. In a contract for the sale of the art and mysteiy of compoundingand man- ufacturing an article of medicine and the exclusive right to make, use and vend the same, the vendor covenanted not to impart the art to any other person and not to make or vend the article himself ; in consideration whereof the ven- dee covenanted to pay a certain sum of money in installment^;, at specified times. JIfhi. that the covenants were independent, and that the vendor need not allege performance of the contract, on his part, in order to recover the monev due. Held, also that it was § •^-^.] CONTRACTS IN UKSTUAINT OK lUADK. ica hciu'tits to :iny {)r;irti(':it)K' extent. She also had the ri^ht to sell the business, inchiding, as an essential part thereof, the secret process, and, in order to phice the purchasers in the same position that she occupied, to promise to divulge not iKH'cssury for the vendor to allege that there was in fact giich an art or secret as was mentioned in the contract; or that it was in his exclusive possession. Such a contract is valid, and does not fall under the rule prohibitin>>; a j;en- eral restraint of trade. Hard v. Seeley, 47 Barb. 428. The princi- ple upon which a contract in gen- eral restraint of trade is held to be void as against public policy, is that such a contract deprives the public of the enterprise and skill of one of the parties to the con- tract, and injures him, without any corresponding benefit to the party contracting for such restric- tion. Although the policy of the law does not permit general agree- ments in restraint of trade, a per- son who is engaged in a particular business whicii he is carrying on by means of a secret process whicli he has discovered, may sell the secret to anotlier and may lawfully contract with the purchaser that he will not thereafter use that secret in such business without the consent of the purcha.ser and will will not disclose the secret to others. Jarvis v. Peck, 10 Paige Ch. 118. "If he invents or discov- ers, and keeps secret a process of manufacture whether a proper sub- ject for a patent or not, he has not, indeed, an exclusive right to it as against the pul»lic or against those who in good faith acquire knowl- edge of it; but he has a jiroperty in it which a court of chancery will protect against one who in violation of contract and breach of confidence undertakes to apply it to his own use or to disclose it to third persons. The jurisdiction in equity to interfere by injunction to prevent such a breach of trust, when the injury would be irrep- arable and the remedy at law in- ade(iuate, is well established by authority. In the earliest reported case of this kind, Lord Eldon, in- deed, refused to grant an injunc- tion against imparting, in violation of an agreement, the secret, not only of a patent which had been obtained and had expired, and which the whole public was, there- fore, entitled to use, but also that of making a certain kind of pills, for which no patent had been pro- cured, and stated, as a reason for the latter, that if the art and method of preparing them was a secret, the coiu"t could not. without having it disclosed, ascertain whether it had been infringed. Xewlterry v. James, 2 Meriv. 440. Hut the same learned chancellor afterwards considered the general question as still an open one, whether a court of ecpiity would restrain a party from divulging a secret in medi- cine, which was not protected by patent, but which he liad promised to keep, and in such a case dis- solved an injunction of the vice- chancellor, upon the sole ground that the defendant made aftidavit that the secret was not derived from the plaintiff. Williams v. Williams. 3 Meriv. IT)?. And in a later case he unhesitatingly granted an injunction against one who. by the terms of his agreement with lU CONTRACTS IN RESTRAINT OF TRADE. [§ 52. the secret to them alone and to keep it from every one else. In no other way could she sell what she had and get what it was worth. Having the right to make this promise she also had the right to make it good to her vendees and to protect them b}' covenants with proper safeguards against the consequences of any violation. Such a contract simply left matters substantially as they were before the sale, except that the seller of the secret had agreed that she would not destro}^ its value after she had received full value for it. The covenant was not in general restraint of trade, but was a reasonable measure of mutual protection to the parties, as it enabled the one to sell at the highest the plaintiff, was not to be in- structed in the secret, and who ob- tained a knowledge of it by a breach of trust. Lovatt v. Win- yard. 1 .Tac. & Walk. 394. Sir John Leach decreed, in one case, spe- cific performance of an agreement by a trader to sell the good will of a business, and the exclusive secret of dyeing; and, in another, an ac- count of the profits of a secret for making a medicine against a son of the inventor, holding it in trust for his brothers and sisters. Byron V. Whitehead, 1 Sim. & Stu. 74; Green v. Folgham. 1 Sim. & Stu. 398. In a more recent case. Morri- son, the inventor and sole proprie- tor of a medicine, for which no patent had been ol>tained. entered into partnerstiip with Moat, to whom he cominimicated the secret of making the medicine, but did not make the secret a part of the assets of the partnership, and re- served it to hiu)self as against all other persons, and Moat covenanted not to reveal it to any person whom- soever. By subsequent agreeuient Morrison's sons and a son of Moat were admitted as partners in the business, and th<' secret was sur- reptitiously obtained from Moat by his son. After the death of both the original parties, on a bill brought by Morrison's sons, who were also legatees of the secret, against Moat's son, Vice- Chan- cellor Turner, in an elaborate judg- ruent, reviewing all the English authorities, granted an injunction restraining the defendant fioin using the secret in any manner in compounding the medicine, and refused to restrain him frou) com- municating the secret, simply for want of any allegation or evidence of any intention to communicate it. Morrison v. Moat, 9 Ilare. 241 . The defendant appealed, but the order was affirmed (21 L. J. Ch. 248), and Lord Cranworth, delivering the opinion of the Court of A|>|)eal. said: 'The principles that were argued in this case, are principles really not to be called in contro- versy. There is no doubt what- ever, that when a party who has a secret in trade employs persons under a contract, express or im- jilied, those persons cannot gain the knowledge of the s-ecret, and then set it up against their em- ployer.' " Gray. J., in IVabody v. Norfolk, 98 Mass. 4.")2. 458. § 53.] CONTRACTS IN RESTRAINT OF TRADK. IGf) price and the other to get what they paid for. It imposed no restriction uj)on cither that \v:is not hcncticial to the other l)v eidiancing the price to the seller or protecting the purchaser. Recent cases make it clear that such an agree- ment is not opposed to public policy, even if the restriction was unlimited as to l)oth time and territory."' Where a contract relating to a trade secret is of such a character that the eifect of it will be prejudicial to the public interest it will not be sustained. In a case in Massachusetts it was held that a contract made between citizens of this common- wealth, bv which one of them agreed for a good consider- ation, never to "set up, exercise or carry on the trade or business of manufacturing and selling shoe-cutters at any place within the commonwealth of Massachusetts," is il- legal as being in restraint of trade, although the manufact- ure of shoe-cutters is an art which can only be carried on by persons instructed in the same, and at the time of making the above contract the person so promising was ignorant of said art, and his said promise was made as a part of an agreement of partnership with one who was skilled and actually engaged in carrying on the same, and to take effect at the expiration of the pai-tncrship, and al- though at that time only three other persons were engaged in the business. -' § 53. Restraint of 'I'radc l).v Pat«Mits. — It is public policy to encourage useful inventions by granting the in- ventor a monopoly in the numufacture and sale of the article invented for a limited period. In a recent case before the United States Circuit Court for the Eastern Dis- trict of Missouri, the rule is st.ited, as follows: ••The entire th<'orv and |)urj)ose of our patent laws is to create a limited nu)nopoly. In consideiation that a patentee will give his in- vention to the pul)li<', with full drawings aiul specifications so as to enable the public to freely use it at the expiration of seventeen years, a grant is made to him of an exclusive right to the monopoly of the patented article or device > Tode V. Gross, 127 N. Y. 480, » Taylor v. Blanchard. i:* Allen, 485. 370. 166 CONTRACTS IN RESTRAINT OF TRADP:. [§ 53. during that time. The rights so acijuiied by the patentee under a gi'ant from the United States are entirely incon- sistent with the j)atontee's being made siihject to the pro- visions of the anti-trust laws of the several States. Under his grant he has been given, and for the consideration alluded to, is entitled to maintain a monopoly in the disposi- tion or use of the patented article or device."' Public ' Columbia Wire Co. v. Freeman Wire Co., 71 Fed. Rep. 302, 300. See also Edison Electric Light Co. V. Sawyer-Mann Electric Co., 3 C. C. A. 605; s. c, 53 Fed. Hep. 592: Strait V. Harrow Co.. 51 Fed. Rep. 819; Soda Fountain Co. v. Green, 69 Fed. Kep.33;{; Billinifs v. Ames, 32 Mo. 2G5. "The objection that the covenants are void as being in restraint of trade, cannot be sup- ported, admitting that all the pat- ents are void. Agreements to re- strain trade in particular places, founded on a reasonable considera- tion, are valid in law, and may be enforced. Here was a sutlicient consideration, whether the patents were valid or not. Being the in- ventors of these machines, the par- ties may obtain valid patents for them; or. without thus securing a monopoly, they might reasonably expect to enjoy it, in fact, by means of their superior skill. For a time, at least, tiiey would have little to fear from the competition of others. It was. therefore, lawful and rea- sonable for them to share in the profits of their invention, either by uniting in a joint concern, or by a more convenient arrangement, whereby each one might have the benefit of his own capital, industry and activity.'" Stearns v. Barrett. 1 rick. 4-13; s. e., 11 Am. Dec. 223. 227. The invalidity of a patent does not destroy the consideration for a contract, based on its sup- posed valiiiiiy. to settle litigation under it. and tix the respective rights of the parties, especially where the contract includes mutual covenants as to the conduct of their business, and is partly exe- cuted before the invalidity is dis- covered. Gloucester Isinglass & Glue Co. V. Russia Cement Co., 154 Mass. 92; s. c. 12 L. R. A. 563. The grant of the right to make, use and vend a patented article ••within the southern half of Ala- bama, less C county.'' is not void for uncertainty in defining the boundaries of the territory. Dud- ley v. Suddoth (1S91). 91 Ala. 349; S. C, 8 So. Rep. 873. '•Considera- tions which might obtain, if the agreement were in regard to other articles, cannot be of any weight in the decision of a question arising upon an agreement as to patented articles. If an owner of a patent should choose to refuse to manu- facture the article covered by his patent, could anyone else claim such right y His simple neglect or refusal to manufacture would stand as a conclusive reasoti why it was not manufactured. .An owner might sometimes make more money by not manufacturing than by doing so. but of that (juestion he is the sole and absolute judge.'' Good V. Daland. 121 X. Y. 1. 8; s. c. '24 N. E. Rep. 15, 16. Com- plainants, who were manufactur- ing, under patents, stays which consisted of a stiffening bhide hav- ing a sheet of rubber on each side. § 53.] CONTRACTS IN RESTRAINT OF TRADE. 167 policy so far favors the inventor tliat it not only upholds his monopoly, hut also legalizing any proper sale of his patents, whether already ac(]uired or jirospective. In a re- cent English case, it was held that an agreement by the vendor of a patent to assign to the purchaser all future patent rights which the vendor niay hereafter ac(iuire of a like nature to the patent sold, is not contrary to public policy.' In Ills opinion in this case, Sir George Jessel, M. K.,said: "Now, nothing is better known than this, that when persons have turned their attention to a particular class of invention they are likely to go on and invent, and likely to continuously improve the nature of their inven- tion, and continuously to discover new nu)des of attaining the end desired. Persons, therefore, who buy i)atents of inventors are in the h:il)it of protecting themselves from the utter destruction of the value of the thing purchased by l)argaining with the seller that he shall not use anv new in- vention of his for producing that product in which they are about to deal at a cheaper rate, because if he were allowed to do so he might, the day after he had sold his j);itent, j)roduce something which, without being technicallv an im- provement, might accomplish the desin'd object in some other way. Miid utterly destroy the \alue of that which they :ind :in outer liiyer of cloth over No. 1'' by complainants, the latter each sheet, and defendant, who being a &tay of the double layer was making two kinds of stays, kind; but it was agreed that eom- the '•Bridgeport" and the '".Self- plainants might put a clioaper Attaching," both of which (^om- double layer stay on the niirket, plainants claimed to be infringe- provided they would furnish de- ments on their j)atent, entered into fendant, at a certain price, the an agreement by whifh complain- same (piantity of such cheaper ants licensed defendant to make stay as should be sold by thera- the ••The Self-Attaching." pro- selves. Held, that this contract viding that he would not make the was not in restraint of trade. '•Bridgeport" stay, and defendant Bowling v. Taylor, 40 Fed. Rep. agreed to make no slays con>isting 404. of a steel, a layer of gutta percha. ' Printing, etc. Co. v. Sampson, and two outer layers of fal)ric. By L. K. U> K(|. 44r); '2fi I.. .1. Kxcheq. factureof the "Self-.Attaching" l)y !*. the defendant, and the "Ypsilanti 168 CONTRACTS IN RESTRAINT OF TRADE. [§ 53. had purchased. They, therefore, not unreasonably, and not unusually, make it a part of their barijain that what- ever the man discovers of the same kind in the shape of machinery or a})paratus which will produce the product in which they are about to deal shall belong to them. They say 'we cannot buy on any other terms, })ecause otherwise we are exposed to the instantaneous, or almost instantaneous, competition of the inventor with the benefit of his j)rcvi()us experience.' That, as I said before, is not an unusual, nor is it an unreasonable bargain."^ In a similar case in Massachusetts, it was held that a covenant made by the patentee of a process of manufacture in a busi- ness not local in its character, for the purpose of selling the patent to better advantage, and as a part of the transaction of sale, and for one and the same consideration received by him for the patent, to use his best efforts to invent iiiij)r()ve- nients in the process and to transfer them to the buyer, to do no act which may injure the buyer or business, and "at no time to aid, assist or encourage in any manner any comi)cti- tion against the same," is not necessarily void as in re- straint of trade.'' ' Printinjr. etc. Co. v. Sampson. L. R. li) EJjed at Berlin. Wis., as partners in the manufacture and sale of wood pol- ishing and sand papering machines of which Perry, either solely or jointly with others, was the inven- tor, and upon which he then held and owned live letters patent issued to such inventors by the United States. The>e m.ichines were bulky and expensive, a largo capital was required to carry on the successful manufacture and sale of them, and they were only sold and used in large cities. It is not alleged that the business extends beyond the United States. In February, 1884, Perry sold his interest in such business, with the good will thereof, also in all the property of the firm, in the letters patent be- fore mentioned, and in an .aiJplica- tion for another patent then pend- ing before the United State.s commissioner of patents, for the sum of $20,000. The contract of sale contained a stipulation by Perry to apply for letters j)atent on anotlier invention of his. being "improvements in sand pai)er ma- chines and planer combined for cleaning sashes, doors and blinds. 170 CONTRACTS IN RESTRAINT OK TRADK. [§54. Mr. Justice Lyon, the coiiit said: "An alleged rule to the effect that restrictions of the character undir consideration if made as incidental to the sale of ])atents and a business thereunder, are valid, no nuitter how ireneral and uidiinited such restrictions may l)e, is invoked to uphold this covenant. But the cases cited to sustain such a rule do not sustain it as broadly as claimed. They hold that such restriction is valid oidy when, in the judgment of the court, it is not un- reasonable, due regard being had lo the subject-matter of the covenant. Tested by that rule, we have seen that the restriction in this case is not a reasonable one, because not necessary to the protection of the covenantee. In other words, this restriction is not in any correct sense of the term incidental to the sale of patents and a business there- under, but reaches far beyond the point of just and lawful protection to such business. It is also argued that because the restriction affects only a single class of machines and does not cover the trade of a machinist, it is not within the rule \\hi(h vitiates contracts in restraint of trade. The position cannot be sustained. \Miile the restriction only relates to sand papering machines, the defendant is an in- ventor of such machines, and the covenant unreasonably and unnecessarily prohibits him from pursuing his trade or pro- fession. It is, therefore, w'ithin the rule that such cove- nants are void."^ etc.. and, when obtained, to assign such letters patent to Mather. The material stipulation in the contract of sale is to the effect that Perry ■will not hereafter manufacture, sell or cause to be sold any sand papering machines of any descrip- tion,' unless with the consent of Mather. The plaintiff corporation has acquired by mesne assign- ments and transfers, the whole in- terest in the business, including the interest thus sold by I'erry to Mather, and the benefit of the stipulation last above mentioned, and is now carrying on the busi- ness under the same letters patent, at Berlin aforesaid. Perry is a cari)enter and joiner by education and trade. and formerly carried on a certain business in that line. He is the inventor, solely in some cases, and jointly with another person in others, of the devices and machines covered by the let- ters i)atent above mentioned. ' Berlin Machine Works v. Perry. 71 Wis. 4'.).-). r)01: s. c. 38 N. W. Kep. 82. § f)5.] CONTRACTS IN RKSTKAINT OF TRADK. 171 § 55. Restraint in the Sale of a Trade-Mark. — The griRTal j)riiu'ij)le.s uiuler which the saU' of patents is i.pheld ari' applicahh' to the sale of tratle-uiai Us, A tnuk'-iuark uiuli'i- w hich a protital)le business in the iiianiifacturc and sale of any article has been established is of value, and any reasonable contract relatinjj: to it will be sustained. The idea of a trade-mark, like that of a patent, is to protect a nionopoh or a rotrainl of trade, and the sale of a trade- mark, where the restraint imposed is not greater than necessary and reasonal)le, will be upheld. In the leading case on this point, where I>, the j)r()prietor of a medicine known us "Brewer's Luui; Restorer," sold the same with the exclusive right to manufacture and sell it, surrendered his trade-mark to the purchaser, and agreed "never to use or permit iin" name to be used on any i)reparation which woidd be rei-om mended and sokl for the same purposes as Brewer's Lung Restorer is used and sold for," such con- tract is in partial, not general, restraint of trade: and being for a valuable consideration is not unreasonable. Such contract does not limit the skill of the vendor in compounding medicines for the cure of throat and lung dis- eases, but stipulates that his name shall not appear with his consent on such medicines. The publishing and offering for sale of "Brewer's Sar.saparilla Syrup, professing to be a permanent cure for all diseases of the lungs and throat" is a violation of the contract; and the vendor being insolvent, (Mjuity will enjoin such action.' In the opinion in this case, ' Itrewer v. l.uinar. flit (i;i. <;."•»;. iiilen-st. tlicy (tlie linii Fioininj; "Within a month siibse(|uent to the Hiotiicrs) prosecntiHl tlie l)usint'ss. death of the senior partner of tlie with some chanjjes in ttje individ- flrni, his executors sold and eon- ual partners, until .July 1st, IStJ.'), veyed all tlie interest of the deee- when the |)resent coinpiainant sold dent in the business to the siir- out his whole interest to his brother, vivin^ partner and complainant John Fleming, who, as sole pro- whereby they, under the firm name prietor of what the firm owned, of Fleming Brothers, acquired not continued the business until the only tiie title to the receipt and "id day of November, 1870, when the riijht to make the pills, but he died, leaving a last will and also the right to use the labels and test.iment. • » * In such cases, trade-marks used by the former the <|nestion is not whether the owners. Possessed of the whole i'om|)lain:int was the original in- 172 CONTRACTS IN RESTRAINT OF TRADE. [§ 55. the court said: "But are the covenants of this contract in general restraint of trade? The stipuhition which it is alleged is void for this cause is in those words : 'I agree never to use or permit my name to be used on any prepara- ventor or iiroprietor of the article made by him, and on which he puts his trade-mark, nor whether the article made and sold under his trade- mark by the respondent is equal to his own in value or qual- ity; but the court proceeds on the ground that the complainant has a valuable interest in the good w'ill of his trade or business, and hav- ing a particular label, sign or trade- mark, indicating to his customers that the article bearing it is made or sold by him or by his authority, or that he carries on business at a particular place, he is entitled to protection against one who at- tempts to deprive him of his trade or customers by using such labels, signs or trade- mark without his knowledge or consent. Coats v. Uoibrook, 2 Sandf. Ch. 5SG; Part- ridge V. Menck, 2 Barb. Ch. 101; s. c, 47 Am. Dec. 281. Every- where courts of justice proceed ui)on the ground that a party has a valuable interest in the good will of his trade, and in the labels or trade- mark which he adopts to enlarge and perpetuate it. Hence, it is held that he, as proprietor, is entitled to protection as against one who attempts to deprive him of the benefit resulting from the same, by using his labels and trade- mark without Ills consent and au- thority. Decided cases to that effect are (juite numerous, and it is doubtless correct to say that a per- son may have a right in his own name as a trade-mark as against a trader or dealer of a different name; but the better opinion is, that such a party is not. in general, entitled to the exclusive use of a name merely as such without more. Millington v. Fox. 3 Myl. & Cr. 338; Dent v. Turpin. 2 J. 2 X. Y. 427; s. c, 20 Am. Rep. 489. * * • Such a proprietor, if he owns or controls the goods which he ex- poses to sale, is entitled to the ex- clusive use of any trade- mark adopted and applied, by hiui to the goods, to distinguish them as being of a particular manufacture and quality, even though he is not the manufacturer and the name of the real manufacturer is used as part of the device. Walton v. Crowley. 3 Blatclif. 440; Emerson V. Badger, 101 Mass. 82." Clifford, J., in McLean v. Fleming, 9G U. S. 245. See also Williamsv. Johnson, 2 Bosw.l ; Leidersdorf V.Flint, 8 Biss. 327 ; Taylor v. Carpenter, 2 Sandf. Ch. G04; s. c, 42 Am. Dec. 114; Hall V. Barrows, 4 De G., J.& S. 158; McAndrews v. Bassett. 4 De G., J. & S. 38(5; Maxwell v. Hogg, L. K.2Ch. App. 314; Lawson v. Bank of Lon- don, 18 C. B. 84. "The jirinciple on which all cases on the subject of trade-marks unite is. that one man will not be permitted, by imitating the distinctive name or mark used by another to designate article/ of the latter's manufacture to impose articles of his own manufacture upon the j)ublic as the articles of the former. The cases so holding rest upon two considerations : First, that it would be a fraud on the rights of the former i)crson thus to permit his trade-mark to be iiui- § ^^^-^ CONTRACTS IN RESTRAINT OF TRADP: 173 tion which could be recommended and sold for the same purpose.' Defendant below had already stipulated and did sell all his interest with trade-mark, etc., in the 'Lunj^ Re- storer,' to the defendants in error. Then in the stipulation above he agrees further 'never to use or permit his name to be used on any preparation which could be recommended and sold for the same purpose.' This stipulation does not forbid him to manufacture or sell such preparation as he tated. Second, that it would also be H fraud on the public. See Gil- man v. Hunnewell, 122 Mass. 139; McLean v. Fleininj^, 90 U. S. 2J.5. 251; Coleman v. Crump, 70 X. Y. 573; Fairbanks v. Jacobus, 14 Blatcbf. 337; Devlin v. Devlin, 67 Barb. 290; s. C. 25 Am. Rep. 173; Amoskeak Mfg. Co. v. Garner, 54 How. Pr. 297; Curtis v. Bryan, 2 Daly. 312; s. C, 30 How. Pr. 33; Amoskeag Mfg. Co. v. Spear, 2 .Sandf. 007; Peterson v. Humphrey, 4 Abb. Pr. 394; Howe v. Howe Machine Co., 50 Barb. 230; Sykes V. Sykes, 3B. Jt C. 541; s. c, 10 E. C. L. 170; Burgess v. Burgess, 3 De G., M. & G. 896, 904; Burke V. Ca>sin, 45 Cal. 467; s. v., 13 Am. Rep. 204; Emerson v. Badger, 101 Mass. 82; Ellis v. Zeilin, 42 Ga. 91 ; Lord Kingsdown in Leather Cloth Co. V. American Leather Cloth Co., II H. L.Cas..538; J'erry V. Truetilt. Bcav. (56; Walton v. Crowley, 3 Blatchf. 448; Dixon Crucible Co. v. Guggenhcimor. 1 Cox's Man. of Trade-Mark Cases, 559. • • • There are some ^Mo^i proprietary rights, such as an elec- tive franchise, wiiich are incapable of assignment. But it would be obviously unjust to restrict the right to use a trade- mark. The advantages which accrue from the use of a particular trade-mark or advertising device are often the result of a lifetime of integritv. skill, perseverance and business capacity. Ought it to be held that a right so valuable should die with the person who created it, it being incapable of assignment, when, by reason of age. or other considera- tions, he might desire to cease using it? The custom of trade, which solves many questions in advance of the courts, has declared that this should not be, and the courts in adopting the view that the right to use a trade-mark is assignable, did no more than de- clare a result which followed from the concession that it was property ; for the jus disponendi is embodied in the very idea of property. It is, hence, settled law that the right to use a trade-mark is not a mere personal privilege, but that, within certain limits, it is capable of being bought and sold as other property. 'A trade-mark,* says Strong, J., 'like the good will of a store or manufacturing establishment, is a subject of commerce, and it has been many times held entitled to protection at the suit of vendees.' Fulton v. Sellers, 4 Brewst. 42. See also Bury v. Bedford, 33 L. J. Ch. 405; Hail v. Barrows. 33 L. .1. Ch. 204; (;ienn. etc. Mfg. To. v. Hall. 01 N. Y. 220; .s. c, 19 .Am. Rep. 278; Peltz v. Eichele. 02 Mo. 171." Thompson. .1.. in .'^kini.er V. ():ik.<. 10 Mo. App. 45. 174 CONTRACTS IN RESTRAINT OF TRADK. [§ 5G. may compound, or either, but that he will not himself use his name or permit his name to be used on any sueh prep- aration. The only restraint the covenant imposes on him is that his name shall not api)ear by his consent on such prep- aration. Can this stipulation be said to be in general restraint of trade, or is it not rather a jiartial restraint, and is it at all unreasonable? The absence of his name may limit the sales of any new |)rej)aration he may comijound; the i)reparation may be wanting in the magic word, l)ut for its absence he contracted and received a consideration therefor. He may compound and sell a score of other nostrums to cure the diseases for which the Lung Restorer is fitted; the only inhibition is he must not put on them the cabalistic word 'Brewer,' and thus violate the contract which he has entered into. That he has done this, the evi- dence abundantly shows, when he pul)lished and offered upon the market 'Brewer's Sarsai)arilla Syru|), professing to be a permanent cure for all diseases of the lungs and throat.'"! § 50. Kestrictioii in Publication Contract. — In cove- nants relating to the sale of periodical publications l)y pub- lishers, or to the sale of articles written for such publica- tions by the authors, such restrictions as constitute a necessary and reasonable protection to the vendee will be upheld. In Ainsworth v. Bentley, the plaintiff had ])ur- chased of the defendant a well established magazine. The contract relating to the sale [provided that the defendant should not ])ublish another ])eri()dical of a similar nature. Fourteen years latei- the defendant entered into an arrange- ment to become the publisher of *'Temj)le Bar," a publica- tion of a like character and within the restriction of the contract. On the trial it wa> claimed l)y counsel for the defendant that the agreement was void as in restraint of trade and unlimited, and also that nuigazine publishing was a trade of itself. It was held that an agreement by a pub- lisher not to publish in future a magazine of a particular ' r.rewer v. l^amar. (i'J Ua. (J.")(i, GOO. § .")().] CONTRACTS IN UKSTRAINT OK IKADK. ITT) (li'scriptioii. is analoiroiis to an aiircciuciil 1)\ a tradcsuiaii not to (leal in a particular article, and, like this hitter agreomeiit, is not void iis a too wjeiierul restraint of trade. ^ In a ease in Massaehnsetts, the eonrt said: "In this count rv there are periodical publications that have a very wide circulation, and it is obvious that a purchasei- of the proprietorship cannot afford to pay the full value, unless he can obtain frcun the vendor a valid restriction a<;ainst competition, which restriction shall be so extensive as his interest recjuires, although it may cover the whole of a State, or the whole country. The same would be true as to some books. For example, the author of a popular school book could not sell its proprietorship for its full value uidess he could bintl liiinself not to j)rei)are another book which should be used in competition with it."' In October, 1857, A, being the proprietor of a weekly publi- cation called "The London Journal," the price of which was Id., assigned his copyright and interest therein to B f or value, and entered into a covenant with B not to publish either alone oi- in ])artner>hip with an\' other person anv weekly periodical of a nature similar to "The London Journal." In May, LS.31I, he issued an advertisement an- nouncing the publication by him on the 1st June follow- ing of a daily new>))ai)er to be called "The Dailv London ' Ainswortli v. Ik-ntley. \i W. li. legally hind himself never aijaiii to 630. The chief defenses that had deal in that article, or in any arti- been raised were — first, that the cle professing to be similar to or agreenjent was illegal as being too identical with it. This was the general a restraint of trade; and, case here. Mr. lientley had dis- secondly. that the agreement was jtosed of his Miscellany to the 80 vague and uncertain that the plaintiff and had undertaken to court could not restrain an in- pul)lish nothing of the kind after- fringi'uiont of it. As to the first wards, liy being l)oun(l to abide defense, it had never been decided by that agreement he would be no that a person could not be com- worse a publisher than he was be- pelled to observe and keep an un- fore; he would only be precluded dertaking not to sell or deal in a from publishing anything of a par- particular article of trade. On the ticular kind." Jbid.. p. <)32. contrary, it had often been held - Morse Twist Co. v. Morse, 103 that the proprietor of an article Mass. 73. 77. might dispose of it to anotlier and 176 CONTRACTS IN RESTRAINT OF TRADE. [§ 5H. Journal," and to be sold at Id. B thereupon filed his bill against A for an injunction to restrain A from publishing "The Daily London Journal," and Sir W. P. Wood, V. C, made an order for an injunction. Upon appeal, Sir J. L. Knight Bruce, L. J., confirmed the order for an injunction, upon B undertaking to abide by any order the court might make as to damages, and to bring an action against A within one week.^ In a case relating to the sale of articles for 1 Ingram v. Stiff, 5 Jur. (N. S.) 947. This was an appeal by the defendant from an order of Sir W. 1*. Wood. V. C, for an injunction to restrain the defendant from printing, publishing or selling any newspaper or other periodical un- der the name of "The Daily Lon- don Journal."' or under any other name or style of which the words "London Journal" should form part, and from doing or commit- ting any act or default that might tend to lessen or diminish the sale or circulation of the plaintiff's pe- riodical called '-The London .lour- nal." The following were the facts of the case: Prior to September, 1857, the defendant was the pro- prietor and publisher of a well- known periodical called "The London Journal," which was pub- lished by him at his ofhce. No. 334 Strand. The publication was not a newspaper, but it contained tales and romances, wliich were illus- trated witii wood engravings, and a portion of each week's number was devoted to answers to correspond- ents. Its circulation then amounted to nearly TjOO.OOO per week. In .September, 1857, tlie plaintiff, Mr. Herbert Ingram, entered into an agreement for the purchase from I lie defendiint of the cojiyright in "The London Journal" for tlie sum of £20. (HH). and also the plant tiiereof from the defendant for the further sum of £4.000. By the deed of assignment, which bore date the 8th of October, 1857, the defendant covenanted that he would not, di- rectly or indirectly, alone or in partnership witii any other person or persons, engage himself or be concerned in bringing out or pub- lishing any weeklj' periodical of a nature similar to "The London Journal" selling at Id. per copy, or commit any act or default which might tend to lessen or di- minish the sale or circulation of the said periodical, or the profit to be derived by the plaintiff from the future printing or publishing thereof. The assignment was duly registered at Stationer's Hall. I'he plaintiff continued for some months after the date of the deed of as- signment to publish "The London Journal" in defendant's oflice. No. 334 Strand; but in April, 1858. the the plaintiff removed the publica- tion of tliat periodical to premises which lie took at Nos. 140 and 141 Strand, nearf^^- opposite to the de- fendant's office. Shortly after such removal, a new publication was l)ublished at No. 334 Strand, by a Mr. George Smith, which was, in appearance, nature of contentj? and style of illustration, jiiecisely sim- ilar to "The London Journal." The day of publication and the price were also the same as those of "The London Journal,'' and the § :..:.] CONTRACTS IN RKSTRAINT OF TKADK. a |>('ii<)(li('al, S. proprietor of a wcckh' iicwsjiapcr. lt\ a U't- \vr lo F, :in nutlior, iiirrc'cd that F should write two taU'> exti'iuHuir over one your, at £U) por week for eacli iiumlx'r, to <()iitain about the same (|uantity as was sent under a t'onuer siniihir entjageinent and to recei\(' the lii>t nundx-i' on thi' '2'2d Aj)ril, bS');'), and to continue to i'ecei\(' one nund)er weekly durinir one year, eonditionally that F should not write for any other newspaper published at less than •■.(]. F aece})ted. received £20 dej)osit and wrote regu- larly for soiue weeks, then went to Paris, sent an abrupt eonelusion of the then current tale in a small (|uantity (jf uianu>;cript , refused to proceed wit h hi> cnuaHcnient with S. and entered into another enuairenient with ('. S ihere- u\H>\\ sto}>j)ed his payment to F, antl euiployetl another au- thor to conclude the half finished tale. It was held on de- murrer by F ( 1 ) that the above entragement was a yearly engagement and could not 1)0 closed by F as a weekly en- gagement. (2) That the condition as to F not engaging elsewhere was valid.' title of tbe new publication was, "Tlie Guide to Littiature and Art.'' 'towards the close of the month of May. in the present year, the at- tention of the plaintiff was called to advertisements issued by the defendant arinonncino^ the publi- cation, on the 1st of June, then next, of a daily newspaper, price Id., to be called '-The London Daily .lournal." to be i)iibli>hed at No. 334 .'^trand, and of which the def«'ndant was the sole rejjistered proprietor. The plaintiff there- upon tiled the present bill, praying for an injunction to restrain the defendant from pul)lisirmg "The London Daily Journal." Upon ttie hearing of tlie motion, before Sir W. 1*. Wood. V. C, his Honor made an order for an injimction in the terms stated, l)eing of opinion that it was a case of gross fraud on tlie part of the defendant, and on 1_> that account he refused to put the plaintiff on any terms as to dam- ages. The defendant appealed from that decision. From the evidence it appeared that the plaintiff had already been frefpiently put to great inconvenience by the deliv- ery at the defendant's oftice of let- ters intended for the plaintiff. ' Stiff V. Cas.sell. '2 Jur. (N. S.) U48. A bond or agreement which creates a partial or jiarticuiar re- straint of trade is good, if fornied upon an adequate consideration: and specific performance will be decreed. Where N sells out a newspaper establishment to W and T. and l)y l)ond and covenant stip- ulates not to set uj) another paper within a certain time and distance, and N afterwards Imys out T's moiety and becomes joint propri- etor witli W. the remedy at law again-t N upon the bond and cove- 178 CONTRACTS IN KKSTRAIXT OV TUADK. [§ .)i; iiant is iroiif. No.-ili v. Wclih. 1 Edw. Ch. 003. "Aifaiii it is Mip- posed that a man who basobtaiued money for tbe future products of his biain will not be ready to pro- duce these products. That must not be assumed. Nothing is more common in intclloctuai pursuits than for men to sell beforehand, the future intellectual product be- fore it is made, or even conceived. Does any one imagine that it is against public policy for the artist to sell tbe picture which he has never painted or designed, or for the sculptor to sell the statue, the subject of which is hereafter to be given to him. or for the author to sell the copyright of the book, the title of which is even as yet un- known, or. more than that, that a eontributoi' to a periodical may agree that he will devote himself to the exclusive service of a cer- tain periodical for a given time for a given reward? These examples are. to my mind, entirely repugnant to the argument that there is any |nil)lic policy in prohibiting such contrMct. * * * A man who is a needy and struggling inventor may well agree either for a present payment in money down, or for an annual payment to put his intel- lectual gifts at the service of a pur- chaser. I see. therefore, not only no rule of public policy against it. but a rule of public policy for it. because it may enable such a man in comparative ease and atlluence to devote his attention to scientitic research, whereas, if such a con- tract were prohibited, he would be compelled to apply himself to some menial or mechanical or lower calling in order to gain a liveli- hood." Jessell,M. K.. in Printing, etc. Co. V. Sampson. L. R. 19 Eq. 4G2, 4G.5. See also Tallis v. Tallis. 1 El. & lil. 391; Ward v. Beeton. 23 W. R. o33; Spicer v. Hoop. 51 Ind. S(i')-, Presbury v. Fisher, 18 Mo. 50; Dakin v. Williams. 11 Wend. 67; Beal v. Chase, 31 Mich. 490. See also Cowan V. Fairbrother. 118 N. Car. 400: s. c. 24 8. E. Hep- 212. C'lIAPTKK III cONTirvc rs i;K[.Ari\(; ro imiofessions and rirvDES. § iu. Introducto.y. 58. Contrai't for the Sale of a Pbysician's rractit-e. 59. The Subject Continued. «J0. The Rule as -\pplied to At- torney.>J. til . The Rule as Applied to Den- tists. t>2. .Vpplication of the Rule to the Profes.-ion of Teach- § 63. Restraint upon the Services of Artists and Actors. G4. .Vs Applied to Trades and other Occupations. 65. In its Application to Trav- eling Salesmen. (!(■>. Constraint of Trade Con- strued as a Limited Part- ncrsliip. § .">7. Iiitfodiictory. — It is well cstahlishcd that a cov- ciKint under which one of the parties, for a vahial)U' <(>ii- siileratioii, hinds himself not to continue the practice nf a profession or the pursuit of a trade is valid, provided the limitations are not unreasonable. The rea.son:d)leness and fairness of the contract is the test of its validity. If there is a ufood considerat ion and the restraint imposed is not greater than is essential t(» the adci|iiatc protectidu of the vendee, and in conse(|uence is not in contravention of ptil)- lic policy, it will he upheld. This is the rule in England audit is sustained by the Americun courts. In the leading Hnglish ca>e of llnnicr \. (iraves, Chief .lu>tice Timial stated the rule, as follows: ''We do not see how a Ix-tler test can be applied to the t|uestion whether this is or not a reasonable restraint of trade, tiian by considering whether the restraint is such only as to afford a fair protection to the interests t)f the jiarty in favor of whom it is given and not so large as to interfere with the interests of the public. 180 CONTRACTS KKI.ATlN(i TO rKOFKSSIONS, KTC. [§ 07. Whatever restraint is larger than the necessary protection of the party requires, can be of no benefit to either; it can only be oppressive, and if oppressive, it is in the eye of the lau- unreasonable. Whatever is injurious to the interests of the public is void on the grounds of pul)lic policy. "• ' Horner v. Graves. 7 Bing. 735. 743. "An agreement not to engage an or pursue a particular business -or profession, when made on a good consideration, with one whose business interest it is to prevent competition is valid, if restrained within reasonable limits, is too well settled to be regarded as an open question. The agreement also be- longs to that class with respect to which it is competent for the par- ties, by agreement, to liquidate the damages which should be re- coverable on a breach.'" lloagland V. Segur. 38 X. J. L. 230, '23r>. Contracts restraining the exercise of a trade or profession in a par- ticular locality, are good and valid, if there be a fair and reasonable ground for the restriction. The restraint, however, to be lawful, must be confined within reasonable limits. Guerand v. Dandelet, 32 Md. ')(>!. The defendant entered into an agreement with the plaint- iff, as his employer, that he would not accept another situation, or establish himself in any business, within fifteen miles of liOndon without the written consent of the l)laintiff, for a period of three years after leaving the plaintiff's service; but such peruiission was not to be witlilield if it could be proved to the >atisfaction of the plaintiff that the situation sought or the busi- ness established, was not for the sale of the same class of goods as those sold by the plaintiff. Held, on a motion for iin injunction to restrain the defemlanl from break- ing the agreement, that the clause providing that the plaintiffs per- mis.sion was not to be withheld imless the business in which the defendant engaged was in the same class of goods as the plaintiffs, showed that the restrictive clause was intended to apply to all kinds of business whatsoever, and was. therefore, wider than was neces- sary for the protection of the plaintiff, and void. Perls v. Saal- field. ].. K. (1892) 2 Ch. 149. The test to be applied in determining whether a restraint upon the exer- cise of a business, trade or pro- fession is reasonable or not is to consider whether the restraint is only such as is necessary to afford a fair protection to the interests of the party in whose favor it is given, and not so large as to interfere with the interests of the public. Ellerman v. Chicago Junction, etc. Co., 49 N. J. Eq. 217; s. c. 23 Atl. Kep. 287. "The principle deduci- ble from all the eases is that the question to be determined is, whether the restraint, having re- gard to all the circumstances of the case and the nature of the em- ployment, is greater than neces- sary for the protection of the per- son in whose favor it is imposed." I.opes, L. J., in Mills v. Dunham. L. R. (1891; 1 Ch. .">7G, 587. The defendant on entering tlie service of the plaintiffs, a banking com- pany, executed a bond in the penal sum of £1,U00, the condition of which was that it should be void if he should perform his duties in § 07.] CONTRACTS RELATING TO PROFESSIONS, ETC. 181 This nilo, iiiuiouiicod in l.s;{l, is tiic law of the [)i'csent, and in this country as well as in Enghind. In a ease in Min- nesota the court said: "Fornierly in England the courts frowned with great severity upon every contract of thi:* kind. The reasons for this j)artly grew out of the English law of apprenticeship. \)\ which, in its original severity, no person could exercise any regular trade or handicraft ex- cei)t after having served a long apprenticeship. Hence, if a person was prevented from pursuing his particuhir trade, he was practically deprived of all means of earning a lixcli- tbe inanuer tberein mentioned, plaintiffs" tiade. It auionnis to and also if he should, at any time this: The defendants say, 'for the within two years after his leaving limited period of three years you' the service of the plaintiffs accept (the plaintiffs) -shall have a any emi)l()yment in any other bank l)reathinij spell, during whiih we within two miles of the jjlaintiffs* will abstain from using the knowl- bank. The defendant resigned his edge we have acquired in your employment in the plaintiffs" l)ank employ against you by setting up and immediately entered the serv- a rival trade.' This is far remote ice of a rival bank in the same from the case of an attempt to de- town. The plaintiffs brought an bar during a limited time a handi- action claiming an injunction to i-raftsman from plying his craft restrain the defendant from hold- anj'where in the world; it is in ing employment in any rival bank, effect a sale by the defendants of The deft-ndant was willing and tlieir interest in the good will of a offered to pay the penal sum of large business l)Milt up l>y the eap- £1.()0(). JIfld. that the defendant ital. skill and industry of the con- could not satisfy his obligation by tracting parties. The defendants paying the penal sum; but that have received a large reuiunera- there was an agreement, between lion, and, what is more, that which the parties, to be implied from the they themselves considered to be bond, that the defendant s'nould an ade(|uate price for the contract not enter into the service of the an their part. To hold the stipu- rival bank, which could be en- lation void would tend to deprive forced in a court of ei|uily. and persons in the position of the de- that the plaintiffs weic entitled to fendants of the advantage of mak- an injimetion. Xat'l I'rovincial ing their own bargains for their Bank v. .Marshall. L. R. -41) Ch. D. remuneration, and would, in my 112. ••Although not conclusive on opinion, imnecessarily interfere the subject, the opinion of mer- witli tl.eir freedom of contract tf> cantile men. manifested by theii- their detriment and to an extent acts, is not to be disregarded on not required by law."" Hadiscb the fpiestion of reasonal>leness. In Anilin Co. v. Schott. L. K. (1S9^2) my opinion the clause is not im- 3 Ch. -147. 4.").S. reasonable for the protection of the 162 ("ONTKA(T8 KKLATIN<; TO I'UOl'K.s.SIOXS, KTC. [§ ')?. hood, and the Shite was deprived of his services. No such reason now obtains in this country, where every citizen is at liberty to change his occupation at will. Moreover, as cheaper and more rapid facilities for travel and transpor- tation gradually changed the manner of doing business, so as to enable parties to conduct it over a vastly greater ter- ritory than formerly, the courts were necessarily (•<)inj)ellcd to readjust the standard of reasonableness of restrictions as to place."* In the recent case of Sternberg v. O'Brien, the rule is stated by Vice-Chancellor Van Fleet, as follows: "The law is settled, that a contract in restraint of labor, which seeks to prevent one of the contiacting parties from exercising his skill or labor generally, without limitation as to i)lace or t ime. or which attempts to })ut a restraint upon his right to labor or to exercise his skill greater than is necessary for the fair protection of the other party to the contract, is void. 'Public policy," said ^'ice-Chaneel- lor James, afterwards one of the lord justices of the Court of Api)eal of Kngland, in Leather Cloth Co. v. T^orsont,'- *re(|uires that every man shall be at liberty to work for him- self, and shall not l)e at liberty to dej)rivc himself or the State of his labor, skill or talent by any contract that he enters into." 'The law," said Best, C. .1.. in Homer v. Ashford,'* 'will not permit any one to restrain a person from doing what the public welfare and his own interest i-cipiire that he should do. Any deed, therefore, bv which a i)erson binds himself not to enijiloy his talents, his industry or his eapitnl ill any useful undertaking in the kingdom would be \(»i(l. because no good reason can be imagined for any pi-r- -oii imjiosing such a restraint on himself." 'So far has tln> principle been carried,' said Chief Justice Beasley. in Brewer v. Marshall,^ 'that even in cases in which the re- straint sought to be imposed is only partial, it has been re- peatedly held that such agreement will be void, unless it be ' Niit'l Benefit Co. v. I'liiim ' Homer v. Ashfoni. 3 Hinc:. :-{'_>'J. IIosp. Co., 4.") Minn. 272. J?.'). HJtl. 2 Leather Cloth Co. v. Lorsont. ■• Brewer v. M;irsh:ill. 4 C. E. I>. R. n E(i. H4.-.. :«.Vt. Creen. 537. r)47. § ;"><"^.] CONTRACTS RELATING TO I'ROFKSSIONS, KTC. l^O ifitsoiKihlc, Mild that no sucli aurcciiiciil can Ix' rea.soiiaMc in whicli tlu' restraint imposed on tlie one partv is laiL'^er than is necessary for the |)rotection of the other." The test which the law prescribes in all >uch cases is this: The restraint, in order to be vahd, niiisl be only such as is nec- essarv to afford a fair protection to the party in fav(»r of wlioni it is ijiven, and not so larue as to interfere with the interest of the public.'"' § 58. Contract for the Sale of a Physician's Practice. — The practice of a successful physieian is reeoffnized by the profession and by the hiw as a thinsf of vahie. and as >uch a proper subject for a contract for sale. There is a sense in which the j)ractice of a physieian beloni^s to liiin, and to that extent he may dispose of it for a consiih-ration. In order to a valid sak' he must devest himself of his riirht in it l)y a traiisfei- to the vendee. lie must bind himself not to continue a l)usiness whieh he has transferred to another for a consideration. A contract l)v which he is resti'ained from the continued practice of his profe««>ion, if the limita- tions are reasonable, will be upheld by a court of e(|uity. In Butler v. Hurleson, the <-ourt irave the lule as follows: ••'ilic contract between the parties is jjlain. clear and ex- ])licit. and accordinu' to the terms of il. the defendant aufreed that, at the expiration of the partnership, if he did not purchase of the plaintiff, he would not settle within ten mile> of the i)laintiff wilhoul his consent : and a similar stipulation was entei'ed into by the complainant, if the de- fendant did purchase. The intention of the parties, in re- lation to the term 'settle.' is sutHcieiit ly ex|>licil by i<'fer- riiiL*^ to the subject about which llie\ wei'«' colli ra<-t inn' : that is. they wei'e not tos<'ttle in the |)ractice of medicine within the limited distances. This contract is not forbidden bv am principle of polic\- or law. I)r. 1) <. jur«Hl l)v Miiv stipuhitioii of this kind l)ot\v(M'ii two pnictii'- iiig and cminciil physicians. "' The ruk' rclatiui; t(» tci-ri- torial limilMlions is stated in a recent case as follow >: A contract by a physician: ••Heceived of (" '$2i\2 for luy share of ofiice Hxtures and proceeds of practice for the month of March, and ijood will of business in town of \V, and aurec not to practice therein," is sufficiently definite to be enforced. Where in such a case it appears that it was the underslandino: of the parties that defendant should not practice within W or vicinity, defendant's chief prac- tice having been in the surrounding country, the contract will be so construed. A contract whereby a physician agrees not to practice medicine within a certain town or \iciiiit\ is not void as against public policy. - ' Butler V. Hiiilcson, Id \t. J7(;. 178. See also the following cases involving physicians' contracts: Davis V. Mason. .') T. R. 118; Sani- ter V. Ferguson. 7 C. B. 7 111: At- kyns V. Kinnier. 4 Exclieq. 77(>: Fox v. Scard, 33 Beav. 327 ; Gravel- ley V. Barnard. 43 L. .J. (Jli. (>.")!»: s. C. L. R. 18 E.] roNTKAc rs KKi,AriN(; ro i'i:<»ik.^si<>\s. ktc. lb.') § 51>. TIm' Siibjert (loiitiiiiied. — With rcutird lo liiiiila- tions ill tiiiic tluTi" is xtiuc coiitlict of :iiit lioritios. On llif one huiul it is lu'kl that a contract in restraint of the |)ra<- tice of a profession that is <>;reater than is essential to the ade(|uate protection of the irrantor is inireasonahU' and void. ( )n the other hand it is held that w here 1 here is a ))rop»'r territorial limitation the limitation in time nniy he indcti- nite. In a recent case in New Jersey, it was held that in that State the rnle as to contracts in restraint of trade i> that a contract imposing u restraint lariferthan the necessary proteetionof thei)arty re(|uires. is void, and, hence, a covenant that a i)hysician shall not. "at any tinu' hereafter," enofaire in |)ractic<' at Xewai-k is void, since it would prevent -uch plnsician from practicini>- there th(»uirh the t)ther party to the covenant should die.' In the opinion in this case, the eourt said : ••Professional >kill. experience and rei)utatit»n jire thinirs which cannot he houyht or sold. Thev consti- tute part of the individuality of the i)articnlar person and die with him. There can he no douht. I think, that if the com- plainant was the nn)st dist iniiuished ])hysician of the city of Newark, and had hy far the nn)st lucrative practice in that eity, and he should he so nnfortimate as to die next month or next year, it would 1>«' impossible foi- his personal repre- sentative to sell his liood will or practice as a thinir of proj)ertv, distinct from the ofHcc which he had occupied prior to his death, for any price, and. I think, it is e(|ually obvious that if it were >old in connection with hi^ollice.the onlv possible vahu' which could Ix' ascribed to it would l»e the sliijht possibility that >ome of the persons who had been his patients mi«rht, when they needed the services of a phy- sician, go or send there for the next ()ccn|)ant of the oflice. The practice of a phvsici.-m is .1 thinir so i)nrely personal, depending ^o absolnteh on the contidence reposed in hi- persomil -kill and ability, that when he ceases to exi-t it necessarilv ceases also, and after hi- death can havt' neither an intrinsic nor a nnirket value. And if the rom- ))lainant should nnike .sale of his practice in his lifetime it is ' Mandevilie v. llurinaii. 42 N. .1. K<|. IS.*.: s. c. 7 All. liep. 37. 1SrE8SION\S, ETC. [§ T)!*. iiiiiiiifcst nil llu' imrcliMscr could posslhly tret would be ini- inunity from t-oiupctitiou with liini, nud, perhaps, his implied iH)i)r()Vid that the purcli.-iser \\:i> fit to he his sue- eessor. hut it would he iuipossihle for hiui to transfer his professional skill and ability to hi> successor, or to induee anybody to believe that he h:id."'' In sujjport of the oj)po- site view, the court, in the case of Martin \ . Mur])hy. said: ' >[iindeville v. Hartnan.42 N. J. E<|. 185. 104; s. c. 7 Atl. Rep. 37. ••These considerations make it ap- liaifiU. I think, that the reason which induced the court of ex- cheijuer chalnhcr to liold a like restraint valid in Hitclicock v. ( oker. does not exist in this case. There a right or interest existed which, according to the hiw of Great Britain, w'ould, on the death of its possessor, pass to his personal repiesentative. No such right oi' interest exists here, at least its ex- isteme is as yet unrecognized in this .State by law. No court of law of this State has as yet decided that a covenant between profes- sional gentlemen, so extensive in duration as the one under consid- eration, is valid. There is strong reason to doubt its validity. It is one of the natural rights of every citi/en of this State to use his skill and lal)or in any useful employ- ment, notonly to get food, raiment and siielter, but to acquire prop- erty, and I think it may be regarded :is very certain that the courts will never deprive anyone of this right, or even abridge it, except in obedi- ence to the sternest demands of justice. Chief Justice Beasley, in sjieaking of the covenant on trial in Hrewer v. Marshall, A C. E. (Ireen. 537, said that the restraint which it imposed was general both as to time, place and person, and it, therefore, transcended by far rbc limits of utilitv to the cove- nantee, and must, for that reason, be declared void. And Chief Jus- tice Woodward, in Keeler v. Tay- loi-. 53 Pa. St. 4G7. declaied that such contracts, if they were not limited to a reasonable time as well as contined to a reasonable space, were void at law. He said. also, that if the terms they imposed were at all hard, erjuity would not enforce them. Vice-Chancellor Shadwell had previously given ex- pression to the same view in Kim- bcrley v. Jennings, G Sim. 340. Besides, no one can fail to see that if this covenant is valid and en- forceable in equity, then it is com- petent for ever}- merchant and trader, when he emj)loys a clerk or siiop girl, to require them, although the compensation he agrees to pay is no greater than that which is customarily paid for such service, to enter into a covenant that on (piitiing his service they will not. at any time afterwards, accept like employment from any other mer- chant oi' trader in the same town or city, and that if such covenants are made and subsequently broken, it will be the duty of this court to enforce them, though the conse- quence may be that a citizen will thereby be deprived of his only means of supporting himself and his family. It may well be doubted. I think, whether legal rules pro- dui'ing such conxeqiumces will ever be estalilishcd merely by force of pidicial actiim." Ihid.. VM. § •!.■».] CONTRACTS RKLATINC TO I'KOKP>SIONS, KTC. I>i7 ••The objrc'lioii tliat it i> not >uHiticiitlv .^pccitic ;i> to tiiiit- is not tonahk'. M aiifreos 'to jn-acticc iiicdiciiic no iiioic in Salem after J an nary Ist, 1^8S.' 'Vh\> i> an aureenient that he will ne\er auain i)ractiee medicine in Salem, and eovei-s all time thereafter. This, appellee says, however, is nn- reasonahh'. and is a irreater restraint than is neees>nry for the protection of the party, and is for that reason void. A contract for the general restraint of any hnsiness is ille»j;al. hnt is otherwise if the restraint is reasonal)le and |)ai-tial. \\'hether in a iii\('n case a restraint is rea-onal)le is a tpies- tion for the conrt. A contract reasonably linnted as to ter- ritory in which the specific hnsiness is not to he carried on is not rendered in\alid, hecanse the restriction as to time is indefinite or ireneral.' In Ilolhrook v. ^^'aters, defendant l)onnd himself with plaintiff Ijy agreement in writinir, in eon- siideration of $;")()(), not to practice medicine nor in any manner to do hnsiness as a physician in the connty of ( )sweo;() at any time after the 1st day of May. 1-S'>1.'- It was held that the contract \\a> valid.-' J; <»(). The Kuh' a.s Appli<'(l to Att(>riie.\s. — In <;eneral the sale of a practice l>y an attorney is snhject to the rule as set forth in the forei^oing section as api)lied to that of a phy-ician. .\- in the latter ca>c the (|nestion of legality ' .M.irtin V. .Miiiiiliy. IJ'.t linl. dil. ci:in. To cany out ilic agieement. 4i>7. tlie money wa.s paid by B's wife. - Holbrool< V. Water.-, H Mow. I'r. and the real estate conveyed to her. H3r>. Wlieie. l)y a written I'oiitracl. In a suit broiiy a physician while residing elsewhere. Ilalde- for the sale of his '-practice and man v. Simonton. r)."i Iowa. 144. A good will" in a specified town, is executed a bond to H, conditioned not void as against puldi<- policy, to convey to him for a certain suu) Dwight v. Hamilton, li:^ Ma^s. \7^y. his land and buildings, and his ' Holl)rook \ . Waters. '.t Mow. I'r. practice and good will a> a physi- 83"). ISS CoNTKACTS KKLATINC TO I'KOFKSSIONS, KTC. [§ 60 turns upon tlnil of the reasonabltMU'ss of (he restraint ini- |)oso(l. Wlu-ro it a))|)oars that the restraint rciiuircd is not unreasonable, or is not irreater than is essential to the proper proteetion of the irrantee, the contract will he held valid. In the case of an attorney the territorial limitations necessary to the proper protection of the grantor may be greater than in that of a physician. In an Enuflish case. Lord Lanij- dale, M. K., in his opinion, said: "The (|uestion. therefore, is whether the restraint ought to be considered as reason- able in this particular i-ase. The business is that of attorney and solicitor, which, to a large extent, may be carried on by correspondence or by agents, and as to which it has been already decided that a restraint of practice within a distance of l/)0 miles was not an unreasonable restraint."' In Max ' Wbittuker v. How e, 6 Beav. 383. 394. A, on beins: articled to B. covenanted not to be concerned for any of B"s clients, and to forfeit £100 for any such breach. A. after being admitted, acted in contra- vention of this covenant. He was restrained by injunction. Xichois v. .Stretton, 7 Beav. 42. An agree- ment between two solicitors in partnership together, that one of them should continue to carry on the business under their joint names, and should be entitled to all the profits thereof, and should grant to the other partner an an- nuity of £300 during the life of his iiiotber. and in the event of his (lying in the lifetime of his mother, should pay to his widow an annuity of £100 during the remainder of his mother's life, and should indem- nify him against all liability in re- spect of his name being used, and that the partnership should cease on the death of the mother of the I ('tiling partner. IlehL not to be void as against public policy, but to be a valid and binding agree- ment. .\ubin V. Holt. 2 K. it .1. fi(i. Bv agreement between the plaintiff, a solicitor, and the de- fendant, after reciting that the plaintiff, being manager of certain estates at T. and finding it expedi- ent to establish an office there for the transaction of law and other business, had proposed to appoint the defendant as resident clerk there, it was agreed that the de- fendant should reside at T. and that in consideration of his serv- ices the plaintiff should pay him a (>ertain salary, and that cither party might determine the agree- ment by a certain notice, and that, the defendant would not, for the space of twenty-one years, not- withstanding the decease of the plaintiff, reside in the parish of T. or within twenty-one miles thereof, or carry on therein or within the distance aforesaid, during the period of twenty-one years, any business of the description of lliat carried on under the agreement. Held, per Pollock. C. B..Alderson. B.. and IMatt. B.. that the restric- tion was not unreasonable, and was good in law; per Martin, that the agreement was valid, for if the re- striction as to residence was void. § •)().] CONTRACTUS KKLATIN(i TO I'KoVkssIoN.s. KT( s:i V. O'Neill, tiu- (Icfciulaiit hound liiui^i'lf to ;i Loudon solic- itor l)\- :irticU's for ;i term, and con cnanlcd that he would not at the expiration of the term, or at anv time thereafter, ei t her solely or jointly, or as atjent for, any other person or i)er- sons, direetly orindirectly, jmuticethe husinessof attorney oi- solicitor within the city of London or the counties of Mid- dlesex or Essex, nor directly or indirectly act as such attor- ne\ or solicitor for any client or clients of the ))laintiff, or an\ i)artner or partners of plaintiff, or for any person or persons who should have been a client or clients of the plaintiff or any partner or partners of the plaintiff, at any time during the term. At the expiration of the teini. the defendant having commenced business on his t)wn account in Southwark, it was held that the restriction was not un- thal as to not carryinjjon thehiisj- nes;. was good. Dendy v. lleiidcr- soii. 11 Excbeij. 194. The condi- tion of a bond contained a recital that T \V had agreed to become the managing clerk of R 11. a solicitor at VV. and it wa.-* there- upon agreed that T W should enter into a bond not to practice as a solicitor at or within fifty miles of W; and provided that if he did so, then, if he should pay to K 11 the sum of £1,000 as li(iuidated dam- ages, the bond should be void. On breach by T W, held on the whole scope of the agreement, that it was not intended to be satisfied by the payment of the sum named, and that the court would, therefore, in- terfere by injunction. Howard v. Woodward. 10 .Fur. (N. S.) IfJU. Appellee insists that defendant's agreement not to engage again in the practice of law in Adel. is against public policy and void. The defendant did not agree gen- erally not to engage in the prac- tice of law. but simply not to en- gage in the practice of the law at Adel. A contract in restraint of trade as to particular places is valid. Hedge v. Lowe, 47 Iowa, i:^7. and cases cited. Jenkins v. Temples. 3'.t Ga. (J;")'); Chappel v. Hrockway. •_>] Wend. 157. In Hol- brook V. Waters. 9 How. I'r. iS'K it was held that an agreement upon sufficient consideration not to prac- tice medicine, nor in any manner to do business as a physician in the coimty of Oswego at any time after the first of .May. 1851, was valid. In Bunn v. Guy, 4 East, I'.lO, a contract entered into by a practic- ing attorney to relincjuish his busi- ness, and recommended his clients to two other attorneys for a valu- able consideration, and that lie would not himself practice in such business within one hundred and fifty miles of London, was held to be valid. ."^ee aiso lleichew v. Hamilton, 3 G. Greene, .V.Mi; .s. c. 4 (i. (Jreene, 317, "Whitiaker v. Howe, 3 Heav. 3S3,*" it is said by Mr. Benjamin (Benj., Sales, Sec. 525), "has been practically over- ruled in the later cases." Wiley v. Baiimsjardner. 07 Ind. nO. (51). 190 CONTKACTS KELATI.\<; TO PROFESSIONS, KTC. [§ > in London, or in any of the town.s or places in Eiiirland or Scotland where the plaintiffs might have been practicing before the expiration of said service. The declaration alleged as breaches: First, that after the term the defend- ant carried on the said bnsiness in London ; secondly, that the plaintiffs had, during the said term, carried on business in Great Russell street, Bloomsburg. yet the defendant, after the term, carried on the said business in the same i)lacc. Plea to the first breach that London was a large and popu- lous district containing 1,500,000 inhal)itants, and that the stipulation in the agreement was an undue, unreasonable and unlawful restriction of trade. Plea to the second breach that before the exi)iration of the service the plaintiff had practiced in very many towns in England, and. amongst others, London. Preston, Oswestry, etc., and that divers of said towns were distant from each other L")0 miles; where- fore the said stipulation was an unreasonable restriction of trade, and the said agreement as to so much was wholly void. It was held that the tirst plea was bad. as the covenant not to i)ractice in London was valid, the limit of London not being too large for the profession in (juestion. Held. secondly, that the stii)ulation as to not practicing in tow u- where the |)laintiff might have been practicing during the service was an unreasonable restriction, and. therefore, illegal and \(ti(l. liul that the stipulation as to not practic- ing in London was not affected l)y the illegality of the other |)art.' In another English lase it was held that an agreement that defendant, a moderately skillful dentist, would abstain from i)racticing over a district 200 miles in diameter in consideration of receiving instructions and a salary from the plaintiff, determinable at three months' notice, was held unreasonable and void.'-' Iti a leading case in Connecticut, the plaintiff, for a sufHcient consideration, boui^ht of the defendant his business as a dentist and the latter executed a contract not to practice dentistry "within a radius of ten mile-- of Litchfield."' The town of Litch- ' Mallan v. Mav. 11 M. iV W. (;.">H. ^ UoriiPi- v. (graves. 7 Hing. 73."!. ll'l' fONTKACTS UKI.AII.NC TO PROFESSIONS, KTC. [§ ()1. rit'ld has an extensive teirit()i\ aiul an irreorular outline, and rontains the vilhige of Litchfield in which the defendant dwelt and had his office at the time and where the contract was drawn and executed. It was held that the contract was not void in not fixing a period within which the defend- ant was not to practice dentistry within those limits. It seems that where a contract is reasonal)le when made, suh- sequent circumstances, such as the covenantee's ceasing t(» do business, do not affect its operation,' In ("lark v. Crosby, where upon consideration that the plaintiff, a den- tist, would keep himself supplied with mineral teeth by l)ur(liases of the defendant, the latter agreed not to sell -U( h teeth to any other person in the place where the plaintiff resided, it was held that the contract, being only in partial restraint of trade, was not illegal. - ^ Cook V. Johnson. 47 Conn. 17"!. He says, in effect, that inasnmch •'As this belongs to the class of as he did not understand, by the contracts in restraint of trade, thiee laugiiajie which he used in the requisites are essential to its valid- contract, where the circle with its it}': 1st. It must be partial or re- ten mile radius would be drawn, stricted in its operation in respect he will locate within the town of either to time or place. 2d. It must Litchtield. where he can do the be on some good consideration. 3d. other party the most injury, and It must be reasonable, that is. it appropriate to himself the good -hould afford only a fair protection will of the business he had sold, to the interests of the party in knowing absolutely such conduct whose favor it is made, and must to be contrary even to his own not be so large in its operation as understandingof the contract. Such to interfere with the interests of a position might well excuse a the public. The motion does not court of equity from giving any disclose that it was claimed in the construction to the contract court below that the contract was merely for his future guidance." lacking in any of these elements. Ibid., 17(). but only that it was too indefinite 2 (^q^rk v.Crosby.37 Vt. 18S. An and uncertain in its language to be instrument under seal was executed enforced. The respondent admits upon a sale made by the plaintiff the making of the contract, and to the defendants, by which the full performance on the part of the former sold to the latter all his in- petitioner. but concedes that he terest in the maiiufactiue and sale has paid no attention to it what- of porcelain teeth in the city of ever, except to keep the money New York, with his stock on hand, paid under it. This is not very and the good will of the business, creditable, to say the least, and the The plaintiff covenanted to instruct excuse given does not at all re- one of the defendants in the art of lieve him in a moral point of view, manufacturing porcelain and in- § <)2.] CONTRACTS RKLATING TO TROFESSIONS, KTC. 1S)3 § ii'2. Application of the liule to the Profession of Teaching. — Where a school building, or the privilege of conducting a school at an established rate of tuition, is sold by one teacher to another, a contract t)indinir the grantor not to oi)cn a school within a fixed territorial limit, if rea- sonable, will be sustained. Where A, a school teacher, was induced by B, another school teacher, to i)urchase of B the lease of an academy under inducements held out by B that, if he could sell, he would (juit teaching in the local- ity, and on these inducements the purchase was made, it was held that equity would enjoin B from teaching a school in the locality during the lease. ^ corruptible teeth, and to furnish him with his recipes therefor. The agreement also contained the fol- lowing clause: And the party of the tirst part will not carry on, or cause to be carried on, by any per- son with whom he shall be inter- ested, the manufacture of porcelain teeth, or impart the knowledge of manufacturing the same to any person other than as aforesaid." It was alleged in the complaint. that the said art of manufacturing porcelain teeth in which the de- fendant was to be instructed was a secret of the plaintiff and known to be such by the defendant. Beld, on demurrer, that the covenant in question was valid, and not one in restraint of trade. Alcock v. Gil- berton, 5 Duer, 7(!. ' Spier V. Lambdin, 45 Ga. 'Sid. '•In the present case, we think the restriction is unreasonable. Not as a rule of law, because it extends throughout the State, but because it extends beyond any apparently necessary protection which the complainant might reasonably re- quiie, and thus without benefiting him it oppresses the respondent, and deprives people in other places of the chance which might be of- 13 fered them to learn the French and German languages of the respond- ent. The complainant urges that he has established a school in Providence, at great expense, to teach languages by a new method, where scholars come from all parts of the State; and that, by reason of the small extent of the State and the case of passing to and fro within it, such a restriction is rea- sonable and necessary to keep teachers from setting up similar schools and enticing away his scholars. All this may be true with reference to Providence and its vicinity. But while, as is averred, many pupils, from all parts of the State, may come to Providence as a center, for the same reason few would go to other places. For ex- ample, a school in Westerly or Newport would not be likely to draw scholars from Providence, or places from which Providence is more easily reached. Indeed, the complainant says he offered, after the contract was made, and now offers to allow the respondent to teach in Newport, thereby admit- ting that the restriction is greater than the necessity. The people of Newport, Westerly and other 194 CONTRACTS RELATING TO PROFESSIONS, ETC. [§ 63. § 63. Restraint upon the Services of Artists and Actors. — An engagement on the part of an artist or an actor under which the party is prohibited from entering the service of a rival concern, daring a designated period, if the restraint is not unreasonable, will be sustained. In Fredericks v. Mayer, it was held that an artist who has entered into a written agreement to perform his profes- sional services for a part}-, for a limited time, at a stipula- ted price, and binds himself not to work for any other house or person during said time, and the agreement is mutual that the party who engages shall employ and pay him according to the agreement, nuiy be restrained b}' in- junction from performing such services, during the term, for an}^ other person than the party to the agreement, without the consent of the latter. The principle is this : That services which involve the exercise of powers of mind which, in many cases, as of writers and performers, are purely ;ind largely intellectual, may form a class in which the court will interfere. Such services are generall}' indi- vidual and peculiar. They exist in nature, or in degree, with some modification of character or expression in the one person. This element of mind exhibited in the subject of the contract, as distinguished from what is mechanical and material, furnishes a rule of distinction and decision,^ places have the right to provide i Fredericks v. Mayer. 13 How. for education in languages without Pr. 566. See also Webster v. Dillon, coming to Providence. It is hard 3 Jur. (X. S.) 432; Howard v. to believe, and the bill does not Hopkins. 2 Atk. 371 : Foxv. Soard. aver, that losing the few, if any, 33 Beav. 327; Jones v. Heavens, L. from such place, who might leave li. 4 Ch. I). 633; Barnes v. McAl- the complainant, if the respondent lister, 18 How. Pr. 534; Xessle v. were to teach there, would seriously Reese, 29 How. Pr. 382; Bradley affect the complainant's school, v. Bosley. 1 Barb. Ch. 125; Dupre Teaching in Providence, or in any v. Thompson. 4 Barb. 279. "It place from which the complainant appears to me, on the plainest receives a considerable number of ground, that an engagement to pupils, might affect it, and a re- perform for nine months at theater striction limited accordingly might A. is a contract not to perform at be reasonable; but we think it un- theater B, or at any other theater reasonable to go further." Her- whatever. How is a man to per- reshoff v. Boutineau, 17 R. I. 3, 7. form his duty to the proprietor of § (!;}.] CONTRACTS RELATINC4 TO PROFESSIONS, ETC. 195 In tlu' Icadiui!: English ease a ladv, not of aiie, and her father, })y writing sio^ned in a foreiirn eonntry, agreed with a theatrical manager to sino; at his theater for a definite period. By a clause subsequently acceded to and signed a theater if, when he has engaged himself to perform for him, he is to go away any night that he may be wanted to another theater? I must treat Mr. Flockton as if he were the greatest actor in the world, and as if wherever he went the public would run after him; and according to this, if a proprie- tor engages an actor to perform for him, he is not, because he is only wanted three nights in the week, to be at liberty to go and perform at any other theater dur- ing the other three nights, and thereby take away the advantage of the contract whicli he has en- tered into with his employer. That, in my opinion, is utterly incon- sistent with the proper construc- tion of the contract. There is no doubt whatever, that the proper construction of these contracts is, that where a man or woman en- gages to i)erform or sing at a par- ticular theater for a particular period, that involves the necessity of his or her not performing or singing at any other during that period." Montague v. Flockton. L. R. lU E(|. 181), 198. The plaintiff, the manager of a London theater, engaged the defendant, a provin- cial actor, desirous of appearing on the London stage for two years. Though there was nothing ex- pressed on the subject, the court inferred an engagement on the part of the plaintiff to employ the defendant for a reasonable time, and on the part of the defendant not to perform elsewhere. The plaintiff (under these circum- stances) delayed the defendant's appearance for five months, the defendant broke his engagement and went to another tlieater. Held, that he had a right to do so. and that the plaintiff was not entitled to an interlocutory injunction to prevent his performing there. Fetcher v. Montgomery, 33 Beav. 22. The defendant agreed with a theatrical company to give them his services as an actor for aspeci- tied time, and agreed not to give his services elsewhere without their written permission. The engage- ment contained a stipulation to the effect that if he should break his engagement, he obligated himself to pay to the companj' a conven- tional fine of $200, to be forfeited by any violation of the contract; and then provides as follows: •'This sum is already forfeited by any violation of the contract, and requires no particular legal proceed- ings for its execution." On a bill for an injunction filed hy the com- pany against the defendant to re- strain him from performing at another theater, it was held that the complainants, having fixed by their own estimate the extent of injury they would suffer from a non-observance of this condition in the contract, and having indi- cated that the only form in which they could seek redress, and re- cover the stipulated penalty or for- feiture, was a court of law, were precluded from resorting to a court of equity for relief by way of in- junction, on the ground that a violation of this part of the con- liM) CONTUACTS H1:LATIN(; to IMiOl-KSSIONS, ETC. [§ It-'). by her agent, and to which she and her father afterwards assented, she onir.'ised "not to use her talents at any other theater nor in any concert or reunion, |)ul)lic or private, without the written authorization of" th(? numager. The lady engaged with the manager of a rival theater to sing at his theater within the defined })eriod, and her debut was announced in the usual public advertisements. Upon mo- tion, in a suit by the manager against the lady, her father and the manager of the rival theater, it was objected that the positive and negative terms formed but one agreement ; and that, as it had been settled that the court could not by injunction enforce the positive term that the lady slu)uld sing, it could not enforce the negative stipulation ; but held notwithstanding (Kem])lev. Kean), that the court would pre- vent the violation of the negative term, and restrain the lady from singing at the rival theater, though the positive term of the agreement could not be enforced.^ In a case in Maryland it was held that upon a contract made by a husband for himself and his wife, that his wife should per- form at the theater of the manauer named therein during a certain period, for a certain salary, a court of eciuity will not enjoin the wife from performing at any other theater, during the same period ; nor the husband from permitting her to change her residence; nor another manager from Uact would result in irreparable damage and injury to them. Ilabn V. Concordia Society, 42 Md. 400. Defendant having contracted to perform at plaintiff's theater, at a fixed compensation, for a certain time, and not to perform elsewhere diu-ing that time, made an agree- ment to perform in another theater before the expiration of the con- tract. Held, that he might be re- strained by injunction from carry- ing out that agreement, there being no demand in the complaint for a decree of specilic performance, and no uncertainty in the contract as to time, place or substance. In such a case a writ of ne exeat, if necessary to carry out the injunc- tions, will issue. Hayes v. Willis. 11 Abb. I'r. (N. S.) 167. Contracts for the exclusive services of distin- guished artists in theatrical repre- sentations are not capable of deli- nite determination, and violations of them may be jtroperly restrained by injunction. Where damages for the violation of a covenant are liquidatfd by agreement, semble, an injunction will not be allowed. McCaull V. Rraham, l(i Fed. Itep. 37. ' Lumley v. Wagner, 5 L)e G. it Sm. 485. § ()4.] CONTRACTS RKLAT1N«J Ic ) IMIolHSSK )NS, ICTC. Ill' giviiitj her cMuployiucnt williin (he term as an actress; neither cun specific execution of such a contract, as against the husband or wife, he (h'creed.^ § <>4. As Applied to Trades and other Occupations. — In all cases rchiling to hiborers and <'nij)h)yces of any chiss, the general rules, as expounded in the foregoing sections, are applicable. Contracts in restraint of trade or of eni- ])l()yinent will be upheld, if there is a valuable consideration and the restraint is reasonable and tit. In a recent English case of more than ordinary interest, the defendant entered into an agreement to serve the plaintiff in his business of dairyman as a milk carrier. By the agreement the defend- ant agreed that he would not, during the continuance of the service, nor at any time thereafter serve, for his own ben- efit or for the benefit of any other person, or solicit, or in any way interfere with any of the customers who should at any time be served by the plaintiff in his business. It was held that the clause was severable and that an injunction could properly be granted restraining the defendant from serving})ersonswho were customersof tlieplaintiff duringthe employment of the defendant by the plaintiff. It was held also, that w'ithout any severance, the restrictive clause was valid, as it did not go beyond what was reasonablv necessary for the protection of the plaintiff's business.-' In his opin- ' Butler V. Marshall. 4 Gill. 487. I'nder an agreement by the de- fendant, a dansense, to dance at the plaintiff's theater, or where he shall prescribe, with no negative or restrictive clauses, the jdainliff. on an alleged breach of the agree- ment by the defendant, cannot have an injimction restraining the defendant from a violation thereof. Butler V. Galletti, 21 How. Pr. 4(5.-). - Dubowski V. Goldstein. (!.") L. .1. Q. B. 397. "[t is said that, over and above the rule, that the con- tract shall be reasonable, there ex- ists another rule. viz. : that the contract shall be limited as to space, and that this contract being in its terms unlimited as to space, and. therefore, extending to the whole of England and Wales, must be void. Now. in the tirst place, let me consider whether such a rule would be reasonable. There are many trades which are carried (m all over the kingdom, which, by their very nature, are extensive and widely diffused. There are others which, from their nature and neces- sities, are local. If this rule ex- isted it would afford a complete protection to the latter class of trade, whilst it would prohibit complete protection of the former 198 CONTRACTS RKLATING TO PROFESSIONS, ETC. [§ »)4. ion in this case Lord Justice Rigby said : "The hiw on this subject has now gone far beyond what it was in the time of Chief Justice Tindal and Lord Deniiian. Lord Watson, in Nordenfeldt v. Maxim-Nordenfeldt Co., points class, and an injury which ought not to be wrought without good reason would arise. In the next place the rule, if it existed, would apply in two classes of cases. It would apply where the want of a limitation of space was unreason- able, and also where it was reason- able. Now, in the former class of cases, those in which the univer- sality was unreasonable, the rule Avould operate notliing, because the ground is already covered by the rule that the restraint must be reasonable. It would, therefore, only operate in cases in which the universality of the prohibition was reasonable; that is, it would only operate where it ought not. For the existence of such a rule I should require clear authority." Fry, J.. in Rousillon v. Rousillon, L. K. 14 Ch. D. 351, 3(J6. A contract by which one, in consideration of em- ployment by a merchant engaged in the instalment clothing business, agrees for one year after the em- ployment ceases not to engage in. or be concerned or interested in. the instalment clothing business in a ceitain city on his own account, or as the agent or employe of any other person "in any capacity." only prevents his accepting em- ployment in the instalment cloth- ing business, and is not objection- able as imposing a restraint on the employe greater than is necessary for the fair protection of the em- ployer, or as interfering with the interest of the public in the employer's labor. Sternberg v. O'Brien. 4S N. J. Eq. 370; s. C, 22 Atl. Rep. 348. The declaration set out a contract whereby the plaintiff agreed to employ the defendant in his service, and the defendant agreed to serve the plaintiff in his business for one month certain and until the expiration of a month's notice, to be given by either party. In consideration whereof the de- fendant did thereby agree that he would not, during the continuance of such service, nor within the space of twenty-four months after quitting or being discharged from the same, commence, etc., the business of a cow keeper within five miles from Northampton Square, in the county of Middle- sex; and if, at any time during such service, or within twenty-four months after the determination thereof, the defendant should coui- mence, etc., such business, that he would pay 10s. for every day that he should act contrary to the agree- ment. Held, that the agreement was valid, being limited both in time and space, and not appearing to be an unreasonable restraint of trade. I'roctor v. Sargent. 2 Man. & Gr. "20. "There are two canons of construction to be considered where questions of this kind arise. One is, that you must examine whether the restraint, having re- gard to the circumstances of the case, the business of the employer and the nature of the employment, is greater than is reasonably re- (luired for the protection of the employer in his trade or business. Tlieothcr is that you must construe the agreement according to the § 04.] CONTRACTS RELATINCJ TO I'ROFESSIONS, ETC. 199 out that tlio opinions of judges as to j)ul)rK' policy must vary at different times. It ;i])pears to me that the only test which can he applied in cases of this kind is to c(jnsider whether the agreement is reasonably necessary for the protection of the person entering into it. If it is not reasonably necessary for that purpose it is against public policy."' In a case in Ohio, M, a married woman engaged in carrying on the business of millinerv and dressmaking with*her separate })roperty, and, on her own account, in the town of F, sold her stock of goods, together with the good will of the business, and engaged not to carry on the busi- ness at any time in the future at the town of F, or at any reasonable nieaninjj of the words used, without regard to what n)ay be the effect of such construction. The first question to be considered is, who is the employer^ He is described as a commission mer- chant, and as such he may be sup- posed to deal in anything in the world. If that is his business, what is the object of this agreement;' Its object is to protect the plaintiff, not from ordinarj' retail dealers, but from any competition which might arise from the defendant entering into the employment of other com- mission agents carrying on a busi- ness like that of the plaintiff, and fretting profit in a similar way. * ♦ ♦ I think that the words 'any trade or business' mean only any trade or business of the kind which the plaintiff was carrying on, and I do not think the words 'in connection with" carry the matter much further. I also think that the words "at any time previ- ously to such determination,* mean at any time during the employment of the defendant in the plaintiff's service. The objection was taken that this clause was too wide be- cause it extended over the I'nited Kingdom. That objection fails for this reason : In considering the validity of this agreement, we must have regard to the business of the plaintiff. But the plaintiff's busi- ness is one which extends from one end of the United Kingdom to the other. Therefore the restraint is not unreasonable, because it is necessary for the protection of the plaintiff's business, so construed the agreement is neither unreason- able or oppressive.'' Lopes. L. J., in Moenich v. Fenestre. 61 L. J. ("h. 7i}7, 740. An employer is en- titled to the labor and skill of an employe in the pursuit of the busi- ness which he was employed to transact during business hours, but has no claim to his labor or earn- ings before or after such hours. A person employed by a firm as a book-keeper and accountant, may recover for services rendered to another person at his recpiest out of l)usiness hours, and also for services during business hours per- formed by him with the consent and permission of the llrm employ- ing him. Wallace v. De Young, 98 111. «;3.s. ' Dubowski V. Goldstein, <;."> L..I. (I. B. 397. 399. 200 CONTRACTS RELATING TO PROFESSIONS, ETC, [§64. place within such distMiuo of said town as would interfere with such business, whether the same was carried on by the purchasers or their successors. It was held that such agree- ment in equity is binding, and that in an action brought by the successors of the purchasers, M will be enjoined from carrying on such business in violation of the agreement.^ In the case of Burrill v. Dao^gett, the court said: "Although there may not have been more than two other shops of the kind in the village, as the case shows, at the time the de- fendant sold to the plaintiff, it may well be inferred that it Avas the understanding of the parties, from the language of the bond, viewed in the light of the attendant circum- stances as disclosed in the case, that defendant was not again to engage in the business by keeping a barber shop, lie sold to the plaintiff not only his shop, tools, etc., but also his good will in the business. It was against the com- petition of the defendant that the plaintiff intended to pro- vide; and whether the defendant bought out and kept another barber shop, or opened and kept one independently of any in operation at the time, still continuing the busi- ness and working at his trade, it would be a violation of the bond.""'^ In an English case, where the object of an agree- ment was to parcel out the stevedoring business of a particu- lar port amongst the parties to it, and so prevent competi- tion, at least, amongst themselves, and also, it may be, to keep up the price to be paid for the work, it was held that such agreement is not invalid if carried into effect by pro- visions reasonably necessary for the purpose, though the effect of them might be to create a i)artial restraint upon the })ower of the parties to exercise their trades.-^ In a very recent case in New York, it was held that an agreement en- tered into by a i)erson hired as a salesman to make sales of merchandise of his employer to the effect that, after leaving his cini)lo3'er's service, he will not engage in a similar busi- ' Morgan v. rerbaiuus, 3G Ohio ^ Collins v. Locke, L. K. 4 App. St. 517. Cas. G74. * Burrill v. Daggett. 77 Me. 545, 548. § G4.] CONTRACTS RKLATIN(; TO PROFESSIONS, KTC. 201 uess for :i jx'riod of three years in sixteen States and ton-i- tories of the United States nor in the Dominion of Canada, will not 1)1' enforced by a court of ecjuity where it does not appear that there were trade secrets connected with the business that came to the servant's knowledge or proof that his employer's customers have been diverted by the action of the servant in engaging in a similar business. Such an agreement is unreasonable where it is based upon no increase of wages, because of its having been made, being calculated to deprive the servant of his al)ility to earn his livelihood.' 1 Oppenheimer v. Hirsch. 5 App. Div. -JS-i: s. c. 38 N. Y. Supl. 311. ••The only thinu^ undisputed before the court is. that the defendant made an agreement by which he contracted not to engage in a par- ticular line of business in sixteen States and territories, and the Dominion of Canada, for three years after he should leave the plaintiffs" employment, which, ac- cording to the terms of that agree- ment, would have enabled the plaintiffs to discharge him within a week after he entered their serv- ice, and would have tied his hands for a period of three years after- wards, such a stipulation is vmrea- sonable. and should not be en- forced, under the situation of the parties to this action. I»y injunc- tion, and the plaintiffs having failed to show that there was any reason for coupling such a condi- tion with a simple employment of the defendant to sell their wares in a part of one State of the Union, or that they have in reality suffered any loss by reason of the acts of the defendant, or that they are in any way actually prejudiced by such acts, or that he is using any knowledge acquired from them in an illegitimate way, or that the enfori'ement of the stipulation of the agreement, pending suit, is necessary for their protection, we must bold that the injunction should not have been continued." /6i. Constraint of Trade Construed as a Limited Partnersliin. — It liMs hcon hold that ti contnit't in restraint of trutlo, nndcr which the parties ao^ree to divide the profits of the business estabHshed hv the airreenient, may be con- strued as a Hniited partnershij), and that, as such, it is sub- ject to the rules by which partnerships are governed. In Carroll v. (xiles, it was held that Ijarbering is such a busi- ness as will support a sale of its "good will" for a definite time and within a defined territory; but where G, a barber, who had no shoj) or jiatronage of his own, entered into an agreement with C, the proprietor of a barber shop, that C ants and acting for them. It does not. therefore, seem to me unrea- sonable that the complainants should exact from him a covenant that he would not reveal their trade secrets, and would not enter the employ of any competitor of complainants for the time specified in his covenant after his employ- ment by complainants should ter- minate. In the wine dealers case just quoted [Rousillonv. Rousillon, L. R. 14 Ch. I). 351] the restriction was for a term of ten years after the eniployment ceased, and the court held that, under the circum- stances, not unreasonable. Here the restriction is for three years only which, it seems to me, was entirely proper for defendant to agree to and for complainants to exact." Carter v. Ailing. 43 F'ed. Rep. 208, 214. R, a brewer, en- gaged M as a traveler for procur- ing orders for and selling malt liquors, and also, if recpured by R, aerated waters, to the class known as wholesale purchasing agents in a certain district. M agreed that for two years after the determination of his employment be would not be concerned in sell- ing malt licjuors or ;crated waters within a certain district. R never dealt in aerated waters, nor reciuired M to obtain orders for them. M, after leaving H's employment be- came traveler to rival brewers within the prescribed district. R brought an action and applied for an injunction. M insisted that the restriction was too wide, and, therefore, void. Stirling, J., con- strued the restriction as only pro- hibiting M from selling wholesale, and held that the stipulation as to jerated waters was severable, and granted an injunction limited to selling malt liipiors wiiolesale. Held, on appeal, that the agree- ment must be construed as pro- hibiting M from selling wholesale or retail within the limit, and that the restraint was not greater than was reasonably necessary for the rea- sonable protection of R, for that selling wholesale and retail were not two distinct businesses, but only different modes of carrying on the one business of selling malt liquors, that the selling malt liquors, either wholesale or retail, within the district, might affect R"s business, and that R was en- titled to restrain M from selling malt liipiors in any way within the district. Rogers v. Maddocks, L . R. (1892) 3 Ch. 346. § ()<).] CONTRACTS Kf:LATI.\(; TO l'K< )FKSSIONS, ETC. 20.') shoiiUl kc'i'p ihv slioj) tiiul puv :ill its cxpeii.ses, :ind (i was to iimna«:eit, :ind "not to do any work, now or hereafter, outside of the shoj) owned bv C, or liire to any piivty or open a shop of any kind to carry on the barber business in" that town, and to "convey all })atronage extended to him heretofore to the business owned by C," "the gross receipts to be divided eipially," such agreement was oidy a contract of indctiiiite partnership, and G's stipulation never to do any barbering business outside of C's shop was unreasonable, and will not be specifically enforced or its violation enjoined.^ In the opinion in this case, the court said: "It is true that the de- fendant was a barber, going about the town and county barbering, but had no shop, patronage or good will to sell. The plaintiff did not purchase his outfit from the defend- ant, giving him a liberal price in consideration of his unusual stipulation to stay with him or go out of the busi- ness. It seems to us that the contract was really nothing more than one of a partnership indefinite in duration, in which one i)arty stipulated to furnish the capital or outfit, and the other to contribute his labor and skill, 'dividing the gross receipts ecpially,' and that the stipulation on the part of the defendant never to do any barbering in B, outside of plaintiff's shop, 'now or hereafter,' was 'unreasonable,' and not of such a character as to call for the exercise of the etjuitable jurisdiction in i'C()uiring it to be sjiccifically ))cr- formed.' -' > Carroll v. Giles, 30 S. Car. 412: * Carroll v. Giles, 3U .S. Car. 41J. s. C, 9 S. E. Rep. 422. 41S: s. c, S. E. Rep. 422. CHAPTER IV. CONTRACTS RELATING TO RESTRICTIONS IN BUSINESS. § 67. 68. 69. 70. Introductory. Contracts Granting an Ex- clusive Business Privi- lege. Contracts Relating to a Par- ticular Article. Contracts under which the Grantor Retains an Inter- est in the Business. § 71. Contracts for the Sale of a Good Will. 72. The Subject Continued. 73. Farther Application of the Rule. 74. Agreement not to Buy or Sell. 75. Contract to Maintain Prices. 76. Statutory Regulations. § 67. Introductory. — The general principles by which contracts in restraint of trade are governed, as expounded in the preceding chapters, are applicable to all contracts between individuals, firms or corporations for the limitation or regulation of any branch of business. The object of this chapter is to discuss the application of these general prin- ciples, not to monopolies or to extensive combinations, the object of which is to control prices, but to transactions of a general and limited character. It is proposed to consider that class of contracts that relate to the restriction of busi- ness operations on a smaller scale. Business men, business firms and corporations of limited resources attempt to effect, in a narrow sphere, essentially the same thing that is accom- plished by the great combinations in a broader field. To this class of restrictions our attention for the present is to be directed. § 68. Contracts Grantinj; an Exclusive Business Priv- ilege. — A contract binding an individual or company not to engage in business at a particular place and for a limited § ««.] RESTRICTIONS IN BUSINESS. 207 time, is not in contravention of public policy, :incl if not otherwise in violation of equitable rules will be upheld. But a contract for an exclusive privilege must relate to a single individual, firm or corporation. There nmst l)e a valuable consideration ; there must be a reason for the contract that the court will accept, and there nuist be no restraint upon one party that is not beneficial to the other. A contract of this character is in no sense a monopoly. As it relates to a single individual or business association, all other persons are at liberty to engage in the business.^ In Illinois, it has been held that a contract to furnish a party with sewing machines at a discount and upon a credit, which provides that such party shall deal exclusively in the nui- chine sold b}' the party agreeing to furnish, and to pur- chase the same of him exclusively, contains no such re- straint of trade as to render it void.^ In New York, a 1 California Steam Navigation Co. V. Wright, « Cal. 258. See also Washburn v. Dosch, 68 Wis. 436; Wright V. Ryder. 36 Cal. 342; West Va. Transportation Co. v. Ohio Riv. P. L. Co., 22 W. Va. 600; Perkins v. Lyman. 9 Mass. 522. - Brown v. Rounsavell, 78 111. 589. In Newell v. Meyendorff, 9 Mont. 254; s. C. 23 Pac. Rep. 333, it was held that a contract to sell a brand of cigars to no one in the State but defendant, and to give him the exclusive agency for such sale, is not in restraint of trade. The court said: '-The contract is not general; it is limited as to place and person. The public is not deprived of the alleged re- stricted party's industry. On the contrary, the contract provides for the placing upon the Montana market the product of the plaint- iff's industry, by the selection and services of a local Montana agent, interested in the success of sales, and to be rewarded by such suc- cess. Nor is there any injury to the party himself, the plaintiffs, by their being precluded from pur- suing their occupation. Rather by the contract, they seem to have sought a means of extending the field of their operations, and not of restricting them. In the light of the authorities, the rules and the reasons therefor, and the facts, we are clearly of the opinion that the contract was not in restraint of trade, and not void. It was simply a contract, for a consideration, for the enlistment of the services of an agent for the plaintiffs in their business." A contract between several companies, under which it is agreed not to st-ll goods within certain territoiial limits for asi)ec- ified time, and that no company shall sell more than a certain per cent, of the whole amount sold by all the companies, is void under Civil Code, §§ 1673-1675, which provide that every contract, by which one is restrained from exer- cising a business or calling, is void to that extent, except that one who 208 RESTRICTIONS IN BUSINESS. [§68. person whose only business was thai of seUing sand from land which he owned, having refused to sell a piece of the land, on the ground that such a sale would be an injury to his business, was finally persuaded to sell on the agreement of the vendee that he would not sell sand from the land purchased. It was held that the stipulation of the vendee was not such a restraint of trade as to be in contravention of public policy.^ In New York, it has been held that a contract not to sell asphalt for pavements and blocks, ex- cept to certain pensoDS in certain cities, is not void as tend- ing to create a monopoly, or to enhance the price of asphalt pavements.'^ In a recent case in Illinois, it was held that a contract not to engage in the liverv and undertaking business in the city of Chicago for the period of five years, is not invalid as being in restraint of trade. -^ In a recent case in Georgia, it was held that an asreement of a seller has sold the good will of a business may agree not to carry on a similar business within a specified county or town, and that, in anticipation of dissolution of a partnership, a partner may agree not to carry on a similar business in the town or city where the partnership was lo- cated. Vulcan Powder Co. v. Hercules Powder Co.. 90 Cal. .")10; s. C. 31 Pac. Rep. 581. A contract made by a seller with the pur- chaser, that he will not, at any time within 99 years, directly or indirectly, engage in the manufact- ure or sale of friction matches, excepting in the capacity of agent or employe of said purchaser, within any of tiie several States of the United States of America, or the territories thereof, or within the District of Columbia, except- ing and reserving, however, the right to manufacture and sell fric- tion matches in the State of Ne- vada, and in the territory of Mon- tana, is not void as a covenant in restraint of trade. Diamond Match Co. V. Koeber, lOG X. Y. 473; S. c. 13 N. E. Rep. 419. 1 Hodge V. Sloan, 107 N. Y. 244; s. c, 17 N. E. Rep. 33.5. * Barber Asphalt Pav'g Co. v. Brand. 7 X. Y. Supl. 744. 3 Hursen v. Gavin (1S9G). 162 111. 377; s. c. 44 X. E. Rep.735. '-One element of the value of the busi- ness transferred by appellant to appellee was the probability that the customers of the former would continue to trade with the latter, and this probnbility was increased and the value of the purchase en- hanced, by the agreement of the appellant not to engage in the same business in Chicago for five years. Such an agreement was in part an inducement to appellee to make the purchase, and was based upon a sufficient consideration. Appellant was at liberty to engage in any other business or in the same business in any other i)lace than Chicago. There was. there- fore, only a limited restraint upon him as a tradesman, and not upon § t><).] RKSTRICTIONS IN BUSINESS. 20it not to carry on a certain business, which is limited as to j)hicc, and is based on a sufficient consideration, is valid. though unlimited as to tiine.^ In Nebraska, it has been held that a stipulation in a contract giving one the exclusive agentn' to sell another's goods for an indefinite period, does not render the contract void as against public i)olicy.2 § (>1). Contracts Relatiiifjf to a Particular Article. — The principle discussed in the foregoing section applies to contracts in which the grantor binds himself not to manu- facture or to trade in a s])ecified article. It is well estab- lished that a covenant not to manufacture a particular article, or to engage in trade in such article, if there is a j)roper limitation in regard to space and a valuable con- sideration, is not in restraint of trade, and, in consequence, is valid. ^ In a leading case in Indiana, it was held that a contract in restraint of the right of making, selling and tradinj; fanninj; mills south of the Wabash river, within thirty miles of Marion, in Grant count}', is not objection trade geneniUy. Where one per- son is restrained from doing a par- ticular business in a particular place competition is left open to all others, and there is no injury to the public. The person restrained in such case merely yields to another the use of what he has disposed of to that other for value. The limitation here did not go be- yond what was necessary for the protection of appellee in the prose- cution of the business purchased by him, and was. therefore, rea- sonable." Ibid. ' Swanson v. Kirby (189(1), 98 Ga. 686; .s. c, -H) S. E. Kep. 71. » Woods V. Hart (1897) (Neb.), 70 N. W. Kep. 53. "The next contention is that the contract is void a.s l)eing against public policy, in that it provides that -W should have the exclusive agency for the sale of the lots.' Such 14 provision did not, in the least operate against the interests of the public, nor yet against those of the defendant, since the appointment as agent was not for a fixed or defi- nite period. The power or right of revocation of the agency re- mained in H and he could have exercised the same at any time, or sold the property himself. Cham- bers v. Se.ay, 73 Ala. 372. Not one of the cases cited by appellant supjjorts the doctrine that the clause under consideration renders the contract void. .Sulllce it to say that they merely hold that contracts in restraint of trade, or those made for the purpose of pre- venting competition at auction and other public sales, are contrary to public policy, and therefore void."" Ibid.. .*>'). 3 Gillis v. Flail. 2 Krewst. 342. 210 RESTRICTIONS IN BUSINESS. [§70. able ou acccjunt of the extent of space prescribed, nor because the restriction is indefinite in regard to time.' § 70. Contracts under which the Grantor Retains an Interest in the Business. — Where a person engaged in business makes a sale of his property to a competitor, but retains an interest in the business, an agreement as a part of the transaction by which a definite price of the goods to • Bowser v. Bliss. 7 Blackf. 344. In Crystal Ice Mfg. Co. v. San Antonio Brewing Ass'n, 8 Tex. Civ. App. 1; s. C, 27 S. W. Rep. 210, a contract between an ice manufacturer and a brewer whereby the former agrees to sell to the latter all the ice he needs, the brewer not to retail ice nor sell to retailers, is held not invalid, there being nothing in it to show that the brewer did, or intended to, make and sell ice. The courtsaid: ''The contract is not upon its face one necessarily in restraint of trade. It contains nothing which indicates that the brewing associa- tion was a manufacturer of or en- gaged in the pursuit of selling ice or intended entering upon the business, and a manufacturer ordi- narily has the right to select his customers, and may sell his goods to a person at a reduced price, to be used by the customer and not sold by him. There is nothing pernicious in such an arrangement if the restraint is such only as af- fords a fair protection to the inter- ests of the party in favor of whom it is granted, and not so large as to interfere with the interests of the public. Pierce v. Woodward, 6 Pick. 206; Palmer v. Stebbins, 3 Pick. 188. If the brewing associa- tion did not deal in ice, nor con- template doing so, we do not per- ceive any detriment arising to the public from the restriction in this contract.*' An agreement between t%vo traders in live stock that the tirst will sell the other all his com- modities and the second will buy from the first alone, is not in vio- lation of law or public policy nor in restraint of trade, where made for a limited time and confined to one locality. Live Stock Ass'n v. Levy, 54 X. Y. Sup. Ct. 32. The grocers in a certain town agreed with a firm which was about to open a butter store that they would not buy any butter for the term of two years. Held, that such con- tract is void as being in restraint of trade. Chai)in v. Brown, 83 Iowa, 156; s. C. 48 X. W.Rep. 1074. An agreement by the manufacturer of printing presses not to sell any presses which could be used for certain kinds of printing is valid. New York Bank Xote Co. V. Hamilton, etc. Co., 83 Hun, 593; s. C. 31 N. Y. Supl. 1060. A contract between a domestic firm and a foreign corporation, both engaged in the manufacture and sale of wooden ware, whereby the former sells its stock, materials, tools and machinery to the latter, and agrees not to manufacture or sell woodenware in seven named States for five years, nor to pernnt to be used for that purpose during the time limited, is in restraint of trade and void. Western Wooden - ware Ass'n v. Starkey, 84 Mich. 76; s. c, 47 N. W. Rep. 604. § TO.] RESTRICTIONS IN BUSINESS. 211 1)0 sold is fixod, is not void as in restraint of trade, unless the product of the business is an article of necessity, or the sale amounts to an attempt to control prices. In a late case it was held that a contract under which two rival manufact- urers agree upon u scale of sellintr prices for their goods, one of them discontinuing his business and becomino: a partner with the other for a specified term, is not void as in restraint of trade, provided the goods manufactured were not articles of necessity, and the transaction ditl not amount to a conspinicy between the parties to control prices by creating a monopoly.* In the opinion in this ' Dolph V. Troy Laundry Ma- chinery Co., 28 Fed. Rep. .")53. See also Jones v. Lees, 1 HurL & N. 189; Ainsworth v. Bentley, 14 W. R. 63U; Marsh v. Russell, G6 N. Y. 292; Perkins v. Lyman, 9 Mass. .522. Where several parties sever- ally entjuored in the business of manufacturing and selling balance shade rollers, for the purpose of avoiding competition, organize themst'lvi's into a corporation, and severally enter into an agreement with the corporation so organized, that all sales of the shade roller shall be made in the name of the corporation, and at once rejjorted to it; that when either party shall establish an agency in any city for the sale of a roller made exclusively for that purpose, no other party shall take orders for the same roller in the same place; and that the prices for rollers of the same grade, made by the different parti,is, shall be according to an agreed schedule, subject to changes upon recom- mendation of three-fourths of tlie stockholders, the agreement is valid and not void as in restraint of trade. Central Shade Roller Co. V. Cushman. 143 Mass. 353; S. C. 9 N. E. Rep. 629. ••The de- fendant entered into the covenant. as a consideration in |)art of the purchase of his property, by the Swift & Courtney & Beecher Com- pany, presumably because he con- sidered it for his advantage to make the sale. He realized a large sum in money, and on the comple- tion of the transaction became in- terested as a stockholder in the very business which lie had sold. We are of opinion that the cove- nant, being supported by a good consideration, and constituting a partial and not a general restraint, and being, in view of the circum- stances disclosed, reasonable, is valid and not void." Diamond Match Co. V. Roeber, lOG N. Y. 473, 4S(!. •'The respondents were incorporated on the 17th of .luly, 1888. and on the 8th of August the agreement of the 3d of July was adopted by the company. It is to be noted that at the time when this agreement was entered into, to which the Xordenfelt Company was a party, the appellant wa.s managing director of that com- pany, and that in the mf-morandum of association of the amalgamated company, which was signed by the appellants, the objects of the com- pany were stated to be, intrr alia, not only the adoption of the agree- 212 uf:v«itrictions in iusinkss. [§ 71, case, the court siiid: "It is not obnoxious to good morals, or to the rijj^hts of the public, that two rival traders a^ree to consolidate their concerns, and that one shall discontinue business and become a partner with the other for a specified term. It may happen as the result of such an arrangement that the public have to pay more for the commodity in which the parties deal, but the public are not obliged to buy of them. Certainly, the public have no right to complain, so long as the transaction falls short of a conspiracy between the parties to control prices by creating a monopoly."^ § 71. Coiitraits for the Sale of a Good Will. — From an early period the good will of a business establishment, and, to a limited extent, that of a profession or trade, has been reo:arded as a thing; of value, and of the nature of property. As such it may be sold or bartered, and con- tracts relating to such sales or transfers, if not illegal, will be upheld. Where a person eng:4ged in any branch of busi- ness or in a profession, disposes of his stock in trade or of his professional practice, he may enter into an agreement ment of the 3d of July, but also "to acquire, undertake and carry on, as successors to the Maxim Gun Company and the Nordenfelt Guus & Ammunition Company, the good will of the trade and busi- nesses heretofore carried on by such companies, and each of them, and the property and rights be- longing to or held in connection therewith respectively." Tliis is of importance, because the appel- lant, in a forcible argument, pointed out that the judgment of the court of appeal was largely foimded on the fact that the cove- nant in question was entered into in connection with the sale of the good will of the appellants* busi- ness, and was designed for the pro- tection of the good will so sold, and he contended that this was an error, inasnuich as there was no sale by him of the good will on that occasion, he having already parted with it to the Nordenfelt Company, the later sale being by that company, and not by him. I think it is impossible to accede to this contention." Lord Herschel, in Nordenfelt v. Maxim-Xordenfelt Couipany. L. K. (1S94) App. Cas. r)3.'). .■■)4U. ' Dolph V. Troy Laundry Ma- chinery Co.. 28 Fed. Rep. 553. ."io.'i. See also Whittaker v. Howe. 3 Beav. 383; Jones v. Lees. 1 Hurl. ife X. 189; Rousillon v. Rousillon. L. R. 14 Ch. D. 351; Leather Cloth Co. V. Lorsont, L. R. 9 Eq. 345; Collins v. Locke. L. R. 4 .\pp. Cas. G74; Oregon Steam Co. v. Winsor. 20 Wall. 04; Morse, etc. Co. V. Morse, 103 Mass. 73. § 71,] HKSTKl riONS IN lUSlNKSS. '2\'^ with the vondro not to i'ii<;:i«(r in tin- same Itusiiicss or pro- ft'ssie)!! within a desiirnated territorial limit, and for a tixcd period, and such eovenunt will be held valid. In such cases the i)o.sition of the vendor is somewhat stronger than where there is a simple contract that the vendee shall dis- continue his business or profession with a valid considera- tion. In a leadinii' English case, Sir .lohn Homilly, M, K., dctined the legal idea of a good will, as follows: "The good will of a trade, although inseparable from the business, is an appreciable ])art of the assets of a concern, both in fact and in the estinuition of a court of equity. Accordingly, in reported cases. Lord Eldon held, that a share of it jn-operly and as of right belonged to the estate of the deceased part- ner. It does not survive to the remaining partners, unless by express agreement, l)ut it may by agreement, as it may be agreed that any particular portion of the ])artnership assets shall so survive. Good will manifestly forms a })()rtion of the subject-matter which produces profits, which constitutes partnership property, and which is to be divided Ix'tween the surviving partners and the estate of the deceased ))artner, according to the terms of the contract, and when that is silent, according to their shares in the concern. There is considerable difficulty in detining accu- rately what is included under this term good ivill ; it seems to be that species of connection in trade which induces cus- tomers to deal with a particular firm. It \ aries almost in every case, but it is a matter distinct i\ appicciable, which nuiy be preserved (at least to some extent ) if the business be sold as a going concern, l)ut which is wholly lost if the concern is wound up, its liabilities discharged and its assets got in and distributed. I am of opinion, then, that both on priucij)le, on the authority of the decided cases, and on the ordinary rules of common sense, I must, whenever there is a reputation and connection in business, constituting good will, treat that as part of the assets of the concern,"' Mr. ' Wedderburn v. Wedderburn. 2'2 4(58; L'riitwoll v. Lye, 17 Vos. 335. Beav. S4. 104. --It was arjined and Kennedy v. Lee. 3 Meriv. 452, that, in .^bakie v. Haker, 14 Ves. Lord Eldon has laid down the 214 RESTRICTIONS IN BUSINESS. [§ 71. Justice Story, defines good will, as follows: "Goodwill may be properly euough described to be the advantage or benefit which is axMiuired by an establishment beyond the mere value of the capital, stock, funds or property principl** that an assignment of the good will of a trade simpliciter, carries no more with it than the advantage of occupying the prem- ises which were occupied by the former firm, and the chance you thereby have of the customers of the former firm being attracted to those premises. But it would be taking too narrow a view of what is there laid down by Lord Eldon. to say that it is confined to that. Good will, I apprehend, must mean every advantage, every positive ad- vantage, if I may so express it. as contrasted with the negative ad- vantage of the late partner not carrying on the business himself, that has been acquired by the old firm in carrying on its business, whether connected with the prem- ises in which the business was previously carried on, or with the name of the late firm, or with any other matter carrying with it the benefit of the business. When Lord Eldon, in speaking of a nursery garden, or a locality which the customers must frequent to look at the flowers and other things, and when .Sir Thomas riumer, in an- other case, in speaking of a retail shop which a person must enter in order to buy the goods there ex- posed — they are only, as it ap- pears to me, giving those as illus- trations of what good will is. But it would be absurd to say that, where a large wholesale business is conducted, the public are mind- ful whether it is carried on at one end of the Strand or the other, or in Fleet street, or in the Strand or any place adjoining, and that they regard that, and do not regard the identity of the house or business, namely, the firm.'' Churton v. Douglas. Johns. [Eng.] Ch. 174. "Now, what good will did he sell? It was not that of his own stall in the same market where he contin- ued to pursue his occupation. During his quasi management of the stall, formerly Journe's, for the brief period of three months, with- out having posted his name over the stall, as required by the city ordinance, and never occupying it himself in person, he could not have acquired, on his own account, any appreciable amount of addi- tional patronage or good will for th:»t stall. But it is said that upon the death of Journe, the good will that appertained to his stall ceased, and that nothing of the kind could have gone to his heirs. This posi- tion is not tenable. It is not ex- clusively to the person that what is termed the 'good will' is attached, but it is chiefly to the place." Suc- cession of Journe, 21 La. Ann. 391, 3D3. '• "Good will,' as property, is intangible, and merely an incident of other property. It was not, in this case, an incident of the stock of hardware, tools and machinery which seems to have been the only tangible projierty i)urchased by the appellants from the appellees. As a rule, it may be said that 'good will' is never an incident of a stock of merchandise; but, generally speaking, it is an incident of locality or place of the store room or place of business." Rawson v. § 72.] RESTRICTIONS IN BUSINESS. 215 employed therein, in consequence of the generul public patronage and encouragement, which it receives from con- stant or habitual customers, on account of its local position or common celebrity, or reputation for skill or atHuence, or punctuality, or from other accidental circumstances or neces- sities, or even from ancient partialities or prejudices."' § 72. The Subject Continued. — In a recent case in New York, the rule was stated by the court, as follows : "While the law, to a certain extent, tolerates contracts in restraint of trade or business, when made between vendor and purchaser, and will uphold them, they are not treated with special indulgence. They are intended to secure to the purchaser of the good will of a trade or business a guaranty against the competition of the former proprietor. When this object is accomplished it will not be presumed that more was intended,"^ Where a contract of this character Pratt, 91 Ind. 9, IG. The "good will" connected with any trade or occupation is a valuable right, and may be made the subject of barter and ^sale. If unlawfully taken away or destroyed, the law will award compensation to the injured party. Where customers, who resort to a particular locality, are driven therefrom by reason of an attach- ment having been levied, the trade loses what is known as "'good will," and suffers not merely a loss of i)rofits. Carey v. Gunnison (Iowa). 17 N. W. Rep. 8S1. The good will of an established business is a common subject of contract, although it is nothing but the chance of being able to keep the business which has been estab- lished, yet the rights of a pur- chaser of such good will will be enforced in etpiity, and recognized at law as effectual between the parties to the contract. Barber v. Conn. Miit. I>ife Ins. Co.. !."> Fed. Rep. 312. ' Story on Partnership, § 99. See also Smith v. Everett, 27 Beav. 446; Lindley on Partnership, 842. 2 Greenfield v. Gilman. 140 N. Y. 1G8, 173. See also Chapin v. Brown, S3 Iowa, loG; s. C, 32 Am. St. Rep. 297; Keeler v. Taylor, 53 Pa. St. 4G7; Rousillon v. Rousillon. L. R. 14 Ch. D. 3r)l ; Jacoby v. Whit- more. 48 L. T. 335; Smith v. Mar- tin, 80 Ind. 2G0; Vickery v. Welch, 19 Pick. 523; Taylor v. Blanchard, 13 Allen, 370; Roller v. Ott, 14 Kan. 609; Warfield v. Booth, 33 Md. G3; Alger v. Thacher. 19 Pick. 51 ; Mackinnon Pen Co. v. F^ountain Ink Co.. 48 X. Y. Sup. Ct. 442; Richardson v. Peacock, 33 N. J. Kq. 597; Finger v. Ilahn, 42 X. J. Eq. 606; Levy v. Walker, L. R. 10 Ch. I). 436: Labouchere v. Daw- son, L. R. 13 E<|. 322; Cruttwell v. Lye, 17 V^es. 306; Price v. Green, 16 M. & W. 346; Gale v. Reed. 8 East, 80. 21(1 RKSTRICTIONS IN HI SINE8S. [§ 72. is violaU'd hy llie rcMiinptioii of bu.sine^s on the jjart of the grantor, he will not only be restrained by injunction, but he will also be held responsible for the injury that he may do to the business of the purchaser. In a case in Massa- chusetts, the defendant, having covenanted with the plaint- iff, on the dissolution of a firm for the manufacture of daguerreotype materials, of which they had been members, "not, directly or indirectly, to enter into, or carry on, or in any way be interested in, or furnish to an}' person or per- sons information in regard to," that business within certain limits, nevertheless formed with a third person a new part- nership within said limits for that business, had the whole financial charge of the new partnership, traveled about the country, visiting the customers of the old firm and introducing the goods of the new })artner- ship, and received a commission on all sales. It was held that these facts warranted a finding that the defendant was lial)lc for all the injury occasioned to the plaintiff by the establishment of the new partnership.' In a late case ' Dean v. Emerson. 102 Mass. 480. '•The plaintiff contends that the agreement Is not void as being in restraint of trade. First, because it Is an agreement pertaining to property and business protected by patents; secondly, because the re- straint is so extensive only with the business sold, and is necessary to enable the company to enjoy fully what it has bought and paid for; and thirdly, because it relates to a single commodity, not of prime necessity, and not a staple of com- merce. See Central Roller Co. v. Cushman. 14:^ Mass. 353; s. C..9 X. E. Rep. (;2!); Morse Twist Co. v. Morse, 103 Mass. 73; Gloucester Isinglass Co. v. Russia Cement Co., 154 Mass. 92; S. C, 27 N. E. Rep. 1005. Tliere seems to be no reason why the defendant Crane should not assign the patents and inven- tions which he agreed to assign, if there are any, and no serious ob- jection has been raised by the de- fendant on this part of the case. The defendant contends that be has a right to assist in forming a cor- poration, and to act as one of its officers, the business of which is to manufacture and sell lire alarm and police telegraph machines which are not made under any patents owned bj' the plaintiff, or under any patents which he has agreed to assign to the plaintiff, or which the plaintiff has elected to purchase, under the option given in the con- tract, even although by so doing he enters into competition with the plaintiff in its business. He. in effect, concedes that, so far as the business is protected by patents which he has assigned, or agreed to assign, the restraint is valid. It appears that there are 'a dozen or lifteen concerns in the United vS 1-2 •^■] RESTRICTIONS IN lU SINESS. 217 ill Alabama, it was held that a contract by which a partiicr- ship, eno^agecl in the business of selling hardware, and sell- insr out their stock of plow blades and plow stocks to a rival States engaged in a somewhat wealth, except one, where a con- siruilar business.' The defendant tract in restraint of trade has been testified that he looked up the held valid, the restriction has been number of patents pertaining to limited as to space. In Taylor v. this branch of the art in ISSl. and Blanchard, 13 Allen, 370, the par- that there were then about 500. ties entered into a partnership for The defendant contends that he carrying on "the trade or business ought to be able to use his own of manufacturing shoe cutters,' and patents for subseciuent improve- it was provided that -at whatever merits, applicable to such appa- time the said co-partnersliip shall ratiis, if tiie plaintiff does not be determined and ended," the de- elect to purchase them; that he fendant -shall not, nor will, at any was previously a manufacturer of time or times thereafter, either tire alarm and police telegraph ap- alone or jointly with, or as agent paratus, and not a seller thereof; for any person or persons whomso- that the good will which attached ever, set up, exercise, or carry on to Ills busine.»s was that of a manu- the said trade or business of manu- facturer who did not sell his manu- facUiring and selling shoe cutters factures in the market, and that it within tlie aforesaid common- is against public ijolicy that lie wealtli of Massacliusetts, and shall should be restrained from exercis- not, nor will, set up. make or en- ing his peculiar skill anywhere in courage any opposition to the said the United States, or in the world, trade or business hereafter to be for the period of ten years. The carried on by the plaintiff. The apparatus, as the defendant con- manufacture of shoe cutters was an tends, which he has a right to art which could be carried on only manufacture and sell, is not secret by persons instructed in it, and the machinery, and is not protected by business was confined to the any patents which the plaintiff plaintiff and three other persons, owns or has a right to control, but but the court held the agreement is apparatus either not protected void. In Bishop v. Palmer. 140 by patents at all, or by patents of Mass. 400; s. c, 10 N. E. Rep. 299. his own, or of some other persons the plaintiff, being engaged in the who may choose to employ the de- manufacture and selling of bed fendant. The only ground upon d. Rep. 502 ; Diamond Match Co. v. Roeber, 1U6 N. Y. 473; s. c. 13 N. E. Rep. 419; Whitney v. Slayton. 40 Me. 224." Field, C. J., in Ganiew.-li. etc. Tel. Co. v. Crane, 100 Ma>s. 50; s. c 3.") N. E. Rep. 98. ' Moore llardwaie Co. v. Towers llardwari' Co.. S7 Ala. 200. See also Hiihbard v. Miller, 27 Mich. 15; Curtis v. Gokey. 68 N. Y. 300; Wartield v. Booth. 33 Md. 03; Dethlefs v. Tomsen. 7 Daly, 354; Real V. Chise. 31 Mich. 490; Hor- ner V. Graves. 7 Ring. 735; Whit.- taker v. Howe, 3 Beav. 383; Tall is V. Tallis, 1 EI. & Bl. 391 ; Morse Machine Co. v. Morse, 103 Mass. 73. Under Sec. 1074. Civ. Code, a contract for the sale of the jjood will of a business and agreeing not to do a similar business in several coimties is void :is to all l)Ut the county in which the business is carried on. City Carpet Beating Works v. Jones, 102Cal.500; s. c, 30 Pac. Rep. 841. Civ. Code, § 1()73, provides that a contract in restraint of trade otherwise than provided in the next two sections, "is to that extent void," and sec- tion 1074 provides that the seller of "the good will of a business may agree with the buyer to refrain from carrying on a similar busi- ness within a specified territory, so long as the buyer or any person deriving title to the good will from him carries on the business." Held, that a provision, on sale of a good will, that the seller shall not engage in the business for three years in a certain city, is not void, but the contract will be limited to such time, not exceeding three years, as the buyer or his assignee carries on the business. Brown v. Kling. 101 Cal. 295; s. C. 35 Pac. Rep. 995. Defendants were the owners of a tobacco warehouse, and had built up quite a trade in the vicinity. I'laintiff purchased the property and good will of their business from them, defendants executing a deed of conveyance which contained a clause to the effect that defendants were selling "also all our good will in said warehouse business, as members of" the firm "or as individuals; and we agree with said company not to engage in said business, di- rectly or indirectly, for a period ol ten years from this date." One of defendants engaged in the same business in the same city within less than live years fr«)m the sale. Held, that it was error to sustain a demurrer to the petition asking for an order restraining di-fendantd from continuing such bu.-iness. Western Dist. Warehouse Co. v. llobson, 96 Ky. 550; s. c, 29 S. W. Rep. 308. 220 RESTRICTiONS IN BU8INKSS. [§ 73. with tlie good will of the business, and engaged not to carry on the business at any time in the future, at the town of F, or at any place within such distance of said town, as would interfere with such business, whether the same was carried on by the purchasers or by their successors. It was held that such agreement in equity is binding, and that in an action brought by the successors of the purchasers, M will be enjoined from carrying on such business in violation of the agreement.^ § 7J$. Farther Application of the Rule. — The value of a good will is largely determined by the peculiar circum- stances under which the business to which it relates has been established and developed. It may be of special value and importance in the sale and transfer of an establishment for the publication of a newspaper, and such sale, if the limitations are reasonable, will be upheld. In a recent case in North Carolina, F and his w^fe sold a newspaper owned by them in D county, and agreed that F "would not edit, ])rint()r conduct a newspaper, nor be in anywise connected with one, printed anywhere in the State of North Carolina, and that, for a like period, Mrs. F should not edit, print or conduct a newspaper or magazine, and be in anywise con- nected with one anywhere in the county of D, said State, without the consent of such purchaser or his assignees. It was held that such contract was not void as an unreason- able restraint of trade. ^ 'Morgan v. Perhaimis. 3(5 Ohio pathos, his humor, his learning, or 8t. 517. of any gift or attainment, attracts 2 Cowan V. Fairbiother. 118 N. subscribers solely by such personal Car. 40G; s. c. 24 y. E. Rep. 212. qualities, he imparts a peculiar '•Where a person acquires a reputa- value to the good will and prop - tion' for skill and learning in his erty of a newspajier. which goes profession, as a lawyer or a physi- with him, to its injury when he cian, he often creates an intangi- leaves it and lends the talent and ble but valuable property, by win- accomplishments that have given ning the confidence of his patrons it patronage and popularity to a and securing immunity from sue- rival journal in the same vicinity, cessful competition for their busi- Where he owns the press and plant ness. So, where an editor by rea- the enhanced value so imparted by son of his style, his power, his him becomes an element of his § 74.] UKSTKICTIONS IN lUSINKSS, 2'2\ § 74. A {jrec'ineiit not to Buy or to Sell. — Contracts uiuU'r which ono of the ptirtii's is hoiiiul not to buy or to sell :i |);irticular article, if there is a valid consideration and the restraint is not unreasonable, will be upheld. In a re- cent case it was held that a contract between an ice manu- facturer and a brewer, whereby the former agreed to sell the latter all the ice he needed, the brewer not to retail nor to sell to retailers, is not invalid, there being nothing in the contract to show that the brewer either did, or intended to, make and sell ice.^ In a recent case ni New York, def end- property, with the same incidental power to dispose of it as attaches to any other of his acquisitions which ha-i a market value. Bealv. Chase. 31 Mich. r)29. But it is not like other property which ordi- narily passes by delivery or assign- ment to the purchaser. Neither an editor, a lawyer nor a physician can transfer to another his style, his learning or hi.« manners. Either, however, can add to the chances of success and profits of another who embarks in the same business in the same tieid, by with- drawing as a couipetilor. So that the one sells and the other buys something valuable, and the policy of the law limits the right to enter into such contract of sale only to the extent that they are held to injure the public by restraining trade. The one sells his pros- pective patronage and tlie other buys the right to compete with all others for it, and to be protected against competition from his vendor. The law intends that tin; one shall have the lawful authority to dispose of his right to compete, but restricts his power of disposi- tion territorially so as to make it only co-extensive with the right of protection on the part of the purchaser. To the extent that the contract covers territory from which the vendor has derived, and will prohably in future derive, no profit or patronage, it needlessly deprives the public of the benefit of open competition in useful business, and of the services of him who sells without any possible advantage to his successor. When the reason upon which a law is founded ceases, the rule itself ceases to operate. The older cases in which the courts attempted to fix arbitrarily geographical bounds, beyond which a contract to forbear competition would not be enforced, have given away to the more rational idea of making every case dependent upon the surrounding circumstances, show- ing the extent as to time and terri- tory of tilt' protection needed." Ibid. -ill. 'Crystal Ice Mfg. Co. v. San .Vntonio Brewing .\*s"n. S Tex. Civ. App. 1; s. c, "27 >. W. Kep. 210. .Vn agreement made by a traveling man with a purchaser not to .sell a certain kind of goods to any one el>e in the same town is not contrary to public policy. Keith V. Herschberg Optical Co., 48 Ark. 13S; s. C..2 S. \V. Kep. 777. •Vs to exclusive telegraph grants by railroad comi)anies there is a 222 KESTKK'TIONS IN BUSINESS. [§ 74. unt, ;i coiporutioii organized uiuler tlic act "to incorporate the Associated Press of the State of New York," adopted a by-hiw prohibiting its members from receiving or publish- ing "the reguhir news dispatches of any other news associa- tion covering a like territory and organized for a like pur- pose." A suspension of all the rights and privileges of the association was provided as a penalty for a violation of said provision. In an action to restrain defendant from enforc- ing this penalty, it was held that the association had power to enact the by-law ; that it was not objectionable either as unreasonable and oppressive, as tending to restrain trade and competition and to create a monopoly, or as an unlaw- ful interference with vested property rights, at least in the absence of evidence that the alleged violation for which the penalt}' was sought to be enforced grew out of acts in the performance of a contract entered into before the passage of the bj'-law, nor did it create a restriction upon the liberty of the press. ^ A contract of this character will be enforced only as there is a valuable consideration and as there is no unreasonable restraint of trade. In a certain town in Iowa, the grocers agreed with a firm, which was about to open a butter store, that they would not buy any butter for the term of two years. The firm did not purchase any established business, and paid nothing to the grocers as a considera- tion for their agreement not to purchase butter for the time specified. It was held that the contract was void for general holding that they tend to Union Tel. Co., 24 Fed. Rep. 319. monopoly, and are, therefore, void. A contract whereby a railroad See Western Union Tel. Co. v. company grants to a particular American Union Tel. Co., 05 Ga. telegraph company the exclusive 160; Western Union Tel. Co. v. B. right to establish lines of conimu- & S. W. R. Co.. 3 McCrary, 130; nication along its right of way is Western Union Tel. Co. v. Ameri- void as a restraint of trade. Union can Union Tel. Co., 9 Biss. 72; Trust Co. v. Atchison, T. & S. F. Western Union Tel. Co. v. Balto., R. Co., 43 Fac. Rep. 701. etc. Tel. Co., 23 Fed. Rep. 12; i Matthews v. .Vssociated Press Western Union Tel. Co. v. Nat. of New York, 136 N. Y. 333; S. C, Tel. Co., 19 Fed. Rep. 660. See 32 N. E. Rep. 981. See also Hodge further West Virginia Transp. Co. v. Sloan, 107 N. Y. 244; Leslie v. V. Fipe Line Co., 22 W. Va. 600; Lorillard. HON. Y. 519. Balto. & Ohio Tel. Co. v. Western § 7.').] RESTRICTIONS IN BUSINESS. 223 lack of a consideration, and tliat it was also void as being in restraint of trade. ^ § 75. Contract to Maintain PriccH. — An atjreenient be- tween two or more individuals to maintain prices, where there is no transfer of property and no valid consideration, will not be sustained. It is in restraint of trade in such a sense as to be invalid. It is not necessary that the contract should amount to a conspiracy or that there should be any attempt to create anything more than a very limited monopoly. Such contract must attempt something that is of the nature of a monopoly in order to accomplish the end sought. It must be an actual restraint of trade. In a re- cent English case, it was held that a contract by which the members of a mineral water association bound themselves not to sell mineral waters at a less price than 9d. per dozen, or such other price, not being less than 9d. per dozen, as the committee mijrht from time to time direct, is a contract in restraint of trade for which there is no consideration, and which cannot, therefore, be enforced in a court of law.'' In a recent case in Kentucky this rule was upheld. ' Chapin V. Brown. 83 Iowa, 156; The appellants, however, conced- s. c, 32 Am. St. Kep. 297; 48 X. ing these to be the facts, insist that VV. Rep. 1074. the contract was not within the 2 Urinsion v. VVhiteleoror, g3 L. prohibition of public policy, be- T. 45."). "The conclusions of fact cause the restraint was but partial, found by the learned court below "Contracts in partial restraint of were amply justiHed by the rec- trade, which the law sustains, are ord : 'It cannot be gainsaid that those which are entered into, by a the object of this combination is vendor of a business and its good to enable the forty-five brewers of will, with his vendee, by which rhiladelphia. individuals firms the vendor agrees not to engage in and corporations, who have entered the san)e business within a limited into it, to regulate and control the territory; and the restraint to be sale and price of beer within the valid must be no more extensive city of Philadelphia, and the than is reasonably necessary for county of ("amden. N. .1. It cer- the protection of the vendee in the tainly is a combination, in restraint enjoyment of the business pur- of trade, tending to destroy com- chased. But. in the present case, petition and create a monopoly in there is no purchase or sale of any an article of daily consumption.' business, nor any other analogous 224 RESTRICTIONS IN BUSINESS. [§ 76. It was held that :iii agreement between owners of two rival steamboats on the Kentueky river, that, in order to prevent rivalry and consequent reduction of charges, the net profits of each should be shared in a certain proportion, each bearing its own expenses, and that, if the owners of either boat should sell with a view of going out of the trade, notice should be given to the owners of the other boat, and the owners so selling should not enter the trade again within one year, is void as against public policy, and the owner so selling may start a new boat within the year.^ § 70. Statutory Regulations. — In some of the States the common law doctrine has been materially modified by statute. In California it has been held that a contract in restraint of trade, otherwise than as expressly excepted in the Civil Code, is against public policy and void by the terms of the same code. A contract for a term of three years circunistiinee.* giving to one party a just right to be protected against competition from the other. All the members of the association are engaged in the same business within the same territory: and the object of the association is, purely and simply, to silence and stifle all competition as between its mem- bers. No equitable reason for such restraint exists. * * * The appellants insist that re- straint of trade in the necessaries of life only, is within the prohibi- tion of public i)olicy. No standard has been furnished by 'vhich to ascertain what constitutes these with reference to the general pub- lic. But assuming that l)eer is not among them, it is equally within the reach of the rule. The law recognizes it as a commodity; regulates It.? sales; it is 'an article of daily consumption.' and the court should refuse to aid in any attempted imposition upon the public by means of illegal combi- nations. The fact that coal was 'an article of prime necessity," was not mentioned as an essential to the illegality of the combinition which was involved in Morris Run Coal Co. V. Barclay Coal Co.. G8 Pa. St. 173, but was suggested. arguendo, as an aggravation of the injury done the public. The whole course of discussion there shows that injury to the public was re- garded as the true test of illegal- ity." Sterrett, C. .1., in Nester v. Continental Brewing Co.. 1(31 Ta. St. 473; s. c, 41 Am. St. Kep. 804; 29 All. Hop. 102; 34 W. N. C. 3S7. See also More v. Bennett, 140 111. (i9; s. c, 29 N. K. Rep. 888. ' Anderson v. .Tett, 89 Ky. 37.t: .s. c, 12 S. W. Rep. 670. § 7(>.J UKSTUIfTIONS IN lUSlNKSS. 225 between sevfenil powder conipuiiies, providing that neither of the |):irties thereto shall make any shipment of dynamite j)()W(ler to any part of the United States, east of eertain hoiuidaries, and regulatinu" the niMnufacture and sale of it hy parties in the territoi'y west of tiiose boundaries, under certain speeitied restrictions, and giving j)()wer to a stand- ing committee to tix prices, regulate the manufacturing cost, and impose fines for violations of the contract, and providing for a termination of the contract, if any other party or parties shall begin to manufacture and sell dyna- mite in coinpetiliou with the parties to the contriict, is in restraint of trade, and void as against ))ul)lic policy.^ In a recent case in the same State, it was held that where the ofood will of a business has accrued from customers residing in several contiguous counties, though the business was conducted in one alone, a sale of the business and good will, witli acovenant restricting the vendor from engaging in busi- ness in any of suchcontiguouscountiesfor a period of years, is not at common law an illegal contract, and is void under the code only as to the counties other than the one in which the business was conducted, but is valid as to that county, the covenant being divisible as regards space, and void onl}' to the extent to which it departs from the provisions of the code.^ In a recent case in Texas, it was held that a con- tract of sale between a brewing c()iiii)any and a dealer, whereby the comi)any grants exclusive territory to the dealer for the sale of its |)roducts, and further agrees to furnish the dealer with a delivery wagon and ice vault, which were to remain its property, and the dealer agrees not to sell the product of any other company, is a com- bination in restraint of trade, as prohibited by the statute.-^ ' Vulcan Powder Co. v. Hercules the piircliaser shall handle only the I'owder Co., n(» Ciil. 'jIO. heer named in the contract, and 'City Carpet, etc. Co. v. Jones, that the manufacturer shall sell to 102 Cal. r)06. no other dealer in that town or 'Texas Brewing Co. v. Tein- vicinity, creates a trust and con- pieman (1890) (Tex.), 38 S. W. spiracy a<;ainst trade, within the Rep. "27. A contract for the prohibition of the Act of 1889, sale of beer, which provides that Fnqua v. Pabst Brewing Co. 16 226 RESTRICTIONS IN BUSINESS. [§ 7y adopting others more limited in their operations, but designed to accomplish the same ends, has become of very common occurrence. The dangerous character of many of these methods has attracted the attention of the courts ami of legislators, and where the common law has proved inadequate to the correction of the evil, it has been met by legislative enactments. The Fnited States statute, known as "The Anti-Trust Act." with many acts of similar nature bv the various State legislatures, are 228 CONSPIRACIES IN RESTRAINT OF TRADE. [§ 78. examples of recent legislation on this subject. These enactments indicate a tendency of the present time and provide remedies for the growing evil. To the application of statutory Jmd equitable rules to business methods, held and treated as conspiracies, the following sections are devoted. § 78. Conspiracy Defined. — In general a conspiracy is an agreement between two or more persons to jierform an unlawful act. The essential points are two or more persons combined to do an illegal thing. It may be an agreement to do a thing criminal or unlawful, per se, or to do a thing which is, per se, lawful, in an unlawful manner. An agree- ment to accomplish a lawful end by unlawful means con- stitutes a conspirac3\ In order that a combination should amount to a conspiracy there must be an agreement on the part of the parties to the combination to attem})t to do an unlawful act. The crime or the offense is determined by the motive by which the act is prompted. The gist of the offense is in the combination and in tlie purpose to accom- plish a criminal or illegal object. It is the power of com- bination that renders the purpose dangerous to the public or to an individual, and it is this that constitutes the form- ing of the plan a conspiracy. At common law the grava- men of the offense is the agreement. An overt act is not essential to the completion of the offense. The unexecuted purpose constitutes the crime. In some cases where the matter is regulated by statute an overt act is essential to the ■offense, but the legal character of the offense is not changed by the execution of the agreement.' Whore the 1 United States v. Walsh. 5 Dill. Htintint^don, 2 Gray. 124. "A oon- 60; State v. Norton, 33 N. J. L. 40, spiracy at common law consists in 46; Hazen v. Commonwealth, 23 the unlawful agreement of two or Pa. St. 363. 364; United States v. more persons to compass or pro- Martin, 4 Cliff. 160, 162; Wilder v. mote some criminal or illegal pur- McKee, 111 Pa. St. 335; Place v. pose, or in the unlawful agreement Minster, 65 N. Y. 89. 95; Walker to compass or promote a purjiose V. Cronin, 107 Mass. 5.55; Gary v. not in itself criminal nor unlawful. Frazer, 76 Me. 37; llutchins v. by criminal and unlawful means. Hutchins, 7 Hill, 104; Jones v. If the crime consists in the illegal Baker, 7 Cow. 445; Barker v. object, the purpose must be clearly § 78.] CONSPIRACIES IN RESTRAINT OF TRADE. 2 2 'J offense is of a civil character, exposing the conspirators only to the payment of damages for an injury inflicted, the gist of the wrong is not in the agreement, l)ut in the act by which the injury was effected. The only effect of the con- ami fiillv stilted in the indictment. When the act is itself illegal there is no occasion to stale the means by which the conspiracy was ef- fected. When an indictment charged that the defendant con- spired by divers false pretenses, and subtle means and devices, to obtain from another large sums of money, and to cheat and defraud him thereof, it was held that the gist of tbe offense being the con- spiracy, it was quite sutlicient to state only that fact and its ol)ject, and not set out the specified pre- tenses." State V. Bartlett. 30 .Me. 132. 134. "The essence of a con- spiracy, so far as it justifies a civil action for damages, is a concert or combination to defraud, or to cause other injury to persons or property, which, because of acts done in pursuance of such conspiracy, actually results in damages to the person or property of the person injured or defrauded. A civil ac- tion will not lie for a mere con- spiracy. It is the damage done in pursuance of the conspiracy which gives the right of action. It is now well established that, in civil actions, the conspiracy is not the gravamen of the charge, but may be pleaded and proved in aggrava- tion of the wrong of wiiii-li the plaintiff complains, and as en- abling him to recover against all the conspirators, as joint tort-feas- ors. If a plaintiff fail in the proof of a conspiracy, or concerted de- sign, he may yet recover damages against such of the defendants as are shown to be guilty of a tort. directly resulting in damages to the plaintiff." Doremus v. Hen- nessey, G2 111. App. 391,402. "It has often been said that a con- spiracy to effect an unlawful pur- pose, or a lawful i)urpose by un- lawful means, is an offense. But this is said to be a limitation rather than a definition. It certainly lacks definiteness. Many acts are said to be unlawful which would not be a subject of a criminal con- spiracy. Other acts are unlawful because they are in violation of the criminal law or of some penal statute. If the ends or means are criminal in ttiemselves. or contrary to some penal statute, the con- spiracy is clearly an offense. Be- tween these two extremes a great variety of cases may arise, many of which ought not to be regarded as criminal. Suppose two or more boys, for instance, agree to go upon another's land; the i)roposed act, is, or may be. a trespass, and, therefore, unlawful. If they do not go no harm is done; if they do go they are or may be civilly lia- ble, but no one would seriously contend that in either case they would be liable criminally for con- spiracy. But sui)pose two or more conspire unjustly and wrongfully to deprive another of his liberty or property; then, as we shall here- after see. the criminal law may take cognizance of the act. Of coiu'se. it is difHcult if not impos- sible to define accurately and clearly in advance what would and what would not be an offense. Hence, the difliculty of regulating 230 CONSPIRACIES IN RESTRAINT OF TRADE, [§ 78. spirat V in a civil offense is the aggravation of the injury iu- rticted. In a recent case in New Jersey, the rule was stated by the court, as follows: "It is not necessary to con- sider till' office of the ancient writ of conspiracy, and the process by which, in time, it was superseded by the later and more efficacious action on the case for conspiracy, and the still more modern action for malicious prosecution. Nor will it now be advantageous to show how long and difficult it was to separate the idea of a criminal cons})irac>' at com- mon law, where the agreement or conspiracy was the grava- men of the offense, from the real complaint in a civil action, that the combination of two or more })ersons has enabled them to inflict a great wrong on the plaintiff. The com- bination or conspiracy in the latter case was, therefore, a matter of aggravation or inducement only, of which one or all might be found guilty, while in the former it was essen- tial to show two or more had joined in an agreement to do an unlawful act, or to do a lawful act in an unlawful man- ner. The distinction is now well estai)lished that in civil actions the cons[)ira(ty is not the gravamen of the charge, but may be both pleaded and proved as aggra\ating the wrong of which the plaintiff complains, and enabling him to recover against all as joint tort-feasors. If he fails in the proof of a conspiracy or concerted design, he may still re- cover danuiges against such as are shown to be guilty of the tort without such agreement."^ In a recent case in Mary- by statute in all cases the l:i\v of shonld say that it is a criminal criminal conspiracy. But this offense for two or more persons, difficulty is not confined to these corruptly or maliciously, to con- cases. There are other offenses at federate and aijree tojrether to de- common law that are not defined prive another of his liberty or by any statute. The statute pre- property. Such a rule is proxi- scribes a penalty for such cases mately correct and practically without attempting to define in just." State v. Glidden. .">.") Conn, advance the acts which shall con- 4G, 70. etitute an offense. It is left for the • Van Horn v. Van Horn, 52 N. court to determine in each partic- ,1. L. 284, 286. ••We have not pre- ular case whether It is or is not an sented for determination in this offense. ♦ * ♦ If we were to pieadinf^ the vexed question, attempt to jjive a rule applicable wliether an action will lie ajjainst to this branch of the subject, we a third person for the malicious § 7*J.] CONSIMRACIKS IN HKSTUAINT OK TKADK. 'J'M liind, the court said : "It is a general rule that a eonspiraey cannot be made the subject of a civil action unless sonie- thiuir is done, which, without the conspiracy, would give a right of action. The danuigo done is the gist of the action, not the conspiracy. Where the mischief contemplated is a(conn)lishcd, tlie conspirac}' becomes imj)ortant, as it may affect the means and measures of redress. The party wronged nuiy look beyond the actual participants in commit- ting the injury and join with them as defendants all who conspired to acc()mplish it, and the fact of conspiracy nuiy aggravate the wrong; but the simj)le act of conspiracy does not furnish a substanti\'c ground of action."^ § 79. The Rule in Eii^hind. — The rule, as established by the recent decisions of the English courts, is somewhat more tolerant of agreements in restraint of trade than the American decisions. In the recent leading case of the Mogul Steamship Company v. McClrcgor, the defendants, who were tirms of shipowners, trading l)etween China and Eurojx'. with a view to obtaining for themselves a monopoly of the homeward tea trade, and thereby keeping u\) the rate of freight, formed themselves into an association, and offered to such merchants and shippers in China as shipped their t<'a c\(hi>ivcly in vessels belonging to nicnilx-rs of the association a icbatc of "> per cent, on all freights paid by them. The plaintiffs, who were rival shipowners trading between China and Europe, were excluded by the (h'fend- ants from all the benefits of the association, aiid. in eonse- (juence of such exclusion, sustained damages. It was held that the association, being formed by the (h'fendants with the view of keeping the li'ade in theii- own hand>. and not with piocureiiicnt of the lneacli of a (liiccd. wlicii tin' caiisc of iiclion is contr.ict, if by siifh procnreinent considored aa l)flonijin«j to the damage was intended to result, class in which inalice. in the sense and did result, to the plaintiff, of actual ill will, is ii necessary Luniley v. Gye. 2 Kl. it HI. 'ilt;; element."' /6jd. Brown v. Hall. I-. It. '• (^ H. Div. ' Robertson v. Parks. 76 Md.l18; 333. In Ihv opinion of Mr. Pollock s. c.. 24 .Vtl. Hep. 411. 413. See («ftj .sjip»vi). the difficulties in such also Kimball v. Ilarmnn. 34 Md. cases disappear, or are greatly re- 407; Cooley on Torts. Pi"). 232 CONSPIRACIES IN KKSTRAIXT OF TRADK. r§ '5*- the intention of I'uininLr iIh' trade (;f the plaintiffs, or throiiofh any personal malice or ill will towards them, was not unlawful and that no action for conspiracy was main- tainable.' In the ojjinion in this case, Lord Justice ^ Mogul Steamship Co. v. Mc- Gregor. L. R. 23 Q. B. Div. 508. This case was taken to the House of Lords and there aflirnied. The opinions of Lords are elaborate, and state most fully the position of English courts upon this ques- tion. The ease is reported in L. R, (1892) App. Cas. 25. At page 49, Lord Morris says : "My Lords, the facts of this case demonstrate that the defendants had no other, or further object, than to appro- priate tlie trade of the plaintiffs. The means used were: Firstly, a rebate to those who dealt exclu- sively with them; secondly, the sending of ships to compete with the plaintiffs' ships; thirdly, the lowering of the freights; fourthly, the indemnifying other vessels that would compete with the plaintiffs* ; fifthly, the dismissal of agents who were acting for them and the plaintiffs. The object was a lawful one. It is not illegal for a trader to aim at driving a competitor out of trade, provided the motive be his own gain by appropriation of the trade, and the means he uses be lawful weapons. Of the first four of the means u-ed by the de- fendants, the rebate to customers and the lowering of the freights are the same in j)rinciple. being a bonus by the defendants to custo- mers to come and deal exclusively with them. The sending of ships to compete, and the indemnifying other ships, was the 'competition' entered on by the defendants with the plaintiffs. The fifth means used. vi/. : the dismissal of agents might be questionable according to the circumstances; but in the present case, the agents filled an irreconcilable position in being agents for the two rivals, the plaintiffs and the defendants. Dis- missal under such circumstances became, perhaps, a necessary in- cident of the warfare in trade. All the acts done and the means used, by the defendants, were acts of competition for the trade. There was nothing in the defendants' acts to disturb any existing contract of the plaintiffs or induce any one to break such. Their action was aimed at making it unlikely that any one would enter into contracts with the plaintiffs, the defendants offering such competitive induce- ments as would probably prevent them. The use of rhetorical phrases in the correspondence cannot affect the real substance and meaning o^ it. Again, what one trader may do In respect of competition, a body or set of traders can lawfully do; otherwise, a large capitalist could do what a number of small capitalists, combining together, could not do. and thus a blow would be struck at the very prin- ciple of co-operation and joint stock enterprise. I entertain no doubt that a body of traders, whose motive object is to promote their own trade, can combine to accjuire, and thereby in so far to injure the trade of competitors, provided they do no more than is incident to such motive object, and use noun- lawful means. And the defend- ants' case clearly comes within the §79.] CONSPIRACIKS IX RKSTRAINT OF TUAOK. ■>'6'6 Bowt'ii said: "To say tliat a iiiaii is to trade freely, Imt that he is to stop sliort at any act which is calciihitcd to harm otlior tradcsincii, and which is desijjjiied to attract business to his own shop, would he a strange and inipossihh' counsel of perfection. r)ut wc were told that competition eeases to be the lawful exercise of trade, and so to be a lawful excuse for what will harm another, if carried to a lenijth which is priiicipk' I buvt' .stated. Now. as to the contention that the combi- nation was in ifstiaint of trade, and, therefore, iliejjai : In the first phiee, was it in restraint of tiade? It was a volnntary combination. It was not to continue for any tixed period, nor was there any penalty attached to a breach of the engage- ment. Tlie operation of attempt- ing to exclude others from the trade might be, and was. in fact, beuelicial to freighters. Whenever a monopoly was likely to arise with a consequent rise of rates, conipetin"on would naturally arise. I cannot .-ee why judges should be considered specially gift<'d with prescience of wliat may hamper or what may increase trade, or wliat is to be the test of adecpiate remu- neration. In these days of instant communication with almost all parts of the world, competition is the life of trade, and lam not aware of any stage of competition called •fair' intermediate Ijetween lawful and unlawful. The (piestion of •fairness" would be relegated to the idiosyncrasies of individual judges. I can see no limit to competition, except that you sliall not invade the rights of another. Hut sup- pose the combination in this case was such as might l)e held to l)e in restraint of trade, wliat follows? It could not be enforced. None of the parties to it could sue each other. It might be held void, be- cause its tendency might be held to be against the i)ublic interests. Does that make ppr se the combi- nation illegal ? What a fallacy would it be that what is void and not enforceable becomes a crime; and cases abound of agreements which the law would not enforce, but whieh are not illegal; which you may enter into, if you like, but which you will not get any assist- ance to enforce.'* Lord llannen, at page UO. says : ••In considering the question, however, of what was the njotive of the combination, whether it was for the purpose of injuring others, or merely to bene- fit those combining, the fact of several agreeing to a common course of action may be important. There are some forms of injury which can only be effected by the combination of many. Thus, if several persons agree not to deal at all with a particular individual, as this could not, under ordinary circumstances, benefit the persons so agreeing, it might well lead to the conclusion that their real ob- ject was to injure the individiuil. Hut it appears to me that in the present case there is nothing indi- cating an intention to injure the plaintiffs except in so far as such injury would be the result of the defendants obtaining for them- selves the benefits of the carrying trade, by giving better terms to customers than their rivals, the plaintiffs, were willing to offer." 234 CONSPIRACIES IN RESTRAINT OF TRADE. [§ 79. not fair or rea.soiiable. The offering of redueed rate.s by the defendants in the present case is said to have been 'unfair.' This seems to assuine that, apart from fraud, intimidation, molestation or obstruction, of some other personal right in rem or in perfionam, there is some natural standard of 'fairness,' or 'reasonableness' (to be determined by the in- ternal consciousness of judges and juries), beyond which competition ought not in law to go. There seems to be no authority, and I think, with submission, that there is no sufficient reason for such a proposition. It would impose a novel fetter upon trade. The defendants, we are told by the plaintiffs' counsel, might lawfully lower rates, provided the}' did not lower them beyond a 'fair freight,' whatever that may mean. But where is it established that there is any such restriction upon commerce? And what is to be the definition of a 'fair freight?' It is said that it ought to be a normal rate of freight, such as is reasonably remunera- tive to the shipowner. But over what period of time is the average of this reasonable remunerativeness to be calcu- lated? All commercial men with capital are acquainted with the ordinary c\j)cdicnt of sowing one year a crop of apparently unfruitful prices, in order by driving competition away to reap a fuller harvest of profit in the future ; and until the present argument at the bar it may be doubted whether shipowners or merchants were ever deemed to be bound by law to conform to some imaginary 'normal' standard of freights or prices, or that law courts had a right to say to them, in respect to their competitive tariffs, 'thus far shall thou go and no farther.' To attempt to limit English competition in this way would probably be as hopeless an endeavor as the experiment of King Canute. But on ordinary princii)les of law no such fetter on freedom of trade can, in my opinion, be warranted. A man is bound not to use his proj^ert}' so as to infringe upon another's rights. Sir ntere (no nf alieniuni non hrdas. If engaged in actions which may involve danger to others he ought, speaking generally, to take reasonable care to avoid endan- gerinjj them. Hut there is surelv no doctrine of law which § ^0.] CONSIMHAIIKS IN Ui:s lUA 1 NT OF TRADK. 235 compels him to use his propi'itv in a way that judjices and juries may eonsider reasouahh*. If there is no such fetter upon the use of property known to Knij^lish law, why should thci'e We any such a fetter ujton trade?"' § 80. Conspirsiey by a CorporJition. — It is well settled that an action may he maintained airainst a eori)orati()n to reeover daniaojes caused by a conspiracy. The leadinu^ case on this subject was an action brought against several defendants, some of whom were bodies corporate and some individuals, for the recovery of damages caused bv an alleged co!isi)iracy. The defendant demurred to the com- plaint on the grounil that it did not state facts sufficient to constitute a cause of action in this particular, to-wit : that a corporation is not caj)able of being a party to a con- spiracy.- In the opinion in this case, the court said: "We ■ Mogul Steamship Co. v. Mc- Grecror, L. R. 23 (^ B. Div. MS. 2 Buffalo Lubricating Oil Co. v. Standard Oil Co., lOG X. Y. (iG9; s. c, 25 Cent. L. J. 587. See also Morton v. Metropolitan Life Ins. Co.. 34 Hun, 3(17 : afliiined in 103 X. Y. 645: Heed v. Home Sav. Bank. 130 Mass. 443; Kiulevitz v. Eastern R. Co.. 140 Mass. 573; s. c. 5 X. E. Rep. ."lOO; Western Xew9 Co. V. Wiliiiarch, 33 Kan. 510; s. c. (J Pac. Rep. 78(1; Sam- uels V. Evening Mail .\s3*n, Hun, 288; Howe Machine Co. v. Louder, 58 Ga.<>4; Hawkins v. Xew Orleans Printing Co., 29 La. Ann. 1:^.4; Hewitt V. Pioneer Press Co.. 23 Minn. 17S: Turnery. Plm-nix Ins. Co.. 21 X. W. Rep. 32t;; Merrills V. Tariff Mfg. Co., 10 Conn, 384; Humes v. Knoxville. 1 Ihunph. 403; Illinois, etc. R. Co. v. Reedy. 17 111.580; Hazen v. Boston Bridge Co., 2 Gray. 575; Bloodgood v. Mohawk, etc. R. Co., IS Wend. 9; Goff V. Great Xorthern R. Co., 3 E. \- E. ('.72: S. c, 30 L. J. (^ H. 140: Maimd v. Monmouthshire Canal Co., 4 Man. & G. 452. "Another important legal proposi- tion in the ease is so clear upon principle, and so distinctly settled l)y authority, that nothing but con- fusion can tlow from its discussion. It will bear no more than plain enumeration. A corporation is liable to the same extent and under the same circumstances as a natural person for the consequences of its wrongful acts, and will be held to respond, in a civil action at the suit of an injured party, for every grade and description of forcible, malicious or negligent tort or wrong which it commit'^, however foreign to it.s nature or beyond its (jrantfd patcers the wrongful trans- action or act may be. Life it Vwe Ins. Co. V. Mechanics* F'ire Ins. Co.. 7 Wend. 31 ; .Vngell on Corp.. §§ 382. 388. 391 ; .\lbert v. Savings Bank. 2 Maryl. Dec. I(i9; Good- speed V. F2ast Iladdam Bank. 22 ('onn. .'>41; Bissell v. Michigan .Southern & Xorthern Indiana R. R. Co.. 22 X. Y. 305. 309. per Selden. 23(j CONSPIRACIES IN RESTRAINT OF TRADE. [§80. entertain no doubt thiit an action against a corporation may be maintained to recover damages caused by conspiracy. If actions can be maintained against corporations for malicious prosecution, libel, assault and battery and other torts, we J.; Wendell's Blackstone. [note] 476; Green 'v. London Omnibus Co., 7 C. B. (N. S.) 290; Frankfort Bank v. Johnson, 24 Me. 490; Phil- adelphia & Baltimore Ry. Co. v. Qiiij^Iey. 21 How. (U. S.) 209, and eases cited by Campbell. J." New York & X. h! R. R. Co. v. Schuyler, 34 N. Y. 30, 50. "In the earlier cases, it was held that an action of trespass could not be maintained against a corporation aggregate, for the technical reason that a capias and exigent, the proper process in actions of trespass, would not be against a corpora- tion; but this technical objection was not uniformly yielded to. as instances of actions of trespass against corporations are to be met with as early as the year books A and A. Corp.. § 38."); notes to Maund v. Monmouthshire Canal Co.. 4 Man. & G. 454. As corpo- rations became more numerous and were multiplied, until aggregated capital, seeking investment for the purposes of business, is generally invested under acts of incorpora- tion to protect individuals from personal liability, technical objec- tions which stood in the way of subjecting corporations to actions founded on torts have been entirely swept away, and corporations have been held liable for all torts, the same as individuals. That they may be sued in trover, care, tres- pass fjuare claitsuin fregit, trespass VI et arviis, and ejectnient. is abun- dantly established by the cases cited by Green, C. J., in State v. Morris & Essex R. Co., 3 Zab. 3G7. A corporation is liable for injuries resulting from neglect to repair a bridge, where the obligation to re- pair lies on them. Ward v. New- ark & Pompton Turnpike Co., Spenc. 323; for obstructing the flow of water, whereby lands are overflowed. Tinsman v. Belvidere Delaware R. R. Co.. 1 Dutcher, 255; Chestnut Hill Turnpike Co. V. Rutter. 4 S. ct R. G; for making an unlawful distress. Smith v. Bir- mingham & Staffordshire Gaslight Co., 1 A. & E. 52(j; for deceit and fraudulent representations, Fogg v. Griffon, 2 Allen, 1 ; National Ex- change Co. V. Drew, 32 Eng. L. & Eq. 1 ; Barwick v. English Stock Bank, L. R. 2 Excheq. 259; for fraud in issuing spurious stock, N. Y. & N. H. R. R. Co. V. Schuyler. 38 Barb. 534; s. C. 7 Tiffany. 30; for wrongfully and maliciously ob- structing a party in his business. Green v. London Omnit)us Co., 7 C. B. (N-. S.) 290; for maintaining a vexatious suit. Goodspeed v. East Haddam Bank. 22 Conn. 530; for a malicious libel. Whitfield v. S. E. Ry. Co., E.. B. ct E. 115; Phil- adelphia c^ W. c^- B. R. R. Co. v. Quiglcy, 21 How. 202; for an assault and battery and false im- prisonment. Railway Co. v. Broou). 6 Excheq. 314; Chilton v. London, etc. R. Co., 10 M. & W. 212; Roe V. Railway Co., 7 Excheq. 30; Seymour v. Greenwood. 6 U. & N. 359; Goff V. Great Northern R.Co., 3 E. & E. 672; Moore v. Fitchburg R. Co.. 4 Gray. 465; Hewit v. Swift. 3 Allen. 420; Evansville it Crawfordsville R. Co. v. Baum, 26 § }Sl.1 CONSPIRACIES IN RKSTRAINT OF TRADK. '2-M e;in jierceive no reason for holding that actions may not he niaiiitaiucd aiiumst thonj for conspiracy. It is well settled hy the authorities cited that the malice and wicked intent needful to sustain such actions may he imputed to corpora- tions. A careful scrutiny of the complaint in each action has convinced us that sufficient facts are alleged to show that the appellant was a party to the conspiracy set forth, and that sutficient facts are, therefore, alleged in the com- plaint to show a cause of action against it."^ The pojjular assumption that "a corporation has no soul," and, in con- sequence, no conscience, may be accepted both in law and in equity, but it is the holding of the courts that it is, to such an extent, in possession of the reasoning faculty as to be capable of a l)usiness offense for which it is to be held legally if not morally responsible. § 81. Combinalion to IVIonopolize a Particular Branch of Business. — A combination, the object of which is to obtain control of a particular branch of business, is a con- spiracy, and all contracts for the accomplishment of this end are unlawful and void. So far as relates to its legality the extent of the cond)ination is immaterial. It may be confined to :i single city or town, or it may extend to a State or to a number of States, or it may include the country. The gist of the offense is the conspiracy or the combination for the purpose of accomplishing the end sought. There is not entire harmony in the decisions of the State courts on Ind. 70.** Brokiiw v. X. J. K. & Transp. Co., 32 N. .r. L. 3JS. 329. See also, to the .«aine effect. Vance V. Erie Ry. Co.. 32 N. J. L. 334. '•Strictly spoakinjj. a corporation cannot, it-^eif. be guilty of fraud. But where a corporation is formed for the purpose of carrying on a trading or other specuhition for profit, such as forming a railway, these objects can only be accom- plished through the agency of in- dividuals; and there can be no doubt that if the agents employed conduct themselves fraudulently, so that if they bad been acting for private employers, the persons for whom tliey were acting would have been affected by tlieir fraud, the same principles must prevail where the principal imder whom the agent acts is a corporation." Ranger v. Great Western Ry. Co., 5 II. L. Cas. 72, S6. > Buffalo Lubricating Oil Co. v. Standard Oil Co.. lOG X. Y. f.tJO; S. c, 25 Cent. L. J. .'JS7. 238 CONSPIRACIKS IN RESTRAINT OF TRADE. [§ ^1- this point, but the rule, as above stated, is orenerally accepted. In the leading case of the Morris Run Coal Company v. Barclay Coal Company, the doctrine is stated by Mr. Justice Agnew, as follows : "There is a certain free- dom which uuist be allowed to every one in the manage- ment of his own affairs. When competition is left free, individual error or folly will generally find a correction in the conduct of others. But here is a combination of all the companies operating the Blossburg and Barclay mining regions, and controlling their entire productions. They have combined together to govern the price and supply of coal in all the markets from the Hudson to the Mississijjpi rivers, and from Pennsylvania to the lakes. This combina- tion has a power in its confederated form which no indi- vidual action can confer. The public interest nmst succumb to it for it has left no competition free to correct its baleful influence. Where the supply of coal is suspended, the de- mand for it becomes importunate, and prices must rise. Or if the supply goes forward, the price fixed by the confeder- ates must accompany it. The domestic hearth, the furnaces of the iron master and the fires of the manufacturer, all feel the restraint, while many dependent hands are para- lyzed, and hungry mouths are stinted. The influence of a lack of su})ply or a rise in the price of an article of such prime necessity cannot be measured. It permeates the en- tire mass of community, and leaves few of its members un- touched by its withering blight. Such a combination is more than a contract; it is an offense. 'I take it,' said Gib- son, J., 'a combination is criminal whenever the act to be done has a necessary tendency to prejudice the public or to oppress individuals, l)y unjustly subjecting them to the power of the confederates, and giving effect to the ])ur}H)se of the latter, whether of extortion or of mischief.' In all such combinations where the })urpose is injurious or unlawfid, the gist of the offense is the conspiracy. Men can often do by the combination of many what severally no one could accomplish, and even what when done by one would be innocent."' Where a c()ml)inati()n of this character is kept 'Morris llim Coal ("o. v. Barclay Coal Co.. OS Pa. St. 173.18(5. § -^1.] CONSIMI{.\(lKS IN KKSTUAINT OF TliADK 2;'>i) secret, ;iiul the appearance of competition is kept up, the secrecy of the act constitutes an ajjfti^ravation of tiic offense. In a case in Wisconsin, it was licld tliat any number of j)er- sons may lawfully form a co-partuership to buy the jjroduce of the country and sell merchandise, at any specified place. If such co-partnershi}) is in fact formed (though not so ex- pressed in the articles) for the purpose of preventing com- petition in the markets in which the firm may operate, and with the intention t)f keej)ing secret from the public the ex- istence of the agreement, and if its existence is thus kept secret and an appearance of com))etition between the parties nuiintained by them toward the })ublic, such executed inten- tion of secrecy and deception taints the agreement itself, and renders it illegal and voitl.' In Illinois it has been held ' Fairbanks v. Leaiy,40 Wis. U87. ••Neither is any other express stipuhition in the agreement illetral on its face. By the terms of the instrument, a co-partnership be- tween the parties to transact a hiw- ful business in an apparently law- ful manner was formed. Of course it does not recjuire arj^ument or citation of authority to sliow that five, or any other number of men, may lawfully form a co-i)artnership to buy the produce of the country and sell merchandise at Waupun, or any other place. But it does not necessarily follow that the aijreement under consideration is a valid one. Althou<;;h not ex- pressed therein, if that aijreement was in fact made for the purpose of prcventinj:^ competition in the markets in which the tirins might operate, and with the intention of keeping secret from the public the existence of the agreement, and if its existence was thus kept secret, and an appearance of competition between the parties maintained by them towards the public, sui-h exe- cuted intention of secrecy and de- ception tainted the agreement it- self, and rendered it illeg:ii and void. In that case, no rights can be enforced under such illegal agreement by any party against another party thereto. The law does not, and did not. require that these parties should compete in the purchase of produce. Individually, eacih had an undt)ul)ted right to bid therefor as low as he pleased. Col- lectively they had the same right, unless deception was practiced on the i)ublic. But if they held them- selves out as competing purchasers, and knew that the people who sold in the markets where they operated relied upon such competition (as well they might) as a guaranty that they were obtaining the full market value of their produce, while, at the same time, the piu'- chasers were not in c()mpetitihip Co. V. McGregor. I.. K. 23 (^ IJ. Div. 598; s. c., L. K. (1892) App. Cas. 2."). Wliiit one man IG may lawfully do singly, two or more utay lawfully agree to do jointly. The number who unite to do the act cannot change its char- acter from lawful to unhiwful. Tiic gist of a private action for the wrongful act of many is not the I'onibination or conspiracy, but the damage done or threatened to the plaintiff by the acts of the defend- ant. If the act be unlawful, the combination of many to commit it may aggravate the injury, but can- not change the character of the act. In a few cases there may be some loose remarks apparently to the contrary, but they evidently have their origin in a confused and inaccurate idea of the law of orig- inal conspiracy, and in failing to distinguish between an unlawful act and a criminal one. It can never be a crime to combine \(> commit a lawful act, but it may be a crime for several to conspire to connnit an unlawful act. which, if done by one individual alone, al- though inilawful, would not be criminal. Hence, the fact that the defendants associated them.-elves together tt) do the act complained of is wholly immaterial in this case. We have refern-d to this for the reason that coimsel has laid great stress upon the fact of the combination of a large number of l)er>ons. as if that, of itself, ren- 242 C'oxspiRACiEy ix mkstijaint of tkadk. [§ 82. })lie(l to the relation of [jriiicipal and airent. In a recent case in Texas it was held that a eontraet, l)y which a inanu- faoturer of winchnills ijranted exelusive territory for their siile to a Hrni, the windmills, after shipment, to remain the property of the maker until sold by the consignees, then to be paid for at a fixed price, was one of agency, and did not create a trust or conspiracy against trade as defined and prohibited by Act March ."»(), is.sO, p. 141, though it fixed the i)i'iccs at which the windmills were to be sold, and bound the consignees to handle no other kind: the statute having no application to contracts between principal and agent.' § 82. Goiubiuations for Regulating Prices. — An asso- ciation of ))usiness men, of firms or of corporations, the object of which is to control the price of any commodity, is held to be a conspiracy in restraint of trade, and as such illegal. All contracts for the carrying out of the purposes of such associations, as well as the covenant under which they are formed, are in contravention of pul)lic jiolicy and void. In a leading case in Ohio, a voluntary association of salt manufacturers was made for the purpose of selling and transporting that commodity. By th(> articles of associa- tion, all salt nnmufactured or owned by the members, when packe(l in barrels, became the |)r()perty of the com- ))auy, whose committee was authorized and reijuired to I'cgulate the price and grade thereof, and also to control the manner and lime of rcM-eiving salt from the members, and each member was prohil)ited from selling any salt dur- ing the continuance of the association, except by retail al the factory, and at prices fixed by the company. It was held thai such agreement was in restraint of trade, and void as against piddic policA.-' In the ()])ini()n in this case the tloipd tlicii- conduct actionabU'. 1-15: I'ayne v. Wesitcrn i<: Atlantic liowen V. Mathcson. 14 Allen. -lOD: II. Co.. 1:5 Lea, T)!)?."* Ilnd., 'IXi. Moj;iil Stt'ain IN UKsriiAi.N r m- ikadi:. 2i:> court said: "Tho clear loiuloncy of such ai» aurccini'nt is to establish a uiouopoly and to destroy conipetition in trade, and for that reason, on irrounds of |)uhlic policy, courts will not aid in its enforcement . It is no answer to sa\ that V. McCononghy, 79 111. 349; \;il- tiie contract. 'I'bal a combination cnline v. Stewart, 15 Cal. 41)4; to effect fJiich a purpose is inimical I"ro>t V. Moi-e, 40 Cal. 347; Peo- to the interests of the public, and pit' V. Fisher, 14 Wend. 9; Stanton that all contracts designed to effect V. Allen, ") Denio, 434; Saratoga such an end are contrary to ))ublic Hank v. King. 44 N". Y. 87; Doolin policy, and therefore, illegal, is too V. Ward. (1 Johns. 194; Wilbur v. well settled by adjudicated cases How. 8 Johns. 444; Jones v. Cas- to be questioned at this day. Every well, 3 Johns. Cas. "29; Hood v. producer or vendor of coal or other I'alin, 8 Pa. St. 238; Milllin v. Com- commodity has the right to use all monwealth, 5 W. ct S. 4{>1 ; Pacific legitimate efforts to obtain the Factor Co. v. Adler, 90 Cal. 110; best price for the article in which s. c, 27 Pac. Rep. 36; Vulcan he deals. iJut when he endeavors Powder Co. v. Hercules Powder to artiticialiy enhance prices by Co., 9(3 Cal. 510; s. c. 31 Pac. suppressing or keeping out of the Rep. 581 ; Richardson v. Crandall. market the products of others, and 38 How. Pr. 142; Burt v. Place. G to accomplish that purpose, by Cow. 431; Darmotli v. Bennett. 15 means of contracts binding them Barb. 001; People v. Fisher. 14 to withhold their supply, such ar- Wend. 9; Hooker v. Vande water, rangements are even more mis- 4 Denio, 349; Tylee v. Yates. 3 chievous than combinations not to Barb. 222; Stanton v. Allen, 5 sell under an agreed price, (om- Deuio, 434; De AVitt Wire Cloth binations of that character have Co. v. New Jersey Wire Cloth Co., been held to be against public 14 X. Y. Siipl. 277. '"Bearing in policy and illegal. H they should mind liie fact foimd that the prod- be sustained, the prices of articles uct of the Butler company's mines of pure necessity, siieti as coal, was largely in excess of 2.000 tons tloiir and other indispensable com- per month the object of the agree- modities, might be ariiticially ment is plain. The defendant, raised to a ruinous extent far ex- wiihout binding hiujself to take ceeding any naturally resulting the whole product of the mines of from tlie proportion between sup- the Butler company, endeavored ply and demand. No illustration by this agreement to keep all of of the mischief of such contracts the coal of that company out of the is. perhaps, more apt than a mo- market, except the limited amoimt nopoly of anthracite coal, the which it agreed to lake, and thus region of the production of which to artificially enhance the price of is known to be limited. Parties that necessary commodity, 'ibis entering into contrai-ls of tliis de- purpose was the basis of the whole scription must depend upon each agreement, and as is found by the other for their execution, and can- referee, was understood by both not derive any assistance from the parties at the time of entering into courts." Arnot v. Pittston & El- 244 CONSPIRACIES IN RESTRAINT OF TRADE. [§82. competition in the salt trade was not, in fact, destroyed, or that the price of the coniinodity was not unreasonably ad- vanced. Courts will not .stoj) to iuiiuire as to the degree of injury inflicted upon the publi(;; it is enough to know that the ineyitablc tendenc}- of such contracts is injurious to the mira Coal Co.. 08 X. Y. 558, 565. ••In Rex V. I)e Beienger, 3 M. & S. 67. it was held to be a con- spiracy to combine to raise the public funds on a particular day by false rumors. The purpose it- self, said Lord Ellenborough, is mischievous — it strikes at the price of a valuable commodity in the market, and if it gives a fictitious price by means of false rumors it is a fraud levelled against the pub- lic, for it is against all such as may possibly have anything to do with the funds on that particular day. Every 'corner" in the language of the day, whether it be to affect the price of articles of commerce. su(!h as breadstuffs, or the price of ven- dible stocks, when accomplished by confederation to raise or de- press the price and operate on tiie markets, is a conspiracy. The ruin often spread abroad by these heart- less conspiracies is indescribable, frequently filling the land with starvation, povertj' and woe. Every association is ciiminal whose ob- ject is to raise or depress the price of labor beyond what it would bring if it were left without artifi- cial aid or stimulus. Ilex v. Hyer- dike, 1 M. & S. 170. In the case of such associations the iilcgality consists most freiiucntly in the means employed to cany out the object. To fix a standard of prices among men in the same employ- ment, as a fee bill, is not in itself criminal, but nuiy become so when the parties resort to coercion, re- straint or penalties upon the em- ployed or employers; or what is worse, to force of arms. If the means be unlawful the combina- tion is indictable. Commonwealth V. Hunt, 4 Jletc. 111. A conspiracy of journeymen of any trade or handicraft to raise the wages by entering into combination to coerce joiuneymen and master workmen employed in the same branch of industiy to conform to rules adoi)ted by such combination for the purpose of regulating the price of labor and carrying such rules into effect Ijy overt acts, is indicta- ble as a misdemeanor. 3 Wharton, C. L.. citing The People v. Fisher, 14 Wend. 9. Without multi[)lying examples, these are sufficient to illustrate the true aspect of the case before us, and to show that a combination, such as these com- panies entered into, to control the supply and price of tlie Blossburg and Barclay regions, is illegal, and the contract therefore void." Mor- ris Kim Coal Co. v. Barclay Coal Co.. 68 Pa. St. 173. 187. In Mill and Lumber Co. v. Hayes, 76 Cal., at pajre 302. the court says: "•In the case at bar the facts are. as we think, even stronger against the jilaintiff than in Arnot v. Pittston and Elmira Co., 68X. Y. 558. Here, it entered into a contract with the object and view to suppress the supply and enhance the price of lumber in four counties of the State, The contract was void as being against public policy, and the defendants, as they had aright to do, repudiated the contract. § 32.] CONSPIRACIES IN RESTRAINT OF TRADE 245 public' In (he recent lending ease of Ford v. Chicago MilU Shippers Association, before the Supreme Court of Illinois, it was held that an association formed for the pur- pose of regulating the i)rice of milk sold by the members thereof in a particular city to retail dealers, which purpose is carried out by the concurrent action of the members and the association, is within the Act of June 11, 18!)1, j)ro- hibiting pools, trusts and combinations. The incorporation of a body of milk ship})ers, who have combined to tix the price of milk, in violation of the Act of rhine 11, 181)1, to prevent pools, trusts and combinations, will not render the combination legal on the ground that the corporation can- not alone enter into a trust, as the acts of the corporation arc those of the associated i)ersons as individuals. Tlie Act of June 11, 1891, forbidding pools, trusts and combinations to control the j)rice of any commodity, applies to a corpora- tion formed previous to its passage. ^ In the opinion in this case, Mr. Justice Phillips said: "The statute by its terms makes a combination, trust or agreement between corpora- tions, partnerslii})s, associations or individuals to fix the price of any article of merchandise, or to limit the amount Plaintiff, who li:i.< partod willi purpose of takinj; trade out of the nothiriij of value, now seeks to re- realm of competition, and thereby cover damat^es for non-delivery of enhancini^or depressing prices of lumber under thiscontract. Plaint- commodities, the courts cannot be iff liad an undoubted right to pur- successfully invoked, and their chase any or all of the lumber it execution will be left to the voli- chose, and to sell at such jirices tion of the parties thereto." and places as it saw lit, but when, ' Central Ohio Salt Co. v. Guth- as a condition of purchase it bound rie, H.") Ohio St. <>72. its vendor not to sell to others un- - Ford v. Chicago Milk Shippers der a penalty, it transcended a Association. 1.").") III. KiG; s. c, :i9 rule the adopti(^n of which has X. E. Kep. (>.")]. See also Central been dictated by the experience Shade Roller Co. v. Cushman. 143 and wisdom of ages as essential to Mass. 3.")3; s. c, 9 X. E. Rep. G29: the best interests of the commu- Urmston v. Whitelegg. 63 L. T. nity. and as necessary to the pro- tection alike of individuals and legitimate trade. Willi the results naturally tlowing from the laws of demand and siipply. the courts have nothing to do. but when agreements are resorted to for tht- 455; .ludd v. Harrington. 19 X. Y Supl. 40(>: Stanton v. Allen, 5 Denio, 434; .Vnderson v. Jetl, 89 Ky. 375; s. r.. IJ S. W. Hep. G70; Handforth v. .fackson. ].">() Mass. 149. '2ii'< ( -()l(L an offense, wliidi is soiiniit to be prohibited; and it I'arlher providcvs lh;ii a piircliaser of any artiele or eoMiiuodily from any individual, eonipany or corporation ti'aiisaci in^- business eoiitrary to the preceding sections of the act siiall not l)e liabh- for the i)i"ice or i)ayment of such artich' or coiniuodity. The |)urpose of the nrranlished thr()Uiih I he corporation were illegal. To carry out such puiposes it stands as the active business agent of the mem- bers who are stockholders, contracting with it to carry out the i)ur|)oses of the organization. It is a coinl»ination in violation (d" the statute and in restraint of trade. Any purchaserof any connnodity thus sold by such organization is not liable for the price thereof."' \j S.'J. Conspiracies under the Federal Anti-Trust Act. — Section first of the Act of Congress of duly iM. iSiK). provides that "every contract, combination in the form of trust or otherwise, or cons[)iracy. in restraint of trade or commerce aniongthe several States or with foreign nat ions, is hereby declared to be illegal. Every person who shall make any such contr;icl. or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by tine not ex- ceeding live thousand dollars, or b\' ini|>i'isonment not ex- ceeding on(^ year, or by both saitl punisliments, in the dis- cretion of the court."" In a recent case before the United States Circuit ('ourt for the Middle District of Tennessee, it was held that an agrei-ment between coal mining com- panies, operating chielly in one State, and dealers in coal in a city in another State, creating a coal exchange to ad- \ance the interests of the coal business, to treat all i)arties to the business in a fair and ecpiitable manner, and to estab- lish the price of coal, and change the same from time to ' Ford v. Cliicngo Milk Sliip|M'is A^sociMtioii. 1.").") HI. Kid. 179; s. c, 39 N. K. no\^. ti.")!. § 83.] CONSIMKACIKS IN KKSTKAINT OK TKADK. '^ll time, 1)V wliirli it was aurccd that the i)ricc nl' the coal al the iui!ie.s should he 4A cents, the freiirht heiiiix I cents, and the niaririn of the dealer should I)e 4A cents. niaUiuL^ the price to the consumer 13 cents, and that whenever the price of the coal is advanced heyond an advance in freiirhts, one- half the advance shall rs or oi)erators rf mines to sell coal to any persoii other than members of the orirunization, and for dealers to purchase of miners who were not members, but exempting coal used for manufacturiuir and steamboat purposes from the prices prescribed until all the mines tributary to that market should come into the exchange, or until the exchange could eontrol the prices of coal used by numufacturers, is within the language of the Federal anti-trust act declaring "-every contraet or combination in the form of a trust or other- wise, or conspiracy in restraint of trade or commerce among the several States." and also the monopolizing or combination with another to nn)nopolize, trade or commerce among the several States, a misdcMneanor.' ' United States v. Ji-llico Moiin- Iweon the miner aiul dt'alei. tin- tain Coal & Colic Co., 40 Fed. liep. prices are fixed Ijy tliciii, and tlie 432. "These provisions, so far as miner and dealer only me eli<;ib!e this combination could do so. fixed to membership. The miners of the lowest price of coal to consii- tlie concern cannot sell to any mers in and near Xastiville at dealer in or near Nashville who is thirteen cents i)er bushel, and pre- not a party to the agreement, nor vented coal beinj; sold there at a can sucli dealer iturchase coal of cheaper rate, no matter how much any miner anywhere who is not a less it mi<;ht co-^t in an open and member of the body. The opera- unobstructed market. Nor is this lions of both are conJined within all. The exchange ordains tliat the membership. So far as Xash- •owners or operators of mines sliall villa is concerned, they cannot go not sell or stjip coal to any firm, to cheaper or more favorable mar- person or corporation in \a!«hville IxCls. or deal with those who would or West Nashville or Ea>t Nash- give more favorable terms. Tiie ville, who are not memi)ers of ttiis restraint is i)ositive and undenia- exchange.' The coal trade is con- ble. .Moreover, in the first section fined, so far as the market supply of the by-laws of the exchange it is concerned, to transactions be- is asserted that 'all coal u««'d for i>48 ( NsriKACIKS IN RESTRAINT OF TRADK. [§ '^4. § S4. Coinbiiiation to Prevent Competition at a Jiidi- vial Sale. — Hiddiiiu- ;it a judicial sale is not a Iciral obliua- lion. All persons are free to attend judicial sales, or to re- frain from attendin Mass. .^)92, r)93. See also Pliiupen V. Stickney,3 Met. 384. 387; Fuller V. Dame, 1.S Pick. 472; Rice v. Wood, 113 Mass. 133. >>There is nothing either in law or morals to prevent parties from uniting to- gether in good faith to purchase property, whether it is offered at public auction, or, as in the present case, advertised for sale, and bids from purchasers are invited. In Sewell V. Jones. 1 W. & S. 129. where there was a purchase of l)roperty at sheriff's sale by several Tenors who united therein, the bid being nuide by one of their num- ber, and the sale was impeached as for that reason fraudulent and against i)ubiic policy, Chief Jus- tice Gibson said : 'It is not to be doubted that lien creditors, as well as others, may purchase jointly at sheriff's sale, if all be open and fair; a combination of interests for that iiuipose is not necessarily cor- rupt, and if it be forbidden, it must be by some principle of public policy. * * * It is, as we have said, the end to be accomiilished which makes such a combination lawful or otherwise. If it be to depress the price of the property by artifice, the purchase would be void; if it be to raise the means of payment by contribution, or to divide tlic proi)erty f<»r the accom- modation of the purchasers, it will 'be valid.' In I'iatt v. Oliver. 3 iSIcLean C. C. 27. it was said by Judge Mcfycan: 'To hold that in- dividuals may not associate to- gether for the purpose of purchas- ing lands of the United States at a public sale, would be a novel doc- trine, and contrary to what has been generally j)racticed by pur- chasers, and that under the sanction of the government.' '' Smith v. Ullman, 58 Md. 183; s. c. 42 Am. Rep. 329, 331. '"It is true, a con- § 84.] CONSPIRACIES IN RESTRAINT OF TltADK. 2')1 iho |)riiu'iple. In none of the cases cited was the parly bound to bid; but, being at liberty to bid, he suffered him- self to be bought off in a way which might i)revent a fair eompetitit)n. The abstaining from bidding, ui)on concert, and \)\ agreement, under the promise of a beiu'tit for thus abstaining, is the very evil the law intends to repress. A public auction is open to every one; but there nuist be no cond)inati()n anu)ng persons competent to bid silencing such bidders, for the tendency to sacrifice the debtor's property is inevitable. The princii)le is of too salutary a nature to permit any refinenuMits which go to sap or subvert it ; and in England, the judges have uniformly held a strict hand over every attempt at fraud or circumvention at aiu'tions."' In Ji case in Massachusetts, it was held that by-bidding at an auction sale, advertised "to be positive,"' of land in lots. tract not to bid at a sheriff's sale, so as to defraud the defendant in the execiuion, or his creditors, will be declared void. Here, however, there was evidence whicli jiistilied subniittinj? to the jury that the de- fendant in the execution, and all his creditors affected by the sale, had notice of the arrangement be- tween the parties in this case. The verdict removes all pretext that any person interested in the sale was defrauded. The plaintiff in error cannot now invoke the rule, that under many circumstances his contract might have been contrary to i)ublic policy, and therefore void." Maffet v. Ijams, W.\ Pa. St. 20(5. ""The confederation of bidders being admitted or estab- lished by proof, it devolved upon the plaintiff to show that it was for the joint prosecution of a business enterprise, and not a mere desire to shut off or reduce competition. Now they depose that they had no design to get an advantage of the State, or to suppress bidding by which we suppose they mean bid- ding by persons outside of the combination. For certainly it could never have been contem- plat.ed that these dormant partners should be at liberty to put in in- dependent bids of their own if they chose. That would have been an art of bad faith to the jiartner- ship. Yet they show no other motive for combining, except the motive, so obvious that it will be inferred, of getting rid of the com- petition of each other by the sur- render of each to the other of a portion of the work and anticipated jirotits. We cannot presume they imited for want of means to under- take the entire job, for they had each proposed to do it singly and alone. * ♦ • 'j'he probable effect of the coml)ination was to reduce the competition to zero, and allow the i)ersons coricerned to dictate the prices to the board. Woodruff V. Berry. 40 .\rk. 2.')!. •JUS. 'Thompson v. Davies. K^ .Johns. 11-2. 11.^). 252 ("ONSl'IKACIKS IN KKSTKAINT OF TRADE. [§ 85. will rciidoi- llic snlc voidable by a jjurchasor iiifluoneed by such hiddiiiir, whether that bidding was upon the lot |)ui'(hased by him or upon lots ])reviously offered, oven thouirh sueh biddint; was instigated l)y the auctioneer with- out the seller's knowledge; but if it appears that he was not so influenced the sale is valid.' In a case in Illinois, the rule in regard to l)ids by sealed proposals is stated by the court, as follows: "There is never to be found in the terms of an auction sale a clause prohibiting the l)idders from combining together to prevent competition, still it is none the less unlawful for them to do so. The law im])lies every- thing which good faith and fair dealing require, and none the less so in the case of sales by sealed proposals than by open bids. In l)oth cases effects and consequences are to be considered, in determining what fair dealing and the true in- tent of the transaction re(]uired. This princij)le has long been applied to sales by open bids, and we cannot doubt that it ought to be api)lied where the bids are by sealed jjroposals."- § 85. Coinbiiiatioii to Destroy Competition. — In ordi- nary business affairs one i)erson may refuse to buy or to sell to another, or in anywise to transact business with him. And W'hat one person may do in this direction, two or more persons may unite in doing. A coml)ination to refuse to bu}' of a particular individual, or to sell to him, is not a conspiracy or an offense. Bui a combination to induce a third ])erson to refuse to sell to another, is a conspiracy, and a ground for a civil action. In a recent case it was held that no action for conspiracy will lie by a butcher against several dealers in beef cattle because they have com- bined to refuse to sell him beeves; but where the petition further alleges that defendants also induced a certain dealer in slaughtered meal likewise to refuse to sell him. such in- terference with his business is a cause of action, and it is error to sustain a demuri'er to the petition.' In the opinion Curtis V. Aspinwall. 114 Mass. ■' Del/, v. Winfrei-. SO Tex. 400; 187. s. c, l(i S. W. ]{op. 111. -It can- Webster V. Kri'ncli. 1 1 111. 254. not he lield that dofcMiflants had the riofht to luevent plaintiffs from § 85. J COXSIMKACIKS IN KKSTKAINT OF TliADlO. 253 ill this case the eoiirt said: ••I'laintiff s petition goes further than to eharge that eaeli of the defendants refused to sell to him. It charires that thev not only did that, but that thi'V induced a third person to refuse to sell to him. It tloes not api)ear from tlu' petition that their interference with the business of plaintiff was done to serve some leiriti- \nn\v \)[iv[)o>v of their own, l)ul that it was tlonc wantttuly sellinj; to consumers, or that such interference by them (defendants) was serving a legitimate purpose connected with their own busi- ness. To break plaintiffs down as competitors for the consumers trade might, it is true, result in benetit to defendants; but sucli a benefit, obtained in such manner, could not be deemed a legitimate purpose, within the meaning of the o[)inion quoted. Delz v. Win- free, SO Tex. 400; S. C, IG S. W. Rep. Ill; Morris Run Coal Co. v. IJarclay Coal Co., 08 Pa. St. 173. I'lainiiffs had tlie right to sell at wholesale or retail, or both, to the retail dealer and the actual con- sumer; and defendants had the same right, as well as the right to solicit and secure trade from i)laint- iffs" customers by underselling them. This would be legitimate. They could do this, and would not be responsible for tlie injurious consequences to plaintiffs' bu.-i- ness; but they could not, without some legal purpose directly serv- ing their own business, maliciously induce third persons not to trade with plaintiffs, and so injure them. Plaintiffs cannot recover for any injury, except such as re-ulls from the wanton and unlawful interfer- ence with i)lainliffs* business in influencing third persons not to trade with them, and only for the injury that has occurred." Olive v. Van Patten (1894), 7 Tex. Cir. App. G30; s. C, 2.') S. W. Rep. 4-28. '•Tiie plaintiff's action is for an in- jury resulting from the doing of a lawful act in a lawful manner. A person, with or without n'ason, may refuse to trade with another, so may ten or fifty persons refuse. An individual may advise his neighbor or friend not to trade with another neighbor; he may even command, when the com- mand amounts only to earnest ad- vice. * * * It is not an unlaw- ful interference with the trade of another to advise people to deal with his competitor, or to decline to do business with him. Nor is it now unlawful to coiubine to raise the rate of wages. More v. Ben- nett, 41 III. .\pp. 1G4; Ileywood v. Tilson. 75 .Me. "231 ; Payne v. West- ern Ry. 81 Tenn. 507; Mogul Steamshii) Co. v. McGregor, L. R. 21 Q. n. Div. 544; S. C., 23 Q. IJ. Div. 51tS : L. R. (18112) App. Cas. 25: Hoiin .Mfg. Co. V. Ilollis, 54 Minn. 223; s. c. .55 X. W. Rep. 1119; Can-w V. Rutherford, lOG .Mass. 1. • ♦ * The fact that such advice is given with a bad or malicious motive, does not render it unlawful or actionable. The law does not ordinarily consider the motive by which pcdple are actuated to law- ful acts, while motive plays a very im|Hirlant jiarl when unlawful pro- ceedings are under consideration." Waterman. J., in Ulery v. Chicago Live Stock Exchange, 54 111. App. 233, 240. L>.")i CONSPIRACIES IN RESTRAINT OK TRADE. [§85. .•111(1 maliciously, and thai it caiix'd. ;is they intciidcd it .should, })('cuniary loss to him. AN'c think the petition staled a cause of action, and (hat tlie demurrer should have l)een overruled."^ But in a recent ease it wa.s held that where the eontract between a railroad company and the proprietor of one of its eatinijj houses does not reijuire it to stop its trains at his hotel in order that passeni^ers ma} lake their meals there, it does not constitute an actionaljle <'on^])iracy. on the j)art of the comi)any. against such i)ro- j)rietor, for it to induce another to start an eatini«: house a short distance from him by agreeing to stop its trains there for meals.-' In the opinion in this case the court said : "We see nothing in the petition which charges an .actionable con- spiracy. Defendnnt had a right to run its trains as it saw fit, and also had the right to sui)ply meals to its passengers at any place it desired. The lease made between })laintiff and defendant did not obligate defendant to stop its trains for meals at his house. In doing what is charged against it, defendant was neither doing an unlawful act nor .-i law- ful .act in an unlaw ful manner. The motive with which one ' Delz V. Winfiee. 80 Tex. 400: s. c, IGS. W. Rep. 111. 2 Kelly V. Cbicago, M. & St. V. Ry., 93 Iowa. 430; s. c 01 N. W. Rep. 957. '-In Bowen v. Hall (GQ. B. Div. 333; 50 L. .1. q. li. 305; 44 L. T. 75; 29 W. R. 307), the broad principle is laid down that if a man induces one of two parties to a contract to break that contract, with the intent to injure the other party or to do himself :i benefit, he thereby commits an actionable wronj^. In this case the jury, in answer to the tirst (pies- tion put to them, found that the defendants did maliciously induce persons who had entered into con- tracts with the plaintiff to break those contracts. I think there w.is abundant evidence to support that finding. The second question in the case is as to inducing persons not to enter into new contracts with the plaintiff. The jury were asked whether the defendants ma- liciously conspired to induce per- sons not to enter into such con- tracts with the i)lainliff, and whether such persons were thereby induced not to enter into such con- tracts; and they answered in the allirmative. Does that answer amount to a lindinjr of an actiona- ble wrong? I think it does. The law appears to me to be that a combination by two or more per- sons to induce others not to deal with a particular individual or to enter into contracts with him. if it is done with an intent to injure that individual, and if he is thereby injured, is an actionable wrong." Temperton v. Russell, 4 Rep. (English) 370, 383. § Sl>.] COXSriKACIKS IN KKSTKAINT Ol" TIIADK. 200 tlot's :in art furnislics no cause of action unless there he st)nie Iciral wronjjj, and not then if it rehites to a l)reach of contract ,"' § 8C Conspiracy for Severing? the Uelatioii of Ji >linister to his Coiij;rojration. — The call of a minister to the jjastoral chai'ixe of a coniirciiation is a free act. There is no law, civil or ecclesiastical, that requires any consj^regation to call a i)articular minister. And where the pastoral or niinisteral relation has been established and has proved unsatisfactory to the conurciiation, such proper and orderly steps as are provided for l>y the constitution of the church nuiy betaken for the severinir of such relation. But, while the pastor is amenable to authority, civil and ecclesiastical, he has certain rights, not only as a citi/en, but also as a pastor, which the courts will enforce. The contract of a church or congrega- tion is not less binding than that of an individual, and any attem))t to break up the pastoral relation that assumes the form of a conspiracy will be held to be an actionable offense. In a recent case in Wisconsin, it was held that a complaint, reciting plaintiff's employment as minister by church otKcers, and charging defendants with "unla-vfully, maliciously and without just cause » • * conspiring, conniving and i'ontriving to injure the plaintiff, and break up his relations with the congregation as their minister, and to drive him from hi> position as minister, » « * .j^i j,, dcprjxc him of the support of said congrc'gation," followed by a recital of many acts done by defendants in pursuance of ••till- purpose aforesaid," is sufKciently definite and certain, and states but one cause of action (unlawful conspiracy), though it als(» recites that part of the defendants were trustees of the church, who (Mnployed plaintiff as minister.'' ' Kelly V. (;hic-:i;?o. M. iV St. 1'. his part (a point wliicli need not Ky. Co. (ISO;")), 9:^ Iowa. 4S<;: s. c.. he dccifled now), yet we are of til N. W. Hep. !»r>7. W,2. opinion that they could not do so - Fisher v. Schnri, 7:^ Wis. 370; hy vote without statinj; that as the s. c. 41 X. W. Rep. 527. "If the reason for rescission, and reciting defendants had a lejijal right to it in their vote. They gave him rescind their contract on the no notice of the reason for their ground of anterior immorality on vote, and ought not to be permitted 2i)G CONSPIHACIKS IN HKSTRAINT OT THADK. [§ HI. § 87. Iiulirtnu'iit for Couspirat y. — An inclictiiRiil fur conspiracy, in order to be valid, must detinitcly charge the particular oifense, stating its peculiar character and setting forth the particular circumstances under which it was com- mitted. It must definitely aver either the criminality of the act, or. if the ad is lawful, the criminality of the means em- ployed in accomplishing it. In a leading case in Iowa, an indictment for conspiracy, under the statutes, charged the offense in the foUowing words: "The said J B F and S D P, late of, etc., on etc., at etc., unlawfully and feloniously, did conspire and confederate together, with the fraudulent intent to do an illegal act, injurious to the administration of public justice, to-wit : did conspire and confederate together to show now for the first time what that reason was." Whitniore v. Fourth Cong. Soc. 2 Gray. 30(i. Tlie trustees of a Methodist Epis- copal church closed the church buildini^aojainst i lie duly appointed preacher, on the ground that it was not for the interest of the church that he should be its pastor, and that be was ajipointed against the wish of the majority of the members. Held, that they had no right lo do so. and after answer a mandatory injunction was issued, requiring them to open the building to the preacher and the church. White- car V. .Alit'bcnor. :!7 X. .1. K(]. (!. A minister of tlie gospel, or preacher, who is employed for a given time by his congregation, is entitled to be retained as the min- ister of the churcli. unless he loses that right by some fault of his own, and for good cause he may be dis- missed l)y the parish, but they cannot do so arbitrarily, as there is no legal distinction between a contract with a minister and his congregation, and any other civil contract for personal service. Con- gregation of Israel v. Peres, 2 Cold. 620. Where some of the charges made against a minister and laid before a council furnish ground for a compul-ory dissolution of his contract with his society, and others do not, and the result of the council states tliat several of the charges were proved, but without specifying wlilch. their recommen- dation of a dissolution of a contract can have no effect. I'arol evidence is not admissible to show which charges the council considered to be proved. An ex parte council should be composed of men who are presumed to be impailiai. and who have not prejudged the ca.>-e : — s(i iliat wlicre some of the mem- bers of a council, called by the society alone, had been members of a previous council, which iiad decided against tlie minister upon the same charges, a similar result of the rx parte council was held to be of no validity. Thompson v. Catholic Cong. Soc, 7 Tick. KiO. A priest may be removed from his congregation at the pleasure of the bishop without trial. lie cannot, however, be suspended from his priestly functions without specific accusation and trial. Stack v. Ollara. !t8 Pa. St. 213. § •^■^.] (•()NSI*IUAS Iowa. .V)-J. Set' also Stale v. .lones, 13 Iowa. •Hii): Comnionwealth v. East. 1 Cush. 1S!». -224: ('oininonwcalth v. Shodd. 7 Ciish. .J14. ••Ttie offense of conspiracy may. it i^^ tiiie. be complete without the commission of the overt act at which the con- spirators agreed to commit. Com- monwealth V. Jiidd, 2 Mass. 3'JS: Commonwealth v. Warren, tj Mass. 74: State v. liiiehanan, ."> liar. iV: .1. :{17: State V. Xoyes.-2."» Vt.4ir). It would seem to follow that. thoui;h the overt act may have ijeen com- mitted, it is unnecessary to charge it. unless the indictment is drawn under a statute which requires that it should lie charged. In 2 Hishop on ( riminal Law. § 203. the authoi' says: -In cons|)iiacy. the indict- ment usually sets oiU the matter aggravating the offense: yet the offense exists without this matter, and. -tiietly, it net-d not be stated in tlie indictment, though some authorities hold otherwise." On this point we observe that in 3 Greenleaf Evidence. § '.)'k tin- learned author seems to regard tin- rule as different from what l{i>liop does. He says: "If the conspiracy was carried out to the full accom- piit\ Iowa. 143. 14r>. 'J'i>^ co.NM'iUAc ii> I.N i:i;m i:.viNi' of iirADi:. [§ H7. l(» do Ji criiiiinal ad, or an ad tlial i> not crimiiial hv ilk'ual means. In the first cax-. an indict nicnt f(»r an offense is siittieient, if it l>e docribcd l»\ the proper name or terms l»v wliicli it is i^eiu-rally known in the law. In the otlwr in.stanci', the nnlawfni incan> hv which the act const itnting the basis of tlie offense, niuU'r the cond)ination or agree- ment, is eharged to have been intench'd to be (h)ne. mnst be j)artieuhirly set forth. The reason of the ruh' is ol)vions. To do an act that is not .an offense, by means that arc not nidawfnl, cannot constitutt^ a crime; neither can a cond»ina- tiim of two or more to do sncli an act in the same manner be criminal. If sneh a combination would amount to an (d'fense. \\i\ would haxc tiic strange and absui'd result of au intention being criminal. In the case, then, of a cons])iracy to do an aet that is not criminal, the gist of the offense is the illegal means. It is plain under the statutory jtro- visions above cited that the acts constituting these means which are 'the particular eircunistances of the offense' nuist be specifically charged."' In a case Ix^fore the United States Circuit Court for the District of Mas>achusi'its. the court said: "'Neither the letter of the statute nor the philosoph}' of pleading consj)iraeies re(juires that it slu)uld api)car that the purpose was to engross, monopolize or grasp into the hands of one of the i)ersons indicted, or that the defendants were interested in behalf of the party for whose benefit they combined to monopolize, engross or grasj), or. indeed, what their relations were to that party. Kv<'n if the statute should finally be held to be limited to cond)inations to engross, monopolize or grasp in behalf of sonu' party to the combination, yet there remains the well known rule of law' that it is unnecessary to indict all the persons involved in :i conspiracy. Of course, the court would have felt less doul)t in meeting this objection if it had been alleged thai the corporation named wa> a party to the conspiracy, or if the relation of the accusi-d to it or some other matter of a kindred character had been set out."- ' Stale v. I'ottrr. -Js iowii. .V)-l. - L'niled States v. fatlcrson, .'I'.t ."mC. Fed. llep. "iSO. I'Sa. •I'lic claim ^ -s.s.] coNSiMiiACiKs IN im:stkaint or ti:ai)K. •_'.')•> § 88. Statutory Kegulatious. — In iiiaiiv of the Slalo the Itiw relntiuii" to c-onspiracios in i-ostraiiit of track' is fixed by statute. In a ease in Illinois, where the statute of iSiij ' corijoration. partnership or individual that the indictment should ne>;u- tive the ownership of patents by tlie defendants, and also set out that the commerce carried, or pro- posed to be carried, on by the National Cash Register Company, was a lawful one, and perhaps some other matters of that char- acter, proved on the hypothesis tliat its allegations should be cer- tain to every intent, a rule which applies only to pleas in abatement. -Ml such are matters of defense, not to be anticipated by the prosecutor. The claim that these counts left it for the prosecutor, and not for the court, to decide whether they state subject-matters of interstate com- merce, and also that it is necessary that they should set out in detail the operations supposed to cf)nsti- tute interstate commerce, are main- tainable, because, so far as this feature of the indictment is con- cerned, it is clearly sufficient, ac- cording to numerous decisions of the Supreme Court, which need not Ite cited, to use the langiuige of the statute. The suggestion of the court, in the opinion passed ditwu February •JSth. that the statute is not one of a class where it i< sufli- cient to declare in the words of the enactment related to the |»articulai- |>roposition then under considera- tion. As to all the propositions touching the existence of com- merce in cash registers, or knowl- edge, or want of allegation of knowledge on the part of the ac- cused, it is sufficient to say that those counts which do allege the existence of such commerce, also allege i)osiliveIy knowledge on the part of the defendants, and tiiose which do not allege such existence are sufficient. l)ecause neither the letter of the statute nor its purpose distinguishes between strangling a commerce which hasbeen born, and preventing the birth of a connnerce which does not exist. On this point, also, in the o|)inion of the court.it is sufficient to use the lan- guage of the statute." Ibid., 'IX'l. See also Commonwealth v. Dyer. 128 Mass. 70: State v. Stewart, ;">» Vt. 273: State v. Cook. 38 V't. 43l»: State v. Jones, 33 Vt. 443: lieg. v. Rowlands, 17 Q. B. 071. Overt acts need not be alleged when the conspiracy to do the acts is unlaw- ful, as the offense is complete in itself. The I'oultercrs' Case, ti ("okc. .")."!; Rex v. Kinnersley. 1 Str. 11(3: l{eg. V. Best. 2 I-d. Raym. 11(17 : Reg. v. (Jompert/. It (^ 15. 824: Reg. v. lleymann. 12 Cox ('. C. 383: Reg. v. Seward. I Ad. ^; El. 70(i; State v. Hartlett. 3U Me. 132: State v. Ripley. 31 .Me. 38U: Commonwealth v. Kastman. .">.") Mass. UtO: s. c. 48 Am. Dec. r.OU: Commonwealth v. Shedd.14: I.andringham v. State. 4'.t iud. 13Ci: Alderman v. i'eo|)le. 4 Mich. 414: s. c. .')1 Am. Dec. 7.">; Isaacs V. State, 4N .Miss. 234; .March v. People, 7 Barb. 391; I'eople v. .\rnold, 46 .Mich. 2(>S; State v. .\oyes. 2"» Vt. 415: United States V. Du.stin, 2 Bond C. C. 332: John- son V. State. 3 'I'ex. App. .V.tl): Heine v. Commonwealth, 91 I'a. St. 14.'); State v. f.ounger. 1 Dev. L. 3.">7: I'eople v. Mather. \ Wend. L^iO (■<)NSJMi;.\hall Ix'conie a pari \ to any contract or conil)ination to fix or limit the amount of any article to he nninufactured or sold, sui-h corporation, partnership or individual shall he iruilty of a conspiracy to defraud. It was held that a corporation, which hy com- bination between its stockholders and itself attempted to regulate the j)rice of milk, came within the purview of said act, although it did not coml)ine with any other corporation oi' with any person other than its own members.' In a ca-e in 22'J: s. v.. 21 All). Deo. 12-2: State V. Cawood. :{ Stew. 300: I.andring- ham V. State. 4!) Ind. ISG: Isaacs V. State. 4S Miss. 2:^4: State v. Straw. 42 X. H. 392; State v. Rickey. '.» N. .1. L. 2!t3. •■Th<' purpose, which was the object of the conspiracy, as allej^ed in the third t'Oiint. not Iteing criminal in itself, i( there is any offense charged, ir must consist in the means designed to be employed. These must l>e specitically stated. State V. Kipley. 31 Me. 3S(;. In this count the means are described only as being "false pretenses.' By this the accused could not J)e siitli- ciently inforuied of the acts, against which they were called to answer. I'he description of the means are too general and not in accordance with the established rules of crim- inal pleading." State v. Roberts. 34 Me. 320. 1 Ford V. Cliicago .Milk Shipi)ers Association, lo.") 111. IWi; s. c. 30 N. E. Rep. (i')!. -'It is lu-ged that the corporation cannot alone enter into a trust or combination that would l)e a violation of tliis statute. Wliilst it is true, as a general proposition, that a corporation may be created and constituted a legal <'ntily. existing separate and apart from the natural persons composing it. yei ii cannot act in- dependently, or against the will, or abstain from complying with the direction of the natural persons who constitute the corporate body. .\ corporation is. in fact, an asso- ciation of persons united in one body, having perpetual succession vested with political rights con- ferred upon it l»y the authoiity creating it. Morawet/ on <.'orpo- ration. <> 227 : 1 Kyd on <'or|»ora- tions. 13. Such l)eing the nature of the corporate 1)ody, acts done by it are the acts of the associated |)ersons. as corporators or as indi- viduals, and in whicli capacity the act is done nnist lie determined from the nature and cliaracter of the act and the purpose for which the corporation was organized. Slate P.C rel. v. Standard Oil < 'o.. 4'.t • tbio. 137. And when the acts of the coiporate body are violative of the statutes of the State and would be a'misdemeanor that would sub- ject to punishnu'nt in accordance with law. such acts are wholly without the lawful |>ower of the corjioralion. as the Slate will cre- ate no l»ody with authority to vio- late its laws. .\nd where, in the or- ganization of the corporate liody or \i .SN.J CONSI'IKACIKS IN l{ KSli; A I N 1' nl' IIIADK. '2^'>\ 'I\'\:i>. where the Ad of iss'.i, aft cr deliii iiii: 1 nist >. |»i(>\ides forfeiture for eorporalioiis .-iiid punislmienl for iiidix idiials who \i()hite its provisions, (h'chires such viohilioii :i con- spiracv ;ii»:iiii>t tra(h'. and pri'x-rilx'-- the necessary nUeiia- tion> of an indi not a nulhty for f.-iihwe to ex- pressly (U'chire lru>t> unh-iwfnl. nor the acts const it utiuj:' a trust punishahh'. nor any act a violation of it> |)rovision>, sucli declarations Ix'inii' clearly implied.' In another case, before the sanu' court, whore the .Vet of 1N<'^!), i-elatiug to conspiracies aufainst trade, forbitls eonibinations of i)er- s()u> or cor|)orations to prevent c()iui)etition in the purchase, >ah' or transjjortation of inerehaiidise, and all aiireeinents not to sell or transj)ort Ik-Iow a certain or <:raduated price, or to establish "the price of any arti<'le or coniniodit\' be- tween tlieniselves and others to j)reelude free competitioM aniono: themselves or others in its sale or transportation, it was hehl that a contract between li<|Uor dealers in a citv for the <-ontrol of the beer traffic there and in all markets tributary thereto, each turninu' "all the beer heorthe\- nuix handle or control into thisco-partnership," violatesthe abo\ c statute, and i^ void, althousfh the j)ersons so combinini:- are the only dealers in tin- cit\ . and the price was not inf» stock- may not prevent llie siicce>-s of liolders in dcterniininjr the jijifencies ingenious sdicnios to evade or selected for nianaijinj; it> Imsines.-. vi()iate the law. 'I'heie can l»e no the linsinej^s as thus eondncteil. immunity for evasion of the policy iuanai;ed and controlled is a;jainst of the State t)y it- own crcalions."' |»ul)lic policy or in contravention Ihid.. I7'.». of :i !>tatule of tiie State, sucli acts ' Queen Ins. Co. v. State. S(» Tex. of the corporate liody and of the •_'.")(): s. c. 24 S. W. Kep. 1597. individual sharetiolder> an- thi- - Anheuser-Hiitich Hrewinff As.s'n «-omt)ined ads of all. anfl courts v. Houck (Tex. ("iv. App.). .'7 S. are not so powerles- that they W. I'ep. t'dv.;. . CIIAPTEK VI. THE CRKATIXC ()K A CORNKK. . Rights and Liabilities of Third I'arties. '.»7. Statutory l'rohibition>. § 81). Introductory. — The modern idea of cornering the market is closelv allied to the early common law offense of engros.sinir or forestalling:, The difference is such as has grown out of the changed industrial conditions of the nineteenth cent ur\-. Kngrossing or forestalling was the buying iij) or otherwise obtaining possession of a large quantity of grain or of other commodities on its way to market, with a view to selling again, and of increasing the price; or of piirsuad- ing ;inv person who held such commodities from offering them in ihc market, or of inducing any one to increase the price. Al coiinnon law the c()mi)lete engrossing of any connn()dil\' with the intention of selling it at an unreason- able price was an indictal)le offense. This rule was abolished by a statute" of the 7th c*v. Sth N'ictoria. As business was conducted at the time that the connnon law rule was estai)- lishcd. a few ])ersons, or evi'u a single individual, might ho able to create a nn)nop()ly and control the market. The act was (laML;"crou> to ihe i)ublic becau>e in man\' instanco the- >uppl\ wa> only adequate to the demand, antl. in con- si'(juence. I he creating of a monoj)oly a com|)arativcly simple matter. < )n thi- account tlu' offense was treated b\ the § iirt> witli urc.il scvt'rilv. .-iiid it \v;i> only after a grcal »h:iiiuc ill l)tisiiu'>s coiiditioiis ilial the law was ahroiratcd by slalutc riic crcatiiii:" <>t a ••(•oriuM'"" in the produce or slock market is an act >iiiiilai' to that of the early en^Toss- inuor forest allinu". hut in >oinc important respects differini:' from it. It differs from the eai'lier methods in that the l)usines> is con(liicte(l on a laru'cr scale; a iai'ii'e aiuounl of capital is ciiiplo\'e(l and the mean-- employed ai'e ada])tedto the industrial condition- (»f the pre-^ent lime.' • In Kiikpatiit'k v. IJoiisall. 12 I'a. St. i.'iS. Agnew uses the fol- lowiiij; pertinent language: '"We cannot pronounce tbi» agreement a gambling contract on the face of the writing. A bargain for an option such as it presents may be legitimate and for a proper busi- ne-is object. We can imagine such cases. Hut it is evident such agree- ments can be readily prostituted to the worst kind of gambling vent- ures, and, therefore, its character may be weighed by a jury in con- nection with other facts in con- sidering whether the l)argain was a mere scheme to gamble upon the chances of prices. The form of the venture when aided by evi- dence may clearly indicate a i)nr- pose to wager upon a rise or fall in the price of oil at a future day. and not to deal in the article as men usually do in that l)usiness. We must not eoiifound gambling. whetlH-ril l>e in corporation stocks or merchandise, with what is com- monly termed >i)eeulation. Mer- chants speculate upon the future prices of that in which they deal, and buy and sell accordingly. In «»ther words, they think of and weigh, that is, specuilale upon the coming market, and act upon this lookout into the futun* in their business transactions; and in this thev often exhibit high mental gra-p. and great knowledge of business, and of the affairs of the world. Their speculations display talent and forecast, but they act upon their conclusions and buy or sell in a honajide way. Such specu- lation cannot be denounced. But when ventures are made upon the turn of prices alone, with no bonu jide intent to deal in the article, but nn'rely to risk the difference be- tween the rise and fall of the price at agiven time, the case is changed. The i>urpose then, i.s, not to deal in the article, but to stake upon the rise or fall of its price. No money or capital is invested in the pur- ciiase, i>ut so much only is re- '(uin-d as will cover the difference. ;i margin, as it is liguratively termed. Then the buyer repre- sents not a transfer of proiierly, but a mere stake or wager upon its future price. The difference requires the ownershiji of only a few hundreds or thousands of dol- lars, while the capital to complete an actual i)urchase or sale may Ite hundreds of thousands or millions. Hence, ventures upon pri»"es invite men of small means to enter into iransaciions far l)eyond their capital which they do not intend to fultill, and thus the apparent liusiness in the particular trade is inflated .and luire.-il. and like a Iiuljl)|e only needs to be pricked to -•'i ( iiivA'iiNc; or A coHNKi:. [ ^ '.'<». s) DO. The Corner D<'fiiie. as to (-nahlc the pMrtiosconductini^ tlu' business to control the i)ri(('. Tlic schemes devised and worked for the accomplishment of tliis end ai'c too numerous and loo intricate to admit of explana- tion in this work, hut the oljject of eacli and all of them is an arrangement to force a ficticious rise in the market, for the purj)ose of ol)taininu' an advantao-e of deah'r< who are compelled to l)uy and of the i)ul)lic to which the connnodity cornered is an article of necessity. In a recent case in Mis- s(»uri. it was held that a sale of goods to l)e delivered in th<' future is valid, notwithstandiuir there is an option a> !<» the lime of delivery, and the seller has no other nu-ans of irettinu them than to iio into the mai'ket and buy Ihem. IJut if. under the iiuise of such a conti'act. \alid on its face, the real purpose and intention of the parties is merely to specu- l:ite in the rise, or fall, of })rices. and the jroods ar<' not to be delivered, but the difference between tin- contract and uiai-kel price only paid, then the transaction is a waiiciand the contract \'oid.' In a leadiuLi" case in lllinoi'-. the rule disait|>t';n'; often earn iii<;' down to acconijilish lii> ('n(l>. If it l)e tbe /'"HO .rf(i« dealer in its collapse, merchandise, '. .'/., ijjrain. the Worse even than this, it tempts poor are rol)bed and ini>eiy ou- nien of laro^e capital to make bar- gendered."' gains of stupendous proportions. ' t'rawford v. .Spencer. U'2 Mo. and then to manipulate the market 498. See also Lyon v. ( .iilliertson. to produce the desired price. S3 111. 88: Beveridge v. Hewitt. S Thi.s, in the language of gambling 111. App. 4(i7: Pickering v. Case, speculation, is making a corner, 7U III. 32S: Whilesides v. Hunt. U7 that is to say, the article is so en- Ind. 101; s. c. -I'.i Am. Kep. t4l: gros.sed or manipulated as to make First Xat. Hank v. 0.»kaloo>a V. it scarce or plenty in the market at Co.. (»(! Iowa. 41 ; (ircgory v. Wen- th«' will of tlie gamblers, and then dell. 4(» Mich. 432: Clay v. .Mien, to place its price within their (!8 .Miss. 42(1: Cockrell v. riu)mp- power. Sucli transactions are dc- >t>u. s."» Mo. ."•10: Tatinu v. .\rnold. structive of good morals and fair 42 X. .1. E(|. (iO: h'lagg v. Baldwin, dealing, and of the liest interests :is N. .1. Imj. 21'.I: Kingsbury v. of the community. If the article Kirwan, 77 X. Y. Hl'2: Williams v. l)e sto«'ks. corporations are crushed Tiedeutan. (» Mo. .Vpp. 2i'>'.i: .Fohn- and innocent stockliolders ruined -on v. Kaune. ■_'! Mm. App. 21: to (■nal)le the gambler in it- i>rice Waugli v. IJeck. IN I'a. >t. l.')2: vj '.'(). I cuKAriNi; oi" A couM'.i:. 2(>.'i ill llic (•;i>t' of colli racl-. rchit inu' to •■oriHT"-. i> >t;ilc(l. ;i> fol- lows: ••Althouuh tlu' statutes Ix-iiii:- (•(Hisiclci-cd :ii-c liiirlilv |)('ii:il, there is no \v:irr;mt for coii.sti'itiiiu' them with :iiiy uii- re;isoiial)h' stri(liies>. 'I'hey ouirht rnther to h:i\'e a just, if Xorili V. I'liillips. Mt I'a. Si. -IM: day. willj gilded sijjn.s and lluiniiii; Mc7'1: Seeliijsotiii happy victim to its einhnice of V. I, ('Wis, (iri 'I'ex. 215: Lowry v. dcaih and destruction. Wbal arc l>illinan. .')'.! Wis. 107; Haruard v. liic c()nsp(|iiencos of these specii- liaci Fed. Rep. 77-J : IJartiett formed ns. as j^rowinjj directly out V. Smith. IS Fed. Kep. '2V>'6: s. c. of these nefarious practices, that -I McCrary. :{S!<; liigelow v. liene- there have been bankruptcies, de- dict. '.» Hun. 4'i9; Cassard v. Hin- falcations of pul)li(' olllcers. em- nian. 1 Hosw. '207. '"But what is l»ez/,leinents. foii^eritis. larcenies tin- iiansaclion termed -futuresy" and death. ( crtainly no one will It is this: One person says I will contend for one moment that a sell you cotton at a certain time in transaction fraujjht with such evil the future for a certain price. You consecpiences is not immoral, il- agree to pay that price, knowinjr lejial and contrary to public pol- that the person you deal with has icy." Cunnini^ham v. National no cotton to deliver at the time. Bank of Augusta. 71 Oa. -100. but with the imderstanding that. --Certainly the legislature did not when, the time arrives for deliv- intend to impose any restraints ery. you are to pay him the differ- up(Mi legitimate commerce, but enee between the market value <.f only to d(^stroy the p:irasite that that cotton and tlie price you infests it. Contracts for future de- agreed to pay if cotton declint--. livery, if entered into in good and if cotton advances he is to |)ay faith, and with an actual intention you the difference between what is noi may sell and agree to deliver his a speculation on chances — a wager- wheat or his cotton for a stipulated ing and b«-lting bet ween the partirs price before it is harvested. Nay. — ^Iheii we are unabb- to under- om- may sell goods to be delivered stand the tr.msacticui. A betting at a future day. whirh he has not on a gauu' of faro, brag or (toker. in actual or potential possession, cannot l)e more hazardous or un- l>ut which lie intends to go into cert:iin. Indeed, it may lie >ai(l the market and bu\ . But this is that these animals are tame, gentlf not what i> commonly known as and submissive, compared to ihi- dealing in futures. This phrase monster. The law has caged them h;is .-ictiuired the signitication of a and driven them to their dens, mere >peculatiim upon chances. They havr been outlawed, whilf where the grain, cotton or stocks this ferocious beast has been al- tlealt in exist only in the imagina- lowed to stalk abotrt in o|ieii mid- tion. and wherr no dflivi-iy i>cfm- 2 •".('. ( KHATINC OF A (OltNKIi. [§ •"•• not lil)t'ral coM^lruftioi), tollu- ciid the li'^islativc intt'iilidii iii.iy l)(' .•iccomplislHMi. lo ))r()hil)il all (Icaliiisrs in ojjtioii- in Liraiii^ or oilier coiiiiiioditics. Nothiiiir i> prodiirtivc of iiiore MiischioNous rouJis, Considorablc forlunes sociircd i)v .1 life of honest indnstry have lu'en lost in a sinorlc vcntnif in •options." 'I'ju^ evil i> all the niore danireroiis from the f:ict it >eeininL:'ly has the snnetion of honorable eoinniei'^-iMJ u>age in its -upport. It is a vice that has in recent ye:ir> irrown to enormous proportion>. Leiiitiinate tran>actions on the l)oard of tr.-ide are of the utnn)>t imj)ortaiice in com- merce. Such contracts, whether for immediate or future deli\('r\'. are valid in law, and recieve its sanction and all toiiiplaled. hut the parties expect to settle upon the difference in the market. Wlien so limited l)y judicial interpretation, the statute is not inconsistent with public policy. it forl)id< and punislies waii^ering contract*: that is. con- tracts in which they stipulate tliat they shall gain or lose upon the happening of an imcertain event, in which they have no interest ex- cept that arising from the possi- bility of such gain or loss. Kariera V. (Jampl)eIl..s".)l*a..St.81»: Tliomi)- son V. (ummings. (!8 (ia. 12-t: Flagg V. IJaldwin. :>s X. .1. I-^i. 21!t."" l^'ortenbury v. State. 47 Ark. ISS. --The evidence fully proves that the appellant. Tearce. was operating what is conimonly de- nominated a "bucket shoj).' — in fact, this is established by his own admission on his cross-examina- tion. He was engaged in conduct- ing the illegal business of selling •futures" or -options." Tlie juod- ucts which he iirelended to .sell to his customers he did not h.ivc at tlie time, and it was mutually un- derstood and inleniled l»y l)Otli parties, th.it tlic wiieat or corn wtjich was claimed to l)e sold and purchased wa- not to l)e delivered. but when the time fixed for its de- livery arrived, the market value at ("hicago of such cereals >liould constitute the basis upon which the settlements would be made As the market would rise or f.iU there would be a loss or gain to the purchaser. The deals oi- trans- actions were understood to be a speculation solely on chances, and were in contravention of, and hos- tile to. i)ublic policy, and therefore illegal. Such transactions are of a like character and alTin to bets made on a game of poker or faro, and are equally as uncertain and hazardous. 'I'lie business or ojier- ations of the "bucket shop" have been the soui"ce of unicb evil. Embezzlements and other crimes on the part of public otlicers. and bank oHicials. having the custody of money l>elonging toothers, have been in tlie past some of the evil fruits directly traci'able to dealings in futures in these institutions, .and the c|uestion of prohibiting such transactions or business as it i- generally conducted uierils the consideration of the legislation. "" . Jordan. .J., in I'earce v. Dill (Ind.). decided I>ec. H. 1S97. § ill.] CIIKATIN*; OK A <'t)UM:i{. L'Im the su|»|)<»ri thai fan Ix' uivrii to llu'iii. It is only a<:ain>l unlawful •iiainhliu'T contracts' the penalties of the law arc denounced, and no subtle p'lussr of construction ouirht to 1)0 adopted to defeat the cud it i> to l>c jioped may l)c ulti- mately a<'complislied.'"' § iM. The Nature of an "Option." — The term ''option." as employed in hoard of trade transactions, is defined hy the c(un-t. in IVarce v. Foote. as follows: *'As was said In this court in rixley v. lioyutou.- the true idea of an option is wiiat arc called, in the peculiar lanuuau'e of the tlealers. •puts' and •iall>." A -put' i> detiued to be the -privilege of deliverinii" or not deliverinu" the thino: sold, and a 'call i> defined to be the -privileu-e of callino- for or not eallinu- for' the thinu; bouiihl. -Optioiuil contracts' in this sense are usually settled by adjusting market values, as the parly havinu' tin- -option' may elect. It i> simply a mode adopted for speculatiiiiT in differences in market values of grain or other <"oinmodities. It nuist have been in this sense the term 'option' is used in the statute. Such a contract is oi)vioush' fi('titiou>, having none of the elements of good faith, a^ in a contract where both i)arties are bound, and i> defined 1)\ statute as a •gambling <-ontract.' Fictitiou> purcha>c> or -alc^. >uch as were in the <()ntemplation of t he parties, were a^ nothing, and it i> a matter of no con>e- (|uence where it is pi-etended they were made, whether on the board of trade oi' elsewhere."' in IJx piirl<' Young, the ' l'e:irc<- v. j-'ootr. li;{ III. lis, Ca^.". 7'.t 111. :>Hs : Rudolf v. Wiu- 2;{'.t. U'i>, 7 N«'l>. l-'.'i: Hi<;elo\v v. lioiif- - I'ixU'V V. |{oy.l. 7!t 111. :i'.l. liict. 7*) N. V. --'iri; s. <•.. -Jii Am. ■ ri'iiiTc V. Foote. Ii:i III. 11>. Kej). ."iS7. • Tlic pliiintiff l»(>ii;;lii. 234: >.(•...">."> Am. Ucp. -114. .Sec tliroui;!] the ajjeiu-y of defen>l:inl. also as to iiKMniiit; of lerms : .Max- a >lock option or privile1 N. V. 2S!S: -.^traiidle.* 'I'lu' word, if not elo- Kirkpairii-k v. Bonsall. 72 I'a. St. s;ani. i> at lea.>»t expressive. It I.").'>: AV p'i;7»' Vouni;. r. IJi>s. C. ('. mt-ans the double |»rivilei;e of a .">;{; .Story v. Solomon. Fed. Itep. holder the ri^ht to demand of the 438; Third Nat. liank v. Harrison, seller at a certain price, within a U) Fed. Kep. 1\:\: Pickering v. certain time, a ceitain nnml>er of -JCs CIIKATINC; ()|- A ( OUNKi:. [^^ '••! followiiii;- (IcHiiilion and statciiH-iil <»f tlic rule w cic iiicliidcd ill tlic fiiuliiii: «»f the <'()iut : ••I*iit>"" or the piivilctrc for a iioiiiiiial «-oii>i(lcratii)ii of dclix ciiiio- a larjic (iiiantitA- of .shares of .specilied .-loi-k. <>r to le- qiiire bill) to take at the same piice. williin the same time, the same shares of stock. The (•(tntimiance of the option is fixed l>y the aj;iee- iiienl. and in this case was for sixty (i. and $2") more for commission, a ijiiar- anty that the a<,'greii:ile lliictualioii in the stock, diirin;^ thf pendency of the contract will amount to eiirbt |)er cent.; and. furtlier. promi>e tliat if the stock does not move to llial f'xtent. the cost of the con- tract, less conimi>sions. shall be refunded." Harris v. Tiimbridoje. s:5 N. Y. '.)•_>. •».■). --p.y tiic evidence offered on the part of the plaintiff, it was shown that :i sale of icold short, accordinij to establislied usagre, means a >ale of that which the seller has not. luii wlial lie expects to buy in at a lower price than that for which he sells. The seller can order the gold to !>« i»ought in at any time, and the luiyer can call for the delivery of it when he pleases. That the buyer or seller is entitled to a uiar- gin for his security, as the gold may rise or fall in the market, 'i'his margin must be in money, or its e(iuivalent in securities, and e(|ual to from tive to ten per cent, on the price at which the gold is sold, over and above its market price at any time, and such margin must be kepi up a- tin' value of gold iluctuates in thf mmket. >o that tlie i)uyer shall \i:\\r in band on a rise in price, an amount in money, or its ■quivalent. suflicient to cover the loss to the seller caused by such rise in gold above the price at which it was sold short, with from tive to len per cent, on the contract price, added to the amount of such loss, if this mar- gin be not kept up as gold ad- vances, the buyer has the right to l)iiy in the gold for account of tin- seller, and charge him with tlie loss."" .\piileman v. Fisher. H4 .Md. .■)4(). .".4!t. -'.\s to the validity of tliese contracts. From wliat iias lieen said concerning them, it a|)pears that there is no essential difference l>etweeii llieiii and the numerous contract.-, of the same kind which have b<'en before the courts in England and in this country, and which have liecn al- most uniformly upheld a- valid contracts. All these decisions unite upon the |iropo>ilion that these contracts are proumptively § !'-^] (KKAi INC (>|- A ( <)km:i;. i^i;:» irr.-iiii within n cciiMin time ;il :i spcciticd |)ric(', wlicii l.-ikni of parties notoriously I'limiiiiij: a ••••oiiicr." arc wairiT con- tracts, and void as against public policy. U'liorc no delivery ot' the urain was contemplated by the ])artios, hut thev expected simply to settle the diiferences as established b^ future prices, th{> contract i> siin))lv a waircr. and. there- fore, void.' § 92. .Aluditicatiuii of the (.'oniinou Law Doctrine. — To some extent the coninion law doctrine in rei^ard to co\ c- nants in restraint of trade. a> establishetl in Kni,dand and followed by the courts of this country, has been modified by statute and by the more recent decisions. Where the earlier rule has been found to conflict with modern business methods beyond what is essential to the adequate protection of the j)arties concenu-d, it has either been abro- irated by >tatute or materially nuxlitied 1>\- the courts. (Cer- tain transactions which, under the law against eniirosxinu' or forestalliuii. were in(lictal)le as misdemeanors, have become dimply \(ti(l. leavinu' the parties without the means of re- dress where tli<' contract is violated. In some of the States, as in New York, the late statutes base substituted for the HMjuirements of the cailici- certain restraints on combina- ti(»n>. I>ul inip(t-inn tlu'ir face, tliey may he shown tjy exlrinsit; evidence to bave been intended by the contracting par- ties, not as coniniercia] transai- tions. but as mere wagers on tlie future state of the market: that the one thing which makes them wagers and renders thftii invalKl is an agreement between ttie con- irarting pariii's. made at the time of the contract, and understood as |)art thereof, that the contract niay be discharged liy th»' seller, not tiy ttie delivery of the commodity sold. Imt by jiaying to the pur- chaser the difference l)etwern the market priee nii tlie la-^t day of the peifoniiaiite of the contract and the price at which the sale was made: or. on the other hand, that the piu'chaser, if the market goes the other way, shall not be boimd lo leceive the conimodity piu- cba>ed. tun may settle by the i)ay- meiit of a difference: and that such an agreement will not. if made suljseijuently to the making of tlie contract itself, taint the contract and render it invalid in law. ■ Kent v. Miltenberger. IH .Mo. .\pp. 503. ,J07. .See also Saw- yer v. Taggart. 14 Hush. 7'27.7'M: William- \. Tiedeiiian. i'> >!<>. App. •_'t;;{. i'7<> cuKA ri.\<; or a (ok.nkh. [§ !•-^ of Ihc earlier statutes relatiiio- to this suhjeet have been le- ))eale(l, hut it seeuis to have heen held that the coniuion hiw is still to such an extent in force as to reiuler coinhinations to enhance the price of provisions |)unishal>Ie.' Inthelcad- ' Ilex V. \Va(l(rni<;t(»ii. 1 Vlni^X. \4A: s. c. I East. I(i7. ••Thcie is IK) doubt tliat modern ideas of trade have practically abrogated some common law doctrines which are supposed to unduly hamper commerce. At tlie common law tiiere is no doubt sucli transactions as were here contemplated, al- though (;ontined to a single person, were indictable misdemeanors un- der the law applicable to forestal- ling and engrossing. .Some of our States have abolished the old statutes which were ado])ted on this subject, and which were some- times regarded as embodying the whole law of sucli cases. Where this has been done, as in Xew York, the statutes have replaced them by restraints or couibinations for that purpose, leaving individual action free. In England, there have been several statutes narrow- ing or repealing all of the ancient statutes, and more recently cover- ing tlie whole ground. But so long as the early statutes only were repealed, it was considered that enough remained of the common law to punish combinations to en- liance values of commodities. And when this doctrine Ijecame nar- rowed, it seems to have been con- sidered that such combinations to enhance the price of i)rovisions lemained under the ban. In Ilex v. Waddington.l East. 143. and s. c. I Kast. I(i7. it was held, the com- mon law was still in force to punish engrossing the necessaries of life or provisions by single persons. The chief ditliculty was in deter- mining whether hops came witliin that rule, and it was held tljeydid. and that the legislature only could change the law. 'i'he defendant was heavily fined. That case has been sharply criticised as not in harmony with modern political economy, and it. no doubt, goes beyond what would be considered proper among us. It has never, so far as the researches of Mr. IMshop have gone. — and he seldom over- looks impoitant cases. — been judi- cially disapproved, although stat- utes have been made to change the rule. See Bishop. Criminal Law. §§ 527. 528, and notes to 6th edition. And he intimates that conspiracies for such purposes may. perhaps, be jMinished. even where the indi- vidual offense has bi'cn abolished. See also Vol. 2. §§ 202. 2()(;. 21(), 220. 230. 231, and notes. In Ilex v. Ililbers, 2 Chitty. 1U3, it was held that there must be a combination of more than one person before an information will be granted for enhancing the price of necessaries. Mr. Russell gives it as his opinion, that in our day. single offenders would not be regarded as punisha- ble unless their offense relates to provisions. 1 Kuss. 170. But where there is a conspiracy the law has been given a much wider ai)plica- tion. and the case of Rex v. De Herenger, 3 M. & S. G7. has ob- tained celebrity from the high rank of the offenders who were con- victed — (and one of them at least. Lord Cochrane, unjustly) — of con- spiring to raise the price of stocks l)y false rumors." Raymond v. Leavitt. 4(i Mich. M7. 4r.O. •§ Ii'i.] C'i:i:A'riN<; or a (oitNKi;. -7! iiiii' casi' of IJiiviiioikI \. Li';i\itl, the couil. :it"l(i- icrciriiii:' to tlu' cases above eited. said : "WC liaxc not n-feired to these eases to assert the j)i-o|)riet y of enforciiiu eonimon hiw eriininal penalties eontrarv to the general uncU'rstandino- of llic business eoniimiiiit\ . ^\'hih• thex' offcu^o ha\c never been abolished in this State l)y statute, and might tiieoretic- ally l)e. therefore, within the |)ossiJ)le range of our laws, there would be no t<»Ieration of their strict |)ro>ecut ion against single [)ersons to the eonmion law extent as eriines. Hut the general sentiment has not led to any change in legislation or to any I'ecognition of the legal })ro|)riety of allowing e\ery species of produce gand)ling to be made sus- ccptil)le of enforcement b\ contract, ^^'e must willfully >hut our eyes before we money and dealers who numip- ulate the market, where the money invested is but a trifling perc(Mitage of the property to be handled, and where the only intent is to j)r()duce unnatural fluctuations in |)rices, is entirely outside the limits of buying and selling for honest trade pur})oses. It is the plainest and worst kind of pro- duce gandjiing, and it is impossible for any but dangerous results to eome from it. We do not feel called upon to re- gard so much of the common law to be obsolete as treats these cond)inations as uidawful, whether they should now be held ])unishable ;is crimes or not. The statute of New York, which i> univei'^ally conceded to be a limitaticm of «-omnH)n law offenses, i> referred to in the case in <>8 X. Y . ')'tX. as rendering such cons])iraeen previously held in l'eo])le v. Fisher. II ^^'en(l. 1'. where the subject is discussed at length. 'I'hcre m.iy be the conduct of the parti<'s <'onies within the undisputed ceusure of the law of the land, and we c.-mnot s.-ive the transaction without doing so on the ground that such dealings are so nuinifestly s.mc- tioned by usage and public approval that it would be absurd to suppose the legislature, if attention were c.-dled to them. -1- CKKATINC OK A ConNKK, [§ U'A . would not h\i>:ili/e llieiii. Wv do iiol think ])ublic opiiiioi) has l)ec())no so ihorouoldy (h'lnorali/cd : and until the law is chjino'cd wc sliall (Icclinc ciit'orcini:' such (■()ntract>. It" j)artl(^s SCO lit to invest money in such ventures they must i>et it hack by some other than leual measure.'"' § W.i. Tlie Creation of a Corner in Necessaries. — In the rides in regard to corners sonu' distinction is made l)e- tween different commodities or articles to which the corner relates. In the decisions in cases of this charactei- the courts have i-eofard to the interests of the ))ub]ic. Transac- tions which in their effects are prejudicial to the interests of the people as a. hotly will not be; upheld. In a recent case in Illinois, it was held that an airreenient, the object of which is to buy up all cash corn offered and by holdinii' the same create an artiticial scarcity, so as to speculate on the market price, is void as auainst public policy, and an action will not lie to recover money advanced or services rendered thereunder.- In the opinion in this case, the court >aid : 'Raymond v. Leavilt. -Id Mich. \v:is left with tlic (k'fon(l:tni. who. 447. 452. l)y ])l:iiiitift'"s request. aft<'i\vanl> - Cmuinings V. Foss. 40 111. App. invested it in a lard deal. //'/(/. tlial r)23. See also Pickering v. Case, defendant must accouiu to plaintiff 79 111.328; I>yon v. Culbertson. S3 for tlie nionev. altliougli tlie wheat 111. 33; Webster v. Sturges. 7 III. deal was illegal. Wells v. .MeCieoch. App. 560; Kreigh V. .Sherman, 10a 71 Wis. lOG; s. <:.. 3:> \. ^V. 111. 49; Pearce v. Foote, 113 111. Rep. 769. -The objection thai a 228; Coffman v. Young, 20 111. contract is immoral or illegal as App. 76; lliggins v. McCrea. 116 l)et\veen i)laintiff and defendant IT. 8. 671 ; White V. Barber. 123 I', sounds at all times very ill in the S. 392; Griswold v. (iregg. 24 111. mouth of tht^ defendant. It is not App. 384; Wheeler v. McDermid. for iiis sake, however, that the ob- 36 III. App. 179: Jvocke v. Fowler, jection is ever allowed, but it is 41 111. A])]). 6(i. Rev. St. HI. 1881. founded on general |>rineiples of chap. 38, § 130, provides for a pen- policy, which the defendant has alty against any one cornering tiie the advantage of. contrary to th<' market in certain commodities, or real justice as between him .md attempting to do so. and that all the plaintiff, as I may so say. 'The contracts foi- that purpose shall be i)rinciple of jtublic policy is this, void. Plaintiff and defendant had fj- dulo malo )ion oritur actio. Xo entered into aspeculation to('orner court will lend its aid to a man the wheat market, which was sue- wlio founds his cause of action ees.sful. .\fter the close of the upon an immoral or illegal act. deal, plaintiffs share of the protits If from the plaintiff's own stating. § i)3.] CREATING OF A CORNER. 273 "It is manifest in the present case that the clear tendency of the acts of the parties was to unnaturally enhance the price of an article of prime necessity ; to create as to it an artificial scarcity, and to compel those whose necessities compelled them to buy to pay, not the price determined by entire freedom of buyers and sellers, but the price to which their combination to buy and to withhold might be able to force the market. Such combination was clearly against public policy, and such conduct of a character that, if it be not now, under the common law, as it existed a century and a half ago, would have been a criminal offense. * » * To the claim of the plaintiffs for moneys advanced and services rendered in aid of this confederacy, so opposed to public interests, so inimical to public welfare, so calculated to make unnaturally dear, food for man and beast, the law answers 'ex turpi causa non oritur actio/ It is immaterial that the defendants' defense is based upon a confession of their own unlawful conduct. The law will not attempt to adjust differences which arise out of transactions it con- demns. It will leave the parties where their own conduct leaves them. It will not compel them to divide the plunder or share the loss of an unlawful enterprise ; neither will it require them to remunerate those who, with full cognizance of the character of such undertaking, assist them with money or service."^ In Raymond v. Leavitt, the court or otherwise, the cause of action appear to arise ex turpi causa, or the transgre^-sion of a positive law of this country, there the court says he has no ri^^ht to be assisted. It is upon that j^round the court goes, not for the sake of the defend- ant, but because they will not hind their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for when both are equally in fault potior est conditio defendentis.^' Lord Mans- 18 field in Ilolnian v. Johnson, Cowp. 341.343. ' Cummings v. Foss, 40 111. App. 523. 530, 531. On error to the Su- preme Court, this case was :itVirnied in Foss V. CuuiMiings, 149 111. 3.">3. At page 3.")I>. the court says: "Our statute makes it a penal offense to •corner the market or attempt to do so' in relation to any grain or other commodity, and declares all contracts tuade for that purpose void. We are imable to distin- guish the combination between these parlies, as found by the ap- pellate court, from an attempt to 274 CREATING OF A CORNER. [§ 94. said : "The object of the arransfeinent between these parties was to force a tictitious and unnatural ri.se in the wheat market for the express purpose of getting the advantage of dealers and purchasers whose necessities compelled them to buy, and necessarily to create a similar ditticulty as to all persons who had to obtain or use that conunodity, which is an article indispensable to every family in the country. That such transactions are hazardous to the comfort of the conmiunity is universally recognized. This alone may not be enough to make them illegal. But it is enough to make c? o c them so questionable that ver}'^ little further is required to bring them within distinct legal prohibition."^ § 94. The Creating of a Corner in Stocks. — A corner is sometimes created in the stock of a particular corpora- tion, as of a railway or gas company. The object is either speculative or the control of the c()ri)oration. The process of creating a corner of this class is termed "the tying up of stocks," and the accomplishment of the object creates what is designated as "a squeeze in the market." Where the object of a transfer of stocks is to create a corner, or to obtain control of a corporation, all contracts in regard to it will be held void. In a case in Massachusetts, it was held that an agreement to make "a corner" in stock, by buying corner tlie Cbicao;o niarket in rela- with otliors to purchase throiitjh tion to corn. L'ractieaily it istiiat. the plaintiff and other hrokers. for and nothing else. Hut whether it delivery during a certain month, is or not. it was an attempt to ad- more wheat than there was in the vance tlie price of corn beyond tlie marl2 Wis. 593. See also Pope v. H^nke, 15.5 111. 017: Crawford v. Spencer. 92 Mo. -198; First Xat. Bank v. Oskii- loosa I'aekinpj Co.. (iG Iowa, 41; Schneider v. Turner, 130 III. 28; Cothran v. Ellis, 125 111. 496; For- tenbury v. State, 47 Ark. 188; IMx- ley V. Boynton. 79 111. 351 ; Miller V. Bensley, 20 III. .\pp. .528; Clay V. Allen. t>3 Miss. 42.] CREATING OF A CORNER. 281 ing to the stiinding of third parties, is stated, as follows : If a grain broker, in executing the instructions of his principal, is rccjuired to pay out money to adjust differences in respect of the purchase and sale of grain, and is guilty of lu) fraud on an illeojiil agreetnent. unen- forceable between tlie oriji^inal parties, but it was not within the ganiini; statute of Missouri, which destroys the negotiable character of a note given for a gaining con- sideration, within the term of that statute, for it pronounces a gaming contract absolutely void. And it was held that an innocent holder for value would recover. In the opinion it is said that the great weight of authority supports the rule that a broker or agent em- ployed to buy or sell commodities for the purpose of speculating on the rise and fall of prices merely, and the agent buys in his own name, but on his principal's ac- count, and after losses have oc- curred in such transactions, he ad- vances money at his principal's request to pay such losses, or if he pays such losses, and afterwards his principal gives him a note therefor, may recover against prin- cipal the advances so made, or the note so executed, notwithstanding the illegal character of the original venture. Whether such be the rule in this State need not be consid- ered. But it is further remarked: 'If a broker or factor supply his principal with funds for the ex- press purpose of enabling him to engage in illegal transactions, and if he (the agent) conducts the illegal venture in his own name, it seems dear that he becomes a particeps criminis. and the law will not aid him to recover moneys ad- vanced for such purposes, nor will it enforce securities taken there- for.' And this makes near ap- proach to the controlling principle and facts, as alleged in the case before us. Where a man lends money to another for the express purpose of enabling him to commit a specific unlawful act, and such act be afterwards committed by means of the aid so received, the lender is a particeps criminis.^'' Waugh V. IJeck, 114 Pa. St. 422, 429. ''The customer employs the broker to buy certain railroad stocks for his account, and to pay for them, and to hold them subject to his order as to the time of the sale. The custonier advances ten per cent, of their market value, and agrees to keep good such propor- tionate advance according to the tlucuiaiions of the market. Waiv- ing, for the moment, ail dis|)Uted (juestions, I state the following as the result of this agreement : Tlie broker undertakes and agrees: 1. At once to buy for the customer the stocks indicated. 2. To ad- vance all the money required for the purchase, beyond the ten per cent, furnished l)y the customer. 3. To carry or hold such stocks for the benetit of the customer so long as the margin of ten per cent, is kept good, or until notice is given by either party that the transaction must be closed. An appreciation in the value of the stocks is the gain of the customer, and not of the broker. 4. At all times to have in ills name or under his control, ready for delivery, the shares pur- chased, or an ecpial amount of other shares of the same stock, .t. 282 CREATING OF A CORNER. [§96. or violation of law, he will be entitled to l)e reimbursed by his prineij)al for the outlay. The principal is bound to in- dcMinify his agent or broker for losses incurred in executing his orders. But if one enii)loys a broker to purchase and sell grain with the illegal purpose of "cornering" the mar- ket or controlling the price thereof, and this fact is known to the agent or broker, the latter cannot recover of his princi|)al for services or money advanced in the execution of ^uch illegal purpose, nor can the employer recover of his agent for moneys received by him in such illegal dealings upon the market. When parties enter into a contract which is illegal or contrarv to public policy, the courts will not assist either of them, but will leave them in the posi- tion in which their illegal acts have placed them. The party advancing money or performing services under such a contract cannot recover for the same of his employer, nor will he be liable to his emplo3'er for any profits derived by him in the business of his agency. The enhancement of the price of an article of prime necessit}', such as wheat or To deliver such shares to the ciis- toiner. when required by him. upon the receipt of the advances and commissions accruinj^ to the broker; or, 6. To sell such shares upon the order of the customer, upon payment of the like sums to him. and account to the customer for the proceeds of such sale. Un- der this contract, the customer undertakes: 1. To pay a marijin of ten per cent, on the current market value of the shares. 2. To keep jjood such margin, according to the fluctuations of the market. 3. To take the shares so purchased on his order whenever required by the broker, and to pay the differ- ence between the percentage ad- vanced by him and the amount paid therefor by the broker. The position of the broker is two-fold. Upon the order of the customer, he purchases the shares of stocks desired by him. This is a clear act of agency. To complete the purchase, he advances from his own funds for the benetit of the customer ninety per cent, of the purchase money. Quite as clearly he does not in this act as agent, but assumes a new position. He also holds or carries the stock for the benetit of the purchaser until a sale is made by the order of the pin-chaser, or upon his own action. In thus liolding or carrying he stands also upon a different ground from that of a broker or agent, whose office is simply to buy and sell. To advance money for the purchase, and to hold and carry stocks, is not the act of a broker as such. In so doing he enters upon a new duty, obtains other rights, and is subject to .additional respon- sibilities." Markbam v. .laudon, 41 X. Y. 235. § iH).] CRKATINd OF A COUNKU. 283 other articles, for puipose.s of extortion, is against public policy, and a combination or agreement to make a "corner" on stock or grain by buying it up, so as to control the mar- ket, and then purcliasing for future delivery, is illegal, and a party thereto whose funds have been used by his direction in carrying out the agreement cannot recover the same back, A person dealing at a particular market will be taken to have dealt accordintr to the known tjeneral custom and usage of that market, and if he employs another to act for him in buying or selling at such market, he will be held as intendinu' that the business shall l)e conducted according to such general usage and custom, and this has been held the rule whether he in fact knows of the custom or not.^ In a recent case in Tennessee, it was held that where several con- federate together for an unlawful i)urpose, e. g., stock gambling or dealing in "futures," the acts of one selected to transact the unlawful business are the acts of all, and each confederate is jointly and severally liable therefor. ^ On this point, the court said: "Where it api)ears that several have unlawfully combined and confederated to gam- ble with and defraud another through a selected party, each confederate participating is liable for the entire amount re- ceived, astluMuoney is received for all, and by all, accordingto the devised alleged method under which they were all jointly operating.""* ' Samuels v. Oliver. 13U 111. 73. See also Roiindtree v. Smith, 108 U. S. 269; Baldwin v. Flagg.3« N. J. Eq. 48; Baker v. Drake. (JH X. Y. .")18; Wieks v. llatcli. G2 X. Y. 535; Knowlton v. Fitcb. .")'2 X. Y. 288; Earl v. Howell. 14 At>l). X. Ca.s. 474; Thaeker v. Hardy. I.. R. 4 g. B. Div. 685; Ex parte Rogers, L. R. 15 Ch. D. 207; Logan V. Miisick. 81 III. 415; Diirant v. Burt. 98 Mass. 161; Maxton v. Gheen, 75 Pa. St. 166; Smith v. Bouvier. 70 Pa. St. 325; .laeksion v. Foote, 12 Fed. Rep. 37; Ashton v. Dakin. 4 H. ^t N\ 867. -Dunn V. Bell. 85 Tenn. 581; s. c, 4S. VV. Rep. 41. •' McGrew v. City Produce Ex- cliange, 85 Tenn. 572; s. c, 4 S. W. He].. 3S. 39. -Before the pas- sage of tills law. .such a transaction as dealing in futures, of it-sclf. was not unlawful. Xor was it unlawful unless it was the intent of both parties that there should be no real purchase or delivery. This act was intended to make it unlawful if either had no intention of effect- uating a real purchase or sale. It was designed to suppress the evil of dealing in futures, and limit 284 CREATING OF A CORNER. [§ 97. § 97. Statutory Prohibition. — In many, if not :ill of the States, the creating of a corner, or the dealing in futures, with a view to creating a corner, is prohibited by statute. In Illinois, the statute is, as follows: "Whoever contracts to have or give to himself or another the option to sell or buy, at a future time, any grain or other commodity, stock of any railroad or other company, or gold, or forestalls the market by spreading false rumors to influence the price of commodities therein, or corners the market or attempts to do so in relation to any of such commodities, shall be fined not less than $10, nor more than $1,000, or confined in the county jail, not exceeding one year, or both ; and all con- tracts made in violation of this section shall be considered gambling contracts, and shall be void."' As C'hicago has such operation to bona fide sales and purchases by those who wished to sell to those who wished to buy. In making the seller responsible for the intent of the buyer, and the buyer responsible for the intent of the seller, it intended to suppress gambling by confining the business of buying and selling for future de- livery in such limits as would prac- tically preclude the possibility of it. The bona fide dealer can still operate, but he cannot do so upon any terms which do not protect the community against the pernicious and ruinous speculation in the rise and fall of prices. He is obliged. for his own safety, as this act pro- vides extreme penalties, to avoid the speculator, and buy only for the legitimate demands of neces- sity and trade." Ibid., 578. ' Starr & Curtis, Ann. Stat. Illi- nois, t 253, p. 1295. Sec. 31G6, of the Code of Tennessee, reads as follows: Any sale, contract or agreement for the sale of bonds, stocks, grain, cotton or other pro- duce, property, commodity, article or thing for future delivery, where either of the contracting parties, buyer or seller, is dealing simply for the margin, or on the pros- pective rise or fall in the price of the article or thing sold, and where either of the said contracting par- ties have had no intention or pur- pose of making actual delivery or receiving the property or thing in specie, shall be deemed and is hereby declared gaming. Section 31(j8 is as follows: If any person shall buy or sell or contract for the purchase or sale of any prop- erty or thing enumerated in section 31(j(!, and in violation of any of the provisions of sections 31()tl and 31 (!7, he shall be guilty of a mis- demeanor, and, upon conviction thereof, for every such violation shall be punished as provided by law for the punishment of gaming, but he shall not be fined less than twenty-five dollars, nor more than two hundred and fiftv dollars, or imprisoned in the county jail not exceeding one year, or both fined and imprisoned within these lim- its." § 1>7.] CREATING OF A CORNER. 285 been the chief seat of operations of this character, the Illinois statute has been followed by other States. The statute of Missouri is, as follows: "All purchases and sales, or pretended purchases and sales, or contracts and agreements for the })ur('hase and sale of * * * grain, * * * either on margin or otherwise, without any in- tention of receiving or paying for the property so sold, and all the buying or selling, of such property, on margin or on optional delivery, where the party selling the same or offer- ing to sell the same does not intend to have the full amount of the property on hand or under his control to deliver upon such sale, or when the party buying any of such property, or offering to buy the same, does not intend actually to receive the full amount of the same if purchased, are hereby declared to be gambling and unlawful, and the same are hereby prohibited."^ The copying of all the statute on this subject would not accord with the plan of this work, but the above will serve as samples. In the details of these statutes there is some divergence, but in general the law is indicated by these illustrations. » § 3931, Rev. Stat. Missouri. CHAPTER VII. TRADES UNIONS AND LABOR ORGANIZATIONS. § 98. Introductory. § 109. 99. The Strike and the Lock- out. 110. 100. The Strike as a Conspiracy. 101. The Subject Continued. 102. Where a Strike will be Up- held. 111. 103. Where a Lockout will be Held Lawful. 11-2. 104. Combination of Employers. 113. 105. The Boycott. 106. The Nature of the Offense. 114. 107. PicketinfT. 115. 108. Biacklistino;. IIG. Obligation of Carriers as Affected by Strikes. The Strike as a Violation of the Federal Anti-Trust Act. The Relations of Trades Unions to a Receiver. Interference with Trans- portation of the Mails. Contracts between Employ- ers and Trades Unions. Remedy by Civil Action. Remedy by Injunction. Statutorv Rcjrulations. S 1)S. IntiMKliictorv. — In the main the law relating to trades unions and other hibor orjjanizations is of very re- cent oriofin. The idea of these associations, as the means of securing the ends for which they are organized, and the methods employed, arc essentially modern. They are an outjjrowth of the civilization and of the industrial condi- tions of the [iresent age. The law has heen determined by the decisions of a recent date, or is the result of siuh legis- lation as existing conditions have appeared to demand. A few unimportant English cases of a date anterior to the present century were reported, but we have no report of any case in this country until a later period. The tirst American case which contributed to the determination of the law as it now stands was that of the Commonwealth v. Carlisle. This ease was tried 1)y Mr. Justice (iibson in the Court of i^isi Pn'ns, in Philadelphia, in 1H21. It was held § 98.] TRADES UNIONS AND LABOR ORGANIZATIONS. 287 that a conihiiiMtioii is tTiiniiial when the act to be done has a iieeessarv teiuleiicy to prejudice the public or to oppress individuals by unjustly subjecting them to the power of the confederates.^ For a considerable period this was the lead- 1 Commonwealth v. Carlisle, Bright. 3(j. In Commonwealth v. Hunt, 4 Met. Ill; s. c, 38 Am. Dec. 340, 3.J4, decided in 1842, the court says: "The manifest intent of the association is to induce ail those engaged in the same occu- pation to become members of it. Such a purpose is not unlawful. It would give them a power which might be exerted for useful and honorable purposes, or for danger- ous and pernicious ones. If the latter were the real and actual object, and susceptible of proof, it should have been specially charged. Such an association might be used to afford each other assistance in times of poverty, sickness and dis- tress; or to raise their intellectual, moral and social condition; or to make improvement in tlieir art; or for other proper purposes. Or the association might be designed for pur{)oses of oppression and in- justice. But in order to charge all those, who became members of an association, with the guilt of a criminal conspiracy, it must be averred and proved that the actual. if not the avowed object of the a.«sociHtion. was criminal. An association may be formed, the de- clared objects of which are inno- cent and laudable, and yet tliey m.iy have secret articles or an agreement communicated only to the members, by which they are banded together for purposes in- jurious to the peace of society or the rights of its members. Such would undoubtedly be a criminal conspiracy, on proof of the fad. however meritorious and praise- worthy the declared objects might be. The law is not to be hoodwinked by colorable pretenses. It looks at truth and reality through, what- ever disguise it may assinne. But to make such an association, os- tensibly innocent, the subject of prosecution as a criminal conspir- acy, the secret agreement which makes it so. is to be averred and proved as the gist of the offense. But when an association is formed for purposes actually innocent, and after\vard> its powers are abused, by those who have control and management of it. to purposes of oppression and injustice, it will be criminal in those who thus misuse it or give consent thereto, but not in the other members of the asso- ciation. In this case no such secret agreement, varying the ob- jects of the association from those avowed, is set forth in the count of the indictment. Nor can we perceive that the objects of this association, whatever they may have been, were to be attained by criminal means. The means which they proposed to employ, as averred in this count, and whii-h we are now to presume were established by the proof were, that they would not work for a person who. after due notice, shotild eniploy a jour- neyman not a member of their society. Supposing the object of the association to be laudable and lawful, or at least not inilawful. are these means criminaly The case supposes that tliese persons are not bound by contract, but free to 288 TRADES UNIONS AND LABOR ORGANIZATIONS. [§98. inof case, but in the main the uuthoritit^.s rehiting to this de- partment of the law belong to a much more recent (hite. The general theory on which the decisions are based is suc- cinctly and happily stated by the court in the recent case of the State v. Stewart, as follows: "In England and here, it \york for whom they please, or not to work, if they so prefer. In this state of things, we cannot perceive that it is criminal for men to agree together to exercise their own ac- knowledged rights, in such a man- ner as best to subserve their own interests. One way to test this is, to consider the effect of such an agreement, where the object of the association is acknowledged on all hands to be a laudable one. Sup- pose a class of workmen, impressed with the manifold evils of intem- perance, should agree with each other not to work in a shop in which ardent spirit was furnished, or not to work in a sLop with anyone who used it. or not to work for an employer who should, after notice, employ a journeyman who habitually used it. The conse- quences might be the same. A workman who still persists in the use of ardent spirit, would tind it more difficult to get employment; a master employing such an one might at times experience incon- venience in his work, in losing the services of a skillful but intemper- ate workman. Still, it seems to us, that as tlie object would be lawful, and the means not unlawful, such an agreement could not be pro- nounced a criminal conspiracy." Other early English and American cases are Rex v. Journeymen Tailors, 8 Mod. 10; Reg. V. Duffield, 5 Cox C. C. 404; Reg. v. Druitt, 10 Cox C. C. 593; Reg. v. Hunn, 12 Cox C. C. 31G; Reg. v. lilbbtrt. 13 Cox C. C. 82; People v. Melvin, Yate's Sel. Cas. Ill ; s. c, 2 Wheel. Cr. Cas. 202; People v. Trequier, 1 Wheel. Cr. Cas. 142; People v. Fisher, 14 Wend. 9; s. C, 28 Am. Dec. 501. '-I am decidedly of the opinion that every w^orkman in the service of an employer is entitled to the free and unfettered exercise of his own discretion, whether he will continue in that employment, provided he has not entered into a contract for a specific period of service. It rests with himself whether he will remain in such employment in connection with any other person or persons with whom he may not choose to work. And more than that, if several persons in the employment of a master consider others in that em- ployment obnoxious, either per- sonally or on account of their char- acter or conduct, they have a perfect right to put to their em- ployer the alternative whether he will discharge the obnoxious per- son or persons and retain their services, or lose them and retain the obnoxious persons. But if men go further than that and do not fairly put the alternative to the master, but seek to coerce him by the threat of doing something which is likely to operate to his injury if he does not discharge from his emjiloyment certain other persons against whom they have some objection. I think they prop- erly come within § 3, of Stat. 6, Geo. IV., chap. 129." Cockburn, J., in AValsby v. Auley, 7 Jur. (X. S.) 465. § ;tl).] TRADES UNIONS AND LAMOIl ORGANIZATIONS. 289 i> law fill, and it ma}' Ix' added coiimiciidaMc, for any \n)dy of men to associate themselves together for the |)ur[)ose of l)ettering their condition in any respect, financial or social. The very irenius of free institutions invites them to higher levels and better fortunes. They ma}' dictate their own wages, fraternize with other associates, chose their own employers, and serve man and mammon according to the dictates of their own conscience. But while the law accords this liberty to one, it accords a like liberty to every other one, and all are bound to so use and enjoy their own liber- ties and privileges as not to interfere with those of their neighbors. All the legislation in Enjjland and America has been progressively in the direction of according to laborers the enjoyment of etjual rights with others. The early English statutes, beginning with the middle of the four- teenth century, are to be read in the light of the civilization of that day, and their provisions, to us of the nineteenth century, harsh, illiberal and tyrannical, were but the reflex of the prevalent notions of class distinctions, that shaped and guided the social and political policy of those days. From time to time, however, down to 187."), this legislation has l)een liberalized and christianized; and to-day in England, as here, workmen stand upon the same broad level of eriuality before the law with all other vocations, ])r()fessions or callings whatsoever, res})ecting the disposi- tion of their labor and the advancement of their associated interots. There, a> here, it i> unlawful for employers wrongfully to coerce, intimidate or himler the free choice of worknuii in the disposal of their time and talents. There, as here, it is unlawful for workmen wrongfully to coerce, intimidate or hinder employers in the selection of such workmen as they choose to emi)Ioy. Tlu-re, as here, no employer can say to a workman he must not work for another employer, nor can a workman say to an em[)loyer he cannot employ the service of another worknuin."' § 1M». The Strike and the Lockout. — A concerted abandon- ment or discontinuance of their work at an appointed time by ' state V. Stewart. .".!• Vt. 'iTS.-is.T. 19 2iM) TKADKS IMONS AM) LA1U)K OKC AMZA TIONS . [§ d[K jinunibei- of lahoiiiiu' men is teniiod a strike. The objeet of the strike is to seeiire an iiiorease of waijcs or to ])revent a reduction of wages, or to enforce some demand or reiiuest. The strike may be detined as a (ombination of laborinir men or of other persons actin*:- in tlie capacity of wage earners, designed to enforce some demand or to secure some concession on the part of an employer. The object of the combination mav be to secure an increase of wacres, or to resist a reduction; or it may be to secure some change in the manner of conducting the business, as the shorteningof the time fixed for the labor of a day. Whatever form it may assume, it is an effort to compel an employer to yield to some denumd, or to grant some favor that is sought. The lockout is the corresponding act of an employer. Literally, it is the excluding of laborers or other employes from their accustomed place of labor by the locking or closing of the doors. It is the dismission by an emi)loyer of persons in his employment, and it may be either a tem- porary or a permanent dismission. A lockout may be the result of a combination on the })art of employes, or a single employe may act on his own res[)ousibility. But whether a concerted or individual action, it is designed as an enforce- ment, either of some demand, as a reduction of wages or of a refusal to yield to the demand or to the recjuest of the em])loye. A i)ractical lockout is sometimes effected 1)\- striking employes who f()rcil)ly prevent the entrance of other workmen who desire to take their places.' ' ".strike — Tlie iict of :i body of conducting tlio lousiness of the workmen employed by the sumc principal, or to enfoioe some pur- iiiastcr. in stopping work alto- ticiilar policy in the character or getlier at a prearranged time, and number of the men employed, or refusing to continue until higher the like."" Anderson"s I.aw Die- wages, or shorter time, or some tionary. Strikes of laborers have other concession is granted to theuj not been unfrequent, and as well by the employer." Black's Law their cause as their consequences. Dictionary. "A combination among and effects upon business arrange- laborers, or those emj)loyed by ments were well understood l)y the others, to compel an increase of parties to this contract, and jiro- wages, a change in the hours of vision was intended to be made labor, a change in the manner of against the results, but not against § 100.] TRAIJES INIONS AM) LABOK ()K<; AM/ATIONS, 291 § lOO. The Strike as a Conspiracy. — It is tlic privilege of everv ciuployi'. except as lie 'may l)e Ixniiul by a contract, to ahaiulon the service of his employer. Tiiless tln're is something peculiar in the nature of his cin|)loymcnt, or in hi.s relations to his emj)loyer, in consctiuence of which his refusal to continue his work would inHict an injurv u))on the l)usiness, any i)ersoii is at liberty to discontinue his labor. lie is free, also, to enter into a combination with others, the oi)ject of which is to promote the interests of the persons constitutiui? such combination, by maintainiuir or increasing their wages. In itself, associations by trades- men or other laborers for mutual protection and benefit, is lawful and altogether })roper. As long as the acts of such organizations are orderly and in conformity to law thev will be favored rather than (Otherwise l)y the courts. \\'iiatever is adapted to promote the pecuniary interests of the labor ing classes l)y legitimate and i)roper means is favored bv public policy. But any combination, the object of which is their occurence; that is, tlieir oh- of ttie plaintiff, under the .stipiilji- ject was to protect tlie phiintiff tion to uialini|)ly a civ il offense or a criminal eonspiracy depends n{)on the extent to which it is carried. In a recent leading case before the Supreme Court of \'ermont, the law to which combinations of this character are subject, is stated by Mr. Justice Powers, as follows: "By the law of the land, these respondents have the most un(iualilied right to work for whom thev please, and at such i)ri(es as they l)leaso. By the law of the land, O'K and (t have the same right. By the same law the Ryegate (iranite Company has the right to employ the respondents or O'K on such terms as may be mutually agreed upon, without let, hinderance or dictation from any man or bodv of men whatever. Suppose the meml)ers of a bar association in Caledonia county should combine and declare that the respondents should employ no attoroe}', not a member of such association, to assist them in their defense in this case, under the i)enalty of being dubbed a 'scab,' and having his name paraded in the pub- lic press as unworthy of recognition among his brethren, and himself brought into hatred, envy and contempt, would the respondents look upon this as an innocent inter- meddling with their rights under the law? The proposition has only to be stated to disclose its utter inconsistency with every princii)le of justice that i)ermeates the law under which we live. If such conspiracies are to be tolerated as innocent, then every farmer in Vermont, now resting in the confidence that he may employ such assistance in carrying on his farm as he thinks he can afford to hire, is exposed to the operations of some secret code of law, in the framing of which lie had no voice, and upon the terms of which he has no veto, and every manufacturer is handicapped by a sys- tem that portends certain destruction to his industr}'. If our agricultural and manufacturing industries are sleeping upon the tire of a volcano, liable to eruption at any moment, it is high time our people knew it. But hai)pily such is not the law, and among P^nglish speaking people never has been the law. The reports, English and Ameri- § 100.] TRADES I'MONS AND LAHOK OKC AM/ATIONS. 2!l3 can, art' full of illiislralioiis of the doclriiu' that a coiiihina- tion of two or more j)ersons to effect an iHeiral purpose, either by legal or illeiral means, whetlier such purpose l)e illegal at common hiw or 1)\ statuti*. or to effect a legal purpose by illegal means, whether such means he illegal at common law or by statute, is a common law conspiracy. Such «-ombinations are e(|ually illegal whether (hey promote objects or adopt means that are ptr .sv indictable, or pro- mote objects or adojjt means that nva per se oj)j)ressive, im- moral or wrongfully |)rejudicial to the rights of others. If they seek to restrain trade, or tend to the destruction of the material j)r<)speritv of the country, they work injury to the whole public. These projjositions are the clear deduction of the cases cited in argument . and breath a spirit of ecjuality and ju>tice that must conmiciid itself to every intelligent mind. Counsel have cited us to no case in which it has been ruled that this crime of consj)iracy does not exist at the common law. \\'e are referred to Mr. Wright's clear monogra])li upon Criminal Cons))iracies, wherein the author, though not denying that conspiracies to injure industries and against the free exercise of one's calling, according to his own choice, wert' held to l»e criminal at the common law, still attempts to throw doubt upon the basis upon which the doctrine i'est>. But when, in 1 Hawkins' Pleas of the Crown, chap. 27, § 2 (a book of great authority: 2 Ku>>ell on Crimes, tiTt), it is laid down "that all c(tn>pira- cies whate\er, wi'ongfnlly to jjrejudice a third person, are highly criminal at common law." and in 2 A\'harton'> Crim- inal Law. § 2;')22. it is saies of the lattci'. whethci' of extortion or mischief;' and the same proposition in one form of expression and another is lai4 TUADKS IMoNs AND I-AMOli ()K(i ANI/.ATIONS. [§ 100, .]., ill Queen \. Keiiriek, .') (^. H. 4I*: 'It \v;i> ediiteiuled in the Hrst j)l:iee tlml ihe third count was had hy reason of uncertainly, as uivinu- no notice of the offense eharired. The whoh' law of conspiracy, as it has been administered at least for the la>-t hunch'cd years, lias been thus called in (juestion: for we haxc sutticient proof that duriuix that period any eoinhination to })rejudice another unlawfully has been considered as constituting the offense so called. The offense has been held to consist in the conspiracy, and not in the acts coniniitted foi" carrying it into effect; and the charge has been held to l)e suthciently made in general terms describing mi unfaivful conspiracy to effect a l)ad purjjose.' ■ ' 1 ' .State V. Stcwiut,")!) Vr. 273. 28."). lci;i,slatiire lias now .so declared. See also Reg. V, Selsby, ") Cox Cr. The enactment is express, tbat Cas. 495; Reg. v. Harris, 1 Car. & agreements among workmen shall M. GGl; Hilton v. Eckersley. H K. be binding, whether they would or & B. 47; Rex v. Mawbey. (i T. R. not. but for the acts, have been (519; Rex v. Eccles. 1 liCach Cr. deemed unlawful as in restraint of Cas. 274; Walsby v. Anley. 3 E. i<: trade. Is it supposable that it E. olG: Reg. v. Rowlands. 17 Ad. would have done so in tlie way it «fc El. 070: Reg. v. Druitt. Id Cox has, had the workmen's eombina- Cr. Cas. 592: Reg. V. liiinn. 12 Cox tion been a punishable misde- Cr. Cas. 81(i; Springhead Co. v. meanor':'"" The iiroeurement of Riley. L. R. ("> Eloyer 415; State v. Buniham. 15 X. H. shall accede to demands of such 390; ^lorris Run Coal Co. v. I'.ar- outside persons, which he is under clay Coal Co.. (is I'a. St. 173. In no obligation to grant, constitutes Mogul S. S. Co. v. .McGregor. L. in law a malicious and illegal in- R. (1892) App. Cas.. at page 47. terferenee wiib the employer's Lord Morris says: --There is one business, which is airtionable. Old thing that is to uie decisive. I Dttminicui Steamship Co. v. Mc- have always said that a combina- Kenna. 30 Fed. Rep. 48. --Eveiy tion of workmen, an agreement man has a right to determine what anuuig them to cease work except liranch of business he will pursue, for higher wages, and a strike in and to mak«' his own contracts conseciuence. was lawful at com- with whom he jileases. and on the nton law; perhaps not enforceable best tern)s he can. He may change inter Sf. but not iiidictalile. TIk- froui one occui>ation to .•mother, § 11)1. J TKADKS INIONS AND I.AI'.OK OIM i AM/A IK )N ; I'l*.') § lOl. The Sub.j«'ft Continued. — 'IMic (l('ti>i()H> (»ii this subject :irt' l):i>e(l upon the i^ciicral piiiiciplc that, whiU' the (Mtizen is enjjaijed in a Icofitinialt' callinu', lu- i> cntitK'd to tlu' j)rotoction of the li'ovcrnnu'nt . and that the State itx'lf I L and pursue iis iiiany differeut or- cupations as he pleases, and com- petition in business is lawful. He may refuse to deal with any man or class of men. And it is no crime for any number of jicrsons. without an unlawful obji-ct in view, to asso- «-iate themselves tojjether and agree that they will not work for. or deal with, certain men or classes of men, or work under a certain price, or without certain condi- tions. Commonwealth v. Hunt. 4 Met. Ill; Boston Glass Manufac- tory V. Binney. 4 Pick. 42."); Bowcn V. Mathcson. 14 Allen. 4t»i». This freedom of labor and business has not always existed. When our an- cestors came here, many branches of labor and business were hamp- ered by legal restriction created by English statutes: and it was a long time l)efore the comuuinity fully imderstood the im|)ortance of freediun in this respect. Sonu' of our early legislation is of this charai-ter. One of the colonial acts entitled -an act against oppres- sion.* punished by tine and im- prisonment, such indisposed per- sons as may take the liberty to oppress and wrong their neighbors l)y taking excessive wages for their work, or imreasonable prices for miMchandise or other necessaries as may pass from man to man. Anc. Chart. 172. .knottier reipiired artificers or handicraftsmen meet to labor, to work by the day for their neighbors, in mowing, reaping of corn and the inning thereof. //>. 210. Another act regulated the j^rice of bread. //'. 7.')2. .Some of our town records show that, under the power to make by-laws, the towns fixed the prices of labor, provisions and several articles of merchandise, as late as the time of the Revolutionary War. But ex- perience and increasing intelli- gence led to the abolition of all such restrictions, and to the estab- lishment of freedomforall branches of labor and business; and all persons who have been born and educated here, and are obliged to begin life without property, know that freedom to choose their own occupation and to make their own contracts, not only elevates their condition, but secures to skill and industry and economy their ap- propriate advantages. P'reedom is the policy of this country. But freedom does not imply a right in one person, either alone or in com- bination with others, to disturb or annoy another, cither directly or indirectly, in his lawful business or occupation, or to thri-aten him with annoyance, or injury, for the sake of compelling him to buy his peace; or in the language of the statute cited above, willi intent to extort money or any pecuniary advantage whatever, or to cou)pel him to do any act against his will." " Carew v. Kutherfs. no crime, an exact definition of which is umre dillicult to give than the of- fense of conspiracy. That a com- bination of perstms to effect an end, itself of an indictable nature, will constitute this crime is clear; nor is there any more doubt that. 2;m; TK\1)KS UNIONS AND LAMOR ()R(i ANIZATIOXS. [§ lOl. has an interest in the successful ])ioseeution of every Iciriti- niate branch of business. The prosperity of the individuals of which it is composed constitutes the prosperity of the conunonwcalth, and whatever tends to the promotion of though the purpose the confed- eracy is designed to accomplish be not criminal, yet. if the means adopted be of an indictable char- acter, this offense is likewise com- mitted. * * ♦ It appears tome that it is not to be denied that the alleged aim of this combination was unlawful; the effort was to dictate to this employer whom he should discharge from his employ. This was an unwarrantable inter- ference with the conduct of his business, and it seems impossible that such acts should not be. in their usual effects, highly injuriou;?. How far is this mode of dictation to be held lawful^ If the manu- facturer can be compelled in this way to discharge two or more hands, he can by similar means be coerced to retain such workmen as the conspirators may choose to designate. So his customers may be proscribed and his business in other respects controlled. I can- not regard such a course of conduct as lawful. It is no answer to the above considerations to say, that the employer is not compelled to submit to the demand of his em- ployes; that the penalty of refusal is simply that they will leave his service. There is this coercion, the men agree to leave simul- taneously, in large numbers, and by preconcerted action. We can- not close our eyes to the fact that the threat of workmen to ijuit the manufacturer. >mdcr these cir- cumstances, is oiiuivalent to a threat, that unless he yield to their unjustitiable demand they will de- range his business and thus cast a heavy loss upon him. The work- men who make this threat, under- stand it in this sense, and so does their employer. In such a condi- tion of affairs, it is idle to suggest that the manufacturer is free to reject the terms which the confed- erates offer. In the natural posi- tion of things, each man acting as an individual there would be nn coercion ; if a single employe should demand the discharge of a co-em- ploye, the employer would retain his freedom, for he could entertain or repel the requisition without embarrassment to his concerns: but in the presence of a coalition of his employes, it would be but a ' waste of time to pause to prove that, in most cases, he must submit, under pain of often the most ruin- ous losses, to the conditions im- posed on his necessities. It is dif- ficult to believe that a right exists in law which we can scarcely con- ceive can produce, in any posture of affairs, other than injurious re- sults. It is simply the right of workmen by concert of action and by taking advantage of their posi- tion, to control the business of another. I am unwilling to hold that a right which cannot, in any event, be advantageous to the em- ploye, and which must always be hurtful to the employer, exists in law. In my opinion, this indict- uu'nt sufficiently shows that the force of the confederates was Mrought to bear upon their em- ployer for the purpose of oppres- sion and mischief, and that this § lOl.] TKADKS rXIONS AND I.A1U)K OUC ANIZATIONS. ■291 this ('11(1 has a claim upon the protection and t"a\-or of its irovi'iniiKMit. This basal principU' is stated with ^reat clearness and force in the case above cited, as follows: *'The principle upon which the cases, Entrli^^h and Aiueri- ean, proceed, is, that every man lia> the right to emph>y his talents, industry and capital as he pleases, free from the dictation of others; and if two or more persons combine to coerce his choice in this behalf, it is a criminal conspiracy. The labor and skill of the workman, be it of high or low degree, the plant of the manufacturer, the eijuipment of the farmer, the investments of commerce, are all in an c(|ual sense pro|)erty. If men by overt act of violence destroy either they are guilty of crime. The anathemas of a secret organization of men combined for the purpose of control- ling the industry of others by a species of intimidation that works upon the mind rather than the body, are (juite as amounts to a conspiracy.'' Beas- ley. C. J., in Slate v. Donaldson, 32 N. J. L. 151, ir)5. Where two or more men wrongfully and cor- ruptly agree among themselves, either for the purpose of creating sympathy in a threatened strike, or for any other i)urpose, to cause trains carrying mail or interstate commerce to be stopped or to dis- charge their employes or to refuse to employ new men. so as to stop such trains, they are guilty of con- spiracy. United States v. Debs, (!3 Fed. Rep. 43f'.. The defendants, to the number of eighteen, were en- gaged by the plaintiff as journey- men tailors to do tailoring work for plaintiff by the piece. They (•onsi>ired together to stop work simultaneously, and return all work in an untinished condition. On the 31st of March. 187(i. th(n- did stop work, and returned to the plaintiff variotis and ninnerous pieces or jobs of work (garments) in an unfinished state, which were entirely worthless in such untin- ished condition. Plaintiff could not get any workmen to finish said jobs, to plaintiffs damage, etc. Held, that a bill of particulars in the county court, setting up the above facts, contained facts sufli- cient to constitute a cause of action. Ulapstrick v. Ramge, 9 Neb. 390. According to the principles of the common law. a conspiracy upon the part of two or more persons with the intent by their combined power to wrong others or toi)ieju- dice the rights of the public, is in itself illi>gal, although nothing be actually done in execution of such conspiracy. This is fundamental in our jurisprudence. So, a com- bination or conspiracy to procure an employe or bod}' of emplcjyes to i|uit service in violation of the contract of service, would be un- lawful, and in a proper case might be enjoined, if the injury threat- ened would be irremediable at law. Arthur v. Oakes, 03 Fed. Rep. 310. 21>(S TRADES UNIONS AND I.AHOK ()K(}ANIZATI()NS. [§ 101, dangerous and irt'ncrally altogether more effeetive than aet.s of actual violence. And while such conspiracies mnv give to the individual directly affected by them a private right of action for damages, they at the same lime lay a basis for an indictment on the ground that the State itself is directly concerned in the promotion of all legitimate in- dustries and the development of all its resources, and owes the duty of protection to its citizens engaged in the exer- cise of their callings. The good order, peace and general prosperit}' of the State are directl}' involved in the (jues- tion."i 1 state V. Stewart, 5!) Vt. 273. Judge Baker, in Lake Erie & W. Ry. Co. V. Bailey, Gl Fed. Rep. 494. 496, says: "In this ease the evidence shows that there are a number of men who belong to a secret labor organization whose ramifications reach not only over the entire extent of the United Stales, but into Canada as well. It has kindred associations by other names in Europe. All these or- ganizations have the same general aim. and that is by force, violence and terrorism to con)pei their em- ployers to submit tiieir business, their property and their means of livelihood to the arbitrary demands of these associations. In their secret oath bound assemblies thej' determine for themselves on wiiat terms they will work for others. They refuse those who are not members of their association the right to labor when tliey desire to do so. Those who will not submit to their exactions have no more option about (-arrying on their business than lias the belated trav- eler when a highwayman presents a revolver and bids him submit. As I say, I do not see any differ- ence, eitlier morally or legally, between this sort of business, wliere an organized body of uumi i-omliinc for the criminal and unlawful i)ur- pose of compelling somebody el>-e. against his will, to submit to their demands, than if the same thing were done by a single individual. If they compel submission, it is robbery, because, whoever com- pels me, by force or terrorism, to give up one dime of my money, or one dime's worth of my property, is equally guilty, whether it be the man who meets me on the street corner in the nighttime, or an organized band of striliers who take possession of my property and deprive me of its use. Hut these combinations are infinitely worse than isolated violations of the law. in that they teach general disre- gard and contempt of law. They make people think thai human rights are of no value. They teach the fantastic and monstrous doc- trine that a man who is hired to labor and is paid for his work, has some sort of eiiuitable riglit in the j)roperty of his enipioyer, together with a right of perpetual employ- ment. It has been said on the floor of the United States Senate that the laborer has a sort of ecjuitable lieu on the property of the man for whom he works, whose money bought the property, together with the right of periK>lual employ- § 1<>2.] TKADKS I'MONS AM) LAHOK OK«i AM/AIK )N.>>. I^l'I* $102. Where a Strike will be Upheld. — I iKhrtlic eai'ly Eiiirlisli decisions all strikes, that is, all aWaiKldiiiiiciit of stTNicc \)\ Iradc^iiicii or other laborers, a> a hodv and l»y j)revious arraiiii'eineiit . were held t() he eriiuiiial (•()n>i)iracies, without I'euard to tlu' eireuinstanees under which the strike occurred, and the earlier American tleeisions were in the same general direction. But the doctrine has been irradu- ally modified, and it is now well established that laboriuir men may abandon the service of an employer, and that they may do so indi\idually or as a body, and by prexious auree- ment. They have the ri^ht to cond)ine for the jjurpose of securinu' an increase in their waues, of resistiiiii" a reducti(tn of waii'es or of otherwise promotinu' their pecuniary interest. But they must })roceed in an ordeily and lawful numner. Any interference with the freedom of their employers, or of that of other worknu-n. or any infrinuement upon the im-nt. It may do for men wLo art' reckless of the welfare of human society. — who care notliinj; for its peace and good order. — to imperil life, projierty and liljerty, and the per|ieniity ofoiw institutions, by teacliinjf such doctrines, but the juduje who tolerates it ought to be .^tripped of his gown, and be driven from the sacred temple of justice. I think these men have been mis- lead : I think they have l)een de- ceived tiy false teachers, but still they ought to have known better than to violate the law of the land, and to trample underfoot tlie sol- enm processes of the court. ♦ • * If laborers wish to organize to learn the j>rinciples of jiolitical economy, to learn something about the great laws of supply and de- mand, or to learn something about the effect immigration and the in- crease of the number of laborers on the wage market of the country, if they want to organize for the purpose of fpiitting tlieir em- ploy ers: in short, if they want to organize to do anything that is recognized as within the pale of the law. I have no word of criti- cisMi. I think that such organiza- tions for lawful purposes are to be commended. But when these or- ganizations, as I said on yesterday, combine and confederate for the purpose of seizing other men's property, or when they undertake by force and intimidation ta drive other men away from employment, and thus deny tliem liie right of earning a livelihood, they commit a criuM- that this court cannot suf- fer to go unpunished. There ought to be blazed on the minds of every one of these men that belongs to a laiior organization, as with a hot iron, so that tliey >hall kn«»w and understand it, that while it is law- ful and connnendable to (uganize for legitimate and .peaceful pur- |)o,-.es. it is criminal to organize for the invasion of the rights of others to enjoy life, liberty and prop- ertv." 800 THADKS INIONS AM) LABOR OKGAMZATIOXS. [§ \()2. rights of the public, will roiKlor the act an offense. In a recent case before the Circuit Court of Appeals of the Seventh Circuit, which has already l)econie a cause ce/ebre, Mr. Ju>tice Harlan staled the rule, as follows: ''The rule, we think, is without exception that eipiity will not compel the actual, atfirniativ'e performance by an employe of merely personal services, any more than it will comi)el an employer to retain in his personal service one who, no matter for\\liat cause, is not acceptable to him ft)r services of that charac- ter. 'I'he riijht of an employe eniraired to perform personal service to (juit that service rests upon the same basis as the right of his employer to discharge him from further per- sonal service. If the (piitting in the one case or the dis- ch;irging in the other is in violation of the contract between the i)arties, the one injured by the breach has his action for damages; and a court of e2.] TKADKS INIONS AM) LAIiOIi ()K( IAN I ZATK >NS. 301 .scrvici' of :i tjnas! public r()ri)()r;iti()ii to withdraw thd'cfroiu at such time a> he .sees fit, and thcriiiht of the niaiiaiiers of such a corporation to dischart:e an euipU)ve from service whenever they .see tit, must he deemed so far absolute that iu> court of e(]uity will compel him, iigain.st his will, to re- main in >ucli ser\ice. or actually to perform the personal acl> re(|uired in such emj)loyinents. or compel such mana- I2:crs, airainst their will, to keep a particular employe in tlu'ir service. It was competent for the receiver.s, in this case, subject to the approval of the court, to adopt a schedule of wages or salaries, and .sa}' to employes, 'we will l)ay according to this schedule, and if you are not willing to accept such Avages, you will be discharged.' It was compe- tent for an employe to say, 'I will not remain in your service under that schedule, and if it is to be enforced I will withdraw, leaving you to manage the proi)ert\' as best you may without my assistance.' Intheoneca.se, the exercise by the receivers of their right to adopt a new schedule of wages, could not, at least in the ca.se of a general employ- ment without limit a> to time, be made to depend upon consideration of hardship and inconvenience to emi)loyes. In the other, the exercise by emjiloyes of their right to(|uit in conse(|ucnce of a jjroposed reduction of w;iges, coidd not be nuideto depend uj)on considerations of hartlship or incon- venience to those interested in the trust properly oi- tu the public. The fact that employes of railroaliow b.-id failli upon thcii'|)Mrl, or a reckless disregard of their contract or of the con- venience and interests of both employer and the public, does lint justify a dep;irture from the gcncr.ii rule that ct|uity will not compel the actual atlii'mati\ c perforniame of merely personal services, or ( which is the sanu' thing) recjuire em- ployes, against their will, to remain in the personal service of their employer."' The rule in thi> case in its relation to ' Arthin- v. Oakes. (i3 Fed Hep. Manley. tUi X. Y. SJ; Benton v. ;M0. 31-S. See iiLso Toledo. A. A. & Pratt. 2 Wend. 3.S."); Lumley v. Gye, N. M. Ry. Co. V. Pennsylvania Co.. 2 El. & Bl. 210: Bowen v. Hall. 6 .54 Fed. Rep. 730, 740: Walker v. Q. B. Div. 333. 337. .\s to issuance Cronin. 107 Mass. Two; Rice v. of mandatory writs before case :m)-2 rUADKS IMONS AM) I.Al'.OK < )K(;AN l/ATIO.SS. [§ 1()2, Ihf receivers and to ihe i)ul)lic is farther slated, as fol- lows: "'I'hese eiiiploves, Iiavin»i' taken service first with the <'oiii|)aiiy aii tlu' riirlit to quit the servioo, their peucealjlc cij-openition jis the result of frieuclly urgunieiit, persu.'ision or conference auiouu- themselves, in assertiuir the right of each and all to refuse furllu'r service under a schedule of reduced waires, would accept; employers would not pay what otherwise they would consider fair wages. Supply and demand consist in the amount of labor for sale, and the needs of the employer who buys. If more men offer to sell labor than are needed, the price goes down and the em- ployer buys cheap; if fewer than required offer, the price goes up and he buys clear; as every seller and buyer is free to bargain for himself. The price is regulated solely by supply and demand. On this reasoning was founded com- mon law conspiracy in this class of cases. But. in this case, the work- men, witliout regard to the supply of labor or the demand for it. agree upon what, in their judgment, is a fair price, and then combine in a demand for payment of that price; when refused, in pursuance of the combination, they quit work, and agree not to work until the de- mand is conceded; further, they agree by lawful means to prevent all others, not members of the com- bination, from going to work until the employers agree to pay the price fixed by the combination. And this, as long as no force was used or menaces to person or prop- erty, they had a lawful right to do. And so far as is known to us, the price demanded by them may have been a fair one. But it is nonsense to say that this was a price fixed by supply and demand, it was fixed t)V a combination of workmen on their combined judgment as to it.* fairness; and. that the supply might not lessen it. they combiDed to prevent all other workmen in the market from accepting less. Then followed the combination of employers, not to lower the wages theretofore paid, but to resist the demand of a combination for an advance ; not to resist an advance which would naturally follow a limited supply in the market, for the supply, so far as the workmen l)elonging to the combination was concerned, was by combination wholly withdrawn, and as to work- men other than members, to the extent of their power, they kept them out of the market : by artifi- cial means, the market supply was almost wholly cut off. The com- bination of the employers, then, was not to interfere with the price of labor as determined by the com- mon law theory, but to defend themselves against a demand made altogether regardless of the price, as regulated by the supply. The element of an unlawful combina- tion to restrain trade because of greed of profit to themselves, or of malice toward j)laintiff or others, is lacking, and this is tlie essential element on which are founded all decisions as to common law con- spiracy in this class of cases. And, however unchanged may be the law as to combinations of em- ployers to interfere with wages, when such combinations take the initiative, they certainly do not depress a market price when they combine to resist a combination to artificially advance price." In Longshore Printing Co. v. Howell. 2t; Ore. 527. 543; s. c, 38 Pac. Rep. 304 TRADES I'NIONS AM) LABOR OROAMZATIOXS. [§ 102, would not have been illegal or criminal, although they may have so acted in the firm belief and expectation that a si- multaneous quitting without notice would temj)orarily incon- venience the receivers and the pi.blic. If in good faith and peaceably they exercise their right of quitting the service, 547. Wolverton, J., uses this lan- g^uage: "'If one person can law- fully quit the service of his em- ployer because of the rate of wages paid or the employment of objec- tionable persons, cannot several or many persons, first agreeing among themselves to the same purpose, likewise lawfully quit? Conspiracy at co'mmon law was a combination between two or more persons to do an unlawful thing, or to do a law- ful thing by unlawful means. Where not under special conti-act for a definite time a simultaneous severance of the relation between employer and employes at the in- stance of the employes, and where there was no preconcerted action of such employe*, was never con- sidered unlawful. Coming to the means employed, it is not unlawful for several or many employes to agree between themselves to quit their employer. As we have seen, at one time it was held to be an unlawful conspiracy for laborers to .combine for the purpose of quitting simultaneously, with the ultimate purpose of raising their wages, or inducing their employer to confine his employment to certain kinds of labor, or the like; but this is not now the law, the principle under- lying it having long since been discarded as inconsistent with lib- erty and the spirit of our free in- stitutions. After workmen have thus combined it is still not unlaw- ful fur them, by use of fair means, to communicate the reasons for their design, and to signify their intention of «piitting to their em- ployer. "24 Am. & Eng. Ency. of Law, 123; Bohn Manufacturing Co. V. Hollis, 54 Minn. 233; s. c, 21 L. R. A. 337; 40 Am. St. Rep. 319; 55 X. W. Rep. 1119; Walsby v. Auley, 7 Jur. (X. S.) 4G6; People v. Kostka, 4 X. Y. Crim. Rep. 434; People V. Wilzig, 4 X. Y. Crim. Rep. 417: Rogers v. Evarts. 17 X. Y. Supl. 268. AVithin these limits a perfectly legitimate strike may be inaugurated and maintained, the object being to better the con- dition of workmen. Such an object is not only legitimate and lawful, but is just and praiseworthy. It was not wrongful, therefore, for the Multnomah Typographical Union to adopt a rule limiting the number of apprentices, and seek by fair means to enforce the ob- servance thereof, so that its pur- pose in that respect was lawful. The claim that a monopoly is thus being promoted surely constitutes no grounds for eijuitable interfer- ence by injunction. This whole controversy has arisen because of the existence of the rule referred to and the efforts of the union to require its observance at the hands of the plaintiff. When, however, unlawful means are used to uphold or maintain a strike, or if the pur- poses for which it is maintained are unlawful, then it follows, as a matter of course, that the strike is in itself unlawful."* See also Rey- nolds V. Everett, 144 X. Y. 1S9; s. c, 39 X. E. Rep. 72. § 104. J TKADKS LNIONS AM) LAMOK ()R(4AN1ZAT10NS. 305 intcnclinii- tliorcby only to bettor their coinlition by .securing such wages as the deem just, but not to injure or interfere with the free action of others, they cannot be legally charged with any loss to the trust property resulting from their cessation of work in (H)nse(iucnce of the refusal of the receivers to accede to the terms upon which they were will- ing to remain in the service. Such a loss under the cir- cumstances stated would be incidental to the situation, and could not be attributed to employes exercising lawful rights in orderly ways, or to the receivers, when, in good faith and in tidelity to their trust, they declare a reduction of wages, and thereby cause dissatisfaction among employes and their withdrawal from service."^ § lOIJ. Where a I^ockout will be Held Lawful. — The right of the employer to the enjoyment of freedom of action in the management of his business rests upon the same basis as that of the workman in pursuing his calling. As the workman may accept an offer of employment or decline it, according to his pleasure, so the employer niay accept the offer of service or refuse it, as shall appear to him to be for his interest. To all intents and purposes, the lockout is simply the refusal of an employer to accept the service of workmen on the terms which they have prescribed. His U right to do this is un(|uestioned. It is simi)ly the right to make a contract, and in this regard the rights of employers are the same as those of other men. Where there is an ex- isting contract it nmst be fulfilled unless nnllitied by the act of the other })arty. But in the absence of a contract the eniploNcr nia\ close his doors either permanently or for a limited j)eri()d. Tlu' right of combination among emi)loyer> suggests other tpiestions which will be considered in a fol- lowing sect ion. - § 104. Coiiil)iiiati«>n of KinployerM. — It is well estab- lished that employers have the same right as employes to combine for nuitual protection niid support. ;in to tlie same rules. They may do whatever they may deem for the promotion of their interests so lontr as they do not interfere with the rights of others, or with the interests of the public. But they may not employ their power as a confederation to oppress their em])loyes, or to compel them to accept terms of employment which they would otherwise reject. But while the}' are not permitted to use their {)ower'to the prejudice of the })ublic, or to the oi)pression of the hdjorer, they may employ it in resisting an unreasonable demand on the part of eni})loyes. Very few cases have been reported in which this was the direct issue, l)ut in some cases relat- ingtothe rights of employes the j)rinci})le has been expounded by the courts. In a leading English case, the court, refer- ring to the Act of Parliament , on which its ruling was based, said: "The object of the legislature numifestly was that all masters and all workmen should be left entirely free to act as they themselves chose with res[)ect to the conduct of their business. The nuisters should be at liberty to conduet their liusiness in what manner they })leased, and to give what watres thev thouo:ht rialit ; and the masters should be at liberty to conduct their different establishments as they thought right; that a number of masters might agree among themselves in what manner they would conduct their business res|)ectively, and what wages they would j)ay. In like manner, the legislature intended to allow that the work- men should meet together and agree and consider, and come to a positive agreenuMit among themselves, on what wages they would work for. what tcrm> they would rctiuiic for their work; and they were not to be ri'stricted from so doing merely because many of the workmen were in the em- ployment of one i)erson. and. perhaps, others in the em- ployment of oth('r>. The legislature having left both par- ties, therefore, intentionally ipiite free to make what agree- ment among themselves they thought lit, foreseeing, never- theless, that it might l)e that much \ iolence might be used, or much intimidation might be used, in order to carry into effect sucli agreenu'ut as the parties among theuuselve-s § 1(»4.] TRADES UNIONS AND LAUOK <)K(i AMZATIDNS. 307 iiii- shouhl lake place. And l>y that section of the Act of Parliament, to which the attention of the court has been directed, it is provided, that if any person shall, by violence to the person or property, or by threats or intimi- dation, or hy m()Icstini>- or in any way obstructing another, force or endeavor to force, any journeyman, manufacturer, workman or other j)erson hired or employed in any manu- fa<'tur('. trade or business to dei)art from his hirini;, em- ployment or work, or to return his work before the same shall be finished; or to prevent, or endeavor to prevent, any journeyman, manufacturer, workman or other person, not bcini:' hired or cmi)loyed, from hirinu' himself, or from ac- ceptiniT work or employment from any person or persons, therefore, by either of these means, to persuade and en- deavor to force any })erson to leave his employment. (»r to l)revent any person from entering into employment which he would otherwise have been willing to enter into, or by vio- lence or intimidation or molesting, to force, or endeavor to force, an\ manufacturer or person carrying on trade or l)usiness, to make any alteration in his mode of regulating, managing, conducting or carrying on such manufacture, every j)ers()n so offending or aiding, or al)etting or assist- ing therein, shall be imprisoned for any time not exceeding three calendar months."' In the leading American case, ' liejj. V. Kowliinds. 5 Cox Ur. .• placf. and the business of Cas. 4Gt». 490. "We are dealin*; in one is injured by ttie competition, this ease with common liiriits. the loss is caused by the other's Every man. be he capitalist, mer- pursuing his lawful right to carry chant, employer, laborer or pro- on business as seems best to him. fessional man. is entitled to invest In this legitimate clash of common his capital, to carry on his busi- rights, the loss which is suffered is ness, to bestow his labor, or to damnum ahai/uf itijuria. .So it may exercise his calling, if within the reduce the emi)ioyer*s protits that law. according to his pleasure, his workmen will not work at Generally speaking, if. in the exer- former prices, and that he is cise of such a right by one. another obliged to pay on a higher scale of suffers a loss, he has no ground of wages. The loss which he sustains, action. Thus, if two merchants if it can l>e called such, arises are in the same business in the merely from the exercise of the 308 TKADKS I'NIONS AM) LAlU>Ii OK(i AMZATIONS. [§ lO-i. tlic Entjlisli doctrine is iiplicld. The ruk' is stated by the court, :is follows: "I take it, then, a combination is crim- inal wherever the act to be done has a necessary tendency to prejudice the public or to ()pj)ress individuals by unjustly workman's lawful right to work for such wages as he chooses, and to get as high a rate as he can. It is caused by the workman, but it gives no right of action. Again, if a workman is called upon to work with tlie material of a certain dealer, and it is of such a character as either to make his hibor greater than that sold by another, or is hurtful to the person using it, or for any other reason is not satis- factory to the workman, lie may lawfully notify his eu)ployersof liis objection, and refuse to work it. The loss of the material-man in his sales caused by such action of the workman is not a legal injury, and not the subject of action. And so it may l)e said that in these respects what one workman may do many may do. and many may combine to do without giving the sufferer any right of action against tlio.se who cause his loss. But on this com- mon ground of common rights, where every one is lawfully strug- gling for the nuistery. and where losses suffered must be borne, there are losses willfully caused to one by another in the exercise of wlial otherwise would Ije a lawful right. from simple motives of malice. * * * The nominal operation of competition in trade is the keeping away or getting away patronage from rivals by inducements offered to the trading pul»lic. The nomi- nal operation of the riglit to labor is ilie securing of better terms by refusing to contract to labor, ex- cept on such t«'rms. * * * If the workmen of an employer re- fuse to work for him. except on better terms, at a time when their withdrawal will cause great loss to him. and they intentionally intlict such loss to coerce him to come to their terms, they are bona fide ex- ercising their lawful rights to dis- pose of their labor for the purpose of lawful gain. But the dealings between 1' Bros, and their material- men, or between such mateiial- men and their customers, had not the remotest natural connection either with defendants" wages or their terms of employment. There was no competition or possible contractual relation between plaint- iffs and defendants, where their in- terests were naturally opposed. The right of the plaintiffs to sell their material was not one which, in its exercise, brought them into legitimate contlict with the rights of defendants to dispose of their labor as they chose. The contlict was brought about by the effort of defendants to use plaintiffs' right of trade to injure 1* Bros., and upon failiu'e of this to use plaintiffs" cus- tomers right of trade to injure plaintiffs. Such effort cannot be in the bona fide jxercise of trade, is without just cause, and is, there- fore, malicious. The iunnediate motive of defendants here wa> to show to the building world what punishment and disaster neces- sarily followed a defiance of their demands. The remote motive of wishing to better their condition by the power so acquired, will not, as we think we have shown, make any legal justilication for defend- § 1(>4.] TRADKS INIONS AM) I.AI'.OK ( )U( ; AM /A TIONS . oOH .subji'ctiiiti- tlic'iii to thr power of tlu- coufi'cU'niU's, and wiviiiiT effect to the the purposes of the hitter, whether of extortion or mischief. Accortliiig to this view of the law a ooiuhiiiatioii of eiiiph)vers to (U'))ress the wa*>i;es of journev- iiien below wliat they would be, if there was no recurrence to arliticial niean> by eitlier side, is criminal. There is be- tween the different parts of the body politic a reciprocity of action on each other, which, like the action of antagoniz- in"afts."" Mooresv. Hiioklayers' I'nioii. 28 Wkl.v.Cin. Law Bull. 48. ••It is insisted tliat the ai^reeinents thus cstaVdished between the mem- bers of tlie order are in unhiwful restraint of trade, and therefore illegal. a.< l)eing against public policy. But in the opinion of the court the point is not well taken. In tlie relations existing between labor and capital, the attempt by po-operation on tlie one side to in- crease wages by diminishing com- petition, or on the other to increase the i)rotits due to capital, is within certain limits lawful and proper. It ceases to be so when unlawful coercion is employed to control the freedom of the individual in dis- posing of bis labor or capital. It is net easy to give a detinition whicii shall include every form of such coercion: it is enough that in the compact before us there is no evidence of any purpose to use such unlawful means in any form. In Walker v. Cronin, 107 Ma.ir). itiU. it is said that 'every man has a right to enjoy the fruits and ad- vantages of his own enterprise, in- dustry, skill and credit. He has no right to be protected against competition; i)Ut he has a right to be free from malicious and wanton interference, disturbance or annoy- ance. If disturbance or loss come as a result of competition, or the exercise of like rights by others, it Is damnum absque mjuria.' In Carew v. Rutherford, 10(5 Mass. 1. 14. it is said, 'Eveiy man has a right to determine what branch of business he will pursue, and to make his own contracts with whom he pleases and on the best terms he can." 'He may refuse to deal with any man or class of men. And it is no crime for any number of per- sons, without an unlawful object in view, to associate tliemselves together and agree tliat they will not work for or deal with certain men or classes of men, or work imder a certain price or without certain conditions.* And in Com- uu)nwealth v. Hunt. 4 Met. 111. lo4. Shaw, (.'. J., declares that the legality of such association will depend upon the means to be used for the atcompli-ihment of its ob- jects, and whether they be inno- cent or otherwise." .Snow v. Wheeler. 113 Mass. 170. IfS.".. 810 TKADKS I MONS AND I,A1U)U <)K(; AMZATIONS. [§ 104. th«' limits of f;iir coiiipclilioii ; hut the increase of power by coiiiljiiiatiou of means, heint; in ireometrifal proportion to the immber coneerned, any association may he ahle to iriv*' an impulse, not only oppressive to individuals, hut mischievous to the public at hirge ; and it is the eui|)loy- ment of an engine so })o\verful and danirerous that irives criminality to an act that would be perfectly innocent, at least in a legal view when done by an individual. The combination of capital for i)ur))oses of commerce, or to carr\ on aii\' other branch of industry, althouirh it may in its conse(|Uence> in- directly operate on third persons, is unaffected by this consideration, because it is a common means in the ordinary course of human affairs, which stimulates to competition and enables men to engage in undertakings too weighty for an individual. It would, I grant, be impossible for the em- ployers in any l)ranch of manufactures to produce a ])erma- nent depression of wages, because others would find it to their interest to eml)ark- in the l)usiness on more liberal terms; and these, by a just compensation for labor, would have a monopoly of all the journeymen, they would ultimateh ruin those who should adhere to the system of depression. The competition of interest must eventually break up every combination of the kind. But though every plan of coer- cion must recoil on those who put it in practice, it may occasion nuu-h temporary mischief to others. The journey- men are compelled to enter, with their employers, into 'the uni)rotitai)le contest of who can do the most harm," or submit lo work for such prices as the latter may choose to give. Hence, jn-ecisely the same oppressive conse(|uences to the comnumitv from a confederacy ainong; the bakers to extort an e.\orl)itant i)rice for bread, which ever\-om' will acknowledge to he indictable. The laboring classes pur- chase their bread with thcii" labor, or. what is the same thing, they give their labor for the money with which they purchase bread, and it is evident the more labor is depreci- ated, the more of it will he required to purchase any given quantity of bread. It must he evident, therefore, that an association is ci-imiiial where its object is to depress the § 10.").] TliAnKS INIONS AM) I.Al'.Oi: I )U( : AM /.A IK ).\S, ."Ul price of labor hclow what it would hriiii;", if it wcic left without artilicial cxcitc'inciit l)\ cither ina«;lcrs or journcN- iiusn, to take its cliaucc in the market, liut the motive may also he as important to avoid, as to iinhicc an inference of criminality. The mere act of comhininu- to chanire the price of labor is, jx-rliaps, «'\i(lcnce of impropriety of inten- tion, but not conclusive; for if the accused can show that the object was not to ijive an undue value to labor, l)ut to foil their antaironists in an attempt to assign to it, by sur- reptitious means, a value which it would not otherwise have, they will make out a good defense."' The iigreement of two or more employers to discharge their employes, or to refuse or to neglect to employ other men in the pla<'e of those discharged, or who had abandoned their service in order to create a prejudice against a trades union or to se- cure ))ul)lic sympathy, is an unlawful con■^piracy ."'^ vj 105. The Boycott. — The boycott, as it is ordinarily conducted, is an :ittem})t on the part of striking or dis- charged employes to interrupt or to prevent the public ' Cominonwe;ilth v. Carlisile. oUie.wise would not bave been dis- Briorht, 3ti. 41. charged, intending that such dis- 2 Of this form of conspiracy, charge should stop the running of •Judge Grosscup, in a charge to the mail or interstate commerce the grand jury in United States v. trains, and tiiereby raisf public Debs. (13 Fed. Rep. 4H(i. says : -'If indignation, they would be guilty two or more men.no matter wiiat of conspiracy. If two or more men, their position in the railroad com- in view of a threatened strike, pany may have been, wrongfully agreed wrongfully and corruptly and corruptly agreed among them- that they would not employ men selves, either for the purpose of to take the place.s of the men who creating public sympathy in a had quitted the service, but would threatened strike, or for any other allow the trains to stand still for purpose, that they would cause the the sake. n)erely. of creatin^j pub- mail trains and trains carrying in- lie sympathy or indignation against terstate commerce to l)e sto|)pcd. the strikers. I hey would l)e guilty and did acts in pursuanc(! of that of conspiracy, unless the circum- agreement, they are guilty of con- stances and situations were >uch spiracy. If two or more men that the employment of new men, agreed wrongfully and corruptly rea.sonably viewed, would lead to among themselves that, for the danger to those men. or danger to purpose of creating public sympa- the railroad proj)erty, or dangi-r to thy in tliis strike, they would* dis- any jiultlic interest." charge men from their employ who 812 TUADKS IMONS AM) I, AMOR ( )R( ; AM/.A IK »NS. [§ 10"). fi'oiii palroiiizini: :i foi'inci' ciiiploN cr. It i> a ((iiiil)!!!;!! ion aiiioiii:" (lisaffcctrd worUincii or t)lli('i" |)i'r>oM> iiiidcr wliirh tliov airret' to clisroutiuiK' all l)iisiiu's> ii'Iations with tlic })t'i's()n or poi'sons aijainst \vli(»m tln'ir efforts are directed, and to unite in an effort to induce the |>id)lic to sustain the luovenient. The t)bje{'t is to compel such jK'rson or persons to accede to some denumd of the organization. The effort is to interrupt the business thus assailed to sucli an extent as to force the |)roprietor to submission. This ma}' be done in a (|uiet and orderly manner, and in the use only of a moral force, or there may be an effort at intimidation and the threat of physical coercion. In some instances the boy- cott, practically, extends to the entire comnuuiity, as many ])ersons as refuse to comply with the demand of the oriranization are threatened with a withdrawal of patron- a*i"e and given to understand that a failure to supjjort the movement will mean a serious injury to their own business. The l)oycott is a com|)arativeIy nu)dern device for the coercion of an employer, and the case in which the teiMu had its origin has become historic and fanu)iis. An histor- ical notice, as (|U()ted in a recent leading case before the Supreme Court of Connecticut, is here copied. In the opinion, the court said: "^^'e will al>o notice that it is alleged that the conspiracy contemplated boycotting as a means to the end sought. That word is m)t easily detined. It is frecjuently spoken of as jjassive merely. — a let aloiu- policv, — a withdrawal of all ))Usiness relations, intercourse and fellowship. If that is its only meaning it will be ditti- cidt to tiiul in it anything criminal. Wv may. however, father some ide:i of its real meaninu' b\ a refer- ence to the circumstances m which the word (U"iginated. Those circumstances are thus nai'i'ated by Mr. -lustin McCarthw an Iiish gentleman of learning and al»ilily. who will be recognized as good authority. In his work, entitled 'Kuiiland under (iladstone,' he says: 'The strike was supported bv a form of action, or rather inaction, which soon became historical. Ca]>tain boycott was an Knglish- nian. an aNS. '.W'.'y ]M;irk, ill the wild and l>caiilit'ul di>lrict of ( 'oiUK'iuai'a. hi his f:i|);u'i(\ as auciit lie liaiid aroiiiid resolved not to \\n\v aiiytliiiiii: to do with him, and, as far as tliey could ))re\»'nt it. not to allow anyone else to have anythini;- to do with him. lli> life a|)|)eared to he in danirer; he had to claim police |)roteo\-cott and his suffer- inirs. and the way in which he was holdini>- his o;round, and they organized assistance and sent him down armed lal)t)rers from Ulster. To prevent ci\il war the ant lioiilies ha and police to Louuh Mark, and Captain Hoycotl's h.arvests wei'c hrouiiht in and his potatoes duiT by the armed Tlster laborers. Lniarded always l>y 1 he little army.' "' 'Stale V. (iliddrn. .■).'» (una. lU. ;iiit. is cli'iirly shown, 'i'liic it i-. 77. ••The ijuestion witli whicli \vc claimed ituit no llire.its were used; have to deal is wlietber this ease l)nt tlie l;ini;nau;e of ttie eiiciilais falls within ttie rule. That the de- has no douhtful uieanitij;. The fendaiu, the typoujraphical union, allidavits on tile sliow that it was set on foot a boycott ajjainst the perfectly understood hy those who ciunplalnant. as stated in the bill, received them; and the cinMiin- and in the aflidavits on tile, is not stances indicate that it was in- denied. Tliat this boycott was to tended that it should l)e so under- be enforced by threatening loss of stood. In Brace v. Kvans. ;{ Ky. & business to those who. havinir no Corp. L. .1. ."ilil. it was lield lliat the connection witli the union, should word •boycott' is in itself .i threat, continue to advertise with, or in -In |>opular acceptation, it is an any way patroni/e. the «'omplain- or<;ani/.ed effort to exi-lude a person im TKAOKS INIONS AM) LAMOIi < )K( SAN IZA IIONS. [§ lOli vj 1<)<». Tlie Nature of the Offense. — A coinbination of two or more jxTsoiis. the object of which is to dcstrow to l)rc;il\ 11)) or to iiitorriipt the business of aiiv person, is a from business lelaliDiis uitbotheis by ])ersii:ision. intimidation, and other ai'ts whit'h tend to violence, and thereby eoerce him. through fear of resiiltino^ injury, to submit to dictation in the ujanagement of his affairs." IJut it is insisted for the defendants tliat every repre- sentation of fact contained in their handbills and circulars is true; that is to say. that the complainant had. in 1S8S. bioken with the typo- j^raphical union, discharj^ed all union employes, and had since that date employed only those who were not members of the union; and that after repeatedly promising to unionize his otlice. he had tinally. in September. 1890. refused to do so. and declared that he would not employ any person who was con- nected with the union. All these are conceded facts. Therefore, argue coimsel for the defendants, this is only a case of lawful com- petition. The complainant having declared that he would not employ any member of the union, the union had a right to say that its members would not patronize the complainant. Nobody disputes that proposition. If that were all that is involved in this case, there would be nothing for the coint to act upon. But it is not all by any means. Instead of 'fair, although sharp and bitter competition." as is contended by counsel, it was an attempt by coercion to destroy all competition affecting the imion. It was an organized conspiracy to force the comiilainant to yield his right to select his own workmen, and sui)mit himself to the Cijntrol of the union, ami allow it to legu- late |)rices for liim. and to deter- mine whom he should employ and whom discharge. In other words, it was. and is. an organized effort to force i)rinters to come into the union or be driven from their call- ing for want of employment, and to make the destruction of the com- plainant"s business tlie penalty for his refusing to surrender to the union. Whatever moral obligation may have been incurred by com- plainant by reason of his promises to unionize his ottice. they were wholly without consideration, and they amount to nothing whatever in law or in etpiity. No case has been cited where, upon a proper showing of facts, an unsuccessful appeal has been made to a court of chancery to restrain a boycott. Tl>e autliorities are all the other way. At common law. an agree- ment to control the will of em- ployers by improper molestation is an illegal conspiracy. In New York, it has been held that the •boycott" is a conspiracy in re- straint of trade. People v. Wilzig, 4 X. Y. Crim. K. 403; People v. Kostka. 4 X. Y. Crim. R. WJ. So also in Virginia, (.'ounnonwealth v. Shelton. 1 1 Va. Law J. 324. And in Connecticut. State v. (ilidden. .V) Conn. 4t); s. «■.. 3 All. Rep. 890. And in England. Reg. v. Harrett, IS L. .1. 4M)." Casey v. (.'incinnati Typographical I'nion Xo. 3. 4.-) Fed. Rep. 13."j. 143. The Century Dictionary detines the word as follows : "Hoycott. [From the name of the tirst ]»rominent victim of the system. Captain Boy- cott, a farmer at Lough Mark, Conncmara. and the agent of Lord § !()(!. j rUADKS IMONS AM) I.A IK )li <)U( ; AM /A 111 »N S. .11.') iTimiiKil coiispirarv. In a iTcciit Kiiu:lish c iim'. Lord Fit/- fjorald, ill his opinion, said: "If th«' judiriiK'ut of tlu' learned jiidue is eorrert , and I do not mean to intimate the Kiirne. an Irish landlord.] To our peopU'. In Itiat sense it may combine in lefiisinj; lo work for. not have been criminal. But even buy from, sell to. ijive assistance to. here if it means, as some hij^h in and in preventing others from the confidence of the trades union working for. buying from, selling assert. al)solute ruin to the business to. assisting, or having any kind of of the person boycotted, unless he dealing with (a person or com- yields, then it is criminal. In- pany), on account of political or stances are not wanting in our own other differences, or of disagree- country wliere the boycott has been inents in business matters, as a attended with more or less vio- uieans of inflicting j)unishment, or lence: and it cannot be denied that of coercing or intimidating. The the natural tendency is. especially word was introduced in Ireland in when ap|)lied by the ignorant and 1S8(). and soon l)ecame (like the vicious, to attempt lo make it siic- practice) common throughout the cessful t»y force. It too of ten leads Englisli speaking world, and was to serious disturbances of tlie peace, adopt«'d by the newspapers in and even murder. We are loth, nearly every Kuropean language." however, to assume that these de- Black's Law Dictionary defines the fendants intended any such conse- word. as follows: '"A conspiracy (juences. Nevertheless it is a dan- formed and intended directly to gerous instrumentality to use; and prevent the carrying on of any if those instigating and resorting lawful l)usine.ss, or to injure llie to it do not. of their own accord, business of anyone by vvrongfullj' take notice of its peril and volun- preventing those who would be tarily abandon its use. as we sin- customers from buying anything cerely hope they will, the courts from, or employing the representa- at no distant day will l>e called lives of said l)uslness. I)y tlireats, upon to recrogni/e its dangerous intimidation or other forcible tendency, and treat it accord- means." -'If this is a correct ingly."" State v. Glidden. supra, picture, the thing we call a boy- at jt. 7t. --But the combination cott originally signitleil violence, was unlawful williout respect to if not murder. If tlie defendants, the contract feature. It was a in their handbills ;ind circulars, boycott. The employes of the nsed the worrl in its original sense railway companies liad no griev- in its application to the Carrington ance against their employes, rublishing Company, there «'an be Handling and hauling Pullman no doul>t of their criminal in- cars did not render their services tent. We prefer, however, to be- any more biirden.soine. They had lieve that they used it in a modified no complaint against the use of sense. .\s an importation from a i'ullman cars as cars. They came foreign country, we may presume into no natural relation with I'ull- that they intended it in a milder man in handling the cars. Me sense, — in a sense adapted to the paid them no wages, lie did not laws, institutions and temper of regulate their hours, or in any way 31(5 TKADKS INIONS AM) LAIJOK ()K<; AMZATIONS. [§ l(Ki. slightest ddubt .-is to its coiTeotness, — liial :i conspinicv to do a thing which has hccii cMllcd l)v Ww iiaiut' of 'hovcot- tiiig,' — is unlawful, and an indictahlc offense, and. if so, dotermiin' their services. .Simply to injure him in his business, they were incited and encouraged to compel the railway companies to withdraw custom from him by threats of quitting their service. This intiicted an injury on the companies that was very great, and it was unlawful because it was without lawful excuse. All the employes had the right to quit their eiuployment. but they had no right to combine to (juit in order thereby to compel their employer to withdraw from a mutually profitable relation with a third person for the purpose of injuring that third person, when the rela- tion thus sought to be broken had no effect whatever on the character or reward of their service. It is the motive for quitting, and the end sought thereby, that make the injury inflicted unlawful, and the combination by which it is effected an unlawful conspiracy. The dis- tinction between an ordinary law- ful and peaceable strike, entered upon to obtain concessions in the terms of the strikers" employuuMit. and a boycott, is not a fanciful one. or one which needs the power of fine distinctions todetermine which is which. Every laboring man recognizes the one or the other as quickly as the lawyer or the judge." Thouuis V. Cin., N. O. it T. 1'. Ky. Co.. (!2 Fed. Kep. 803, .S18. -The term boycott has acquired a signifi- cance in our vocabulary, and in the lileraliire of the law. 'i'he resolu- tion of the defendant associations says, unless complainant discon- tinue the use of said machines on and after .laiiuarv l.">. istMI. thai Coopers" Union Xo. IS would cause a boycott to be placed on all pack- ages hooped by said machines. Just what action would be taken, the re.sohnion does not state. It does not say the defendants could not purchase the packages, or the goods packed in them, but simply says a 'boycott' would issue. That term implies that a general pro- scription of all articles so manu- factured, and the goods packed in them, would be inaugurated and maintained by the i)Ower of tliese assemblies wherever they could reach. It is fair to presume, from the resolution and other testimony, that the defendants were deter- mined to use all means, short of violence, to make the proscription effective. That has been the his- tory of such proceedings in the past, anil such is the meaning im- puted to the use of the word "boy- cott." It has become a word carry- ing with it a threat and a menace, and was evidently so intended V)V this resolution. In Thomas v. Railway Co.. G2 Fed. Hep. SIS. S21, the court says: "But the combina- tion was unlawful, without respect to the contract future. It was a boycott." Again, the court says; •The combination under discu.ssion was a boycott. It was so termed by Debs. Thelan. and all engaged in it. Boycotts, although unac- c;ompanied by violence, have been pronoum-ed unlawful in every State of the Tnited .States where the ([uestion has arisen, unless it be in .Minnesota, and they are held to be imlawful in England. ' "" Oxley Stave Ct). V. Coopers" International I'nion. 72 Fed. I{e|). . [§ 10(1. ing <'iise ill \'iririiii;i, on ;i trial tor consj^irju-y, it appcarod that defendant and otli(r>, inenihers of a typ(»irraphical union, (•on>|)ii('(l lo conipcl 15 Bros, lo niakc their oftiee a ''union oHice," and not to employ any j)riiiter who did not Ix'loiiir to the said union. On refusal of B Bros, so to do, defendant and others, eoinposiiiij said union, detennined to boyeott B Bro.s. Tht'y sent circulars to many customers of B Bros., ♦nforminu- them that they had, with the aid of other labor oriraiiizations. boycotted B Bros., and notifvini; them that the names of all who sluuild. after notitica- tion. conlinuc to patronize B Bros,, would be pultlished in the Labor Herald, the organ of the union, as- a ''ijlacklist," and they, in their turn, "boycotted" until they agreed to withdraw their patronage from B Bros. The employes of B Bros, were denounced for months in tlie Labor Herald, ill order to excite })ul)lic feeling against them, and prevent them from obtaining even board and shelter. Tlic names, not only of B Bros., their employe^ and customers, but of the hotels, boarding houses, public schools, railroads and steamboats of the city were listed and i)ul)lished, under the standing head of "blaclclist." The conspirators declared it their set purpose to crush J3 Bros,, and used every means short of actual physical force to compel the customers of B Bros, to cease j)ati-onizing them. It was held tiiat a coiiNic- tion for coiis|)ira(y was warranted.' In a leading ca>e Reg. V. Druit.lO Cox Or. Cas. 593; 39G; Brown v. Heir, 21 Xel>. IIH; State V. Donaldson, 32 X. J. L. 157; Tucker v. Fineb.OO Wi.*. 17; Siiiitli Slate V. Crowley. -11 Wis. 271 ; State v. Freeman. 71 Ind. 85: Iloyne v. V. Kowiey, 12 Conn. 112: Keg. v. MoClintock. 7() Ind. 205; Reynolds Diiflield,5 CoxCr. Cas.4:{2: Owens v. Everett, 144 N. Y. 1S9: s. c. 39 V. State, 1(5 Lea, 1; Spies v. Peo- N.E.Rep.72: Murdoek v. Walker, pie, 122 111. 1: United States v. 152 l^a. St. 5!)5: s. c. 34 Am. St. Woollen. 29 Fed. Rep. 702; Rep. »i78: Barr v. Essex Trades Slaiijrhler House Cases, 83 U. S. Council, 53 N. ,F. Ecj. 101; s. c. 30 IG; Bowen v. Hall. L. R. (i il. B. All. Rep. 881 : Continental Insnr- Div. 337; Gregory v. Brunswick, G ance Co. v. Board of Underwriters. Man. & G. 205; Gunter v. Astor, 4 (17 Fed. Rep. 310. Moore. 12; People v. Fisher. 14 'Crump v. Commonwealth, 84 Wend. 9; Snow v. Wheeler. 113 Va. 927: s. c. i! S. K. Rep. G20. Mass. ISG: State v. Noyt's, 25 Vt. The methods of the great strike of 415: State v. Burnham, 15 N. II. 1893 an- thus stated Ity Taft, J., in § lot).] TKADK.s IMONS AND I.AUOK ( )!:< ; A M/ A TK >NS. .HI* alrrady citetl. the court said: ••If" the (K'f('iulaiit> have the riirht which they chiiiu, then all l>u>iiicss ciitcrin'iscs arc alike subject to tlieir dictation. Xo one i> safe in ciiirair- iuir in business, for no one knows whetlier his business affairs arc to be tlirected by intellii^ence or ignorance, — whether law and justice will })rotect the business, or brute 'riiuinas V. Ciucinnali. X. U. cV: '1'. iiul inembcrs eilher to j(jin Ibi' P. Ily. Co.. 62 Fed. Kep., at page union or to strike without joining. i>()7 : ••The phin of the boycott, as by guarantying that, if they would sliown by the evidence, was this: strike, tlie union would not allow rullnian cars are used on a large one of its uieuibers to return to majority of the railways of the work until they also were re- country. The members of the stored." ••The editorials in the American Railway Union, whose liulletin, the organ of the union. diUy it was to handle I'ullman ears December 1st. declares that the on such railways, were to refuse to boycott is still on, and will be until do so. with the hope that the rail- the proprietor of the rat sheet em- way companies, fearing a strike, ploys union men. It requests 'all would decline furthei to haul them K. of L. assemblies, unions and in their trains, and intlict a great workingnien to bear in mind that pecuniary injury upon the I'uU- Mr. Casey refused to employ, or in man Company. In case the rail- any way recogni/c. organized way companies failed to yield to labor." It asks their aid in com- the demand, every effort was to be pelting complainant to recognize made to tie up and cripple the the rights of labor liy withdrawing doing of any business whatever by their patronage from his paper, them, and particular attention wms and. if possible, let him know why. to be directed to the freight tratlic. It calls ujjon them not to patroni/e which it was known was theirchief any merchants who advertise in .-ource of revenue. As the lodges complainant's newspai)er, and if of the American Kailway I'nion they >ee the paper in any place of extended from tlje Allegheny business, to refuse to l»uy goods, mountains to the Pacific coa>l. it unless the merchant immediately will l»e seen that it was contem- stops the -rat' slieet. The com- plated l)y those engaged in carry- municarion sent l)y ttie union on ing out this plan thai, in case of a the 'M of November to ilessr.«. refusal of the railway companies to Gritthi, agents for the sale of corn- join the union in its attack upon plainant's paper, contains the fol- the i'ullman Company, tliere lowing: "This union will consider -hould tte a paralysi;. of all railway it a great favor for you to give u|) iraltic of every kind, throughout the agency of the Connuonwealth. that vast territory traver.M'd by If y. forct' i'('o;ircll('>s of hiw will control it : for it must l»i' ri'- iiKMiiberod that the t'xercisc of the iiowcr. if coiu'cded, w ill I)V no mean- he eontiiied to the matter of emplovinir help, rpon llie same j)rineij)le and for the same reasons the riLdit to determine what business others shall eiiiiaiic in, when and where it >hall he earriecl, etc.. will l)e demanded and must he i-oneeded. 'I'he principle, if it once obtains a foothold, is auii^ressive, and is not easily checked. It thrives on what it feeds, and is insatiate in its demands. More re(|uires mori'. If a larire body of irresponsible men demand and receive power outside of law and over and above law, it is not to be expected that they will i)e satisfied >:iv tliiit there were no threats, ttiat they may lie i)erfectly indifferent tlie defendants were only exercising but the conspirinij witli a view to ttieir constitutional rio;lit to freely effect the intended mischief by any spealv and publish their opinion; means. The illeufa! combination that what defendants tiave done is is the ^\>t of the offense.' See also a necessary and natural and inoper In re AVabash K. Co.. '24 Fed. Rep. incident of bitter, but yet lawful. '217. In that case the followin^j compr'tition. and that this was only notice was sent to various foremen fair arj^ument and persuasion, of the shops of the railroad coin- These propositions are in direct pany, during a strike organized to contlict with decisions made long resist a reduction of wages, the ago. and recognized in all subse- railroad company being at that (juent cases. In Kex v. Kccles. 1 time in the bands of a receiver ap- Leach. 274. the defendants were pointed by the I'nited States (ir- indicted for conspiring to impov- cuit Court: •Ollice of liOcal Com- erish a tailor, and by dire<"t means mittee. .June 17. 188"). — Foreman: to prevent him from carrying on You are rcijuested to stay away his tiade. They were convicted, from the shop until the pre>ent and upon a motion in arrest of dillicully is settled. Yoin-compli- judgment it was objected that the anoe with this will i-onnnand the indictment ought to have stated jirotection of the Wabash em- the acts that were connuitted to ployes. But in no case are you to impoverish the tailor, and to pre- consider this as an intimidation." vent him from carrying on his * * * The court in passing upon trade, in order that the defendants the case said: "The statement in might thereby have notice of the all these noti«-es ttiat they are not particular charges they were called to be taken as intimidations goes upon to answer, liut Lord Mans- to show beyond a doul)t that the lield. wiilioiii bearing the prose- writer knew be was violating the eulion. .-aid t'lat that was certainly law. and by this subterfuge sought not necessary. 'The offense does to escape its penally." "* Casey v. not I'onsist in doing the acts t)y Cincinnati 'l'yi)ographical I'nion. whieb the mischief i- effected, for 45 Fed. Kej). \',\'k 144. § KXJ.] TKAUKS UNIONS AND LAUOK < )K<;AN IZATIONS. ^521 with a luodorati' and reasonable use of it. All history proves that abuses and excesses are inevitable. The exer- cise of irresponsible power by men, like the taste of human blood by tigers, creates an unappeasable appetite for more. Business men have a general understanding of their rights under the law, and have some degree of confidence that the government through the courts will be able to protect those rights. This eontidence is the cornerstone of all business. But if their rights are such only as a secret and irresponsible organization is willing to concede to them, and will receive only such protection as such an organization is willing to give, where is that confidence which is essential to the pros- perity of the country?" ^ ' State V. Glidden, 55 Conu. 4G. 72. "The more serious phase of this case, and the one which de- mands special attention, is the al- leged boycott of plaintiff in its business, inaugurated for the pur- pose of so handicapping it as to compel submission to the rules and regulations of the union. Every person has a right to require that he be protected in his property rights. "The labor and skill of the workman, or the professional man. be it of high or low degree, the plant of a manufacturer, the equip- ment of a farmer, the investment'? of commerce, are all in an erpial sense property. If men. by overt acts of violence, destroy either, they are guilty of crime.' Ray on Con- tractual Limitations. 409; State v. Stewart. 59 Vi. 273; s. c. 59 Am. Rep. 710. Sections 1897 and 174S of the Code, seem especially de- signed to prevent and i)unish act.'? which are grossly injurious toper- son or property, and attempts to compel others to doany act against their will. It seems the principle that a combination or conspiracy of two or more persons to injure the rights of others is illegal, al- 21 though nothing has been done in execution of that intent, has not been embodied in oiu* statutes, but there is no good reason why civil liabilities may not ensue by reason of a conspiracy to conunit that which is made unlawful liy statute. •The general rule of the common law is that it is a criminal and in- dictable offense for two or more to confederate and combine to- gether by concerted means to do that which is unlawful or criminal, to the injury of the public, or jior- tions or classes of a community, or even to the right of an individ- ual." Connnonwealth v. Hunt. 4 Met. 121; s. c, 38 Am. Dec. 34(3. 'Combinations against law or against individuals are always dangerous to the public peace and to public seciu-ity." State v. liurn- heim. 15 X. II. 401. 'An agree- ment to effect an injury or wrong to another by two or more persons is constituted an offense, because the wrong to be effected by a com- bination assumes a formid.able character. When done by one alone, it is but a civil injury, but it assumes a formidable or aggra- vated character when it is to be 'i-2-2 TRXDES UNIONS AND LABOR ORGANIZATIONS. [§ 107. § 107. Picketing:. — Closely allied to the boycott, iis a meaii!:? of enforcing u demand, is the device of picketing. This term, as employed in connection with strikes, desig- nates the act of establishing a watch over the actions of worknuMi not connected with the association by which it is conducted, for the purpose of dissuading thcni from acce[)t- ing employment, or of persuading them to abandon it. Pickets are stationed where they will be able to see other workmen as they are going to or returning from their work, effected Ijy the powers of the com- bination." Keg. V. Parnell. 14 Cox Cr. Cas. 514. The entire cm-rent of authority for the last century or more is to the same effect. See State V. Donaldson. 32 N. J. L. 151; Crump v. Commonwealth, 87 Va. 927; s. c, 10 Am. St. Rep. 395; 6 S. E. Rep. 620; United States V. Kane, 23 Fed. Rep. 748; Callan v. Wilson, 127 U. S. 540. 545; s. C, 8 Sup, Ct. Rep. 1301. Powers. J., in State v. Stewart, 59 Vt. 28G; s. c, 59 Am. Rep. 710; it Atl. Rep. 559. says: 'A combination of two or more per- sons, to effect an illegal purpose, either by legal or illegal means, whether such purpose be illegal at common law or by statute, or to effect a legal purpose by illegal means, whether such purpose be illegal at common law or by stat- ute, or to effect a legal purpose by illegal means, whether such means he illegal at common law or by st.itute. is a common law conspir- acy.' And in State v. Glidden. 55 Conn. 47; s. c, 3 Am. St. Rep. 23; S Atl. Rep. 890, an indict- ment for conspiracy to violate a statute very similar to section lvS93, of our code, was sustained by the court. While conspiracy in itself is not an indictable offense under our law, all these authorities show conclusively that such a combina- tion for the purpose of doing injury to the public or to individuals is perse wrongful. Civil consequences are not changed by reason of the fact that the combination is not made a statutory offense. Recent decisions sustain the doctrine that in a proper case, where two or more persons conspire and confed- erate together for the purpose of destroying or injuring the business of another, or doing violence to his property or property rights, and it is clearly made to appear that the injury is threatened and imminent, and will become irrep- arable to the suitor, an injunction will lie to restrain the conspirators. Brace v. Evans, 3 Ry. & Corp. Law Journal. 501; Cogley on Strikes and Lockouts, 342; Einackv. Kane, 34 Fed. Rep. 47; Sherry v. Perkins, 1J7 Mass. 212; S. C, 9 Am. St. Rep. U89; 17 N. E. Rep. 307; Coeur d'Alene Mining Co. v. Miners' Union. 51 Fed. Rep. 2G0; s. c, 19 Ti. K. A. 3S2; Casey v. Cincinnati Typographical Union, 45 Fed. Rep. 135; s. C, 12 L. R. A. 193; Toledo, A. A. & N. M. R, R. Co. V. Pennsylvania Co., 54 Fed. Rep. 730; s. c. 19 L. R. A. 387; and Arthur v. Oakes. K3 Fed. Rep. 327; s. c. 25 L. R. A. 414." Longshore Printing Co. v. Howell. 2() Ore. 527. 5J(;. § 107.] TRADES UNIONS AND LAHOll OKC ANI/.ATIONS. :523 with ;i view to the accoinplishiueut of tliis purpose. Like the boycott, picketing may be conducted in a (juiet and orderly manner, or there may be a resort to threats and in- timidations. Whore the act does not extend beyond inof- fensive persuasion it is not necessarily unlawful, but where it amounts to intimidation and coercion it is a criminal con- spirac}'. In a leading English case, an indictment for (.con- spiracy, to molest and obstruct workmen, with a view to coerce them to quit their employment, and to molest and obstruct employers with a view to coerce them to alter their mode of busmess, the evidence being that the defendants had continually watched and walked up and down before the jirosecutor's premises, and had accosted their workmen, inviting them to (juit their employment and promising them money if they did so, and threatening if they refused they would be known as "black sheep," and would not be able to get employment elsewhere, it was held that the ques- tion was whether the watching and besetting was carried on in such a manner and to such an extent, that it would operate on the will by giving rise to apprehension or annoy- ance, and that if the watching and besetting had been done with the intention to coerce, the defendants t)ught to be found ijuiltv.^ The rule is the same as that relatinir to the ' lieg. V. llihbert. IH ('ox Cr. Cas. 82. See ulso Keg. v. Dnlliold, 5 Cox Cr. Cas. 404; Keg. v. Shep- herd. 11 Cox Cr. Cas. 325; Connor V. Kent. 2 Q. B. 545; Reg.v.Selby, 5 Cox Cr. Cas. 495; Reg. v. Haiild, 13 Cox Cr. Cas. 282; Perkins v. Rogg, 28 Wkly. L. Bull. 32; Com- monwealth V. Silvers, 11 I'a. Co. Rep. 481 ; Crump v. Common- wealth. 84 Va. 927; .s. c, 10 Am. St. Rep. 895; U. S. v. Kane, 23 Fed. Rep. 748; s. C, 25 Am. & Eng. R. Cas. G08; Richter v. .Tour- neymen Tailors' Union. 24 Wkly. T>. Bull. 189; Sherry v. Perkins. 147 M:i!is. 212: Carew v. Ruther- ford. 10<) Mass. 1 ; Baltimore ct P. R. Co. V. Firth Baptist Church. 108 I'. S. 317; Wick Ciiina Co. v. Brown, 1G4 Pa. St. 449; Reg. v. Druitt, 10 Cox Cr. C. 592; Tem- perlon v. Russell, L. R. (1893) 1 Q. B. 435. A patrol by strikers in front of a factory, used in combi- nation with social pressure, threats of jiersonal injury or unlawful harm, and persuasion to break ex- isting contracts, is an unlawful in- terference with the rights of both employer and employe, since it is a means of intimidation indirectly to the employer and directly to persons actually employed or seek- ing to be eu)ployed by him. Vege- lahn V. (Juntner. 107 Ma.ss. 92; .s. c. 44 N. i:. Rep. 1077; 43 Cent. L. .1. 464. Black's Law Die- 324 TRADES UNIONS AND LABOR ORGANIZATIONS. [§ 107. strike in general or to the boycott. As workmen are free to abandon the service of their employer, and to decline to do any business with him, and as they may by all proper means endeavor to persuade others to join them in the effort to accomplish their purpose, so they may establish a tionury thus defines the word as here used: "'Picketing by members of a trade union on a strike, con- sists in posting members at all the approaches to the works struck against, for the purpose of observ- ing and reporting the workmen going to or comingfrom the works, and of using such influence as may be in their power to prevent the workmen from accepting work there."' A court of equity has ju- risdiction to enjoin the commission of unlawful acts, prejudicial to personal rights where the rights are clear and the injury irrepara- ble. A man's business is property and may be protected against in- jury by unlawful acts tending to injure or destroy it. The fact that the acts complained of may be the subject of criminal prosecution does not oust equitable jurisdiction to prevent private injury. A bill in equity alleged that a number of persons had combined to proscribe the plaintiff's business by '"boy- cotting" him. and requesting others so to do, by threatening the parties dealing with him that they in turn will be '"boycotted" or proscribed, and by following his wagons through the streets with requests to the public to boycott him; and as a result of these acts, plaintiff's business had fallen off greatly and was threatened with entire destruc- tion. Held, that a court of equity would enjoin the parties so con- spiring to injure plaintiffs from a continuance of these injurious and threatening acts. Brace v. Evans, 6 Ky. & Corp. L. J. .501. ""The question remains whether this un- lawful demand was sought to be enforced by unlawful means and that depends upon the character of the so-called 'boycott." Of course, gentlemen, it was unlawful to platoon the street in front of T"s place in great numbers, with strange devices, with placards and with circulars denouncing the men inside. That it was unlawful in the sense of the civil law there can be no doubt whatever. It was an unlawful conspiracy within the civil law, for which an appropriate action for damages would lie. Whether the men were amenable to the criminal law is another question, dependent upon intimi- dation. The essence of the oven act is intimidation. I charge j^ou that it was not necessary that there should be any overt act of violence, nor any direct threat by word of mouth. If those men (parading up and down, dressed as they were, doing what they did, distributing the circulars as they did) pre- sented even to the weak and help- less an attitude of intimidation, that is sufficient. The gentle, the timid and the weak had the right to approach and quietly enter that place of entertainment without be- ing molested, annoyed or dis- turbed; and if the attitude, con- duct and method of these men was such as to deter any of T"s custo- mers from entering his place, or to inspire any part of the public with the sense of danger in ignoring § 107.] TRADES UNIONS AND LABOR ORGANIZATIONS. 325 picket, as lonor as thoy do not resort to acts of violence, or in any manner interfere with the freedom of others. In another English case, \vhere, on an indictment, under (j Geo. IV., chap. 129, § 3, for consjjiracy to force workmen to leave their employment, the evidence being that the de- fendants merely waited outside the place where the work- men were employed, and tried to induce them not to work there, and that their conduct was civil and peaceable, it was held that the ipiestion was whether they had endeavored to control the free action or overcome the free will of the tbeir appeals, then there was in- timidation within the sense of the crii^iinal law." Barrett. J., in People V. Wilzig. 4 N. Y. Crim. Rep. 403. 419. The defendants were members of a trade union of the tailors. The workmen iiaving at the instigation of the union, struck for wages, and the masters having employed work people, men and women, not being mem- bers of the union, the defendants, who were members of tiie manag- ing committees of the union, caused '-pickets" to be stationed about the doors of such employers to note work people who went in and out, for the purpose of deter- ring them from continuing in such employ and inducing them to join the union. Proof was given of the use of insulting expressions and gestures used by "the pickets" to the non-union work people. Held. to be ••intimidation." "molesta- tion" and "obstruction," within the meaning of the statutes. Keg. V. Druitt, 10 Cox Cr. Cas. 592. "Every person who, with a view to compel any other person to ab- stain from doing or to do any act which such other person has a legal right to do or abstain from doing, wrongfully and without legal authority : (1) Uses violence to or intimidate such other person or his wife or children, or injures his property; or (2) persistently follows such other person about from place to place; or (.'}) hides any tools, clothes or other prop- erty owned or used by such other person, or deprives him of or hin- ders him in the use thereof; or (4) watches or besets the house or other place where sue other per- son resides, or works, or carries on business, or happens to be, or the approacli to such house or place; or (5) follows such other person with two or more persons in a dis- orderly manner, in or through any street or road, shall, on conviction thereof, by a court of summary ju- risdiction, or on indictment as hereinafter mentioned, be liable either to pay a penalty not ex- ceeding twenty pounds, or to be imprisoned for a t«Min not exceed- ing three months, -vith or without hard labor. Attending at or near the house or place where a person resides or works, or carries on business, or happens to be. or the approach to such house or place, in order merely to obtain or com- municate information, shall not be deemed a watching or besetting within the meaning of thi^ sec- tion." Section (5 of Conspiracy and Protection of Property Act 1875 of England. ^^6 TRADES UNIONS AND LABOR ORtJANIZATIONS. [§ 107. workmen b}- force or intimidation , If there hud been merely persuasion, no matter what the consequence of it was, peaceable and unaccompanied by menace or violence, this would not render the defendants amenable to criminal justice on such a charc^e, they being then protected by 'I'l \'ict. chap. 34.' The P^nglish doctrine has been accepted at least to some extent in this country, but in some of the States it has been made a misdemeanor, by statute, to persuade em- ployes to abandon their employers. In Rogers v. Evarts, it was held that an injunction will not lie to restrain handi- craftsmen from combining, and peaceably and without in- timidation, persuading their fellow workmen to leave the service of their employers, in order to compel an advance in wages, on the ground that such persuasion invades the con- stitutional right of the employer to prosecute his business free from unlawful obstruction. A body of handicrafts- men, combining for the purpose of peaceably and without intimidation persuading their fellow craftsmen to leave their employment in order to obtain an advance in wages, may lawfully pay the expenses of those who leave and post in their places of asseml)ly the names of such persons as have contributed to the fund for the support of those who have surrendered their wages. '"* In the opinion in this case, the court said: "In People v. Kostka,-^ Justice Barrett says: 'The mere fact that no violence was used in the street is not conclusive. It is for you (the jury) to say whether, the attitude of these men was threatening. Nor is it neces- sar}' that there should have been a direct threat. If you l)elieve that the attitude actually i)resented by the dis- tributors of those circulars was an attitude of intimidation, either to the passers by or to the woman inside, considering all the circumstances, then all who participated in it. directly or indirectly, are within the meaning of that word intimida- tion, as used in the Conspiracy Act.' It stands conceded 'Reg. V. Shepherd, 11 Cox Cr. •'' Teople v. Kostka, 4X. Y. Criin. Cas. 325. Rep. 434. ' Rogers v. Evarts, 17 X. Y. Snpl. 264. § 108.] TRACKS UNIONS AM) LAHOli ORCANIZATIONS. 'A'21 by tlefoiul.-mts' counsel tliat tlic strikers have not the right to Jissenibk' in front of a faetory in such numbers as to con- stitute intimidation. Picketinu' may be done in such num- bers as to constitute intimidation, fleeriuir and shoulintrat emjdoj'es by strikers may constitute intimidation. Per- suasion or entreaty may be so persistent as to constitute in- timidation. Whenever the strikers assume towards the em- ployes an attitude of menace, their persuasion and entreaty, with words however smooth, may constitute intimidation, which will render those who use them liable to the penalties both of the civil and criminal law. There has been no evi- dence offered in this case as to circumstances surrounding the acts of persuasion and entreaty, so that the court can hold that they were so used as to constitute intimidation, and thus become unlawful. It may be impossible to lay down a general rule as to what surroundino- circumstances will characterize persuasion antl entreaty as intimidation. Each case must i)robably depentl upon its own surround- ings. But where the evidence presents such a case as to convince the court that the emi)loyes are being induced to leave the employer by operating upon their fears rather than upon their judgments or their sympathy, the court will be y employe^, lor (lie purpose of compelling the persons so listecl to ai' two thousand strangei-s in this city in October, none of whom will patroni/.e a hotel or board- ing house iv/tose name appears on (lint I/'sf.' 'The boycott on B Bros, is working so good that a man cannot l)uy a single bristol l)oar(l from the )-iif firm without haviui; his § lU^.] TRADES UNIONS AND LABOR OU(JANIZATI()NS. 329 name put upon the blacklist.' 'The old ral establishment is about to cave in. Let it fall with a crash that will be a warning to all enemies of labor in the future.' « « * The acts alleged and proven in this case are unlawful and incompatible with the prosperity, peace and civilization of the country, and if they can be perpetrated with impunity by combinations and irresponsible cabals or cliques, there will be an end of government, and of society itself. Free- dom, individual and associated, is the boon and boasted policy and pecuUum of our country ; but it is liberty regulated by laic; and the motto of the law is, 's^c utere (uo, ut aJienum non leadas.' "^ Where employes fail to obtain work on account of a blacklist by a former em- ployer, ])ut are members of a trades union by which they are paid while out of employment, an action for damages will not be sustained. In a recent case in Pennsylvania, four employes of defendants asked for an increase of wages, and, on being refused, left work. Defendants were mem- bers of a manufacturer's association, the by-laws of which provided that, when any hands employed by the members should l)e on strike, either for wages or disagreement, no member should emj)loy them after receiving due notice thereof, and addressed a circular letter to the other mem- bers, giving the names of such employes, and requesting that they should not be employed until the trouble was settled. Plaintiff, one of said employes, failed to get work for a month, and l)roughl an action against defendants for damages. It appeared that plaintiff and the other em- ' Crump V. Commonwejilth, 84 the secretary and other otlicMM:; who Va. 927. 045. Where a trades were defendants by name without union published a poster headed addition. Affirmed on appeal on "T's Blacklist." givins; the names the groimd \.\x-At -a prima facie case of T's non-union workmen : Held, had been established that defend- by Kekewich. .J., that as on the ants had «rone beyond what they evidence, the principle motive was were entitled to do. and had re- to injure T and the non-union men. fused to p^ive an undertaking to and as the injury was beintj in- desist pending the action. Trol- flicted from day to day, T and the lope v. London Building Trades non-union men were entitled to an Federation (1805), W. X. 95; s. c. Injunction against the trades union C. A. (1895) W. N. 45. and their servants, etc.. and against '6-M) TKADKS INIONS AND LABOR ORG Ax\ IZATIOXS, [§ lOH. ploj'cs were niciuber.s of a union, and that the union paid them while they were out of employment. It was held that a nonsuit was ])r()])erly irranted.^ ' Bradley v. I'ierson, 148 Pa. St. 502; s. c, 24 Atl. Rep. 65. '-A list of persons marked out for special avoidance, antagonism or enmity on the part of those who prepare the list, or those among whom it is intended to circulate; as where a trades union -blacklists' work- men who refuse to conform to its rules, or where a list of insolvent or untrustworthy persons is published by a commercial agency or mer- cantile association." Black's Law Dictionary, tit. Blacklist. The Constitution of North Dakota, § 212, prohibits the exchange of blacklists between corporations. The statute. § 7042. provides: "Every corporation, olVicer, agent or employe thereof, and every per- son of any corporation on behalf of such corporation, who ex- changes with or furnishes or de- livers to any other corporation or any officer, agent, employe or per- son thereof, any 'backlist,' is guilty of a misdemeanor.'' The Indiana statute governing the offense is as follows: Section 7070. "That if any person, agent, company or corpo- ration, after having discharged any employe from his or its service, shall prevent, or attempt to prevent, by word oi- writing of any kind, such discharged employe from ob- taining employment with any other person, company or corpo- ration, such person, agent or cor- poration sliall be guilty of a mis- demeanor, and shall be punished by a line not exceeding live hun- dred dollars, nor less than one hundred dollars, and such person, agent, company or corporation shall be liable in i)enal damages to such discharged person, to be re- covered by civil action; but this section shall not be construed as prohibiting any person or agent of any corporation from informing in writing any other person, company or corporation, to whom such dis- charged person or employe has applied for employment, a truth- ful statement of the reasons for such discharge. Section 7077. If any railway company, or any other company, or partnership or corpo- ration in this State, shall authorize or allow any of its or their agents to bhicklist any discharged em- ploye, or attempt by word or writ- ing, or any other means, whatever, to prevent such discharged em- ploye, or any employe who may have voluntarily left said com- pany's service, from obtainingem- ployment with any other person or company, except as provided for in section 1. of this act, such com- pany or co-partnership shall be liable in treble damages to such employe so prevented from obtain- ing employment, to be recovered by him by a civil action. Section 7078. It shall be the duty of any person, agent, company or corpo- ration, after having discharged any employe from his or its service, upon demand by such discharged employe, to furnish him in writing a full, succinct and complete state- ment of the cause or causes of his discharge, and if such per$on. agent, company or corporaJtion shall refuse so to do within a /rea- sonable time after such deniand. it shall ever after be unlawful for such person, agent, compahy or corporation to furnish any state - § lOi'.] TRADES UNIONS AND I.AIiOU OKCAMZATIONS. :VM § 109. Obligations of Carriers as Affected by Strikes. — Common caiTicrs nvv suhjcrl to ver}' striii«;ont regula- tions. Thcv nm-t transport ami deliver goods committed to their care without unneeessury dehiy. The former rule WHS that unless prevented by an act of God or of a public enemy they were responsible for any delay or non-delivery of goods. This is the English rule at the i)resent time.^ iiient of the cause of such d'scharge to any person or corporation, or in any way to blacklist or to prevent such discharged person from procuring employment elsewhere, subject to the penalties prescribed in section 1, of this act. Provided. that said written cause of discharge, when so made by such person. agent, company or corporation at the request of such discharged employe, shall never be used as the cause for an action for slander or libel, either civil or criminal, against the person, agent, com- pany or corporation so furnishing the same." 1 Forward v. Pittard. 1 T. R. 27; Galena, etc. R. Co. v. Rae. 18 111. 488; s. c, 08 Am. Dec. 574. In Blackstock v. New York. etc. R. R. Co., 20 N. Y. 48; s. c., 75 Am. Dec. 372, 373. Denio, J., says: ••It has been repeatedly held, and may be taken as settled law. that a carrier is not under the same ab- solute ol)lig;iti(>n to carry the goods intrusted to hiui at the usual time which he is to deliver them ulti- mately at theirdestination. Conger V. Hudson River R. R. Co.,6Duer, 375; VVibert v. New York, etc. R. R. Co., 12 N. Y. 245. But in the absence of a legal excuse, he is answerable for any delay to for- ward them in the time which is ordinarily recjuired for transporta- tion, by the kind of conveyance which he uses. In the case of Wibert v. New York, etc. R. R. Co., supra, we held that where a railroad was fully equipped with engines and freight carriages, but more property was offered at a particular point than could be sent forward at once, the delay was justifiable, provided no unfair pref- erence was given to other freight over that of the plaintiff. In the present case, the excuse arises wholly out of the misconduct of the defendants' servants who wrong- fully refused to perform their duty, and thus deprived the defendants, for the time, of the ability to send forward the property; and the question is. whether the defend- ants' case can be separated from that of the engineers, so that it can be held that, though the latter were culpable, their employers, the defendants, were without fault, and consequently not responsible to the plaintiff. This involves a consideration of the legal effect of the relations which exist between these several parties. In the tirst place, there was no i)rivity between the plaintiff and the engineers. The latter owed no duty to the former which the law can recog- nize. If they bad committed a positive tort or trespass upon the l>roperty, the owner might pass by the employers and hold them re- sponsible, biU for a non-feasance or simple neglect of duty they were only answerable to their em- ployers. The maxim in such cases is respondeat superior. Story on 332 TRADES UNIONS AND LABOR ORGANIZATIONS. [§ 109. But thij> rule has been somewhat inoditied by recent Ameri- can decisions. Where a common carrier is prevented from delivering goods by a mob consisting of persons not at the time in his employment, he will not be held responsible for the delaj'. While he is responsible for the acts of his own employes, if he is rendered helpless by strikers and their supporters, he will be held excusable. In a recent case in Illinois, it was held that a common carrier is onl}' required to exercise due care and diligence to guard against delav, and where its servants are overjDowered by a mob and prevented from forwarding its trains, it will not be held responsible Agency, § 309; Denny & Manhat- tan Co.. 2 Denio, 115; s. C, in error. 5 Id. G39. Although the nature of the contract between the railroad company and the engi- neers is not disclosed in the find- ing, it is quite improbable that it was such that the latter might throw up their employment upon two days' notice without any legal cause. If it were of that character, the liability, moral as well as legal, would rest upon the defendants, for in that case they would have neglected a most ordinary precau- tion for securing the continuous running of their trains. Assuuiing. then, that abandoning their work was a breach of contract on the part of the engineers, they, by that act, became responsible to the de- fendants for all its direct conse- quences. The case, therefore, is one in which the actual delin- quents, through whose fault the injury was sustained, were respon- sible to the defendants, but were not responsible to the plaintiff. This shows the equity of the rule which holds the master or em- ployer answerable in such cases. Its policy is not less apparent. Those who intrust their goods to carriers have no means of ascer- taining the character or disposi- tion of their subordinate agents or servants; they have no agency in their selection, and no control over their actions. In the ^ase of a loss by the misconduct of a serv- ant, the party injured has no means of ascertaining whether due cau- tion was exercised by the master in employing him. or prudence in retaining him; and in the case of a controversy between the master and the servant as to which was the real delinquent, the owner of the property must generally be without the necessary evidence to charge the liability upon the mas- ter. The rule which the law has adopted, by which the master is held responsible for the acts of his servants, is the one best calculated to secure the observance of good faith on the part of persons in- trusted with the property of others. The motive of self-interest is the only one adequate to secure the highest degree of caution and vig- ilance by the master. The princi- ple itself is extremely well settled. Story on Agency, § 452; 2 Kent's Commentaries, 259; Harlow v. Ilumiston, 6 Cow. 189; Ellis v. Turner, ST. R. 531." § 109.] TRADES UNIONS AND LABOR ORGANIZATIONS. 333 for the delay, provided it omits no reasonable effort to secure the property in course of transportation. For a de- lay, occasioned by a refusal of the company's servants to do their duty, the company is responsible; but for a delay re- sulting solely from the lawless violence of men not in its employ, the company is not responsible.^ In a case in Illinois, the rule is stated by the court, as follows : "Where employes suddenly refuse to work, and are discharged, and delay results from the failure of the carrier to supply promptly their places, such delay is attributable to the mis- conduct of the employes in refusing to do their duty, and this misconduct in such case is justly considered the proxi- mate cause of the delay, but where the places of the recu- sant employes are promptly supplied by other competent men, and the 'strikers' then prevent the new employes from doing duty by lawless and irresistible violence, the de- lay resulting solely from this cause is not attributable to the misconduct of the employes, but arises from the misconduct of persons for whose acts the carrier is in no manner re- sponsible"'^ In a recent case in Texas, it was held that for failure to carry and deliver, the carrier cannot excuse him- self by reason of the fact that through human agency not under his control this was })revonted, without fault on his part. When the goods are actually transported and de- livered, but the time of delivery was delayed, such delay if caused by mobs, strikes or other causes not under control ' Indianiipolis it St. L. R. R. Co. Co., 23 Fed. Rep. 757; llagan v. V. Jiint_<,'en. 10 111. App. 29.5. See Biindell. 54 Fed. Rep. 40; s. c. also Biirtlett V. I'ittsbiirgh, etc. R. .5(; Fed. Rep. GOO; Reed v. St. L., Co., 94 Ind. 281; Pittsburgh, etc. K. C. it N. R. Co.. GO Mo. 199; R. Co. V. Ilollowell, 65 Ind. 188; Geismer v. Lake Shore & M. S. R. Lake Shore, etc. R. Co. v. Bennett, Co., 102 X. Y. 5()3; s. c. 55 Ain. 89 Ind. 457; Sherman, Hall & Co. Rep. 837; Wertheimer v. l*a. R. R. V. Pa. R. R. Co., 3 Am. & Eng. R. Co., 3 Am. & Eng. R. R. Cas. 279; R. Cas. 274; Del., Lackawanna & s. c. 1 Fed. Rep. 232; 17 Blatchf. W. R. Co. V. Bowns, 58 N. Y. 573; C. C. 421; Wolfe v. Matthews, L. Lewis V. Ludwick. fi Colo. 368; R. 21 Ch. I). 194; Hornln- v. Close. s. c, 98 Am. Deo. 4.54; Haas v. L. R. 2 Q. B. 153; Farrar v. Close. Kansas City, Ft. Scott it Gulf R. L. R. 4 Q. B. G02. Co., 81 Ga. 792; s. c, 7 S. E. Rep. 2 Pittsburgh, Ft. W. & C. R. Co. 629; Frank v. Denver & R. G. Ry. v. Uazen, 84 111. 3G, 38. '>34 TRADES UNIONS AND LAliOK ORGANIZATIONS. [§ 110. of the carrier, ma}' be excused; liis duty then remains that he omit no reasonable effort to secure the safety of the goods.i § no. The Strike as a Violation of the Federal Aiiti- Triist Law. — The refusal of locomotive engineers to handle the cars of aconnectinof roadon account of a strike ordisagree- ment of the engineers of such road with its officers is in violation of the Act of Congress of July 2d, 18H0, and renders such engineers obnoxious to the penalties of said statute. In the recent case of Waterhouse v. Comer, be- fore the United States Circuit Court for the Western Dis- trict of Georgia, it was held that rule 12 of an association of locomotive engineers, styled the "Brotherhood of Loco- motive Engineers," which provides "that hereafter when an issue has been sustained b}- the grand chief, and carried into effect by the Brotherhood of Locomotive Engineers, it shall be recognized as a violation of obliga- tions if a member of the Brotherhood of Locomotive Engi- neers, who may be employed on a railroad run in connec- tion with or adjacent to said road, to handle the property belonging to said railroad or system in any way that may benefit said comjjany with which the Brotherhood of Loco- motive Engineers are at issue, until the grievances or issues or differences of any nature or kind have been amicably settled," is plainly a rule or agreement in restraint of trade or commerce, and violative of section 1 of the Act of Con- gress of Jul}^ 2d, 181K). Construing several clauses of the interstate commerce law with section 5440, of the Revised Statutes, it follows (hat a coml)inalion of persons, without regardto their occu))ation, which will havethe eff<'ct todefeat the provisions of (lie iiilerstate commerce law. inhibiting dis- crimination in the transportation of freight and })assengers, and further to restrain the trade or commerce of the coun- try, will be obnoxious to the penalties therein prescribed.'^ 1 Gulf, Colo. & Santa Fe Ry. Co. v. Elliott. 62 Fed. Rep. SOI ; Thomas V. Levi, 76 Tex. 337. v. Cincinnati, X. O. & T. P. Ry. 2 Waterhouse v. Comer, 55 Fed. Co., 62 Fed. Rep. 803. "On July Rep. 149. See also United States 2, 1890, Congress passed the law § llU.J TKADES UXION8 AND LABOR l)R(} ANIZATIONS 111 the opinion in this cuse, the court said: "It is true that in any concievable strike upon the transportation lines of this country, whether main lines or branch roads, there will be interference with and restraint of interstate or forei."» Fed. Hep. 1-in. 157. A combination of men to secure or compel the em- ployment of none but union men becomes a combination in restraint of interstate commerce within the 33Iatioii of Trailes Unions to a llecei\«'r, — \\'lu'i'(' ;i r:iilro;i(l is in the h.-inds of a receiver, tlic rt'l:ili()ii> ol" till' cmplovcs to their (■iii|»l(»\ its arc iii;itcri;ill\ iiiodificd. The receiver is ;iii otlicer of the court, and as Mich is ch)thed with autliority not possessed by the ordinar\' ofHcers of ;m incorporation. Tlie receiver cannot violate or disre- lifard the instructions of the court, and he cannot be com- pelled by a trades union to do aiiythinu- inconsistent with his instructions. He is in siicii a sense the representative of tlie court tiiat an attempt to coerce him i> an attempt to coerce the court. In the case above cited, the rule i> >tated by the court, as follows : "If there were no statutory enact- ments upon the subject, no court of ecjuity could justilial)l\ direct its receiver to enter into a contract with a l)od\ of men who hold themselves l)ound to repudiate tiieir contract, and disi'cgard a i^rave public duty, because of real or al- leged grievances, which sonieother person or coipoiatioii not a i)arty to the contract iiiHicts, or is alleged to iiiHict, not u})()n a party to the contrac^t. l)ut u[)on somebody ejsi'. To compel the receiver to do this woukl be monstrous. The receiver may be wholly just, considerate, humane and cncii indulgent to the engineers in his employ. Thiy may with reason regard him not only as their Uindly employer, but as their friend. The people of (ic{»rgia ma\ have afforded to them every needed e\idence of sympathy: t he conipeii>a- tion may be ample, their future as bright as possible for in- telligent, energetic, and couragt'ou> manhood; and yet be- cause of a difficulty with or without cause which originates in Elaine or ^linnesota, the\ will abandon the service of their kind employer, and forego the realization of theirow n ho|)cfiil anticipation, and bring dismax. and it iiia\ be ruin, upon the kindly and sympathetic ])cople among whom lhe^ li\('. 'IMiis is almost the inevitable consequence of this rule. ineiining of tlie gtHlutc. wlieii, in ti ;insiiort:itioii of ojoods from State order to gain its ends, it seeks to in State, and to and from foieijjn enforce, and does enforce, by vio- nations. V. S. v. VVorlcingmen's lence and intimidation, a discon- Amai<;amated Council, M Fed. tiniiance of labor in all depart- Kcp. WA. inents of biisines^s, incliidin"; tlie ^ 111.] TKADKS INIUN.^ .\S\) l.AUOU OUtlAMZATlONS. 'A'AU It is in eviclc'iK'O, and is i^cncrallv known, that almost the entire hnsinoss of transportation of frciirht is tarried on in cars wliieli, withont l>reakinu' tiie hulk of their freiuht. are forwarded from one raih'oad lo another. 'rhi> is an ahso- hite necessity. 'I'iic interests of the puhiic and the econo- inii'> of cliea|) :in' ask ft)r an in(iuiry and detcrmiiuition by the proper court as to the existence and character of such obstruction, and if any is found to exist or to threaten to occur, he may ask that they be removed or restrained. In such cases relief will be granted even though the act mav be criminal and subject to a penalty as a criminal offense.^ their service, or by usinuj like methods lo cause the employes to tatt'd by tlie court. Mr. flustirt" Brewer delivering the opinion, as follows: "We have given to this case the most careful and anxious atlen- of the mail by railroad trains, to which I desire to call your atten- tion. Section 3964 of the Revised Statutes provides as follows : *The followino; are established post roads: * * * All railroads, or parts of railroads, which are now or hereafter may be in operation.' Section 3, Act March 3. 1879 (20 Stat. 358), provides *that the post- master general shall, in ail cases, decide upon what trains and in what manner the mails shall be conveyed.' Section 4000 of the Revised Statutes provides that •every railway company carrying the mail shall carry on any train which may run over its road, and without extra charge therefor, all mailable matter directed to be car- ried thereon, with the person in charge of the same.' * * * Re- curring now to Section 399") of the Revised Statutes, making it an offense to obstruct and lotard tlie passage of the mails, and you will observe that the statute applies to those persons who •knowingly and willfully" obstruct and retard the passage of the mails, or the carrier carrying the same; that is to say. to those who know that the acts performed, however innocent they may otherwise be, will have the effect of obstructing and retarding the passage of the mail, and they perform the acts with the intention tluit such shall be their oi^eration. United States v. Kirby. 7 Wall. 485. 'It would be no defense under this statute,' said an eminent judge in a recent case, 'that the obstruc- tion was effected by merely (juit- tingemployment. where the motive of (juitting was to retard tlie mails. and iiad nothing to do with the terms of employment." Thomas V. Railway Co., G2 Fed. Rep. 822. The statute also applies to those persons who. having in view the accomplishment of other purposes, perform unlawful acts, which have the effect of obstructing and re- tarding the passage of the mails. In such cases, the intention to ob- struct and retard the passage of the mails will be imputed to the authors of the unlawful act, al- though the attainment of other ends may have been their prinniry object." United States v. Cas- sidy. (i7 Fed. Rep. 098. 703. "The second objection is that the de- fendants charged with the overt acts of retarding the mail trains are not charged with having known at the time that the trains carried the mails of the United Stales. It is said tliat no intent against the mails can be inferred, unless tlie l)erpetrators had knowledge that the mails were on board the trains obstructed. I do not concur in this view. The defendants are properly chargeable with an intent to do all the acts that are the reasonable and natural consequence of the acts done. The laws make all the rail- ways post routes of the United Slates, and it is within every one's knowledge that a large proportion of the passenger trains on these loads carry the mails. There is no stretching eitlier of law or of com- mon sense, to presume that a per- son obstructing one of these trains contemplates, among other intents, the obstruction of the mails."" United Stales v. Debs. (>.") Fed. Ke]). 210. 211. § 112.] THADKS rXIONS AM) I.Al'.Oll OIKi AM /. AllONS. -I lo tioii. for wo rrnli/c that it touches (•h)s('ly (|ii('>t ions of ■^u[)reiuo inii)ort;ni<'(' to the pcopK' of this couii- trv. Siiininiiin' u\) our cont'Iusioiis, wc hohl that thi' govcrnnicnt of the rnitcfl States is one haviiiu' jurisdic- tion o\cr cvcr\' foot of soil within its tcrritorw and Hctinu' directly upon each citizen: tlnit wiiile it is a goverii- inent of enumerated powers, it has within the limits of those powers all the attiil)utes of sovereignty: that to it is com- mitted power over interstate commerce and t he t ransnn^sion of the mail: that the powers thus conferred ui)Oii the national ii'overnmeid are not dormant, but have been assumed and put into practical exercise by the legislation of Congress; that in the exercise of those powers it is comj)c- tent for the nation to I'emove all obstructions u\)on hiiih- ways, natural or artificial, to the passaijje of interstate ct)m- merce or the carryiui; of the mail: that while it may be competent for the government (through the executive branch and in the use of the entire executive power of the nation) to forcibly remove all such obstructions, it is e(|ually within its competency to a})i)eal to the civil courts for an in(|uiry and tletermination as to the existence and charactei' of an\ alleged obstruction, and if such are found to exist or threaten to occur to invoke the powers of those courts to remove or restrain such tib-t met ion : that t he jurisdiction of courts to interfere in such nuilters by injunction is one recognized from ancient times and by in(lul)ital)le authority ; that such jurisdiction is not ousted l>y the fact that the ob- structions are accompanied by oi- consist of acts in them- selves violations of the criminal law: that the proceeding by injunction is of a civil character, and may be enforced by proceedings in contempt : that >nch proct'edings are not in exet'ution of the criminal laws of the land; that the penalty for a violation of the injuncti(ni i> no substitute for and no defenseloa pi-osccution for any ciiminal com- mitted in the course of such violation; that the complaint tiled in this case clearly showed an existing obstruction of artificial highways for the ])assage of interstate commerce and the transmission of the mail, — an olxtruclion nnt oidv 344 TRADES UNIONS AND LAHOR ORGANIZATIONS. [§ 113. temporarily existiiii!:, but threatening to continue; that under such complaint the circuit court had power to issue its process of injunction ; that it having l)een issued and served on these defendants, the circuit court had authority to inquire whether its orders had been dis- obeyed, and when it found that the}' had been then to pro- ceed, under section 725, Revised Statutes, which grants power 'to punish by fine or imprisonment * * * ji^. obedience * * * j^y m^y piuty * * « ^^y other person, to an lawful writ, i)rocess, order, rule, decree or command,' and enter the order of punishment com- plained of; and, finally, that the circuit court, having full jurisdiction in the premises, its finding of the fact of disobedience is not open to review on habeas corpun in this or any other court. We enter into no ex- amination of the Act of rluly 2d, 1800, ujjom which the circuit court relied mainly to sustain its jurisdic- tion. It must not be understood from this that we dissent from the conclusions of that court in reference to the scope of the act, but simply that we prefer to rest our judgment on the broader ground which has been discussed in this opinion, believing it of importance that the principles underlying it should be fully stated and affirmed."^ § li;j. Tontracts Between Employers and Trades Unions. — There is nothing to forbid employers from enter- ing into a contract with the officers of a trades union in re- gard to any matter properly appertaining to their relations as employers mihI employes. The fixing of the terms and conditions of the service to be rendered, so far as it in- volves nothing illegal, is a proper subject for a contract. But a contract under which an employer undertakes to in- terfere with the rights of third parties is illegal and void. Two [)arties may enter into an agreement in regnrd to their own l)usiness relations, but a covenant, the ooject of which is to control the acts of third p;irties to their injm'w is ;in unhiwful conspiracy, and, as such, in cont raxciit ion of puh- ' In re Del)S. 158 U. 8. olj."), 591). § ll)).] TRADES UNIONS AND LAHOK ORCAMZATIONS, .U") lie [)()lify. Ill a leatliiig' Kiiszlish case, the rule is staU'd l)y Sir ^^'illialn Krle, us follows: *'The law is clear that work- iiKMi have a right to coinhine for their own protection, and to obtain such wages as they choose to agree to deniund. 1 say nothing at present as to the legality of other persons, not workmen, combining with them to assist in that pur- pose. As far as I know, there is no objection in |)oint of law, to it; and it is not necessary to go into that matter: but 1 consider the law to be clear so far, only, as while the pur- pose of the cond)ination is to obtain a benefit for the parties who combine; a benelit which by law they can claim. I make that remark because a combination for the purpose of injuring another is a combination of a different nature, directed personally against the party to be injured; and the law allowing them to combine for the purpose of obtaining a lawful benefit to themselves gives no sanction to combina- tions which have for their immediate purpose the hurt of another. The rights of worknien are conceded : but the exercise of a free will and freedom of action, within the limits of the law, is also secured ecjually to the masters. The intention of the law is at jjresent to allow either of them to follow the dictates of their own will, with respect to their own actions, and their own i)roperty; and either, I believe, has a right to study to |)romot(' his own advantage, or to (•()uil>inc with others to promote their mutual ad\antage.'*' » Re«r. V. Rowlands, 17 Ad. i!v: El. 465; Connor v. Kent. L. K. (1891) (N. S.) G71. H87. See also Coin. 2 Q. B. 545: Coninionwoiilth v. V. Sheriff. 15 Phila. 393; Ma.<5ter Dyer. 12S Mass. 70; Spies v. I'eo- Stevedores* Association v. Walsh, pie. 122 Ill.l: s. c..:{ .Vni. St. Rep. 2 Daly. 1; Sprin-rliead Spinning 3-2(): Collins v. Hayte. 50 111. 337; Co. V. Riley, I.. R. t; E: wealth v. Silvers. 11 Pa. Co. Ct. 8. C. IIGE. C. L. 374; O'Neill v. Rep. 481. -The evidence justifies Kruger. 4 B. & S. 389; s. c.. IKi the conclusion that defendants are E. C. L. 388; Ejt parte I'erliani. 5 organized into associations wherein Jur. (N. .S.) 1221; Reg. v. Hewitt. sii))Miis>ion to stringent and arhi- 5 Cox Cr. Cas. 1(52; Skinner v. trary rules is required; that by Kitch. 10 Cox Cr. Cas. 493; Wood means approaching dictatifui they V. Bowron, L. R. 2 Q. B. 21: have attemi>ted Xo control em- Walsby v. Auley. 7 Jur. (X. .S.) ployers in the selection of laborers. ;U(; TliADKS rMONS AM) I.AI'.oi; <)K< i AM/ ATIOXS, [§ ll,"}. This nik' is sustMiiicd hy the Ain(>i-i<-;iii courts. In ;i i-ccciit case in New "^'ork. the rule was staled hy the court, as fol- lows: ''In the ireneral consideration of the .sul)ject it must be premised that the ori>:ani/ation or the co-operation of and the wa^estobe i)aid them, and have discouraged and. as far as tbey could, prevented those who do not belong to their societies from procuring work: that by force, in one instance, tbey tooiv complainant's laborers from its mine to Iboir ball, wliere. upon such laborers refusing to comply witii their demands to join them, and abide by their laws, they actually ordered their banishment from the State, and in a manner deserving the most severe condem- nation, enforced their lawless de- cree, and against men who. by reason of their birth, and not through the grace of the govern- ment, were entitled to all the rights of American citizenship: tliat in such numbers, and under such cir- cumstances as were necessary, they have requested non-union men to cease work, and to such have ap- plied in an offensive and threat- ening manner most opprobious epithets and in other wajs have annoyed and vexed laborers who refuse to join their association. I am not unmindful that they meet these charges by alleging in effect that when such things were done it was without their authority and that the meeting referred to was held by citizens: but such defense is too transparent to conceal the truth. Such meeting was held in their hall, was composed largely of miners, and was presided over Ijy defendant who says lie was. and now is. the president of the Miners' I'uion of Hiuke." and he also says tli.it "the meeting voted that they [the men banished] should be marched up the canyon, upon the j> round that if they pro- ceeded down the canyon violence might be apprehended from out- siders." Such explanations cannot be received in exculpation of the wrong done by defendants, but on the contrary t hey cast a shadow over all their statements." Beatty. .1.. in Coeur D'Alene Mining Co. v. Miners' Union, 51 Fed. Rep. 260; s. c. 11) L. R. A. 3S-2. 384. -Under our law every workman assumes many risks arising from the in- competency or negligence of his fellow workmen, it would be an anomalous doctrine to hold that after their fellows have concluded that he was not a safe, or even a desirable companion, they must continue to work with him. under the penalty of p.aying damages, if by their refusal to do so the works are for a time stopped and be thrown out of employment, we cannot believe it to be in accord- ance with the spirit of our institu- tion or the law of the land to say that a body of workmen must respond in damages because they, without malice or any evil motive, poacealdy and (juietly quit work, which they are not recpiired to continue, rather than rejnain at work with one wlio is for any rea- son unsatisfactory to them. To hold so would be subversive of their natural and legal rights, and tend to place them in a t-ondition of involuntary servitude."' (Javiii, .1.. in Clemuiitt v. Watson. 14 lud. App. ;i><. 4_>: s. c. 42 X. E. Rep. § ll.l.] TKADKS INIONS AND I.A I'.OU ( »It( i A M /A TH )NS . -UT workiiiiiiiu'ii is not :i£r:iiiis( ;my piihlic policy, liulccd, it must he rcixartlcd as li;iviiiu' the sMiiction of hiw when it is for such U'uiliniatc purposes :is (h;it of ol)|;iiniiiir an :i(i\ance in the rate of waii'es or compensation, or of maintaining such rate. It is proi)erani\e privilego. Il woidd tend to depri\(' the pul)lic of the services of men in useful employments and capacities." ' It would, to use the language of .Mi-. Justice IJanctt. in Peo- ple V. Smith, "imijoverish .and cru>h a citi/.en for no reason connected in the slighte>t degree with the ad\ancenH'nt of wages or the nuiintenance of the r.ite.""-' ;^(i7. A Ijiisiness linn sued a trade their cii^tomtTs at tlu' tiiiic tlicy union for losses charged to a ma- withdrew their trade, as lo their licioiis conspiracy to injure plaint- reason for its withdrawal. Moores iffs business. Held, that an at- v. Itricklayers' Union No. 1 . 7 Uy. tempt to injure the liusiness as a it Corp. Law .1. lOS: s. r.. '2'^ coercive measure to regulate the Wkly. Law Bull. 48. employment of workmen consti- ' I'eople v. Smith. ."> X. Y. (."r. \{. tuted an unlawful and actional)le .")i:^. conspiracy; and that plaintiffs * Curran v. Galen (1897), 1.V2 X. might show declarations made by Y. 33: .s. c 41) N. K. Rep. 207. 348 TRADES UNIONS AND I.AMOU ( HiCiAM/.ATIONS. [§ 114. § 114. Koiu<'dy by Civil Actihel(l by the 298. All combinations and asjioci- Iiatllc, or with their lawful ciii- ations designed to coerce woiknu-n ployment of other i)ersons, are to bec^oine members of such com- pro tanto illegal combinations or binations or associations. t)r to ob- associations, and all arts done ia struct or annoy them in working, furtherance of such intention by or in obtaining work, because they such means and accompanied by are not members, or in order to damage are actionable. Old Do- induce them to become members, minion Steamshij) Co. v. McKenna. or designed to i^revent eu)|)loycrs '60 Fed. Kep. 48. from making a just discrimination ' Bowen v. Hall. L. M. (> Q. H. in the rate of wages, or to interfere Div. H33. See also People v. Fisher, with the perfect freedom of em- 14 Wend. 1 : s. c, 2S .\m. Dec. ployers in the proper management 501; State v. Donaldson. 32 X. .T. and control of their lawful i)usi- L. 151; s. c. IK) Am. Dec. 049; ness. or to dictate in any particular Johnston Harvester Co. v. Mtin- the terms upon which their busi- hardt. 9 .\bb. X. Cas. 393; s. c. ness shall be conducted, by means (iO How. I'r. 108; Bixby v. Dunlap, of threats of Injury or loss, by in- 5(1 X. H. 450; s. c. 22 Am. Rep. t«rfeience with their property or 475; Haskins v. Royster. 70 N. § 114.] TUADKS UNIONS AND LAIJOU OKC AN IZATIONS. ;')4i> American courts. In a cas«' boforo the United States ("ir- cuit Coiiit for the Southern District of New York, it was hehl that all combinations and associations desitrnecl to coerce workmen to become members of such combinations or associations, or to interfere with, obstruct, vex or annoy Car. G03; s. C. ic, Am. Kep. 780; Teople V. Wilzitj, 4 \. Y. Ciiin. Rep. 423; Carew v. Kutherford. lOG Mass. 1 ; s, c. v the de- fendant. If before the child, ap- prentice or servant, had ever n>et or communicated witti the defend- ant, there had been an abandon- ment of the services, it cannot be maintained that there was an en- ticement therefrom by the defend- ant. Butterlleld v. Ashley. Cush. 249. The solicitation to leave must be shown. Stuart v. Simpson. 1 Wend. 370, 379; Blake v. Lay ton, T. R. 221. And there must be an actual state of service then sub- sisting. Buttertleld v. Ashley. 2 Gray, 2.54. "' In Carew v. Ruther- ford, 100 Mass. 1, 13. Chapman. (.'. J., says: "We have no doul)t tb.it a conspiracy against a meclianic. who is under the necessity of em- ploying workmen in order to carry on his business, to obtain a sum uf inf)ney from him. which he i< un- der no legal liability to pay. by inducing his workmen to leave him, and by deterring others from entering into his employment, or by llireiitening to do this, so that he is induced to pay the money demanded, under a reasonable aji- prehension that he cannot carry on his business without yielding to the illegal demand, is an illegal, if not a criminal conspiracy; that the acts done under it are illegal, and tliat the money tliiis obtained may be recovered l)ack. and. if the parties succeed in injuring his business, they are liable to pay all the damage thus done to him. It is a species of annoyance and ex- tortion which the common law has never tolerated."' In Walker v. ;!.')() TKADKS I NIONS AM) I.AUdU ( )IJ( ; A M / A IK iNS. T^ 111. tlu'in in workiiiof, or in ()lit:iiiiiii<:- work, lu-caust' thoy arc not iiK'iuhcrs, or in order to induce llicni to Itcconic nu-ni- hers, or (U'siiiiicd to iircNcnt ('nii)loyc'r> froin uiMkinir a ju>t discriniinalioii in the latc of waires |)aid to the >killful and the nnskillful; to the diliiicnt and to the la/.y ; to the etti- cient and to tlie inettieient: and all assoeiation.s designed to intt'rt'ere with the perfect freedom of enii)h)\-ers in the proper nnmagenient and control of tiieir law fnl hnsiness, or to dictate in any particular the terms upon which their husiness shall he conducted, hy means of threats of injury or loss, by interference with their property or trattic, or L'ronin, 107 Mass. 55"). it is held who. kno\vinI{(i AM/.Al lONS. .J.')! with their i;i\vfiil cmphjvincnt of other persons, or (h'sirinch nn-ans and acconipanifd Uy chmiaiic are actionahh'.' The ruh", as alioxf vtalfd, i> held apjjheahh' al>o where the offense is coniniit led l>y an indi- \idiial instead of a fond)inal ion. In (ieornia it has been hehl tliat where one man eni|)h)\('d a hihorer to work on his farm, and another man, knowino- of sueh contract of eni))h)\ nient , entices, hire> or per>ua ihc hd)orei" to leave the service of his employer durinij the time for which ho was so employed, the law jrives to the ])aity injured a riiriit of action to recover daniaijes.'^ In a case in Massa- <'hu-etts. llic ruh' was stati-d l>y Mr. dustice Wells, as fol- low> : "'It is a familiar and well established doctrine of tin- law upon the relation of master and servant, that oiu' who entices awa\' a servant oi' induces him to leave hi> master, mav 1)«' held liable in damai>es therefor, jjrovided there exists a valitci' and serwmt : anil that it ap|)lies to all ••ontracts of employmcul. if nnt lo <"ontracts of e\cry dc-cripiion."'' ' (Jld Doininiun S. S. Co. v. Me- a eomlMnation to induce llie olli- Kenna. 'M Fed. Kep. 4S. cors of a coiiiinon carrier corpora- -' .tones V. Blocker, 48 Ga. ;W1. lion sid»ject to tiie provisions of ' Wallicr V. Cronln. 107 Mass. itic inlerstate coniMierc<^ act, and ."»."m. The measure of daniaye for its locomotive enj;ineers. to refuse enticinjj away ll>e servant of to receive, handle and haul inter- ant)ther. who is hired l)y the year, stale freiglil from another like is ilie dn-ect loss suffered, and the common carrier is directed, is in- avera<;e net profits that were made jiired l)y acts done in furtherance by men of fair business cajiacily. of it. has a cause of action against out of the labor of such servant all of those «'n<;aj;ed in the con- dnrinjj tlie year for wliich the en- spiracy. Toledo. A. A. & X. M. ticed servant was hired. Lee v. I{y. Co. v. Pennsylvania Co., r>4 v. West. 47 (la. 311. If the com- Fed. Kcp. 7M). mon carrier comi)aiiy aijalnsl whom .■i.">2 TKADKS UNIONS AND LAlJOll (>Ii(JANIZATIONS. [§ 11.'). § 115. lioiiiody by Iiijiinotioii. — It is well settled th;it any attempt to jncveiit one jxtsou from eiiterintj into or continuing in the employment of ancjthcr by threats or in- timidation in any form i.s unlawful, and where such acts are continuous in their nature, an injunction will issue to re- strain them. Ill a recent case in Massachusetts, the rule was stated by Mr. Justice Allen, as follows: ••The act of displ:iyiiiir banners with devices, as a means of threats :iiid intimidation to prevent persons from entering into (tr con- timiiiig ill the emijjoymeiit of the plaintiffs, was injurious to the plaintiffs and illciral at common law and by statute. We think that the i)laintiffs are not restricted to their remedy by an action at law, but are entitled to relief by in- junction. The acts and injury were continuous. The banners were used more than three months before the tiling of the ])laintiffs' bill, and continued to be used at the time of the hearing. The injury was to the plaintiffs" business, and an adeijuate remedy could not be given by damages in a suit at law. The wrong is not, as argued I)y the defend- ants' counsel, a libel upon the plaintiffs' business. It is nc)t found that the inscripti(;n u])oii the banners were false, nor do they apjiear to hav(> been in disparagement of the plaintiffs" business. The scheme, in ])ursuance of which tlu' banners were disj)layed and maintained, was to injure t he ])laintiffs' J)usiness, not by defaming it to the public, but by intimi- dating workmen, so as to deter them from keeping or making engagements with the plaintiffs. The banner wa> a standing menace to all who were or w ishcd (o be in the employment of the plaintiffs to deter them from entering the plaintiffs' juHMiiises. Maintaining it was a continuous unlawful act, injurious to the plaintiffs" business and prop- erty, and was a nuisance such as a court of e(juily will grant relief against.' In its general i)r()visi()ns this rule i> ' Slieny v. Perkins. 147 Mass. Knott. L. H. 10 Ch. 142: Saxby v. 212. See also Boston Diatite Co. Easterbrook, L. R. 3 C. P. D. ;W!t: V. Florence Mfg. Co. ,114 Mass. (Ifl; Thorley's Food Co. v. Massain. J-. s. c.. V.) Am. Hep. 31 ; Spiingbead II. 14 Cli. D. 7()3; Tbonias v. Will- Spinninjr ("o. v. Kiley. L. K. (i Ki]. iams. L. H. 14 Cb. 1). 804: Day v. .").") 1 ; Pnulential Assurance Co. v. Brownrigg. I.. K. 10 Cb. D. "JIM; sS [{. '•J TUADKS I NIONS AND LAUOU ()It( ; AMZATIONS. Xu) aj)plie-al)U' to the i'iu|)li)V('> of :i railro.-ul coinpaiiy or to trades unions, tlie incnilxTs of which art* railroad employes, and it is farther modified by the rcMiuircnient of the inter- slate eommei-ee ael. In the recent leadiniu'h ol)structions amounted to what on a public highway would be a public nuisance, such legisla- tion would be admissible.* Such an act, not going beyond the scope of equity jurisdiction in Kngland at the time when the federal constitu- tion was adopted, it is plain would not be obnoxious to the objection that it was an invasion of the field of criminal law which involved in- 23 terference with the right of trial by jury. Tlu^ jurisdiction of the courts of equity, and by implica- tion their right to punish for con- tempt, are established by th<' con- stitution e»jually with the right of trial by jury, and so long as there is no attempt to extend jurisdiction over subjects not proi)erly cog- nizable in equity, there can be no ground for the assertion that the right of jury trial has been taken away or impaired. The same act may constitute a contempt and a crime. But the contempt is one thing, the crime another; and the punishment for one is not a dupli- cation of the punishment of the other. The contempt can be tried and punished only by the court, while the charge of crime can be tried only by a jury." In the Su- preme Court in In re Debs, 158 U. S., at page 582. Brewer, J., says: •■I{ut passing to the second ques- tion, is there no other alternative than the use of force on the part of tlie executive authorities whenever obstructions arise to the freedom of interstate commerce or the trans- portation of the mails? Is the army the only instrument by which rights of the public can lie enforced and the jieace of the nation pre- served? (Jrant that any public nuisance may be forcitdy abated, either at the instance of the au- thorities, or by any individual suffering private damage there- from, the existence of tliis right of forcible abatement is not incon- sistent with, nor does it desM'oy. the right of appeal in an orderly Ho4 TKADKS INIONS AND LAHOR OUCJAMZATIONS. [§ llo. Toledo, Ann Arbor & Northern Mirhigiin Railway Com- pany V. The Pennsylvania Coiupany, before the United States Circnit Conrt for the Northern District of Ohio, W. D., it was held that circuit courts of the United States have way to tlje courts for a judicial de- termination, and an exercise of their powers by writ of injunction and otherwise to accomplish the same result. In Stamford v. Stam- ford Horse Railroad Co., 50 Conn. 381, an injunction was asked by the boroup;h to restrain the company from laying down its track in a street of the borough. The right of the borough to forcibly remove the track was insisted upon as a ground for questioning the juris- diction of a court of ecjuity. but the court sustained the injunction, adding, 'And none the less so be- cause of its right to remove the track by force. As a rule, injunc- tions are denied to those who have an adecpiate remedy atlaw . Wh ere the choice is between the ordinary and the extraordinary processes of law, and the former are sufficient, the rule will not permit the use of the latter. In some cases of nui- sance, and in some cases of tres- pass, the law permits an individual to abate the one and prevent the other by force, because sutiii per- mission is necessary to the com- plete protection of i)roperty and person. When the choice is be- tween redress, or prevention of in- jury by force, and by peaceful process, the law is well pleased if the individual will consent to waive his right to the use of force and await its action. Therefore, as between force and the extraordi- nary writ of injunction, the rule will permit the latter." So in the ease before us, the right to use force docs not exclude the right of appeal to the courts for a judicial determination, and for the exercise of all their powers of prevention. Indeed, it is more to the praise than to the blame of the govern- ment that, instead of determining for itself questions of right and wrong on the part of these peti- tioners and their associates, and enforcing that determination by the club of the policeman and the bayonet of the soldier, itsubmitted • all those questions to the peaceful determination of judicial tribunals, and invoked their consideration and judgment as to the measure of its rights and powers, and the cor- relative obligations of those against whom it made complaint. And it is equally to the credit of the latter that the judgment of those tribunals was by the great bod}' of them re- spected, and the troubles wiiidi threatened so much disaster termi- nated." See also People v. Van- derbilt, 28 N. Y. 396; State v. Dayton & S. E. K. R., 30 Ohio St. 434; Springfield v. Connecticut River R. R.. 4 Cush. 03; Aity.- Gen. V. Woods, 108 Mass. 430; Easton it Amboy R. R. Co. v. (ireenwich, 25 N. .F. Eq. .")0.'); Stearns Co. v. St. Cloud, M.vt A. R. R., 36 Minn. 425; Rio Grande R. R. Co. V. Brownsville, 45 Tex. 88; Philadelphia v. Street Ry. Co.. 8 Phila. 648; Atty.-Gen. v. Tudor Ice Co.. 104 Mass. 23!): Atty.-Gen. v. Jamaica Pond Acpie- duct Coipnration, 133 Mass. 301 : Village of Pine City v. Munch. 4J Minn. 342; State v. Goodnight. 7tk 'i'ex. 082. § 111').] TKADKS INION'S AM) LAHOli ORGANIZATIONS. 35.5 jurisdiction of a bill in equity to rcstiJiin violations of the interstate eoniinerce law to the irreparable injury of the eoniplaiiiant , l)ecaus(' of the subjiH't-niatlcr, and without re- gard to tile eiti/ensliip of tlie parties. A eonil)inati()n to in- duce and procure tlie ollicers of a common carrier corpora- tion, subject to the j)ro\isions of the interstate commerce act, and its locomotive ensineers, to refuse to receive, handle and haul interstate freight from another like com- mon carrier in order to injure the latter, is a combination or conspiracy to commit liic misdemeanor described by sec- tion 10 of the interstate commerce act. and, if any person engajjed in it docs an act in furtherance thereof, all com- bining for tlic pur[)ose are guilty of criminal conspiracy, as denounced by section 5440, Revised Statutes. The injury which will be caused to the comnu)n carrier against which such conspiracy is directed will be irreparal)le, and, in order to jircvcnt this and maintain the sfafus f/iio until full relief can be granted, a preliminary and temj)orarv mandatory in- junction will issue against the company and its emj^lo^'es threatening the injury, restraining them from refusing to afford the proper interchange of interstate freight and traf- fic facilities to c()mj)lainant. The employes, while in thi' emidoy of the defendant company, must obey this manda- tor\' iiijuMct ion, but maw without contempt of court, avoid or evade obedience thereto by ceasing to be such em- ployes, otherwise the injumlion would, in effect, be an order compelling the employes to continue the relation of servant to the complainant, — a kind of order never yet issued by a court of ecpiity. A preliminary injunction may issue against the chief mend)er of such a conspirac}', as thai above described, to restrain him from giving the order and signal which will result, and is intended to result, in the un- lawful and irreparal)le injuries to the comj>lainaiit . ^^'her(! such chief member has already issued an uidawful, willful and criminal order, the injurious effect of which will be continuing, the court nuiy by nnmdatory injunction comj)el him to rescind the same, especially when the necessary effect of the order or signal is to iiuluce and i)rocure flag- 350 TRADES UNIONS AND LAHOIi OK(;ANIZAT10NS. [§ 116. rant violations of ;iii iiijmiclioii picviously issiu-d l»v the court.' § 11<>. Statutory Regulations. — In many, i)(.'iliap:? in most of the States, there are statutes designed to determine the rights of trades unions in their relations to their em- ployers, and, especially, with reference to strikes. In some of the States, as Arkansas, California, Maine, Tcnnesse, etc., it has been made n criininal offense to coniinit any act that is adapted to injure the pul)lic health or morals, or that constitutes an obstruction to trade or commerce, or that tends to the perversion of justice or is an obstruction to the orderly and regular administration of the law. In other States, as Delaware, Maine, Michigan, Wisconsin, etc., statutes have been enacted, the object of which is to re- strain trades unions or other combinations from interference with the o})erations of railroads, or the work of corpora- tions, or with the regular course of business, by firms or in- dividuals. In other States, as Michigan, Khodc Island, etc., it is made a misdemeanor to attempt by force or by any manner of intimidation to prevent any person from en- tering into or from continuing in any employment. In New Jersey, where it is j)rovided by statute that "it shall not be unlawful for any two or more pcrst)ns to unite, combine, or bind themselves by oath, covenant, agreement, alliance or otherwise to persuade, ad\ise or encourage, by peace- able means, any person or }>ersons to enter into any com- bination for or against leaving or entering into the employ- ment of any person or persons or corporations," it was held that under this statute it i> not unlawfid for the members ' Toledo. A. A. i<: X. M. liy. Co. and peaceably and without in- V. I'enna Co.. i34 Fed. llep. 730. tiniidation pertiuadinortbeiifellow- F](juity will enjoin the publication workmen to leave the service of and circulation of posters, hand- their employers, in order to com- bills. circulars, etc., printed and pel an advance in wages, on the circulated in pursuance of a com- t^round that such persuasion in- bination to boycott a newspaper, vades the constitutional right of Casey v. Cincinnati Tyiiograpbical the employerto prosecute his busi- Union Xo. 3. 4."> Fed. lvt^>. 13."». An ness free from unlawful obstruc- injunctlon will not lie to restrain tion. Rogers v. Evarts. 17 N. Y. handicraftsmen from combining. Supl. 2G4. § IK).] TKADES UNIONS AND LA1U)K ( )K( i AN l/ATIONS. 357 of an association to conibinc for the i)uri)oso of securing the control of the work connected with their trade, and to endeavor to eifect .such purpose by peaceable means, and equity will not enjoin such acts on the ground that they may he dctriincntal to trade or injurious to individual l)usi- ne 1 M!iyeiv..Ioiirneyinen Stone Cut- ters' Association. 47 N. J. Eq. 519; S. C, 20 Atl. Kep. 492. 24 United States Statutes at Large, chap. 5G7, provides "that the term 'National Trade Union.' in the meaning of this act, shall signify any associa- tion of working peoi)le having two or more branches in the States or territories of the United Slates for the purpose of aiding its members to become more skillful and efli- cient workers, the promotion of their general intelligence, the ele- vation of their character, the regu- lation of their wages and their hours and conditions' of labor, and the protection of their individual rights in the prosecution of their trade or trades, the raising of funds for the benetlt of sick, disabled, or unemployed members, or the families of deceased members, or for such other object or objects for which working people may law- fully combine, having in view their mutual j)rotection or benefit." Chap. 114, Illinois Statutes. 1 128. provides: '"If any locomotive en- gineer, in furtherance of any com- bination or agreement, shall will- fully and maliciously abandon his locomotive upon any railroad at any other point than the regular schedule destination of such loco- motive, he shall be fin<'d not less than $20, nor more than $100, and confined in the county jail not less than twenty days, nor more than ninety days." ^130: "If two or more persons shall willfully and maliciously combine or conspire together to obstruct or impede by any act. or by means of intimida- tion, the regular operation and conduct of the business of any rail- road conipany, or any other cor- poration, firm or individual in this State, or to impede, hinder or ob- struct, except by due process of law. the regular running of any locomotive engine, freight or pas- senger train on any railroad, or the labor or business of any such cor- poration, firm or individual, such persons shall, on conviction thereof, be punished by fine, not less than $20. nor more than $200, and confined in the county jail not less than twenty days, nor more than ninety days.'' f 131 : "This act shall not be construed to apply to cases of persons volimfarily ciuit- ting the employment of any rail- road company, or such other corporation, firm or individual, whether by concert of action or otherwise, except as provided in section 1 [^ 128. stipra] of this act." Laws 1892. chap. (i02. which creates a board for the examination of jjliimbers. and which forbids any person to exercise the calling of a mast«'r i)lumber without passing an examination before said board, is ;i valid exercise of the police power, since the work of ])lumb- ing is essential to the comfort and health of the inhabitants of cities. I'eople V. Warden. 144 N. Y. r)29; ^. c. 39 N. K. Kep. (386. In Penn- svlvania there is a statute which 358 TRADES TMONS AM) LAIJOK ()Kj)('citi('(l tinu'. It was i^rantcd by the kini; antl, ordinarily, without i)('cuniar\' consideration, and as an expression of th<' royal faNor. It is detined by Hlackstonc as "a license or privileire allowed by the king, for the sole buying and .selling, making, working or using of anything whatsoever, wherein' the subject in general is restrained from that liberty of manufactnring or trading which he had before."' Lord Coke detin<'s a monopoly as "an institution by the king, by his grant, connnissivas not limited to an indi- vidual or to a few individuals, but was carried on by a con- siderable class. It had reference to a branch of business in which all had a right to engage and in which, as a matter of fact, many had pr(!vi()usly been engaged. An exclusive privi- lege is not, necessarily, a monopoly, inasmuch as it does not in all eases relate to a |)rivilege which others had previously enjoyed. The right to o[)erate a ferry, to construct a bridge, or to sui)ply a cit}^ with water or gas, is an ex- clusive privilege, but not a monopoly in the sense of depriv- ing a class of persons of a privilege of which they had pre- viously been in possession. The grant of such a privilege is a contract, and the presumption is that the primary object of the authorities in making it is not to confer a special favor u})on the party to whom the grant is made, but to })romote the public interest. One of the conditions of the grant is that of rendering to the ])ublic a special service, and a failure to render such service invalidates the contract. Such grants of exclusive jirivileges are not void at common law as nion()|)()lics, and the}' are not in contra- vention of public policy.-' In The Commonwealth v. Hacon, J 3 Coke Inst. 181. - New Orleans Water Works Co. V. Rineis, llf) U. S. 83. "Permission to keep a tavern or a ferry, to erect a toll bridge over a stream wiieie it is crossed by a imhlic hiijliway. to build a mill dam across a navif^a- ble stream, and the like, are special privileijt's. and IxMnjj matters in which I lie public have an interest, may be g;ranted by th«^ leirislature to individuals or corporations; but the grantee, upon accepting the grant at once becomes bound to render that service, to secine wliich the grant was made: and sucii obligation, on the i)art of the grantee, is just as necessary to the validity of a legislative grant of an exclusive privilege, as a con- sideration, either good or valuable, is to the validity of an ordinary contract. Whenever by accepting such privilege, the grantee be- comes bound l)y an ex|)ress or im- plied undertaking, to render service to ttie public, such undertaking will uphold the grant, no matter how inaderpiatc it may be: for, the Ictrislature beinsr vested with § 117.] MlMCll'AI. <;KA.\r.S AM) CONTKACTS. ;;»;i power to iiiiik*' grunts of tliat chur- jicler, when the public convenience demands it. the iegislaiive jiidg- inent is con«^liisive both as to the necessity for niakinjif the j^rantand ttie amount of service to be ren- dered in consideraiion therefor, and the courts have no power to interfere, however inadequate the consideration or unreasonable the •jrant may appear to them to be. IJiit when they can see that the jjrantee of an exclusive privilege has come under no obli«^ation whatever to serve the i)ublic in any matter in any way connected with the enjoyment of the j^rant, it is their duly to pronounce the jfrant void, as eontraveninj; that provision of the bill of lights which prohibits the granting of exclusive privileges, except in consideration of public service." Gordon v. Winchester, 12 IJush. 110, 114. ••These [the foregoing] observations were made in a case wheie it was held that a statute giving a building association the right to receive a greater rate of interest than was allowed by the general law was unconstitutional, in that it conferred exclusive i)riv- ileges not in consideraiion of any public services to be performed." Louisville Gas Co. v. Citizens' Gas Co., ll.'> U. S. (iS3, ()1M. See also Commonwealth v. Thipps, SO Ky. 2(")0; Commonwealth v. Hacon, 13 Bush. 210; Boston it Lowell I{. K. Co. V. Salem & Lowell H. K. Co., 2 Gray. 1 ; Boston Water Power Co. V. Boston & Worcester 1{. H.. 23 rick. 3C.0; Hi<-hmond, etc. U. R. Co. V. Louisa H. K. Co., 13 How. 71. ••In the same manner as Congress may reward the dis- coverer of a new invention or niode of constructing roads, by an ex- clusive privilege, the legl>lature may reward those who employ their capital and industry in doubt- ful enterprises, for the const ruction of a railway between two jioints. which may be of great uiility to the public, though the suceess of the enterprise may be precarious." I'ontchartrain K. li. <'o. v. New Orleans Ky. Co.. 11 La. Ann. 2.-.3. See also Asylum v. New Orleans, 105 U. S. 302; New Jersey v. Wil- son, 7 Cranch, 1(54; Humphrey v. Pegues, K) Wall. 244. ••The i.re- cise question is. bad tlie city of Kansas the power to grant for a term of years the exclusive right to occupy its streets with street railroads";:' The (juestion must be answered in the negative. Let me in the outset formulate two or three unquestioned propositions: (1) The legislature has, as a gen- eral representative of the public, the power, subject to specific con- stitutional limitations, to grant special i)rivileges; (2) itmay,wiih similar limitations, grant the like power to municipal corporations, as to all matters of purely munici- pal nature; but (3) as the posses- sion by one individual of a privi- lege not open to accjuisition by others apparently conflicts with that e(|uarny of rights which is the underlying principle of social or- ganization and pojjular govern- ment, he who claims such exclusive privilege must show clear warrant of title, if not also probable cor- responding benefit to the public. Hence the familiar rule that char- ters, grants of franchises, privi- leges, etc.. are to be construed in favor of the government. Doubts as to what is granted are resolved in favor of a grantor, or, as often epigrammatically said, a doubt destroys a grant. Now, coming close to the (juestion. the legisla- ture has not in terms given to the city the power of granting an ex- :u\2 .MLMCIPAL (JKANTS AND CONTKACTS. [§11- olusive privilege of occupying the streets with railroads; it has not in terms given to it the right to contract away its continuous con- trol of the streets, and its future judgment of the needs of the public in those streets, by a surrender of their occupation for railroad pur- poses to individuals for a series of years. Indeed, it has not in terms made any specific grant in respect to the occupation of streets by rail- roads, and their operation thereon. Upon wliat. then, can it be claimed that the city has the power to give to an individual, the light to oc- cupy the streets witli i-ailroads. secure lilm that liglit for a term of years and also the right of de- barring, during such term, every other citizen from a like use of the streets. It was held in the Atchison case [Atchison St. Ry. Co. v. Mo. Pac. ]iy. Co.. 31 Kan. GOO; 8. c. 3 Tac. Rep. 284], that the city might permit a street railroad, and this because the legislature had granted to it a general control and supervision of the streets. In this the current of opinion and author- ity was followed. I'nder such power the city may permit any ordinary use of a street as a street. A street railroad comes within the ordinary scope of such u:^e. But power to permit one citizen to u.se the streets in a given way is a very different tiling from power to give such citi/en the light to keep every otlier citizen fri)iii a like use of the streets. The one is a mere street regulation — a license; the other rises into the dignity of a contract — a franchise. The one may rest upon the ordinary powers of street management and control, the other reipiires the support of a special grant. Doubtless, the city, may practically secuic exclusive occupation to one. and withholding permission from all others, the occupation of that one becomes for the time being, exclusive. But this is an altogether different mat- ter. In the one case, the exclu- siveness depends on the continuous will of the city; in the other upon that of the individual company. In the one the full and consf^ant control of the streets is retained: in the other it is partially trans- ferred to the other company. Again, exclusiveness of occupation is not necessary to the full per- formance of a street railroad com- pany of all its functions. The running of a street railroad on one street is in no manner interfered with by the running of a similar road on a parallel street. Doubt- less the profits of the one will be increased if the other is stopped. Monopoly implies increase of profits. But the (juestion of profits is very different from that of the imimpeded facilities for transact- ing business. The latter may be granted without exclusiveness, and power to grant all facilities for transacting business does not imply power to forbid all others from transacting like business. Even where a charter is granted by the legislature directly, it grants no exclusive right, unless the exclu- siveness is expressly named. As said by Judge Dillon, 2 Mun. Corp. § 727: 'IJiit a legislative grant of authority to construct a street railway is not exclusive, un- less so declared in terms, and, therefore, the legislattire may at will, and without comi)ensation to the first company, aiitliorize a sec- ond railway on the same streets or line, unless it has disabled itself by making the first grant irrepa- rable and exclusive." And if a di- rect grant from a legislature carries no imi)lication of exclusiveness. § 117.] MlNlCirAI. CUANIS AM) CONTKACTS. 3G3 it was held thnt in prohihitiiii;" unlicensed persons from ki'epinii- a ferry, and in interdicting the establishment of lateral roads, etc., the government exercises j)ul)lic func- tions, and does not in\ade the ])ri\ate right of the citi/.en.' why fhoiild it be prc^imied lliat tbe legislature intended to vest in 11 city the power to <;ive exeiusive privileijes, w lien it has in terms granted no such power? Will the power to create monopolies he pre- sumed unless it is ex{)ressly with- held? 'I'hat would reverse the settled rule of construction, which is that nothing in the way of ex- clusiveness or monopoly passes, unless expressly named. It will not do to say that the grant of general supervision and control of the streets carries wiih it. by im- plication, the j)ower to give exclu- sive privileges; for that grant implies a ve.-ting in the city of continuous control. It is no au- thority for surrendering its con- stant supervision and management to any other corporation or indi- vidual. It implies that the city to-day, to-morrow, and so long as the grant remains, shall exercise its constant judgment as to the needs of the jjublic in the streets, and not that it may to-day sur- rendeiito an individual or a private corporation the right of determin- ing a score of jears hence what the public may then need. The city to-day may d»'termine that one street railroad will answer all the wants of the pubiic, and so give the privilege of occupying the streets to but a single company. Ten years hence its judgment mny be that two railroads are needed. Where is the language in the char- ter which restricts it from i-arrying such judgment into effect by giving a like privilege to a second com- Ijany? It is doubtless true, as counsel say. that capital is timid, and will not undertake such enter- prises without abimdanl guaran- ties and undoubtful security. But this suggests matters of policy, and presents considerations for the legislature. It does not aid in de- termining what powers have been granted or m the construction of charters or ordinances. AVhen tbe legislature deems that the public interests recjuirc tliat cities should be invested with power to grant exclusive privileges, it will say so in unmistakable terms, as it al- ready has in some instances. Till then, courts must deny the posses- sion of such power." Krewer, J., in Jackson County Horse R. Co. v. Interstate Rapid Transit Ry. Co., •24 Fed. Rep. 300, 308; s. c. 32 \m. ik Eng. Ry. r:i<. •2111. ' Commonwealth v. Hacon. 70 Ky. -210. '-It is the duty of gov- ernment to establish and maintain highways. Ferries are parts of highways and the government may perform its duty in establishing througli the agency of private in- dividuals or corporations, and such agencies .ire representatives of the government, and perform for it a jiart of its functions. And in con- sideration of the service thus per- formed for the public, the govern- ment may prohibit altogether persons froni keeping ferries and com|)eting with those it has licensed. The establishnient of j^ublic highways being a function of govfinmcnt. no person has a right to establish such a highway 3G4 MrMCII'AL CHANTS AM) CONTUVCTS. [§ llX. But while special privileges of this eharacter are not illeiral, a grant l^y which the grantor is enabled to create a monop- oly, in the jiroper sense of that tei-ni, is in contravention of l)ul)lic policy, and void at connnon law. Such a grant de- stroys the freedom of trade, which is the constitutional right of every citizen. It discourages enter})rise and indus- try, and restrains the citi/en from an honest effort to obtain a livelihood. Besides, it enables the grantor to enhance the ])rice of the commodity of which he enjoys a monopoly and thus to become a robber and oppressor of the public.^ § 118. Limitation of Exclusive Privilej^e. — In all grants of special privileges there; must be a limitation in time. As municipal authorities have no power to grant a monopoly, so they have no right to grant a perpetual franchise. The extent in time to which they may go has not been definitely fixed. It ai)pears that each case nmst be determined by its peculiar circumstances. In a recent case in Indiana, the court said : "The making of contracts for the suppl}' of gas or water is a matter delegated to the governing powers of munici))alities, to be exercised according to their own dis- cretion ; and, in the absence of fraud, while acting within the authority delcgatc(l to them, their action is not subject to review by the courts. The length of time for which they shall bind, their towns and cities depends u})on so many cir- cumstances and conditions as to situation, cost of sup))Iy without the consent of govern- llicni. ;iiid ni;iy piotiibit .iny one im-nt; and htMice in prohibilinjr i( chooses from doing so, because unlicensed persons from Iveepino; a the esUiblishment of a ferry witb- ferry tlie <;ovornment does not in- out tlie consent of governujent is vade the right of even tiiose wiio an invasion of its right, just as the own the soil on both sides of the use of the soil for a ferry landing, stream. The owner of the soil witliout tlie consent of tlie owner, may. unless liis land be regularly would be an invasion of his right condemned for the jiurpose, i)ro- of property. ( 'ommonwealtli v. hii)it any other person from using j'.aeon. 7('> Ky. '.MO, 2I*2. it as a landing for a ferry. This ' On tliis point see the very able he may do. because he is theowner dissenting ojiinions of Justices of the soil. So the government. Field. Swayn(> and Hradley in the being charged with tiie duly of es- Slaughter House Ca-es. Ill Wall, tablishing aixl maintaining feii ies, S.J. liJO. lias the exclusive right to establisii § U.S.] MrMCll'AI. (ilJANTS AM) (( )NT1:A('TS. 'Mk) and future })ro.spe(ts, lliat courts cjui intorffrc only in cx- trcnie cases and upon reasonable apijlication. We cannot sa\' tlnit twontv-tivc xcars is an uni-casonable time for wliicli to contract for a suj)ply of liiilit or water. Tnii)ro\'cincnts made in the methods and cost of street lir;iiitor a privdeue that will eiud>le him at a future tinu' to take advantage of the necessities of the people by tixing exorbitant and oppressive rates. Where the length of time for which a franchise is granted is l)hiinly luireasonabje and inconsistent with the j)ul)lic wel- fare, the grant is not void, but voidalih'. It is voidable as an uKni rires act of the municii)al authorities. A grant nuiy be made for a term of years, and a |)rivilege which is not a monopoly at the time at which it is granted does not become a monoj)oly I)y the lapse of any reasonable period. In municipal grants there is a necessity for a tixed and some- what extended time. As the cost of supplying a city with gas or water is large and iiiNohcs an exjx-nsive i)hiiit, it would not be undertaken \>y a private cor|)()rati(»n on any tem})orary or uncei-tain franchise. - ' City of VinconiH's v. Citizens* Bridi^eport Uydnuilic Company Gas Light Co.. i:^2 Ind. 114. 120; was incorpoiali'd wiiii power to S. C..31 X. v.. Hep. .')73. T)??. See aciiuirc. and wliicli did ac(piire, all also City of Valparaiso v. Gardner, the rights of G iiiuler the vote of 97 Ind. 1. tlie city, and hecanw charged with '^ City of Memphis V. Water Co.. ali his duties; and this company, ") IIeisk.4n."). In IS.')^, the common soon after, expended a large sum council of the city of Bridgeport of money in acquiring property accepted a proposition made by and establishing its water works, one (J to supply the city with Held that, so long .as this company water, and granted him (with a supi)Iicd the city with an abnnd- riiiiit of assignment) the exclusive ance of pure water, the legislature right to lay pipes in the streets, so had no power to give another cor- long as a full supply of pure water poration the riglit to lay its pipes should be furnished. In IS.")? the in the streets of the city for the 3()() MUNICIPAL CHANTS AND C(JNTKACTS, [§ ll!l. § 111). Statutory Ko^iilatioiiK. — Tlu'ic is some conflitt of authority in tlio statutory enactiiioiils of the different States touchiiiir tlu' rii^ht of municipal authorities to irninl exchisive privilcires. In some of tiic States an exclusive l)ri\ilege is treated as m monopoly and iilciral. In the case of the City of Brenham v. The lirenham Water Co., the charter of the city provided that it • -shall be cajjable of contracting and being contracted with," an'd gave it power to provide the city with water for the convenience of the in- habitants, and the extinguishment of lires ; while the law under which the water comi)any was organized provided that it should have full power io furnish water to any city where it was located, for i)ublic or private buildings, or for other purposes, and to lay pipes through the streets with the consent of the citv. A i>;eneral law also authorized anv purpose of siipplyinj^ the city with water. Altlioii<>h the State may be no party to, and have no inter- est in, the subject- matter of a con- tract, yet if it invests a corporation, otherwise powerless, with a power to n)al; Olmstead v. Camp. 3S Conn. 53'2; Harding v. Stamford AVater Co., 41 Conn, ill ; State v. Milwaukee Gas Light Co.. 29 Wis. 454: Atlantic City Water Works Co. V. Atlantic City. 39 N. J. Eq. 367; Tierce v. Drew, 136 Mass. 81 : Von Hoffman v. Quincy, 4 Wall. 535; Ilolyoke Co. v. Lyman, 15 Wall. 500; New Orleans Water Works Co. v. Rivers, 115 U. S.fi74: New Jersey v. Yard. 95 U. S. 104; Railroad Co. v. Maine, 96 U. S. 499; Commissioners v. Ilolyoke Water Co.. lOJ .Mass. 4^6. § 111'.] MlMCirAL CHANTS AND CONTKACTS, 367 oitv in which a water coniiJaiiy was oriiani/i'd to coiitracl with it for supplviiiir {hv city with walcr. It was hchl that whik' tiie!5C several hiws, taken toirether, undouhtedlj authorized the eity to make some contract for supplying itself with water, yet they did not confer on the city the express power to make a contract giving the wuter comi)any the exclusive riuht to supply the city and inhabitants with water for the period of twenty-tive years, at a lixed rate per annum, and, as no such power was necessary or essential to the i)roi)er exercise of the powers expressly granted, it could not be implied, and this contract must be considered as unauthorized by the legislature and invalid. Power given to a municipal c()ri)oration to contract in relation to a given subject-matter does not carry by im})lication the power to contract, even with reference to that, so as to enil)arrass and interfere with its future control over the matter, as the j)ublic interest may require. A grant which gives to one or an association of persons an exclusive right to buy, sell, nuUie or use a given thing or commodity, or to pursue a given employment, creates a monopoly. The exclusive right need not continue indetinitely, so as to amount to a per})etuity. It is sullicienl that it is an exclusive privilege for a period of time of the character forbidden. So, in this case, the ordinance granting the exclusive right to sell water to a community, for public and private uses, affects all the inhabitants in their common rights directly, and in tlu'ir in- dividual rights indirectly, and is in conflict with that clause of the Texas constitution which i)rovides that jx-rpet uities and nu)nopolies arc contrary to the genius of a free govern- ment and shall never be allowed.' In a recent case in 'City o( Bienhaiii v. Brenhaiii the iiieans to carry out siicli leijis- Watcr Co., 67 Tex. r>42; s. c. 4 J>. lalive determinalion, tlie making W. liep. 143. "Whi'tber and bow of one or many cuiuracts may be- a municipal government will exer- come necessary. Tbe validity of cise a discretionary power con- every contract a munici|)al corpo- ferred upon it, must necessarily ration may assume to make, must depend upon the determination of at last depend upon the validity of that question by it in the exercise the law or municipal ordinance of whatever legislative power has under which it is made. If the been conferred upon it. To secure legislature had expressly author- 3(]8 MUNICIPAL ORANT.S AND CONTRACTS, [§11! Montaiiii, it was hold that the grant by a city coimcil of the exclusive right of selling to the city all the water re- (juired by it for sewerage add tire purposes for the |)eriod of twenty years at a niininiuni rate tixed in the contract is a ized the makini:: of the contract under consideration, it would doubtless be binding, unless there be some constitutional objection to such a law. — a matter which will be considered hereafter, — and the ordinance could not be held to operate, considered with its ac- ceptance as a contract, as a sur- render of any power the legislature intended the city government to exercise at all times. The ques- tion would then have been deter- mined by a power superior to that of the municipality, — a power from which it derives all the power it has, and even its existence as a corporation. The city having given such a power as we have stated, it must be understood tliat it was in- tended not only that it might use it, but that it should use it, if deemed necessaiy for the public welfare, so long as the power is possessed by it, /. ^.. until taken away by the legislature. Will not the contract under consideration, if valid, have the effect not only to embarrass the city government in the exercise of the i)ower conferred upon it, but to withdraw from it the right to provide, in any au- thorized way, water for public purposes, and the use of its inhab- itant-, wiiich was the sole purpose for which the |)ower to erect, main- tain and regulate water works was given to iiV It seems so to us, for, as we have before saitl. the con- tract in effect assumes to give an exclusive right. — assumes to sur- render to a privatf corporation for a period of twenty-five years the power which the legislature con- ferred on the municipal govern- ment. The power given to a mu- nicipal corporation to contract in relation to a given subject-matter does not carry the implication that it may contract, even with refer- ence to that, so as to render it un- able, in the future, so to control any municipal matter over which it is given power to legislate as may be deemed best. If the con- tract relied on is valid, neither the repeal of the charter of the city, nor any other act of the legislature can abrogate it. If it is invalid, the city council had the right to declare it null, and to refuse to comply with it." Ihid., r)54. See also Richmond County Gas Light Co. V. Middletown, 59 N. Y. 2)1} : State V. Gas Light Co., 18 Ohio St. 291 ; Garrison v. City of Chicago, 7 Biss. 4S(J; Canal Company v. St. Louis. 2 Dillon, 84; Norwich Gas Light Co. V. Norwich City Gas Co., 2.') Conn. 18; Lord v. Oconto. 47 Wis. 38G; Mattliews v. Alexandria. ()8 Mo. 115; Bodine V. Trenton, ;{<■) N. J. t. 198; State v. New Uruns- wick. 3U N. J. L. 395; Indianapolis V. Indianapolis Gas Co., UO Ind. 39G; Milhau v. Sharp, 27 N. Y. (ill; Gale v. Kalamazoo. 23 Mich. 344; s. C, 9 Am. Rep. 80; Louis- ville City Railroad Co. v. Louis- ville, 8 Bush. 415; Covington, etc. R. K. Co. v. Covington. 9 Bush. 127; People's Railroad v. Memphis Railroad. 10 Wall. .{S; Trfshy. Church V. Mayor, etc.. 5 Cow, 538; Stuyvfsant v. Mayor, etc, of New York. 7 Cow. 588; Sav. Fund v. § 11I>.] >ll M( IPAL (; RANTS AM) CONTRACTS. 369 monopoly; and this th()Ui;h the iiiaiit docs not ))i('V('iil other people fri)in selling water to j)risat<' citizens.' It was held farther in the same case that a city conncil has no aulliority to grant to any person a monopoly, even where no express prohibition is found in the charter or other acts of the legislature.'^ The present inclination of the courts is to construe statutory enactments relating to the powers of numicipal authorities in favor of the citizen. In a late case before the United States Circuit Court for the Eastern Dis- trict of ^Michigan, it was held that authority conferred by act of legislature upon a city council "to cause the streets of a city to be lighted," and to make "reasonable regula- tions" with reference thereto, does not empower the city government to grant to one comi)any the exclusive right to furnish gas for thirty years, and that the exclusive right to light a city with gas for thirty years is not legally impaired by a subseijuent contract with another compan}- to light the streets with electricity.'^ But it has been held that if the riiiladolphia, 31 Pa. St. 175; Le- high Water Co.'s Appeal, 102 Pa. St. r)15; San Francisco Gas Light Co. V. Duno, G2 Cat. .")80; In re Mayor, etc., of Aihany, 23 Wend. 277; Railroad Co. v. Mayor. 1 Hill. .")G2; Martin v. Mayor, 1 Hill. .")4r»; (joszler V. Georgetown. U Wlieat. r)93; Bryson v. Phiiadeli)hia. 47 Pa. St. 329; Britton v. Mayor, 21 How. Pr. 251 ; New York v. Second Avenue, etc. Co., 32 X. Y. 2G1 ; Dingnian v. People, 51 111. 277; Briinner v. Boston. 102 Mass. 19; .lohnson v. Philadelphia, CO Pa. St. 445; .lackson v. Bowman. 39 Miss. 671; Oakland v. ('arpentier, 13 Cal. 540; Smith v. Morse. 2 Cal. 524; Karst v. St. Paul. etc. K. It. Co., 22 Minn. 118; Peru v. Gleason, 91 Ind. 50(5; National Bank v. St. Joseph, 31 Fed. Rep. 21«;; Costar V. Brush, 25 Wend. 028; Brooklyn V. City Railroad Co., 47 X. Y. 475; Home v. Rouse, 8 Wall. 430. 24 ' Davenport v. Kleinsehmidt, G Mont. 502; s. c, 13 Pac. Rep. 249. See also case of L'nion Ferry Co., 98 X. Y. 150; Mohawk Bridge Co. V. Utica & S. R. Co., G Paige, 554; Costar v. Brush, 25 Wend. G28; Chenango Bridge Co. v. Bing- hampton Bridge Co., 27 X. Y. 87; s. c. 3 Wall. 51; WVst River Bridge Co. v. Dix, IG Vt. 44(i. -' Davenport v. Kleinsehmidt. G Mont. 502; s. c 13 Pac. Rep. 249. See also Jackson Co. H. R. Co. v. Interstate R. T. Ry. Co., 24 Fed. Rep. 30G; Xew Orleans C. R. Co. v. Crescent City R. Co., 12 Fed. Rep. 308; Meadville Fiu'l it (ias Co.'s Appeal (Pa.). 4 Atl. Rep. 733. ■* Saginaw (Ja.s Light Co. v. City of .Saginaw. 2S Fed. Rep. 529. .See also Minturn v. Larue, 23 How. 435; Wright v. Xagle, 101 U. S. 791; Vicksburg, S. & P. Co. v. Dennis. IIG U. S. G65; s. c. G Sup. Ct. Rep. G25; Beaty v. Lessee of 370 MlNKMI'Ar. CIJANTS AM) CONTRACTS. [§ 119. State, or its imniicipalitics, delegate any of its j)olice or sovereign powers to persons or corporations, and the per- son or corporation in consideration thereof engages in some enterprise which he could not have otherwise done, then such grants or privileges, public and private, become contracts, for a sufficient consideration, and cannot ))e im- paired by any subsecjuent act of the State or its municipali- ties capriciously and without just cause. ^ In a case in Georgia, it was held that grants by the public are to be strictly construed and nothing passes by implication. The whole legislative history of this State shows that the under- standing of our })eople has been that exclusive j)rivi- leges are never conferred, where none such are expressly given ])y the charter. The legislature, or the inferior court, as its agent, after having chartered a company to make a particular improvement for public accommodation, without any provision that no rival improvement should afterwards be authorized, may grant a charter to another company or indi\ idual, to make an improvement of the same or of a different kind to afford the like accommoda- tion, however the work of the junior company might im- pair or even destroy the protits of the elder. It is compe- tent for the legislature to grant charters with exclusive ])riviloges, ])ut should a change in the business population Knowler, 4 Pet. 152; Chesapeake & Ohio Ry. Co. v. Miller, 114 U. S. 176; s. c. 5 Sup. Ct. Rep. 813; Butchers' Union, etc. Co. v. Cres- cent City, etc. Co., Ill U. S. 746; s. c 4 Sup. Ct. Rep. 6.V2. ^ City of Louisville v. Weible. 84 Ky. 290: 8. C. 1 S. W. Rep. 60."). "The power to protect, throujrh her cities and towns and other public agencies, the public health, the i>ublic morals, and the public safety, cannot be relinquished or surrendered; for the government is bottomed upon the fundamental principles, promotion of the peace, safety, hai>piness and security of its citizens. Therefore, any sur- render of its power to protect the public health, the public morals, the public safety of the citizen, would violate this fundamental principle, and tend to revolution and anarchy. The power, there- fore, cannot be surrendered. The State, howevei-. and its municipal- ities intrusted with the execution of this power, may provide the means of protecting the public health ; it is its duty to do so. Any means may be adopted that will effect that end, such as employing trusty persons to take the matter in charge, under the supervision and control of the State or city."' Ibid., 295. § 120.] MrNICIPAL (JitANTS AM) CONTRACTS. .")71 and intercourse of the country require it, new avenues may be opened within tiie limits of such exchisive o^raiit, by provitliiiu' just compensation. There is no difference l)c- tween a franchise and any other property in tiiis res})ect ; all may be nnidc subservient to the public use, provided the public faith be not violated in making adccjuatc renmnera- tion.^ § 1'20. The Subject Continued. — The law, as stated in the foregoinix section, is not sustained in all the States. In a recent leading case in Connecticut, the view upheld is quite out of harnu)ny with the above stated. In 1.S53 the common council of the city of Bridgeport accepted a prop- osition made by one O, to suj)ply the city with water, and granted him (with a right of assignment) the exclusive right to lay pipes in the streets so long as a full supply of j)ure water should be furnished. In l-S')? the Bridgei)ort Hydraulic Company was incorporated with })owcr to accjuire, and which did acquire, all the rights of G, under the vote of the city, and became charged with all his duties; and this company soon after expended a large sum of money in accjuiring property and establishing its water works. It was held that, so long as this company sup})lied the city with an abundance of pure water, the legislature has no power to give another corporation the right to lay its pipes in the streets of the city for the puri)ose of supjjlying the city with water. Although the State may be no party to, and have no interest in, the subject-matter of a contract, yet if it invests a corporation, otherwis<' ])owcrless, with power to make it, the iegi>latur(' is thereafter concluded in reference to it. It i-. a- a lawful contract, sacred from any inter- ference other than judicial construction. It is the duty of courts to preserve contracts inviolate rather than to destroy monopolies. If the common council had no power to grant the exclusive use of the streets, yet as the charter of the de- fendant company recognized and confirnu'd the grant by the city, it became as effective as if the city had had the power ' Shorter v. .Smith, li Ga. niT. 372 MUNICIPAL (JUANTS AM) CONTKACTS. [§ 120. to make it, and as if th(> loirislatiire had made it in the most direct and explicit words. By a clause in the charter of the defendant company the legislature reserved the power to recall the franchise at its pleasure. It was held that this provision did not authorize the legislature to set aside or im- pair the contract which the city had entered into for the exclusive use of its streets by the defendant company so long as it should supply the city with water, and which the charter had recognized and coniirmed.^ A similar view has been upheld in New Hampshire. In a case before the Supreme Court of that State, it was held that this court has jurisdiction in chancery of a complaint by the grantees of an exclusive right of building and maintaining a bridge, setting forth that others are attempting to infringe their rights by the erection of another bridge to their ]n-ejudice; and if the right is clear, may, by injunction, restrain the party from proceeding to erect such bridge. The existence of a ferry does not render void an act of the legislature granting an exclusive rio^ht to erect a bridsfe within certain limits which include the place where the ferry is situated; and the extinguishment of the ferry, afterwards, does not give to the legislature a right to grant another bridge within such limits. The legislature have power to grant an exclusive right to erect and maintain a l)ridge within certain limits, and to take tolls. The giant in such case gives to the grantee a franchise; and the legislature cannot authorize the erection of another bridge within those limits without provision for a compensation to the tirst grantee. But such franchise is ]n"operty, and another grant to l)uild a bridge within those limits may afterwards be made if com})ensati()n ispro\ided. It is not sufHcient, however, to authorize the erection of such other bridge, that the tirst grantee may obtain com- pensation, by action, for the wrong done in erecting it; no provision for compensation having been made in the second grant.'' In a recent leading case before the Supreme Court 1 Citizens" Water Co. v. Bridge- Ilaiiiitshire Bridge. 7 X. H. 'My. port Hydraulic Co.. 5.") Conn. 1. "U Furbur had bad the grant of a ^ riscataqua Bridge v. New ferry, generally, we should pause § 120.] MUNICIPAL GRANTS AND CONTKACTS. ;i73 of Iowa, it was lu-ld that an ordinanct' which grants a street railroad couipanv tlie right to hiy and operate tracks in a city, and provides that "the right herein granted to said company to oj)erate said railway shall he exclusive for before holding that the h'jrisliitiiio couUi not gfant ;i bridge, or even another ferry, so near as to be con- seijiiently injurious to him. Upon this subject different opinions have been entertained; and it may well be questioned whether the grantee of a ferry, or of a right to erect and maintain a bridge at a particular place, without any terms of exclu- sion in the grant, can set up that right in avoidance of any other grant which is not directly in- jurious in its operation, but in- jurious merely in its remote (!onse- quences by diverting travel and tolls. It would seem to have been the understanding, in this State at least, that if the party intended to secure himself from competition of this character, he must obtain a provision to that effect in his grant; and if no such provision is found, it may well be held that the grant was taken with a reliance on the wisdom and discretion of the legislature to protect the grantee from injurious competition by re- fusing to authorize any other enter- prise of a similar character in the immediate vicinity, unless re(juired by an imperious necessity, and with an assent, on the part of the grantee, that whenever the legislature should deem it expedient, they might make other grants remotely affecting the former, so long as the right and privilege conferred by the terms of the grant were not in- fringed. * • * The grant con- tains no covenant in terms that tlie State will never grant another bridge within those limits, nor do we tliink that any such covenant is to be implied, and, of course, no ob- ligation to that effect is imposed. Sturgis V. Crowninshield. 4 Wheat. 197; Jackson v. Lampliire, 8 Pet. 280. The terms and object of the grant are satislied without any such stipulation. The grantees have all the State professed to grant, — the exclusive right. They have a property in this, and no part of it can be taken from them, ex- cept for public use, and upon ade- quate compensation being made. If a grant of franchises is like other grants of property, wby sliould a covenant be implied extending the right of property in a franchise of this character beyond the rights of the holders of other property, and enabling the grante«'s to resist all public improvements, and deny all public wants entirely, or until such compensation as they please to de- mand shall be made to them? When the legislature shall have granted land, with a covenant that no highway, canal or railroad shall ever be made through it. or a bridge with a stipulation tbat no other bridge shall ever be erected within a certain distance, it may deserve incjuiry whether such con- tract is within the scope of its con- stitutional power, whether the right to provide for the public necessities, and to take property for public use whenever those necessities refpiire it, making there- for an adeipiate compensation, are not inherent rights of sovereignty which no legislature can part with or control by any stipulation, so as 374 MUNICIPAL C RANTS AND CONTRACTS. [§ 120. thirty years, .'UkI that no privilege shall be granted to other persons which may impair the privilege herein granted," operates as an exclusive grant of street railway ])rivileges to such corporation, and not merely to secure the corj)oration the sole use of the tracks it should lay. Under Code, Iowa, § 4()4, which empowers cities "to authorize or forbid" the laying down of a street railroad track, a city council may make })rovision by contract for present and future street railroad service, and may secure the company contracted with against the impairment of its profits for a term of thirty years, and against interference with its extension during that time by the grant of exclu- sive privileges, if by such contract a better service can be obtained. Under an ordinance which grants the exclusive right to operate street railways in a city to a certain corjio- ration for a term of years, such corporation has the right to prevent the operation of a competing line, not only on the streets already occupied by its own lines, but on any street. The constitution of the State of Iowa, § 12, art. 8, providing that "no exclusive j)rivileges, except as in this article provided, shall ever be granted," has no applica- tion to the case of an exclusive grant to a corporation, w^here the grant is of such rights as might proi)erly be acquired by an individual by contract.^ to bind tlie people. * * * Wc by it. ;ind in consequence of all this, conclude, then, that the legislature that the revenues of the tirst corn- might lawfully authorize the tak- pany were so far lessened that it ing of a portion of the plaintiff's could observe its charter no better franchise for public use, making a than it did. If a State injure one just compensation." Ibid,, 5 i, (Ji), incorporated company by the un- 70. If a State grant no exclusive lawful grant of a charter to another privileges to one company wliich it and rival one. the remedy of the has incorporated, it impairs no con- first company is by proper proceed - tract by incorporating a second ings to restrain the second from one which itself largely manages getting into operation, and not by and profits by, to the injury of the neglecting its own duties. Turn- first. In such a case it is no de- pike Company v. State, 3 Wall. 210. fense to a scire facias against the ' Des Moines St. R. Co. v. Des first for non- user or abuser of its Moines Broad (tauge St. Ry. Co., franchises, that the State had in- 73 Iowa. r)18; s. c, 33 N. W. Rep. corporated the second, was in part (JIO. "In the case at bar, the time managing it, and largely profiting limited was thirty years, which § 121.] MlNICirAL <;KANTS AM) CONTRACTS. 37') § 121. Uuw KegartlcMl in Equity. — In tlic :il)>tr:i(t monopolies and special piivileijes ar(! not favored in ecjiiitv. It is a very eonunon oecurrcnrc, if not the rule, that in con- troversies between the people and coi-poratioiis enjoving monopolies or spei-ial j)rivileo;es th<' right is with the people. So, generally, is this trnc that the interests of the people will be favored by the conrts. But while corporations will not be favored and nothing will be presumed in their inter- does not seem to be iinieason:ible, and especially in view of the fact that the lines were operated at a loss for fourteen years. Possibly thirty years, or any shorter time, should be deemed too long in any case, if the contract were sueh that the street railroad company could not be required to meet the public wants as the same should arise. In the case at bar, two miles only of track were specifically stipulated for. but it is not denied by the plaintiff that the acceptance of the ordinance, which allowed its as- signor to lay a track upon all the streets, raised an implied contract upon the part of its assignor to lay so much tr.-ick as reasonably might be demanded by the public. At the time of the commencement of this controversy, the plaintiff and its assignor had in fact laid ten miles of track, and was contem- plating the laying of still more. It may be that neither the plaintiff nor its assignor did all that it should; but such a question is not before us. The ordinance appears to us to be reasonable, and our holding is that, under our statute, which en)powers cities to authorize or forbid the laying down of a street railroad track, a city coimcil may make a reasonable provision by contract for the present and future street railroad service, and may secure the company contracted with against the impaimaent of its profits for a limited time, and against interference with its exten- sion during the time, if a larger and better, or more immediate service can be thus obtained. This question has never before been de- termined by this court: but the ruling in Iturlington & Henderson County Ferry Co. v. Davis, 48 Iowa, 133, goes far towards supporting the views which we have expressed. See also, as having a slight bearing on the case. City of Davenport v. Kelly, 7 Iowa, 102; City of Du- buque V. Stout, 32 Iowa. 80; City of Burlington v. liurlinglon St. Ry. Co., 4t» Iowa. 1-14. In New Orleans Gas Light Co. v, Louisiana Light Co., 115 U. S. (550; s. c, (J Sup. Ct. Rep. 2.52, and in Boston & L. R. Corp. V. Salem & L. R. Co., 2 Gray, 1, cited by plaintiff, the question was essentially different; but there is much said in the course of the opinion, showing the view which those courts took in regard to the importance, sometimes, of securing a service to the public by contract, even though the contract should, for a litnited time, grant an exclu- sive right. Other courts have held somewhat different views, sup- ported by more or less weight of reasoning. .Some of the reasoning, however, we think, cacnot be al- lowed much weight as applied to the condition and policy of Iowa." 37() MUNICIPAL (JRAXTS AND CONTRACTS, [§ 122. ests, it is the pix)vince of e(iuity to protect corporations no less than individuals. AVhere the right is with the corpora- tion it will be sustained against any usurpation of its franchiso, and against any effort to put an end to its corpo- rate existence. Public prejudice is not a rule to a court of chancery.^ In the case of The Jersey City Gas Co. v. Dwight, the court said: "The foundation of the present suit is the invasion of a })rivate right created by statute, and that, I have always understood, it is the undoubted province of a court of equity to protect, whether the injury be committed by an individual or a corporation. "- § 122. Monopoly in Street Railways. — It is well estab- lished that municipal authorities have no power virtule offiicio to grant any exclusive privilege to a street railway corporation. Such power may be conferred by the legisla- ture, but it must be in direct and express terms. Nothing 1 Jersey City Gas Co. v. Dwight, 29 N. J. Eq. 242; Atty.-Gen. v. Stevens. 1 N. J. Eq. 369; Pennsyl- vania R. R. Co. V. National Ry. Co., 23 N. J. Eq. 441; Atty.-Gen. V. Utica Ins. Co., 2Johns. Cb. 371 ; Atty.-Gen. v. Bank of Niagara, Hopkins, 3.")4; City of Newport v. Newport Light Co.. 84 Ky. 160, 183; Atty.-Gen. v. Tudor Ice Co., 104 Mass. 239: Delaware & R. Canal Co. v. Raritan & Delaware Bay Co.. 16 N. J. Eq. 321, 378. "The only question is as to the remedy, and this appears to me to be equally certain. It is settled that an injunction is the proper remedy to secure to a party the enjoyment of a statute privilege, of which he is in the actual pos- session, and when his legal title is not 'put in doubt. The English books are full of cases arising im- der this head of equity jurisdic- tion. (Bush v. Western, I'rcc. in Chan. 530; Whitchurch v. Hide. 2 Atk. 391.) But I need not enter into this discussion, for the point has been recently settled in this State in the case of Livingston and Fulton v. Van Ingen and others (9 Johns. Rep. 507). and I shall rest upon the authority of that case, and upon the application of the principles on which it was de- cided. The equity jurisdiction in such a case is extremely benign and salutary. Without it the party would be exposed to con- stant and ruinous litigation, as well as to have his right exces- sively impaired by frauds and evasion. Croton Turnpike Co. v. Ryder, 1 Johns. Ch. 611, 615. Legislative acts granting fran- chises are to be construed strictly according to their terms, and the grantees in such acts take nothing by implication, either as against the power making the grant, or against other corporations or in- dividuals. Auburn & Cato Plank Road V. Douglass, 9 N. Y. 444. ' Jersey City Gas Co. v. Dwight, 29 N.J. Eq. 242. §122.] MrXlCIl'AL GRANTS AND CONTKACTS. 377 in favor of .such a grant will \)v. presumed, but the charter will be strictly construod. In this direction the courts will recognize such powers only as are clearl}' and unecjuivocally expressed in the legislative act. The rule is that ti grant of a monopoly by the government of a city is illegal and void, but there are exce]:)tions. The rule applies to all branches of business in whicli citizens have a common right, but whether it will apply to an enterprise which is essentially a monopoly or of the nature of a monopoly will depend upon the circumstances of the case. It has been denied that a legislature has power to confer upon a municipal corpora- tion the authority to grant to a street railway company an exclusive privilege which is a practical monopoly, but it is now well settled that, in the absence of an}' pr()hi])ition of such a grant b}- the constitution of the State, a legislature ma}' not only confer upon a city government the power to make such a grant, but it may directly grant to a corporation or to an individual a franchise to construct and oi)erate a street railway within any city, town or village in the Sta^,e. In a recent case it was held by the Court of Appeals of New York, that the legislature may authorize the construction of a railway upon the streets of New York without farther compensation to the adjoining landowners. ^ In the case of ' In re New York El. K. Co., 70 N. Y. 327. See also New Orleans City & L. R. R. Co. v. City of Xew Orleans, 44 La. 728; s. c, 11 So. Rep. 78; In re Citizens' Pass. Ry. Co.. 2 Pittsb. 10; Henderson v. O^den City \ly. Co., 7 Ctab. Ut»; s. c. 2(i Pac. Rep. 28{>; Canal i^ Claiborne St. R. R. Co. v. Crescent City R. R. Co.. 41 La. Ann. oCl : Cbristopber A: Tenth St. R. R. Co. V. Central Crosstown R. R. Co., (i7 Rarb. 31.5; Louisville & Portland R. R. Co. V. Louisville City R. R. Co., 2 Diiv. 175; North Rallo. Pass. Ry. Co. v. North Ave. R. R. Co., 75 Md. 233; s. c. 23 Atl. Rep. 466; Davis v. Mayor, etc. of N. Y., 14 N. Y. 506; s. c, 67 Am. Dec. 186; Milliaii v. Sliari), J? X. Y. 611; s. c, 84 Am. Dec. 314; Coleman v. Second Ave. R. Co., 38 N. Y. 201; People v. O'Brien, 111 N. Y. 1 ; s. <;., 36 Am. it Eng. R. Cas. 78; Eichels v. Kvansville St. R. Co.. 78 Ind. 263; s. C, 5 Am. & Enjj. R. Cas. 274; 41 Am. Rep. 562; I'.inninijbam. etc. R. Co. v. Hirniinj:;hain R. Co.. 78 Ala. 46.'.; Stranjje v. Hill, etc. R. Co., .">4 Iowa, 660; Stanley v. Daven- jiort, 54 Iowa, 463; s. c, 37 Am. Rep. 216; Denver, etc. R. Co. v. Denver City R. Co., 2 Colo. 673; State V. IJell, 34 Ohio St. 194; Reg. V. Train. 2 H. li S. 640; s. r., 110 E. C. L. 640; Recj. v. Charlesworth, 16 Q. B. 1012: Reg. v. Longton 378 MUNICIPAL (J RANTS AND CONTRACTS. [§ 122. New Jersey v. Yard, before the Sui)reine Court of the United States, Mr. Justice Miller, in speaking of the dif- ference in the power of the legislature where there is no constitutional inhibition and where there is such constitu- Gas Co.. 2 E. & El. G51 ; Chicago v. Rumpff. 45 111. 90; Logan v. Pyne, 43 Io\v;i,r)24; Memphis City R. Co. V. Memphis, 4 Coldw. 400. The corporate authorities of the city of New York have no power to confer upon individuals, by contract for an indefinite period, the franchise of coEstructing and operating a railroad in the public streets for their private advantage. The powers of the corporation, in re- spect to the control and regulation of the streets, are held in trust for the public benefit, and cannot be abrogated nor delegated to private parties. A lesolution of the com- mon council, authorizing private persons to construct and operate a railroad upon certain conditions, without limitation as to time, or reserving a power of revocation, is not a license, nor an act of munici- pal legislation merely, but a con- tract wliich, if valid, it could not abrogate. Such a contract, if valid, conveyed, it seems, an im- mediate freehold interest in the streets, and aright to the exclusive use of the rails to be laid upon them in perpetuity, and is void be- cause it would deprive the corpo- ration of its power to control and regulate such use. It is no answer to the application for an injunction, that the wrong comi)lained of is a public nuisance if it subjects the plaintiff to a special injury not common to the public. The find- ing of fact, that a proposed railroad "will be specially injurious to the property of the plaintiffs, and other property similarly situated," con- strued as showing a special and direct injury to each of the plaint- iffs in severalty, not a remote one, and not mereh' a common or pub- lic nuisance. Milliau v. Sharp. 27 N. Y. 611. Under the provisions of the municipal code, the city council is not authorized to pass an ordinance giving to street rail- road companies the exclusive right to maintain and operate such railroad upon a street, or to grant the right to construct sucli rail- roads on streets, to be designated, to such corporation or conii)any of individuals as will bid ••the lowest price of commutation tickets in packages," the law requiring such grants to be let to the one that "will agree to carry passengers at the lowest rate of fare:*' and where an ordinance contains such im- authorized provisions, and they are so connected with authorized pro- visions that tl)eir separation is im- practicable, the wiiole ordinance is invalid. Cin. St. R. Co. v. Smith. 20 Ohio St. -201. The city of Xew Orleans, by delegated power from the legislature, has the paramount control and regulation of the streets of the city, and can grant the use of street railway already con- structed to another which she has authorized to be operated. The city council cannot grant the ex- clusive use of the streets to a street railway, and deprive succeeding councils of the power of perform- ing the duty of regulating the use of the streets in such manner as it may deem best for the public in- terest. The proprietary right § 122. J MUNICIPAL GRANTS AND CONTRACTS. 379 tional inhibition, suitl : "The cusc differs from those in which, by the constitution of some of the States, this riijht to alter, amend and repeal all laws creating corporate ])ri\ i- leijes, becomes an inalienable leal corporation is not a contract, but an exercise of legislative l)ower, and the legislature may, at any time, take away, re- sume or limit such power. The rule of construction of statutes is that a provision in a statute inconsistent with a provision in a former statute repeals the first statute pro ianto.^ 1 Des Moines St. R. R. Co. v. Des Moines Broad Guage St. Ry. Co., 73 Iowa. .")13. 2 Des Moines St. R. R. Co. v. Des Moines Broad Guage St. Ry. Co., 73 Iowa, 513. 3 Mayor v. Jersey City it Bergen R. Co., 20 N. J. Eq. 3G0. -Grants of franchises by public corpora- tions to individuals or private cor- porations are to be strictly con- strued, and no exclusive i)rivilege passes unless it be plainly conferred by express words or necessary im- plication. Citizens' St. Ry. Co. V. Jones. 34 Fed. Rep. r>79. A grant made by the commonwealth, or by a municipal corjjoration. under authority from the common- wealth, is to be taken most strongly against the grantee, and nothing is to be taken by implication against the public, except what necessarily flows from the nature of the terms of the grant. Mayor, etc. v. Ohio, etc. R. R. Co., 2(1 Pa. St. Sf)."); Bir- mingham, etc. Ry. Co. v. Birming- ham, etc. Ry. Co., 79 Ala. 405. '" § 123.] MUNK'll'.M- CHANTS AND ( ONTRACTS. 381 § 123. Grant of Exclusive Gas Privilege. — The rules rehitinor to the i;rniilin<; of ;i franchise to a street railway corporation are applicable in the main to the special privi- leges to a gas company. The right to supply a city with gas may be granted on such terms as to render a })ractical monopoly. Where the charter of a city empowers the council to contract with ajgas company for the lighting of its streets, })ul)lic buildings, etc., and for the privilege of supplying the people of the city with light, it nuiy exercise such power, as far as conferred by its franchise, according to its discretion. The power conferred by the charter is the power to confer privileges of this nature according to the judgment and sense of fitness of the men intrusted with the administration of the government. And what the municipal corporation may do indirectly, through the in- strumentality of a company or individual, it may do directly, as a private corporation, and acting in this capacity it will incur the same responsibility as other private corporations or as a natural person, and such obligations the legislature cannot authorize a municijKd corporation to violate.' In a Indianapolis Cable St. li. Ji. Co. v. Citizens* St. R. R. Co.. 127 Ind. 369, 390. ' Western Saving Fund Society v. City of Philadelphia. 31 Pa. St. 185. "The restriction ui)on the power of a nuinicipal corporation to enter into contract.^ which n)ay prevent itfron) performing its duty to the public, is nothinj; more than the application of the principle which avoids the contracts of indi- viduals when they are detrimental to the public rij^hts. Rut the con- tract which a municipal corpora- tion may make for the purpose of supplying the inhabitants with gas light in their streets and houses, relate to the "things of commerce.' as distinguished in the civil law from the "things public' which are regulated by the sovereign. Such contracts are not made by the mu- nicipal corporation, by virtue of its powers of local sovereignty, but in its capacity of a private corpora- tion. The supply of gas light is no more a duty of sovereignty than the supply of water. Roth these objects may be accomplished through the agency of individuals or private corporations, and in very many instances they are accom- plished by those means. If this power is granted to a borough or a city, it is a special, private fran- chise, made as well for the private emolument and advantage of the city as for the public good. The whole investment is the private property of the city, as much so as the lands and houses belonging to it. Rlending the two powers in one grant does not destroy the clear and well-settled distinction, and the process of separation is not 382 Ml'MCIl'AL (ilJAMS AMJ CONTUACTS, [§12;3. leading ease in Indiana, it was hold that a city incorjxjrated under llic ucnerai act for the incorporation of cities has power with respect to tlie lighting of its streets, public buildings, etc., to contract with a gas company upon that subject, and may exercise such power, within the limits of its franchise, according to its own discretion. Such a con- tract when made, must be regarded as made by such city in the exercise of its power to contract, and not in the exer- cise of its power to legislate, although the power to nuike the contract be authorized by an ordinance. And when, by the terms of such a contract, the city is not restricted in any respect from the legitimate exercise of its public power touching the subject-matter thereof, but expressly reserves its administrative authority to keep the posts, lamps and burners in good rei)air, if the company should fail to do so, and also reserves the right to test the quality of the gas furnished by such company and the capacity of the burners at all times; and is not restricted from extending its streets, establishing an additional numlier of lamps, obtaining gas from other sources or establishing its own gfas works, as the public interests may reciuirc; such contracts, not being a re- striction upon its legislative power, nor fraudulent, nor against public policy, is valid and binding upon such city, may be enforced in the same manner as the contract of a person or a business corporation, and cannot i)c i-epcalod. rendered impossible by the con- fusion. In scpanitino^ them, regard must be had to the ol)jeot of the ietjisliiture in conferring tliem. If granted for public purposes ex- clusively, they belong to the cor- porate body in it public, political or municipal character. But if the grant was for purposes of private advantage and emolument, tliough tlie public may derive a common benefit therefrom, the corporation (juoad hoc is 'to be regarded as a private company. It stands on the same footing as would any indi- or body of persons upon wliom tlie like special franchise had been conferred. These prin- ciples are well enforced by Chief Justice Nelson, in delivering the opinion of the iSupreme Court of New York, in the case of Bailey v. City of New York, 3 Uill. 538. In that case, the acts of the city had relation to the construction of water works. In this they have relation to gas works. But the principle is precisely the same in both cases." Western Saving Fund Soc. V. Philadelphia, 31 Pa. St. 175, 183. § 12.].] .MlMCirAI. CUAMS AND CONTKACTS. 883 iiiij):iirotl or chaiii^tHl by the c-ity by ordinaiiccM)!- otlKTw isc,' 111 ti oasie from Louisiana, before tlie Supreiiie Court of the United States, it was held that thelegishitive grunt of an e.\- chisive right to supply gas to a municipality and its inhal)- itaiits, through pipes and mains laid in the public streets, ami upon eondition of the performanee of the service by ' Indianapoli.s V. Indianapolis Uas Ligtit it Coke Co.. GG Ind. 396. See also State v. Cincinnati Gas Co., 18 Ohio St. 202; State v. Mil- waukee Gas Co.. 20 Wis. 454; Peo- ple V. Bowen, 30 Barb. 21; s. c. 21 N. Y. 517; Crescent Gas. Co. v. New Orleans Gas Co., 27 La. Ann. 148; Des Moines Gas Co. v. City of Des Moines, 44 Iowa, 505: Jersey City Gas Co. v. Dwijrht, 29 N. J. Eq. 242; Chartered Gas Co. v. Great Cent. Consumers' Co., 1 Gas J. 322; Memphis, etc. Gas Co. v. Williams, 9 lleisk. 314; Grand Rapids Electric Light Co. v. Grand Kapids, etc. Co., 21 Am. & Eng. Corp. Cas. 270; State v. Milwaukee Gas Light Co., 27 Wis. 454: State V. Columbus Gas Co.. 34 Ohio St. 572: Richmond Gas Light Co. v. Middlotown. 50 X. Y. 228. "A municipal corporation cannot grant to any fuel or gas supply company a monopoly of its streets. There is nothing in the nature or busi- ness of such a company making its use of the streets necessarily exclusive. The spirit and policy of the law forbid municipal corpo- rations from creating monopolies, by favoring one corporation to the exclusion of others. It is probably true that a municipal corporation may make a contract with a gas company for supplying light to the public lamps for a limited time, even though it be for a num- ber of years: on this point, how- ever, there is some conflict, but there is no conflict on the proposi- tion that, in the absence of express legislative authority, a mimicipai corporation cannot grant to any corporation the exclusive privilege of using its streets. There is. we know, much conflict among the authorities upon the question of the power of the legislature to grant an exclusive right to a gas company to use the highways of a muuifi{)al corporation; and. under our constitution, it is very doubtful whether the legislature possesses such authority. But we are not here concerned with that phase of the (pu'stion, since the legi?>lature has not attempted to vest an ex- clusive privilege in anv corpora- tion. Upon thf direct question be- fore us there is a remarkable uniformity in the decisions of the courts. City of Indianapolis v. Indianapolis Gas Light, etc. Co., U(i Ind. 39(1; Norwich Gas Light Co. V. Norwich City Gas Co., 25 Conn. 19: State v. Cincinnati Gas Light, etc. Co., IS Oliio St. 2()2: State V. (Jas Co., 34 Ohio St. 572; City of .Memphis v. .Mem|)liis Water Co., 5 lleisk. 495; Stale v. Milwau- kee Gas Light Co.. 29 Wis. 454; Garrison v. City of Chicago, 7 Biss. 480; Illinois, etc. Canal Co. v. St. Louis, 2 Dill. 70; City of Brcnliam V. Brenham Water Co., (57 Tox. 542; Richmond County Gas Light Co. V. Middieton. 59 N. Y. 228; Davenport v. Kleinschmidt.GMont. 502; .Meadville Fuel Gas Co. v. Meadville Natural Gas Co., 3 Cent. Rep. 921; s. C, 2 Dillon Munic. 384 MLXICirAL ORAXT.S AND CONTRACTS. [§ 1^3. the grantee, is a grant of a franchise vested in the State, in consideration of the performance of a pubHc service, and, after performance by the grantee, is a contract protected by Corp. (3d ed.). section (;93." Elliott, J., in Citizens' Gas & Min- ing Co. V. Ehvood, 114 Ind. 332. 333; s. C, 20 Am. & Eng. Corp. Cas. 263. Upon the question whether an exclusive privilege to furnish gas illumination to a city will exclude other means, the fol- lowing from the West Virginia Su- preme Court is pertinent: "We have already shown that the grant of an exclusive privilege will not be implied. It is equally well set- tled that such privilege, when legally granted, will not be ex- tended beyond its obvious mean- ing. Thus, in Parrott v. City of Lawrence. 2 Dill. 332, it was held that the exclusive right to build a bridge at a given point, would not prevent the establishment of a ferry near the same point. In Bridge Prop'r v. Hoboken, 1 Wall. 110, it was decided that an exclusive right to build a bridge at a certain point was not infringed by the establish- ment of a bridge for the passage of a railway alone. In Emerson v. Com.. lUS Pa. St. HI. the court decided that the franchises of two charters, the one. the Fuel Gas Company, incorporated for the purpose of supplying 'heat to the public from gas within the city of Pittsburgh, and the other, the Pennsylvania Fuel (.'ompany. in- corporated for the purpose of sup- plying heat to the public within the city of Pittsburgh by means of natural gas. conveyed from such adjoining counties as may be con- venient.* were not identical, and. therefore, not necessarily hostile to each other, under the statute grant- ing ;»n exclusive privilege to the company first chartered. The effect of the decision in this case is that the grant of an exclusive right to one company to supply the city of Pittsburgh with manufactured gas is not infringed by the grant of the right to another company to supply the city with natural gas. In 18GS the city of Saginaw made a contract with the gas light com- pany, giving it the exclusive right to light the street lamps and supply the inhabitants with gas for thirty years. In 1880 the city council passed a resolution accepting a proposition from an electric light company for lighting the streets and business houses. Upon a bill filed l)y the gas company to re- strain the city and electric light company from carrying out the contract with the latter, it was de- cided, in ( Jas Company v. City of Saginaw. 22 Reporter. 578. that said contract with the gas company, so far as it attempts to give an ex- clusive right to supply gas for thirty years, was a monopoly, and could not be enforced, and that the plaintiff was not entitled to any re- lief. Brown, J., in the conclusion of his opinion in that case, says: •The plaintiff took nothing by its franchises but the privilege of lighting the streets with gas. and this it will continue to enjoy so far as its patrons prefer the use of gas to electricity, liut its claim to the exclusive privilege of lighting the city by all melliodsof illumination cannot be supported on legal prin- ciples.' ■ (ias Company v. Park- ersburg, 30 W. Va. 43."). 441 : .s. c, 4 S. E. Rep. G50. § 12.).] MlNICll'VI, (iUVNTS AM) ( •ONTUACTS. 385 tlu" Constitution of tlio I'nitt'cl Stales a^iiinst State Iciiisla- tion to impair it . In t^rantinu' the exclusive franeliise to supply _i>as to a niunicipaiity and its inhahitanls, a State leirislature docs not part with the police power and duty of protecting the pid)lic health, the [)ublic morals and the [)ub- lic safety, as one or the other may be affected by the exer- cise of that franchise by the grantee. The prohibition in the Constitution of the United States against the i)as8age of laws inij)airinii- the oblioation of contracts ai)plies to the con- stitution as well as the laws of each State, ^ In the opinion in this case, the court said: "The wants of the i)ublic are often so imperative that a duty is imposed on the govern- ment to jn-ovide for them ; and, as experience has proved that a State should not directly attempt to do this, it i> necessary to confer on others the faculty of doinu' what the sovereign power is unwilling to undertake. I'he legislature. therefore, says to public spirited citizens: 'If yon will em- bark with your time, nionc}' and skill in an enterprise which will accommotlate the public necessities, we will grant to you for a limited period, or in jierpetuity, pri\ i- leges that will justify the ex])en(liture of your money and the employment of your time and skill.' Such a grant is a contract with mutual considerations, and justice and good ))olicy alike re(|uire that the prote<-tion shall be assured to it. The same principle was declared l)y the Supreme Court of Louisiana in Poiit<'hartrain Kailroad Co. v. Orleans Navigation ( '<>.. where ( "liief rlustice Martin said: "In the same manner a^ (Onuress ma\ reward the disi-ovei'cr of a new invention or njode of constructing roads, by an exclu- sive privilege, the legislature mav reward those who employ their capital and industr\ in doubtful enterpri>e>, for the construction of a railway between two p()int> which may l)e of great utility to the public, though the succes> of the en- terprise nniy be precarious.' And in Crescent (ity (ias Light Co. \. New ()rleans (ia> Light Co., thecdurt ^aid: •As tlu* legislature had (he right in is.},") to grant the sole and exclusive privilege to the defendant conipany to make ' \.. II.") U. 8. UriO. 32; Conery v. ers' Water Co., 44 N. J. Eq. 427: Xew Orleans Water Works Co., Memphis v. Memphis Water Co.. 41 La. Ann. 910; s.c. 7So. l{ep.8: 5 Heisk. 495; Allgelt v. San .\n- Livingston v. IMppin, 31 Ala. 542; tonio. SI Tex. 43li: Long v. Dii- I § 124. >ii:m('ii'al chants and contracts. .•i«7 special leirislatiou upon this point a city government may act under the aeneral powers conferred by its charter to do such things as may be necessary to the security and welfare of the jx'ople for preserving the [)eaee, health and good huh. V.) Mhin. 'iSO; Dodge v. Coun- cil Bhiff.s. i)7 lowu, 5(5U. '-The New Orleans Water Works Com- pany was in existence before the adoption of the present constitu- tion of Louisiana, one of the arti- cles of which, as we have seen, repeals the monopoly features in the charters of all her then existing corporations other than railroad companies. This case is, there- fore, controlled by the decision just rendered in New Orleans Gas Co. V. Louisiana Light Co., 115 U. 8. GoO. The two are not to be distinguished upon principle: for, if it was competent for the State before the adoption of her present constitutioo, as we have held it was, to provide for supplying the city of New Orleans and its people with illuminating gas by means of pipes, mains and conduits placed at the cost of a private corporation, in its pul)lic ways, it was equally competent for her to make a valid contract with a private corpora- tion for supplying by the same means pure and wholesome water for like use in the same city. The right to dig up and use the streets and alleys of New Orleans for the purpose of placing pipes and mains to supi)ly the city and its inhab- itants with water is a franchise be- longing to the State, svhich she could grant to such persons or corporations, and upon such terms as she deemed best for the public interests. And as the object to be attained was a public one, for which the State could make pro- vision bv legislative enactment. the grant of tiie franchise could be accompanied with such exclusive privileges to the grantee, in respect of the subject of the grant as in the judgment of the legislative de- partment would best promote the public health and the public com- fort, or tlie protection of iniblic and private property. Such was the nature of the plaintiffs grant, which, not being at the time pro- hibited by the constitution of the State, was a contract, the obliga- tion of which cannot be impaired by subsequent legislation, or by a change in her organic law. It is as much a contract, within the meaning of the Constitution of the United States, as a grant to a private corporation for a valua!>le consideration, or in consideration of public services to be rendered by it, of the exclusive right to con- struct and nuiintain a railroad within certain lines and between given points, or a bridge over a navigable streaiu within a pre- scribed distance above and below a designated point. It is idle to insist thai this contract was preju- dicial either to the public health or to the public safety, as might, perhaps, be said to be the case if the State, after uuiking it. was prevented from exercising any con- trol whatever over the matter of supplying the city and its inhab- itants with water. But, notwith- standing the exclusive privileges granted to the plaintiff, the power remains with the .State, or with the municipal government of New Orleans, acting under legislative 388 MlMCIl'AL (JKANIS AND fONTKACTS. [§ 124. order of tlio public, ancl for UKikiuo- siu-li contracts as niav be essential to the welfare of the iminicipaiity. In (Jeorgiu it has been hekl that under a jjower conferred \)\ the leiris- lature u|)()ii a municipal cori)oration. to make all contracts authority, to make .sncli regula- tions as will secure to the public the uninterrupted use of the streets, as well as prevent the distribution of water until for use. and provide for such a continuous supply, in quantity, as protection to property, public and private, may recpiire. In the case just decided we said : "The constitutional prohibition upon State laws impairing the obligation of contracts does not restrict the power of the State to protect the public health, the pub- lic morals, or the public safety, as the one or the other may be in- volved in the execution of such contracts. Kights and privileges arising from contracts with a State are subject to regulations for the protection of the public health, the public morals, and the jjuhlii- safety, in the same sense as arc all contracts and all property, whether owned by natural persons or cor- porations.* ■■ New Orleans Water Works Co. V. Rivers, 115 U. S. (J74, 680. A contract with a municipal corporation, whereby the corpora- tion grants to the contiactor the sole privilege of supplying the municipality with water from a designated source for a term of years is not impaired, within the meaning of the contract clause of the constitution, by a grant to another jiarty of a piivilegc tu supply it with water from a differ- ent source. Stein v. Bienville Water Supply Co.. 141 U. S. G7. '•The construction and effect to i»e given to the contract between the State and the grantee of a fran- chise have been the subject of much discussion, and the view of Chancellor Kent at one time was that, although 'the creation of the franchise be declared exclusive, yet it is necessarily implied in the grant, as in the case of the grant of a ferry, bridge or turnpike or railroad, that the government will not either directly or indirectly interfere with it. so as to destroy or materially impair its value. All grants or franchises ought to be so construed as to give them due effect by excluding all con- tiguous competition which would be injurious and operate fraudu- lently upon the grant.' ('6 Kent's Com. 4(10; Xewburgh Turnpike Co. V. Miller, .i Johns. Ch. 101.) What- ever support that rule may seem- ingly have in reason or propriety, it is not now available to that ex- tent for the beneficial protection of the grantee in the exercise of his franchise. l)ut. on the contrary, public grants are to be so strii-lly construed as to oi)erate as a sur- render l)y them of tlie sovereignty — no farther than is expressly de- clared by tlie language employed for the purposes of their creation. The grantee takes nothing in that respect by inference. Such is deemed the legal intent of tlie State in imparting to its citizens or corporations powers and privi- leges of public character. And. theiefore. except so far as they are by the terms of the grant made exclusive, the power is reserved to grant and pernut the exercise of competing and rival powers and § ll^4.J MIMCII'AL (iKANTS AM) CONTRACTS. .'iSiJ in tlu'ir corporate cajjacity, which they may deem necessary for the welfare of the city, and which do not conflict with the constitution and hiws of the Fe(h>ral or State jj^overn- ment. they have the right to make a contract for the con- struction of water works.' A contract l)etween two corpo- rations, under which one supplies the water to the other, or makes the other a special and exclusive aaent, has been uplield. In a recent and very important ease, it was held that a contract makino- a water company the exclusive agent of a flume company for the sale and distribution of water within the corporate limits of a city to consumers of water, all sales of water being subject to the a|)proval of the Hume company, is not illegal, nor beyond the powers of either of the corporations, nor is such contract against public policy, as being a combination between the corporations for the })urpose of creating a monopoly for the sale of water to the city and its inhabitants, nor as injuriously affecting the interests of the city or its iidiabitants. A contract between corporations for a common supply of a city and its inliab- itanl^- with water through one distributing system at reason- able rates, whereby the interests of the city is furthered in that its streets are not subjected to the i)ur(I(Mi of laving [)rivilei);es. liowevcr injurious tlicv iiiakc sucli by-law-, rules and rejj- inay l)e to those taken Ijy \he prior ulations as the public interest or grantee. ♦ • • 'i"h(. municipal welfare of the city may rerpiire. corporation, as such, could bind Milhau v. Sharp. 27 X. Y. <',ll; it.seif by sucti contract only, as it New York v. Second Ave. II. ]{. was authorized by statute to make. Co.. H2 N. Y. 'Jtil : ]{ichiiu)nd Co. It could not grunt exclusive privi- Ga.s Light Co. v. Middleton, .")!» X. leges, especially to put main>. Y. 228; Gale v. Village of K.ala- pipes and hydrants in its streets, niazoo. 2H Midi. H44 ; s. <•., !• Am. nor could it lawfully, by contract. Kep. 80; Logan v. I'yne. -13 I6wa, deny to itself the right to exercise 'r24\ s. c, 22 Am. Rep. 2til ; Des the legislative i»owers vested in it.s Moines Gas Co. v. (Jity of Des coiiuiion council. It cannot well Moines. 44 Iowa. .'lO'); s. <•.. 24 .\m. be claimed that any express power Hep. 75(i; Norwich Gas Light Co. was delegated to the municipality v. Norwich City Ga.s Co., 2r» Conn, to grant any exclusive franchises. 111." Bradley, . I., in Syracuse Water and public policy will not permit Co. v. City of Syracuse. 116 X. Y. the inference of authority to make 1R7, 178, 180. a contract inconsistent with the ' Mayor v. Cabot. 28 Ga. .^0. continuously operative duty to 31K) MrMClI'AL (iKANTS AND CONTRACTS. [§ 125. and keeping in repair an additional system of mains and pipes, is not an unreasonable restrietion of competition be- tween the parties; nor does public policy condemn or pro- hibit an an-aiiucnicnl inlcnded to prevent a competition be- tween corporations which would result in the tinancial ruin of one or both of them, and which could not in any event benefit the city or its inhabitants. Where water tan be supplied more cheaply through one distributing plant by two corporations, the governing body of the city in whom is vested the power to fix water rates is bound to take that fact into consideration, as well as all other facts which en- able it to fix reasonable rates and award a just c()m))ensa- tion, and an agreement between such corporations for a com- mon supply, through one distributing ])lant, cannot increase the rate of com[)ensation to be paid by the city or its in- habitants for the water supplied. The agreement between the flume company and the water company, making the lat- ter an exclusive agent for the sale and distribution of water in the city limits, and providing for a distribution of prof- its, does not create a partnership l)etween the two corpora- tions, but onl>' a limited agency with a mode provided of determining the compensation to be received by the flume company for the water furnished by it to the water com- pany. ^ § 125. The Subject Continued. — It has l)een held that a committee of a municipal corporation, unless specially authori/ed. has no power to bind the city by a contract for the introduction of a new and expensive improvement in a system of water works. Such power can be exercised only unfler a cor})orate act. In Tennessee it has been held that the power to make a contract for the introduction of a new and expensive improvement in asj^stem of waterworks, being equivalent in general to the power to levy, collect and disburse taxes, nuist be exercised in the same manner and by the same authority, that is, In' a corporate act. There I)eing no gen- eral law or ordinance modifying this rule, a water works J 8an Dietro Water Co. v. Flmiie Co.. lOS Cat. M'.). § I'^'o-] MUMCirAL CRANTS AND C'ONTKArrS. aoi committee h:ul no power to biiul a corponition by a contract of this character,' In a case in Minnesota, it was held that, under the statute, the hoard of water commissioners of St. Paul is imcsted with authority to make coiilracts witli refer- ence to the water wori-cs in its own luune, as the representa- tive of the city, Tliis is not the creation of a corporation within the iidiibition of the constitution. The contracts which the board is thus authorized to make are, in effect, made with as well as for the city. The statute which re- (juires contractors for doing any work or furnishing any material to or for said city, to enter into a bond with the city'for the use of all persons who may do work or furnish nuiterials pursuant to any such contract, is applicable to the case of a contract made by the board of water commisioners in its o\vn name, within the scope of its authority, in refer- ence to water works, and the bond may be taken by the board in its own name.-' Where a municipal government has entered into a contract thai is illegal, as conferring a monopoly, the tax payers of the city nuiy nuiintain a bill in equity to enjoin it from carrying out the contract. The fact that such contract, if carried out, would increase the burden of taxation, and thus inflict an injury upon the ))laintiffs, would l)e a sufficient ground for th(> action.-^ ' Mayor v. IIa«jiin. '.» I'.axl. VX). - Morton v. I'owcr, '.V.i Minn. 'i'2\. 3 Davenport v. Kleinscliniidt. tl Mont. 502. ••Tlie ciiy charter of Helena contains the followintj |)ro- visions: -The city council sliail have power to provide the city with water, erect hydrants and pumps, build cistern?, and dijj wells in thestreetsfor the supply of engines and buckets (Sec. S. i>ati;c 8), to provide for the prevention and extinguishment of tires.' (Sec. 18, page ft.) I'nder the powers to provide the citj' with water, and to erect hydrants, and to provide for the prevention and extinguish- ment of fires are doubtless in- cluded, as necessarilv incident llierclo. or implied therein and es- sential thereto, the power to do tliis l)y agerUs employed for that I)urpose and to make contracts with individuals or other corpora- tions to do the same. The city could scarcely accomplish such objects in any other way; and it is hardly probnbli' that any other method was contemplated in the granting of the charter. Thougli. doubtless, the city council would cause water works to be built, and own, operate and control tliem thereafter as tlie properly of the city, the charter does not limit the city corporation to either one metliod or the other. Any appro- l)riate means necespccial rights or privileges l)eyond that of jx'rsonal and private use. In Iowa it has been held that a public ferry franchise can be conferred only by the government, and must be founded on grant, license or jirescription. Ownership of out the objects would be properly within the powers f>^ianted to the city council in the charter. East St. Louis V. East St. Louis G. L. & C. Co.. 3S 111. 424. 425. Then, the power to provide the city with water, by making a proper con- tract with some person to erect water works, and sell water to the city, beintj conc^eded. the next question that presents itself is as to the power of the city to make this particular contract. Is the present such a contract as to be beyond the power of the city council to enter into so as to bind tlie munic- ipal corporation? Does this con- tract create a monopoly":' For, if it does, it goes l)cyond the power of a city council. Monopolies may be created: but they must be called into being by tiie sovereign power alone. A city council has no authority to grant to any per- son a monoi)oly. even where no express prohibition is found in the charter or other acts of the legis- lature. .Monopolies are contrary t(i the genius of free government, and ought not to be encouraged by the i)eople or countenanced liy the courts, except when expressly au- thorized by positive law. Ibid., 528. See also Dibble v. New Haven. 56 Conn. 199; s. C., 20 Am. tt Eng. Corp. Cas. 174; Valparaiso v. Gardner. 97 Ind. 1; s. c. 7 Am. & Eng. Corp. Cas. 626; 49 Am. Rep. 410; Sackett v. New Albany, 88 Ind. 473; S. C.. 2 Am. & Eng. Corp. Cas. 85; 45 Am. Kep. -467: :Madison v. Smith. 83 Ind. 502; Xoble V. Vincennes. 42 Ind. 125; Pedrick v. Kipon. 73 Wis. 622; s. c. 24 Am. i*i: Eng. Corp. Cas. 422. ' Trotter v. Harris. 2 G. & J. 285. See also Williams v. Turner, 7 Ga. 348; Blisset v. Hart. AVilles, 508: McKoberts v. Wasbbiirne. 10 Minn. 8; Mississippi Kiver Hridge Co. v. Loncrgan.91 111.513: Bellv.Clegg. 25 Ark. 2(1: Prosser v. Wapello, IS Iowa, 327: Haithcock v. Swift Island Mfg. Co.. 72 X. Car. 410; Stark V. Miller. 3 Mo. 470; Milton v. Haden, 32 Ala. 30; Columbia, etc. Co. v. Gei.se, 34 X. J. L. 268; (ireer v. Ilaiiirbabodk. 47 (Ja. 2S2. § I2«j.l Mr.MCIl'AI. CKANTS AM) ( ( »N lUAC IS. .Sl>3 the sioil Upon ciu'h side of the strcMiu doo not confer the right to c'stal)lish thereon, without irnint or license, a pul)- lic fen-v at which tolls are charu-ed. The owner may estal)- ii>h a pri\atc fcirx for the conNcniencc of himself and family, and at which he may ferry for a compensation tixed by contract, expressed or implied, when not forbidden by statute, and when this does not injure or affect any estab- lished ))ul)lic ferry. In establishinir a ferry, preference should be uiven in awardino- the franchise to the owner of tlie land on which it is established, if he is a proper person to receiv(> and exercise the same. The urantiuii" *d' a ferry franchise does not authorize the holder thereof to use the land of another without his consent or without making due compensation. Such authority may be secured by contract or l)\ proper proceedings to eontirm the i-ighl and compen- sate the owner for it.' As the word government is em- ployed in the i)receding sylla))us, it includes that of a city or of a county. While the grant of a ferry or bridge franchise is a monopoly in a general sense, it is held not to be such in the strict and legal sense, or in any sense that renders it in contravention of public policy and void. In a case in Connecticut, it was held that a grant, by the legis- lature, in consideration of expenses to be incurred by the grantees, and in contemplation of a pul)lic benetit, of the exclusive riffht of erectinir a l)ridti:e and takiii>r tolls, to reimburse such expenses, within certain limits, for a limited time, is not a m()no|K)ly. in the odious sense of that term. Such a grant is in the nature of a contract, which may not l)e impaired. The court will give to its stipulations such construction as will carry them into full effect.- In a case before the United States Circuit Court of A})i)eals, the city of Laredo. Tex., owning a ferry franchise over the Hio (Jrande river, granted to it at an early day by the Spanish government, contracted, lt\ ortlinance, with u bridge company to permit the erection ' I'lKSiPi- V. W.'ipello County, is - Kndeld Toll Hridije v. Hartford lowu. :V27. it New Haven H. R. Co.. 17 Conn. 4t>. 3!)4 MUNicn'Ai- <;kants and contracts. [§ 12(>. of Ihc north end of a hiitluc' in certain of its streets, and agreed not to exercise its ferry franchise for a period of twenty-five years, in return for whidi it was to receive $5, ()()() per year for the same period. It was held that this ordinance did not create a nionoj)oly, witliintlic incaniiiirof the Texas constitution, which declai'es that •'])(n-j)ctuities and iU()n()])olies are conti-ary to tlic ucniiis of a free srovern- nient, and shall never be avowed/' In thus converting its ferry privilege into an equivalent or more beneficial l)ridge privilege, for a limited period, the city was not exercising a dis- cretion so clearly beyond the purposes of the franchise, as to make the contract void, and the ordinance was within the lawful i)ower of the council to enact.' ' City of Laredo v. Iiitei national Bridjre & T. Co., 00 Fed. Kep. 24(5. '•There are classes of exclusive privileges which certainly do not amount to 'inonopolios.'' within the ineaninj"; of the coininon law or of the Texas constitiUion. Courts of last resort have generally refrained from piopounding an authoritative aftirinative definition of the -mo- nopoly" so odious to the common law and to the genius of a free government. It would try the power of expression of most judges, if not of human speech, to frame such a definition oiUside of which a grant or contract must wholly and clearly rest to escape the stroke of nullity. It has, therefore, gen- erally been deemed wise and safe to use ratlier the process of exclu- sion, and determine what is not a monopoly, so far as the fuse in hand required. From the time of the separation of Texas from Mexico, the provision above quoted has liad a |»lace in her constitution. From its lirst adoption, now nearly sixty years ago, it has been the constant practice to grant exclu- sive ferry privileges to individuals and to corporations. 'I'licse grants have been made sometimes directly by the legislature, but commonly by the subordinate municipal bodies. It has also been the prac- tice in that State to grant to indi- viduals and to corporations author- ity to erect and maintain toll bridges over llie larger streams. Atone time a general law author- ized the securing of such a privi- I(ige to be exclusive for a period of not exceeding ten years, on the terms and in the manner prescribed in that statute. Special charters have been passed granting such privileges to individuals and cor- porations for longer i)eriods than ten years: and the power of the legislature to make such grants has been held to be imdoubted by the Supreuie Coiut of Texas. Hudson V. Emigration Co.. -17 Tex. 50. It may be safely atllrmed that many of these enterprises thus author- ized and fostered liave been as useful and beneli(Mal to the public, as promotive of the general good, as they have proved profitable to the holders of the privilege; that they have been made successful by means of the enjoyment of the ex- clusive right; and that, at the time § 1l'7.] MlMCirAL CKANTS AM) COXIKACrs. 3:)5 § 127. Tli«' Suhject Cinitimied. — As stated in tlu' pre- c'odiiii; sootion, tlie legislatum of a State has the j)()\vei- to establish or to cliseontiiuio a ferry wherever it is essential to the eonvenienoe of the public. AVhere the river is a bound- ary line between two States, each State may irrant a franchise for its own territory, and neither can grant a privilege for the opj)osite shore. In the leadinir case of Conway v. Taylor, before the Su])renic Court of the United States, it was held that a ferry franchise on the Ohio is grantable, under the laws of Kentucky, to a citizen of that State who is a riparian owner on the Kentucky side; and it is not necessary to the validity of the grant that the grantee should have a riofht of landinir on the other side or beyond and place wticn and where these bridges were erected, they could have been constructed, maintained and conducted to success only in that way. It is not suggested that the defendant's bridge is not pro- motive of the general good, or useful and beneticial to the iniiab- itants of the city of Laredo, ortliat it is not as useful and beneticial as the ferry which tlie city had main- tained for more than a century under its grants from the Spanish crown and from the State of Texas. It is not shown by the plaintiff's pleading, nor can it be fairly in- ferred therefrom, that the ferry privilege so early granted, so often recognized by the Icgislatuie.andso long enjoyed, was held by the city of Laredo for strictly municipal pur- poses, rather than bestowed as a source of revenue, to be adminis- tered as such for the btst interest of the city, in the sound discretion of its constituted aiUhorities, acting in good faith. On the contniry, if the petition does not expressly so aver, it is fairly and clearly to be implied from its allegations that the privilege was originally ex- tended as an endowment for the puipose of providing revenue for the infant town, to be reared in a remote province existing in the state of nature, inhabited chiefly by savage Indians. * * * Con- sidering the grant of the ferry privilege as an endowment for the purpose of producing revenues, and conceding that this franchise, though not alluded to in the de- fendant's proposition, was a mate- rial, if not the chief subject of the contract between the parties, the administration and disposition of it by the ordinance whicli embodies their contract does not appear to have been or to be reclvless or im- provident. The discretion to con- vert tht" ferry privilege into an e(piivalent or more beneficial bridge privilege witiiout loss of revenue to the city, does not ap- pear to us to be a dangerous dis- cretion, 80 clearly beyond the pur- poses of the franchise as to malte the agreement to do so void. In the nature of tlie ciiae. such a dis- position, if made at all. must ex- tend over a period aj^proximating the ordinary lifetime of the bridge structure." Ibid.. 2-lS. 39(; MrMCIl'AI, (MtAN'lS AM) CONTKACTS. [§ 12' the jurisdiction of Iho State. Tlio coiu-urrt'iit action of two Stales is not necessarv to the oniiit of a ferry franchise on a rivei- that divich's them. A ferry is in respect to the land- ino;. not to the water; the water may be to one, and the ferry to another. After a citizen of Kentucky has hecome the grantee of a ferry franchise, and his riparian rights have been repeatedly held sullicient to sustain the grant bv the highest legal tribunal of the State, the same (piestion is not open here: the adjiulications of the State courts are a ruk' of ))roi)erty and a rule of decision, which this court is bound to recognize. A license to establish a ferry, which does not extend across the river, may be less valuable for that reason, but not less valid as far as it goes. The laws of Kentucky, relating to ferries on the Ohio and Missis- sii)pi, are like the laws of most, if not all. the other States bordering on those rivers: they do not leave the rights of the ])ul)lic unprotected, and are not uiu-onstitu- tional. The franchises which the State grants are confined to the transit from her own shores, and she leaves other States to regulate the same rights on their side. A ferry franchise is projx'rty. and as sacred as other ])ropert^■. An injunction to protect the exclusive privilege to a ferry does not conHict or interfere with the right of a boat to carrA* passengers or goods in the ordinar\ pi'osecution of com- merce without the regularity or })urpose of ferry trips; that remedy a))plies only to one which is run o|)enIy and a\'owedly as a ferry boat. The autliorit\' to estab- lish and regulate ferries is not iuchided in tlie power of the Federal governnuMit to "regulate connnerce with foreign nations and among the several States and with the Indian tribes." The authority to reguK-ite ferries has never been claimed by the genei-al government, has always been exercised by the States, never by Congress, and is undoul)t- edly a part of the immense mass of undcdegated powers re- >ei\('(l to tile States respectively.' \\'hile the grant of a ' Conway v. Taylor. 1 Black (U. v. County Com.. ;^ Scam. r)8; Ilart- S.). f'03. See also Allen v. Farns- ford v. Hartford Bridtje Co.. 10 wortli. .") Yerp;. 187; Harrington v. How. "iS-l ; s. c. 17 Conn. 7ft; Neii.^e Kiver. 09 N. Car. lor>: Mills Colunil»ia. etc. Co. v. Geisse. 38 X. § 127. J .MrNICll'AI, <;i;ANTS and CONTHAtTS. ay 7 ferry fraiichiso is, in a souse a monopoly, llic Iciiislaturc has tlu' rii::ht lo establish another ferry within such a chs- taiK'e of one ahcady in operation as to interfere with its business and to diminish its \ahie, unless the original ferr\' J. 3U; People v. HabeocU. 11 Wend. r)8tj. Tbe legisliitiires of the sev- eral States possess the i)o\ver wiihin their limits to establish and it'ii,!!- late ferries, and that power is siifti- eiently extensive to authorize a grunt for the construction of a ferry from the Illinois shore, on the waters of the Mississippi, in the manner prescribed by the Act of March 2, 1819, a privllesje thus conferred in no way contlicts with the provision of any treaties made by the United States with foreign powers, or with any act or acts of Congress relative to the free navi- gation of thtfse waters. A ferry franchise is neither more nor less than a right conferred to land at a particular point, and receive toll for the transportation of passengers and jMoperty from that point across a stream. The exercise of such a franchise divests no right or priv- ilege which any citizen theretofore enjoyed freely and uninterruptedly to navigate the river. This right of free navigation can, by no man- ner of means, be construed as con- ferring upon the citizens the right to appropriate the banks or land- ing of this river to themselves, or to receive toll for transporting pajjsengers and property from point to point across the sau)e. The grant of a ferry franchise by the legislature of a State, unless limited by some general^ law, or some restrictive provision in the grant itself, is necessarily exclu- sive to the extent of the privilege thus conferred. When a grant has once been made by legislative au- thority, to the extent of the priv- ilege thus conferred, the power which made it is expended, and it cannot he taken back or trans- ferred to another until the public interests and welfare shall demand its resumption, and provision shall have been made for just compen- sation to the owner in the manner reijuired by law. Mills v. County of St. Clair. 7 III. i'.i7. --In respect to those purely internal streams of a State, the public right of naviga- tion is exclusively under the con- trol and regulation of the Slate legislature; and in cases where these erections or obstructions to the navigation are constructed un- der a law of the State, or sanc- tioned by legislative authority, they are neithei- a public nuisance subject to abatement, nor is the individual who may have sustained special damag(! from their inter- ference with the public use entitled to any remedy for his loss. So far as the public use of the stream is concerned, the legislature having the power to conti-ol and regulate it. the statiUe authorizing the >tiucture. though it may be a real impediment to the navigation, makes it lawful." Pennsylvania v. Wheeling it Helmont Bridge Co.. IS How. -121, 432. •'Neither the fact that the title to the Pennsyl- vania landing was in another, nor that the exclusive ferry franchise on that shore existed in another will operate to defeat the grant made to Geisse by the legislature of this State. The grant was of a franchise capable of existence in- 3ii,s MIMCIPAL (iKANTS AM) CONTRACTS. [§ l-^>^. is protc'tU'cl by the terms of its privilege.' The act of Con- gress bv which the State of Mississipj)! was admitted to the Union, and which recites that "the Mississippi river shall be a common highway, and forever free to the citizens of the United States," withont any tax, duty, impost or toll there- for imposed by this State, does not interfere with the i)olice power of the State to grant ferry licenses across the river. - § 128. Power to Impose a Ferry License. — A State legislature has i)ower to levy a license tax uj)on all ferries subject to its authority. It may do this directly, or it may be done indirectly, through the municipal corporations of the State. In the leading case of the Wiggins Ferry Com- pany v. East St. Louis, it was held that the fourth section of the act of the legislature of Illinois, passed in 1819, touching a ferry across the Mississippi river from a place in Illinois to the city of St. Louis, Missouri, declares: "That the ferry established shall be subject to the same taxes as are now, or hereafter may be, im]K)sed on other ferries dependent of the title to the land. To enable the owner of such a franchise to exercise it and enjoy its emolunients, he must obtain the right to use the land on both sides of the river, for the purpose of re- ceiving and landing passengers, but he need not have any property in the soil. Peter v. Kendall. 6 B. & C. 703; Newton v. Cubitt. 12 C. B. (N. S.) 32; s. c, 13 C. B. (N. S.) 8G4: Bowman v. Waltham. 2 McLean, '37(>: Fay, Petitioner. 15 Pick. 243. The grant by one State of a ferry franchise over a river which is the boundary between it and another State, is valid, and it is not necessary to the validity of such a grant that there be concur- rent action by the legislatures of both States, nor that the grantee have the right of a landing on the other side, or beyond the State by which the grant is made. Conway V. Taylor. 1 Black (U. S.), G03; Freeholders v. State, 4 Zab. (N. J.) 718; People v. Babcock. 11 Wend. 5.58. That by reason of hostile legislation in the other State, the grantee n)ay be unable to exercise his franchises on the other shores, or. because of exclu- sive rights in others under such legislation, his profits may be di- minished, will not defeat his fran- chise, as far as his own property rights are concerned, or the juris- diction of his State extends. The franchise may be less valuable for that reason, but it will bo valid, as far as it goes.'' Columbia Bridge Co. V. Geisse, 38 X. J. L. 39, 42. 1 Gibbes v. Town Council of Beaufort. 20 S. Car. 213. 2 Marshall v. (Jrimes, 41 Miss. 27: Fanning v. (Jregoire, 16 How. 534: Chiapella v. Brown. 14 T,a. Ann. 180. § 12^.] .MUNIflTAL (iKANTS AND (CONTRACTS. 3i>9 within this State, and nnder tho same regulations and for- feitnres." It was held that the section provicU^s for ecjuality of taxation; that is to say, that the property of the feriy company shall he valued and taxed by the same rule as other like property, and be subjeet to the same exaetions and forfeitures, but the company is not exempted from any license tax on its ferry boats, which the State or a municipal eor})oration thereto authorized niii>ht impose. The power to license is a police power, although it may also be exer- cised foi' the purpose of raisin"' revenue. The State has the power to impose a license fee, either dirc^ctly or tlirough one of its municipal corporations, upon the ferry lvee})ers living in the State, for boats which they own and use in conveying from a landing in the State passengers and goods across a navigable river to a landing in another State. The levying of a tax u[)on such boats, although they are enrolled and licensed under the laws of the United States, or the exaction of a license fee b}' the State within which the proi)erty subject to the exaction has its si/ut>, is not a a regulation of commerce within the meaning of the Con- stitution of the United States, nor is such tax or fee a duty on tonnage, if it be not graduated by (he tonnage of the boats or !)}' the munber of times they cross the river or land within the limits of the State. ^ ' Wiggins Ferry Co. v. Eiist St. chise or privilciijes. nor convert Louis. 107 U. S. 3<)."). Long after said nionopolistii- feature into an the license and estal)lislinient of a irrevocaljle perpetuity in the hands ferry, the legislature, by general of liie vendee, but left it subject to law. provided that the county repeal just as it was held by the courts should not license a ferry vendor: and the legislature having within half u mile in a direct line repealed it by general law. the W «)f one already established. It was & B Bridge Co. have no right to held that this general law. so far as complain, and a new bridge may it applied to such existing ferry, be erected within the restricted did not create in it the right to a territory without any violation of perpetual monopoly, luit was re- vested rights. One internal im- pealable at the will of the legi.-- provement comjjany. in the same luture. The purchase of said ferry manner, and generally under the by the W. A B. Bridge Co., under same condiiions. that it may take an enabling act authorizing them the lands owned by others, pro- to make the purchase, could not vided the lands proposed to be enlarge nor add to the ferry fran- taken are not n<'cessarv to the en- •loo MlNKir.M. CHANTS AM) CONTKAC'TS. § V2i). Fuv Removal «»f aarbaj^e. — Muiii('ip:il authorities may require all persons actiuu' in the capacity of x-avengers to take out a Uceuse for that work, and to \):i\ a Hcensetax. as a conchtion of tiie })riviU'e exclusive, there nuist be something in the act granting it showing that such was the legislative intention." Power V. Village of Athens. 99 X. Y. .")0l>. 598; s. c. 10 .Vm. tt Eng. ( orp. Cas. .■)4. ' In re TiOwe. 54 Kan. 757: s. c, H9 Pac. Rep. 710. See generally on the power of municipal corpo- ration to pass ordinances on the § 1-^y.] :\irM('irAL okants and r(iNTRArTs. 401 in this case the rule wtis stated, as follows: "It will be ob- served that the ordinance under consideration authorizes the ai)pointinent of two or more persons as scaveng'ers. It, therefore, places it in tlic power of the mayor to grant to preservation of public health : Har- rison V. Baltimore. 1 Gill. 2(J4; State V. Mott, 61 Md. 297; s. c, 4 Am. c^- Enj;. Corp. Cas. 334; 48 Am. Kep. 10."); Mayor v. Kadeoke. 49 Md. 217; Town of Suiiimeiville, 33 S. Car. 5G; s. c, 11 S. E. Kep. 54.5; City Council v. Baptist Church. 4 Strobh. 306; Copes v. Charleston. 10 Rich. L. .^02; Zyl- stra V. Charleston. 1 Bail. 382; Huesing v. Rock Island, 128 111. 405: s. c. 27 Am. & Eng. Corp. Cas. 050; Slate v. Lowery. 49 X. J. L. 391 ; Weil v. Kicord. 24 X. J. E(i. 109: Gregory v. Mayor, etc. of New York. 40 N. Y. 273; Cronin V. People. 82 X. Y. 318; s. C, 37 Am. Rep. 504; People v. Mulhol- land, 82 N. Y. 324; s. C., 37 Am. Rep. .508; Metropolitan Board of Health v. Heister, 37 X. Y. 001; Johnson v. .Simonton. 43 Cal. 242; In re Linehan. 72 Cal. 114; Ex parte Shrader. 3 Cal. 279; Bliss v. Kraus, K! Ohio St. 155; State v. Cowan, 29 Mo. 330; Mayor, etc. of Monroe v. Gerspach. 33 La. Ann. 1011; Kennedy v. Phelps. 10 La. .\nn. 227; Wreford v. People, 14 Mich. 41 ; Dubois v. Augusta, Dudley. 30; St. Louis v. McCoy. 18 Mo. 238; Metcalfe v. St. Louis. 11 Mo. 103; Train v. Boston Disin- fecting Co.. 144 Mass. 523; s. c, 19 Am. i^-. Kng. Corp. Ca.s. 548; .59 Am. Rep. 113; O'Donovan v. Wil- kins, 24 Fla. 281; s. C, 23 Am. & Eng. Corp. Cas. 1 ; Polinsky v. People, 73 X. Y. 05; Health De- partment V. Knoll. 70 X. Y. 530; Johnson v. Simonton. 43 Cal. 242; Ex parte O'Leary. 05 Miss. 80; State 26 V. Uolcomb, 08 Iowa, 107; s. C, 50 Am. Rep. 852. A city may abolish wells in its streets as a san- itary measure, without compensa- tion to lot owners. Ferrenbach v. Turner. 80 Mo. 410; s. c, 50 Am. Rep. 437. As to regulation of sec- ond-hand clothing dealers see Greensboro v. Ehrenreich, 80 Ala. 579; s. c, 60 Am. Rep. 130; 18 Am. & Eng. Corp. Cas. 483. In Indiana, in Walker v. Jameson, 140 Ind. 591. a different view is taken. In this case the court held an ordinance prohibiting owners or tenants of premises from haul- ing away garbage from their prem- ises, requiring them to put it into receptacles convenient foi' removal by a public contractor, requiring such owners or tenants to pay a certain specified amount per pound, but not prohibiting their destruc- tion of such garbage on the prem- ises (taking care not to create a nuisance in so doing) to be valid under and authorized by the pro- visions of a statute empowering the common council to enact ordi- nances "to prevent the deposit of any unwholesome substances, either on private or public prop- erty; to compel its removal to designated points, and to require slops, garbage, ashes, waste or other material to be removed to designated points, or to require occupants of premises to place them conveniently for removal.*' In the course of the opinion Daily, J., says: "In view of the great weight of authorities, we are of the opinion that the contract and 402 MINK II'AL CRANTS AND CONTRACTS. [§ 1-^s' two persons a monopoly of the scavenger's business within the limits of the eity. \\'hile monopolies of any ordinary legitimate business are odious, we have seen that monop- olies are upheld when deemed neeessarv in executing a dutv ordinance assailed are botii uitiiin the lonjj settled and clearly recuo;- nized lines of public power, which is as broad as the power of taxa- tion, and being simply a sanitary regulation, they cannot be consid- ered as in the nature of confiscation or an attempt to create a monopoly. The provision for the removal of the garbage at the expense of the property holder is an extreme ex- ercise of this power, but is an in- cident to its existence. It is a familiar rule that if the power is conferred upon a municipal cor- poration by the laws of the state, and the law is silent as to the mode of doing such act, the corporate authorities are necessarily clothed with a reasonable discretion to de- termine the manner in whicli sut;h act shall be done; all the reasona- ble methods of executing such power are inferred. Lewisville Natural Gas Co. v. State, 135 Ind. 49.'' A conviction for removing garbage in an open wagon, con- trary to an ordinance of the city of Detroit which provides that all garbage shall be collected in water tight closed carts, will beallirmed, as the restrictions imposed by the ordinance are reasonable, and au- thorized by the city charter, giving the council power to regulate the handling of garbage. People v. Gordon, 81 Mich. SUG; s. c, 46 X. W. Kep. 0.")S. As to regulations gov- erning burials, see Bogert v. In- dianapolis, 13 Ind. 134; IJegein V. Anderson, 28 Ind. 7'.>; Town of Lake View v. Lelz. 44 III. 181; HricU Presbvleriau Church v. New York, .5 Cow. r)38; Ex parte Kceney, 84 Cal. 304: s. c, 24 Pac. Rep. 34. "The validity of the>e ordinances was not seriousl}' questioned in argument. That the,v are a lawful and proper exercise of the power 'to preserve Ihe health of the city and to prevent and remove nui- sances' does not admit of doubt. Such powers have been universally granted to municipal corporations in this country. In fact. Ihe pres- ervation of the health and safety of the inhabitants is one of the chief purposes of local govern- ment, and reasonable by-laws in relation thereto have always been sustained in England as within the incidental authority of such corpo- rations. Under such a power a municipal corporation has the un- doubted right to pass ordinances creating boards of health, appoint- ing health commissioners, with other subordinate otlicials. regu- lating the removal of house dirt, night soil, refuse, offal and tilth, by persons licensed to perform such work, and providing for the prohibition, abatement and siij)- pression of whatever is intrinsically and inevitably a nuisance. * * * The subject-matter dealt with by these ordinances recjuired the adoption of very stringent rules and regulations and such is the character of their provisions. Every person obtaining a license to perform this offensive but nec- essary work, is very properly sub- ject to orders of the board of health in all matters pertaining to the manner of doing it." Boehm v. § 121).] MUNICIPAL GRANTS AND CONTRACTS. 403 iiKUiul)c'nt on the city authorities or the legislature for the protection of the public health. It is sometimes a matter of great nicety and dirticulty to determine whether a })ar- ticular business or calling is in its nature so directly con- nected with the public welfare that the performance can only be safely intrusted to some one acting under public authority. So much of the business of the scavenger as consists in removing dead animals, it would seem under the authorities, ma}- properly be regarded as a public function, for the discharge of which a monopoly may be created. But this ordinance goes further and gives to the scavengers the exclusive privilege also of cleaning privy vaults and cesspools, and of removing garbage not only from the streets, but from the private })remises of the citizens. By its terms it would })rohil)it the owners from performing these services for themselves, or from employing any one else than the persons appointed. It not only makes a monopoly of the cleaning of vaults and cesspools, which are necessarily offensive to the senses, but it also includes the removal of garbage. * * ♦ xhe business of a scavenger may not be nice or attractive, but the removal of garbage and tilth is a necessarv work, which has l)een ordi- narily performed through any agency the party interested might select. If the term 'garbage' includes all refuse from the kitchen, then the waste which ordinarily is used, when practicable, to feed swine, can only be removed from the premises bv the |i('i>()n aj)poiiitcd under this ordinance. Privies and cesspools are not ordinarily (Un'med nuisances per se. They are not so regarded by the statute under con- sideration. They may be permitted or not by the city authorities, according as the circumstances and surround- ings of the particular place or portion of the city render it more or less dangerous to the health of the inhabitants. "NMien constructed they are on private |)roperty. and in ordei- to remove their contents, or to remove garbage not de- posited in the streets or alleys, it would be jiecessary to Mayor, etc. of Baltimore. Gl Md. Pick. 1>7: s. <;.. 7 Am. Dec. 3."); 259. 2G3. See Vandine. Petr., G State v. Orr, 68 Conn. 101. 404 MUNICIPAL GRANTS AND CONTRACTS. [§ I'M). enter private premises. "\\'e are not eited to any ease hold- inir (hat a in()n()])oly of this business may be created."^ The rule relating to the i)o\ver of municipal corporations to license aiKl regulate the business of scavengers, is stated, as follows: "The power of the city eouncil to license and reg- ulate the business of scavengers is not now (juestioned. nor, in view of the express authority contained in the statute above quoted, can there be any (juestion of their i)()\ver to make and enforce all reasonable rules and regulations for the conduct of this disagreeable business. Under the authorities, and, especially, in view of the constitutional provision quoted, these regulations niu>t have a wav open to every person who will comply with the requirements of the ordinance to engas^e at least in so much of the business of scavengers as relates to entering on private })r()i)erty and removing filth and garbage therefrom. This ordinance clearly authorizes the restriction of this business to two persons, to be selected by the mayor, thereby providing for a monopoly. This the niavor and council had no ]i()\ver to do. "2 § i:{0. Muiiici|>al Grant of Market Fraiicliiso. — The rule governing a municipal grant of an exclusive i)rivilege in a market is not uniform. In the leading case in Michigan, the i)laintiff contracted with the authorities of a village to build a market house, and to put it under their control foi ten years, in consideration that they would j)av over the rents thereof to him, appoint a person to sui)erintend it, permit no other public market house to be erected or used, nor certain articles specified to be sold elsewhere in the vil- lage during the said ten years. In an action for breach of contract, it was held that the said contract was against pul>- lic i)olicy and void.' The o))inion in this case is an able and logical discussion of the principle on which the decision is based. Tt merits very deliberate consideration.^ In Iowa ' /h rr T.owp. .">4 Kan. 757. 7f>'J; ^ Gale v. Kalamazoo. "JiJ Mirli. s. c. 39 Vnc. Rep. 710. 344; s. c, 9 Am. Kep. 80. •In re. liOwe. 54 Kan. 7r)7. 7ii2; ^ ••In each of these particulars. s. C, 3!t Pac. ]{ep. 710. this contract differs widely from § lao.] MlNltll'AL (;UANT8 AND CONTKACTS. ■10') un opposite view has been upheld. It a|)pe:irs tliat the doe- trine of the ]Mic-hiposition is ably dis- cussed and atlirmed in the case of McCulloch V. State of Maryland (4 Wheat. 316), in relation to the power of Congress to organize the 408 MlXICirVL (JRANTS AND COXTKACTS. [§ I'^l. })rivik'ae, giKirtlocl l)y proper limitatUMi of tlio i)rico.s to he eharged, and imposing the duty of providing ample con- veniences, with permission to all owners of stock to land, and of all butchers to slaughter at those places, was a police Bank of the United States to aid in the fiscal operations of the gov- ern in out. It can readily be seen that the interested vi^ihince of the corporation created by the Louisiana legislature will be more efficient in enforeing the limitation prescribed for the stock landing and slaughtering business for the good of the city, than the ordinary efforts of the officers of the law. Unless, therefore, it can be main- tained that the exclusive privilege granted by the charier to the corporation is beyond the power of the legislature of Louisiana, there can be no just exception to the validity of the statute. And in this respect we are not able to see that these privileges are especially odious or objectionable. Tlie duty imposed as a consideration for the privilege is well detined. and its enforcement well guarded.'' Ibid., 64. "The business which the de- fendant carries on in his slaughter house, without the written consent and permission of the selectmen of Watertown, is in plain violation of the provisions of the St. 1871. chap. 1C7, which prohibit the use of any building for slaughtering cattle, etc., or for other noxious or offen- sive trades, without such consent, in any city or town containing more than four thousand inhab- itants. ♦ ♦ * All rights to the use and enjoyuu'iit of property, secured by the Constitution of the United States, or of this common- wealtli, are subject to regulation imder that power known as the police power of llie Stale, which. like the power of taxation, is neces- sary to its existence, and which is implied in the idea of free civil government. It is detined by Blackstone to be that power which concerns "the due regulation and domestic order of the kingdom, whereby the individuals of the State, like members of a well- governed family, are bound to conform their general behavior to the rules of propriety, good neigh- borhood and good manners, and to be decent, industrious and inoffen- sive in their respective stations." 4 Blackstone's Commentaries, 102. It has its foundation in that inaxiui of all well-ordered society, which requires everyone to use his own. so as not to injure the ecpial enjoy- ments of others having equal rights of property. Laws passed in the legitimate exercise of this power are not obnoxious to constitutional provisions, although in some meas- ure interfering with private rights, merely because they do not pro- vide compensation to the individ- ual whose liberty is restrained. lie is presumed to be rewarded by the common benelits secured. It differs from the right of eminent domain, which involves the ap- propriation of private property to public use. and re. the l)uil(liiiii' with combustible materials and the burial Al<;er. 7 Cash. 53; Fisher v. Mc- Girr. 1 Gray. 1; Coniinonwealtli v. Tewk.sburv, 11 Met. .").'); Baker v. Boston, 12 rick. 184; Vandine, Petitioner, U Pick. 187." Water- town V. Mayo. 10f» Mass. 31."). 317. See also Metropolitan Board v. Ileister. 37 N. Y. (Jlll. An ordi- nance of the city of New Orleans prescribed the place where slaughter houses must be located. Relyinfj upon Ihi.s desiojnation of such place, complainant secured land within its limits, and pro- ceeded thereon to erect houses and make other improvements for slaut;hterino purposes, when the city amended the ordinance by niakino; it unlawful to maintain slaughter houses in the prescribed place. •*excej)t permission be jj^ranted by the council of the city of New Orleans," and proceeded to prevent complainant, who had no such permission, from carryinj; on his slaujjlilcrinjjj business. Jlrld. th:it the aiiienilment is unconstitu- tional because it would, in effect, deny complainant the equal jiro- tection of the laws guaranteed by the XlVth Amendment of the United States Constitution. The prevention by the city of the com- plainant's exercise of his business is enjoinable in equity as being likely to do him irreparal)le in- jury for wliich d.images at law would be no adeipiate compcn^.i- tion. Barthel v. City of Xew Or- leans. 24 Fed. Rep. .")G3: s. r.. Am. & Eng. Corp. Cas. .">0D. 410 MrNICIl'AL (iKANTS AND CONTRACTS. [§ 1-^2, of the (U'.-id, may all," says C'liancellor Kent, 'bo iiiteixlicted l)y law, ill the midst of dense masses of population, on the general and rational principle, that every person ought so to use his property as not to injure his neighbors ; and that private interests must be made subservient to the general interests of the communit}'.' This is called the pub- lic power; and it is declared, by Chief Justice Shaw, that it is much easier to perceive and realize the existence and sources of it than to mark it l)oundaries, or prescribe limits to its exercise. The power is, and must be, from its very nature, incapable of any very exact definition or limitation. Upon it depends the security of social order, the life and health of the citizen, the comfort of an existence in a thickly poi)ulated community, the enjoyment of private and social life and the l)eueticial use of property. 'It extends,' says another eminent judge, 'to the protection of the lives, limbs, health, comfort and (juiet of all per- sons, and the protection of all the property within the State; * * * .^^^ persons and property are sui)- jected to all kinds of restraints and l)urdens in order to secure the general comfort, health and prosperity of the State. Of the perfect right of the legislature to do this no question ever was, or, upon acknowledged general i)rinci- ples, ever can be made, so far as natural persons are con- cerned.' The regulation of the place and the manner of conducting the slaughtering of animals, and the business of butchering within a cily, and the inspection of the animals to l)e killed for meat, and of the meat afterwards, are among the most necessary and freciuent exercises of the l)ower. It is not. therefore, that we seek for a compre- hensive detinition, but rather look for the proper source of its exercise.""' § 13 "2. L.ejji.sliitiv4' and Business Powers I>istin- guished. — There is a well established distinction between ' Sliiughter House Cases. 10 Wall. land. etc. K. K. Co.. '27 Vt. 14".t; 3(1, (!1. See also 2 Kent's Com- Gibbons v. Ogden. J) Wheat. 20;}; uientaries, 340; CommonweaUh v. City of New York v. Miln, 11 Tet. A I- .7Cii-'h.S4: Thorpe v. KiU- 103; License Tax Cases, 5 Wall. § 132. J MIXICIPAL GRANTS AND CONTRACTS. 411 the ordinarv Icuislntivo power of a immieipal irovernincnt and its capacity to transact business rclatin«r to the affairs of the city. Tiiere are cases in which the distinction is of practical and vital importance. In the case of The City of Vali)arai8o v. (Jardner, the court said : "The important and controlling leadini>s. We have no doubt that the corporation had authority to contract for a sui)i)ly of wattM- for a |)eriod of twenty years, and that the contract cannot be overthrown solely on the ground that it is a sur- render of legislative power. There is a distinction between powers of a legislative character and powers of a business nature. The jjower to execute a contract for goods, for houses, for gas, for water and the like, is neither a judicial nor a legislative power, l)ut is purely a business power. The question is, however, so tirndy settled by authority that we deem it unnecessarv to further discuss it."^ 471; United States v. DeWitt. Wall. 41; Harmison v. City of Lewiston, 1.53 111. 313; s. c, 38 N. E. Rep. 628. ' City of Valparaiso v. Gardner. 97 Ind. 1. 4. See also City of In- dianapolis V. Indianapolis, etc. Co., . "The defendants are a corporation, and in that capacity are authorized by their charter, and by laws, to [)iirchase and hold, sell and convey real estate, in the same manner as individuals. They are considered a person in law within the scope of their corporate powers, and are sul)j<'ct to the same liabilities, and entitled to the same remedies, for the violation of con- tracts, as natural persons. They are also clothed, as well l)y their charter as by subse<|U('nt ,-tatiite< of the .State, witli let^islative powers, and in the capacity of a local legislature are [tarticularly charged with the care of the pub- lic morals and the public health within their own jurisdiction. In ascertaining their rights and lia- bilities as a corjioration, or as an individual, we must not consider their legislative character. They had no power, as a party, to make a contract which should control or embarrass their legislative jiowers .and duties. Their enactments, in their legislative capacity, are to have the same effect upon their in- dividual acts as ui)on those of any other persons, or the public at large, and no other effect."" Pres- byterian Church v. City of New York. 5 Cow. 538, .">4(). CHAPTER IX. THE I'OWEK 10 REGULATE PRIVATE CORPORATIOXS. AVhere Subject to Cono;res- sional Control. Application of the Rule to the Telephone. Power to Regulate in Case of Patented Prop- erty. Application of the Rule to the Baking Business. Application of the Rule to the Laundry Business. luiiniinity from Govern- Miontal Control. A Business Juris Pitblici Distinguislied from a Business Juris Privati. vj i:{;5. [iittMxIiictioii. — It is well cst;il)lishod tliMl private corporations, so far as the piihlie has an interest in their l)iisine.s.s, are subject to governmental control. In certain branches of business, as that of a railroad corporation or telegraph conipanv. a work of a ijubiic character is com- mitted to a private corporation. I)nrini>; the earlier i)eriods of Knirlish historv, the highways were laid out and con- structed directly l)y the government. The government assumed the direct and sole management and control of the pidilic roads. The carrving on of this business was recog- nized as an essential function of the government. In the grant of a railroad franchise this prerogative is committed § 133. Introductory. § 141. 134. Power to Regulate the Business of a Railway 142. Company. 13.-). Power not Lost by Xon- User. 143. 13G. Power to Act Through a Commission. 144. 137. The Power to Assess Dam- ages. 145. 138. Power to Regulate Public Warehouses and ^yare- 14(5. housing. 139. Effect of Statutory Regula- tions. 147. 140. Power to Regulate the Operations of Telegraph Companies. § 138.] PKIVATK CORPORATIONS. 413 to ;i private coi'jjorat ion. But in carninu^ on a work of this character, throuuh the inslriinicntality of a private corpora- tion, the government does not .surrender its power of con- trol of the work. It may make such reguhitions, including the fixing of a maximum rate of transportation, or of freight, as may l)e demanded ))y the interests of the pul)iic, and it may do whatever else is required by the public wel- fare, unless its power in this regard has been surrendered in the orrant of a charter. In the leading case of Munn v. Illinois, before the Supreme Court of the United States, the general doctrine relating to governmental control of private corporations is stated at length. It was held that under the powers inherent in every sovereignty, a govern- ment may regulate the conduct of its citizens toward each other, and, when necessary for the public good, the manner in which each shall use his own property. It has, in the exercise of these powers, been customary in England, from time immemorial, and in this country, from its first colon- ization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, innkee})ers, etc., and, in so doing, to fix a maximum of charge to l)e made for services rendered, accommodations furnished and articles sold. Down to the time of the adoption of the fourteenth amend- ment of the Constitution of the United States, it was not supposed that statutes regulating th(3 use, or even the price of the use, of private property, necessarily deprived an owner of his property without due process of law. Under some circumstances the}' may, but not under all. The amendment does not change the law in llii> p;iit irular : it simply prevents the States from doing that which will operate as such deprivation. When the owner of property devotes it to a use in which the public has an interest, he, in effect, grants to the public an interest in such use, and nuist, to the extent of (hat inti'rest, submit to l)e controlled by the public, for the common good, as long as he main- tains the use. He may withdraw his grant by discontinuing the use. Kights of property, and to a reasonal)le compen- sation for its use, created bv the common law, cannot be 414 I'RIVATK CORPORATIONS. [§ 133. taken away without due t)roeess ; but the hiw itself, as a rule of conduct, may, unless constitutional limitations forbid, be changed at the will of the legislature. The great office of statutes is to remedy defects in the common law asthej'^are develo])ed, and to adapt it to the changes of time and cir- cumstances. The limitation by legislative enactment of the rate of charge for services rendered in a public employment, or for the use of propert}^ in which the puijjic has an inter- est, establishes no new principle in the law, but only gives a new effect to an old one.^ In the case of Railroad Com- 1 Munn V. Illinois, 94 U. S. 113. In the course of the opinion in this case. Chief Justice Waite uses this language: ''This brings us to in- quire as to the principles upon which this power of regulation rests, in order that we may deter- mine what is within and what is without its operative effect. Look- ing, then, to the common law, from whence came the right which the constitution protects, we find that when private property is 'affected with a public inteiest, it ceases to be juris privati on\y .' This was said by Lord Chief Justice Hale, more than two hundred years ago. in his treatise. De Portibus Maris, 1 Harg. Law Tracts. 78. and has been ac- cepted without objection as an essential element in the law of property ever since. Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his properly to a use in which the public hiis an interest, ho, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by dis- continuing its use; biU. so long as he maintains its use. he must sub- mit to the control. Thus, as to ferries. Lord Hale says, in his treatise, Be Jure Maris, 1 Harg. Law Tracts, 6, the king has "a right of franchise or privilege that no man may set up a common ferry for all passengers without a pre- scription time out of mind, or a charter from the king. He may make a ferry for his own use, or the use of his family, but not for the common use of all the king's subjects passing that way. because it doth, in consequence, tend to a common charge, and is become a thing of public interest and use. and every man, for his passage, pays a toll, which is a common charge, and every ferry ought to be under a public regulaiiou. viz. : that it give attendance at due times, keep a boat in due order, and take but a reasonable toll, for if he fail in these he is finable.' So if one owns the soil and landing places on both banks of a stream, he cannot use theui for the pur- poses of a public ferry, except upon such terms and conditions as the body politic may from lime to time impose, and this because the common good requires that all public ways shall be under the control of the public authorities. This privilege or prerogative of § 133.] PK1\ATK C'OKl'OiiATIONS. 415 pan\' V. I)a\is, the rule is expouiuled, as follows: "Upon the sin)j)ositi()n that the legislature may take the property to the pul)lit' use, it is next said that tliis taking is not legit- imate, because the property is bestowed on j)rivate persons. It is true that this is a private corporation ; its outlays and enioluinents being individual i)roperty ; but it is constituted the kinij, who in this connection only represents and gives another name to Uie body politic, is not primarily for his protit, but for the protection of the people and the promotion of the general welfare. And, again, as to wharves and wharfingers. Lord Hale, in his treatise, De Portibus Maris, already cited, says: 'A man. for his own private advantage may. in a port or town, set up a wharf or crane, and may take what rates he and his customers can agree for cran- age, wharfage, houseilage, pesage, for he doth no more than is lawful for any man to do, viz. : makes the most of his own. * * * jf the king or subject have a public wharf, unto whicli all persons that come to that port must come and unlade or lade their goods as for the purpose, because they are the wharfs only licensed by the queen, • • * or because there is no other wharf in that port, as it may fall out where a port is newly erected; in that case there cannot be taken arbitrary and exces.-ivc duties for cranage, wharfage, pes- age. etc.. neither can they be en- hanced to an immoderate rate; but the duties must be reasonable and moderate, though settled by the king's license or charter. For now the wharf and crane and other con- veniences are affected with a pub- lic interest, and they cease to be juris privati only, as if a man set out a street in new building on his own land, it is now no longer bare private interest. i)ut is affected by a public interest." This statement of the law by Lord Hale was cited with approbation, and acted upon by Lord Kenyon at the beginning of the present century, in Bolt v. Stennett, 8 T. R. 60«. And the same has been held as to ware- houses and warehousemen. In Ald- nutt v. Inglis, 12 East, '>-27. decided in 181U, it appeared that the London Dock Company had built ware- houses in which wines were taken in store at such rate of charge as the company and the owners might agree upon. Afterwards the com- pany obtained authority, under the general warehousing act. to receive wines from importers before the duties upon the importation were paid; and the question was, whether they could charge arbi- trary rates for such storage, or must be content with a reasonable compensation. Upon this point Lord pjllenborough said (p. 537) : •There is no doubt that the general principle is favored, both in law and justice, that every man may tix what price he pleases upon his own property, or tlie use of it; but if for a particular purpose the I)ublic have a right to resort to his premises and make use of them, and he have a monopoly in them for that purpose, if he will lake the benefit of that monopoly, he must, as an e.] PRIVATE COUrORATlONS. 417 to the public. The irovermnent a>>suined the exchisive direction as well as authority, as if they chose to be seen and felt in everything, and would avoid even a remote con- nection between private interests and public institutions. An inunensc and beneficial revolution has been brougjht we are now examining. Of Lord Hale, it was once said by a learned American judge: "In England, even on rights of prerogative, they scan his words with as uiiich care as if they had been found in Magna Charta; and the meaning, once ascertained, they do not trouble themselves to search any further.' 6 Cow. (X. Y.) 536. note." '-The power of regulation in these cases does not turn upon the fact that the entities affected by the legisla- tion are corporations deriving their existence from the State, but upon the fact that the corporations are connnon carriers and. therefore, subject to legislative control. The State in constituting a corporation may prescribe or limit its powers and reserve such control as it sees tit. and the body accepting the charter takes it subject to such limitations and reservations, and is bound by them. The t-onsidera- tions up(m which a corporation holds its franchises are the duties and obligations imposed by the act of incorporation. But when a cor- poration is created it has the same rights and the same duties, within the scope marked out for its action, that a natural person has. Its property is secured to it by same constitutional guaranties, and in the management of its property and business is subject to regula- tion by the legislature to the same extent only as natural persons, except as the power may be ex- tended by its charter. The mere fact of a corporate character does •27 not extend the power of legislative regulation. For illustration, it could not be justly contended that the Act of 1888 would be a valid exercise of legislative power as to corporations organized for the piu-pose of elevating grain, al- though invalid as to private per- sons conducting the same business. The conceded power of legislation over common carriers is adverse to the claim that the police power does not in any case include the power to fix the price of the uses of private property, and of services connected with i-uch use unless there is a legal monopoly, or spe- cial governmental privileges or pro- tection has been bestowed, [t is said that the control which the legislature is permitted to exercise over the business of common car- riers is a survival of that class of legislation which in former times extended to the details of personal conduct and assumed to regulate the private affairs and business of men in the minutest particulars. This is true. But it has survived because it was entitled to survive. By reason of the changed condi- tions of society and a truer appre- ciatif)n of the proper functions of government, niany things have fallen out of the range of the police power as formerly recognized, the regulation of which by legislation would now be regarded as invading personal liberty. But society could not safely surrender the power to regulate by law the business of common carriers. Its value has 41>S PRIVATE CORPORATIONS. [§ 183. about in niodoni tiines;, by engaging individiuil enterprise, industry and economy, in the execution of public works of internal improvement. The general management has been left to individuals, whose jn-ivate interests prompt them to conduct it beneficially to the public ; but it is not entirely confided to them. From the nature of their undertaking and the character of tiie work, they are under sufficient re- sponsibilities to insure the construction and preservation of the work, which is the great object of the government. The public interests and control are neither destroyed nor suspended. The control continues as far as it is consistent with the interests granted, and in all cases as far as may l)e necessar}^ to the public use. The road is a highway, although the tolls nuiy be private ])ropcrty, by force of the grant of the franchise to collect them. It is a common nui- sance to allow it to become ruinous, or to obstruct it. The government may, upon sufficient cause, claim a forfeiture of the charter, or compel the execution and repairs of the road by those undertaking them by any means api)licable to other i)ersons charged with the like duties in respect to other highways. The difference is, that the corporation, in lieu of the sovereign, has the custody and i)roperty of the road, and the collection of the tolls in reimbursement of the cost of construction and remuner/ition for labor and risk of capital. As to the corporation, it is a franchise, like a feriy or any other. As to the public, it is a highway, and, in the strictest sense, publici Juris. The laml needed for its construction is taken by the jniblic foi- the public been infinitely increased by tbe to regulate in tlie jmblir interest condition of modern commerce, tbe cbarges of telepbone and tele- iinder whicb the carryin*;; trade of grapb companies, and to make the the country is, to a great extent, telephone and telegraph, those absorbed by corporations, and. as important agencies of commerce, a check upon tbe greed of these subservient to tiie wants and ne- consolidated interests, the legisla- cessities of society. These regula- tive power of regulation is de- tiona in no way interfere with nianded by imperative public in- rational liberty — liberty regulated terests. The same principle upon by law." Andrews. J., in People which the control of common v. Budd. 117 N. Y. 1, 21. carriers rest has enabled the State § i;;4.] run' .VTK COUPOItATIONS. 419 use, and not nioivly for the private advantage of indi- viduals. It is oidy vested in the conijiany for the purposes of the act: that is, to make the road."^ § 1154. Poui'i- to Kejfulate the Business of a Railroad Company. — It is the ruh', .-md it is well established, that the incorporation of a railway comijany by a legislature affeets the property and employment of such company with a i)ublic use, and thus subjects the business of the company to legislative control. This is a result of the special privi- leges conferred by the charter of a railway company, and, in particular, of the authority, which it confers, to exercise the right of eminent domain to appr<)i)riate private pro})- erty to its uses, and, also, of the obligation assumed by the company in the acceptance of its charter, to transport pas- sengers and freight at reasonable rates. This regulation of rates extends to the prevention of extortion by unreason- able charges, and of any form of favoritism by improper discrimination. 2 In the recent leading case of The (icorgia 1 Railroad Company v. Davis, 2 Dev. & Bat. 451, 468. - Georgia Banking Co. v. Smith. 128 U. S. 174, 17!». The Chicago tt Northwestern Railway Company was. by its charter and the char- ters of other companies consoli- dated with it. authorized "to de- mand and receive such sum or sums of money for the transporta- tion of persons and property, and for the storage of property, as it shall deem reasonable." The constitution of Wisconsin in force, when the charters were granted, provides that all acts for the crea- tion of corporations within the State "Mnay be altered or repealed by the legislature at any time after their passage." Held, that the legislature had power to prescribe a maximum of charges to be made by said company for transporting persons or property within the State, or taiten up outside the State and brought within it, or taken up inside and carried without. Cer- tain Wisconsin railroad corpora- tions were consolidated with others of Illinois on terms whicli. in effect. r('(|iiired that the consolidated company should, when operating in Wisconsin, be subject to its laws. Held, that Wisconsin can legislate for the company in that State precisely as it could have legis- lated for its own original com- panies, if no consolidation had taken place. The.Vct of Wisconsin, approved Marcli 11. 1n74. entitled •an act relating to railroads, ex- press and telegraph companies, in tlie State of Wisconsin," is con- lined to State commerce, or such interstate commerce as directly affect"* the people of Wisconsin. Until Congress shall act in refer- ence to the relations of this consoli- dated company to interstate com- merce, the regulation of its fares, 420 PHIVATK CORPORATIONS. [§ i;^4. Baiikintr C'unipauy v. 8iuith, before the Sin)reine Court of the United State.s, the rule was stated by the court, as fol- lows : "It has been adjudged by the court in numerous instances that the legislature of a State has the power to pre- etc, so far as they are of domestic c»)ncern. is within the power of the State. Where property has been olotlieJ with a piiblit; interest the legishiture may fix a limit to that which shall in law be reasonable for its use. Peik v. Chicago, etc. Ry. Co.. 94 U. S. KM. '-Rail- road corporations hold their prop- erty and exercise their functions for the public benefit and they are. therefore, subject to legislative control. The legislatuie which has created them may regulate the mode in which they shall transact their business, tlie price wliich they shall charge for the transportation of freight and pas- sengers, the speed at which they may run their trains, and the way in u liich they may cross or run upon highways and turnpikes used for public travel. It may make all s\u'h regulations as are appro- priate to ])rotect the 'lives of per- sons carried upon railroads or passing upon higinvays crossed by railroads. All this is within the domain of legislative power, al- though the power to alter and amend the charters of such corpo- rations has not been reserved. * * * Such legislation violates no contract, takes away no prop- erty, and interferes witii no vested right. But the defendant was in- corporated under cliapter 917, of the Laws of IStJit, by the consolida- tion of other railroad companies, and hence it took its charter under the constitution, and the laws sub- ject to the right of the legislature to alter or amend it. Under this reserved power, the legislature may impose upon railroad corpo- rations such additional restrictions and burdens as the public good re- quires. It may not conliscate i»rop- erty. but it cannot be doubted that it can do all that is required by the Act of 1874." People v. B. & O. R. R. Co., 70 N. Y. 5(i9, 570. See also Albany Northern R. R. Co. v. Brownell, 24 N. Y. 345. 351. "The plaintiffs in error do not contend that it is always or generally un- reasonable to restrict the rate for carrying each passenger to three cents a mile. They aigue that it is so in this case by reason of the ad- mitted fact that with the same tratHc that their road has now. and charging for transportation at the rate of three cents per mile, the net yearly income will pay less than one and a half per cent, on the original cost of the road, and only a little more than two per cent, on the amount of its bonded debt. But there is no evidence whatever as to how much money the bonds cost, or as to the amount of the capital stock of the corpora- tion as reorganized, or as to the sum p.iid for the road by that cor- poration or its trustees. It cer- tainly cannot be presumed that the price paid at tlie sale under the decree of foreclosure equalled the original cost of the road, or the amount of the outstanding bonded debt. Without any proof of the sum invested by the reorganized corporation or its trustees, the court has no means, if it would under any circumstances have the § I'U.] I'KIVATK CORPORATIONS. 121 scribe the charges of ji railroad company for the carriage of persons and merchandise within its limits, in the absence of any provision in the charter of the company constituting a contract vesting in it authority over those matters, subject power, of determininoj that the rate of three cents a mile fixed by the legislature is unreasonable. Still less does it appear that there has been any such confiscation as amounts to a taking of property without due process of law. It is equally clear that tiie plaintiffs in error have not been denied the ecjual protection of the laws. The legislature, in the exercise of its power of regulating fares and freights, may classify the railroads according to the amount of the business which they have done or appear likely to do. Whether the classification shall be according to the amount of passengers and freight carried, or of gross or net earnings during a previous year, or according to the simpler and more constant test of the length of the line of railroad, is a matter within the discretion of the legis- lature. If the same rule is applied to all railroads of the same class, there is no violation of the consti- tutional provision securing to all the efjual protection of the laws." Dow V. Beidleman, I'Jo IJ. S. !) Iowa, 14S; s. c, 128 U. S. 174, 179. .See also (.'hi- 44 Am. Kep. tuti; Wisconsin Cent, cage, etc. R. Co. v. Dey, 35 Fed. R. Co. v. Taylor Co., 52 Wi^. 77; Rep. 866; Chicago, etc. R. Co. v. s. c, 1 Am. & Eng. R. Cas. 532; Becker, 35 Fed. Kep. 883; Reagan Sloan v. Mo. Pac. R. Co.. 61 Mo. V. Farmers' Loan & Trust Co., 154 24; Xelson v. Vt.. etc. R. Co., 26 U. S. 362; s. C. 14 Sup. Ct. Vt. 717; Fitchburg. etc. R. Co. v. Rep. 1047; Stone v. Farmer.s' etc. Grand .lunclion R.. etc. Co.. 4 Co., 116 U. S. 307; s. c, 6 Sup. Allen, 19S. Ct. Rep. 334; Carton v. Illinois 424 PRIVATE CORPORATIONS. [§ lHo. company invc!>tecl its capital, relyiiiir upon the irood faith of the people and the wi.sdoni and inipartialitv of leiii.slators for protection against wrong under the form of legislative regulation."' § 135. Power not Lost by Non-User. — The power of the government to regulate the business of railway com- panies is not acquired by exercise*or assumption, and is not lost by any failure to exercise it. This power is inherent to the government; it existed from the beginning, and it will continue to the end. In the case of The Chicago, Burling- ton c^ (^uincy Railroad Company v. Iowa, before the Su[)reme Court of the United States, the rule was stated by Mr. Chief Justice Waite, in delivering the opinion of the court, as follows : "It is a matter of no importance that the power of regulation now under consideration was not exer- cised for more than twenty years after this company was organized. A power of goverment, which actually exists, is not lost by non-user. A good government never puts forth its extraordinary powers, except under circumstances which require it. That government is the best which, while performing all its duties, interferes the least with the law- ful pursuits of its people. In Kii'l, during the third year of the reign of William and Mary, Parliauient provided for the regulation of the rates of charges by common carriers. This statute remained in force, with some amendment, until 1.S27, when it was repealed, and it has never been re- euacted. No one supposes that the power to restore its provisions has been lost. A change of circumstances seemed to render such a regulation no longer necessary, and it was abandoned for the time. The power was not surrendered. That remained for future exercise, when rc- (juired. So here the power of regulation existed from the beginning, l)ut it was not exercised until in the judgment of the body politic the condition of things was such as to render it necessary for the common good. Neither does it affect the case that before the power was exercised the J Chicago, etc. R. R. Co. v. Iowa, 94 U. S. 154, 161. § 136.] PRIVATK rOUrORATIONS, 425 company had pledged its income as security for the pay- ment of debts incurred, and had leased its road to a tenant that relied upon the earnings for the means of paying the agreed rent. The company could not grant or pledge more than it had to give. After the pledge and after the lease the property remained within the jurisdiction of the State, and continued subject to the same governiental powers that existed before."^ § 130. Power to Act Through a Commission. — It is now well settled that the power which a legislature exercises, directly, in the regulation of the business of a railroad, so far as relates to the charges for freight, and the rates of fair for passengers, etc., may be exercised through a board of commissioners. The manner in which this power shall be exercised is within the discretion of the legislature. In the Railroad Commission Cases, before the Supreme Court of the United States, it was held that an act of incorporation, which confers upon the directors of a railroad company the power to make by-hiws, rules and regulations touching the disposition and management of the company's property and all matters appertaining to its concerns, confers no right which is violated by the creation of a State railroad com- mission, charged with the general duty of preventing the exaction of unreasonable or discriminating rates upon trans- portation done within the limits of the State, and with the enforcement of reasonable police regulations for the com- fort, convenience and safety of travelers and persons doing business with the company within the State. A railroad, forming a continuous line in two or more States, and owned and managed by a corporation whose coi-porate |)o\\('i's are derived from the legislature of each State in which theroatl is situated, is, as to the domestic trathc in each State, a corporation of that State, subject to State laws not in eon- flict with the Constitution of the Tnited States. This court agrees with the Supreme Court of Mississi])j)i, that a statute creating a commission, and charfjintr it with the dutv > Chicago, etc. R. R. Co. v. Iowa, 04 U. S. K5, 162. 42() PRIVATE COKl'OUATIONS. [§ 13(5 of siipervisins: railroads, is not in conflict with the constitu- tion of that State. The provisions of the statute of Missis- sippi, creatintj a raih'oad commission, are not so inconsist- ent and uncertain as to necessarily render the entire act void on its face.' In the case of The Charlotte, Columbia 1 Railroad CommLs^ion Cases. IIG U. S. 307. See also InterstateCora- merce Commission v. Brimson. 154 U. S. 447; S. C, 14 Sup. Ct. Rep. 1125; Fargo v. Michigan, 121 U. S. 230. 239; Interstate Commerce Commission v. Cincinnati, etc. Co.. 64 'Fed. Rep. 981; Kentucky, etc. Co. V. Louisville, etc. Co.. 37 Fed. Rep. 567; Chicago, etc. Co. v. Dey, 35 Fed. Rep. 866. 875; Tilley V. Savannah, etc. R. R. Co.. 5 Fed. Rep. 641; Reagan v. Fanners". etc. Co.. 154 U. S. 362; s. C, 14 Sup. Ct. Rep. 1047. See also following cases upholding State commissions by State courts : State v. Chicago, etc. R. Co., 38 Minn. 281; s. c. 37 X. W. Rep. 782; State v. Fre- mont, etc. R. Co.. 22 Xeb. 313; S. C. 35 X. W. Rep. 118; 23 Xeb. 113; 36 X. W. Rep. 308; Charlotte, etc. Co. V. Gibbs, 27 S. Car. 385; S. C, 31 Am. & Eng. R. Cas. 464; Stone V. Xatchez. etc. R. Co., 62 Mi.ss. 646; s. c. 21 Am. & Eng. R. Ca.«. 6; Georgia, etc. R. Co. v. Smith. 70 Ga. 694: s. c, 9 Am. & Eng. R. Cas. 385: Stone v. Yazoo, etc. R. Co.. 62 Miss. 607; s. c. 21 Am. & Eng. R. Cas. 6; 52 Am. Rep. 193; Board of R. R. Com- missioners V. Oregon R.. etc. Co., 17 Ore. 65; s. C. 35 Am. &Eng. R. Cas. 542; Chicago, etc. R. Co. v. Jones. 149 HI. 3);i ; s. c, 37 N. E. Rep. 247; 24 L. R. A. 141; Rich- mond, etc. R. Co. V. Trammel. 53 Fed. Rep. 196. In C, B. er satisfaction for the damage actually done. In the case of the Missouri Pacific Railway Company \. Humes, it wa- held l»y the ' Cbailulte. etc. Co. v. Gitjbcji, 142 U. S. 380. ,WS. 4;}() I'KIVATE CORPORATIONS. [§ 1-5; Supreme Court of the United States, that a statute for a State, re(|uirintr every railroad ('ori)oratioM in the State to erect and uiaiiitaiu fences and cattle guards on the sides of its road, and, if it does not, niakinir it liable in tloul)le the amount of damages occasioned thereby and done by its agents, cars or engines, to cattle or other animals on its road, does not deprive a railroad corporation, against which such double damages are recovered, of its property without due process of law, or deny it the equal protection of the laws, in violation of the fourteenth article of amendment of the Constitution of the United States. The legislature of a State may tix the amount of damages beyond compensation to be awarded to a l^arty injured by the gross negligence of a railroad company to provide suitable fences and guards of its road, or })rescribe the limit within which the jury, in assessing such damages, may exercise their discretion. The additional damages are by way of punishment to the com- pany for its negligence; and it is not a valid objection that the sufferer instead of the State receives them. The mode in which tines and penalties shall be enforced, whether at the suit of a private party or at the suit of the public, and what disposition shall be made of the amounts collected, are matters of leg-islative discretion.' ' Missouri Pacific Ry Co. v. Hume?, 115 U. S. ol2. See also Illinois Cent. R. Co. v. Ciider, 91 Tenn. 489; s. c. ')(; Am. & Eno^. R. Cas. l;")?; .Taclvsonville, etc. R. Co. V. Prior, 34 Pia. 271 ; Wortiniin V. Kleinschniidt. 12 Mont. 31(j; Hurlino;ton. etc. R. R. Co. v. Dey. 82 Iowa, 312; s. c, 4.") Ain. it En^. R. Cas. 391; Gulf, etc. R. Co. v. Ellis. 87 Tex. 19; s. c, Gl Am. & Eng. R. Cas. 3r)7 ; Peoria, etc. R. Co. V. Diiggan, 109 111. 537; s. c, 20Ain.&Eng. R. Cas. 489; Per- kins V. St. Louis, etc. Ry. Co., 103 Mo. 52; Dow v. Beidleman. 49 Ark. 455; s. c, 31 Am. Sc Eng. R. Cas. 14. "Again it is said that that portion of section 2 giving to the stock owner t lie rigiil to recover attorney fees is unconstitutional. The proposition is thus stated by the learned counsel for plaintiff in error. 'Our State Constitution (Rill of Rights, §§ 1. IS), guaran- tees to ail etjuity of rights, and remedies for injury by due course of law. We contend that a law whicli gives a successful plaintiff in a civil action his attorney's fees, and denies them to defendant, is a most gross violation of these con- stitutional provisions.' We do not think the contention of counsel can be sustained. While the law may be harsh and rigorous (and yet its rigor may have seemed to the legislature as e.ssential to its § 138.] run ATK Cl)Ul't)KATIONS. 431 § 1J58. Power to K«'{;ulut<' Public Warehouses and Warehousing. — The right of a State to reguhito it.s domestic affairs is not affected by the limitation of the powers of Congress by the Constitution of the United States. And notwithstanding that warehouses are used by persons engaged in interstate commerce, the State k'gisla- ture may prescribe and enforce reguhitions as a matter of State concern. In the heading case of Munn v. Illinois, it was held by the Supreme Court of the United States that where wharehouses are situated and their business is carried on exclusively within a State she may, as a matter of domestic concern, prescribe regulations for them, notwith- standing they are used as instruments by those engaged in value, for, if a claimant for stock killed was compelled to pay his attorney's fees, it might well hap- pen that in all cases the amount of his flaim — such amounts, beins uniformly small — would be con- sumed by attorney's fees, and so leave the claimant in no better condition than before), we see no reason to hold it beyond the power of the legislature. It is no uncom- mon thing for legislatures to pro- vide, in cases where a failure to pay seems to imply more than ordinary wrong, that such failure should carry with it something in the nature of a penalty. Sometimes double or treble damages are given. The Iowa stock law gave double damages. Our trespass act provides for both double and treble dam- ages. Ten per cent, may some- times be added in the discretion of the court. Other illustrations might be suggested." Kansas Pacitic Ky. Co. v. Mower, Hi Kan. 673, ."j82. Contra: See Chicago, etc. R. Co. V. Moss, tJO Miss. (;41 ; South., etc. R. Co. V. Morris, 6") Ala. 193; Wilder v. Chicago, etc. R. Co., 70 Mich. 3S2; Schut v. Chicago, etc. R. R. Co., 70 Mich. 433; Ziegler v. South., etc. R. R. Co., 58 Ala. 594; Smith v. Louisville, etc. R. Co., 75 Ala. 449; State v. Divine, 98 N. Car. 778; Indiana, etc. R. Co. v. Gapen, 10 Ind. 292; Madison, etc. R. Co. v. Whiteneck. 8 Ind. 217; St. Louis, etc. R. R. Co. v. Will- iams, 49 Ark. 492. The rights of every individual must stand or fall by the same general law that governs every member of the body politic in the land, under similar circumstances, therefore a partial law which proposes to affect or destroy the rights of particular persons, or a particular class of persons, is not the law of the land. That part of the statute of June 22, 1867, which gives to the owner of live stock "double the value"' of his property accidentally injured or destroyed on a railroad track is void. .Vtchison & Neb. R. R. Co. V. Baty. ti Xeb. 37. See generally: Calder v. Hull, 3 Dall. 38(5. 388; Hull V. Conroe, 13 Wis. 233. 244; Wally V. Kfunedy, 2 Yerg. .')54; (iurdon v. Winchester, 12 Bush, 110; Durkee v. City of Janesville, 28 Wis. 404; Janes v. Reynolds. 2 Tex. 250; Van Zant v. Waddel. 2 Yers. 200. 432 privatp: corporations. [§ 138. interstate, as well as in State, commerce; and until Con- gress acts in reference to their interstate relations, such regulations can he enforced, even though they may indi- rectly operate upon commerce beyond her immediate juris- diction. The court does not hold that a case nuiy not arise in which it may be found that a State has, under the form of regulating her own affairs, encroached upon the exclusive domain of Congress in res[)ect to interstate com- merce. The ninth section of the first article of the Con- stitution of the United States operates only as a limitation of the powers of Congress, and in no respect affects the States in the regulation of their domestic affairs. The act of the General Assembly of Illinois, entitled "an act to regulate public warehouses and the warehousing and inspec- tion of grain, and to give effect to article i3 of the constitu- tion of this State," is not repugnant to the Constitution of the United States.^ In a recent case in New York, an act of ' Miiiin V. Illinois. 94 U. S. 113. This case, which is justly consid- ered the leading case on this point, was rendered by a divided court. Its authority was repeatedly at- tacked and its soundness ques- tioned. However, in the case of Budd v. New York, 143 U. S. 517, Justice Bhitchford, in a most con- vincing decision commencing with these words: "The main (luestion involved in these cases is whether this court will adhere to its decis- ion in Munn v. Illinois, 94 U. S. 113," clearly and finally upholds the case. lie cites in support of the late conclusion, among others: Spring Valley Water Works v. Schottler, 110 U. S. 347, 354; Davis v. State, G8 Ala. 58; Girard Storage Co. V. Southwork Co., 1U5 Pa. St. 248, 252; Brechbill v. Randall. 102 Ind. 528; Webster Telejihone Case, 17 Neb. 12(5; Zanesville v. Gas Light Co., 47 Ohio. 1; Central Union Telephone Co. v. The State, 118 Ind. 194. 207; Chesapeake & Potomac Telephone Co. v. Balto. & Ohio Telegraph Co., 6G Md. 399, 414. '"Since the formation of the State government, the sale of this great staple [tobacco] has been fostered and protected by legisla- tion. The rights and duties of the warehouseman, the buyers and sellers and all the officers con- nected with the warehouses, have been defined by statute, and no commodity has received the same protection in the way of either general or special legislation. Nine- tenths of the tobacco is sold at auction, with tlie right unques- tioned, until the present contro- versy, of all parties to enter the warehouses as buyers or as sellers, by their warehousemen as their agents, and comjjetition left un- restricted, save the option on the part of the owner to approve or reject the bid. There is no pro- vision, it is true, in any of the statutes now in force, or that ex- isted prior to the law as we now § 138.] I'ltlVATK CORPOrwVTIONS. 433 the legislature of New York provided thut the maximuiu charge for elevating, receiving, weighing and discharging grain should not exceed tive-eightlis of one cent a l)ushel ; and that, in the process of handling grain l>v means of tloat- tind it, compelling the producer of tobacco to take it to the ware- houses iu the city of Louisville, or to expose it for sale at public auc- tion, but such warehouses liave always been regulated by law for the benefit of the producer, as well as those who are the proprietors of these warehouses, and the latter have assumed an obligation to the public that exists so long as they continue public warehousemen. They have assumed a quasi public character under the protection of the law, and will not be allowed to exercise all the privileges that have heretofore belonged to ware- housemen, and evade all the duties and responsibilities of thqir posi- tion by the passage of a resolution disclaiming that they are operating their houses in the capacity of warehousemen, but as commission merchants." Nash v. Page. 80 Ky. ")H'.». 542. "The power of the legishiture to regulate the charge for elevating grain where the busi- ness is carried on by individuals upon their own premises, depends upon the (juestion whether the regulation falls within the scope of what is called the police power, which is but another name for that authority which reside in every sovereignty to pass all laws for the internal regulation and govern- ment of the State, necessary for the public welfare. The existence of this power is universally recog- nized. All property, all business, every private interest may be af- fected by it and be brought within its influence. Under this power 28 the legislature regulates the uses of property, prescribes rules of personal conduct, and in number- less ways, through its pervading and ever present authority, super- vises and controls the affairs of men in their relations to each other and the community at large to secure the mutual and equal rights of all, and promote the interests of society. It has limitations; it can- not be arbitrarily exercised so as to deprive the citizen of his liberty or property. But a statute does not work such a deprivation in the constitutional sense, simply be- cause it imposes burdens or abridges freedom of action, orreg- iilates occupations, or subjects individiuils or property to restraints in matters indifferent, except as they affect public interests or the rights of others. Legislation under the police power infringes the con- stitutional guaranty only when it extends to subjects not within its scope and purview, as that power was defined and understood when the constitution was adopted. The generality of the terms employed by jiuists and publicists in de- fining this power, while they show its breadth and the univers- ality of its presence, nevertheless- leave its boundaries and limitations- indefinite, and impoee upon the court the necessity and duty, as each case is presented, to deter- mine whether the particular statute falls within or outside of its appro- priate liiiiits. » * • There are elements of publicity in the busi- ness of elevating grain which pecn- 434 l'HI\ ATK (OIU'OKATION.S. [§ 166. jnjr and stationary olevator.s, the lake vessels or propellers, the ocean vessels or steamships and eanal boats should only be re(juire' of the eU'Nator when unloadinii". and trimmintr liaily affect it witli a public inter- est. They are foiind in the natine and extent of the business, itsrehi- tion to the commerce of the State and country, and the practical monopoly enjoyed by those en- gaged in it. The extent of the business is shown by the facts to which we have referred. A large proportion of the surplus cereals of the country passes through the elevators at Buffalo and tinds its way through the Erie canal and Hudson river to the seaboard at New York, from whence they are distributed to the markets of the world. The business of elevating grain is an incident to the business of transportation. The elevators are indispensable instrumentalities in the business of the common carrier. It is scarcely too much to say that, in a broad sense, tlie ele- vators peiforni the work of car- riers. They are located upon or adjacent to the waters of the State. and transfer from the lake vessels to tlie canal boats, or from the <3anal boats to the ocean vessels. the cargoes of grain, and thereby perform an essential service in transportation. It is by means of the elevators that transportation of grain by water from the upper lakes to the seaboard is rendered possible. It needs no argument to flhow that the business of elevating grain lias a vital relation to com- merce in one of its most important aspects. Every excessive charge made in the course of the trans- portation of grain is a tax on com- merce, and the public have a deep interest that no exorbitant charges shall be exacted at any point upon the business of transportation.'* People V. Budd. 117 N. Y. 1, 22. "The defendants' business [stock yards] is of recent origin. Their duties and liabilities are wholly undetined. except as they may be deduced from the application of well-established legal principles to other corporations in analogous cases. No case was cited on the argument, and none is known to exist, in which the duties of a body corporate, like the defendants', have been the subject of judicial consideration. The business of the defendants has uo exact coun- terpart or model in any of the es- tablished instruments of conimerce. or aijencies used by the public in the transaction of business. It bears a I'loser resemblance to the business carried on by warehouse- men than to any other business known to the law. Except in the character of the property, which is the subject of the bailment, the business of the defendants corre- sponds, in many respects, with th.it of the warehouseman. That is the only business whicli can. in my judgment, be safely used, by way of analogy, for the purpose of ascertaining whether or not, ac- cording to established principles of general law, the defendants are subject to the duty which the com- l)lainants ask the court to compel them to perform. There can be no doubt. I think, that a ware- houseman is not required, by any general rule of law, to receive § l."ii>.] i'i;i\ MK (iiKroi; A ri().N>. 435 carifo when loadiiiir, it \v;is held that the act wus u legiti- mate exercise of the police })()\ver of the State over a busi- ness affected with a public interest, and did not violate tlie Constitution of the I'nitcd States antl was \alid.' v; i:Ji). Kffect of Statutory Re^iilatioiiM. — The business of conductiniT a warehouse for the accommodation of the public is subject to legislative control. It is subject not only to any statutory regulations that may have been in force at the time that the business was commenced, but, as well, to any changes that may subsequently be made in the statute by which they are controlled. In Munn v. Illinois, the rule is stated by the court, as follows: *'It matters not in this ease that these plaintiffs in error had built their warehouses and established their business before the regu- lations complained of were adoi)ted. What they did was from the beginning subject to the power of the body politic to require them to conform to such regulations as might be established by the projjcr authorities for the common good. They enteretl upon their business and provided themselves with the means to carry it on sul)ject to this condition. If they did not wish to submit themselves to such interfereuce, they should not have clothed the public with an interest in their concerns. The same princi[)le applies to them that does to the proprietor of a hackney carriage, and as to him it has never been supposed that he was exempt from regu- lating statut<'s or nrdiiianco, because he had pui-chased his hoi'ses and eairin<_!")' and established his l>usine>-' before the goods on stor:i N. .1. Eq. .*)0, 00. by force of statutory regulation. ' Budd v. New York. 143 I'. S. rest in contract, and no contract ."ilT. 43G PRI\ ATK COIil'ORATIONS. [§ 139. statute or ordinance was adopted. It is insisted, however, that the owner of property is entitled to reasonable com- pensation for its use, even though it be clothed with a pub- lic interest, and that what is reasonable is ajudicial and not a legislative question. As has already been shown, the practice has been otherwise. In countries where the coni- nion law prevails, it has been customary from time inmie- morial for the legislature to declare what shall be a reason- able compensation, under such circumstances, or, perhaps, more properly speaking, to fix a maximum beyond which any charge made would be unreasonable. Undoubtedly, in mere private contracts, relating to matters in which the public has no interest, what is reasonable must be ascer- tained judicially. But this is because the legislature has no control over such a contract. So, too, in matters which do affect the public interest, and as to which legislative control may be exercised, if there are no statutory regula- tions upon the subject, the courts must determine what is reasonable. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge, as one of the means of regulation, is implied. In fact, the common law rule, which reijuires the charge to l)e reasonable, is itself a regulation as to price. Without it the owner could make his rates at will and compel the pub- lic to yield to his terms, or forego the use. Hut a mere common law regulation of trade or business may be changed by statute. A })erson has no property, no vested interest in any rule of the common law. That is only one of the forms of nuuiicipal law, and is no more sacred than any other. Rights of ))roperty which have been enacted by the common law cMiiiiof l)e taken away without due process; but the law itself, as a rule of conduct, may be changed at the will, or even at the whim, of the legislature, unless pre- vented by constitutional limitations. Indeed, the great office of statutes is to remedy defects in the common law as they are developed, and to adapt it to the changes of time and circumstances. To limit the rate of charge for services rendered in a {)ublic emj)loym(Mit , oi- for the use of prop- § 140.] I'UIVATK CORPORATIONS. 437 crtv ill which the pulilic has an interest, its only chaiiirin*!: a rciiiihitioii wliich existed before. It estahlislies no new principle in tlie law, l)ut only irives a new effect to an old one. ^^'(• know that this is a power which may be abused; hut that is no argument against its existence. For protec- tion against abuses by legislatures, the people must resort to the polls, not to the courts."' § 140. Power to Rejjiilate the Operations of Tele- g:rii|>li Coni|>Hiiies. — The legal sfa/iis and I'csponsibility of telegra])h comj)anies are held to be essentially analogous to that of coininon carriers. They are not strictly common carriers, and their res[)onsibilities are not identical with those of common carriers. This follows from the diverse character of the two forms of business. But as public serv- ants, and as engaged in branches of business in some re- spects similar, they are subject to responsibilities of a kin- dred nature. In a case in New York the court said: "Although telegraph companies are not, strictly s))caking, coiuinoii ^rriers for the reason that they do not have tan- gible possession of goods which can be stolen or destroyed, yet fi'om the public nature of their emi)loyment, the im- portant matters confided wholly to their care, and the skill and tidelitv re(juired in the piopiT performance of their duties, their legal cliaractcri>tics become so analogous to those of carriers that the law must consider them as such, subject only to such modifications as the peculiar nature of their business renders absolutely necessary. In this view, no reason appears why a telegraph company should be per- mitted to limit its liability in any othei- manner than a com- mon carrier." -' In a ieadiiiir case in \'eniioiil the relation ' Miinn V. Illinoi.-i. '.»4 L'. S. IK^. Am. St. liep. S'.tJ ; American Union 133. Tel. Co. V. Western Union Tel. Co.. « Baldwin v. U. S. Tel. Co.. 1 «!7 Ala. 32: s. c. 42 Am. Kep. 90; Lan<. 125, 136. See generally, on Miit. U^nion Tel. Co. v. Chicago. 16 State control : Connell v. Western Fed. Rep. 300: Western Union Union Tel. Co., 108 Mo. 459; s. c. Tel. Co. v. New York, 38 Fed. 39 Am. tt Kng. Corp. Cas. 594: Rep. 552; Western Union Tel. Co. People V. Scmire. 145 U. S. 175. v. I'endleton, 122 U. S. 347; s. c. aftinnino: 107 N. Y. 593: s. c. 1 IS Am. it Eng. Corp. Cas. IS. In 438 l'KI\ATK COin'OUATIONS. [§ uu. of tclcgi-jiph coinjjaiiie.s to coinmoii carriers, or the analoirx' l)ot\\oeii tlioiii. is stated b}' the eoiirt, as follows : ••Although there may he no aihdoirv between the business of teleffraph coiiipanies and tiiat of public carriers of ))assengers for tliis last case. Field. J., says : ••Tlic subjects upon which the State may act are almost inlinite, yet in its regulations with respect to all of them there is this necessary limita- tion. — that the State does not theieby encroach upon the fiee exercise of the power vested in Congress by the constitution. Within that limitation it may un- doubtedly make all necessary pro visions with respect to the ijuild- ings, poles and wires of teiegrapii companies in its jurisdiction, which the comfort and conveni- ence of the community may re- quire."" "'In the exercise of its rights under the assumed grant and contract, this corporation was subject to the regulation and con- trol of tiie legislature. By giving tiu' franchise the State did not abdicate its power over the public streets, nor in any way curtail its police power to be exercised for the general welfare of the people, nor did the State absolve itself from its primary duty to maintain the streets and highways of the State in a safe and proper condition for public travel and other necessary street and highway purposes. The grant, if any, was made in refer- ence to the streets, and their main- tenance and regulation forever as streets. 'I'he State could at all times regulate the size and location of the poles, the height of the wires from the surface of the groiind. and their location in the streets, and when the i)oles and wires liecanu' a serious obstruction and nuisance in the streets from any cause, it could lake such ac- tion and make such provi.-iuns by law as were needful to remove the nuisance and restore the utility of the streets for public purposes. The right of the plaintiff lo main- tain and operate its wires in the streets could certainly be no greater than the right of railroads which, by public authority, occupy the streets and highways of the State. The State, in the exercise of its police power, and the regulating control which it has over corpora- tions created by its authority, may exercise a general supervision over such corporations. It may pre- scribe the location of the tracks, the size and character of the rails, the precautions which shall be taken for the i)roteclion of the public, and the character and style of highway crossings; and no one has ever questioned that it may do whatever is necessary and proper for the public welfare in the con- trol and regulation of the fran- chises which such corporations have obtained by statutory au- thority."' American Rapid Tele- graph Co. V. lless, 125 N. Y. (i41, (i4t>. Section VI of the act relating to telegraph companies makes such company "liable for the non-deliv- ery of dispatches intrusted to its care, and for all mistakes in trans- mitting messages made by any jierson in its employ,"' etc., and provides tiiat it shall not be ex- empted from any such liability by- reason of any "clause, condition or agi'eement i-ontained in its printed l)laiiks."' Such require- § 1^0.] I'KIN ATK COIil'OKATlONS. 4;ii> hire, vet \v<' i('u:ii(l llii'ir k'srnl s(a(u.s as practically the .same. Both arc cuiiaijed in a Imsincss of a public nature; both must serve all who come; neither are insurers nor lia- ble as .such, but both .iic liable for negligence."' In a re- cent case in Virginia il \\as held that telegraph companies are not public carriers, in the strict sense of the term, yet^ on account of the pul)iic nature of their employment, they have in many cases been held to a very similar responsi- l)ility. The obligation of such com|)anies, upon payment of the usual charges to transmit faithfully and promptly all messages presented for transmission, rests in \'irginia not merely on contract, but is imposed by statute. Such com- panies may make their own regulations for the conduct of their business, but they must be reasonable and not in con- flict with any liability imposed In law, and they cannot re- lieve themselves from liMl>ility for the imi)i'oper or negli- ments are reasonable, and are liindingonall telegraph companies in the State. Kemp v. Western Union Tel. Co.. 28 Neb. 661. A city ordinance requiring telegraph rompanies engaged in business within tlie State in whicii such city is located, and which have a place of business in sucii city, to pay a license tax, is valid, in that it can Ite enforced without interfering with or violating any rights such companies may have under the interstate commerce law. Moore V. City of p:ufaula. ;)7 Ala. ti70; s. c. 11 So. Hep. 0-21. "This well- founded rule of the joint liability of connecting carriers, tipon the contract made at the terminus nf the route with the conunon agent, who receives pay for the whole distance, applies with equal force and good sense to telegraph as to railroad companies. Judge Daly, in his elaborate opinion in the case of De Rutte v. N. Y.. An)any A: IJuffrtlo Tel. Co.. savs: -Where a message is to be tiansmitted through many connecting lines, it is a n)atter of convenience to be able to pay the entire charge either at the place from which it is sent^ or at the place where it is received; and it is the interest of companies to make arrangements whereliy, upon the payment to them of the whole charge, a message nuiy be sent the entire length of telegra|ihic communication. It is to be assumed that this is the case, where a tele- graph company is paid for the transmission of a message to a place beyond its own lines, witb which it is in connection by the agency of other companies. For their own benetit. telegraph com- panies siiould arrange matters of this kind inter sc, and should be taken, each to have made the other their agents.' " Baldwin v. V. S, Tel. Co., 1 Lans. 125, 132. > Gillis v. Telegraph Co.. ni Vt. 461. 4t!4. 440 I'KIVATE CORPORATIONS. [§ 141. gent coiKliict of their servantr^ or defective character of their inslruiiients.' § 141. Where Siit)ject to Coiiffressional Coutrol. — Under it.s j)ower to reiriilatc the coninicrcial rehitions of the States, Contrress has control of the business of teU'L'"rai)h companies, so far as relates to their interstate conmiunica- tions. Any statutory regulations of the different States that are adapted to interfere with the interstate operations ■of telegraph companies will be set aside, as in conflict with the Constitution of the United States. In the leading case of the Peusacola Telcuraph Cc)mi)any v. The Western Union Telegraph Comi)any. Ijcforc the Sujjreme Court of the United States, it was held that the powers conferred upon Congress to regulate commerce with foreign nations and among the several States, and to establish •])ost offices and post roads, are not confined to the instrumentalities of ■commerce, or of the postal service known or in use when the constitution was ad()|)tcd. but keep pace with the prog- ress of the country and adapt themselves to the new de- velopments of time and circumstances. They were in- tended for the government of the business to which they relate, at all times and under all circumstances, and it is not ■only the right, but the duty, of Congress to take care that intercourse among the States and the transmission of intel- ligence are not obstructed or unnecessarily incumbered by State legislation. The Act of Congress, entitled an "act to aid in the construction of telegraph lines, and to secure to the government the use of the samv' for postal, military and other ])uri)()ses," so far as it declares that the erection of telegraph lines shall, as against State interference, be free to all who accept its terms and conditions, and that a tele- graph company of one State shall not, after accepting them, be excluded by another State from prosecuting its business within her jurisdiction, is a legitimate regulation of commerce and intercourse among the States, and is apj)r()- priate l('gislati()n to execute the powers of Congress over ' Western Union Tel. Co. v. Reynolds. 77 V:i. 178. § 141.] IMUVATK ("OUrOIiATIONS. 441 the postal service. Nor is it liiiiitcd in its operation to such niilitarv and post roads as arc upon tlic public domain. The statute of Florida, so far as it <;rants to the Pensacola Tele- graph ('oni|)Mn\ the exclusive riirht of estal)lishinu- and niaintaiuinu- lines of electric telegraph as therein specitied, is in conllict with that act, and, therefore, inoperative against a corporation of another State entitled to the piivi- leges which that act confers. Without deciding whether, in the absence of that act, the legislation of Florida of 1874 would have been >utlicient to authorize a foreign corpora- tion to consti-uet and operate a telegraph line within tlu^ counties of Ksc;uubia and Santa Kosa in that State, the court hold that a telegraph company of another State, which has secured a right of way by private arrangement with the owner of the land and duly accepted the restric- tions and obligations re(iuired by that act, cannot be excluded bv the Pensacola Telegraph Company.* This case ' TensacolH Tel. Co. v. Western, etc. Tel. Co., 9G U. S. 1. The statute of the 8tate of Indiana, §§ 417t>. 4178. Rev. Stat. Ind. 1881. whii'li leqiiiie telegraph companies to deliver dispatches by messenger to tiie persons to whom the same are addressed, or to theii agents, provided they reside within one mile of tlie telegraphic station, or within the town or city in which such station is. are in conflict with the clause of the Constitution of the United Slates, which vests in Congress tlje power to regulate commeree among the States, in so far as they attempt to regulate the delivery of such dispatches at places situated in other States. The authority of Congress over the subject of commerce by telegraph with foreign countries or ainervation that it does not encroach upon the free exercise of the powers vested in Congress, make al! necessary provisions in respect of the build- ings, poles and wires of telegraph companies within its jurisdiction, which the comfort and conveni- ence of the couuuunily may re- quire. W. r. Tel. Co. V. Pendleton, I'2'2 I'. .S. 347. Where a telegraph company is doing the busmess of transmitting messages between different States and has accepted and is acting under the telegraph law passed by Congress. July 24th, 186i». no State within which it sees fit to establish an offlce can impose 442 run Alio coKi'oKA'rioNs. [§ in was decided in 1^77, hut tlie decision is the law of the present. In the opinion the court. Mr. Chief Justice Waite, said: "The electric telegraph maiks an cpocii in the j)rogres.s of time. In htth' more than a (jiiarter of a century upon it ;i license t;ix or require il to take out a license for the trans- action of such business. Tele- graphic couiniunications are coni- inerce. as well as in the nature of postal service, and if carried on between different States, they are interstate commerce, and within the power of regulation conferred upon Congress, free froiu the con- trol of Slate regulations, except such as are of a police character: and any State regulations liy way of tax on the occupation or busi- ness, or requiring a license to transact such business, are uncon- stitutional and void. Leloup v. Port of Mobile. 127 U. S. 640. See also Telegraph Co. v. Texas, 105 U. S. 4()0. "'Is telegraphy any liranch of commercial inten'onrsey To ask the (juestion is to answer it. So interwoven has the custom of communication by telegraph be- come with trade and traffic, that to separate it without serious dis- turbance of vast trade relations and financial transactions, would be a task as diniculi as to cut the pound of flesh without a single drop of blood. It is the life and soul of civilized commercial transactions; many of the most important are daily ruled by telegraph. The banker, the merchant, the farmer, the broker, all traders depend upon the telegra])h for speedy informa- tion and means of intercourse in their various business and traflic. If the sliip that carries the cargo comes within the constitiUional power of Congress to regulate commerce, as it confessedlv does. as a means of commercial inter- course, certainly the instrumen- tality through which is directed the lading, sailing and unlading of the ship, the purchase and sale of the cargo, and all the minutiae of the ventiue and the voyage, is equally a means, only of a higher and more advanced grade. ♦ ♦ * Does the Act of Congress attempt to regulate this branch of com- mercial intercourse? On the part of appellant it is claimed not. be- cause no specific rules are pre- scribed for its exercise. The act gives to any telegraph comjianj- the right to construct, maintain and operate telegraph lines on the public lands of the United Stales, and along the post and military roads, u[)on evidence of acceptance of its terms under specified restric- tions, and for certain compensa- tion, which is the priority of government messages, and the privilege of i)urchase. at option, by the Ignited States, at any time after the expiration of five years. 'J'o that extent, then, there is regu- lation; the right is given l)y rule, and limited by rule, certainly as much regulated as the licensing or registering of vessels.** Western Union Tel. Co. v. Atlantic it I'a- cific States Tel. Co., 5 Nev. 102. 10». See as to power of Congress to amend and alter franchises. United States v. Union I'acitic Railway. Itid U. S. 1. A franchise to operate a telegrajih line over any part of the United States' domain or any military or jjost road, acquired un- der .Act of Congress. Julv 24. 18()6. § 141.] run' AT K COKrOKATIONS. 443 it has changed the habits of Imsinos, mikI hccomc one of the necessities of commerce. It is iiKlis|)cnsal)le as a means of intercommunication, l)nt es|)eciallv is it so in commercial transactions. The statistics of the business before the recent rcchu'tion in rates show that more tiian eiirhty per cent, of all the messages sent bv telegraph related to commerce. Goods are sold and nu)ney paid upon telegraphic orders. Contracts are made by telegraphic correspondence, cargoes secured and the uu)vement of ships directed. Th«' tele- graphic annouiu'cment of the markets abroad regulates prices at home, and a prudent merchant rarely enters upon an important transaction without using the telegraph freely to secure information. It is not only important to the peo- ple, but to the government. By means of it the heads of the departments in Washington are kept in close connnuni- eation with all their various agencies at home and abroad, andean know at almost any hour, by incjuiry, what is trans- piring anywhere that affects the interest they have in charge, lender such circumstances it cannot for a moment l)e doubted that this powerful agency of commerce and inter- communication conies within the controlling power of C'on- wlien accompanied by occupancy thereunder, confers rights sii[)erior to those of a company siM)>c(|ucntly constructing a line for transmitting electricity both for lighting pur- poses and for propelling ma- cbinery, and the hitter line must be constructed so as not to inter- fere with the former. Western Union Tel. Co. v. Los Angeles Electric Co.. 70 Fed. Rep. 178. A .•^taie privilege tax of a certain amount per mile of wires operated within the State imposed on all telegraph companies therein opir- ating in lieu of all other Stale, county and municipal taxes and amounting to less than the ordi- nary ad valorem tax. is substantially a mere tax on j)roperty. to which a foreign corporation operating within t'le State is subject, not- withstanding it is engaged in in- terstate commerce, and has ac- cepted the rights conferred on telegraph companies by the stat- lUes. Postal Telegraph Cable Co. V. Adams, l.")5 U. S. 688; 8. C, 15 Sup.Ct.Kep.'2(;8. Under Rev. Stat. .')2G3. authorizing telegraph com- panies to operate lines ••through and over any portion of the public domain, and over and along any of the military or post roads." a telegraph company may erect a line on a railroad right of way granted by Congress over public lands, that is declared to be a mil- itary and post road. Mercantile Trust Co. V. Atlantic .'c Pacilic R. Co.. (53 Fed. Rep. :>13. ^44 I*i:i\ ATK CORrORATIONS. [§ 142. gress, certainly as against hostile State legislation. In fact from the beginning it seems to have been assumed that Congress might aid in developing the system ; for the tirst telegraj)!! line of .iny considerable extent ever erected was built between \\'ashington and Baltimore, oidy a little more than thirty years ago, with money appropriated by Con- gress for that purpose, and large donations of land and money have since been made to aid in the construction of other lines. It is not necessary now to inquire whether Congress may assume the telegraph as part of the postal service, and exclude all others from its;isc The present case is satistied, if we find that Congress has jxtwcr, by ap- propriate legislation, to prevent the States from placing ob- structions ill the way of its usefulness."' § 14*2. Application of the Rule to tlie Telephone. — It is well established that the rule relating to the power of the government to regulate the business of corporations affected with a public use, as exjKninded in the preceding sections, applies to the operation of .the telephone. Though the decisions are recent and not numerous, they are all to that effect. It is held that the proprietors of a public telephone, like a corporation which operates a telegraph line, is a com- mon carrier of news, and that, as such, it is subject to the rules by which the business of a telegraph company is governed. Though it is a recent invention, it is so nearly allied to the telegra])h in the objects for which it is estab- lished and in the mode of its operations, that there is an obvious fitness in subjecting the telephone l)usiness to the same rules of governmental control as those to which the older institution has been subject. In the Webster Tele- phone case, before the Supreme Court of Nebraska. — the leading case relating to the subject, — the rule is stated by the court, as follows : "That the telephone l)y t he necessities of commerce and j)ublic use has become a pul^lic servant, a factor in the comnun-ce of the nation and of a great jiortion of the civilized world, cannot be (|uestioned. It is to all in- ' Pensacola Tel. Co. v. Western I'nion Tel. Co., !•(> V. S. 1. '.K § 142.] I'KIVATK COIiroUATIONS. 445 tents {ind purposes ji part of thetelei^rapliif system of the coun- try, and, in so far as it has been introduced for public use and has bcuMi undertaken by the respondent, so far should the respondent be lield to the same obligations as the tele- irraph and other })ublic servants. It has assumed the respon- sibilities of a common carrier of news. Its wires and i)oles line our public streets aud thoroughfares. It has, and must be held to have taken its place by the side of the telegraph as such common carrier. The views herein expressed are not new, similar questions have arisen in and have been fre- quently discussed and dccicU'd by the courts, and no statute has been deemed necessary to aid the courts in holding that when a person or company undertakes to supply a tlemand which is 'affected with a public interest,' it must supply all alike who are like situated, and not discriminate in favor of nor against any. This reasoning is not met by saying that the rules laid down by the courts as ap[)licable to railroads, express companies, telegraphs and other older servants of the pid)lic, do not apply to telei)hones, for the reason that they are of recent invention and were not thought of at the time the decisions were made, and hence are not affected by them, and can only l)e reached by legislation. The principles established and declared by the courts, and which were and are demanded by the highest material interests of the country, are not confined to the instrumentalities of connnerce, nor to the particular kinds of service known or in use at the time when those princi|)les were enunciated, 'but they keep pace with the progress of the country, and adapt themselves to the new developments of time and cir- cumstances. They extend from the horse with its rider to the >tage coach, from the sailing vessel to the steamboat, from the coach ;in(l the >te;inil)oat to the railroad, and t'rttm the railroad to the telegraph,' and from the telegra|)h to the tcle{)hone, 'as these new agencies are suc- cessively brought into use to meet the denninds of increas- ing population and wealth. They were intended for the irovernment of the busine>> to which thev relate, at all I4ii rUIVATK COKI'OKATIONiS. [§ "42. times and uiuler all circumstances.'"' In a recent case in Indiana, it was held that the State has a right to prescribe ' Webster Telephone Case, 17 Xeb. 126. 134. See also Central Union Telephone Co. v. State, 123 Ind. 113; State v. Bell Telephone Co.. 3G Ohio St. 29(5; s. c, 38 Am. Rep. 584; Bell Teleph. Co. v. Com. (Pa.). 3 Atl. Rep. 825 ; Central Dist. Teleph. Co. v. Com.. 114 Pa. St. 592 ; Commercial Union Tel. Co. v. New England Teleph. Co.. (Jl Vt. 241 ; s. c 15 Am. St. Rep. 893; State V. Bell Teleph. Co.. 23 Fed. Rep. 539; S. C 8 Am. & Eng. Corp. Cas. 7; I^ouisville Transfer Co. v. American District Telephone Co.. 24 Alb. L.J. 283; People v. Hud- son River Telephone Co., 19 Abb. X. Cas. 4G6; Balto. & Ohio Tel. Co. V. Bell 'telephone Co.. 24 Am. L. Heg. 573: Johnson v. State. 113 Ind. N3: Bradley v. Southern New- England Telephone Co.. (JG Conn. 559: s. c. 34 Atl. Rep. 499: Marshall v. City Baj'onne. (N. .1.), 34 Atl. Rep. 1080; York 'I'elephone Co. v. Keesey. 5 Pa. Dist. Rep, 30fi; Central Union Tel. Co. V. Fehring, 140 Ind. 189; s. c. 45 X. !•:. I{ep. G4; Postal Tel. Cable Co. V. City of Balto., 79 Md. 502; s. c. 29 Atl. Rep. 819. A tele- phone comjiany organized under article 5. of chapter 21. of the Re- vised Statutes of 1879. liiis all the powers therein conferred upon such corporations among which are the power to own and operate lines of t«'lephone. to make reason- able charges for the use of the same, to erect its poles along and across i)ul)lic roads and streets and to condi'uin i)rivate j»r()perty for a right of way. Such corporation is subject to public regulations and the State has the power to fix and prescribe a maximum rate for telephone service and it may dele- gate such power to municipal corporations. The power of the city of St. Louis to regulate the use of its streets extends to new uses as they spring into existence from time to time, as well as to uses common and known at the time of the grant of the power. The erection and maintenance of telephone poles is one of these new- uses and is a proper use of the streets. But the power to regulate charges for telei)hone service is neither included in, nor incidental to, the power to regulate the use of the streets, and an ordinance regulating such charges cannot be upheld upon any such ground. City of St. Louis v. Bell Telephone Co.. 9G Mo. mj):mv shall chaiiri* for the use of itstolei)hoii('s,aiKl the >t at utelimitiiijr the rental price of siu-h instruments, and also the amount which shall l)e collected for conversatitins between cities antl vilhiiics is con- connected with tlie win-s of I he company, with facilities for trans- niitiinij and receiving messages by telegraph, would be of no use to a patron, unless be was learned in the art of telegraphy. But the telephone is entirely different; a tele|>hone. with proper connec- tions and facilities for use, can be used by any person; it re- quires no experience to operate it. Webster defines it as 'an instru- ment for conveying sound to a great distance.' In the case of the Central Union Telephone Co. V. Bradbury. 100 Ind. 1. the word -telephone.' as used in the Act of Ai)ril 13th, ISSf). was held to mean 'an organized apparatus, or combination of instruments. usually in use in transmitting, as well as in receiving, telephonic messages." By the use of the telephone per- sons are enabled to converse with each other while in their respect- ive business houses or residences a great distance apart. Although of recent date, it has become of im- portant use in the transaction of business, and there is no other in- vention or device to supply its place. While it may not supply and take the place of the telegraph in many instances and for many purposes, yet in others it far .sur- passes it, and is. and can be. put to many uses for which tlu' telegraph is unfitted, and by |)ersons wholly unable to operate and use the tele- graph. It has been held univer- sally by the courts, considering its use and purpose, to be an instru- ment of commerce and a common carrier of news, the same as llie telegraph, and by reason of being a common carrier, it is subject to proper obligations, and to conduct its business in a manner conducive to the public benefit, and to be controlled by law. To conduct the business of the telephone by pub- lic telephone stations, and by send- ing messengers to notify persons with whom a patron of the com- pany desires to converse in other parts' of the city, to compel tiie person desiring to converse with others to remain at the public tele- phone station until the person with whom they desire to converse can be notitied. and so arrange their business as to leave and go to another telephone station, and hold the conversation, tenders the u>e of the telephone almost worth- less. It is by reason of the fact that business men can have them in their oflices and residences, and, without leaving their homes or their places of business, call up another at a great distance, with whom they have imi)ortant busi- ness, and converse without the loss of valuable lime on the part of either, that the telephone is par- ticularly valuable as an instrument of coiuiiierce. It being an instru- ment of commerce, and persons or corporations engaged in the general telephone business being common carriers of news, what are the rights of the public, independ- ent of tlie statute, as regards dis- crimination? ♦ * • It is not controverted in the argument, by counsel fnr the :ippcllant. that the 448 r K n' A T E C ( ) R I'O K A r 1 N 8 . [§ 1^^- stitiitioiial. Ill l(\i>^al coiitfiiiplatioii all the instruiiR'nts and a[)pliancc.s u.sed by a telephone company in the prosecution of its business are devoted to a public use, and propert}' thus devoted to such use becomes a legitimate subject of lesrislative regulation. Where a statute is one which the legislature had power to enact, the courts cannot sit in judgment upoli cither its justice or expediency, but ri'licf must Lc >:0"(rlit of the legislature.' In the opinion in this case, the court said: "The telephone is one of the remark- able productions of the present century, and, although its legislature had the right to regu- late the price to be charged and collected for the use of telephones and telephonic connections, facili- ties and service; and even if it were controverted, it is well-settled by authorities that the legislature has the right to do so, relative to the business connected vviiliin the State. Hockett v. State, ]05 Ind. 250; Central Union Telephone Co. V. Bradbury, snpra. and authorities cited in those cases; Johnson v. State, 113 Ind. 143; Munn v. Illi- nois. 94 U.S. 113; Ouachita Packet Co. V. Aiken, 121 U. S. 144; Pat- terson V. Kentucky, 97 U. S. 501.'' Central Union Telephone Co. v. State. 118 Ind. 194. 205. The word "telegraph," which means and in- cludes any apparatus or adjustment of instruments for transmuting messages or other communications by means of electric currents and signals, embraces the "telephone." A company organized as a tele- graph company, under the general incorporation law, before the pas- sage of the Act of 1884, chap. 3G0, is fully authorized to do a general telephone business; and. in doing such business, it is subject to the provisions of the general incorjio- ration law that apply to telegraph companies. The telegraph and telephone are public vehicles of intelligence, and they who own or control them can no more refuse to perform impartially the func- tions that they have assumed to discharge, than a railway com- pany, as a common carrier, can rightfully refuse to perform its duty to the public. They may make and establish all reasonable and proper rules and regulations for the government of their otHces and those who deal with them, but t hey have no power to discriminate, and while offering to serve some, refuse to serve others; they must serve all alike upon compliance with their reasonable rules and regulations. Tliey cannot l)e ex- onerated from the performance of such duty by any conditions or restrictions imposed by contract with the owner of the invention applied in the exercise of the em- ployment. The legislature of the State has full power to regulate the service of telephone companies as to the parties to whom facilities should be furnished, notwithstand- ing the instruuients employed are the product of a patented inven- tion. Cliesapeake ct Potomac Telephone Co. v. Baltimore it Ohio Tel. Co.. Of) Md. 399. ' Hockett V. State, 105 Ind. 250. § 143.] PRIVATE CORPORATIONS. 449 discovery is of recent date, it li;is been in use Ion*;: enoiiirh to have attained well defined relations to the general public. It has become as much a matter of i)ublic convenience and of public necessity as were the stage coach and sailing ves- sel a hundred years ago, or as the steamboat, the railroad and the telegraph have become in later years. It has already i)ecome an important instrument of commerce. No other known device can supply the extraordinary facilities which it affords. It ni:iy, therefore, be regarded, when re latively considered, as an indispensable instrument of com- merce. The relations which it has assumed toward the public make it a common carrier of news, a common carrier in the sense in which the telesfPiiph is a common carrier, and impose upon it certain well defined obligations of a public character. All the instruments and api)liances used by a telephone company in the prosecution of its business are, consequently, in legal contemplation, devoted to a pub- lic use. It is now a well settled legal proposition that property thus devoted to a jjublic use becomes a legitimate subject of legislative regulation and control."^ § 143. Power to Rej?iilate in Case of Patented Prop- erty. — The claim has been set u[) that the State has no jtowcr to regulate a I)ranch of business which is conducted under a right conferred by letters patent. But this position has not been sustained. In a late case in Ohio, the rule was stated by the court, as follows: "It is claiuu'd that the statute above referrc72. It is a power inherent in every sovereignly, and is, in its broadest sense, noibing more than the power of a State to govern men and things within the limits of its own dominion. I^icense Cases, .5 How. 504, 5S2. It extends to the protec- § 1-t-i.] I'KIXATK CORrORATIONS. 451 v} 14-4. Application of the llule to the Baking Busi- ness. — It is well settli'd lliat the State has power to regu- late the niamifacliire of l)read. It may retjuire all persons cniraired in the hakino- business to take out a license author- tion of th«i lives, limbs, healtli. comfort :ind convenieuce. as well as the property of all persons with- in the State. It authorizes the leg- islature to prescribe the mode and manner in which every one may so use his own as not to injure others, and to do whatever is necessary to promote the public welfare, not in- consistent with, is our or<>;anic law. Thorpe v. K. & B. K. K. Co., ->7 Vt. 140. In 1SU7 letters patent were issued to one De Witt for a discovery in the manufacture of a quality of oil known as 'Aurora Oil." and one Patterson became the assignee of the right conferred upon De Witt by his letters i)atent. Under a system of inspection pro- vided by the laws of Kentucky, some casks containing this Aurora oil were branded 'unsafe for illumi- nating purposes,' and notwith- standing a statute of that State making it penal offense to sell oil thus branded, Patterson sold the casks of oil in question to one Davis. I'atterson was thereupon indicted, tried and convicted in one of the Kentucky courts for the al- leged unlawful sale of these con- demned casks of oil. This judg- Mjent convicting Patterson of a criminal offense having been :if- tlrmed by the court of appeals of that .State, the cause was taken to the Supreme Court of tlie United States to test the validity of the statute under which I'atterson was so convicted, as a restraint upon the sale of a commodity covered by letters patent of the United States. Upon a review of all the questions involved, the validity of the statute was maintained, and the judgment of the court of appeals was in all things atlirmed. See Patterson v. Kentucky, 97 U. S. 501. The court held in that case, and as we have no doubt correctly, that all that the letters patent secured was the exclusive right in the discovery, and that the right thus secured was an incorporeal right, and hence without "tangible evidence;' that the right to sell the oil was not derived from the letters patent, but existed and could have been exer- cised before the issuing of such letters, unless prohibited by some local statute; that because the patentee acquired a monopoly in his discovery, and was hence secure against interference, it did not fol- low that the tangible property which came into existence by the application of tiie discovery was beyond the control of State legisla- tion; that, on the contrary, the right of the property in the phys- li-al sul)stance. which is the fruit of the discovery, is altogether distinct from the discoveiy itself, just as the property in the instruuients or plate l)y which copies of a map are multiplied is distinct from the copyriglit itself; that hence the rigljt conferred upon the patentee and his assigns to make, use and vend liie corjioreal article or com- modity itrought into existence by the a|)plication of the patented dis- covery must be exercised in subor- dination to the police or local regalations established by the State. The doctrine of that case 452 PRIVATE COUrOKATIONS. [§ 144. izing them to engage in this work, and it may fix the weight and j)rice of the baker's loaf. And the power which a legislature may exercise directly, it may grant to a nuinici- })al corporation. In the leading case of The Mayor and Alderman of ^Mobile v. Yuille, it was hold by the Supreme Court of Alabanui, that a power granted to the cor|)()ration of the city of ^Mobile, "to license bakers and regulate the weight and price of bread, and prohibit the baking for sale, except by those licensed," is not contrary to the constitu- tion of the State. ^ The principle involved in this decision is exj^ounded by the court, as follows: "The regulation in this case seems to combine all these (jualities. AVhere a great number of ])crsons arc collected together in a town or city, a regular supply of wholesome bread is a matter of the ut- most importance ; and whatever doubts may have been thrown over the question by the theories of political econo- mists, it would seem that experience has shown that this great end is better secured by licensing a sufficient number of bakers and by an assize of bread, than by leaving it to the voluntarv acts of individuals. Bv this means a constant was approved and followed in the more recent case of Webber v. Vir- ginia, 103 U. S. 344, and has tbe support either in direct terms or in principle, of numerous otiier care- fully considered cases. I'atterson V. Commonwealth. 11 Bush. 311; S. C. 21 Am. Kep. 220; State v. Telephone Co., 3G Ohio St. 2'H); s. C, 38 Am. Kep. 5S3, and note; Jordan v. Dayton, 4 Ohio, 295; Fry State, 03 Ind. 552; People v. Rus- sell, 49 Mich. 617; s. C, 43 Am. Hep. 478; Thompson v. Staats. 15 WcMid. 395; Marlinctli v. Majjuirc. Deady, 210; Vannini v. Payne, 1 Harrington, 05 ; I>icense Tax Cases, 5 Wall. 4()2; United States v. I)e Witt, 9 Wall. 41; Itailroad Co. v. Ilusen, 95 U. S. 405; Beer Co. v. Massachusetts, 97 U. S. 25; Brech- bill V. Kandall. 102 Ind. 582; S. C, 52 Am. IJop. 095; Palmer v. State, 39 Ohio St. 230; s. c, 48 Am. Rep. 429; Western Union Tel. Co. v. Pendleton, 95 Ind. 12 ; S. C, 48 Am. Rep. 092; New Orleans Gas Co. v. Louisiana Light Co.. 115 U. S. 050. While, therefore, it is true that letters patent confer upon the pat- entee a monopoly to the extent of vesting in him, bis heirs and as- signs, the exclusive right to make, use and vend tiie tangible property brought into existence by a practi- cal application of tbe discovery covered by the letters patent, for a liniited time, it is not true that such exclusive right authorizes the making, using or vending of such tangible property in a manner which would be unlawful, except for such letters patent, and inde- pendently of State legislation and State control." Ibid., 254. 1 Mobile V. Yuille, 3 Ala. 137. § 14o.] PIUVATE CORPORATIONS. 453 supply is obtained without that Ihictuatioii in quantity which wouhl ho tho inovitabU? rosult of tlirowiiii; tlio trade entirely open, and tlie conscijuent rise in })rice, when from accident or design a sufficient supply was not produced. The interest of the city in always having an abundant sup- ply will be a sufficient guaranty against any abuse of the right to regulate the weight, the consequence of w'hich would be to drive the baker from the trade."' § 145. Application of the Rule to the Laundry Busi- ness. — It has been held that the business of washing and ironing, as sustained by public })atronage, may be regulated by legislative enactments. The legislature has power to fix the territorial limits within which public laundries and washhouscs may be established, and it may determine the hours during which the business may be jnirsued. The granting to a city government of ordinary municipal powers carries with it this riirht. In the Icadinii: case of Soon Ring V. Crowley, before the Supreme Court of the United States, it Avas held that a municipal ordinance, prohibiting from washing and ironing in public laundries and washhouses within defined territorial limits from 10 o'clock at night to G in tho morning, is a police regulation within tho competency of a municipality possessed of ordinary powers. It is no objection to a municipal ordinance, ]irohibiting one kind of business within certain hours, that it permits other and dif- ferent kinds of business to be done within those hours, ^lunicipal restrictions imposed upon one class of persons engaged in a particular business, which are iu)t imposed u|)on others engaged in the same business and under like condi- tions, impair tho 0(iual rights which all can rl.-iim in the en- forcement of tho laws. When tho general security and welfare reijuire that a particular kind of work should be done at certain times or hours, and an ordinance is made to that effect, a person engaged in performing that sort of work has no inherent right to pursue his occupation during the prohibited time. Tiiis court cannot incjuiro into the ' Mobile V. Yiiille , 3 Ala. 137, 141. 454 riilVATE COIirOKATIONS. [§ l-^- motives of Iciri.shitors in enact in34; I'eople V. Gilman. 12 Me. 403; s. c, 28 v. Mark. 0!) X. Y. 377: I'eople v. Am. Dec. ISS; Brady v. X'^orth- Arensber-r. 10.". X. Y. 123: Pierce western Ins. Co.. 11 Mich. 42.">; v. Maryland. <;3 Md. .V.)2; State v. Monroe v. Hoffman. 2".» I.a. Ann. Mar-hall. (;4 X. II. .">49: s. c.. 1.") All. 651; 8. C, 29 Am. Hep. 34."); Kinor Hep. 210. As to \vei>;iits and meas- V. Davenport, 9S 111. 30.'); s. c, 38 ures see Gaines v. Coates. .")! Miss. Am. Rep. 89; Krm<,'er v. Bickel. 33"); Guillotte v. New Orleans, 12 117 Pa. St. 32t!: McCloskey v. Krel- La. Ann. 432: Pap;e v. Fazackerly, ing, 76 Cal. .")11 ; Miller v. Craig. 11 36 Barb. 392; Raleigh v. Sorrel, 1 X. J. Eq. 17."). .See following cases .Tones(X. Car. ).49;Wortmanv. Phil on oleomargarine laws: Powell v. adelphia. 33 Pa. St. 202: Spaiilding Pennsylvania. 127 U.S. 678; allirm- v. Lowell. 23 Pick. 71: (iall v. 456 riilVATE CORPORATIONS. L§ 146. § 14G. Iiuiniiiiity from Governmental Control. — The charter of a cor|)c)r:iti()ii is a contract, as that term is em- ployed by the Federal Constitution. In the granting of such charter a legislature may protect the corijoration from any sul>se(juent legislative control. It may l)ind itself not to exercise its power in the regulation of the business of a corporation thus protected. In the case of a railway, of a street railroad, of a telegraph or gas company, etc., it may bind itself not to regulate established rates of fare, or of freight or other charges, as they may he fixed by such cor- poration. But in the absence of any specific {)rovisions of its charter, nothing will be presumed in favor of the corpo- ration in this regard. It enjoys immunity from govern- mental control only by being of an ext)ress and unecpiivocal leofislativc enactment. Without this the rijrht of the legis- lature, either directly or through the instrumentality of a municipal corporatiyn, to regulate the business of any com- pany acting under a legislative or municipal franchise, is not to be (juestioned.^ In the case of Kuggles v. Illinois, Cincinnati. 18 Ohio St. 503; State V. Fisher. .")2Mo. 174; Municipality V. Cutting. 4 La. Ann. 3:5(5. As to prohibitinjj sales of opium: State V. Ah Chew, 10 Xev. 50. .4s to market licenses and privileges: Buffalo V.Webster, 10 Wend. 99; Bush v. Seabury, 8. Johns. 418; Ash V. People, 11 Mich. 347; State v. Leiber, 11 Iowa. 407; I.eClaire v. D.ivenport. 13 Iowa, 210; Bowling Green v. Carson. 10 Bush, 04; Xew Orleans v. Stafford, 27 La. Ann. 417; Niglitingale's Case. 11 Tick. 168; Gossigi v. New Orleans (La.). 4 So. Kep. 15. See generally as to State laws governing trades and professions: Pierce v. Kimball, 9 Me. 54; s. c, 23 Am. Dec. 537; Shepherd v. Commissioners, 59 Ga. 535; Fry v. State, 03 Ind. 552: In re Quong Foo, 13 Fed. Kep. 22'.t: State v. State Med. Ex. Board, 32 Minn. 324; Gage v. Censors, 03 N. "H. 92; Wilkins v. State, 113 Ind. 514; Gosnell v. State, 52 Ark. 228; s. c., 12 S. W. Rep. 392; State v. Dent, 129 U. S. 114; s. c., 25 W. Va. 1. iRuggles v. Illinois, 108 U. S. 520, 538. "Great stress is laid on the fact that this warehouse was erected in 1802, long anterior to the passage of the law and by this kind of legislation the alternative is presented, either to abandon the use of the property for which it was fitted, or to do business for less compensation than its owners had theretofore and always re- ceived. In another part of their argument they say that they, by consent of their customers, have received during the past year higher rates of storage than those specified in the act. and so. in this r('si)ect, the act is a jilain, i>alpable violation of the clause of the con- § 140.] I'KIVATE CORPORATIONS. 457 before the Supreme Court of the United States, the ruk^ was stated by the court, as foHows: "Grants of ininuinity from lejjitimate trovcrnmontal control arc never to be pre- sumed. On the contrary, the presumptions arc all the stitiition relied on. — that deprivinc^ thoiii of the value of the use. is de- privinof them of their property. This argument is answered hy what we have already said. It is idle to talk ahout the consent of their customers to higher rates of charges than this law allows them to receive. Their customers, before this law was enacted, had no protection against these monop- olists. They had no consent to give. They were obliged to have their grain taken to these ware- houses, and be subjected to such charges as the organized combina- tion, shutting out all competition, might choose to demand. The producer and shipper had no al- ternative but submission. They were completely in the power of this combination, and it did not fail to demand and exact the high- est charges. It is this state of things the law is designed to rem- edy. One of the first and most im- perative duties of the law-making power is, to enact all necessary laws to remedy existing evils, tak- ing care in so doing not to trans- gress any constitutional limitation. The means by whii-h to do it most effectually is, in the discretion of the legislature, keeping in view the provisionsof the organic law. This law in no respect affects the title, possession or use of this warehouse by the plaintiffs in error. It de- prives them of nothing they owned and possessed at the time of its enactment. Anticipated profits are not and cannot be held and re- garded as property in the owner- ship or possession of him who owns the article out of whicli protits are expected to tlow. The property is one thingand remains untouched, — the protits are not in esse, and can- not be claimed as property. When it is said one is deprived of his property, the understanding is, it has been taken away from him. — he is divested of title and posses- sion. This provision in the bill of rights has never been so construed by the courts of any State, whose constitution has such a provision, as to deny to the legislature the power to make all needful rules and regulations respecting the use and enjoyment of property. Ever since the organization of our State government, the legislature has exercised this power unquestioned. Familiar instances are found in regulating public ferries and pub- lic mills, and fixing the comjiensa- tion in the shape of toll. Another is, in delegating power to munic- ipal bodies to regulate charges of hackmen and draymen, and the weight and price of bread. But in a property the njost sought after by nearly all classes of community, and deemed the most valuable of any. as it controls all others, the legislative power of every State in the Union has been brought to bear upon it, and no court has ever ;e, 11 Pet. 420. r>47. servation shows, in most localities, * Ru^<5les v. Illinois, lOS U. S. greatly below its market value." 52G, 531. Breese, .1.. in Miiiin v. People, G9 111. 80, 90. §147.] PRIVATK CORPORATIONS. 459 nuinoroiis, that lli(> interest of society (leinaiuls that the rules and principles applicable to i)ul)lic employments should he applied to it, this would have to be done by the legislature (if not restrained from doing so by the constitu- tion) before a demand for such an use could be enforced by the courts. "• In a case before the United States Circuit Court for the Eastern District of Tennessee, the rule is stilted by Mr. Justice Key in his opinion, as follows: "The control which courts may have over railroads and business incidental to, and necessary for, their conduct and operation, such as warehousing in our great railroad centers, is based upon public necessity. Railroads do lu'arly all the business of interior transportation. The public is compelled to use them exclusively. There is scarcely anything to com[)ete with them where they operate. Hence, discriminations or extortion cannot be tolerated in their management. If they refuse like facilities to their shippers, or discriminate in rates or otherwise, courts may compel them to be just. The » Lurid V. S. C. r. & M. Co.. 53 Tex. 172, 188. -It will readily be admitted ttiat in many instances combinations may be made by par- ties enpjanjed in a particular trade, or l)y those who, at the time, have the control of the market for some article of prime necessity, to make most inconceivable exactions for their services, or demand a most extortionate price for their com- modities. But certainly tliis does not chan<;e the nature of the em- ployment in wiiich they are en- ga^jed, or atithori/.e the court to say, when the business of the par- ties is strictly private, tliat it has become public. If tlie combination is ille^jal, the i)arties to it will sub- ject themselves to sucii penalties as the law imposes, and if the injury to society to Ite apprehended from su*h combinations is of a character demandinjx it. the legislature may, by adefjuate provision, regulate or prohibit persons from engaging in them. Xor do we say that there may not be instances where, by combination, or even without it, some particular business, by reason of its extent and magnitude, and the great nun)ber of persons affected by it, though strictly prirnti juris under the conunon law and previous statute, which may be declared puhlici juris by the legislature. This seems, in effect, what was iield by tlie Su- preme Court of the I'nited Slates to have been done by the legis- lattu-e of Illinois. (.Munn v. Illi- nois. 04 U. S. l-J").) liut as this is not the character of this case, we are not called upon to express an authoritative opinion on the jioint. It is sutllcient for us to say thiU in the absence of legislation to that effect, a parly who has not .sub- jected his property and services to public use by the character of the 4(50 PKIVATE COIirORATIOXS. [§ 1-47. business in which he is engaged, does not do so by reason of combi- nation with others in a like busi- ness, thouf^h he is enal)ied thereby to exact from those who employ him unreasonable and extortionate charges for the services rendered. Whether payments made under such circumstances may not be held to have been paid under duress, is another question to be considered hereafter. Nor can it justly be held that the mere extent and magnitude of the business changes a private charge for serv- ices into a toll to be regulated by law. Nor, if so, that the court may, in the absence of legislation upon the subject, substitute its judgment as to the proper amount of such toll for the contract of the parties. * * * It is not con- tended by appellant that, as ordi- narily conducted, the business of receiving, storing, compressing and delivering cotton is privati juris, which those engaged in it have not the right to fix the rates and conditions upon which it will be conducted. But the argu- ment seems to be that, in view of the necessities of trade, its magni- tude and effect upon the interest of the people throiigliout the State, as well as of those engaged in the business of appellant, it has be- come of like public interest as other occupations and trades whieii the law pronounces and holds to be 'wm publici. The conclusion sought to be maintained rests upon the hypotlKsis that whenever it is made to api)ear that any particular business is of so general public in- terest as that wiiich the law holds to be juris publici. the courts have the power to so declare and hold it. The case of Munn v. Illinois, 94 U. S. 125, seems to be the au- ority mainly relied on to support this position. We cannot regard this case as authority for such a doctrine. It was brought to enforce the statute law of the State. The conclusion to be drawn from it is, as we think, that the legislature may declare a particular business publici juris, if the facts and cir- cumstances under which it is con- ducted justities and the good of society requires it; but not that the court may so treat it in advance of legislative recognition or decla- ration. Whether this may be done, even by the legislature, without infringing upon tlie constitution, need not now be considered. Neither is it necessary for us at present to determine whether the submission of property and service to public use (as there is high au- thority for holding) is solely de- pendent upon the fact that those engaged in such business enjoy some fran(!hise. privilege, or im- munity from the State, or did so in the early days of the common law when this character was impressed upon their property or service."' Ibid., 189, 191. In the Express Cases, 117 U. S. 1, 23, Chief Justice AVaite uses this language: "The reason is obvious why s^pecial con- tracts in reference to this business are necessary. Tlie transportation recpiired is of a kind wliich must, if possible, be had for the most part on passenger trains. It re(iuires not only speed, but reasonable certainty as to the quantity that will be carried at any one time. As the things carried are to be kept in the l)ersonal custody of the messenger or other employe of the express company, it is important that a certain amount of car space should be specially set apart for the busi- ness, and that tliis should, as far as practicable, be put in the exclu- sive possession of the expressman §U7.J PRIVATE CORPORATIONS. 461 cases of Munn v. Illinois,* and Adams Express Co. v. L. & N. R. R.,- iiud other cases referred to, proceed on this theory. There is no such ground for jurisdiction in the case under consideration. There is no necessity, public or other, for people to visit Lookout Point. That is a mere matter in charge. As the business to be done is -express,' it implies access to the train for loading at the latest, and for unloading at the earliest convenient moment, all this is entirely inconsistent with the idea of an express business on passenger trains free to all express carriers. Kailroad companies are by law carriers of both persons and property. Passenger trains have from the beginning been provided for the transportation primarily of passengers and their baggage. This must be done with reasonable com- fort to the passenger. The express business on passenger trains is in a degree subordinate to the passen- ger business, and it is conseijuently the duty of a railroad company in arranging for the express to see that there is as little interference as possible with the wants of passen- gers. This implies a special under- standing and agreement as to the amount of car space that will be afforded, and the conditions on which it is to be occupied, the par- ticular trains that can be used, the places at which they shall stop, the price to be paid, and all the varying details of a business which is to be adjusted between two pub- lic servants, so that each can per- forui in the best manner its own particular duties. AH this must necessarily be a matter of bargain, and it by no means follows that, because a railroad company can serve one express company in one way. it can as well serve another coDipany in the same way and still perform its other obligations to the l)ublic in a satisfactory manner. The car space that can be given to the express business on a passenger train is, to certain extent, limited, and, as has been seen, that which is allotted to a particular carrier must l)e, in a measure, under his exclusive control. No express company can do a successful busi- ness unless it is at all times reason- ably sure of the means it requires for transportation. On important lines one company will at all times till all the space the railroad com- pany can well allow for the business. If this space had to be divided among several companies, there might be occasions when the puij- lic would be put to inconvenience by delays which could otherwise be avoided. So long as the public are served to their reasonable sat- isfaction, it is a matter of no im- portance who serves them. The railroad company performs its whole duty to the jiublic at large and to each individual when it affords the public all reasonable express accommodations. If this is done the railroad company owes no duty to the public as to the particular agencies it shall select for that purpose. The public re- quire the carriage, but the com|)any may choose its own appro|)riate means of carriage, always provided they are such as to insure reasona- ble promptness and security.'' ' Mimn V. Illinois. 94 U." S. 12.*). ^ Adams Expres Co. et. al. v. T,. ifeX. R. R., 117 U. S. 1. 4(52 I'lilVATE CORPORATIONS. [§ 147. of tnsto, i)lo:i8ure, curiosity. Coinmorco, the ])ul)lic weal, social order, the public health or comfort, have nothinjj: to do with it. Already the courts have gone *to the verjje of the law' in the direction asked for here, and it is appre- hended that no authoritative case can be found which will carry us as far as we are now asked to go. Now, take the case ill hand: Miss W, as the owner of the Point and park, or her {irivies in estate, at one time might have excluded all persons from entering ui)on either. It, to say the least, has been jirivate property. No legislative act has declared a public use in it. If such use has been impressed upon it, it has been done by her. Holding the absolute title, she could control it as she liked, so long as she did not use it to the injury of others. She could have donated it to a public use genei'aliy and absolutely, or to such limited use as she might i>rescribe, or she could have preserved its private character. As her private property she had the right to inclose it; after its inclosure she had the right to admit as many or as few within the inclosure as she pleased. Because she saw tit to admit some })ersons upon pay^ment of a given fee gave to others no right to be ad- mitted on the tender of a like fee. They were in no worse or different position than before an}^ admissions were made. No losses have been sustained by them. No consideration had passed from them. Nothing can be found on which to predicate an equity in their favor. The fact that people may have been admitted to such an extent as to make the business of carrying passengers to the Point prf)fitable to the coni))lainant raises no ecjuity in his favor. It was l)rought about by no use of his ])roj)erty or expend- iture of his nioiicy. Kespondciit has as much right to re- quire him to contribute such portions of jirotits as might be deemed equitable, which she has enabled him to make by the allowance of great numbers to go to the Point, as he has to demand of her the use of her property that his business may prosper. Neither he nor the jiubjic has any greater right to the projierty than she has given them. There is no greater obligation on her part to contribute to the public § 147.] runATK coKrouATioNs. 463 use, gratificution or pleasure than rcsls u\)on others. She holds her i)roi)('rty subject to her control just as others hold theirs, until it is applied to the i)ul)lic use hy an act of the sovereign j)o\ver throuiili methods known to tlu^ law, or until she appropriates it by her voluntary act to the use of the public. A court cannot appropriate to such purpose against her consent. She can determine who shall be ad- mitted within her premises and who shall be refused admis- sion. Of course, this remark has no reference to officers of the law armed with process."^ 'Sharp V. Whitesides. 19 Fed. Rep. 15G, 100. CHAPTER X. COMBIXATIOXS OF RAILWAY COMPAXIES FOR THE SUP- PRESSING OF COMPETITION. § 148. Introduction. § 153. Consolidation of Parallel 149. Combinations for the Pur- Lines. pose of Suppressing 154. The Subject Continued. Competition. 155. Rule in Case of Traffic Ar- 150. The Subject Continued. rangement. 151. Purchase of Competing 156. Admission to Depot Lines. Grounds. 152. Lease of Competing Lines. 157. General Powers of Railway Corporations. § 148. Introductory. — By the conditions of its corpo- rate existence a railroad compan}' is subject to certain pub- lic obligations. In accepting its charter and in entering upon its work it undertakes to render a ptiblic service. This is the condition of its cor{)orate privileges. These privileges are granted b}^ the legislature, not as a favor to the indi- viduals of which the company is composed, — for it has no power to confer personal favors, — but for the benefit of the public. And the })rivileges, having been accei)tcd, the ob- ligations involved cannot be escaped. They fasten upon the company, and attach themselves to the jiroperty accpiired under its charter. In a leading case, before the Supreme Court of the United States, this doctrine is stated by Mr. Justice Campbell, as follows : "The plaintiff complains here of this charge, for that the cars employed were not built by, and did not belong to, the company. That they were the exclusive property of the Maryland corporation ; and that the agreement to divide the profits did not constitute a partnershi}), nor evince a relation of principal or agent to § 14S.] KAIKW AV COM TAN IKS. 4'65 inipu.sc ;i liability. This conclii^ioii implies, that the duties imposed upon the plaintiff by I lie charter are fulfilled by the construction of the road, and that by alienating its right to use, and its powers of control and sui)ervisi(ni, it may avoid further responsibility. But those acts in\olve an overturn of the relations which the charter has arranged be- tween the corporation and the comnuinity. Important franchises were conferred upon the corporation to enable it to provide the facilities to communication and intercourse required for the public convenience. Corporate manage- ment and control over these were i)rescribed, and corporate responsibility for their insufKcienc}- provided, as a remunera- tion to the community for their grant. The corporation cannot absolve itself from the performance of its obligations without the consent of the Icirislature."^ In a more recent iXew York it Md. R. R. Co. v. Winans, 17 Uow. 30, 39. See also AVhite River T. Co. v. Vermont C. R. Co., 21 Vt. 590; Pierce v. Com- monwealth, 104 Pa. St. 150; s. C, 13 Am. & Eng. R. Cas. 74, 79; Camblos v. Phila., etc. R. Co., 4 Brewst. 563. 597 ; 'I'ninick v. Smith, 03 Pa. St. 18. ■•The owners of railroads are common carriers. They cannot distinguish between different persons. They must carry for ail that come, and for reasona- ble rates controllable by the pnl)Iic. If they refuse to receive freight that is offered, they are liable to an action in damages; and, indeed, in such case the agrieved party would not bo con- Hned to the slow remedy by action, but mijiht sue out a mandamus to compel the corporation to carry his goods. They must provide adequate and suJlicient rolling stock to do the business offered, and cannot excuse themselves for not receiving freight or passengers on the ground of the lack of any of these things which it is in their 30 power to provide. Apply any of these tests to a corporation, the use of whose property is private, and the distinction between a pri- vate and public use is apparent. Now the question presents itself sometliing in this shape: Is it clear beyond any reasonable doubt, and by evidence irrefragable, that the use of a railroad is not a public use? If the use is strictly private, then the legislature cannot author- ize taxation in its aid, because it cannot take the property or money of one i>erson and hand it over to another with or without compensa- tion, for a mere private purpose, lint, if the use be a public use, then it is admitted tliat the legisla- ture may levy a lax to aid in the construction. It seems almost a self-evident proposition that the use of a railroad is public. It is so as a matter of couunon knowledge. It has been so adjudged by the United States Supreme Court, and by the highest courts in every State in the Union, for the j»ur|iose of invoking the power of eminent 46() KAIL^^AY COMPANIES. [§ 148. case, before tlie same eourt, the doclriiie is stated by Mr. Justice Miller, as follows : "That j)riii(ij)K' is tliat where u corporation, like a railroad eonipaiiy has j^raiited to it, by charter, a franchise, intended in large measure to be exer- cised for the j)ublic good, the due performance of those domain in the condemnation of real estate for riglit of way, depot grounds, round houses, freight yards, etc. Indeed, this power was thorouglily settled in the leading case of Beeknian v. Railroad Co., 3 Paige, 45, and has never been questioned since. ♦ * ♦ 'phe State has always exercised the au- thority to tax the people to build and juaintain highways and the authority is not (juestioned. It may do so itself, or through individuals or corporations, andjiiitliorize the establishment of toll gates. It may build a road through the State or any part of it. It may authorize a town or countj^ to build a town or county road, and tax its people for its construction and maintenance. This power has been recognized and practiced from very ancient days, and from the first dawn of civilized life. It was common in the times of the Roman Empire, and has come down to us from immemorial days, and througli im- memorial usage. It has always been exercised in this country from the first settlement of the colonies. The practice and the principle are older tlian tlie connnon law, or the present nations of the world, and have been Iransmilled to us from a period now darkened to view by time and distance. Laying aside, then, the (piestion of jjublic policy. of which the State must judge, why should the naked authority be now questioned simply because the necessities of civilization have demanded a more commodious method of travel than the old com- mon highway could afford? The following are some of tlie leading cases on tlie subject: Beekman v. Railroad Co., 3 Paige. 4."); Hrocaw V. Gibson Co.. 73 Itid. 543; Allison V. Railway Co.. 10 Bush, 1 ; Town of Bennington v. Park. 50 Vt. 192; Perry v. Keene, 56 X. H. 514; Walker v. City of Cincinnati, 21 Ohio St. 14; Sharpless v. Mayor of Philadelphia. 21 Pa. St. 147; Rail- road Co. V. Smith. 02 Ill.2(iS; Ilal- lenbeck v. Ilahn. 2 Neb. 377; Ex parte Selma & G. R. Co., 45 Ala. GOO; Davidson v. Commissioners, IS Minn. 482; Railroad Co. v. Mc- Donald, 53 Miss. 240; People v. Mitchell. 35 X. Y. .551 ; Gibbons v. Railroad Co.. 36 Ala. 410; Thomp- son V. Lee Co.. 3 Wall. 327; Blood- good V. Railroad Co., 18 Wend. 10; Worcester v. Railroad Corp., 4 Mete. 504; Stewart v. Polk Co.. 30 Iowa. S); Town of Qucensbury v. Culver, 10 Wall. 83; Railroad v. County of Otoe. Iti Wall. 007; Louisville v. Bank. 104 U.S. 47; County of Moultrie v. Fairfield, 105 U. S. 370; St. Joseph Tp. v. Rogers. 10 Wall. 0(54; Rogers v. Burlington. 3 Wall. 004; Mitchell V. Burlington. 4 W.ill. 270." North- ern Pac. R. Co. V.Roberts, 42 F»-d. Kep. 734. 74(). ''That railroads, though constructed by private cor- jioraiions and owned by them, are public highways, has been the doctrine of nearly all the courts ever since such conveniences for passage and transportation have had any existence. Very early the § 148.] liAlLWAY CU.MrAMKS. 4117 functions bointj the oonsideration of the puhlif irraiit, any contract which disables the corporation from performing those functions which undertakes, without tlie consent of the State, to transfer to others the rights and powers con- ferred by the charter, and to relieve the grantees of the l)urden which it imposes, is a violation of the contract with the State, and is void as against public policy."' In the case of lieckman v. The Saratoga tSc Schenectady Kailroad Coui[)any, before the Court of Chancery of the State of New question aI•o^Je whellier a State's right of eminent domain could be exercised by a private corporation created for the purpose of con- structin>j a railroad. Clearly it could not, unless taking land for such a purpose by such an agencj' is taking land for public use. The riglit of eminent domain nowhere justifies property for a private use. Yet it is a doctrine universally ac- cepted that a State legislature may authorize a i)rivate corporation to take land for the construction of such a road, making compensation to the owner. What else does this doctrine mean, if not that building a railroad, though it is built by a private corporation, is an act done for a public use":' And the reason why the use has always been held a public one, is that such a road is a highway, whether ma^ie by the government itself, or by liie agency of corporate bodies, or even by in- dividuals, when they obtain tlieir power to construct it from govern- ment grant. It would be useless to cite the numerous decisions to this effect whidi liave l)een made in the Slate courts. We may. how- ever, refer to two or three wliich exhibit fully not only the doctrine itself, but the reasons upon which it rests. (Beekman v. Saratoga & Schenectady H. R. Co.. 3 Paige, 45; Bloodgood v. Mohawk & Hudson H. R. Co., 18 Wend. 1 ; Worcester v. R. R. Co., 4 Mete. 5(J-I.) Whether the use of a railroad is a public or a private one depends in no meas- ure upon the (piestion who con- structed it or who owns it. It has n3ver been considered a matter of any importance that the road was built by the agency of a private corporation. No matter who is the agent, the functions performed is that of the State. Though the ownership is private the use is public. So turnpikes, bridges, ferries and canals, although made by individuals under public grants, or by companies, are regarded as publici juris. The right to exact tolls or charge freights is granted for a service to the public. The owners may be private companies, but they are compellable to permit the juiblic to use their works in the manner in which such works ran be used. (Charles Itiver Bridge Co. V. Warren, 7 IMck. 4t»5.) That all persons may not put their own cars upon the road, and use their own motive power, has no bearing upon the i|uestion whether the road is a public higiiway. It bears only upon the mode of use of which the legislature is the exclusive judge." Olcott V. Supervisors, 10 Wall. G78, 694. > Thomas v. Railroad Co., 101 U. S. 71, 83. 468 K.\IL^\AV CO.MI'AMES. [§ 148. York, the doctrine is stated bv Ciianeellor \V;d\v()rth, as fol- lows : "It is objected, however, that a railroad differs fi'oin other ])ul)lic impi-ovi-iiieiils, and particularly from turii|)ikes and canals, because travelers cannot use it with their own carriaires, and fanners cannot transport their produce in their own vehicles; that the company in this case are under no obligation to accommodate the public with transporta- tion ; and that they are unlimited in the amount of tolls which they are authorized to take. If the making of a rail- road will ciinblc the traveler to go from one place to another without the expense of a carriage and horses, he derives a greater Ix'uelit fiom the improvement than if he was com- pelled to tra\el with his own conveyance over a turnpike road at the same exi)ense, and if a mode of convejance has been discovered b}' w'hich the farmer can procure his pro- duce to be transported to market at half the expense which it would cost him to carry it there \^itll his own wagon and horses, there is no reason why the public should not enjoy the benefit of the discovery. And if an}- indi\ idual is so un- reasonable as to refuse to have the railroad made througli his lands, for a fair compensation, the legislature may law- fully appropriate a portion of his property for this public benetit, or ma}' authorize an individual or a cor{)oration thus to appropi'iate it, ui)on paying a just comi)ensation to the owner of the land for the damage sustained. The objection that the corporation is under no legal obligation to trans- port ))roducc or passengers upon this road, and at a reason- able expense, is unfounded in fact. The privilege of nnd\ing a road and taking tolls thereon is a franchise as much as the estal)lishment of a ferry or a ijubiic wharf and taking tolls for the use of the same. The public have an interest in the use of the railroad, and the owners may be ])rosecuted for the damages sustained, if they should refuse to t r:iii>|)ort an in(li\i(hial or his pro])erty, without any reasonable excuse, uj)on being j)aid the usual rate of fare. The legislature nniy also, from time to time, regulate the use of the franchise and limit the amount of toll which it shall be lawful to take, in the same manner as thev mav regulate § 14!!.] RAILWAY ("OMl'AMKS. 4)'.1> the ainomit of lolls to ])v taken at a ferry, or for liiiiKliiiii; at a mill, unless they have deprived theiusclves of thai power by a legislative eontraet with the owner of tht^ road."^ The doetrine api)ertainintr to the relations of rail- way eonipanies to the public, as above expounded, lies at the basis of all legislation and of all sound decisions of the courts, in regard to the attempts of such c()mj)anies to create a monopoly or to suppress competition between competing or parallel lines. They are public servants, and their special privileges impose upon them the obligation, not only to serve the public, but also to make only fair and reasonable charges for such service. And, for this reason, the attempt to create a monopoly, by entering into a covenant for the sup[)ression of competition, with a view of increasing or to maintaining either freight or passenger rates, is illegal and void. § 1-H>. C(>ni1>ii)atioiis for the Purpose of Snppressiiif? Competition. — Any roinl)ination of railway conipaiiie-^, the object of which is to restrain competition by establishing and maintaining a uniform charge for the transportation of freight, or of passengers, is illegal and void. Where the agreement provides that any member of the pool or associa- tion that shall carry either freight or passengers f(»r less than the rate tixed, shall be subject to a fine, such |)rovisi()n will not be enforced by the courts. It is the rule that con- tracts or agreements of this character are void as in contra- vention of public jiolicy, and in many of the States such compacts arc rendeicd nugatory by constitutional or statu- torv enactments. In a late case in Indiana, it was held that a contract, entei'cd into between conipcling conniioii car- riers for the estalilishment and maintenance of freight rates, forming what is known as a "pool," being a coiubmation for no other purpose than that of stilling conipetitioii. and providing means to accomplish that jjurpose, is illegal. Such a combination being void, any one of the associated ' Beekman v. Saratoga & Sclien- v. Warron Hridgo. 11 |Vt.420; s. C, ectady H. R. Co.. 3 raige. 4."). 74. 7 Tick. 344: G Tick. 370. See also Charles River Bridge Co. 470 UAII.WAY COMPAMES. [§ 14I>. carriers has a right to provide by special contract for a special rate to a shipper, and such contract will he upheld when no element of partiality, oppression or inijjroper favoritism entered into the coiilract.' In dclivcrinL'' the opinion in this case, Mr, Justice Elliott said: "It is, how- ever, l)oth appropriate and necessary to adjudge that a com- hinatioii Ix'lween coniinon carriers to prevent competition is, at least, prima facie, illegal. The doubt is as to whether any ultimate purpose can save it from the condemnation of Ihe law: there can be no doubt that, unexplained, such a combination for such a purpose is condemned ])\ i)ublic poli(y. If such a combination c;in, in any event, be admitted to be legal, it can only be so when it is afhrma- ti\-ely show 11 that its object was to prevent ruinous <-oiiipeti- tion, and that it does not establish unreasonable rates, un- just discrimination or oppressive regulations. If such a con- tract can stand it must be upon an aitirmative showing, and one so full, complete ;ind clear as to remove the presump- tion (to which its existence, in itself, gives rise), that it was found to do mischief to the pul)lic by repressing fair com- petition. The burden is on the carrier to remove the pre- .sumption, and until it is removed the agreement providing for the condjination gives way before this presum[)tion, and 'Cleveland. C. C. & I. Ry. Co. 137: s. c. 30 N. E. Rep. 279; Cen- V. Cidsser. ]-2(; Itid. 348; s. c, 2G tial. etc. Co. v. Guthrie. 35 Ohio N. E. Rep. If)!). See al.so Texas, St. GOd; Stanton v. Allen. 5 Denio, etc. Ry. Co. v. Southern Pacific 434: Hooker v. Vande water. 4 Ry. Co.. 41 I^a. Ann. 070; Wood- Denio. 349; Chicago. eU-. Co. v. stock Iron Co. v. Riclnnond, etc. People's, etc. Co., 121111. 330; s. c. Extension Co.. 129 U. S. 093; Cen- 13 N. E. Rep. 109; West Virginia, tral Trust, eic. Co. v. Ohio Central etc. Co. v. Ohio River, etc. Co., 22 R. R. Co., 23 Am. Si Eng. R. K. W. Va. 000; Western Union Tel, Cas. OOG; Boston Chauiher of Com- (O. v. American, etc. Co.. 05 Ga, nierce V. Lake Shore, etc. Ry. Co., IC.U; Sayie v. Louisville Assn., 1 32 Am. it Eng. R. R. Cas. (MS; Duv. 143: Hurke v. Concord R. Hare v. London, etc. Ry. Co., 2 J. Co.. 01 N. II. UK); Pittsburgh, etc. &U. 80; Leslie v. Loriliard, 110 R. Co. v. Keokuk, etc. Co., 131 U. N. Y. 519; Chicago, etc. R. Co. V. S. 371: Kettle River R. Co. v. Wab;ish,etc. Co.,01 Fed. Rep. 993; Eastern R. Co.. 41 Minn. 401; s.C, Gulf, etc. R. Co. V. State, 72 Tex. 40 Am. & Eng. R. Cas. 449; 43 N. 404; s. c, 10 S. W. Rep. SI ; State W. Rep. 409. V. Standard Oil Co.. 49 Ohio St. § 1-ii'.] RAILWAY COMrANlKS. 471 the agreement luii^t Ix- hckl to be within the conchMnnation diiXH-ted aixainst all contracts which violate puhlic policy."^ 1 Cleveland, C. C. & I. Ky. Co. V. Closser, 120 Ind. 34S, SCO; s. c, 2G N. E. Kep. ir)9. "Coining to the inu'siion which awaits oin* jiidjjment. and to which we have cleared our path, we airinii that a contract between corporations charged with a public duty, such as is that of coininon carriers, pro- vidinoj for the formation of a com- bination having no other purpose than that <>f stitlini; ct)nii)etition, and providing means to accom- plish that object, is illegal. The purpose to break down competition poisons the whole contract, and there is here no antidote which will rescue it from legal death. The element which destroys the contract is the purpose to stifle coun)etition, for a combination of rival carriers, moved and controlled by that purpose alone, is destruc- tive of public interest, and to the last degree antagonistic to sound public policy. The principle on which this rule rests is a very old one. and its place in the law is very firm. The overshadowing element in this case, and in kindred cases, is the purpose which intluences the parties in uniting themselves in a comi)ination. and concerting moans to make its purpose effective, for the law abhors u combination which has for its principal objt-ct the suppression of competition in matters of commerce in wliich the public have an interest. Among the early cases establishing and enforcing the general principle which now occupies our attention, are those wherein it is held that an agreement to prevent or hinder competition at public sales is void. Our court has again and again en- forced the general principle we have stated. Hunter v. I'feiffer, 108 Ind. l'J7; Board v. Verbarg, 03 Ind. 107; Maguire v. Smock, 42 Ind. 1; Gilbert v. Carter, 10 Ind. IG; Forelander v. Hicks. Ind. 44S; Plaster v. Biuger. 5 Ind. 232; Bunts V. Cole. 7 Blackf. 2U5." Ibid., 3(i0. In Murray v. Vander- bilt, 39 Barb. 140, an agreement was made between the Pacific Mail Steamship Company and the Ac- cessory Transit Company, by which the former company was to i>ay to the latter a certain sum per trip, or jier month, so long as the boats of the Pacific Company should run without opposition. It was held that in an action brought by the Transit Comi)any against the I'acific Company, although the contract was unusual and in re- straint of trade and commerce, the court would not enforce it against the delin(]uent party, or if the money had been paid, enable the party paying to recover it back but would leave the parties as the law found them; both being in pari de- licto. Yet this rule did not apply to an action by one of the princi- pals in such 1. contract, against the agent who had received money thereon. "Tlie allegatiijn of the bill is. that the Boston it Maine Railroad, a corporation chartered by the legislature of this State, and the Eastern Railroad, a Massa- chusetts corporation, but which, on tlie first day of May, 1874, and for a long time prior thereto, did, and does now, run, operate and control certain railroads chartered by the legislature of New Hamp- shire, on or about the first day of May. 1874, entered into a contract. 472 KAILWW COMPANIES, [§ 14!'. In :i ](';i(liii JIartford & New Haven Kail- road Company was eliartered to construct and operate a rail- road from Hartford to the navioahle waters of New Haven harbor. A steamboat comi)anv was afterwards chartered to run in connection with it to New York and the railroad and lineof steandioats constituted a route that was of threat con- venience to the public. After the construction of the road and the use of it in connection with the steamboat line for several years, the railroad company constructed a track diverging from the original track at a point a mile and a half from its terminus at tide water, and running to the station of the New York & New Haven Kailroad Company in the city of New Haven, and discontinued the running of passenger trains to the original terminus at tide water. This change incommoded travelers who wished to pass by the steandjoat route, of whom there were many. It was held agreement, or iuiangenif'nt, by the of what precedes. Fifst. the con- terms of wliich the said Hosion li; solidation of the roads or lines is Maine and Eastern railroadsshould prohiliiied in general terms; then each retain sixty per cent, of its the running of one rival road upon gross earnings lietween all com- an arrangement by another is pro- peting points of their respective hii)ited; then the running, man- routes and the city of Boston, to agement and operation of every pay the running expenses of the such railroad by its own officers respective roads, and the balance and agents is enjoined; and then of said gross earnings, being forty comes the provision that each shall per cent, thereof, should constitute be dependent for support ujion its a common fund to be divided own eainings. etc.. that is. shall equally between said roads. The not be dependent for support upon question is, whether such a con- the earnings of another, — which tract and arrangeir.ent comes seems to belittle more thanacorol- within the prohibition of the act? lary from what comes before, a It is argued, on behalf of the de- specification of an act in the nature fendaiits. that the latter part of the of consolidation which had been section (pioted is intended to cjual- already forbidden. It seems to me ify and explain the preceding not to admit of doubt that the clauses, and not to establish a new arrangement set up in the ])ill limitation. Tlie wliole section comes witiiin the prohibition of together seems to me quite plain, the statute."" Morrill v. Itaihoad. and when so read the last clause f).") N. II. 531, 537. See also Currier appears to be a specification in- v. Concord R. Co., 66 N. H. 100; serted to make more definite and s. c, 20 Atl. Rep. 383; 8 ^y. «fe certain the application and effect Corp. L. .1. 443. § !')().] RAILWAY C'OMI'AMKS. 473 thatawj'"njcril)e ratios, which, when agreed to. ' vState V. Hartford i<: N. II. H. R. -SUte v. Hartford I'c X. H. R. K. Co.. 29 Conn. .")iJS. Co., 29 Conn. 538. 547. 474 KAILW AY COMTAXIKS. [§ 150. are to govern all tiie companies, and u violation of which subjects the defaulting conii)any to a pecuniary penalty, is an agreement or combination in restraint of trade or com- merce, in the meaning of the :mti-trust law, though each party to the agreement may withdraw therefrom on giving thirty days' notice.' In the opinion the principle on which ' United States v. Trans-Missouri Freight Association, 1G6 U. S. 290; s. c, 17 Slip. Ct. Rep. 540. In the course of the able and well reasoned opinion of Mr. .Justice Pei-khaui in this great case, at page 814, he uses the following language: "It is maintained that an agreement like the one in question on the part of the railroad companies is author- ized by the Commerce Act. which is a special statute applicable only to railroads, and that a construc- tion of the Trust Act (which is a general act) so as to include within its provisions the case of railroads, carries with it the repeal by im- plication of so much of the Com- merce Act as authorized the agree- ment. It is added that there is no language in the Trust Act which is sufficiently plain to indicate a purpose to repeal those provisions of the CoMimerce Act which per- mit tlie agreouient; that both acts may stand, the special or Commerce Act as relating solely to railroads and their proper regulation and management, while the later and general act will apply to all con- tracts of the nature therein de- scribed, entered into by any one otlier than compctingcommor car- riers by railroad for the purpose of establishing rates of tratlic for transport.ilion. On a line with this reasoning it is said that if Congress had intended to in any manner affect the railroad carrier as gov- erned by the Commerce Act, it would have amended that act directly and in terms, and not left it as a question of construction to be determined whether .•^o impor- tant a change in the commerce statute had been accomplished by the passage of the statute relating to trusts. The first an- swer to this argument is that, in our opinion, the Commerce Act does not authorize an agree- ment of this nature. It may not in terms prohibit, but it is far from conferring eitlier directly or by implication any authority to make it. If the agreement be legal it does not owe its validity to any provisions of the Commerce Act, and if illegal it is not made so by that act. The fifth section pro- liibits what is termed 'pooling,' but there is no express provision in the act jnohibiting the mainte- nnnce of traffic rate^ among com- jteting roads by making such an agreement as this, nor is there any provision which permits it. Prior to the passage of ilie act the com- panies liad sometimes endeavored to regulate competition and to maintain rates l)y pooling arrange- ments, and in the act that kind of an arrangement was forbidden. Afier its passage other devices were resorted to for llie purpose of curbing competition and maint:tin- ing rates. The general natine of a contract like the one before us is not mentioned in or provided for b.v the act. The provisions of that act look to the prevention of dis- crimination, to the furnishing of § 150. J HAILWAY rO.Ml'ANIKS. 475 tills casi' was (Iccjdcd is staled and ('xjjoundcd l)v Mr. Jus- tice Pockham, a.s follow.s : ''It is matter of coininon kiiowl- cdu^e that airieoiuents as to rates have been continually made of late years, and that comjjlaint.s of each comj)any in re- •r.-ird to the violation of >ucli a<2;reenients hy its ri\als have been frecjuent and })ersistent. Kate wars go on notwith- standinji' any agreement to the contrary, and the struggle for busines.s among competing roiids keeps on, and in the nature of things will keep on, any alleged agreement to the contrary notwithstanding, and it is only by the exercise of good sense and by the presence of a common interest that railroads without entering into an^• aflirmative agreement in regard thereto will keep within the limit of exacting a fjiir and reasonable return for services rendered. These agree- ments have never been found real!}' effectual for any ex- tended period. The interstate commerce commission, from whose re])()rts quotations have been (juite freely made by counsel for the purpose of proving the views of its learned members in regard to this subject, has never distinctly stated that agreements among com|)eting railroads to main- tain prices are to l)e commended, or that the general effect is to be regarded as beneficial. They have stated in their fourth annual report that competition may degenerate into rate wars, and that sutllinir to the l)nsi- equal facilitie.s for tlit> iiitt'rcli:mrmity of rates to be charged of tradlc, to the rate of i-ompensa- by coiiipetin*; companies, nor was tioii for what is termed the long there any iirovision tlierein as to a and tiie short iiaiii. to the attain- maximum or minimum of rates, inont of a continuous passage from Competing and non-compeling the jxiint of shipment to the point roads are not authorized by this of destination, at a known and pub- statute to make an agreement like lished schedule, and in the Ian- this one. As the Conniierce Act does guage of counsel for defendants, not authorize this agreement, argu- 'without reference to the location ment against a repeal by implica- of those points or The lines over tion, of the i)rovisions of tlie act which it is necessary for the tratlic which it is alleged grant such au- to pass.' or to procuring uniformity thority. Ijecomes ineffective. There of rates charged by each company is no appeal in this case, and l)Oth to its patrons, and to other stil)jects statutes may stand, as neither is of a similar nature. The act was inconsistent with the other." not directed to the securing of 47(; UAII.WAV COMPANIES. [§ 151. ncss of the country as they are inischievous to the carriors, and that the .spirit of existing law is against them. They then add: 'Agreements between raihoad companies which from time to time they have entered into with a view to prevent such occurrences have never been found effectual, and for the very sufficient reason that the mental reserva- tions in forming them have been quite as numerous and more influential than the written stipulations.' It would seem true, therefore, that there is no guaranty of financial health to be found in entering into agreements for the maintenance of rates, nor is financial ruin or insolvency the necessary result of their absence. The claim that the com- pany has the right to charge reasonable rates, and that, therefore, it has the right to enter into a coml)iiiati()n with competing roads to maintain such rates, cannot be admitted. The conclusion does not follow from an admission of the premise. What one company may do in the way of charging reasonable rates is radically different from entering into an agreement with other and competing roads to keep up the rates to that point. If there be any competition, the ex- tent of the charge for the service will be seriously affected by that fact. Competition will itself bring charges down to what may be reasonable, while in the case of an agreement to keep prices up, competition Js allowed no play; it is shut out, and the rate is practically fixed by the companies themselves by virtue of the agreement, so long as they abide by it."» § 151. Purchase of Coinpetiiis" Lines of Transportii- tion. — Under ordinary circumstances the object, and if not the sole object, at least the primary or principal object of such purchases, is the creation of a monopoly for the pur- pose of sup|)ressing competition. But the creation of such a iii(iii()])(>ly is in contravention of ])ublic i)oli(\- at common law, and will not be upheld unless it is accomplished under the provisions of its charter. The legislature may grant ' United states v.Tians-Mi.«soini S. 290, 338; s. c. 17 Sup. Ct. Kep. Fre gilt Association (1897), l(i() U. o-lO. 5r)y. § l.')l.l RAILWAY COMrAMKS. 477 such power, unlr-> iJiohibited by the constitution of" the State, anil it is only under a leofislative trrant tliat it can he exereisecl. A railway company cannot sell its j)roperty to a conipetinu" line, and where it is soltl at judicial sale the pur- chaser will acijuire no riirhts or })rivileges which were not conferred by the charter u|)on the original coinj)any. The new company can do in this direction oidy what miirht be done by the oriuinal i)roprietors. In a very recent and leailinu- case jjcfore the Supreme Court of Texas, it was held that a corporation, organized foi* jjublic purposes, cannot. e\('e[)t with the consent of the political aut hority wliich created it, render itself incapable of performing its corporate duties to the public, whether this be attempted by contract of lease, sale or otherwise. Any such contract made without legislative sanction is void. lender the statute authorizing a railway company to borrow money to construct, complete, inn)r()ve or o|)erate its road, and to give mortgages therefor, a purchaser may acijuire title to the road by a sale nnulc under a power conferred in such a mortgage, or title nuiy be acipured by purchase under judi- cial sale to pay such indebtedness. After such a sale the corporate existence continues, and the purchaser becomes, in effect, a stockholder of the corporation. A railway com- pany chartered under general laws cannot jjurchase the rail- wa\' of another company; it ri-sults that, since the j)owerto make such a i)urchase could not exist under an original charter of incorporation, it could not be obtained through an amended charter in the al)sence of legisIatiNc |iermis>ion. Though the statute requires articles of iiicoipoiation to be passed on by the attorney-general before they can be tiled with the secretaiy of state, and the incor])oration com- pleted, yet that otlicer cannot jiidicialh' (h'tciminc either the purj)oses for which a company may be incorporati'd or what powers it may accjuire by the act of incorjjoratiijn ; the law, to be construed by the judicial department, must de- termine both. The rule that a cori)onition has only power to do such acts as its charter, considered in relation to the general law, authorizes it to do, applies to every class of 478 UAILWAY COMPANIES. [§ 151. corporation. The CJulf, Colorado *.Sc Santa Fc Railway Company obtained an amended charter under general law, which provided, among other things, that it niiirht purchase the Central & Montgonierv Railroad, and own, operate and e<|uip the same. Certain stockholders of the (iulf, Colo- rado tSc Santa Fe Railway Comi)auy purchased all the bonds and stocks of the Central & Montgomery Railroad Com- pany, and, after destroying the bonds, attempted to sell the latter road to the Gulf, Colorado & Santa Fe Railway Com- pany. Possession of the road-bed, etc., was taken under the attempted sale, and the road operated and controlled as part of the Gulf, Colorado & Santa Fe Railway Company. It was held: (1) That no title to the road passed by the l)urchase. (2) The Central & ]Montgomerv Railroad Com- pany continued as an existing corporation, and those hold- ing its stock might complete a reorganization. (3) The Central & jNIontgomery Railroad Company and its property was liable for any debts incurred in its management, with- out regard to whose management it was subjected to.' In ' Gulf. Colorado & Santa Fe R. shall consider, with a due appre- Co. V. Morris, G7 Tex. 692. "It elation of its importance, is whet her may be urged however, tliat if tlie the constitutional inhil)ition con- power of the one corporation to taincd in sec. 17, art. 12 (of Mis- buy the other was not ;;;iven under souri) is any more comprehensive the 01 ii^inal charters of either cor- than the statutory prohibition last poration, yet that such a power consideied. Accordinj; to the view was acijuired through the amend- that the court takes of the case it nient of the charter of the Gulf, cannot, or at least it ought not, to Colorado & Santa Fe Railway grant an injunction, unless it Company, which provided in effect clearly appears that the general that it should have the 'right to assembly has failed to give full purchase the Central «fc Montgoni- effect to the constitutional prohihi- ery Railroad and to own, operate, tion, nor unless it appears that the equip and maintain thesame under purchase of the Frisco stock is in this charter asa i)artof said Eastern violation of the constitution though branch.' The law prt)viding for not in violation of the statute. It the amendment of railroad charters is sutlicient to say on this point that nowhere intimates that such a cor- the court is not prepared to hold poration may acquire rights or that the general assembly has either powers through an amendment misconstrued sec. 17, art. 12 of that it could not have acquired the constitution, or thai it inton- under its original incorporation.*' tionally failed to give it full effect Ibid., 701. "The next f Coinpetinjj Linos. — \Vhere a railway company leases or attempts to lease a competinir line the presumptive objci-t is the creation of a monopoly for the supi)ression of comi)Ctition. But as this is illcijal, as oi^posed to public policy, a lease of this character will be upheld only as it is made under an express i)rovisioii of its charter. As a rule, the charter of a railway corporation will enable it to lease a branch line, which is in no proper sense the points designated in theci);uter out increase of fare. It can iiardly for the road which it was author- be supposed that the legislature ized to build. The charter power while expressly making jirovisions conferred on a railway company for such facilities intended to pro- to rent, lease, sell or consolidate scribe companies connecting with with another railroad company another road, which happened to cannot exist in the absence of own a line parallel for a certain some law authorizing it. and cannot portion of its length, but which be iuiplied from a prohibition ex- also owned other lines extending tending only to parallel or com- beyond the parallel portion, from poling lines. Railway companies, the benefits to be derived from a by reason of their relations with trallic contract. It seems to us that or control or management of other the obvious intent of this provision lines than their own. may become was to avoid the monopoly of par- within the meaning of the law allel lines, and prevent the ac(iui- compeling lines, though the rail- silion by one railroad company of ways owned by theui may not in the exclusive possession and con- fact connect. East Line & Red trol of such lines. It, therefore, Riv. Ry. Co. v. State. 7.") Tex. 434. prohibits leases to parallel roads. "Tlie uniform comse of legislation This does not. and. in our judgment, in reference to street railroads, was not intended to preclude such shows a policy on the i)art of the companies from making trallic State to facilitate arrangements contracts for the partial use of for the connection of continuous their respective routes beyond the lines, and the transfer of passen- line of parallelism.'" People v. gers from one road to another, O'Brien. Ill N. Y. 1, 64. with the view of giving the longest MVilliamson v. N. J. Southern service possible to the public with- R. R. Co., 2G N. J. Eq. 398. § 1^'-^] KAII.W AV CO.MrAMKS. 481 :i rompctitor, but wIktc \\\v lino is parallel and is or may become a competing:- line, it may lease it only as the [)o\ver todosoisspeeitieallyand une(juivocally conferred by the legis- lature. Provisions of this character in a charter will be most riiridly and strictly construed. Nothing will be pre- sumed in favor of the j)()wer. It has l)een held that where a raiiwa\- coi-porat ion U'a>c> its property to another road without such power for a long period the act will be held as an al)andonment of the oi)eration of the road, and that assenger cars over two or more of such roadscontinuously.' within the proper meaning of section 3379. That the mere physical ability to pass cars from one road to the other satisfies the statute is a construc- tion of it, — which is wholly inad- missible, for the jirovision requir- ing such connection would be without meaning. In imposing that restriction upon consolidation, the legislature intended, not merely that the physical fact should exist, but that suoh consolidation should only be made for the very purpose of passing freight and passengers over both lines, or some material parts thereof, not necessarily in a direct or straight lin<'. but contmu- ouxbj. • » * Having regard to the language of this statute, in the light of such aids as are here indicated I am satisfied the legisla- ture never intended that railroads. 4.S2 UAII.W AV CO.Ml'AMKS. [§ 1'^:^. situated as these are. should be re- garded as constructed for the carriage of freight and passengers continiioushj, in the manner con- templated by the section. Indeed, each of these consolidating com- panies had a line for the carriage of freight and passengers from Cincinnati to Lake Erie, 'continu- ously, without break or interrup- tion." and the policy of the country in general, indicated in the con- stitutional and statutory pro- visions, has long been opposed to the consolidation of roads bear- ing such relation to each other, and this strengthens the belief that these companies are not within the section in question. Consoli- dation for the transportation of freight and passengers continu- ously is a thing which the legisla- ture might well desire to encourage. as it may be advantageous alike to the public and the companies; but corporations have power only as granted by the general assembly; and where com|)anies. situated as these are, being parallel and com- peting, claim that authority to consolidate has been granted to them, they must be able to point to words in the statute which ad- mit of no other construction, for it will not be assumed that the law- making power has authorized the creation of a monopoly so detri- mental to the pul)lic interest. Rut the statute contains nosucli words. An cxan)ination of the provisions relating to the power of railroad companies to lease does not lead us to a different conclusion. True, by the Act of 18.")!. it was not pro- vided in express words that the fact that tlie lines of two com- panies were parallel and competing should be a bar to a lease by one to the other or to a consolidation of the companies; nor was there any such express provisions in the Act of \S')'2 (3 Curwen, 1884). or the Act of 18U9 (3 Sayler. 17(J0), with re- spect to leasing. Express provis- ion, however, prohiltiting one company from leasing to another where their lines were comjieting. was made by the Act of 1873 (4 .Sayler. 29.50). and that provision was carried in the Kev. .Stats. § 3300. From the absence of any such express prohibition with re- spect to consolidation, it is argued that here is a legislative expression that the fact that lines are com- petitive is no objection to consoli- dation, but that conclusion, in my judgment, is altogether erroneous. By the Act of 1852 (3 Curwen. 1877). a consolidation was provided for in section 21, and leasing in section 24. When section 24 was re- pealed and re-enacted with certain changes in 1809, it was left, in the respect mentioned, unchanged, and such prohibition was introduced, as we have seen, in 1873. when the section was again amended. Perhaps this latter amend- ment was introduced by reason of some abuse which had no direct relation to consolidation, and hence the propriety of amending tiie sec- tion on that subject was not con- sidered. ]5ut, however this may be. it does not follow that sudi change in the language of the act worked any radical change in the law. The presumption, as we liave seen, is the other way. where the purpose to recpiire a change in the construction is notclear. Notwith- standing the Act of 1873, the quest ion still isas to thefair interpretation of the section relating to consolida- tion ])revious to that time, which section is still in force in substan- tially the same form. Kev. Stats. 3379. That it does not authorize a consolidation of lines bearing to ^ l.")2.] ijAir.wAY coMrvNiKs. 4M3 cited the vu\v is .stated by tlu- court, as f()ll(t\\>: *'lii Tliomas V. Railroad Company,' a railroad cciiipany in New Jersey had leased its road, rraiichises and })rt)perty for a period of t\vent\' years, jrivini:' the lessee complete con- trol thereof, and received as rent one-half the jjross sum collected by the lessee from the operation of the road. Tlie decision turned upon the power of the company uiuler its corp(»rate authority to make the lease. The lessee insisted that a corporation may, as at connnon law, do an act which is not either expressly or impliedly prohibited by its charter. To this the court responded: 'We do not concur in this proposition. AVe take the o;eneral doctrine to be in this country, though there may be exceptional cases and some authorities to the contrary, that the powers of corpo- rations orirani/.ed under leuislative statutes are such, and such oidy, as those statutes confer. Conceding the rule ap- plicable to all statutes, that what is fairly implied is as nuich granted as what is expressed, it remains that the charter of a corporation is the measure of its powers, and that the enumeration of these powers implies the exclusion of all others.' The doctrine, as above stated, meets our heart\" approval. If the allegations of the information arc true, and they are to be so considered on demurri-r to the information, the defendant induced the peojjle along its line, from the Kansas border to the city of Lincoln, to grant liberal aid for the construction of the road. Every jjiecc of land subject to taxation in tin- counties along the line of said road is practically mortgaged by the issuing of bonds <'acli other the rcliitioii lioint* tw Ie.«see nro coinpeting, and it is ail- thes«' roads, is a proposition to mitted that if there can l)e no lease, which I fully a.«sent. Kntertainini; there <"an l)e no consolidation of these views, the question how far such lines leased since theri. The this consolidation may be affected rule upon the 8ul)je('t may l>e more 1>y the clause in the Act of XSl'.i. rio;id since 1S73 than it was under incorporated into section 33(K) of the former lejjislation. [ clo not the Revised Statutes, is not witli think it necessary to determine me a vital one. Hut the policy of how that was."" .State v. Vander- the State, as declared in that enact- hilt. 37 Ohio St. aOO. 043. ment. cannot be in doubt. .Since ' Thomas v. Railroad ('nmpany. 1S73 at least there cm l)e no lease 101 L'. S. 71. where the lines of the lessor and •1^4 K.MLWAV C:O.MI'AMKS. [§ l.')2, to :ii(l ill huikliiiL^ it. Tlic interest has presiiin:il)ly hccn paid on these l)onds to the present time; many of the set- tlers along such road when the bonds were issued were pioneers, strugtrling with the hardships, poverty, iirivations and difficulties incident to a new country. To many of them, no doubt, the taxes necessary to meet the interest and amount ie(|uired for the sinking fund have been a biu(h'ii. and by every one the tax was voted to aid in constructing and operating an indejiendent line of railway. That was the contract of the parties, and the State would be derelict in its duties if it did not coini)el an observance on the i)art of the defendant of its duties. The defendant, however, having obtained this bonus, sought to surrender all its powers, rights and frMiicliises to another corporation for the period of nine hundred and ninety-nine years. So far as the defendant is concerned, it has ceased to o])erate a rail- road, and the charge of misuser and non-user plainly appears on the face of the record. It is not the i)oli(y of the law to allow a railroad company, organized as an inde- pendent line, to procure aid on every hand in that character, and after the road is completed sell out to the higlie>t l>id- tler. Honorable and fair dealing are as essential in the dealings of a railroad corporation with individuals and the |)ubii(' ill the construction and operation of its road a> bi-- tween individuals in the ordinary affairs of life. A railway company cannot be permitted to act in l)ad faith with those from whom it has received aid upon certain conditions. Having i-e<-eive(l the consideration it must perform on its part, and the i)arties arc entitled to a literal conii)liance. And while a lessee in a pi()j)er case, or assignee or pur- chaser, will take a road l)ur(leiied with the conditions, obli- gations and duties assumed by the original corporation, yet there can be no such transfer by lease, assignment ov sale without express statutory authority, and as we tind no such auth(n-ity. and tin* defendant has been guilty of misuser and non-user of its franchises, they an- sul)ject to for- feiture.""' ' State V. Atcliison i<; Neb. K. 11. Co.. 14 Nev. 143. 1U2: s. c, 32 Am. »!L- Knjr. K. Tas. 3SS. § 1.');}.] IIAII.WA^ COMI'AMKS. 4'S,') s( l.">.*{. CunsulidiitiiMi of Parallel Liiirs. — 'VUv ((Mi- s(»li(l;iti(»ii of railway cofporaticnis wliidi own and opcraU' parallel and coiiipt'tiiiu' lim'>, like the purchase or lease of n parallel line, i> iiisalid at law, Imt is subject to statut»»r\ reirulatioii. The legislature has |)o\ver to })r()hii)it or to wfraut the consolidation ot" conipetini; lines of rail\va\', <»r of corporations owninir and operatinij such lines. The leadinir 1 lit f^ ease relatino; to this sul)ject is that of Pearsall v. The (Jreat Northern Railway. In ISJlJ the Minneapolis cVc St. Cloud Railroad Company \\a> incorporated by the territorial lejjfis- hiturt' of .Minnesota with very liberal riii:hts and privileges, and under this charter the road was put in operation. In 1.S74 the State of Minnesota enacted that "no railroad corpo- ration or the lessees, purchasers or managers of anv railroad corporation shall consolidate the stock, j)r()pertv or fran- <-hises of such corporation with, or lease or purchase the works or franchises of, or in any way control an^• other rail- road corporation owninir <>r ha\inu' under its conti'ol a paral- lel or C()nn)eting line; noi- shall any officer of such railroad corporation act as the otHcer of any othei- railroad corporation owning or having the control of a parallel or competing line ; and the ijuestion whether railroads aic parallel or competing lines shall, when demanded b\- the l>arly complainant, be decided by a jury as in other civil issues;" and in 1881 its legislature enacted that "no railroad «'()r|)oration shall consolidate with, lease or purchase, or in any way l)ecoine ownei- of, or control an\- other i-ailroad corporation, or any stock. franchi>e. rights of pi-opcrty thereof, which owns or conti'ol.> a parallel m- ronipcting line." In l.SS!> the company changed its name to the (ireat Northern Railway ('om|)any, and extended its line westward. At the organization of the Northern Racitic Railroad an arrangenient was entered into by the two com|)anies, wlii( h was a practical consolidation of their lines. In the case of Pearsall v. The Gr«'at Northern Railway Companv. a stockholder of the (iifat Northern Compain- tiled his bill against it to restrain it from canving oift such ajjreement. It was held that the (ireat Northern Company was subject to the provisions of the Acts of 1874 and 1881, and that the 45SH UAII.W AV ( O.MI'AMKS. [§ l."*,"). pi()))o^.ecl arrnnL^t'iiiciit was in violation of the pi()vision> in those acts, prohihitinir raih'oad corjxn'ations from consoli- datint; with, leasing or purchasing, or in any other way Ix- eoming the owner of. or controlling any other railroad corporation, or the stock, franchises or rights of property thereof, having a parallel or conii)eting line, and was. there- fore, heyond the corporate power of the company to make. A\'here. by a railway charter, a general power is given to (•onsolid;ite with, purchase, " lease or accpiire the stock of othei- roads which has remained unexecuted, it is within the competency of the legislature to declare, by subsetjuent acts, that this power shall not extend to the purchase, lease or consolidation with ])arallel or competing lines. Where a charter authorizes a comi>aiiy in ^weeping terms to do cer- tain things which are unnecessary to the main object of the grant, and not directl}' and immediately within the con- teiuplation of the i)arties thereto, the i)ower so conferred, so long as it is unexecuted, is within the control of the legislature, and may be treated as a license, and may be r<'- voked if a possible exercise of such power is found to con- flict with the interests of the public' In the opinion in tlii< ' Pearsull v. Gt. Norlbein Jly.. short, we cannot recofjnize a vested lUl U. S. t>4G. "We do not deem it liojlit to do a manifest wroni;. necessary to express an opinion in Nor do we undertake to s.-iy this ease whether the legislature that the legislature umy not. in could wholly revoke the power it the exercise of a wise fore- had given to this conji>any to extend sight, and for the purpose of its system by the construction or attracting capital to enterprises purchase of branch lines or feeders; of doubtful profit. aiUhori/e the since a possibility of an extension granting of monopolies for a lim- of the road even to the Pacific ited time, irrevocable by a subse- coast may have had an intluence tpient legislatine. To do so would upon persons contemplating the practically ignore or overrule a purcliase of its stock or securities, series of cases to which we have so that a right to do this might be already adverted, wherein corpora- said to have become vested. But tions have been induced to furnish we think it was competent for the municipalities with bridges, gas. legislature, out of due regard for water and other retjuirements of the public welfare, to declare that modern civilization, by the promise its charter should not be used for of exclusive privileges for a term the purpose of stitlingcompetition. of years. Perhaps, too. it migiit and building up monopolies. In not be beyond the competency of § i:.;5.j K'A1I,\V \^ ( OMl'WIKS. 4.S7 cMsc. (li'li\ I'lH'd I)\' Mr. .liistitc lirowii. llic |)riii(i|)|c on which thi' decision is based is cxpouiuh'd, as foUous: "Wliclhcr thi' consolidation of coni|)ctiiiii: lines will neces- sarily resnh in an increase ot" lales. or whelher sncli con- tbe le«;isl;ifint' to :iiithoii/.<' a rail- road, l)y a clear and explicit act. to consolidate with a parallel or coinpetinjj line, since cases may be inia<;ined where it niisjlit be for the public welfare to permit siicli consolidation. Hut the Act of ISl!."), upon which the defendant relics, contains no such provision. There is only a ijeneral authority to con- solidate, which we think the li'o;is- lature may, by another act. declare shall not apply to ca-^es manifestly not within its oritjinal intent. We think the j^eneral doctrine requir- ing grants to corporations to be construed favorably to the public, where there is a reasonable doubt as to the extent of the privilege confern'd, may properly be invoked to declare that such privileges shall not be used to the detriment of the i)ublic." //i- tion of certain lands situate on the shore of such waterway near tin- said terminus, alleges, as a prom- nent reason fur their condemna- tion, that a charter had been granted by such foreign govern- ment for the constructiou of a sliip canal connecting the said water- way with other navigable waters, which, when completed, would greatly increase the business of the railroad, and that the lands were needed for the constru(rtionof ships and docks for tlie accommodation of vessels bringing freight to or taking il from tiie said road and of tenements for the employes of the railroad and to meet the recjuire- ments cf the anticipated increased business; and it appeared from the proofs that the company iilready had. at such terminus, a convenient and accessible water front and docks, which were used but in part, and were capable of extension on its own premises, and it did not appear that the work on the ship canal referred to had l)een commenced, or that the cajii- tal to construct it had been secured, ApW, that it was not sulH- ciently sliown that the lands were re(|riired for the jiresent or pros- pective Imsiness of the corporation within tlie meaning of the statute, and they «'ould not be taken against llie will of tlie owner. Rensselaer it Saratoga K. K. ('o. v. Davis. 4» N. Y. 137. 'It is enough that by the lease the connected roads form a continuous line, and it is not essential thai the leased line be an exten-ion from either terminus of the lessee's road. 'I'lie evil which was intetuled to be guarded against by this limitation was the placing of j»;irallel and competing roada 4SS i;aii,\\a^ (o.mi'amks. [§ Uui. solidution has o-cnerally rcsulU'd in a detriment tothe puMic, 1^ beside the question. \\'hether it has that effcet or not, it oertainly puts it in the jiower of the consolidated corpo- ration to irive it that effect. — in >hort. puts (he ])ul)lic at under one management, and tlii- control by one company of the general railroad affairs of tbe State through the leasing of roads remote from its own. and with which it has no physical or direct business connec- tion. It was not intended to pre- vent a company with a long road. like the lessee company, from leasing branches by means of which it establishes continuous lines from their several termini to each of its own. By this lease a direct and continuous line from Louisville to Shelbyville was cre- ated, and neither the letter nor the spirit of the statute was thwarted.*' Hancock v. Louis- ville R. K. Co.. 145 r. 8. 409. 412. In Pearson v. Railroad. ()2 X. II. 537. it is held that a railroad cor- poration cannot become a stock- holder in another railroad corpora- tion for the purpose of controlling the business of the latter, or the election of ils otHcers, unless such power is given by statute. In the opinion the court say: "A cor- poration cannot become a stock- holder in anotbi'r corporation unless such power is given it by its charter or is necessarily imi)lied in it (Franklin Co. v. Bank, 08 Me. 43: Bank v. Agency Co.. 24 Conn_ ir)0: (ireen'sBrice's Ultra Vires. 01. and cases cited ; Morawet/ on Cor- porations. § 229. and cases cited), especially if tbe jjurchase be for the purposeof controlling or affect- ing the management of tbe other corporation. Sumner v. Marcy. 3 W. & M. in.-): Central It. U. Co. v. Collins, 40 Ga. 582: Ilazlehur.-t v. tjavannah, etc. R. R. Co.. 43 Ga. 13 ; G. X. Ry. Co. v. E. C Ry. Co., 21 L. J. Ch. 837; Booth v. Robin- son. 55 Md. 419, 439. Dealing in stocks is not expressly prohibited in the Act of Congress providing for tbe organization of national banks (U. 8. Rev. St. § .-)l3r). i)ar. 7). but such prohibition is implied from tbe failure to grant tbe power. Bank v. Bank. 92 C S. 122. 128. Corporations are creatures of the legislature, having no other powers than such as are given to them by their charters, or such as are inci- dental or necessary to carry into effect tbe purposes for which they were established. Downing v. Mt. W. Road Co.. 40 .N . H. 230. 232: Trustees V. Penslee. 15 N. II. 317, 330; Beaty v. Knowler's Lessee. 4 I'et. 152: Terrine v. Company. 9 How. 172: Bank v. Earle. 13 Pet. 519: Dartmouth College v. Wood- ward. 4 Wheat. 518. 53(!. Certain classes of corporations, such as re- ligious and charitable corporations, and corporations for literary pur- I)oses, may riglitfully invest their moneys in tbe stock of other cor- porations. The i)ower. if not ex- pressly mentioned in theircharters. is necessarily implied, for the pres- ervation of the funds with which such institutions are endowed, and to render their funds productive, .'^o ail insurance com|>any or sav- ings bank may rightfully invest its capital or deposits in the stocks of railroad companies, banks, manu- facturing companies and similar corporations. The power is ntc- § l.').).] IJAII.WAV COMI'AMKS. 4N!> llif iinTcN of till' cttrponit ion. 'riicrc is aiid li:i> Itccii, for till' |);i>l tlirec lumilrocl vi';ir>, both in Kiiirlaiul :iiul in this rmnitrv. :i popular projuiliri' auaiiist inonopolies in licMU'ral, which ha> found I'xprrs^ion in innunieriible nets of lotrishi- tion. Wv cannot >ay that such projuilicr is not well fomidi'd. It is a matter upon which tho k'nislaturr is en- titled to pass judirment. At K'ast, thi're is sufHcient douht of the ]iropriety of such monopolies to authorize the Iciris- hiluie, which may he presumed to represent the views of the pul)lic, to sav that it will not tolerate them unless the power to establish them he conferred l)y clear and c\i)licit luiijruairt'. While, in particular eases, two railways by eon- solidatiuiT their interests under a single manaijenu'ut, may have l)een able to so far reduce the expenses of administra- tion as to irive their customi'r> the benelit of a lower tariff, the loirieal effect of all im)no|)olii's is an increase of price of the thinir produced, whether it be merchandise or trans- jiortation. Owins; to the irreater speed, and cheapness of the service perfornu'd l)y them, railways become neeessarily monopolists of all trattic alonsr their lines, but the ireneral sentiment of the ])ul)Iic declares that su<'h monopolies uuist be limited to the ni'ce>sitie> of the ease, and rcln'N airainst the attempt of one road to control all trafKc between termi- nal points, also connected l»y a competiuL^ line. There are, moreover, thouirhl to l)c other danirers to the uu)ral sen>e of the i(»uununit\ iucidcni to -uch ureat ai^irreiratioU'- of essary to enat)le llicm ti> t'n;;;ij;i' in cssary fur a national iiank <>r a tlio t>u-iiness for wliicli tlicy are uiannfai'turinj; coriioration. or a or<;ani/e(t. and lience is implied, if railroad coiporaiion, as in >atis- not fXpressly granted, in tlicir faction of a valid did)!, iir l»y way I'harti'is. .Sni'li investments are of s»efnrity. l)iit witii a view to its in llie line of tlicir l>nsiness. <>n >iil»se(inent sale or conversion into tlie otljer Ijand. a niannfarturin;j; money so as to make good or re- or railroad corporation is ineorpo- deem an anticipated loss." See rated to do the business of mann- also rieeknor v. Hank, S Wtieat. factoring, or transporting passen- :{."il. .V juint stock corporation lias gers and merchandise. Investing power Iw law to declare that no their funds in that of other corpo- person who is attorney against it rations is not in the line of their in a suit shall be eligible as a di- luisiness. I'nder extraordin.ary rector. Cross v. W. Va.. C. «.t I'. circumia- tiveaets. Tlie consolidation of the.se two srreat corporations will nnavoidahly resnil in ijivinir to the defendant a niono))- olv of all traffic in the northern half of the State of Minne- sota, as well as of all trans-continental tratiic north of the line of the Union Pacific, aijainst which pnhlic reirnlation will he hnt a feeble protection. The acts of the ^Minnesota leu'islatnre of 1.S74 and ISSl nndonl)tedly reflected the gen- eral sentiment of the pnhlic, that their best seenrity i> in competition. In conclnsion. we hold that where, by a rail- way charter, :i general power is oiven to consolidate with, purchase, lease or acquire the stock of other roads, which has remained unexecuted, it is within the comi)etency of the leirislature to declare, by subse(|uent acts, that this power shall m)t extend to the purchase, lease or consolidation with parallel or competinu' lines. "'^ § l.">4. Tlie Subject Coiitiiuied. — Where the consolida- tion of parallel lines cannot be accomi)lished by direct action an attempt to accomplish it by indirection will not l>e sus- tained. In a recent case before the Supreme Court of tin* United States, it was held that a contemporaneous construc- tion of its charter, which ratified the |)urchase of a few short local lines, does not justify the company in ton-oji- dating with a iiarailei and comi)etinii" line between its two (rnniiii with a view of distroyinir the com|)etition which had existed between the two lines. If. from reasons of public policy, a IcirisIaturc declares that a railway company shall not become the purchaser of a ])arallel or competin<:' line, the purchase is not the less unlawful, because the i)arties choose to let it take the form of a judicial sale. \\'h;itever is <-ontrarv to })ublic policy or inimical to the j)ublii- inter- ests is subject to the ])olice power of the State, and is within legislative control : ;md. in the execution of such power, till' legislature is \-est<'d with a l.irire discretion, which, if ' r<':ir-;ill V. Cl. Xurlh.Tii Ifv.. IC] | '. S. case the rule is stated, as follow •<: -'Wcdo not iiiidcr-i.nid. ■ Louisville iV: X. I'. \l. v. Kcii- >i)lvfil :ij;:iiii^t tin- corporation. ;iiul tiicky. lt)l I'. S. G77. "By the Act that a surrender of the power of the of March 7, l>>r)4. the company was le V . lution also provided for the callini;^ S. 1; St. Louis Railroad v. Terre of a special meetinj; of the stoi-k- Ilaute It. R., 14."» U. S. 3H3; Com- liolilers to vote upon the matter, missioners v. Railroad Co.. ."»0 Ind. and it was not to be carried out 8.T. The important power to pur- without their approval. It was chase or con.solidate with another held tiial the proposed purchase line (;annot be inferred from such wa< ultrn vires, and hence could indetinite Iani;ua>je as -to imile or not be executed, even if ralilied by connect with such road." ♦ ♦ • ibc stockholders. That it was void The company insists that the power and a»;ain.-t public policy, in that to purchase and hold other road-* its object was to prevent lawful is not only unlimited, and extends com]ietition. See. as to inaliility to all other roads built, or to be of railroad to become stocklnddep built, althoujLTh i)arallel and com- in another railroad. Central R. R. petinj; lines, but that it «'onsti(iites ( 'o. v. ('ollins. 40 (Ja. 582; ("om- an irrevocable contract, which a pagnie Francaise v. Western Union sul>seiiuent lejjislature is powerless Co.. 11 Fed. Rep. 842; Solomons to impair. In construinj; this sec- v. J^aini;. (! Kng. Ry. Cas. 2S9; tion, we are bound to bear in mind Franklin Bank v. Commercial the ijeneral rule, so often allirmed Bank. 3(1 Ohio St. 3.">i»; Franklin by this I'ourt. that all doubts, with Co. v. Lewistn. 41t2 UAILUA'^ (OMTANIKS. [§ 1.').'). however, that the fact that a purcliase is made at a judicial sah' confers u])on the purchaser any liirlit he is forhichU'n to ac(|uire. if the i)urcha>e had Iteeii nia(h' at a prixate sah'. If. fioni reasons of i)ul)lic pohcy. the IcirisKature (U'chire>< that a railway shall not heconie the purchaser of a jiarallel or conipetini; line, the purchase is not the less uidawful, be- cause the |)arties choose to let it take the form of a judicial sale. A person who. by reason of any statutory disabil- ity, — such as infancy, lunacy, marriaire or otherwise, — is incomi)etent to buy at private sale, is not less incompetent from becoming the purchaser at a judicial sale. The pro- hibition is not u})on the power of the court foreclosinsf the mortirage to order a judicial sale of the property, but upon its ])ower to contirm a sale made to a pai'allcl or compctinii" road."i vj 15;". Kule in Case of Trafti<* Arraiij;enient. — The rule relating to the control of [jarallel lines by a competing railroad applies mutatifi nin/andis to all tratfie agreements by which one company obtains control of the property and of the management of the business of a comi)etiiig line. A railway company cannot purchase the controlling interest in the stock of a competing line, and thus control its busi- ness with a view to supi)ressing competition. In a recent case before the Tnited States Circuit Court for the District villr iV X. i;. |{. V. Kcniiickv. ir.l l\ S. (;77. "I'.KS. § la:,.] KAll.WA^ < OMTANIKS. 4ii;; tioii of ;i hoard of trii>(('os, coiisistiiiir of its own otHcers and cmplovcs, who owned no >to(k in tlu'ii" own rinht. Tills l)<)artl then cxocutotl an ilk'iral trafhi- airrccnicnl whorehy tho cntii-e control of tho franchises and jn-opcrty of the former coinpanN' was snrrendered to the hitter. It was lield that tlie nnnority stockholders in the former com- pany coukl maintain a bill to annul the contract without first apply ini; to the l)oard of trustees for protection.' In • Earle v. Seattle. L. S. I'i: E. Ky. Co., 5(5 Fed. Rep. 900. "Tbe only authority found in the ehaitt'r of the Northern I'aeitic Railroad Company for what has been done in absorbing the jiroperty and franchise of the Seattle, Lake Shore it Eastern Company, and assuminj; liability for its bonded indebtedness, is section 17, sup- plemented by a provision of the laws of this State, authorizing rail- road corporations to purchase or lease and operate connecting lines of railway in this .State, enacted March 28, 1S'.)0. (Laws Wash. 1881t- !H). p. 527.) The section of the charter referred to reads as follows : •Sec. 17. And be it further enacted that the said company is authorized to accept to it.s own use any grant, donation, loan, power, franchise, aid or assistance which may lie granted to, or confem-d upon, said compiiny by the Congress of the I'nited .States, by the legislaliue of any State, or by any corporation, person or persons; and said cor- [toration is authorized to hold and enjoy such grant, donation, loan, power, franchise, aid or a^'si.stancc to it{} own use for the purpose aforesaid." The statute referred to does not prescribe the manner whereby piircha>cs or leases of railways may be consuunnated. otherwise than by the general pro- visions of the several statutes re- lating to corporations, and to con- veyances of property. A railroad corporation cannot lawfully trans- fer its franchise without authority emanating from tlie jiower which granted it. .\nd an unauthorized transfer, made in disguise, as by a tratlic contract, will not, in a judi- cial proceeding, be treated with greater favor than if the contract expressed plainly the real intention of the parlies. On the subject of tratlic contracts, the text of Green's Brice's L'ltra Vires (page 427) con- cisely and clearly states the law, as follows: 'Corporations may make all necessary arrangements for cheaply and exi)ediliousIy devel- oping or carrying on their par- ticular business; but it is another thing, going beyond this, to enter into contracts, for instance, by which the exclusive control or the exclusive right of working the line is handed over to oilier par- ties. .Vllsucharrangeuieiits, what- ever their forms, however dis- guised, are ullrn rire.s and void. This applies with peculiar force in the case of those bodies which have been created for what may be conveniently styled public i»ur- poses.' Now, assuming tliat the section of th«' charter al»ove <|uoted does authorize the Northern racitic Railroad Company to take the benefit of rights and privileges, and exercise new powers, granted i:i4 IIAU.U AV CO.MI'AMKS. [§ I. Pcmi>vlvania it husrccfntly been heldlhatarailrorulcoinpaiiy has a riirht to make a special tratiic contract with a couucct- iiiu laihoad which is not jjarallel or conipetinir; Jind it niav also niaU(; such a c-ontrad with a special class of shippers to secure husincss. On a hill in e(|uity, where it ai)pears that the defendant, a furnace conii)any, has agreed for a suHicient consideration to giNc all of its Iraflic to the plaint- iff, a railroad company, the court will decree specific per- formance of the contract, hut will not enjoin the otiiccrs of the defendant company from particii)atinir in the construc- tion of a railroad parallel to that of the plaintiff, and to which, the plaintiff alleires, the defendant's trafKe was to be aiven.' In another very recent ease, before the same court. and conferred by the .State of Washington, the question whether the contracts and proceedings by which it has gained control of the Seattle, Lake Shore it Eastern Company's franchise and business are ultra vires or not depends upon whether the requirements of the State laws in this regard have been met. There has been no sale and conveyance, nor lease, of the rail- road property, in accordance with the laws of this State relating to tlie manner of transferring titles to such property. As the parties have not done what the statute authorizes to be done, I do not thinl< tliat the deal l)et\veen them lia-j any government sanction wiiat- ever. No consolidation has been attempted, and yet the transaction is of such resemblance to a consol- idation that the legal principles by wiiich tlie validity of proceedings to effect a consolidation may be applied."" Earle v. Seattle. L. S. A K. \ly. Co.. no Ked. Ifep. 00!). IMo. ' Ha 1.1 Eagle Valley 1{. K. Co. v. Xitlany Valley ]{. J{. Co.. 171 Ta. St. 284: s. ('.. 33 Atl. Itep. 2H!i: 37 W. X. ('. sn. In Cuml»eiland Val- ley Ji. Co. V. Gettysburg »!c II. liy. Co. (1S9G), 177 Pa. HW; s. c, 35 Atl. Kep. 952, it is held that aeon- tract between railroad companies whose roads approach their i)oint of connection almost at right angles, so tliat tiiey cannot become competitors, to interchange tratlic and cars, sell coupon passenger tickets, make through bills of lad- ing and apportion their earnings, is not unlawful. In the course of the opinion. Dean. J., says: "We are clear io our conclusions that the South Mountain and (iettys- burg i*c llarrisburg form in no rea- sonable view a parallel and coui- l)eting line to the Cumberland N'alley. witii which they cnnnect. Their line approaches Carlisle, the connecting ipoint. almost at right angles. A glance at any railroad map shows this. From Gettysburg to Carlisle, the traftic along this line, when tiie contract of 30th Septemlier, 1882, was made, was not one for which the Cumberland Valley could comjiete. The only competitors that these two short roads could have had at that date were country wagons on the ordi- naiv highways. The contract was I :><;.] I:AII,\\ AV CoMrVNIKS. 4i>:> ;i railroiid (•(im|);in\' lu'iicli.'ili'd tlirouuli riiiollu'r railroad fijiiipaiiy for the purchase of a coiilrolliiiir iiilcri'st in tlu' stock of a parallel or coni|K'tiiiii" line, the lesral title of the stock to l)e held l>v the otiier railroad, hut the consideration <-t)MiiMi:' from the conipetinu' coiupaiiN . A preliurmarv injunction to restrain the execution of the contract was granted, and a decree entered continuiiiir the injunction until linal hcaiinu' was athruicd on a})[)eal.' vj loiJ. Admission to Depot Grounds. — The (|Uestion whether a railway company nujy i)rohil)it all solicitations of not, tlu'icforc. forbidden by llie right to conned. :ind then avows ooustitiUion. It was. in fact, an the purpose that they may -receive advantage to tiie public, as well as and transport each the other's to the contraeting parlies; for it passengers, tonnage and cars, relieved the public of the incon- loaded or empty, without delay or venienee of transfer of goods and discrimination.' We eoncliide. rebilling. provided for traveler's therefore, that the contract was close connections, and necessarily not between parallel and compet- lessened the actual cost of trans- ing roads, nor was it unlawful in portation, and tliere is no evidence its ostensible piu'pose. Whether that the contract was made with a any of its provisions are unlawful, view to increase charges to the or wliether because of the indeti- shipper. The profits of the con- niteness of others it is incapable of tracting parties were expected to specific execiUion. are altogether result from a lessening of operat- different (piestions.'' Mandamus ing expenses to all of them. Any will lie to compel a railroad to run such contract inevitably tends to a passenger train. A railroad run- tbe advantage of the public; for ning through three counties having the cheaper any product can be a po|»ulation each of from 17.000 delivered at destination, the better to 1!>.(M)0 inhabitants, and eight .ible is the producer to meet in the towns ranging in population from market the same products brouglit 200 to .').000. tlie country being to the sauu! destination by other tributary to St. Louis, should be road>. which last always aim to rcfjuired to run a daily passenger reach, and do reach, the points train. Tlie nmtiing of a passenger where products are marketable, coadi attaclied to a freight train The contract really tends to ac- is not a compliance with its duty complisb the pur|io>e of the gen- to the public, where the revenues eral railroad law of 18US, which of the company are sulHcient to provides that railroads of a similar pay the operating expenses of a character shall have the right to separate train for passengers. I'eo- conneet. upon such terms a> may pie v. St. I^.. A. & T. il. H. Co. be agr« ed upon by those who have (180«i). 4.'> X. K. Kep. t<24. the managemeiu of such road>. ' I'enna It. K. Co. v. Common- and also of the constitution which wealth. 4 Cent. r)01 . declare.- that lliev sliall have the 4it. business on the irrounds coiuKHted with its stations has not been detinitcly and finally determined. liut it is well settled that in their regulations relating to this matter they cannot discriminate in favor of one i)erson and against another engaged in the same branch of business. They cannot a(hnit the omnibus or hack of one person or coni- ])any to their grounds and exclude that of another. And they cannot give one person or comi)any any advantage over a competitor. Their treatment of all engaged in this branch of business must be strictly fair and impartial. In the leading case on this su))ject it was held that a railroad company cannot legally give to one hack and bus company the right to the use and occupancy of a portion of its depot grounds to the exclusion of others engaged in the like busi- ness of the carriage of i)assengers and freight to and from its depot. The statute recpiiring all railroad companies to grant equal facilities for the transportation of j^assengers and freight to all persons, companies or corporations does not relate entirely to the mere carriage in the cars of the road, but includes the receiving of such passengers and freight at its depots, and by other '^persons, companies or corporations" at the i)oint upon its road where the carriage ends. A railroad company can nudvc :dl needful, reason- able rules and regulations concerning the use of its depot and grounds, and can exclude all persons therefrom who have no business with the railroad or passengers going to and coming from its trains or depots, and it ^irobably can prohibit all persons from soliciting business for themselves ui)on its premises; I)ut it cannot, arbitrarily, admit one common carrier of })assengers or freight to its depots or grounds and exclude all others, for no other reason than that it is for its own profit or pleasure to do so.* In the ' Kiilainiizoo Hack it l}iis Co. v. Co. v. Ifailroad Co.. .")7 Mo. 18S: Sootsina. SJ Mich. 194. See also Beadoll v. P^a.^tern Counties Hy. Marriott v. Ky. Co., 1 C B. (X.S.) Co.. 5 Com. B. (X.S.) 500: rainter 490; In >•<> Palmer, L. R. G C. P. v. London. Brighton & S. C. Ky. 104; In re Parkin«=on, L. K. C. P. Co., ."> Com. B. (X. 8.) 70: Barker .')."i4; Camblos v. Railroad Co.. 9 v. Midland Ry. Co.. 18 Com. B. I'liila. 411: Xew England Express 40; Markliam v. Brown. S X. H. § irx;.] K A I LW A Y CO M PA N I KS , 497 oj)ini()ii ill this case the (ioctiine is (Stated by the court, as follows: "The plea is iiuule that the railway compaii}', owniny: these grounds, or havini; the actual occuijaucy and possession thereof, has the same riirht of conlrol oMTlhcni 523. "The exclusive privilege which the plaintiffs claim under their license from the railroad couipany's station agent of occu- pying tiie space beside the railroad platform of easiest approach thereto, next to the station build- ing, the objective point for the discharge of railroad passengers, is a valuable one, giving the plaint- iffs an advantage in carrying on their business over the defendants, their rivals in the same line of business. The business of both parties is that of common carriers for hire, on the same line, and, by their connection with the railroad, forming one continuous line by which passengers are transported to the same general destination; the railroad company carrying them to its station near the city, and the plaintiffs and defendants carrying them to their severals destinations in the city. As com- mon carriers it is the duty of each of the parties to transport all per- sons who offer to take and pay for passage with tiiem; and they are charged with grave and re>i)onsi- ble duties to such persons when they have once taken passage. Tliey must make the trip whether they have one or many passengers. As a corollary of this duty to carry all, there ought to be a corre- sponding right upon the part of each to have the .same facilities afforded them to obtain the pas- sage in their respective vehicles of all such passengers as are brought to the point of connection by the connecting carrier, tlie railroad 32 company on the same general route. In this way the enterprise of each is encouraged, competition is stimulated, the price of trans- portation is kept within reasonable bounds, the safest, best and most comfortable means of conveyance, a rapid passage, and polite and agreeable service are apt to be se- cured to the traveling public. On the other hand, if better facilities are afforded to one carrier than another by the connecting carrier competition is discouraged, a mo- nopoly created, and the traveling public are apt to receive a slow, uncomfortable, slovenly, negligent and expensive service. Monopolies are obnoxious to the spirit of our laws, and ought to be discouraged. This is the spirit of our constitu- tional provision which prohibits •discrimination in cliarges. or fa- cilities in transportation * * ♦ between transportation companies and individuals or in favor of either.* Article 12, § 23. And in this case we do not think the rail- road company could give the l)laintiffs the exclusive privilege of ajiproacli to nearly one-half of its platform and that the most desira- ble and advantageous half for pro- curing passengers and therei)y deny it to the defendants, both be- ing there for the same purpose, and in the same business, of for- warding the railroads passengers to their places of destination from the point where the railroad com- pany landed them." Cravens v. Kodgers. 101 Mo. 247. 2.".2; S. C, 14 h^. \V. Hep. IOC. A railroad 498 KAII.W AV COMI'AMKS. [§ lad that any citizen would have under .similar eircuiiistanees. provided only that it discharges its duties to the public, witli reference thereto, as a coninion carrier. This is true. But when the jxround is used in its business as coumion car- company may not j^iant to one person the exclusive rio^lit to the use of a portion of its depot plat- form to deliver passengers depart- ing, and to receive and solicit the patronage of incoming passengers, to the exclusion of all other per- sons from the exercise of such rights, as such grant is against public policy and contrary to the provisions of Article XV.. § 7, of the constitution, which provides that -no discrimination in charge,-, or facilities for transportation of freight or passengers of the same class shall be made by any railroad or transportation or express com- pany, between persons or places within this State.' Passengers ar- riving at or departing from the station of a coujuion carrier are entitled to whatever benefit of competition may grow out of the contests of others to supply the public demands and receive the compensation therefor. A rule or regulation as applied to the gov- ernment of the conduct of persons, or of a class of persons, contem- plates uniformity and not discrim- ination, and the grant by a railroad company of a iilatform privilege at its depot to one hackman to the exclusion of all others is therefore not such a rulv or regulation as applied to the right of a common carrier to make and enforce all reasonable rules and regulations necessary to govern persons com- ing to its station buildings, plat- form and grounds. Montana I'nion lly. Co. V. Langlois. 9 Mont. 41!); s. c, 24 Pac. Kep. 201). A railroad company may make and enforce by its agents reasonable and nec- essary rules for the transaction of its business, and for the proper and orderly management of its depot and other buildings open to the public. The rules, however, must be reasonable and such as do not unnecessarily infringe upon the rights of the public and others having or carrying on lousiness in connection with railroad trallic and travel. A regulation forbidding hackmen. peddlers, expressmen and loafers from coming within the passenger depot is reasonable. Sumniitt v. State. S Lea (Tenn.), 413. In Massachusetts, in Old Colony Railroad Co. v. Tripp, 147 Mass. 35, a different view is taken. In this case the court held that a railroad corporation uuiy contract with one to furnish the means to carry incoming passengers or their baggage and merchandise from its stations, and may grant to him the exclusive right there to solicit the patronage of such passengers. Such an agreement is not within the Pub. Stats, chap. 112, § 188, which provides tjjat such a corpo- l)oration "shall give to all i)ersons or coujpanies reasonable and etjual terms, facilities and accomodations ♦ * * for the use of its depot and other buildings and grounds. The holding was by a nearly e(iually balanced bench. In the majority ()i)inion. .Mien. .1., says: "We have not been referred to any decision or dictum in England or in this country, that a common carrier of passengers and their § l')7.] IIAII.WAV COM PAN IKS. 499 rier, and for the purpox- of the staiidiiii!; oi' 'scttiiiir' of hacks and l)use.s to solicit the patronage of incoming pas- sengers, then it must use it for the benefit of all, and not for the privilege of one. It could prohahly refus<>, if siu'h refusal was reasoual)lc in that there was other |)r()per ground for them to staml upon, to })ermit any hacks or buses to occupy the ground at all; but if it opens the door to one, all must enter and have equal facilities and privi- leges, one with the other. No doubt one wrongfully creat- ing disorder or disturbance upon this ground, or defrauding or deceiving passengers, could l)e lawfidly ejected tliere- from, and, persisting in siu-h conduct, be forever l)arrcd therefrom l)v the rtiilroad com[)any, but that would be a matter for the railroad company, rather than the plaintiff."^ § 157. General Powers of Kailway Corporations. — In general the powers of a railway company is represented by its board of directors. In the exercise of this power a board of directors is subjected to the restrictions of the charter and by-laws of the comjiany. It must be guided by these rules and l)y the legal regulations to which such corporations are subject. In a leading case in Indiana, the rule was stated, as follows: "A railroad comi)any is a baggage to and from ii railroad defendant in his business of solic- station ha-< any riglit without the itor of the patronage of passengers consent of the railroad company, lield no relations with the pluintiff to use the groimds, l)uildings and as a conunoii carrier, and tiad no platforms of the station for the right to use its station grounds and purpose of scdieiting the patronage buildings."" of passengers, or that a regulation ' Kalama/oo Hack & Bus Co. v. of the company which allows such Sootsma, 84 Mich. U>4, 201. See use by particular persons, and de- generally. McUonnellv. I'edigo. 92 nies it to others, violates any right Ky. 4(5.j; s. c, 18 S. W. Kep. 15; of the latter. Cases at common "» Am. H. & Corp. Rep. 711; New law or under statutes to determine York, etc. R. Co. v. Flynn, 74 llun, whether such railroad companies 124; s. C, 26 X. Y. Supl. 859; City in particular instances gave e<|ual of Colorado Springs v. Smith. 19 terms and facilities to different Colo. r>.")4 ; s. r.. 3») I'ac. Rep. 540; parties to whom they furnished Landrigan v. State. 31 Ark. 50; transportation and with whom they Commonwealth v. Tower. 7 Mete, dealt as common carriers, have no 596. bearing on the case at bar. The 500 RAILWAY COMTANIKS. [§ 157. quasi puhlic oorporation. It dopeiuls on the public for its .support, and the public depends upon it for its iicconiinoda- tions. Powers are granted to it which are denied to indi- viduals or partnerships or other corporations, as those for producing, manufacturing, commercial or monetary pur- poses. It has privileges which are denied to other common carriers, such as lines of ships, steamboats, or stage coaches, or other means of the carrying trade. It exercises the right of eminent domain, which is an attribute of sovereignty. The power of taxation, as in the case before us, is often invoked in its aid. It is, therefore, bound to reciprocal obligations to the State, and owes reciprocal obli- gations to the public. It must not make contracts beyond its chartered powers, or jierforni acts injurious to the pub- lic, or pursue a course in contravention of public policy. It is created, sustained and ])rotectcd by the law, and wields power with which private enterprise cannot compete: it must, therefore, obey the law, keep within its powers, and pursue, in its general course, the end and design of its creation. * * * j^ board of directors represents the general power of a railroad company, subject to the restric- tions in the charter and the by-laws of the corporation. Within their general agency their acts will bind the com- jiany. They have no i)o\ver to manage the property or franchises of the road for their own benefit. They may not divert the business of the road, or imi^air its ability to carry out its duties to the stockholders. Their power, as l)etween themselves and the company , is conferred l)v the corpora- tors, and nnist not be exceeded. They cannot subject the capital of the company to risks, or incur liabilities beyond their agency. They cannot sever the road and favor one portion of it to the injury of another, or serve the interests of a part of the stockholders to the injury of other stock- holders. They are the agents of the corj)oration, and are limited in their powers. They cannot change the termini of the road, or its general course and direction, but must in all things sul)serve the original purpose, design and end of the organization. A board of directors of a railroad com- pany stands as a trustee of the stockholders, in the general § 157.] IJAII.W AV COMPANIKS. 501 business .-ukI for the propcity of tlu' roads, and may not violate their trust. It can make no eonsiderable ehanj^e in the road, as severine; its trunk, c'hanginjr its (ermiiii, leasing or selling a portion of its track, without their consent. As between the corporation and the stockholders, tlic latter ai'c not bound by the acts of the board of directors outside of the ordinary busines.s and general purpose of the road. The corporation may become bound l)y the act of its board of directors, when the stockholders, as between themselves and the corjioration, would not be bound by the same act, unless ac(juicsced in ; ))ut if the act is itlfra viies of the cor- poration it is void, and no one is l)oun(l.'"^ ' Board, etc. Tippecanoe County V. Lafayette, etc. R. R. Co., .')() Ind. 85, 108. 112. See also McCluer v. Manchester, etc. R. R. Co., 13 Gray. 124; Bissell v. Michigan Southern, etc. R. R. Co., 22 X. T. 299; Langley v. Boston, etc. R. R.. 10 Gray, 103: Life & Fire Insur- ance Co. V. Mechanic Fire Insur- ance Co.. 7 Wend. 31; .Vlle^^lieuy City V. McClurkan. 14 Pa. St. SI; Barorate v. Shortridge, ."> II. L. Cas. 297; Railroad Company v. How- ard, 7 Wall. 413; Zabriskie v. C, C. & C. R. R. Co., 23 How. 381 ; Randall v. Van Vechten, 19 Johns. 60; Xeustadt v. 111. Cent. li. K. Co.. 31 111. 4S4; Illinois Cent. H. R. Co. V. McLean Co.. 17 III. 2'.il : Rice V. Rock Island, etc. H. R.Co.. 21 111. 93: Palmer v. Forbes, 23 Mi. 301 : Bruffet v. Great Western R. R. Co., 2.") 111. 310; Racine, etc. R. R. Co. V. F'ariners' Loan «i Trust Co., 49 111. 331 ; OhiOi'c Miss. R. R. Co. V. Wheeler, 1 Black, 286; Pearce v. Atwood, 13 Mass. 342: Allison V. Hubbell. 17 Ind. r>.")9; Harding v. Third Presb. Church, 20 Ind. 72: Kx. parte Clifford, 20 Ind. 106; Wall v. State, 23 Ind. 150; Webb v. Rice. 6 Hill. 221; Hitt V. Ormsbee, 14 111. 235; Mc- (^uilkin V. Doe, 8 Blackf. 581 ; Fort V. Burch. 6 Barb. 74; Board, etc. V. Culter, 6 Ind. 3.54; State v. Buckley, 2 Blackf. 249; Smithson V. Dillon, 16 Ind. 169; Mayor, etc. V. Colgate, 2 Kernan, 146; Sun Mut. Ins. Co. V. Mayor, etc., 8 N. Y. 2.53; People v. Hills. .35 N. Y. 452; I'eople V. O'Brien. 38 X. Y. 195: Smead v. Indianapolis, etc. K. W. Co.. 11 Iiul. 104: Y.. Sc II. R. R. Co. V. Hunt, 20 Ind. 4.57; President, etc. v. Jackson, 7 Blackf. 36; Burkham v. Beaver, 17 Ind. 367; Indianapolis, etc. R. R. Co. v. Solomon. 23 Ind. .534; Pittsburgh, etc. 1{. K. Co. V. Kain.35 Ind. 291 ; Indianaiioiis, etc. R. R. Co. v. Warner, 35 Ind. 516; Smith v. Sheeley. 12 Wall. 3.58; Myers v. Croft. 13 Wall. 295; Land v. Hoff- man. IJ Am. L. R. (X. S.) 143; Ilaywanl v. Davidson, 41 Ind. 212; White V. Howard. 38 Conn. 342; Eastern Counties R. W. Co. v. Hawkes, 35 p:ng. L. & Eq. 32; Bank. etc. v. Kdgerton. 30 Vt. 190; Eldridge v. Sn)itb, 34 Vt. 484; Miller v. R. .'c W. R. R. Co.. 36 Vt. 490: Parish v. Wheeler, 22 X. Y. 494: Town of Pine Grove v. Tal- coit, 19 Wall. 666; Steam Xav. Co. V. Weed, 17 Barb. 378; Boston, etc. 502 HA 1 LW A Y COM PAN I K8 , [§ 157. R. R. Corp. V. Salem, etc. R. R. Co., 2 Gray, 1 ; Black v. Delaware, etc. Canal Co., 22 X. J. Eq. 130; Fall River Iron Works Co. v. Old Colony, etc. R. R. Co.. 5 Allen, 221 ; Great Luxembourg R. W. Co. V. Magnay. 2.5 IJeav. 586; Beman V. Rufford, 1 Sim. (N. S.) .550; Bagsbaw v. I^astern Union R. W. Co.. 2 Macn. & G. 389; Eastern Anglian R. W. Co. v. Eastern Counties R. W. Co., 11 C. B. 775; Richard.t>. Clas8iti(>atiun of Trusts. — In their general cliai- acteristic's "trusts" have hocn divided into throe chisses : FiitST, siieh as are ereated by a union or eonibination of a number of corporations or companies. In this class all the similarity, and iiave been induced by Miotivt's of individual or corpo- rate aijfjrandlzenient as aj^ainst the public interest. In business or trading combinations they may even temporarily, or perhaps per- manently, reduce the price of the article traded in or manufactured, by reducinor the expense insepara- ble from the running of many dif- ferent companies for the same purpose. Trade or commerce un- der those circumstances may. nev- ertheless, be badly and unfortu- nately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein, and who might be unable to readjust themselves to their altered surroundings. Mere reductions in the i)rice of the com- modity dealt in might be dearly paid for by the ruin of such a class, and tiie absorption of c INDUSTHIAL IKL'STS. [§ 151>. .stock of the conibiniiig corj)oialions is traiisf erred to a board of directors or trustees, as explained in the foregoing section. In lieu of the stock thus surrendered the stock- holders receive trust certificates. Under this form of trust the directors or trustees are clothed with absolute control of the entire business of the combination. They receive their a])|)<)iMtment from the holders of the stock certificates, and are answerable only to them. A Skcond class of "trusts"' consists of corporations that have ac(juired control of other corporations by purchasing their stock. This organization is of the same general character as the preceding, but the form is changed in order to escape the force of the decis- ions of the courts relating to corporate partnerships. Tiik TiiiiM) class of "trusts" consists of corporations wliich have servant or agent of a corporation condemned in common. It is en- for selling the commodities which tircly appropriate generally to he once manufactured or dealt in. subject corporations or persons having no voice in shaping the engaged in trading or manufactur- business policy of the company ing to different rules from those and bound to obey orders issued applicable to railroads in their by others. Nor is it for the sub- transportation business, but when stantial interests of the country the evil to be remedied is similar that any one commodity should be in both kinds of corporations, such within the sole power and subject as contracts which are unqueslion- to the sole will of one powerful ably in restraint of trade, we see combination of capital. Congress no reason why similar rules should has. so far as its jurisdiction ex- not be promulgated in regard to tends, prohibited all contracts or both, and both be covered in the combinations in the form of trusts same statute by general language entered into for the purpose of re- suMiciently broad to include them straining trade and commerce, both. We see nothing either in The results naturally Mowing from contemporaneous history, in the a contract or combination in re- legal situation at the time of the Btraint of trade or commerce, when jiassage of the statute, in its legis- entered into by a manufacturing laiive history, or in any general or trading company, such as above difference in the nature or kind of stated, while differing somewhat tliese trading or manufacturing from those which may follow a companies, which would lead us to contract to keep up transportation the conclusion that it cannot be rates by railroads, are nevertheless supposed the legislature in prohib- of the same nature and kind, and iting the making of contracts in the contracts themselves do not so restraint of trade intended to in- f:ir differ in their nature that they elude railroads within the pur\iew mav not all be treated alike and be of that act." § ir>().J INDUSTRIAL TRUSTS. .')()7 purohiised the plants, iiicliuling tlu' real estate, maehiiu'i-y, stock ill trade, aodd will, etc., of a nuiiiher of corpo- rations, tiriiis or iiulividuals iMiiraired in a particular branch of business. I'ayinent for this property is made in the stock of the corporation. The work is then carried on ))y the orticers antl directors of the corporation witli reference to the interests of all the stockholders alike. As the corpo- ration holds both the leual and c(juitable title to all the property of the associated corporations it conducts the busi- ness as it was previously conducted by all, or susi)ends the ojieration of one or more of the plants as may be deemed best for the interests of the whole. The object of the com- bination in this form is to limit production where that can be made protital)le, as well as to create a monopoly and control prices. § IGO. Legality of the "Trust," — Class First. — A union of a nundu'r of business associations, eniraircd in the same ln*ancli of business, is not, necessarily, illei^al. Both the object sought and the means employed may be altogether unobjectionable from a legal point of view. But upon the character then, that is, upon the nature of the end in view and of the method of acc()mj)lishing it, the legality of the union depends. ( )f "trusts" of the tirst class, The Standard Oil Trust and The North Kiver Sugar Kefining Company, commonly designated 'I'he Sugar Trust, are jjrominent examples. In an action brought by the State to secure the dissolution of The Standard Oil Company, one of the corporations which con- stituted 'IMie Standard Oil 'Trust,it was held by the Supreme Court of Ohio that an agreement I)y which all or a majority of the stockholders of a cor|)oration transfej" their stocks to certain trustees, in consideration of the agreement of the stockholders of other companies and of the members of limited partnerships, engaged in the same business, to do likewise; and by which all arc to receive in lieu of their stocks and interests so transferred trust certificates to be issued by the trustees ecpial at |»ar to the ]tar value of their stocks and interests; and b\- which the tru>tee> are em- 508 INDUSTRIAL TRUSTS. [§ ICO. powered, as apparent owners of the stock, to elect directors of the several companies, and thereby control their affairs in the interests of the trust so created ; and are to receive all dividends made by the several companies and limited })artncrships, from which, as a common fund, dividends are to be made by the trustees to the holders of the trust cer- tificates, tends to the creation of a m()noj)()ly to control in-oduction as well as ]n-ices, and is against public })olicy.^ ' State V. Standard Oil Company. 49 Ohio St. 138. Defendant and his partner sold their bakery busi- ness to complainant corporation, receiving payment in its stock, and defendant leased to it the premises where the business was conducted, and contracted to carry it on as the purchaser's a2;ent, for a salary. After operating under this arrange- • ment for a time, he repudiated the sale, resumed possession under the old firm name, and refused to ac- count to complainant. The bill was brought to enjoin him from asserting a hostile claim, for an ac- c'ounting and a receiver. Defend- ant and his partner, as intervenor, filed a cross-bill for rescission of the sale for fraudulent representa- tions, and tendered back the stock. Complainant was practically a trust, organized to monopolize the l)usinoss. and had already secured control of thirty-five leadiugbaker- ies in twelve different States. Held, that while a case was made for a receiver, pending litigation be- tween ordinary parties, the prayer •would be denied, as eipiity would not encourage a combination in re- straint of trade, and prol)ably il- legal under Federal Ant i- Trust Act of IStlO. "to protect trade and com- merce against unlawful restraints and monopolies," and .Vet Louisi- ana. July 5. 1890, for the same pur- pose. American Biscuit & Manf. Co. V. Klotz. 44 Fed. Hep. 721. A contract by which a Michigan cor- poration agrees with other per- sons and corporations to transfer its entire property and business to a new corporation, which is to be organized for the purpose of con- trolling the business of making and selling a certain article, is void un- der 3 How. Ann. St. Mich.. § 3832, forbidding monopolies and combi- nations. Merz Capsule Co. v. United States Capsule Co.. (w Fed. Rep. 414. '-The agreement recites that it is designed by its signers to form a trust for the purpose of se- curing co-operation in the busi- ness of manufacturing preserves. etc.,andof sellingand dealingin the same in home and foreign markets. This co-operation, to be secured through tlie extraordinary powers conferred upon the nine trustees named in the agreement, six of whom are designated by name and authorized to elect three others, could not result otherwise th.-m in a grinding monopoly controlling all trade in the business specified, and raising or depressing prices therein at the will of the trustees. Such trustees are empowered to or- ganize corporations with all or any of the powers specified in the purposes of the agreement; and the stock of such corporation is to be issued to or purchased by said trustees. For this stock the trus- § i<:o.] INDUSTlilAL Tia STS. :)Ui> In the opinion in this case, Mr. .lustice Minshall, said : "Applyini;. then, the principle that a corporation is simply an association of natural i)ersons, united in one body under a special dcMomiiiatiun, and vested by the policy of the law tees are to issue certificates of trust. The au;reenient is to go into effect within sixty days from the time those liolding the majority of the stoclv in seven specified corpora- tions formed, or to be formed, shall transfer the same to the trustees. Eacii signer of the agreement agrees to assign and transfer to said trustees absolutely all the shares, which he may own in said corporations formed, or to be formed, and is to receive therefor, not money, but trust certificates, equal to the appraised amount of the earning capacity of his stock as fixed by the trustees and the stockholder. The trustees are au- thorized to purchase in the same way. by the issue of trust certifi- cates, other stocks of the same ^companies, and also the property and business of any firm or indi- vidual engaged in the business of manufacturing and dealing in said products. The trustees are to ex- ercise supervision over the corpo- rations whose stocks are transferred to them, and are empowered to elect themselves directors and offi- cers in such corporations and pro- cure such management of the same as will be conducive to the inter- ests of the holders of the tru>t of the trust certificates. These trust certificates are divided into shares of the par value of .SlOO each, and are prejiared by the trustees. They provide that the holders thereof shall be bound by the terms of the trust agreement and of the by-laws passed in pursuance thereof, and are intended to show the interest of each beneficiary in the trust. The trustees hold the stocks trans- ferred to them in trust for the holders of the certificates, and are to receive and hold the dividends or interest upon said stocks, and are to distribute the same by de- claring dividends upon the certifi- cates. The stocks so transferred to the trustees are to be held by them for the benefit of all the owners of the trust certificates. The trust is to continue for twenty- five years, subject to the right of 75 per cent, of the holders of the certificates to terminate it after the expiration of one year, and of G5-3 per cent, of such holders lo terminate it at the end of five years; and the trustees cannot sell or surrender any of the stocks held by them during the continuance of the trust, without the consent of a majority in number and value of the holders of the trust certificates. It will thus be seen, that the agree- ment in (piestion makes provision for welding together all the inter- ests engaged in the business named in the agreement, into one giant combination or partnership under the absolute dominion and control of a board of nine trustees. Its il- legal i)urpose is apparent upon its face. and. therefore, under the de- cisions above referred to. it must be held to be void as being inju- rious to the public interest. The object of the testimony of the; de- fendant, upon the trial below was to show that the plaintiff. The American Preservers* Company, was a party to ihis illegal combi- 10 INDUSTRIAL TRUSTS. [§ !<:<». with Iho capacity of acting in several respects as an indi- vidual, and disreirarding the mere fiction of a separate legal entity, .since to regard it in an in(jniry like the one hefore us would be sul)versi\e of the purpose for which it was in- nat'on. and ttiat the execution of the bill of sale to it was to enal>le it to carry out the unlawful de- signs of such combination. If this testimony as offered had been re- ceived, it would have tended to show, not only that the j)laintiff company was under the contiol of this board of trustees, but that it was in a partnership with other corpo- rations. The corporators named in plaintiffs' charter and whose names are signed to the agreement therein set out. upon the basis of which they were declared to be a corporation, were trustees in the trust. The court below ruled out the testimony, showing that these trustees held stock in more than a dozen different corporations in the different States of the Union, be- sides the stock in the plaintiff company transferred to it l»y the defendant and others. The agree- ment was illegal as providing for a partnership among coiporations. It is a violation of law for corpo- rations to enter into partnership. The provisions of the general in- corporation act of Illinois are to the effect that everv corporation organized in this State must man- age its own affairs separately and exclusively, and cannot enter into any contract or relation, by wliicli it is divested of such power of ex- clusive management, or by wliich its franchises are vested in a part- ner or any outside l)oar(l. witli ecpial ])ower to direct its business. "NVhittenton Mills v. Upton, 10 Gray. .")82; People v. N. Riv. Sug. Ref. Co.. 121 X. Y. 582. The ap- l>pliee heie, a fureign corporation, so far as it was doing business in this State through any control which it assumed to exercise over the l)usiness transferred to it by appellant, was subject to the same restrictions and duties as corpora- tions formed in this State and could have no other or greater powers. 1 Starr & Cur. Stat. pageClD. chap. 32. § 20. It was, therefore, unlaw- ful for it to be operating in this State as a member of a partnership of corporations. State v. Nebraska Distilling Co.. 29 Xeb. 700; Mallory v. Oil Works, SO Tenn. 55)8; People V. Chicago Gas Trust Co.. 130 111. 208.*' Magruder. J., in Bishop v. American Preservers' Co., 157 111. 284. 311. In Distilling & Cattle Feeding Co. v. The People. 15G 111. 448.400; s. C..41 X.E. Hep. 188. the , court, after connuenting on State v. Nebraska Distilling Co.. 2!) Xeb. 700; State v. Standard Oil Co.. 49 Ohio St. 137; People v. North River Sugar Refining Co.. 54 Ilun. 354; s. c. 121 X. Y. 57; Richardson V. Buhl. 77 Mich. 032; People v. Chicago Gas Trust Co., 130 111. 2(i8. says, at page 490: •■The de- fendant contends that, while this may all l>e so. the change in or- ganization from an unincorporated association to a corporation, and the change in the mode of holding the distillery properties of the various corporations formerly be- longing to the trust, by surrender- ing the stock of the corporations, by means of which the control of those properties was formerly maintained and having the prop- ^ 100.] INDlsruiAL Turs^Ts, :)ii vcntotl, is tluTc, upon an analysis of the airrt'Cinent, room for doubt, thai the act of all the stocUhoklcrs, officers and directors of the company in >ii;ninu' it, should he imputed to them us an act done in their cai)acity as a corporation? We think not, since thereby all tlie property and business of the company is, and was intended to be, virtually trans- ferred to the Standard Oil Trust, and i> cout rolled, through its trustee, as effectually as if a formal transfer had been made l)y the tlirectors of the company. On a (juestion of this kind, the fact nuist constantly be kept in view, that erties themselves transft'ired and conveyed directly to the defendant cori)oration, have piiifjed the com- bination of its illei|;ality it must be admitted that these chanties, so fai- ns they have any effect upon the rights or interests of the former stockholders in those corporations or of the public, are formal rather than substantial. The same inter- ests are controlled in sul)stantially the same way and by the same agencies as before. The nine trustees of the trust, who. as the holders of all the capital stock of the corporations and as a majority of the directors of each, controlled such corporate property, became the suljscritiers for all the stock of the new corporation and its board of directors. The conveyance and tran>fer of the properties of the constituent companies to the new- corporation was merely a transfer by the trustees to themselves, though in a slightly different ca- pacity, and the former stockholders in the constituent companies sim- ply exchanged their trust certifi- cates, share for share, for stock in the new corporation. That corpo- lation thus succeeds to the trust, and its operations aie to be carried on in the same way. for the same purposes, and by the same agencies as before. The trust, then, being i-epugnant to public policy and illegal, it is impossible to see why the same is not true of the corpo- ration which succeeds to it and takes its place. The control exer- cised over the distillery Ijusinessof the country — over production and prices — and the virtual n)onopoly formerly held by the trust, are in no degree changed or relaxed, but the uiethods and purposes of the trust are perpetuated and carried out with the same persistence and vigor as before the organization of the corporation. There isno magic in a corporate organization which can purge the trust scheme of its illegality, and it remains as es- sentially opposed to the principles of sound public policy as when the trust was in existence. It was il- legal before, and is illegal still, and for tlie same reasons." A mercantile corporation cannot, by an arrangement with other corpo- rations, place its stock in the hands of trustees, with power to manage the affairs of all the conipanies as one. for the purpose of increasing its profits, thus substituting the trustees as the governing l)ody of the corporation instead of its ofH- cers. as such an act is inconsistent with the purposes of its creation. Gould V. Head. 38 Fed. Rep. 88t;. '">12 INDUSTRIAL TRUSTS, [§ l»i(). the int'ta|)liy.sicul entity lias no thought or will of its own; that every act ascribed to it emanates from and is the act of the individuals personated by it ; and lliat it can no more do an act or refrain from doing it, contrary to the will of these natural ))ersons, than a house could be said to iict in- de{)endently of the will of its owner; and where an act is ascribed to it, it must be understood to be the act of the persons associated as a cor])oration, and whether done in their capacity as corporators or as individuals, must be de- termined by the nature and tendency of the act. It, there- fore, follows, as we think, from the discussion we have given the subject, that where all or a majority of the stock- holders, comprising a corporation, do an act which is de- signed to affect the property and business of the company, and which, through the control their numbers give them over the selection and conduct of the corporate agency,' does affect the property and business of the company, in the same manner as if it had been a formal resolution of its board of directors; and the act so done is ultra vires of the corporation and against public })ohcy, and was done by them in their individual cajjacity for the purpose of con- cealing their real purpose and object, the act should be re- garded as the act of the corporation ; and, to prevent the abuse of corporate power, may be challenged as such by the State in a proceeding in quo warranto. That the nature of the agreement is such as to preclude the defendant from becoming a party to it, is, we think, too clear to rc(|uire such consideration by us. In the first })lace, whether the airreement should be regarded as amountinij to a i)artner- shi|) between the several companies, limited partnerships and individuals, who are parties to it, it is clear that its ob- servance must subject the defendant to a control incon- sistent with its character as a corporation. Under the agreement all but scncu of the shares of ca])ital stock of the company iuive been transferred by the real owners to the trustees of the trust, who hold them in trust for such owners; aiul being enjoined by the terms of the agreement to endeavor to have 'the affairs' of the several companies manaired in a manner most conducive to the interests of the § llil.J INDUSTRIAL TRISTS. 513 holders of the trust certificates issued bv the trust, have the riirht, in virtue of their apparent ownershiji, and l)y the terms of the airreeinent, to select such directors of the com- pany as they may see tit. nay more mny, in fact, select themselves. The law re(iuircs that a corporation should he controlled and managed by its directors in the interest of its own stockholders, and conformable to the purpose for which it was enacted by the laws of its State. By this agreement, indirectly, it is true, but none the less effectually, the de- fendant is controlled and managed by The Standard Oil Trust, an association, with its principal place of business in New York City, and organized for a i)urpose contrary to the policy of our laws. Its object was to establish a virtual monopoly of the business of producing petroleum, and of manufacturing, refininsj and dealing; in it and all its products, throughout the entire country, and by which it might not merely control the production, but the price at its pleasure. All >U('h associations arc contrary to the i)olicy of our State and v(.id."'' § 1(>1. The Subject Continued. — Another illustration of thi> class of "trust" is piesented by The North Kiver Sugar Hetining Company. In a case before the New York Court of Appeals, where, in an action brought i>y the attorney-general, in the name of the people, against the de- fendant, a corporation organized under the (ieneral Manu- facturing Act, to vacate its charter and annul its corporate existence, it ai){>eared that at a meeting of defendant's stockholders, held April 22d, 1.S87, at which all its trustees were present, a preamble and resolutions were adopted by a uiianinuuis vote. The preamble recited that it was contem- pl:ited by the sugar retineries in the city of New York to consolidate in one large concern and comj)any, and that it was for defendant's interest to p.nticipate in the consolida- tion. By the resolutions a connnittee named were appointed to perfect the consolidation, with full power to act, and de- fendant's president and secretary were authorized "to sign ' State V. Standard Oil Co.. 4'J Ohio St. 137. 1S4. 33 514 INDUSTRIAL TRUSTS. [§ Id. all contracts, agreements and papers which the ab«ve-nanied committee may make in relation to said consolidation." An agreement was therenpon made l)y and between various corporations engaged in the sugar refining business. To this agreement the name of defendant was signed b^ its secretary, as he testified, "by virtue of authority * » « from the stockholders and trustees." It was held that the official signature was but the evidence of the agreement en- tered into by the committee, the authorized agency ; and that the making of the agreement was a deliberate corporate act. By the agreement or "deed," as it was termed, so executed, a "board" so called was formed, the parties agreed to transfer all their shares of capital stock "to the names of the board of trustees, to be held by them and their successors as members of the board strictly as joint tenants," which board, it was declared, "shall hold the stock transferred to it with all the rights and powers incident to stockholders in the several corporations." The board was authorized to transfer "to such persons as it may be desired to constitute trustees or directors or other officers of corporations, so man}' of the shares as may be necessary for that purpose." In lieu of the capital stock it was provided that certificates should be issued by the board to the contracting parties in specified proportions. It was provided that each of the parties should maintain a separate organization and carry on and conduct its own l)usiness, paying over the profits to the board, "the aggregate or such amount as shall be designated for dividends," to be proportionally distributed by the board to the holders of the certificates. The board was prohibited from taking any action "which shall create liability I)}' it or by its nieml)i'rs,'" but it was })r()vided that the funds n<'cessary to enable the board to make payments as spi'cified "may be raised by mortgage to be made by the corporation or any. either or all of them u})on their property." The number and amount of shares to be issued by the board was fixed, with a proviso that they "may from time to time be increased or (liininisiied b^■ deeds executed !)\' a iiiaiorilN in \alue of the § l()l.] INDrSTIIIAl. IIMSIS. 515 certitictite holders." Defendant's stock was transferred and certificates issued to its stoelvholders, as provided for. The hoard elected defcnulant's ofHcers and hoard of trus- tees, lia\inu' transferred to each a share of the stock to eu- ahle him to hold ofHce. It was held that the transaction was not an ahsolute sale of defendant's stock ])y its liolders; hut that a trust was created in the hoaid, to whom as trustee and upon the trusts declared the stock was transferred : that the certificates issued were formal declarations of the trust, and throuirh the ()})erati()n of which the stockholders retained the heneticial ownership; that hy the deed the corporation parties thereto entered into a co-i)artnership, vestint; the partnershij) power in the hoard. By the terms of the trust deed it took effect Octoher 1, 1887. At a meet- ing of defendant's stockholders, held November 4, 1887, a preamble and resolution were adopted, hy which, after re- ferring to the former action, alleging that the committee so appointed had failed to make or sign contracts, and that the powers conferred upon the committee and the president and secretary had not been executed, it was resolved that the powers so conferred be revoked. At a subsequent meeting, held November 2oth, a preamble and resolution were adopted, by which, after reciting the fact of the signatun' of the trust deed by the secretary, "under the belief that he was authuri/ed so to do,"' and that one S had offered to purchase defendant's stock for $H25,()()(), a committee was appointed consisting of the same jjcrsons who had been authorized to make the consolidation agreement, to deliM-r the stock to S or to those pers(»ns uaiiied a> trustees, on receipt of the sum ;;ffered, the proceeds to be divided among the stockholders. The >tock was transferred on de- fendant's books and delivered to S, who delivered it to the board, receiving in exchange a certificate for ;^7()(),(K)U, le.-s fifteen per cent., as ))rovided for in the deed. 8 was a member of the l)oard ; he was elected defendant's president, and other members were elected trustees. Defendant '> share of the regular dividends was allotted to it for the certiticate holders, a»)d it whoUv ceased to refine sugar. It -ik; INOISTRIAL TKISTS. [§ 1(31. was hold that thciv was corporalo action in iiiakintr the t-oin- bination agreomont, which hound dclVnuhint, and was not revoked b}' the suhsiMjucnt proceedings; that such action was in excess of its corporate powers, illegal and tended to the public injury, and so authorized a dissolution of the corporation.^ ' People V. North River Sugar Refining Co.. 1-Jl N. Y. 582. "The first question requires us to ascer- tain what the defendant corpora- tion has done in violation of its duty, or omitted to do in perform- ance of its duty. We find disclosed by the proof that it has become an integral part and constituent ele- ment of a combination which pos- sesses over it an absolute control, which has absorbed most of its corporate functions, ^ and dictates the extent and manner and terms of its entire business activity. Into that combination, which drew into its control sixteen other corpora- tions engaged in the refining of sugar, the defendant has gone, in some manner and by some process. for as an unquestionable truth we find it there. All its stock has been transferred to the central associa- tion of eleven individuals denomi- nated a *Board ;' in exchange it has taken and distributed to its own stockholders certificates of the board, carrying a proportionate in- terest in what it describes as its capital stock; the new directors of the defendant corporation have been chosen by the board, made eligible by its gift of single shares, and liable to removal under the terms of their appointment at any moment of independent action. It has lost the power to make a divi- dend, and is compelled to pay over its net earnings to the master whose servant it has become, t'n- der the orders of that master, it lias ceased to refine sugar, and by so much, has lessened the supply upon the market. It cannot stir unless the master approve, and yet is entitled to receive from the earn- ings of the other refineries, massed as profits in the treasury of the board, its proportionate share for division among its own stockhold- ers holding the substituted certifi- cates. In return for this advantage it has become liable to be mort- gaged, not for its own corporate benefit alone, but to supply with funds the controlling board when reaching out for other and coveted refineries. No one can look these facts fairly in the face without be- ing compelled to say that the de- fendant is in the combination and in to stay. Indeed, so much is with great frankness admitted on the part of the appellant. Its counsel concedes that the stock was transferred *to the board men- tioned in the agreement and on tlie terms and for the purposes mentioned in the agreement; and that this action effectually lodged tlie control of the defendant com- pany so far as such control can be secured by the voting power in that board.' " Ibid., GOO. The stockholders and members of cer- tain corporations and partnerships engaged in a similar business, by agiecment in wiiting, created a trust, the oliject of wliich was to authorize the trustees to control and manage the business of the parties. The trustees issued to § l'>-^] INDUSTRIAL TRUSTS. 517 § 1G2. The Ssinie Suhject. — In the opinion in the case of The People v. North Kiver Sugar Hefinin*!; Company, noticed in the preceding section, the doctrine is expounded by Mr. Justice Finch, as follows : "It is quite clear that the the parlies trust cer|ifiCiUes truns- fenible on their books. Hy tlie terms of the agreeinont the parties tiiereto, and the transferees of the eertifieates, were the beneficiaries under the trust. By the terms of the certificates they were trans- ferable only on the books of the trustees on surrendering the cer- tificates, and it was provided that the holder of a certifi- cate should be suliject to all teru)s of the agreement or the by-laws adopted in pursuance thereof, as fully as if he had signed the same. Upon the back of each was a blank form for a transfer thereof by the terms of which the transferee was appointed attorney with authority to make the necessary tiansfer upon the books. These certificates were dealt in, in the open market in the city of New York. Tlaintiff pmchased in said market one of said certificates which was deliv- ered to him with the transfer on the back made out to him by the person to whom it had been issued. Plaintiff i)resented the certificate to the trustees, with a den)and that a transfer be made on the books and a new certificate issued to him, he offering upon receipt thereof to surrender the old certifi- cate. The transfer was refused. Held, that an action to compel such transfer was maintainable; that while to give plaintiff the charac- ter of transferee for the purposes of recognition by the trust, a transfer on its books was neces- sary, this was for the benefit and protection of the trust, and as t)y the agreement and the form of the certificate, the (piality of transfer- ability was given to it. this im- ported the right to make the transfer on the books. Rice v. Rockefeller, 134 N. Y. 174. In Mallory v. Hanaur Oil Works. Stj Tenn. 798; s. C, 20 Am. & Eng. Corp. Cas. 478, where a number of manufacturing corporations en- tered into a contract whereby a counnittee composed of represen- tatives selected from each corpo- ration took entire control of the property and machinerj^ of each company, and managed and oper- ated the same for the common benefit, the several corporations sharing the profits and losses in agreed proportions, it was held that such contract was a contract for paitnership between the cor- porations. In the opinion, the court says: -"A careful exiimina- tion of this agreement discloses every essential element to a con- tract of partnership. The absolute ownership of the corporate prop- erty, tiie mills, machinery, etc.. is not conveyed to the partnership, nor is this necessary. The Itcncfi- cial use of all such property is surrendered to the common pur- pose. The provisions for the com- l)lete possession, control and use of the properties of the several cor- porations by the partnership or syndicate is perfect. Nothing is left to the several co-partners but the right to receive a share of the profits, and participate in the man- agement and control of the con- solidated interest as one of tlie :)i.s INDISTKIAL TKU8TS. [§162. effect of the defendant's action was to divest itself of the essential and vital elements of its franchise by placing them in trust; to accept from the State the gift of cor[)o- i-alc life only to disregard the condition upon which it was new associations. Tlic contract is both technically and in its essen- tial character a partnership, in so far as it is possible for corporations to form such an association. * * * A partnership and a cor- poration are incongruous. Such a contract is wholly inconsistent with the scope and tenor of the powers expressly conferred and the duties expressly enjoined upon a corpo- ration, whether it be a strictly business and private corpor.ition, or one owing duties to the public, such as a common carrier. In a partnership each member binds the tirin when acting within the scoije of the business. A corpora- tion must act through its directors or authorized agents, and no in- dividual member can, as such member, bind the corporation. Now. if a corporation be a member of a partnership, it may be bound by any other meml)er of the asso- ciation, and in so doing he would act. not as an olHcer or agent of the corporation, and by virtue of authority received from it. Imt ;isa principal in an association in which all are equal, and each capable of binding the society by his acts. The whole policy of the law cre- ating and regulating corjiorations looks to the exclusive m.magement of the affairs of each corpor.ition by the officers provided for or au- thorized by its charter. This man- agement must be separate and exchisive. and any arrangement by which the control of the affairs of the corporation should be taken from its stockholders and the au- thorized oflicers and agents of the corporation would be hostile to the policy of our general incorjxj- ration acts. The decided weight of authority is that a corporation has not the power to enter a part- nership either with other corpora- tions or with individuals."" The •'Car Trust"' is thus described by Allen. J., in Ricker v. American Loan & Trust Co.. 140 Mass. 34G: ''The New England Car Trust is a partnership unless, indeed, it is to be consideied that there are two or more partnerships under the same name. The essential features are as follows: A number of per- sons formed an association, b\' an instrument in writing containing numerous articles, for the purpose of buying, selling and leasing rail- road rolling stock, to be sold or leased to the New York and New England Railroad Company, with provisions for admitting other per- sons to membership. The members of the car trust were to furnish money for the purchase of the rolling stock, and were to have certificates for the amounts so furnished, providing that the prin- cipal sum contributed by each member should be repaid in ten annual instalments, with interest: both principal and interest being payaltlc only out of the rentals re- ceived for tlie rolling stock. In- stead of the lease being made to the r.iilroad company directly by the car trust, a jiian was adopted by which the car trust delivered the property to the American Loan & Trust Comjiany. as trustees, which § lt)2.] INDUSTRIAL TRUSTS. 51V* iri\ t'li : to receive its powers and privileges merely to put them ill pawn; and to give away to an irresj)onsil)le board its entire independenee and self control, ^^'hen it had l>as.>ed into the hands of the trust, only a shell of a corpo- ration was left standing, as a seeming obedience to the law, but with its internal structure destroyed or removed. Its stockholders, retaining their beneficial interests, have s«'i)arated from it their voting power, and so parted with the control which the charter gave them and the State re- (|uired them to exercise. It has a board of directors nomi- nally and formally in ofhce. but (|ualiHed by shares which they do not own, and owing their official life to the board which can end their power at any movement of disobedience. It can make no dividends, whatever may be its net earnings, and must incumber it> property at the command of its ma>ter, and for purposes wholly foreign to its own cor[)o- rate interests and duties. At the command of that master it has ceased to refine sugar, and without any doubt for the purpose of so far lessening the market supply as to prevent what is termed 'over production.' In all these respects it ha^ wasted and perverted the privileges conferred by the trustee issued the certificates to the members of the car trust, and also executed the leases to the railroad company with provisions for a rental sufficient to meet the above payments of principal and interest, in addition to the ex- penses, includinj^ the taxes. In this manner, the railroad company became bound by its covenants in the leases to make payments which in the course of ten years would pay in full for the rolling stock, so that the roUinj^ stock would become the property of the railroad company at the end of that time. All contracts relating to any business of the car trust, involving liabilities for the pay- ment of money, were to be in writ- ing, and made under the direction of the board of inanagers. The original board of managers was named in the articles of associa- tion, but the shareholders were to have the power to remove them and to elect others. At all meet- ings every shareholder was to have one vote for each share of stock owned by him. and provision was made for the transfer of shares, and the association was not to be dissolved by the death of members. Every owner of one or more shares was to be entitled to a proportion- ate share of the rentals received. The contemplated profits, to be sure, were limited to six per cent, interest on the money advanced. The losses, if any, must be Ijorne proportionally. This constituted a partnership." 520 INDUSTRIAL TRUSTS. [§ 1<>-^- charter, abused its powers and piovod unfaithful to its duties. But graver still is the illciral action substituted for the conduct which the State had a rii^ht to expect and re- quire. It has helped to create an anoniolous trust which is, in substance and effect, a partnershij) of twenty se})arate corporations. The State permits in many ways an aggrega- tion of capital, but mindful of the possible dangers to the people, overbahmcing the benefits, keeps upon it a restraining hand and maintains over it a prudent supervision, where such aggregation depends upon its per- mission and grows out of its corporate grants. It is a viola- tion of law for corporations to enter into a partnership. The case last cited [Whittenton Mills v. Upton], ^ furnishes > Whittenton Mills v. Upton. lU Gray, 582, 590. See also New York & S. C. Co. V. F. Bank. 7 Wend. 412 ; Clearwater v. Meredith. 1 Wall. 29; Central R. & C. Co. v. Smith. 7G Ala. 572; s. C, 52 Aui. Rep. 353; Mallory v. Hanaur Oil Works. 80 Tenn. 598; Charlton v. New Castle & C. Ry. Co., 5 Jur. (N. S.) 297; Commonwealth v. Smith, ]() Allen. 448; Hanson v. I'aige. 3 (Tray, 239; Bissell v. Michijj;an Southern & N. I. R. Co., 22 N. Y. 258; Catskill Bank v. Gray, 14 Barb. 471 ; Catskill Bank v. Hooper, 5 Gray. 574; Marine Bank v. Og- den, 29 HI. 248; Conklin v. Wash- ington Univ., 2 Md. Ch.497; Gimn V. Central R., etc. Co.. 74 Ga. 509; Jones V. Parker. 29 N. H. 31 ; Van Kuren v. Trenton Co., 13 N. J. Eq. 302; French v. Donohue. 29 Minn. Ill; Lamoine Val.. etc. Co. V. Bixby, 55 Vt. 235; Ontario Salt Co. V. Merchants" Salt Co.. 18 On- tario Ch. 540; Ledsinger v. Cen- tral Line Steamers, 75 Ga. 5G7. "At the threshold of the cause and of its elaborate discussion is the question. Was this corporation capable of forming a partnership, of entering into the contract':' This ijuestion presents itself in two forms. The more general one is: Has a corporation, as one of its usual inherent powers, the capacity to form a contract of co-partner- ship? The narrower question, but for this case the practical and pertinent one is, can a manufact- uring corporation in this common- wealth, incorporated since Feb- ruary, 1831. and subject to the provisions of the thirty-eighth and forty-fourth chapters of the Re- vised Statutes, enter into a contract or society of co-partnership? This corporation was created in March. 1836, as a manufacturing corpora- tion, for the purpose of manufact- uring cotton goods in the town of Taunton, and for that purpose was invested with all the powers and privileges and made subject to all the duties, restrictions and liabil- ities set forth in the thirty-eighth and fortj'-fourth chapters of the Revised Statutes passed on the 4th of November preceding, but not to take effect till the 1st of May. 1832. Stat. 1830. chap. 19. This charter, with the provisions of the chapters referred to and made part of it. is the origin and sourceof the powers § it;2.] INUUSTKIAl. riU'STS. :r2l the reusons with |)recisf?ion aiul at leiiuth. It shows the utter ineonsistenc}' of a double allegiance by those who act for the corporation to two different principles, and demon- strates that the \ital characteristics of the corporation are ami functions of the corporation. What powers are granted ex- pressly, or by implication, because necessary or usual for the purposes which this charter was given to effect, the corporation has and no more. There is one obvious and important distinction between such a society as tliis charter creates and that of a partnership. An act of the corporation, done either by direct vote or by agents authorized for the purpose, is the manifesta- tion of the collected will of the society. No member of the corpo- ration, as such, can bind the so- ciety. In a partnership each mem- ber binds the society as a principal. If. then, this corporation may enter into partnership with an individ- ual, there would be two principals, the legal person and the natural person, each having, within the scope of the society's business, full authority to manage its concerns including even the disposition of its property. The second section of chapter 38. of the Revised Stat- utes, provides that the business of every such manufacturing corpo- ration shall be managed and con- ducted by the president and direc- tors thereof and such other otHcers. agents and factors as the company shall think proper to authorize for that purpose. It is plain that the provisions of this seclit'U cannot be carried into effect where a part- nership exists. The partner may manage and conduct the business of the corporation and bind it by his acts. In so doing he does not act as an officer or agent of the corporation by authority received from it, but as a principal, in a society in which all are equals, and each capable of binding the society by the act of its individual will. ♦ ♦ * Indeed, the effect of all our statutes, the settled pol- icy of our legislature, for the reg- ulation of manufacturing corpora- tions is that the corporation is to manage its affairs separately and exclusively; certain power to be exercised by the stockholders, and others by officers who are the servants of the corporation and act in its name and behalf. And the foi uiation of a contract, or the entering into a relation by which the corporation or the officers of its appointment should be divested of that power, or by which its franchises should be vested in a partner with equal power to direct and control its business, is entirely inconsistent with that policy. The power to form a partnership is not only not among the powers granted exi)ressly or by reasonable impli- cation, but is wholly inconsistent with the scope and tenor of the powers expressly conferred, and the duties expres.»ly imposed, upon a manufacturing corporation under the legislation of the common- wealth. The difficulties would be obviously greater in holding siu-li a partnership to be valid, when formed and carried on for the prosecution of a business other than that, if not foreign from that, for which the corporation was created. It is difiicult to see how the corporation should engage in 522 INDISTRIAL TRUSTS. [§ i^y^. of necessity drowned in the paramount authority of the partnership. That the combination of the retineries par- takes of the nature of a })artnership is not denied. Indeed, in one of the papers added to the appellant's brief, it is not such business, even when under its when such an anangeinent or own control, still less to enter into business legitimately pertains to co-partnership with third persons the corporate purposes, or may for that purpose. By the Stat, of reasonably be inferred to have 1S,")2. chap. 195, not adverted to in been contemplated and intended tlie argument, corporations created by the creating power. Such for the manufacture, of woolen and power is incidental to the purposes cotton goods are authorized to of the corporation, and such infer- carry on certain other manufact- ence is reasonable when a railroad ure^. but this only when four- company is incorporated with fifths of the stockholders shall, by power to construct a railroad be- vote at a special meeting called tween fixed and designated termini, for the purpose, consent to the and to effectuate the construc- sajue. This statute furnishes a pretty strong implication that the power to carry on a different busi- ness from that for which the cor- poration was chartered did not tion it is necessary to cross navi- gable rivers, bays or arms of sea, which, on account of their width and depth, or from other causes, cannot be bridged, or when a body exist before the statute was passed, of water, lying at the termination We are. therefore, all of opinion of the railroad proper, separates it that in the formation of the alleged from the metropolis, to and from partufrship the corporation ex- which it was contemplated, in- ceeded the powers given by its tended, and is necessary to trans- charter expressly or by implica- port freight and passengers con- tion. and that the contract of co- veyed over the road — 'from the partnership was illegal and void.'' Whittenton Mills v. Upton, 10 Gray, 582, 595. ''The general rule, that corporations created by an ostensible and substantial temiini of their route:' or when the act under which the company is or- ganized authorizes it *to contract act of tlie legislature, or organized for the transportation and delivery under general laws, can exercise only the powers expressly granted, tiie implied powers necessary and proper to carry into effect the express powers, and such inci- of. and to deliver |)ersons and property, conveyed over their road beyond its termini.' Wheeler v. S. F. & A. R. R. Co., 31 Cal. 4(i; Shawmut Bank v. P. it M. R. K. dental powers, as pertain to the Co., 31 Vt. 491; So. Wales R. R. purposes of their creation, is not controverted. It may be conceded, that a railroad comjKiny, in the absence of express power, is au- thorized to make traflic arrange- ments for transportation by water, or may purchase, own and operate steamboats, or other water craft. Co. V. Redmond, 10 Com. B. (N. S.) r>74. In such cases the power is implied, as necessary and proper to ac<"omplish the objects of the incorporation; or is incidental, pertaining to its purposes as ex- pressed in the charter or general law, and without which theexpress § IClM INDUSTRIAL TRUSTS. oiilv admitted, l)ut asserted and defended. Tliat paper shows (juite eloarly that, l)y foree of the arraiijrenieiit, tliere was a eoinnmnity of interest in the fund created by the corporate earnings before division, and that euch member of the. trust shared in the profit and loss of all. It is suid, however, that a consolidation of manufacturing corporations is permitted l)y the law, and that the trust or coiid)ination or partnersjiip. howe\er it may be described, amounts only to a practical consolidation, which pul)lic ])olicy does not forl)id, because the statute permits it. The refineries did not avail themselves of that statute. They ehose to disre- gard it, and to reach its practical results without subjection to the prudential restraints with which the State ac- comi)anied its permission. If there had been a consolida- tion under the statute, one single cori)oration would have powers are ineffectiiul. ♦ * * A late decision of the Supreme Court of Georgia has rendered a further discussion of the question unnecessary. In Gunn v. Cent. R. K. it Banking Co., 74 Ga. 509, that court has construed the powers conferred by the charter of the defendant, and lield that the corpo- ration has no power to enter into a i)artnership with a natural per- son to purchase and run a steam- boat on one of the rivers of that State. This decision was made in a suit brought by a passenger on the same steamboat, to recover damages for injuries sustained at the same time and under the same circumstances, as the i)Iainliff in the present action. If we enter- tained doubt of the power of the defendant to engage in such busi- ness. — when it is said -to be in doubt is to be resolved.' comity would suggest an acceptance of. and acquiescence in. tbe construc- tion of the statute's of that State, under which the corporation was orjranized. bv the court of last resort."" Central K. K. iV: iianking Co. V. Smith, 7(3 Ala. 572. 579. "I do not think it was necessary to establish a co-partnership between the defendants to create the lia- bility claimed against them. A corporation may. in furtherance of the object of its creation, contract with an individual, though the effect of the contract may be to impose upon the comi)any the lia- bility of a partner. And. as to third persons, the liability of a partner is frequently imposed, though it was not the intention of the i)arty sought to be charged to become one. and even though a jiartnership could not have been made. Field. Corporations. § '2(V.i: Manhattan. H. U to the capital already eml)arked, without limit to the magnitude of the aggrega- tion, a tempting and easy road is opened to enormous com- binations, vastly exceeding in number and in strength and in their power over industry any possibilities of individual ownership; and the State, by the creation of the artificial persons, constituting the elements of the combination, and failing to limit and restrain their powers, becomes itself the responsible creator, the voluntary cause of an aggregation of capital which it sim[)ly endures in the indi- vidual as the product of his free agency. What it may l)ear is one thing: what it should cause and create is (|uile another."^ ^< HJ;j. Lcf-alitv of the "Tru.st" Continued, — CIjiss Second. — Tlii' leading case relating to "trusts" of this class is that of The Chicago Gas Trust Company, This corporation was organized under the General Corporation Law of Illinois.-' The object of the trust, as set forth in the certificate of corporation, was, as follows: "The objeai(l State of Illinois as said cori)oration may, by the vote of the majority of its stockholders, elect, for the manufacture, supply, sale and distril)ution of gas and electricity, or cither, for the fiiiiii-hing of light, heat, fuel and power for an\ and all purposes for which ga> or electricity may now ' People V. North Itiver Sii^ar ■' Kev. 111. (ode H*J. 1 iV: .".. H.'tining Co.. 121 X. Y. .')»_». t;-22. b2ij INDUSTRIAL TRUSTS. [§ 1()3. or hereafter be used; and to purchase and liold or sell the capital stock or i)uri-hase or lease or operate the property, plant, ^ood will, riirhts and franchises of any gas works or ^as company or gas companies, or any electric company or electric companies in the said city of Chicago, or elsewhere in said State, as said cor{)oration may, by vote of the majority of the stockholders, elect; and to purchase, hold, sell, operate or anywise become interested in coal or other ])roi)erties })roductive of nuiterial necessary or useful in the sui)ply or manufacture of gas, or other agenc}' or medium of light, heat, power or fuel ; and to sell, inii)rove, enlarge, extend, maintain, operate and demise any and all prop- erty, — so purchased or leased."' In the case of The People V. The Chicago Gas Trust Company, it was held that a corporation formed under the general law for a law- ful purpose, such as the manufacture and sale of gas, cannot clothe itself with power to purchase and hold stock in similar corporations merely' by naming this as one of the objects of its incorporation in the articles filed with the secretary of state. A corporation cannot become a stock- holder in another corporation unless such power is expressly given or is necessarily implied, and this more especially when the object is to obtain the control or effect the management of such other corporation. The General In- corporation Law of this State does not, in ex|)ress terms, confer upon corporations formed thereunder the power to purchase and hold shares of stock in other corporations, but it is silent on the subject. The only powers granted by it are the ordinary corporate powers, such as the right to be bodies corjiorate and politic, to sue and be sued, to have a common seal, etc. Section ;"» of the General Incorjxjration Law expressly restricts the })owers of a corporation formed under such law to such as are necessary to carry into effect the object for which it was formed. The purchase of stock in other companies not being necessar}' to enable a gas company to carry its object in making and selling gas into effect, is impliedly ))rohibited by the statute. Whatever ' People V. Cliicjigo G:is Trust Co.. 130 111. 27.'). § 1 no power to purchase and hold or sell shares of stock in other gas companies as an incident to such purpose of its fornui- tion, even though such power is specified in its articles of incorporation. The gas trust comj)any mentioned was in- corporated under the general law for two purposes, as expressed in its articles of association : First, for the pur- pose of erecting and o))erating gas works for tlie manufact- ure and sale of gas in Chicago and other places in this State; and second, "to purchase and hold or sell the e or op(>rate the pi'operty. plant, good will, rights and franchises of auy gas works or gas company or companies, or any electric company or com- panies, in Chicago or elsewhere," etc.-^ The company ' People V. Chicago Gas Trust i>:i>;ni<' Fiaiu-aise v. Wo!-t(Mn I'liion Co., 130 111. 275. .See also Taliuago Co.. 11 Fed. Itcp. S(i2; Solomons V. Pell, 7 \. Y. 348; Berry v. v. I.ainj;. 12 lieav. 339; Franklin Yates, 24 Barb. 200; Milhank v. Bank v. ConinHMcial Bank. .3(; Ohio New York. etc. K. Co.. ca How. St. 3.*>0; Bufonl v. Kt-okuk ( " •.. 3 Pr. 20; Mechanics' Sav. Bank v. Mo. App. l.V.t; McMillan v. Carson Meriden, etc. Co., 24 Conn. l."i!»; .Min. Co.. 12 Phiia. 404; In re Central, etc. R. Co. v. Pennsyl- British Life Ins. Assn.. L. R. SCh. vania R. R. Co., 31 X. .1. Eq. 47'>; D. VuU: Taylor v. Earle. S Hiin. 1 : Hazlehurst v. Savannah, etc. R. Frothinj^hain v. Barney. C. Hun. Co.. 43 Ga. 13; Valley R. Co. v. 3Ci;; Joint-Stock Co. v. Brown. L. Lake Erie Ins. Co.. 4»i Ohio St. 44; R. 8 Eq. 381; Sumner v. Marcy. Hill V. Nisbet. 100 Ind. 341: Com- 3 \V. vV M . 10*); New Orleans Co. 528 INDUSTRIAL TRUSTS. [§ I6;i sousrht to exorcise the powers clniiuecl under the seeoiul ehiuse, only, and for that |)urpose houtrht a majority of the shares of all the stock of all the gas coniijanies in Chicago, being four in number, whereby it might have the control of all the gas companies in the city, and thus destroy competi- tion and monopolize the gas business. It was held that the corporation so formed was not for a lawful purpose, and that all acts done by it towards the accomplishment of such object were illegal and void.' In the opinion in this case, V. Ocean Dry Dock Co., 2S La. Ann. 173; Easiin v. Buckeye Brew. Co.. 51 Fed. Rep. 15G; Buckeye Marble, etc. Co. v. Harvey, 92 Tenn. 11."). 1 People V. Chicago Gas Trust Co.. 130 111. 2GS. A corporation authorized to conduct a lumber business is legally incapable of be- ing a stockholder in a telegraph company. Peshtigo Co. v. Gt. West- ern Tel. Co., 50 111. App. 624. "We think it well settled as a result of the decisions in this State, as well as elswhere. that an incorporated company cannot, unless authorized by statute, make a valid subscrip- tion to the capital stock of another, that such subscription is nltra vires and void. Mr. Morawetz. in stat- ing this to be the law. observes: 'The right of forming a corpora- tion is conferred by the incorpora- tion laws only upon persons acting individually, and not upon associ- ations; moreover, it would, under ordinary circumstances, be a vio- lation of the charter of an existing company to subscril)P for shares in a new company and assume the resulting liabilities.' (Priv. Corp. § 433.) There has been no direct decision upon the question by this court, but such has been the uni- form holding elsewhere. Hailroad Company v. Hailroad Company, 31 X. .1. Ei|. 47.">: Franklin Co. v. Lewiston Savings Bank, GS Me. 43: Railroad Company v. Collins. 4S Ga. 582. These cases all proceed upon the legislative principle that the powers of corporations organ- ized under legislative statute are such, and such only, as those stat- utes confer, or that may be fairly implied therefrom. This doctrine was clearly announced and applied in Straus v. Eagle Ins. Co.. 5 Ohio St. 59. and has been firmly adhered to in this court. Railroad Co. v. Hinsdale. 45 Ohio St. 5.")G. 573. Xo claim is made by the defendant that the iron company Ijad any express statutory authority to use its capital or assets in aid of the construction of a railroad by sub- scription to its capital stock or otherwise. The only averment as to this, is, the iron company con- ceived that it would be benefited by the reduciion of the price of coal at Cleveland, its place of busi- ness, and the market which the construction of the road would afford for its manufactures, and by these considerations was in- duced to make the subscription. But all of this can be of no avail in the face, at least, of the prohibi- tion contained in § 32GG. of the Revised Statutes, that *no corpo- ration shall employ its stock, means, assets or other property, directiv or indirectlv. for anv § 163.] INDUSTRIAL TKl'STS. 529 the court said: ••()[" what avail is it tliat any muuher of gas companies inav he foniietl uiuler the General Incorporation Law, if a iriant trust company can be clothed with the power of Wuyiiiu' ii|) and liolding the stock and jiroperty of other purpose whatever, than to accomplish the legitimate objects of its creation.' There was, then, as we think, no authority whatever in the iron cuinpany to make a valid subscription to the rapital stock of the railway company, and no recovery can be had upon it."' Valley Railway Co. v. Iron Co., 4«) Ohio St. 44, 49. "The purpose for which the ageney company united, as expressed in their arti- cles of association, was to do a general insurance agency, com- mission and brokerage business, and such other things as were in- cidental to, and necessary in, the management of that business. So far as that company was concerned the proper officers of the company had power to act and bind the company. But if they departed from that business, and entered into contracts not authorized by the company, such contracts would not be binding. A subscription to the stock of a building association has no legitimate connection with the business of an insurance agent, commission merchant or broker, and was not, therefore, authorized by the defendants' articles of asso- ciation. It is said that the defend- ants had power to borrow money, mortgage their real estate for its security, and, if necessary, to ob- tain a loan, as in this case, become a stockholder in a building associ- ation. We are not disposed to question the right of the defendants to borrow money, and mortgage their real estate for its security. This may be one of the powers in- 34 cidental to, and necessary in, the prosecution of their business, and the successful management of the same. We are inclined to think the power is implied in their arti- cles of association. But when the directors of the company sub- scribed for stock in a building association, whatever may have been their motive, whether to ob- tain a loan of money, or for pur- poses of speculation, they tran- scended the powers conferred upon them, and departed from the legitimate business of the company, as much so as if they had sub- scribed for stock in a manufactur- ing or steamboat companj'. Such subscription, in our opinion, is not binding upon the defendants, and any payments made upon it to the plaintiffs would be money re- ceived by them without considera- tion." Mutual Sav., etc. Co. v. Meriden Agency Co., 24 Conn. 159, 1(J3. A railroad comi)any c.Jjartered for the purpose of build- ing ajid maintaining a railroad froM' Savannah to Macon, with general powers to purchase and hold personal estate, of any char- acter whatever, is not authorized to beeome a stockholder in a rail- road from Savannah to B:iinbri(lge. Such a purchase is wholly beyond the purposes of the charter. It is a, part of the putilic policy of the State, as indicated by the charter of several railroads from the sea- board to the interior to secure a reasonable competition between said roads for public patronage, and it is contrary to that policy 530 INDUSTRIAL TRUSTS. L§ 103. such companies, and through the control thereby attained can direct all their operations and weld them into one huge combination? The several i)rivileges or franchises intended to be exercised by a number of companies are thus vested exclusively in a single corporation. To create one corpora- tor one of said roads to attempt to secure a controlling interest in another, and any contract made with that view will be set aside by a court of equity as illegal, beyond the objects of the charter, and con- trarj' to the public policy of the State. Central R. R. v. Collins, 40 Ga. 582. See also Hazlehurst V. Savannah, etc. R. R. Co.. 43 Ga. 13. Though a railroad company may take title to all kinds of per- sonal property, including stock of other railroad corporations, to se- cure debts due it. the investment by a railroad company of its cor- porate funds in th,} purchase of the stock of another corporation is not necessary in the exercise of any of its corporate powers, and is unau- thorized and in violation of the statute and is consequently ultra vires. While a railroad corpora- tion remains the owner of the stock of another corporation, it may collect and receive dividends thereon and has the right to sell and dispose of the same, but fe^is no right to vote thereon; and the stockholders of the company whose stock is thus held, have the right to have the comjiany holding such stock enjoined from so voting, in case it threatened to do so. Mil- bank v. New York, etc. R. R. Co., 64 llow. Pr. 20. A corporation cannot, in its own name, subscribe for stock, or be a corporator, un- der the general railroad law; nor can it do so by a simulated com- pliance with the provisions of the law through its agents as pretended corporators and subscribers of stock. Any attempt by a corpora- tion to avail itself unlawfully of the general railroad law to build a railroad, will, on complaint of tlie party injured, be enjoined as an abuse of the law. Central R. R. Co. of New Jersey v. Pennsylvania R. R. Co.. 31 N. J. Eq. 475. The trustees of the Lewiston Institution for Savings subscribed for S.jO.OOO of tlie capital stock of the Conti- nental Mills, and having no power to pay for it. the Franklin Com- pany, another corporation, paid that amount to the Continental Mills, taking the notes of the sav» ings institution therefor, and a cer- tificate of the stock in their own name as collateral security for the payment of the notes. Held, that the action of the trustees of the savings institution was ultra vires; that it was not within the authority of savings institutions, at a time when they have no funds for in- vestment, to purchase stocks or other property, not needed for immediate use, on credit, and thus create a debt binding upon the institution: that the Franklin Com- jiany. having participated in the illegal transaction, could not claim the privileges of a bona flde holder of commercial paper; and that the savings institution, having received no benefit from the transaction, was not estopped to set up the defense of ultra vires. Franklin Co. V. Lewiston Savings Bank, 68 Me. 43. § 1()3.] INDUSTRIAL TRUSTS. 531 tion for llie express purpose of enabling it to control all the eorporations engaged in a certain kind of business, and parlicularlv a business of a public character, is not only op- posed to the public policy of the State, but is in conlra\en- tion of the spirit, if not the letter, of the constitution. That the exercise of the power attempted to l)e conferred upon the appellee company must result in the creation of a monopoly, results from the ver}' nature of the })o\ver itself. If the privilege of purchasing and holding all the shares of stock in all the gas companies of Chicago can be lawfully conferretl ujjou a))pellee, under the (icneral Incorporation Act, it can be lawfully conferred u})on any other corj)()ra- tiou formed for the purpose of buying and holding all the shares of stock of said gas companies. The design of that act was that any number of corporations might be organ- ized to engage in the same business, if it should be deemed desirable. But the business now under consideration could hardly be exercised 1)V two or three corporations. Sujipose that after appellee had purchased and l)ecome the holder of the majority of shares of stock of the four companies in Chicago, another corporation had been organized with the saiue object in view, that is to say, for the purpose of i)ur- chasing and holding a majority of the shares of stock of the gas companies in Chicago. There Ix'ing only four sur it iiiiprojjcr for a coinpaiu' to do so, haviiiu' regard to its own com- stitiitioii as defined hy its nicnioranchun andartich's; hut exckidintj: all these considerations, althouirh in the statute of 18(»2 the words 'person or persons' continually occur, -till 1 think it must be taken to include corporations, and lookiuu- at the (piestion as a mere abstract question, in my juili^mcnt there is nothinir to ])revent a cor[)oration from beinoj a shareholder in another ti'adinir corporation."^ This rule, in its essential features, has been adopted in i\Iar}land, and possibly in some of the other States, but so far as the courts of the country are concerned the position is excep- tional. The doctrine, as set forth in the preceding sections, is well established. In the case of Booth v. Hobinson, be- fore the Supreme Court of Maryland, it was held that there is no legal presumption of illegality or unfairness, in trans- actions between two corporations, from the mere fact that a portion of the board of directors in the one company con- stituted a part of the board of directors in the other at the same time, and participated in the dealings between the two corporations. It is only when their dealings are shown to be prejudicial to the one or other of the corporations repre- sented l)y llieiii, that their conduct will he subject to a strict and severe scrutiny by the courts. A cor|)oration may invest in the stock of other corporations as well as in any other fumls, |)rovi(led it be done bona Jide and with no sinister or unlawful purpo>e, and there be nothing in its charter or in the nature of its business that forbids it.'- In the opinion in this case, the court said: "The tir>t (juestion is, as to the power of the Sieam Packet Company to purchase and hold the >tock of the Powhatan Company. This, it is contended by the jilaintiff, could not be done without express authority by law. Hut while some courts have so held, the great weight of authorit\" is the other way. Then* is nothing in ' Koyiil Bank of India's Case, L. * Booth v. Robinson, 55 Md. 419. R. 4 Ch. App. 252. 257. 536 INDUSTRIAL TRUSTS. [§ 165. the charter of the Steam Packet Company, or in the nature of its business, that would, in the slitrhtcst manner, forbid the exercise of such power; and having money to loan or invest, there would appear to be no good reason why it might not invest in the stock of other corporations as well as in any other funds, provided it be done bona fide and with no sinister or unlawful purpose. The courts of En- gland, at one time, strongly opposed the right of one corpo- ration to deal or invest in the stock of another corporation without express authority for so doing; but that opposition has been entirely overcome, and it is now settled there that one corporation may deal in the shares of another without express authority so to do, unless where expressly prohibited or the nature of its business render it improper so to deal."^ §165. Legality of the "Trust" Continued, — Class Third. — Trusts of this class, as above shown,- are corpora- tions which have purchased or otherwise accjuirod the plants, including the real estate, machinery, stock in trade, good will, etc., of a number of corporations, firms or indi- viduals engaged in a particular branch of business. Pay- ment for all property thus acquired is made in the stock of the new corporation. The business is then conducted l)y the officers and directors of the corporation and with refer- ence to the common interests of all the stockholders. They continue the business of all the separate concerns, or sus- pend the work of a })art of them, as is Ix'lieved to be for the profit of the new organization. The object is the creation of a monopoly and the control of prices, and this may require that the i)roduction of the combined interests should be limited. The leading case relating to corpora- tions of this class is that of The Diamond Match Company, before the Supreme Court of Michigan. The legality of this corporation was determined in the case of Richardson V. Buhl. In this suit the corporation was not directly a })arty. The Diamond ^Nlatch Company was organized 1 Booth V. Robinson, 55 Md. 419. v. Okisko Co., 1 Md. Ch. Dec. 392; 433. See also Elysville Mauf. Co. s. c, 5 Md. 152. 2 Ante. § 158. § 1G5.] INDISTKIAL TRUSTS. 537 December 3d, 1880, under the hnvs of the State of Con- necticut, for the purpose of uniting in one corporation all the match nuuiufacturers in the United States. Its object was to nu)nop()lize and control the business of making all the friction matches in the country, and to establish the price thereof, and it became necessary to buy many phints which had become established in the business or were }n'ei)arin£: therefor, and all the property used in connection therewith, and to obtain promises from the owners and manufacturers that they would not engage in the business themselves, or indirectly through others, for ten or more years thereafter; and, for the purpose of obtaining the con- trol and good will of such manufactories and their proper- ties, large powers were given by the legislature to the Dia- mond Match Company when organized and under the by-laws by which it was controlled. The extent to which it was allowed to go in this direction in the accomplishment of its purposes appears in the articles of incorporation, in which it is stated, among other things, that the business of the company is "to manufacture, buy, sell and deal in fric- tion matches of all kinds, and all articles entering into the composition and manufacture thereof; to manufacture, buy, sell and deal in machines and machiiu'ry, whether a{)i)Iica- ble to the manufacture of friction matches or to other pur- poses; to purchase, own and sell exclusive rights under let- ters patent relating to the manufacture of friction nuitches, and to machines and machinery, whether applicable to the manufacture of friction matches or to other purposes ; to manufacture, l)uy, sell and deal in animal pokes, tobai-co pipes, curry combs, brushes, shoe blacking and shoe dress- ing. Mild aixi articles entering into the composition and manufacture thereof ; to purchase, own and sell exclusive rights under letters patent relating to the manufacture of all the articles herein enumerated, and to machines and machinery applicable to the manufacture thereof; to buy, sell, own aiul deal in any real or personal jU'operty, necessary or conven- ient to the prosecution of said business, — and, generally, to do all things incidental to sai8. Tlio Purpose and Scope of Federal Lejfisla- tioii. — Federal stalute.s, pruhibiling trust combinations, are limited, of course, to contracts relating either directly or indirectly to interstate commerce. But while Federal legis- lation is, necessarily, limited in this direction, the object, as in the case of State legislation of this character, is to sup- press combinations designed to create a monopoly in restraint of trade. The most important statute on this subject is the Act of July 2d, 18'J0, entitled: "An Act to Protect Trade and Commerce against Unlawful Restraints and Monop- olies." The design and scope of this act appears from sec- tion 1, which provides that "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce, among the several States or with foreign nations, is hereb}'^ declared to be illegal. Every person who shall make any such contract, or engage in any such combination, or conspiracy', shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine, not exceeding $5,000, or by imprison- ment, not exceeding one year, or by both said punishments, in the discretion of the courts."^ In the recent leading case of The United States v. The Trans-Missouri Freight Asso- ciation, we have a construction of this act b}' the Supreme Court of the United States. In that case it was held that, under this act, all combinations in restraint of trade or com- merce are prohiliited by the Act of Congress of July 2d, 1890, whether they are in the form of trusts or in any other form whatever. The words, "unlawful restraints and monopolies," in the title of the Act of Congress of July 2d, 1890, do not show that the purpose of the act was to include only contracts which were unlawful at common law, but refer to and include those restraints and monopolies which arc made unlawful in the body of the act. The term "contract in restraint of trade," as used in the Act of Con- gress of July 2d, 1890, does not refer only to contracts which were invalid at common law, but includes every con- tract in restraint of trade, and is not limited to that kind of 1 Federal Anti-Trust Act, § 1. § 1(58.] TRUST COMBINATIONS. bVo a contract wliicli is in unreasoniible restraint of trade. The pul)lii' policy of the government is to be found in its statutes, and where they have not directly spoken, then, in the decisions of the court and the constant practice of the government officials ; but where the law-making power speaks on a particular subject over which it has constitu- tional power to legislate, public policy in such a case is what the statute enacts. A contract or combination made in vio- lation of a law is void, whatever nuiy have been theretofore decided by the courts to have been the })ubli(' policy of the country on the subject.^ * United States v. Trans-Missouri Freight Association. 166 U. S. 290. 20 Stat. 209. declaring illegal ••every contract or combination in the form of trust, or otlierwise in restraint of trade or commerce among the several States or with foreign nations," applies to com- binations of laborers as well as of capitalists. In order to sustain the allegations of a bill for an injunc- tion against a combination in re- straint of interstate commerce, complainant may offer in evidence, as matter of history, the otlii-ial proclamation of the various govern- ment ofticers and also newspapers reports supported by affidavits containing manifestoes and decla- rations of respondents. United States V. Worivingmens' Amalga- mated Council, 54 Fed. Kep. 994. A contract between manufacturers, wherebj' tiie first party agrees in consideration of a percentage on the sales made by the second party, not to use his plant for the produc- tion of strap and T hinges for tive years, the contract to be void in case the second party increases his facilities for production of such hinges, is void as against public policy. Oliver v. Gilmore, 52 Fed. Rep. 562. To constitute the offense 35 of -Muonopolizing, or attempting to monopolize," trade or commerce among the States, within the mean- ing Act July 2, 1890, § 2, it is nec- essary to acquire, or attempt to acquire, an exclusive right in such commerce by means which will prevent others from engaging therein. In re Greene, 52 Fed. Rep. 104. The act "to protect trade and commerce against un- lawful restraints and monopolies" confers no right upon a private individual to sue in equity for the restraint of the acts forbidden by such .statute, an action at law for damages being the only remedy provided for private persons, and the right to bring suits in equity being vested in the district-attor- neys of the United States. Pidcocii V. Harrington. 64 Fed. Rep. 821. An action in a Federal Circuit Court for New York, charging numerous business couipetitors of complainants in various States with forming a combination and at- tempting to create a monopoly in 1S87, but charging that after the Act of July 2, 1890. defendants ratified and renewed their previous combinations, and demanding treble damages "under and by virtue of the statute," held to be 540 TRUST COMBINATIONS. [§ ICit § 1G9. Tho Subject Contimied. — In the opinion in the case of The United States v. The Trans-Mi-ssouri Freight Association, we have a farther construction of the purpose and scope of the Federal Anti-Trust Act. In delivering the opinion, Mr. Justice Peckhani said: "Coming to the merits of the .suit, there are two important questions which demand our examination: Thev are, first, whether the above-cited an action founded on the ISflO Act. In an action by a manufacturer of watch cases against numerous other manufacturers thereof in various States to recover treble damages under Act Congress July 2. 1890. prohibiting unlawful re- straints and monopolies of inter- state commerce, the complaint al- leged that plaintiff operated an extensive factory ; that previous to Nov. IG, 1887, it sold its goods to a great number of dealers "-through- out the United States and Canada ;" that prior to that date defendants had agreed with each other to maintain arbitrary and fixed prices for their watch cases; that for the purpose of compelling plaintiff to join with them therein, defend- ants on said date mutually agreed that they would not thereafter gell any goods to persons who bought or sold goods manufactured l)y plaintiff: that they caused notice thereof to be served on manj- dealers in such goods throughout the United States and Canada, who had formerly dealt in plaintiff's goods, whereupon many of such dealers withdrew their patronage from plaintiff; tliat after the pas- sage of tiie Act of 18K0, defendants ratified, renewed and confirmed their previous agreements, and served notice of such ratitication on all said dealers in plaintiff's goods, whereby said dealers were compelled to refuse to purchase plaintiff's watch cases. Held, that the complaint failed to state a cause of action under the statute. Dueber AVatch Case Mfg. Co. v. E. Howard Watch & Clock Co.. G6 Fed. Rep. 037; s. C, 14 C. C. A. 14. A cor- poration organized to procure as- signments of all patents relating to spring tooth harrows, to grant licenses for the use of the same, to regulate the price at which such harrows shall be sold and prose- cute all infringements, is an illegal combination, contrary to public policy, whose purposes equity should not aid b3" entertaining in- fringement suits. National Harrow Co. v. Quick. 67 Fed. Rep. 13U. The purchase of stock of sugar refineries, for the purpose of ac- quiring control over the business of refining sugar for sale in the United States, does not involve a monopoly or combination in re- straint of commerce among tlie States within the prohibition of Act July 2. 1800. United States v. E. C. knight Co., 15G U. S. 1: s. c, 15 Sup. Ct. Kep. 249. Where both plaintiff and defendant, in an action for goods sold, were corpo- rations of the State in which the sale was made, the sale was not a transaction within Act July 2. 1890. relating to restraint of trade and commerce between the several States. National Distilling Co. v. Cream City Importing Co.. 8G Wis. 3.V2; s. C, 5GN. W. Rep. 8«4. A lease bj' one corporation to another, engaged in the same business, of § 169.] TRUST COMBINATIONS. 547 act of Congrcs.s, — called herein the Trust Act, — applies to and covers common carriers by railroads; and, if so, second, does the agreement set forth in the bill violate any provis- ion of that act? As to the first (lucstion : The language of the act includes every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce, among the several States or with foreign nations. So far as the very terms of the statute go, they apply to any contract of the nature described. A contract, therefore, that is in restraint of trade or commerce is by the strict language of the act prohibited, even though such con- tract is entered into between competing connnon carriers by railroads ;uul only for the pur})ose of thereby affecting tratHc rates for the transportation of jiersons and proi)erty. If such an agreement restrains trade or commerce, it is pro- hibited by the statute, unless it can be said that an agree- ment, no matter what its terms, relating only to transporta- tion, cannot restain trade or commerce. We see no escape from the conclusion that if any agreement of such a nature does restrain it. the agreement is condemned by this act. It cannot be denied that those who are engaged in the trans- {)ortation of j)ersons or property from one State to another are encrajred in interstate commerce, and it would seem to follow that if such persons enter into agreements between themselves in regard to the compensation to be secured from the owners of the articles transported, such agree- ment would at least relate to the business of commerce, and iis premises and plant, which gives public policy, as such slipiilaliou no exclusive privilej^e but is made does not disable the sleepin;jf car to remove the lessor's competition, con)pan\- from furnishing cars to a is not af^ainst public policy nor rival railroad, and the law will void. United .States Chemical Co. imply, from the terms of the con- V. Provident Chemical Co.,t!4 Fed. tract, that it must furnisii the rail- Kep. 940. A stipulation in a con- road company in question, not only tract that a sleeping car company adequate and safe cars, but sulli- shall have the exclusive right for cient in number for the use of the fifteen years, to furnish drawing public traveling on the latter's rooms and sleeping cars for a rail- road. Chi., St. L. & X. O. R. Co. road company's use, does not ren- v. Pullman 8o. Car Co., 139 U. S. der the contract void as being in 79; s. c, 11 Sup. Ct. Hep. 400. restraint of trade or as .against 548 TRUST COMBINATIONS. [§ i<;t» might more or less restrain it. The point urged on the dv- fendant's part is that the statute was not really intended to reach that kind of an agreement relatinjj only to tratiic rates entered into by competing common carriers by rail- road; that it was intended to reach only those who were engaged in the manufacture or sale of articles of commerce, and who, by means of trusts, combinations and conspiracies were engaged in affecting the supply or the piicc or the place of manufacture of such articles. The terms of the act do not bear out such construction. Railroad companies are instruments of commerce, and their business is commerce itself. An act which prohibits the making of every con- tract, etc., in restraint of trade or commerce among the several States would seem to cover by such language a con- tract between com})eting railroads, and relating to tratKc rates for the transportation of articles of commerce between the States, provided such contract by its direct effect pro- duces a restraint of trade or commerce. What amounts to a restraint within the meaning of the act if thus construed need not now be discussed."^ After a farther discussion of ' United States v. Trans-Missouri Freight Association. liIG U. S. 290, 311. 313. See also State Freio;hi-Tax Case. 1.") Wall. 232. 275; Tc*lei,naph Co. V. Texas, 105 U. S. 4(i(). ICM. The case of United States v. Knight, 156 U. S. 1. makes very clear the distinction between State and Fed- eral jurisdiction on trust subjects. In the course of the opinion, at page 12, Chief .Justice Fuller uses this language : "The argument is that the power to control the man- ufacture of refined sugar is a mo- nopoly over a necessary of life, to the enjoyment of which by a large part of the i)opulaiion of the United States interstate commerce is indispensable, and that, there- fore, the general government in the exercise of the power to regu- late commerce may repress such monopoly directly and set aside the instruments which have cre- ated it. But this argument cannut be confined to necessaries of life merely, and must include all arti- cles of general consumption. Doubtless the power to control the manufacture of a given thing in- volves in a certain sense the con- trol of its disposition, but this is a secondary and not the primary sense; and although the exercise of that power m.ay result in bring- ing the operation of commerce into play, it does not control it, and af- fects it only incidentally and in- directly. Commerce succeeds to manufacture, and is not a part of it. The power to regulate com- merce is the power to prescribe the rule by which commerce shall be governed, and is a power inde- pendent of the power to suppress monopoly. But it may operate in § i<;i».] TRUST COMBINATIONS. 549 the merits of tlie case and the princijiles involved, the opinion continues: "The conchision which we have drawn from the cxMUiiuation above made into the question before us is, that tlie Anti-Trust Act appUes to railroads, and that it renders illegal all agreements which are in restraint of trade or commerce, as we have above defined that expression, and the (|uestion then arises whether the agreement before us repression of monopoly whenever that comes within the rules by which commerce is governed or whenever the transuction is itself a monopoly of commerce. It is vital that the independence of the commercial power and of the polii't' power, and the delimitation between them, however sometimes perplexing, should always be rec- ognized and observed, for while the one furnishes the strongest bond of union, the other is essen- tial to the preservation of the au- tonomy of the States as required by our dual form of government; and acknowedged evils, however grave and urgent they may ajjpear to be, had better be borne, than the risk be run, in the effort to suppress them, of more serious consequences by resort to expedi- ents of even doubtful constitution- ality. It will be perceived how- far reaching tlie i)roposition is that the power of dealing with a mo- nopoly directly may be exercised by the general goverment when- ever interstate or international commerce may be ultimately af- fected. The regulation of com- merce applies to the subjects of commerce and not to matters of internal police. Contracts to buy, sell or exchange goods to be trans- ported among the several .States, the transportation and its instru- mentalities, and articles bought, sold or exchanged for the pur- poses of such transit among the States, or put in the way of transit, may be regulated, but this is be- cause they form part of interstate trade or commerce. The fact that an article is manufactured for ex- port to another State does not of itself make it an article of inter- state commerce, and the intent of the manufacturer does not deter- mine the time where the article or product passes from the control of the State and belongs to commerce. This was so ruled in Coe v. Errol, IIG U. S. 517, r)2.">, in which the question before the court was, whether certain logs cut at a phice in \ew Hampshire and hauled to a river town for the purpose of transportation to the State of Maine were liable to be taxed like other property in the State of New Hampshire. Mr. Justice Bradley, delivering the opinion of the court, said : 'Does the owner's state of mind in relation to the goods, that is. his interest to export them, and his i>artial preparation to do so, exempt them from taxation? This is the precise (piestion for solution. • * * There must be a point of time when they cease to be gov- erned exclusively by the domestic law and begin to be governed and protected by the national law of commercial regulation, and that moment seems to us to be a legiti- mate one for this purpose, in wliicb thev commence their final move- .')")() TRUST COMBINATIONS. [§ 169. is of th:il iiMtuic. Although the case is heard on bill and answer, thus making it necessary to assume the truth of the allegations in the answer, which are well })leaded, yet the legal effect of the agreement itself cannot be altered by the answer, nor can its violation of law be made valid bv allepra- tions of good intention or of desire simplv to maintain reasonable rates; nor can the i)laintiff's allegations as to the intent with which the agreement was entered into be uient from the state of their oriijin to that of their destination.' * * * It was in the light of well settled principles that the Act of July 2, 1890, was framed. Congress did not attempt thereby to assert the power to deal with monopoh^ di- rectly as such; or to limit and re- strict the rights of corporations created by the States or the citi- zens of the States in the acquisi- tion, control or disposition of property; or to regulate or pre- scribe the price or prices at which such property or the products thereof should be sold: or to make criminal the acts of persons in the acquisition and control of property which the State of their residence or creation sanctioned or per- mitted. Aside from the provisions applicable where Congress might exercise municipal power, what the law struck at was combina- tions, contracts and conspiracies to monopolize trade and commerce among the several States or with foreign nations; but the contracts and acts of the defendants related exclusively to the acquisition of the Philadelphia refineries and the business of sugar refining in Penn- sylvania, and have no direct rela- tion to commerce between the States or with foreign nations. The object was manifestly private gain in the manufacture of tiie commodity, but not througii the control of interstate or foreign commerce. It is true, that the bill alleged that the products of these refineries were sold and distributed among the several States, and that all the companies were engaged in trade or commerce with the several States and with foreign nations, but this was no more than to say that trade and commerce served manufacture to fulfill its function. Sugar was refined for sale, and sales were probably made at Phil- adelphia for consumption, and un- doubtedly for resale by the first purchasers throughout Pennsyl- vania and other States, and refined sugar was also forwarded by the companies to other States for sale. Nevertheless, it does not follow that an attempt to monopolize or the actual monopoly of, the manu- facture was an attempt, whether executory or consummated, to mo- nopolize commerce, even though in order to dispose of the product the instrumentality of commerce was necessarily invoked. There was nothing in the proofs to indi- cate any intention to put a restraint upon trade or commerce, and the fact, as we have 6een, that trade or commerce might be indirectly affected was not enough to entitle complainants to a decree. The subject-matter of the sale was shares of manufacturing stock, and the relief sought was the surrender § Uiil.] TRUST COMBINATIONS. 651 reiriirdeil, :is such intent is denied on the part of defend- ants; and if the intent alleged in the l)ill were a necessary fact to be provi'd in order to niaiiitaiii tiic >uit, liic hill would have to he dismissed. In the view we have taken of of property which had already passed and the suppression of the alleged nionoi>oly in manufacture by the restoration of the status quu before the transfers, yet the Act of Congress onl)' authorized the cir- cuit courts to proceed by way of preventing and restraining viola- tions of the act in respect of con- tracts, combinations or conspir- acies in restraint of interstate or international trade or commerce." "In regard to .State legislation, it has been declared from the be- ginning that, to render such legis- lation subject to constitutional ob- jection under the commerce clause, the effect of the legislation upon interstate commerce must be di- rect, and not incidental or indi- rect. This general statement of the law so often repeated has been illustrated by the varying facts of many cases, but it would extend this opinion beyond reasonable limits to now refer to these. It has often been observed that the line of demarkation between State and federal jurisdiction and regu- lation is a delicate one. and at times grows dim and shadowy. In considering a question of this delicate nature, proper and prac- tical distinctions become extremely important. A particular business must be distinguished from the mere subjects of the business, and from mere incidents to or instru- ments by which the business is carried on. It is hardly conceiva- ble that any large industrial or manufacturing establishment could be carried on without shipping products from one State to another. and such would certainly be the course of business contemplated. Xevertheless. the business of such an establishment would be related to interstate commerce only inci- dentally and indirectly. Commerce would not be the main business, nor within the main purpose of the ordinary manufacturing es- stablishment. Interstate commerce would be altogether an incident. There is no direct relation between the two. It is probably true that every wholesale establishment within the limitsof the larger cities is engaged in such mode of busi- ness as that it is known that the business can be conducted only by the method of interstate commerce in part. Such commerce is. how- ever, not directly affected, and least of all, impeded or restricted. If every private enterprise which is carried on in jiart or chiotly by interstate shipments, or by a mode of business which makes this nec- essary, is to be regarded as thereby so related to interstate commerce as to come within the regulating power of Congress, it is obvious that this power could at once be extended to almost every form of business in the country which is conducted on anything like an extensive scale. So liberal an in- terpretation as this would ob- viously in a large sense obliterate the lines between federal and .State jurisdiction, and as an act of Congress is paramount in author- ity, would strike down the auton- omy of the States." United States V. Addystone Pipe * Steel Co.. 78 Fed. Rep. 712, 718. ^52 TRUST COMBINATIONS. [§ 170. the (luestion, the intent alleged l)v the soverniuent is not necessary to be proved. The question is one of law in re- iiard to the meaning and effect of the agreement itself, namely : Does the agreement restrain trade or commerce in any way so as to be a violation of the act? We have no doubt that it does. The agreement on its face recites that it is entered into 'for the purpose of mutual protection by establishing and maintaining reasonable rates, rules and regulations on all freight traffic, both through and local.' To that end the association is formed and a body created which is to adopt rates, which, when agreed to, are to be the governing rates for all the com[)anies, and a violation of which subjects the defaulting company to the payment of a penalty, and, although the parties have a right to withdraw from the agreement on giving thirty days' notice of a desire so to do, yet, while in force and assuming it to be lived uj) to, there can be no doubt that its direct, immediate and necessary effect is to put a restraint upon trade or com- merce, as described in the act. For these reasons the suit of the government can be maintained without proof of the allegation that the agreement was entered into for the purpose of restraining trade or commerce, or for maintain- ing rates above what was reasonable. The necessary effect of the agreement is to restrain trade or commerce, no mat- ter what the intent was on the part of those who signed it."'' § 170. Pooliii}? by Railroads. — A contract between com- j)eting lines of railroad, under which their earnings are put into a i)ool or common fund, and the proceeds divided in proportion to the importance of the roads, in order to pre- vent competition, is in contravention of public policy and void. Contracts of this general character, of two kinds, have been made by parallel and competing railroad lines. In one class there is a i)()()ling of the trallic or business, and in the other a p()t)linu of receipts or earnings. The traffic pool is an agreement by which a fixed ))crcentage of the business is allotted to each line in the association. In the ' United States v. 'l"raii.s-Miss»iiri Freight Association, l(i(i U. S. 290. 341, 342. § 170.] TRUST COMBINATIONS. 553 other class the receipts or earninirs are divided in accordance with tlie i)ro})ortion or percentage agreed iqjon in the cove- nant, not, necessarily, according to the amount of business actually done by each road. In England railroad pooling is not, necessarily, illegal. If there is nothing in the compact that is, essentially, illegal, or in contravention of public policy, it will be sustained by tho courts. In a leading English case, two groups of railway companies, being respect- ively the owners of indei)endent conterminous routes, agreed to divide the profits of the whole traffic in certain fixed proportions, calculated on the e\'})erience of the past course of traffic. It was held that such an agreement, be- ing bonafide^ was not ultra vires.^ Other decisions of the Ulaie V. London & X. W. Ry. Co., 2 Johns. &, H. SO; s. C, iJO L. .1. Ch. 817; 7 Jur. (X. S.) 1145. See also Shrewsbury & Birming- ham R. Co. V. London & North- western R. Co., L. R. 17 Q. B. or)2; 9 Eng. L. & Eq. 394. The defend- ants, owning a short railway from New Orleans to Lake rontchartrain and one Morgan, owning a line of steamers plying from the lake terminus to Mobile, and the plaint- iffs and other parties owning two other steamers in the same trade, an arrangement was made by de- fendants with Morgan, and tem- porarily with the proprietors of the other steamers, respectively, to sharepro rata the through freight from New Orleans to Mobile. It appeared that this arrangement was unprofitable to the defendants, for the lines of steamers, by com- peting and lowering rates of freight, greatly reduced the share coming to the railway. The de- fendants, therefore, entered into an agreement with Morgan by which the latter loaned them 8250,000. and the former agreed to prorate with him the through freight from New Orleans to Mobile, and to charge all other steamers the tariff rates paid by the public generally. The plaintiffs immedi- ately laid up their steamers and sued for damages on the ground that this prorating with Morgan and refusing to further i)rorate with plaintiffs was an illegal com- bination with Morgan to confer on him an unlawful monopoly and preference. Held, that the acts of defendants ^vere not in contraven- tion of any statute of J>ouisiana or any principle of her jurisprudence; that they might agree or refuse to prorate through freight with any- body, and the plaintiffs could not complain of a refusal to prorate with them; and that as common carriers, in the absence of statutory prohibition, their acts in the prem- ises were not unlawful. Eclipse Towboat Co. v. Pontchartrain R. Co., 24 La. Ann. 1. "The second plea avers, and the demurrer of course admits, tliat at the time of the uuiking of the contracts be- tween the parties, and of the deal- ings thereunder, their respective roads 'were rival and competing 554 TRUST COMBINATIONS. [§ 170. English courts are in the same general direction. In this country there is not entire harmony in the decisions on this subject. In some of the States the decisions turn upon the railroads, by the competition of which the prices of transportation thereon were. and. but for said supposed contracts, dealings, trans- actions, operation and business would have continued to be ma- terially reduced, and said alleged contracts, dealings, transactions and business were made and had for the purpose of destroying and preventing such competition, and did destroy and prevent it.' It will be noticed that there is no averment in the plea that the pur- pose of the contracts was to raise the prices of transportation above a reasonable standard, or that they did have this effect, or that the public were prejudiced by their operation in any manner, and the naked question presented then, is, whether all contracts between rival railway corporations which prevent competition are neces- sarily contrary to public policy, and. therefoie, mala prohibita and illegal in themselves. To state this question is to answer it in the negative, because it is obvious that the illegality depends upon cir- cumstances. While without doubt contracts which have a direct tendency to prevent a healthy competition are detrimental to the public and. consequently, against public policy, it is C(iually free from doubt that when such con- tracts prevent an unhealthy com- petition, and yet furnish the public with adequate facilities at fixed and reasonable rates, they are benelicial, and in accord with sound principles of public policy. For the lessons of experience, as well as the deductions of reason, amply demonstrate that the public interest is not subserved by com- petion which reduces the rate of transportation below the standard of fair compensation; and the theory which formerly obtained that the public is benefited by un- restricted competition between railroads has been so emphatically disproved by the restilts which have generally followed its adop- tion in practice, that the hope of any permanent relief from exces- sive rates through the competition of a parallel or rival road maj-. as a rule, be justly characterized as illusory and fallacious. Upon au- thority, also, arrangements and contracts between competing rail- roads, by which unrestrained com- petition is prevented, do not con- travene public policy. Hare v. London it X. W. R. Co., 2 .Johns. & II. SO, is directly in point. In that case a bill in chancerv liad been filed by a stockholder in the defendant company to annul an agreement between two railway companies to divide the profits of the traffic in fixed proportions; and it was admitted there, as it is here, that the purpose of the agree- ment was to prevent competition. In dismissing the bill. Vice-Chan- cellor Wood said (p. 103) : 'With regard to the argument against the validity of the agreement, I may clear the ground of one objec- tion by saying that I see nothing in the alleged injury to the public arising from the prevention of competion. * ♦ • It is a mis- taken notion that the public is benefited by pitting two railway companies against each other till § 17U.] TRUST COMIJINATION.S. 555 circumst:iiu'es of the case under consideration.^ But in most of the States i)ooling is held illegal, and all contracts relating to it void. The tendency is to a more rigid enforce- ment of this doctrine. In a leading case in Pennsylvania, five coal corporations of that State entered into an agree- ment in New York, to divide two coal regions, of which they had the control ; to appoint a committee to take charge of their interests, which was to decide all (piestions and ap- one is ruined, the result beinj; at last to raise the fares to highest possible standard." Manchester it Lawrence li. Co. v. Concord R. Co.. 6(; X. H. 100. 127; s. C.,9L.R. A. 089; 27 Atl. Kep. 383; 47 Am. & Eng. K. Cas. 3o9; 3 Int. Com. Rep. 319. But see Charlton v. New- castle & Carlisle R. Co., 7 W. R. 735; s. C. 5 Jur. (N. S.) 1096; Midland R. Co. v. London & X. W. R. Co.. L. R. 2 Eq. Cas. 524; Maunsell v. Midland, Gt. Western R. Co., 1 IL & M. 104; s. c, 32 L. J. Ch. 513. 1 Cleveland, etc. R. Co. v. Clos- ser, 120 Ind. 348; s. c, 45 Am. & Eng. R. Cas. 275. See also Chi- cago, M. ct St. P. R. Co. V. Wa- bash, St. L. & P. R. Co.. 01 Fed. Rep. 993; s. c. 58 Am. it Eng. R. Cas. 703; Central R. Co. v. Collins, 40Ga. .')82; Cutting v. Florida. R. & N. Co., 48 Fed. Rep. 508; Morrill V. Boston & M. R. Co., 55 X. U. 531; s. c, 11 Ry. Rep. 484; Gulf, C. & S. F. R. Co. V. State, 72 Tex. 404; s. c, 10 S. W. Rep. 81; 30 Am.&Eng. R. Cas. 481; 1 L. R. A. 849; 2 Int. Com. Rep. 335: Chicago, D. & V. R. Co. v. Smith, 02 III. 208; s. c. Am. Ry. Rep. 221 ; Texas & P. R. Co. v. Southern Pacitic R. Co.. 41 La. Ann. 970; s.C, So. Rep. 888; s.c.,40 Am. & Eng. R. Cas. 475; Stewart v. Erie ct W. Transp. Co.. 17 Minn. 372; Burlington. C. R. »!t X. R. Co. v. Xorthwestcrn Fuel Co., 31 Fed. Rep. 052. A railroad pooling con- tract, the evident object of which is to stitle competition for the pur- pose of raising rates, is void, as contrary to public policy. Chi- cago. M. & St. 1'. Ry. Co. V. Wa- bash, etc. Ry. Co., 01 Fed. Rep. 993. A contract by which a railroad company arranges with another, to the exclusion of still others, for the interchange of passengers and freight by through tickets and bills of lading, is not a contract in unlawful restraint of trade, within the meaning of the Act of July 2, 1890. Prescott & A. C. R. Co. v. Atch., T. & S. F. Co., 73 Fed. Rep. 438. The provision of section 5, making any "contract, agreement or combination with any common carrier or carriers for the j)ooling of freights of different and com- peting railroads" unlawful, does not apply to a pooling contract between a railroad company and a pipe line company for the trans- portation of oil. Independent Re- finers' .Vssoc. V. Western, X. Y. it I'. IJ. Co.. 5 Int. Com. Com. 415; .s. r., 4 Int. Com. Rep. 102. The provisions of section 5, prohibiting freight pooling, does not invali- date a contract for such pooling as a whole, but only the pooling pro- visions therein. Ives v. Smith. 8 X. Y. Supl. 40; afflrming 3 X. Y. Supl. 045. 5nfi TRUST COMBINATIONS. [§ no. point a general agent at Watkins, New York ; the coal mined to be delivered through him, each corporation to de- liver its proportion at its own cost in the different markets at such time and to such persons as the committee might direct; the committee to adjust the prices, rates of freight, etc., enter into agreements with anthracite companies; the five companies might sell their coal themselves only to the extent of their proportion and at prices adjusted by the committee; the agent to suspend shijiments by either beyond their proportion; frequent detailed reports to be made by companies, and settlements monthly b}' the com- mittee, prices to be averaged and payments made to those in arrears b}^ those in excess, neither to sell coal otherwise than as agreed upon, and the regulations of the committee to be carried out faithfully. A statute of New York makes it a misdemeanor for "persons to conspire to commit anv act injurious to trade or commerce." It was held that their agreement was in contravention of the statute, and also against public polic}', and, therefore, illegal and void.' 1 Morris Run Coal Co. v. Barclay Coal Co., 08 Pa. St. 173. -The referee found, as his conclusion upon the whole case, that the con- tract was void by the statute, and void at common law, as against public policy. The restraint of the contract upon trade and its in- jury to the public is thus clearly set forth by the referee : 'These corporations (he says) represented almost the entire body of bitu- minous coal in the northern part of the State. By combination be- tween themselves they had the power to control the entire market in that district. And they did control it by a contract not to ship and sell coal otherwise than as therein provided. And in order to destroy competition they pro- vided for an arrangement with dealers and shippers of anthracite coal. They were thereby prohib- ited from selling under prices to be fixed by a committee represent- ing each company. And they were obliged to suspend shipments upon notice from an agent that their allotted share of the market had been forwarded or sold. In- stead of regulating the business by the natural laws of trade, to-wit, those of demand and supply, these companies entered into a league by which they could limit the supply below the demand in order to enhance the price. Or if the supply was greater than the de- mand, they could nevertheless compel the payment of the price arbitrarily tixed by the joint com- mittee. 'J'he restraint on the trade in bituminous coal was by this contract as wide and extensive as the market for the article. It already embraced the State of New York, and was intended, and no § 170.] TRUST COMBINATIONS. .'),')7 lu the opinion in this case, Mr. Justice Aujnew suitl : ''There is a certain freedom which must be allowed to every one in the management of his own affair-. Where competition is left free, individual error or folly will gen- erally tind a correction in the conduct of others. Hut here is a coinl)inati()n of ail the companies operating in the Blossburgh and Barclay mining regions, and controlling their entire productions. They have combined together to govern the supply and the price of coal in all the markets from the Hudson to the Mississippi rivers, and from Penn- sylvania to the lakes. This combination has a power in its confederated form which no individual action can confer. The public* interest must succumb to it, for it has left no competition free to correct its baleful inHuence. When the supply of coal is suspended, the demand for it becomes im- portunate, and prices must rise; or, if the supply goes forward, the price fixed by the confederates must accompany it. The domestic hearth, the furnaces of the iron master and the fires of the manufacturer all feel the restraint, while many dependent hands are paralyzed and hungry mouths are stinted. The influence of a lack of sup})Iy, or of a rise in the price of an article of such prime necessity, cannot be measured. It permeates the entire mass of com- munity, and leaves few of its members untouched by its witheringblight. Suchacombination ismorethanacontrait ; it is an offense. •! take it,' said (iibson, rlustice, 'a combina- tion is criminal whenever the act to i)e done has a necessary tendency to prejudice the pul)lic, or to o|)j)ose individuals, by unjustly subjecting them to the power of the confeder- ates, and giving effect to the purpose of the latter, whether of extortion or of niixhief.'* In all such combinations doubt did. affect the market in the their business, nor for the protec- western States. It is expressly tion of themselves by a reasonable stipulated that the parties to this restraint as to a limited time and contract shall not be considered as space, upon others who might partners. The agreement was not interfere with their business.' '" entered into for the purpose of Ibid., 183. aggregating the capital of the sev- ' Commonwealth v. Carlisle, eral companies, nor for greater Brightley, 40. facilities for the transaction of 558 TRUST COMBINATIONS. [§ 171. where the purpose is injiiriou.s or unlawful, the gi.st of the offense is the conspiracy. Men can often do by the com- bination of many what, severall}^, no one could accomplish, and even what when done bv one would be innocent."^ § 171. Tlie Pooling of Stocks. — The putting of stocks into a pool or common fund is not, necessarily, illegal. If the object is not objectionable, a reasonable regulation in regard to the manner of selling corporate stocks, in order to prevent a sacrifice of the interests of the parties concerned, is not in contravention of public policy as in restraint of trade. In the recent and leading case of "Williams v. Montgomery, l)e- fore the New York Court of Appeals, the court said : "After careful study of the agreement in (juestion, we think that it Avas neither a violation of the statute aijainst accumulations nor a restraint upon trade. What are the facts? Four promoters of a corporation, who owned ninety- nine one-hundredths of its capital stock, as tenants in com- mon, agreed, in writing, to partition their holdings, after first placing in the treasmy one-fifth of all the stock, to be sold in order to provide working capital for the company. As the amount of the capital stock was large and they did not wish to glut the market by the sale of treasury stock in competition with individual stock, they provided for the deposit of the latter with a trust company, under the agree- ment that they would not Avithdraw the same for six months, except by mutual consent, unless enough treasury stock should be sooner sold to realize the sum of $30,000. in which event any one could withdraw his certificate on five days' notice to the others. No trust was created. The title was not vested in a trustee, unable to sell, with like in- ability on the part of the beneficiary. No restriction was placed on the power of any stockholder to sell, but he could not deliver the certificates for six months, except in either of the contingencies named. There was no suspen- sion of absolute ownership, because the statute expressly declares (hat the 'power of alienation is suspended when ' Morris Run Coal Co. v. Barclay Coal Co.. OS Pa. St. 173, 186. § 171.] TKLST COMHINATIONS. OOD there arc no persons in bring by wiioni an absolute fee in posses-sion can be conveyed.'^ A\'liilc this a})pHe.s, })rinia- rily, to real estate, by a sub.se<|uent chai)ter it i>; made applicable to personal profjerty also.'^ The test of alienabil- ity of real or personal ])r()perty is that there are persons in being who can ijive a perfect title. ^ Where there are living parties who have, unitedly, the entire rioht of ownership, the statute has no api)lication.^ The ownership is al)solutc whether the }H)wer to sell resides in one individual or in general. If there is a ju'esent right to dispose of the entire interest, even if its exercise depends upon the consent of many persons, there is no unlawful sus|)ension of the power of alienation. The ownership, although divided, continues absolute. The agreement in question, therefore, which ex- pressly reserved the right to sell by nuitual consent, did not violate the statute, because there was no time when an ai)s()- lute title to the stock or an}' part of it could not have been transferred by the joint action of the four parties to the contract. Nor was the agreement opposed to public policy, for a reasonable regulation, as to the mode of selling the stock, so as to prevent the sacritice thereof, was not a re- straint upon trade. As an incident to the contract, making partition of the shares, it was competent for the parties to agree that the stock donated to the corporation, in which they had a comnuui interest, should be tirst offered for >ale. This was no restraint upon the business freedom of the parties, but a promotion of the general interest, by temporarily withholding from the market shares owned by individual>, in order to afford a reasonable ojjportunity to sell shares, indirectly owned l»y all. Tlic protection of the interests of all concerned \)y preventing the market from suddenly becoming overcrowtled and ruint)usly tlejjressed, was a reasonable, just and honest purpose, which the law does not condenni. There was no e\il tendency in the ' 1 Rev. Stat. 723. § 14. "22'}, 235; Gott v. Cook. 7 Taij^e. - 1 Key. Stat. 773, § 2. fiil ; atHrmed 24 Wend. 041 ; Bolles •' Genet v. Hunt, 113 X. Y. I.'kS, on .Suspension, 2. 172; Xellis v. Xellis. 90 X. Y. Mb. < Noiris v. Beyea. 13 X. Y. 273, 516; Kobert v. Corning, {?9 X. Y\ 289. 560 TRUST COMBINATIONS. [§ 171, jimuiirement, as it simply prevented a course of action that would have brought loss both to the common and to the personal interest s.^ ' AVilliams v. Montgomery, 148 N. Y. 519, 525. See also Hodge v. Sloan, 107 N. Y. 244. -There was nothing in the written contract between the parties which required the plaintiff to transfer the control and management of the corpora- tion to Brown and Seligman; but I will assume that it was the under- standing and a purt of the scheme that he should do so. Brown and Seligman were attempting to pro- cure the control of the corporation and of its franchises for a legiti- mate purpose. There is no reason to suppose that they meant to per- petrate any fraud on the stock- holders. They were dealing with a person who held a majority of the stock and who, in virtue thereof, had the right and the power to control the corporation within the limits of its chartered powers. He had the right to sell out all his stock and interest in the corporations, and in doing so he perpetrated no wrong upon any one, and when he ceased to have any interest in the corporation, it was certainly legitimate and right that he should cease to control it. It is the general rule sanctioned by the policy of the law, that those who have the largest interest in corporations may control them, as they have the greatest interest that they shall be well managed." Barnes v. Brown, 80 N. Y. ,')27, 53G. The oHicers of a corporation having taken means to obtain from the stockholders a deposit of their stock, together with powers of attorney, in the hands of such officers or their agents in order to enable them, among other things, to vote on the stock at a stockholders" meeting, held, that one stock- holder is not entitled to have tbe officers restrained from voting on the stock of others, upon the theory that the transaction creates a trust for the corporation, unless corpo- rate funds were used in doing what was done. Woodruff v. Dubuque. 30 Fed. Rep. 91. In an action against several persons upon an account arising from stock trans- actions, claimed by plaintiff to have been joint transactions on the part of the defendants, but claimed by one of the defendants to have been several, held, that evidence that said defendant had a private account running at the same time was competent as a circum>tan Ilun, t;42; Williams v. Montgomery, 08 Hun, 41tJ. Another plan was to restrict by a by-law the right to transfer stock, but this was held illegal. Morgan v. Struthers, 131 U. S. 24ti. A provision that a|)Mr- chaser of a certificate of stock who sold in violation of the agreement should be entitled to the dividends 30 but should receive no right to vote, was likewise held invalid. Harper v. Raymond, 3 Bosw. (X. Y.) 29. Numerous decisions aflirm the cor- rectness of the above rulings, which are based upon the illegality, be- cause against public policy, of permitting large blocks of stock to be irrevocably tied up for the pur- pose of being voted in solido for the interest of a cli(iue or section of the stockholders, and not ac- cording to the judgment of each individual stockholder for the benefit of the entire corporation. There are some few decisions trenching more or less upon the principles above stated, but we deem them contrary to sound principle of public policy, and hence not authority. In short, all agreements and devices by which stockholders surrender their voting powers are invalid. ."> Thompson, Corporations. <; (»(i04. The power to vote is inherently annexed to and inseparable from the real ownership of each share, and can only be delegated by proxy with power of revocation. The 'pool- ing' arrangement, admitted to have been entered into by the majority of stockholders in the present ca.se is contrary to pulilic ])olicy and voidable." Harvey v. Improvement Co.. 118 N*. Car. 092, 098. 562 TRUST COMHIXATIOXS. [§ 172. case of Emery v. The Ohio Candle Company, the court said : "We are of the opinion that the suit cannot he maintained, for the reason that the objects of the association were con- trary to pul)lic policy, and in no way to he aided by the courts. No recovery can be had except by giving effect to the terms of the agreement. The action is, in substance, a .suit against the association to recover a sum due the phiintiff under the terms on which the association was formed. The committee represents the association, and a judgment against them is a judgment against it. If, as claimed by the defendants, a member could not withdraw from the association until the six years had expired, then the committee, as representing the association, had a defense on which it might have relied, had the objects of the association been perfectly legitimate. But should a court be called on to consider any defense, so long as the claim itself is based upon an agreement to which it can give no countenance? It nuist be observed that the withdrawal of the plaintiff was not at a time nor under cir- cumstances that could give to it the merit of repentance. It had passed beyond the i)oint at which it might by with- drawal have secured the aid of a court in recoverins what it had advanced in furtherance of an illegal object. Its suit is to recover its portion of the ill-gotten gains."' In a still ' Eiiieiy V. Ohio Candle Co.. -J7 Ohio St. 320 322 ; s. c, 24 X. E. tU'i). 660. 061. An association of nianii- factiiiers of wire cloth, formed for the avowed purpose of leguhiting the price of the con)niodity. each of tlie inenibeis stipiilatinii;. under a heavy penalty, thai he will not sell at less than a specified rate, is contrary to i)ublic jiolicy and il- legal; and one of the uienihers of the association, who lias paid the penalty for violation of the stipu- lation, cannot recover it back. De Witt Wire Cloth Co. v. Xew Jersey Wire Cloth Co., 14 N. Y. Supl. 277. A contract by which three of four companies engajred in the manu- facture of oleomargarine, consoli- date us a corporation for the pur- jiose of stopping tlie sharp compe- tition between them, and agree that none of them shall separately en- gage in the business for five years, is not invalid as constituting a monopoly. Oakdale Manfg. Co. v. Carst. 18 K. I. 484: s. C, 28 Atl. Rep. 973. Where a con- tract for the sale of grain bags provides that the vendee shall have the exclusive sale of the same to the amount of 187.500. and the vendor agreed not to sell, or offer the same for sale, to any other person, and if the vendee failed to sell the full amount, the vendor agreed to ac- 172.] TRUST COMIU.VATIONS. /■)(;3 more recent case, where plaintiffs, rcpresentino; foureotton t>cecl mills, :initing rom- binations in restraint of trade, a rom])inatlon of dealers in beer, which secured control, by lease, of "all the cooling room capacity for cooling beer" in a town, so that competition in beer would be kept out, is unlawful; the parties to it cannot recover for a breach of con- tract, the performance of which would have aided them to carry out their unlawful enterprise. An- heuser-Husch Brewing Assn. v. Ilouciv. 27 .S. \V. Rep. 092 ; s. C, 30 S. W. Rep. 869. 564 TRUST COMBINATIONS. [§ 172. case, after referrinor to the ao;reement under which that association was organized, the court said: "It thus appears that the above artificial regulations of the value or prices of these staple articles of trade, as well as the arbitrary restrictions imposed by the contrast upon the right to deal in them in the usual or customary course of legitimate busi- ness, were intended to apply to and control, as far as the contracting parties were able to do, the market in reference to these staples, and the agreement embraces within its operation the chief cities or commercial centers of the State, as well as the cotton producing regions thereof, as we may judicially know. There seems to us to be scarcely anvthing lacking to characterize the combination between the parties in this case, as evidenced by the language and purposeof their agreement, as a complete monopoly, except the proof that they were the only parties who were engaged at thf specified localities in the manufacture referred to in the ct;ntract, at the time it was made. It is not improbable that everv cotton oil mill in the State was represented in this combination, or was intended to be brought into it eventually; but as this is not alleged in the petition we can- not presume it. We must admit some limit even to judicial knowledge. But to render the contract void it is not neces- sary that it should create a pure monopoly. It would seem that the acrrecmcnt mav be illegal if the natural ornecessarv consequences of its operation are to prevent competition and create fictitious prices independently of the law of de- mand and supply, and to such an extent as injuriously to affect the interests of the public or the interests of any particular class of citizens who may be especially interested either as producers or consumers, in the articles or staples which are the subject of the restrictions imposed by the contract. Likewise the agrecnu'ut may be in some instances void, because of unreasonable restrictions imposed upon even one of the parties to it. According to the authorities, the extent of the restraint, though sometimes difiicult to measure, deter- mines the character of the agreement, whether legal or it;}.] TRUST COMBINATIONS. /)H5 not. Tho authorities are too niiinercni.s even to cite all of them."' § 173. The Subject Continued. — The foniiiiiir of an association or {\\v enterinu' into an aureement l)y a number of indeiiendent (U'alers in an article in common use, with a view to controlling the price by suppressing conipetition, if ' Texas Standard Oil Co. v. Adoue, 83 Tex. G50; s. c, 19 S. W. Rep. 274. See also Callaghan v. DonnoUy. 45 Cal. 152; Salt Co. v. Guthrie, 35 Ohio St. OGG ; Sampson v. Shaw, 101 Mass. 145; Wright v. Ryder, 30 Cal. 342, 361 ; Hooker v. Vandewater, 4 Denio (N. Y.), 349; S. C, 47 Am. Dec. 258; Craft v. MeCon- oughy, 79 111. 34(5 : Leonard v. Poole, 114 X. Y. 371; Angler v. Webber, 14 Allen, 211; s. c, 92 Am. Dec. 748. '"It will be seen that the Howard Company was given almost an unrestricted field to ob- tain the raw material for its mills, and the exclusive right to control, free from the competition of the owners of the "four mills' (who had no doubt up to that time been its rivals) not only the sales and ruling prices of the products of its own mills (which are not disturbed in this respect), but also 'the entire yield' of the mills of the other par- ties to the contract. It was thus enabled by the confederation of all of the parties to dictate at will the prices at which the public must buy (if at all) the oils or other products of any of the mills. If both of the parties had entered a market open to both under the con- tract, in order to purchase the raw materials they could not have com- peted, for no competition was con- templated .and all freedom of action in this particular was forestalled by arbitrary regulations of the price to be paid, which must be observed. In the markets assigned to each they are confronted by the same barrier, and the party cannot buy at all if the market price at that point happens to be greater than the contract price; or if the price prevailing there should even be below the contract price, still the party could not avail him- self of this advantage without first obtaining, if he could, the consent of the other par- ties. In other words, neither the parties nor the producers of the raw material are to have the benefit of but one price, which has been definitely fixed in advance. These things, as it seems to us. are well calculated to affect the Inter- ests of the public detrimentally, and would doui)tless have been deemed by the parties as injurious to their own interests had they been contemplating a lawful enter- prise. These restrictions, how- ever, were instituted in this in- stance, not for the purpose of a fair protection to all of the parties, but as suitable means for preventing all competition. If not, then it would have been clearly to the advantage of the Howard Oil ( 'om- pany, in view of its obligations to the 'four mills,' that the raw materials should be bought by all of the parties to the contract at the lowest figures. This company had bound itself to payor bear the cost of the seed as well as the expense of 'working" the same by 'the four 56G TRUST COMBINATIONS. [§ 173. ])ut into cxi'cutioii, constitutes a t'onspiracy and will not l)o enforced. In a recent case in New York, it was held that where there exists in a city an association of retail coal ciealers, the object of which is to lix a uniform price of coal sold in the city, in order to prevent competition among the retail dealers in coal, such agreement, followed bv overt mills.' etc. We recur now to the law of the case. AVe can scarcely conceive how mere territory limits can be the controlling test in all instances of the legality of the re- straints imposed upon the ordinary course of trade. This criterion may do very well when applied to the occupation or profession of one man or even a few individuals; for neither their labor, industry, busi- ness nor services may be so neces- sary to the public as not to be dis- pensed with without inconvenience or injury. It appears to us. how- ever, that the case is very different in regard to trade or commerce in those articles of prime necessity or even of very frequent use among a large number of people in any given locality. Doesany one doubt that a combination of a number of the most extensive dealers in Hour, meat or oils, etc., in one great city, to sell those commodities at only one price or not at all within the limits of that city, would affect the interests of the public, and. per- haps, also some of the individual dealers, much more extensively and disastrously than a similar agreement extended to a much greater area of country, but in which only a very few people re- side or require such articles^ It would seem that the injurious effects upon the public interests would be in proportion to the number of people affected by the restrictions, thougii we are not unaware that this position has not been deemed tenable by some of the authorities in cases where the right to exercise a trade or profes- sion within a particular district or locality has been restricted by the contract. We think that territory cannot be the sole test, though in the present instance the contract embraces such extensive territory and such a number of localities as to bring it even within that rule. In determining the reasonableness of the restraint the effect upon the interest of the public is a better test." Standard Oil Co. v. Adoue. 83 Tex. 650, 659. A contract be- tween manufacturers, whereby, without any sale of the business of one to the other, one party is prohibited from manufacturing of pressed metal any parts of a dia- mond car truck frame, is void as an unreasonable restraint of trade. Fox Solid Pressed Steel Co. v. Schoen, 77 Fed. Rep. 29. A con- tract to control the price of a com- modity is void as in restraint of trade where the annual sales of such commodity in the State are about $1,500,000, though it is not an article of necessity. Cummings V. Union Blue Stone Co.. 44 N. Y. Supl. 787; s. c. 15 App. Div. 607. See also People v. Sheldon, 139 X. Y. 251; s. c, 34 N. E. Rep. 785; Greer V. Payne, 4 Kan. App. 153; s. c. 46 Pac. Rep. 190. In an action brought by the attorney-general to vacate the charter of defendant, a domestic corporation, and to annul its corporate existence. § 17.).] TRUST COMIMNATIONS, ."iCiT ;ict.s, on their part, constitiitcsaconspiracy within the lueaiiinir of the Penal Code, and the members of snch association are guilty of a misdemeanor. Ordinarily persons in their (U-al- ings nniy adopt sueh method as they ph-ase to reuiihite the measure of eomiiensation or prices in the future, throuiih tile })eriod of the operation of their contracts, hul thev caniH)t effectually do so to accom|)lisii an uid:i\vful jnirijose. As the business of buying and selling coal is in itself legit- imate, the fact that the prices adopted between the vendor and the vendee are in furtiierance of a scheme of an association to regulate the price thereof would not deny to the seller all remedy for non-payment of the price of the coal delivered by him under such contract; l)ut the contract, so far as the prices therein provided for, are founded or dependent upon the prices fixed by such association, is ineffectual and ^()id. Where it appears that a contract, which is the subject of an action, is void us against pul)lic policy, (he court will decline to enforce it l)y judgment, although such intirmity is imt pleaded, if the invalidity of the contract a])pears in the pi-e- sentation thereof by the plaintiff u[)on the trial, but if the contract, as alleged and proved by the plaintiff, is valid on its face, the defense that it is in fact against public policy and illegal is not available, unless specially pleaded.' these facts appeait'd : In defend- No milk was piirelia.sed by defend - ant's charter the object of its ant. but it did a conunission biisi- orpjanization was stated to be the ness, selling milk for farmers to "buying and selling of milk at dealers, who would purchase at wholesale and retail." A large the price fixed, guanmteeing pay- majority of the stockholders were ment and charging a commission milk dealers in the city of New therefor. 'J'he prices so fixed York, and creamery or milk com- largely controlled the market in mission men in that vicinity. At and about said city. //(7(Z. that the the first meeting of its board of evidence justilled a tindinglhat the directors a by-law was adopted, corporation was a combination declaring that said board "shall inimical to trade and commerce. Imve the power to make and tixtbe and so unlawful, and that a judg- standard or market price at which ment granting the relief sought milk shall be pun-hased by the was proper. People v. Milk K\- stockholders of the company."' change. 14.") N. Y. "iG?. Acting under this by-law. the ' I>rake v. Siebold.M Hun. 178. board fixed from time to time the 8ee also Craft v. .McConoughy. 7f> price of milk to be paid by dealers. 111.34(3; I'eople v. Fisher. 14 Wend. 568 TRUST COMBINATIONS. [§ 1'4. § 174. Monopoly under Patent. — A patent, for the time for whitli the .special privilege is grauted is, essentially, a monopoly. The idea of a patent is the prevention of any manufacture or sale of the article patented by other parties. The patent confers the exclusive privilege of manufacture and sale. This is not a matter of govern- mental favor, hut a consideration for the labor and monev 10; Arnot V. P. & E. Coal Co., 68 N. Y. '>oS. A combination between independent dealers to prevent compel iiion between themselves in tlie sale of an article of prime ne- cessity is, in the contemplation of law. an act inimical to trade or commerce, without regard to what may be done under and in pursu- ance of it, and although the object of such a combination was merely the due protection of the parties against ruinous rivalry, and no at- tempt was made to charge undue or excessive prices. Where it ap- pears that the parties acted under the agreement, an indictment for con?-piiacy is sustainable upon trial of an indictment for conspiracy to raise the price of coal at retail and to destroy free competition, the court charged the jury that if the defendants entered into an organi- zation agreement for the purpose of controlling the price and man- aging the business of the sale of coal, so as to prevent competition in price between the members of the organization, the agreement was illegal, and if the jury found this was their intent, and that the price was raised in pursuance of the agreement, the crime of con- spiracy was established. Held, no error. People v. Sheldon. 139 X. Y. 2.")1. 8ee also Hooker v. Van- dewater, 4 Denio. 34tt; .Stanton v. Allen..") Denio, 434; Saratoga Co. Bank v. King, 44 X. Y. 87 ; Leonard v. Poole, 114 X. Y. 371 ; People v. Milk Exchange, 145 X. Y. 267. An agreement, the real nature and purpose of which is to suppress competition in articles of food, and so tends to enhance the price, is contrary to public policy and is void. Certain parties who were brokers and dealers in sheep and lambs, executed an agreement, by its terms organizing an association for the declared purpose '"of guarding and protecting their busi- ness interests from loss by un- reasonable competition,"' by which they agreed to pool their commis- sions, except such as should be agreed to be paid to a certain butchers" association, and the asso- ciation so formed entered into an agreement with the butchers" asso- ciation, by the terms of which the brokers were only to sell to the butchers, and the butchers to buy only of the brokers belonging to their respective associations. In an action brought by plaintiff, as treasurer of the brokers' associa- tion, against one of its members to recover damages stipulated therein for a breach of the agreement, held. that the two agreements were to be taken and considered together; that they were intended to control the markets, fix the price and de- stroy competition, and so were in- valid and not enforceable: that the the i)ublic might be prejudiced, and whether they were so. in fact, was not material. .Judd v. Har- rington, 139 X'. Y. 105. § 174.] TRUST COMBINATIONS. ,')(;i) oxpcndocl in the iuvontion of the patented article. In a monopoly of this character there is no restraint of trade. No right of any other party is abridged or in any way in- fringed. In order to render a monopoly illegal its opera- tion must dej)ose some jierson or class of persons of sonic privilege which they had previously enjoyed. But this is not true of a monopoly under a patent right. The patent simply secures to the patentee the reward or, for a limited time, the sole enjoyment of the fruit of his skill and labor in producing the article patented. Moreover, the protection which is given to an individual as a patentee is extended to a combination of individuals or companies which are in possession of patents relating to the same article, provided the combination is not otherwise illegal. In a recent case before the United States ('ircuit Court for the Northern District of New York, it was held that the fact that a corpo- ration owning letters patent upon a particular kind of machinery has entered into a combination with other manu- facturers thereof to secure a nu)noi)()ly in its manufacture and sale, and to that end has ac(|uired all the rights of other manufacturers for the exclusive sale and manufacture of such machine under patents, will not entitle a stranger to the combination to enjoin the corporation from bringing anv suits for infriuirement against him or his customers.^ ' strait V. National Harrow Co., 51 Fed. Rep. 819. 'Tbe com- plaint alleges that the plaintiffs, and other persons threatened with suit, do not infringe any of the patents of the defendant, but. as was said by Mr. . Justice Hunt, in Celluloid Manfg. Co. v. Goodyear Dental Vulcanite Co.. 13 Blalchf. 384 : "To allow the action is to re- verse the proper position of the parties. Whoever receives letters patent from the United States re- ceives thereby a prima facie right to maintain an action against every infringer of the right given by such letters. While it is true that such right is prima facie only, and that the holder must be prepared to maintain it in the courts when at- tacked, it is still a right on his part to sue such alleged violators. The present action would convert the right to sue into a liability to be sued, wliich is quite a different thing. • * • The defendant has a right of action against each one of these individuals. It has the right to sue the whole of them. It has the right to sue any one of them, and to allow the others to go undisturbed. Wiiile it would not be a highminded theory, I know of no principle that, as a matter of .•)70 TRUST COM HI NATIONS. [§ 174. It is to be observed that the basis of this decision is that no rights of third parties or of the public are infringed, and that the combination gave the parties concerned no rights and no power which tlic indivithials liad not previously pos- sessed. The monopoly was not created l)y the combination, but was enjoyed by the interested parties before it was law, would prevent its seeking the feeblest of tbeni all. — the one least able to defend himself, — and to make a victim of him. If that in- dividual shall appear to have in- fringed upon this defendant's patents, he is liable to the dam- ages, although he maj' be poor. — unable to defend himself. — al- though others may have offended in a greater degree, and although we may condemn the spirit which selected him as the particular de- fendant. On principle, this can- not be doubted. See also Asbestos Felting Co. v. United States & F. Salamander Felting Co. .13 lilatchf. 453; Tuttle v. Matthews, 28 Fed. Rep. 98; Kelley v. Manufacturing Co., 44 Fed. Rep. 19; Chemical Works V. Ilecker. 11 Blatchf. Turl. If the defendant had brought suit against the plaintiffs for some breach of contract or violation of its alleged rights, founded upon the combination agreement, then it might become pertinent to in- quire into the character of the cou)bination and ascertain whether the court would enforce any rights growing out of it. But in a suit brought for the infringement of a patent by the owner, any such in- (luiry. at the behest of the in- fringer, would bo as impertinent as one in respect to the moral char- acter or antecedents of the plaint- iff in an ordinary suit for trespass upon his property. E\en a gam- bler, or the keeper of a brothel, cannot be dei)rivcd of his property because he is an obnoxious person or a criminal, and it is no defense to the trespass upon it, unless It was removed or destroyed in the suppression of a nuisance, that it was used in carrj'ing on the un- lawful occupation. Ely v. Super- visors. 30 X. Y. 297." Ibid.. 820. A defendant in a patent suit, who was the manufacturer of certain articles claimed to be an infringe- ment of plaintiffs patent, sought to obtain an order enjoining the prosecution of three suits begun in other districts against its custom- ers, as well as the commencement of new suits, and the sending of letters and circulars to others en- gaged in the trade, threatening prosecution for selling articles made by the defendact. Held, First, that the prosecution of suits in other districts should not be en- joined, because such suits werebe- gim before this suit, and because comitj- demanded that application should be made to the court in which such suits were pending. Second, that as the plaintiff miglit recover substantial damages against the defendant's vendees, in addition to those which he would be entitled to recover against the defendant as manu- facturer, the commencement of new suits should not be enjoined, unless irreparable injiuy was threatened to defendant's busi- ness, or there was evidence of malice or bad faith on the part of the plaintiff in commencing such § 174.] TRUST COMBINATIONS. T)?! foniK'il. In the opinion in this case, W'nlhice, ,Juclr eerson using the spring-tooth harrows manufaetured hy the i)laintiffs. The defendant has de- murred to the comi)laint. In substance the complaint shows that the defendant has entered into a combination with various other manufacturers of sjUMng-tooth harrows for the purpose of ac(iuiring a monopoly in this count ly in the nninufacture and sale of the same, and, as an incident thereto, has accjuired all the rights of the other nnmu- facturers for the exclusive sale and manufacture of such harrows under patents, or interests in patents, owned by them respectively. Such a c()nd)ination may be an odious and wii-ked one, but the proi)ositi()n that the plaintiffs, while infringing the rights vested in the defendant under letters i)atent of the United States, is entitled to stop the defendant from bringing or prosecuting any suit therefor, because the defendant is an obnoxious corporation, and is seeking to perpetuate the monopoly which is conferred upon it by its title to thi' letters patent, is a novel one, and entirely unwarranted. The })arty having such a patent has a right to bring suit on it. not only against a manufacturer who infriuLM'-, but airain-t the dealei's and users of the suits. Anil tl»ii(l. that plaintiff ti.nd jury. Kelly v. Y|isilanti Dress a rii;ht to notify persons iisin^ his Stay Manufacturing Co., 44 Fed. (lovice of liis claim, and to cull Hep. 10. See also Allis v. Stowell, attention to the fact that, by sell- 10 Fed. Rep. 783; Booth v. Sccvers, ing or using it. they were making 19 Tat. Off. Gaz. 1140; Hirdsell v. themselves liable to prosecution, Ilagerstown Agricultural Mfg. Co., and that an injunction would not 1 Hughes (U. 8.), (J4; Ide v. Ball be ordered unless the language of Engine Co., 31 Fed. Kep. 901; his letters or circulars was false. National Cash Register Co. v. Bos- malicious, offensive or oppro- ton Cash Indicator Co.. 41 Fed. brious, or they were u«ed for the Rep. 51 ; Tuttle v. Matthews, 28 willful purpose of intlicting an in- P'ed. Rep. 98. 572 TRUST COMIUXATIOX8. [§ 175. patented article, if he believes the patent is being infringed ; and the motive which jn'onipts him to sue is not open to judiiial in(juirv, because, having a legal right to sue, it is immaterial, whether his nu)tives are good or bad, and he is not recjuired to give his reasons for the attemj)t to assert his legal rights. "* § 175. The Subject Continued. — While a patent is the grant of a monopoly for the numufacture and sale of the article patented, it confers upon the i)atcntee no right to enter into an illegal combination for extending or perpetu- ating such nu^nopol}'. With regard to combinations de- signed to create a monopoly, the proprietor of a patent en- joys no special privileges. He has no right to make an agreement with other manufacturers to pool the products of their manufactories for the purpose of increasing or main- taining prices, and he may not enter into any association with a view to the accomplishment of any similar purpose. In the recent case of The National Harrow Company v. Hench, it was held that a combination among manufacturers of spring-tooth harrows, by which each manufacturer assigns to a corporation, organized for the purpose, the patents under which he is operating, and takes back an ex- clusive license to make and sell the same style of harrows, previously made by him, and no other, all the parties being bound to sell at uniform prices, was held to be an unlawful c(»ml)inati()n for the enhancement of })rices and in restraint of trade.-' In the opinion in this case, Acheson, Judge, said : "Now, it is (]uite evident to me, as well bv the papers them- selves as from the testimony of witnesses, that this scheme was devised for the purpose of regulating and enhancing prices for iloat spring-tooth harrows, and for controlling the manufacture thereof throughout the whole country, and that the c()m))inat ion, especially by force of the numbers engaged therein, tends to stifle all competition in an im- portant branch of business. I am not aware that such a far- ' Strait V. National Harrow Co., * National Harrow Co. v. Hench, 51 Fed. Kep. 819. 76 Fed. Rep. GG7, fiGO. § 1'^-] TRUST COM HI NATIONS. .573 reacliiiii:; c-ombinatiun as is here tlisclosfd has over been judicially sustained. On the contrary, the courts have re- peatedly adjudged combinations between a number of per- sons ensTiiircil in the same general business to prevent com- petition among themselves, and to maintain prices, to be against sound public i)oiicy, and, therefore, illegal.' I am ' National lluirow Co. v. Hench, 70 Fed. Kep. GOT, (Jl39. See also Morii«: Run Coal Co. v. Barclay Coal Co., GS Pa. St. 173; Pittsburg; Carbon Co. v. McMillan, 119 N. Y. 46; s.c, 23 X. E. Rep. 530; Merz Capsule Co. v. United States Cap- sule Co., G7 Fed. Rep. 414. A com- bination or conspiracy among a number of persons engaged in a particular business, to stitle or pre- vent foiiipetition. and thereby to enhance or diminish prices to a point above or below what they would be if left to the influence of unrestricted competition, is con- trary to public policy, and the courts will refuse their aid to the enforcement of contracts by which such combinations are sought to be effected. So a contract, entered into by the members of a steno- graphic association in a city, by which tlie i)rices of reporting legal proceedings by shorthand are to be kept up by the prevention of com- petition, although such associa- tion may embrace but a compara- tively small |)art of the steno- grapliic reporters engaged in the business, biu wliich is oj) 'n for the admission of all reporters wljo may be induced to join and by which a schedule of prices is tixed, and by which any member violating its rules as to prices is subject to a tine, is void, as tending to prevent a free and unrestricted competition in business. More v. Benaett. 140 111. G9. '-.Vppellants insist that restraint of trade in the neces- saries of life only is witliin the prohibition of public policy. Xo standard has been furnished by which to ascertain what constitute these with reference to the general public. But, assuming that beer is not among them, it is equally within the reach of the rule. The law recognizes it as a commodity, regulates its sales, it is "an article of daily consumption,' and the court should refuse to aid in any attempted imposition upon the public by means of illegal com- binations. The fact that coal was 'an article of prime necessity' was not mentioned as essential to the illegality of the combination which was involved in Morris Run Coal Co. v. Coal Co.. G8 Pa. St. 173, but was suggested, arguendo, as an aggravation of the injury done the public. The whole course of dis- cussion there shows that injury to the public was regarded as the true test of illegality."' Xesterv. Brew- ing Co., IGl Pa. St. 473, 483; s. c 29 All. Rep. 102. Three manufact- urers of a certain kind of curtain tixture, under different letters patent, owned by them severally, desiring to avoid competition, formed a corporation in which tliey were the only stockholders, and an agreement was executed by the corporation, of the one part, by the terms of which the manufa"t- urers gave the corporation the sole right to sell said curtain tlxt- ures for three years, the corjiora- tion agreeing to buy, at a specified 574 TRUST COMBINATIONS. [§ 17/). not ;il)le to concur in llio view that the principle of these cases is ina})plica))le here, because the aureenient in (jues- tion involves patents. It is true that a })atentee has the exclusive control of his invention during the life of the patent. He may practice the invention or not, as he sees tit, price, all that the iiiannfaclurers might make, and the manufact- urers acting as the selling agents of the corporation, and receiving a commission on goods sold l)y tliem. The agreement further provided, that during the term of the con- tract, the manufacturers should not dispose of their patents except upon such terms that a transferee should be bound by the agree- ment; and that they should not dispose of their stock in the corpo- ration without the written assent of a majority of the stockholders. Held, that the agreement was not void as against public policy, and that the court would restrain by injunction one of the manufact- urers from selling goods on his own account, in violation of the agreement. Central Shade Roller Co. V. Cushman, 143 Muss. 353. At page 303, the court says: '"The contract does not restrict the sale of the commodity. It does not look toward withholding a supply from the market in order to enhance the price, as in Craft v. McConoughy, 79 111. 340. and other cases cited by tlie defendant. On the contrary, the contract intends that the par- ties shall make sales, and gives them full power to do so; the only restrictions being that sales not at retail or for export shall l»e in the name of the i)laintiff. and reported to it, and the accounts of them kept by it, and the provisions that, when any party shall establish an agency in any city or town for the sale of a roller made exclusively for that purpose, no other party siiall take orders for the same roller in the same place. To these restrictions, clearly valid, is added the one which affords an argument for the invalidity of the contract, the restriction as to price. That restriction is, in substance, that the prices for rollers of the grade made by the different parties shall be the same, and shall be according to a schedule contained in the con- tract, subject to changes which may be made by the plaintiff upon recommendation of three-fourths of its stockholders. In effect, it is an agreement between three makers of a commodity, that, for three years, they will sell it at a uniform price fixed at the outset, and to be changed only by consent of a majority of them. The agreement docs not refer to an article of prime necessity, nor to a staple of commerce, nor to merchandise to be bought and sold in the market, biU to a particular curtain fixture of the parties own manufacture. It does not look to affecting competi- tion from outside, — the parties have a monopoly by their pat- ents. — but only to restrict com- petition in price between them- selves. Even if such an agreement tends to raise the price of the commodity, it is one which the parties have a right to make. To hold otherwise would be to impair the right of persons to make con- tracts, and to put a price on the products of their own industry." § 175.] TRUST COMBINATIONS. 575 and lie may grant to others licenses upon liis own terms. But where, as was the case here, a large number of inde- pendent manufacturing concerns are engaged in making and selling, under different i)atents and in various forms, an extensively UNcd article, competition is the natural and .ine\ital)le result, and thereby the pul)lic interest is pro- moted. Therefore, a combination between such manu- facturers, which imposes a widespread restraint upon the trade, and destroys competition, is as injurious to the com- munity, and as obnoxious to sound })ul)lic policy, as if the confederates were dealing in uni)atentcd articles. To the present case may well be applied the remarks of the Supreme Court of Pennsyh ania. in the case of The Morris Run Coal Company V. The Barclay Coal Conn)any: 'This combina- tion has a power in its confederated form which no indi- vidual action can confer.' By the united action of more than a score of different manufacturers, natural and salu- tary competition is destroyed. To sanction such a result, because accom})lislied by a combination of patentees, would be, 1 think, to jjcrvert the j^atent laws. Moreover, it is to be noted, that under these license contracts, the licensees can only make or sell their own specific form of harrow. AH other forms, whether patented or unpatented, are pro- hibited to them. For this interdiction there is no justifica- tion. In the case of The National Harrow Conijjany v. C^uick,' Judge Baker expressed the tjpinion that thiscombina- 'Xational Uarrow Co. v. C^uick, eiu-c iiiippiil the free and jiure ad- 67 Fed. Rep. 130. "It seems to me ministiatio-i of justice. Strait v. that such a combination is ille<^al, Harrow Co.. 18 X. Y. Siipl. 224; and that its purposes are violative Richardson v. Buhl, 77 Midi. 032; of sound public policy. The com- s. c. 43 N. W. Itep. 11U2; Emery mon law forbids the organization v. Candle Co.. 47 Ohio .St. 320; of such combinations, composed of s. c. 24 X. E. Kep. 0(50; State v. numerous corporations and tirms. Xebraska Distilling Co.. 21) Xeb. They are dangerous to the peace 700; s. C, 40 X. W. Hep. 155. and good order of society, and Complainant says that its title to they arrogate to themselves the ex- the patent in question is valid, and ercise of powers destructive of the that it has a lawful right to its pro- right of free competition in the tection from invasion by a stranger, markets of the country, and by regardless of the objects and pur- their aggregate power and inllu- poses of the combination which it 576 TRUST COM HI NATIONS. [§ l''»- tion \v:i'< unlawful and uiiainst sound public ))()li('y. I am con- straiiuMl to roL^ard the license contracts sued on as ])ai't of an illegal combination, and in unwarrantable restraint of trade. I must, therefore, deny the plaintiff the relief sought."^ § 170. The "Voting Trust. — A voting trust or an agree- ment among the shareholders of a corporation under which they unite their votes, with a view to controlling an elec- tion, is legal or illegal, as the circumstances and objects are justitiable or unjustifiable. Such an agreement is not, essentially, illegal, but the ends sought and the means em- ployed may render it in contravention of i)ublic policy and void. Where the agreement is a bargain by which one or more of the parties is to receive some special benefit which is not shared l)y other stockholders it will not be sustained. In a leading case in Massachusetts, it Avas held that a con- tract, by which a shareholder in a corporation, in considera- tion of the })urchase of a part of his stock at a price represents. On the other band, the defendants contend that to give its title protection would be to give aid to the nnhnvfiil purposes of tlie combination. In suits at law it is doubtless true, as a general jiropo- sition. that a wrongdoer will not be periniited to dispute the legal titU; of one in possession of money or property by showing that the title thereto was unlawfully ac- quired, or that the owner intends to ai>ply it to an imlawful use. I have strong doubts wiiether this rule ought to apply to a suit in e(iuity. where nothing but clean hands and a good conscience will move the court to act. The com- bination represented by tiie com- plainant is not illegal in any other sense, except that tlie law will not lend its aid to the accomplishment of its purposes. The common law does not i)ioliibit Ibc making of such combinations. It merely de- clines, after tliey have been made, to recognize their validity, by re- fusing to make any decree or order which will in any way give aid to the puri)osesof such combinations. It seems to me that the court can- not sustain the present bill without giving aid to the unlawful combi- nation or trust represented by the complainant. The question is not free from doubt, but in a case of doubt I feel it my duty to resolve it in sucli a way as will not lend the countenance of the court to the creation of combinations, trusts, or monopolies. They have already grown to alarming proportions, and courts, to the full extent of tlicir powers, ought to discounte- nance and repress them." Ibid., VM. ' National llanowCo. v. Ilcncli. 7''' Fed. Ki'i>. (KIT, i.01 ; Forbes v. McDonald, 54 Cal. 98; Cone's Exrs. v. Russell, 48 X. J. Eq. 208; s. C, 21 Atl. Rep. 847; West v. Camden. 135 U. S. 507; s. C, 10 Sup. Ct. Rep. 838. In the case last cited the court, referring to a con- tract, one element of which was a promise to give one of the parties to it permanent employment as manager of a corporation in which he was a stockholder, said : "It was a contract, the purpose and effect of which was to influence the de- fendant as a stockholder and officer of the company, in the decision of a question affecting the private rights of others, by considerations foreign to those rights, and the de- fendant, by the contract, was placed under direct and very pow- erful inducement to disregard his duties to other members of the corporation, who had a right to demand his disinterested action in the selection of suitable officers. He was to bf* in a relation of trust and confidence, which would re- quire him to look only to the best interests of the whole, uninflu- enced by private contracts. We think this statutory rule is applica- ble in this c.ise. notwithstanding the alleged contract was not cor- ruptly made for private gain on the part of the defendant. There were other stockholders in the company. The defendant and the .Standard 578 TRUST COMBINATIONS. [§ 17(5. transaction of this cliaiacter, the piesuinptiou is that the end in view vitiates the act and renders the agreement ille- gal and void. Unless it is showD, beyond a reasonable doubt, that it was a fair and honest transaction, and adapted to promote the interests of all the shareholders alike, or, at least, that it had the consent of the share- holders, it will not be upheld. In the opinion in the case Oil Company, for whose benefit it is alleged the contract was made, were not all the stockholders; and it seems to us that it was certainly the right of those other stockhold- ers to have the defendant's judg- ment, as an officer of the company, exercised with a sole regard to the interests of the company.' "" A syndicate purchased a majority of the capital stock of the Shepang Railroad Comp.-iny, which was placed in a voting trust to continue for five years, or until a consolida- tion was effected with some other railroad company, or it should be dissolved by agreement. A trust company was to act as trustee, and was to take the title and issue cer- tificates to the members of the syn- dicate of the shares in it held by each, and was to vote on the stock as directed by a committee of the syndicate. The apparent object of the arrangement was simply to ex- tend the railroad to tide water and form a connection there with a cer- tain other road, but there was a secret purpose to make a profit for themselves out of the construction contracts which they, as directors of the railroad company, would be able to make. After they had purchased the majority of the stock, they made tliemselves direc- tors and officers of the road, and one of their number its president. The syndicate made S one of their number, their financial agent, and. it being necessary to borrow money to pay for the stock purchased, had a large portion of the trust certifi- cates issued directly to him. and they were pledged by him in rais- ing the money. They were, by their tern)s. transferable, and had powers of attorney printed upon them, which were signed in blank by S. Before the connection at tide water could be effected, S failed and went into insolvency. The loans were not paid and the pledged certificates were sold at public sale, and most of them were bought by the plaintiffs. The cer- tificates thus bought covered 7.00() shares of capital stock. The plaint- iffs also purchased 3.300 shares of the stock which had not gone into the trust, making their entire holdings 85 per cent, of the whole capital. After the plaint- iffs had acquired these trust cer- tificates and this stock, they noti- fied the trust company that they revoked the powers given by the trust agreement and demanded that the stock represented by tlie certificate should be transferred to them upon a surrender of the trust certificates, but the trust company refused to make tlie transfer. Held. 1. That the trust agreement was void as in violation of tlie duties of the directors of the railroad com- pany, and against the policy of our law. 2. That the plaintiffs had the riglit to revoke the powers given to the trust com|)any by the trust agreement, and to have transferred § l'«5.J TRUST COM HI NATIONS. 571) above cited, the eoiirt said: "It was llic jxirpose and effect of the contract to influence the tlefenle's Home ."^av. Bank v. Su- perior Court. 104 Cal. fi49; .s. c. 38 Pac. Rep. 452; Eckstein v. Downing. 04 X. H. 248; s. c, 9 Atl. Rep. G26; Goodwin Gas Stove Meter Co.*s Appeal, 117 Pa. St. 514 : s. c, 12 Atl. Rep. 736; True v. Houghton, <> Colo. 318; Bumgard- ner v. Leavitt. 35 VV. Va. 194; s. c. 13 S. E. Rep. 07. 580 TRIST COM UI NATIONS. [§ 177. irregulaiit)' in the niaiiner of ooiKliuting an election, or of casting any part of the votes, the whole proceeding will he held illegal and void. In a case in New York, where there was a preconceived scheme, combination or conspiracy on the part of a portion of the stockholders in a railroad corpo- ration, to carry an election of directors, and thus get the control of the road, by the use and abuse of legal process and proceedings, and by their efforts and contrivances to prevent a fair election of inspectors, at a preliminary meet- ing of stockholders, which conspiracy was carried into effect by those means, together with the concurring preoccupation of the room where such meeting was to be, and was, held, by such a number of j^ersons, not stockholders, as utterly precluded a free and fair meeting for such purpose, it was held that an election of directors held under these circum- stances, by inspectors so chosen, was irregular, fraudulent and void.^ § 177. The Subject Contiuued. — The voting trust, as we have seen, is not per se illegal or void. But the pre- sumption is against its validity and the burden is on the parties interested to show that the transaction is fair and honest, and that it cannot work to the injury of other mem- bers of the corporation. In a recent case in Ohio, before a lower court, it was held that an agreement by which the stockholders of a railroad comjiany confer the power to vote upon their shares, for a lawful i)urpose, is not illegal or against public policy, but such agreement may be revoked at any time by any one of the subscribing shareholders, notwithstanding it is in terms irrevocable. ^ So far as 1 Teople V. Albany, etc. Ry. Co.. So long as the parties to it. or 5r> Barb. 345. their successors in interest, are 2 Griffith V. Jewett. 15 Wkly. satisfied with it. no other person Law Bull. 419. "'We can perceive may complain, and the 'irrevocable no reason why any number of clause' does not affect the rights shareholders, either by means of a of any one. But if the equitable proxy or by vesting the legal title owner elects to withdraw the legal in another, may not authorize him title from the holder thereof, the to vote upon their stock, and, as case assumes a different .aspect, such is the substance of this agree- As we have heretofore seen it is a ment, we consider it not illegal, dry trust— the trustees having no § 177.] TRUST COMIUNATIONS. 581 appears this decision has not been affirmed hy any court of hist resort, and it may be doubled whetlier the position is altoofether correct. At all events, special emphasis must be ])laced upon the words "for a lawful purpose," and this is a point to be established by very conclusive proof. Wheie it is manifest that the transaction is for the interests of all the stockholders of the corporation it will l)c sustained. In the case of Ilavemeyer v. Ilavemeyer, before the Supreme interest to set up in favor of its continuance; but the parties have agreed that this power to VQte, vested in the trustees, shall be irrevocable. Can this provision be sustained as against the demand of certificate holders, — that they be permitted to revoke? If such de- mand be not complied with, the party holding the entire beneficial interest in the stock cannot cast the vote thereof, while it tnay be voted upon by one having no inter- est in it or in the company; and so it may come to pass that the ownership of a majority of the stock of a company may be vested in one set of persons, and the con- trol of the company irrevocably invested in others. It seems clear that such state of affairs would be intolerable, and it is not conteu)- piatcd l»y the law. the universal policy of wliich is tiiat the control of stock companies shall be and remain, with the owners of the stock. The right to vote is an incident of the ownership of stock and cannot exist apart from it. Freon v. Carriage Co., 42 Ohii) St. 30; Hafer v. X. Y., L. E. & \V. Ry. Co., 14 Wkly. Law Bull. G8. The owners of those trust certiti- cates are, in our opinion, the equi- table owners of the shares of stock which they represent, and being such, the incidental right to vote ujion the stock necessarily per- tains to them. They may permit the trustees as holders of the legal title to vote in their stead, if they choose, but when they elect to exercise the power themselves, the law will not permit the trustees to refuse it to them." Ibid., 422. A written agreement between pur- chasers of stock in a corporation that they will for live years -'re- tain the power to vote the shares in one body, and that the vote which shall be cast by said shares shall be determined by ballot be- tween them or their survivors" is a proxy, authorizing the vote of all the stock to be cast in accord- ance with the determination of the majority of the parties thereto. It is sufficient consideration for an agreement between purchasers of stock to have it voted in one block for five years, the vote to be deter- mined by ballot between the parties, tliat in their agreement among themselves to ptirchase they had stipulated for such a voting agreement; and it is imma- terial that the voting agreement was not executed till after their bid for the stock was made, it having been executed before they had com|)!cte(l the jxirchase and become the owners by paying the purchase money; and it is likewise immaterial that a certificate for part of the stock was issued to each party. Smith v. San Fran- 082 TRUST COMHINA IIOXS. [^ 1 Court of New York, it was hold that an airreeinoiit hot wren direct .stockholders of a corporation who, together, own a majority of all the shares of the capital stock of said corpo- ration, entered into for the pur|)osc of the election of direc- tors, who would nuinage the affairs of the company in the interests of the stockholders, and thus improve the value of their stock, is not in conflict with the requiren)ents of law, and in no wise derogates from its policy. There is nothing in it that tends to frustrate or interfei-e with the legal right of the nuijority of stockholders to delegate to directors of Cisco & N.P.Ry. Co.. 11.5 Cal. r)S4; s. C, 47 Pac. Rep. 582. In this case the court says: "In cases of •voting trusts* where the owners of stock transfer the shares to trustees with authority to vote at elections according to the direc- tion of a majority of those holding trust certificates, and the only consideration for such transfer and agreement is the mutual promises of the several stocliholders. it has been held that any stockholder may revoke his agreement and withdraw his stock at will; and it is also held that stockholders who become such after an agreement of this nature is entered into are not bound by its terms, but will hold their shares freed from the liuiitations of the agreement. P'isher v. Bush, 35 Hun. (J41 ; Woodruff V. Railroad Co., 30 Fed. Rep. 91; Brown v. Steamship Co., 5 IJlatchf. .525; Jed. Cas. No. 2325. In Moses v. Scott, 84 Ala. 608; s. c. 4 So. Rep. 742, certain stockholders had formed a voting trust, and placed their stock in the hands of four trustees, with power to vote the stock as a unit at ail meetings as lliree of them should think best, or if they failed to agree, as three-fourths of the stock rep- resented should deteru)ine, and had agreed not to sell their stock so pooled for three years. There was no consideration for this agreement other than the mutual promise of the several stockholders, and while the court refused to en- force the agreement concerning the sale, upon the ground that it was in restraint of the free aliena- tion of property, it said : 'We can- not sav thtre is anything per se illegal in an agreement entered into bj- and between certain stock- holders in a joint stock company by which they promise to vote together as a unit in all matters pertaining to the government of the corporation. Each member has the clear right to cast his ballot as he pleases, wisely or unwisely, and no other stockholder can control his conduct or gainsay his discretion, and it can make no difference if several stockholders uniformly vote together, or so vote in obedience to a prior agreement that they will do so. The vote, when cast, is but the expressed wish of the stockholder, or, at least, must be so regarded, and no other stockholder can be supposed to be injured thereby. To hold otherwise would greatly abridge the voter's right to cast his ballot as he pleased.* '' § ITS.] TRUST COMHIXATIONS. 5«3 its own choice the iiuuiageinent of the affaii> of the com- pany, nor is an aorroenient made between a like nnniber of stoclvhoklei'8, in rejraixl to hohlinu' their stock or selling: the same toojether, invalid and in conlraN cntion of pnl)lic policy and law. fn the opinion in this case, the court said: "I am unable to perceive anything in this combination, or in the agreement therefor, which tends to defeat the riijhts of stockholders generally, or the interests of the public at large, as defined bv that provision of the revised statutes, which declares that the directors of raih'oad corj)orations 'shall be chosen annually by the majority of the votes of the stockholders voting at such elections.' Practically, the selection of candidates must precede an election, and it would often be difficult, if not impossible, to make such selections without comparison of views, combination, con- cession and concerted action. No formidable and effective opposition to an existing board, however obnoxious, could be oriranizcd without combination. An agreement to com- bine stock for the purpose of terminating mismanagement by a change in the directors, through the instrumentality of a majority of votes, at a regular election, is not in conHict with the requirements of the law and in nowise derogates from its policy."* § 17S. The Same Siib.ject. — Where a voting trust or an agreement in regard to voting is in restraint of trade and against public j)olicy, or forbids voting by j)ro\y. or is not founded upon a valid and proper consideration, it will not l)e ui)held. In a recent and leading case in New York, the comj)lainant alleged that the plaintiff, the defendant and ' Havenieyer v. Ilaveiiieyer. 43 olc H. (Jo.. i:{ 111. r)li;; Woodruff N. Y. Super. Ct. oOd. See also v. I)ul)U(|U*>. 'M) Fed. Hop. 91; Fremont v. Stone. 42 Bart). 170;. Brown v. Pacilic Mail Stcauj-ship Guernsey V. (Jook. 120 Ma.ss. 501; Co.. 5 Biatctif. r)2r>; Wei)!) v. People V. All)any \' Susquehanna Kidgely. 38 Md. 3(;4; lloppin v. R. Co.. Jio Barb. :U4, 381, 382; Buffuni. K. I. r>13; s. c, 11 Am. Card V. Hope, 2 B. ct C. G(>1 ; Rep. 2JU ; Reed v. Jones. G Wis. Fi.-iher v. Bush, 3.'i Hun. ()41; 680; Erwin v. IMiiladelphia & Camden, etc. R. Co. v. Elkins. 37 Reading R. Co.. 7 Ry. iS: Corp. L. N. J. Eq. 273: Hilles v. Parrish, J. 87. 14 X. .1. Eq. 3S0: Ryder v. Alton. 584 TRUST COMBINATIONS. [§ 178. eight other persons signed the following written seiiled in- strument : "For value received from and paid to each other, we, the undersigned, stockholders of the Genesee Valley Canal Railroad Company, mutually agreed with the others and to all, that we will not sell, assign, set over, pledge or give power of attorney to vote, or agree to sell, assign, transfer, set over, pledge or give power of attorney to vote, in liny way, shape or manner, the stock which we respect- ively and individually own, hold or possess, in said company, without the concurrent consent of all signers of this instru- ment. * * * Xhis agreement is made for nuitual pro- tection and to i)revent the sale of the company's franchise by a majority of the members of the present board of direc- tors, wdio are, and who represent, a minority of the shares of the capital stock of this company." It was held that the agreement was void, because : First. It was in restraint of trade and against public policy. Second. Because the clause providing that none of the signers should vote by proxy was a pernicious and unlawful provision. Third. Because it was not founded upon an adequate and sufficient considera tion. Agreements of this character must be supported by a real and special consideration.^ 1 Fisher v. Bush, 35 Iliin. G41 . See also Haveineyer v. Havemeyer, 4'S N.Y. Super. Ct. ;-){)(;. 1213; aflinned 86 N. Y. G18 ; Vanderbilt v. Bennett, 2 Kv. & Corp. L. J. 400. An ag^reeinent by which various owners of stock place their stock in the hands of one person as trustee or agent to hold for a certain period of time, the parties agreeing not to sell their stock without liaving first offered to sell it to the rest of their associates at a price not above the then current market value, and in case of their declining to take it, without next offering it to the trustee, but any one of the parties to be at liberty to withdraw at any time on those terms is not "con- trary to public policy or anywise open to objection.'* Brown v. Pacific Mail S. Co., 5 Biatchf. .rif). In Ohio & M. Ry. Co. v. State. 49 Ohio St. 068; s. c, 32 X. E. Rep. 933, it is held that stockholders may place their stock in the hands of a depositary, with direction to vote it as directed by a connnittee appointed by themselves and sub- ject to their control. It the opin- ion the court uses this language: •'It does not appear that the ownership of the stock and its voting ])ower were separated by the agreement under which the 'shareholders' committee was ap- pointed and the stock deposited with the depositary therein named * * * and that the agreement does not, therefore, constitute what § 179.] TRUST COMBINATIONS. 585 § 17i). Rebates on Freight BilLs. — Tlu'ie is a wide diverireuce in the Aiiiericiiu decisions in rc'fjiird to the right of railway companies to make rebates on their freight rates. In some of the States it is held that they may enter into an agreement to refund to a shipper a percentage of their schedule rates as a rebate. It is held that where a contract of this nature is made without reference to rates made to other shippers, it is not to be reckoned as a discrimination between parties. In these States, as a rule, it is held that the presumption is that such contracts may be made and that the burden is on a complainant to establish a charge of unjust or illegal discrimination. In the leading case of Bayles v. The Kansas Pacific Railway Company, it was held that under the constitution of Colorado forbidding "undue or unreasonable discrimination" by railroad companies in freight charges, a contract to carry freight for a party at a specific rate, being less than its published schedule, is not void as being an unjust discrimination and against public policy, in the absence of evidence that such special rate is an exclusive privilege. Freight charges must in all cases be reasonable to shippers, and where the circumstances and conditions are the same they nuist likewise be equal. The fundamental law prohibits the granting of privileges to one shipper, tending to give him a monopoly to the preju- dice of others engaged in like pursuits. Contracts creating such privileges are against public policy and void. A rail- road company may contract to refuntl to a shi|)j)er a certain Is known us :i "votinf; trust.' It their power from the .shareholders was, at most, a convenient method by the same instrument, and in the by which distant and widely sepa- end effectuate their wishes. Such ratedshareholders became enabled, an arranj^ement differs widely indirectly, to participate in the from an agreement whereby control and mana\i(iing for a (h-awb.uk.' This rule, sonu'what moditicd. cliarges, which are uniform and no rebate is made thereon. Wil- loiighby V. Chicago, J. R. & U. S. Co.. 50 N. J. Eq. 6.56; s. C. 2.5 All. Rep. 277. See also the following interstate commerce cases: Interstate Conunerce Com- mission V. B. & O. R. Co., 14.') i;. .S. 263; In re Grand Trunk K. Co.. 2 Int. Com. Rep. 490; s. C, 3 Int. Com. Com. 89; Shamberg v. Delaware, L. & W. R. Co., 3 Int. Com. Rep. 502; s. c. 4 Int. Com. Com. 630; Providence Coal Co. V. rruvidence & W. R. Co.. 1 Int. Com. Rep. 363; s. c, 1 Int. Com. Com. 107. The D Co., which manufactured and sold spirits, etc., issued to the pur- chasers of its goods so-called "re- bate voucher.-,'* by which, '"for the purpose of securing the con- tinuous patronage" of the cus- tomer, it promised to pay him. in six months, a sum ecpial to the cents jier gallon cf the goods pur- cliasi'd by him; such vou»-hor pro- viding tliat it should "be valid and payable only on condition" that the purchaser and his successors should, during such six months, have bought all his supply of such goods from the D Co. or certain persons named as its distributing agents. The D Co.. having b«'en placed in the hands of a receiver, certain of these vouchers were presented to him for allowance, by persons who claimed to hold them as equitable assignees from the persons to whom they were issued. It appeared that the condition as to continued purchases from the D Co. had not been complied with. Held, that such vouchers did not create a present obligation to pay the rebate, subject to be defeated by a breach of the condition, but that such obligation would arise only on performance of the condi- tion, and. accordingly, that even if the condition were held to be il- legal, there would be no obliga- tion without performance. Held. further, that such rebate vouchers were not illegal or against public policy. Olmstead v. Distilling tk Cattle Feeding Co.. 77 Fed. Reji. 265. 1 Cleveland. C C. ^S: I. R. Co. v. Closser. 126 Ind. 34S; s. c. 26 N. E. Rep. 1.".;); 45 .Vm. & Eng. R. Cas. 275. "The contract described is valid. It is not different, in any material respect, from the ordinary one in which the carrier stipu- lates directly to carry goods at a fixeil rate, for the agree- OHS TRUST COMHINATIONS. [§ 17St. is ujihold in Pennsylvania. In a recent ease it was held that ruih-oad companies have no right to make any undue dis- crimination or preference in their charges; and a charge made to one shipper higher than to another, for the same inent to repay does not of itself change the legal effect of the undertaking to such an ex- tent as to transform it into an an il- legal contract. It is, in contempla- tion of law, nothing more than an agreement to carry the grain at the compensation ultimately agreed upon, inasmuch as the provision binding the carrier to pay back part of the nominal compensation, simply fixes the amount of the actual compensation, although it does provide for a peculiar mode of payment. There is no element of moral or legal wrong in an agreement to repay part of the compensation received; to give an illegal character to such an agree- ment more must be shown than the mere fact that the parties stipulated for a rebate. In simply making a rebate, or in providing for a drawback, parties violate no law, and their contracts must stand. It cannot be presumed that fraud was intended, or practiced, nor can it be presumed that there was any wrongful combination to secure an undue advantage over other shippers; neither can it be presunied that in stipulating for a rebate the carrier intended to make, in favor of the particular shipper, a discrimination forbidden by law. It is by no nieans. every favor shown a particular shipper, although it may constitute, in some measure, a discrimination favor- able to him and unfavorable to other shippers, that impresses upon a contract for the carriage of goods the seal of condemnation. The common law authorities (and by them this case is ruled) fully support the doctrine tliat a mere discrimination will not invalidate a contract; to have that effect other elements must enter into the con- tract ; but when such elements are present in such force as to make the discrimination unjust or op- pressive the contract will be il- legal. It is not necessarily, or per se, a legal wrong for a carrier to give better rates to one who ships many car loads of grain than to one who ships a single car load or a single bushel. It is a matter of common knowledge, and, thorefore, one of which judicial notice is taken, that an increase in the volume of busi- ness is desirable and advantageous, and in the rivalry of business com- petition it is lawful to favor those whose business is great rather than those whose business is small or inconsiderable." Ibid., 3.")!. See cases cited by the court: Nichol- son v. Gt. Western Ry. Co.. 7 C. B. (X. S.) 755; s. c, 1 Xev. & McX. R. W. Cas. 143; Garton v. Bristol, etc. R. W. Co., 1 B. & S. 112; llo/.ier V. Caledonian R. W. Co., 1 Xev.ct McX. R. W. Cas. 27; Great Western Ry. Co. v. Sutton, L. R. 4 II. ]j. 22(i; Ransome v. Eastern, etc. H. W. Co., 1 C. B. (X S.) 437; Jones v. JCaston. etc R. W. Co., 1 Nev. & McX. R. W. Cas. 72; Baxendale V. Railway Co., ."> C. B. (X. S.) 33(>; Bellsdyke, etc. Co. v. Xorth British R. W. Co., 2 Xev. A McX. R. W. Cas. !().■); Spofford v. Bos- ton, etc. Railroad, 128 Mass. 32G; § 180.] TRUST COMBINATIONS. 589 service, under like circiiinstance^, coii^tiltitcs uikIuc prcfor- eiu'cs and discrimination, and, conse(|UcntIy, renders the charge unreasonable. The equality, however, which is thus described, is not a strict and literal equality, — under all cir- cuinstiinces, however varying and different. It is rather an et|uality in the sense of freedom from unreasonable dis- crimination. The statute of 1883 prohibits only such dis- crimination as is undue or unreasonable, and the prohibited discrimination is farther limited by the consideration that it must be "for a like service, from the same i)lace, upon like conditions and under similar circumstances."^ § 180. The Subject Continued In other States it has been held that an agreement to make a rebate is void at com- mon law, and in some States there are statutes makintr puch contracts illegal and void. In Illinois it has recent h- been held that a contract between a railroad company and a ship- per, that the latter shall ])ay the regular and established rates of freight, the same as all other shippers, and that the company shall pay back to him, by ^vay of rebate, a certain portion of the freight so charged and paid, whereby such shipper will pay a less rate for transportation than that paid l>y others, and the public generally, for like services, Fitcbbmi? K. K. Co. v. Gage, 12 S. 355; Hays v. I'eiinsjivania Co.. Gray, 393; Johnson v. Pensacola, 12 Fed. Rep. 309; Rhyniney Iron etc. R. R. Co., 16 Fla. 623; s. c, 26 Co. v. Rhyniney A. Co., 6 Ry. & T. Am. Rep. 731; Ragan v. Aiken, 9 Cas. 60. Lea, 600; s. c, 42 Am. Rep. 684; ' Hoover v. Pennsylvania H. Co.. McDuffee v. Portland, etc. R. R., 156 Pa. St. 220; s. c. 27 All. Rep. 282, 52 X. 11.430; .s. c. 13 Am. liep. 72; Seealso Borda v. Philadelphia. etc. Hersh V. Northern Central R. W. R. Co., 141 Pa. St. 4S4; .s. c, 21 Co., 74 Pa. St. 181; Christie v. Atl. Rfj). 665; Sliarpless v. Mayor. Missouri Pac. R. W. Co.. 94 Mo. 21 Pa. St. 147; .\iidenried v. Phila- 453: Chicago, etc. R. R. Co. v. delphia. etc. R. Co., 68 Pa. St. People, 67 111. 1; Toledo, etc. R. 370; McDuffee v. Portland, etc. R. W. Co. V. Elliott. 76 III. 67; Erie & Co.. 52 N. II. 430; New England Pacific Dispatch v. Cecil, 112 III. Ex. Co. v. Maine Central R. Co., 185; Root V. Long Island R. R. 57 Me. 188; Scofield v. Lake Shore. Co.. 114 N. Y. 300: Kilmer v. New etc. R. Co., 43 Ohio St. 571 ; s. c York, etc. R. \l. Co.. KM) N. Y. 3 N. E. Rep. 907: l"nion Pac. R. 395; Stewart v. Lehigh, etc. R. R. Co. v. Goodridge. 149 U. S. 680; Co., 38 N. .1. L. .505; I'nion Pacific 8. C. 13 Sup. Ct. Rep. 970. R. W. Co. v. United States, 117 V. oltU TRUST COMIilNATIDXS. [§ l.so. under similar oircuiustjinoes and for like distances, is void, as beinof against public policy at the common law, and in viola- tion of the statute against unjust discriminations.' In Iowa it has been held that where a railroad company makes a reb.itc in favor of one shipper, other shippers, who have paid the regular freight rates over the same line, may collect from the company the same proportionate amount of rebate. In the case of Cook & Wheeler v. The Chicago, Rock Island and Pacific Railway Company, the plaintiffs, who were shippers of cattle, were charged by the defendant from three to ten dollars per car load of cattle shipped over its road in excess of the charges made to other shippers for the same service and under the same conditions, the difference being allowed the favored shippers in the form of a secret rebate, which fact was concealed from the plaintiffs. It was held that at common law a common carrier is entitled to a reason- 1 Indianapolis. D. & S. R. Co. v. Ervin. 118 111. 250; s. c. 8 X. E. Rep. 802; 27 Am. & Eno;. R. Cas. 8. See also Indianapolis, I). & S. R. Co. V. Davis. 32 III. App. 67; Jacksonville S. E. R. Co. v. Rab- bitt, 29 111. App. 288; Beadle v. Kansas City. etc. R. Co.. 51 Kan. 248; S. C, 32 Pac. Rep. 910; Win- sor Coal Co. v. Chicago, etc. R. Co., 52 Fed. Rep. 716; Swift v. Philadelphia, etc. R. Co., 58 Fed. Rep. 59; s. c. 64 Fed. Rep. 59; Gatton v. Chicago, etc. R. Co., 95 Iowa, 112; s. c, 63 X. W. Rep. 589; Atchison, etc. R. Co. v. Denver, etc. R. Co., IIOU. S. 667; s. c, 4 Sup. Ct. Rep. 185; Chicago, etc. R. Co. v. Osborne, 52 Fed. Rep. 912; Wabash R. Co. v. Illinois. 118 U. S. 557; S. c. 7 Sup. Ct. Rep. 4; Messenger v. Pennsylvania R. Co., 37 N. .1.1. . 531. Under the Hail- way Clauses Act 1845 and the Kail- way and Canal Traffic Act 18.54. it constitutes an undue preference for a railway company, in order to compete with another line, to give certain advantages as to free cart- age and rebate to shippers who have a direct communication by sidings with such other line, and refuse these advantages to others in the same trade not having such di- rect communication with the other railway. London & X. W. R. Co. V. Evershed, L. R. 3 App. Cas. 1029: s. c. 39 L. T. 306. An agree- ment between one trader and a railway, which secures to the trader rates uncijual when com- pared with those of another trader having similar trallic, which is car- ried by the railway to the same place, is, prima facie, an undue preference, and the circumstances that the company have offered the same agreement as to rates and re- bates to the competing trader will not necessarily justify the un- e(|iiality. Rbymney Iron Co. v. Khymnoy R. Co.. 6 Ry. & C. T. Cas. 60. See also Harris v. Cock- ermouth & W. R. Co.. 1 Ry. \- C T. Cas. 97 § 181.] TRUST COMBINATIONS. .')5' I able fliarii*.' only fi)r the service reiulerecl ; that its disenm- inations in favor of other .shippers were evidence that the charges demanded of the phiintiifs were unreasonable; and that the plaintiffs were entitled to recover the difference be- tween the charges paid by them and the more favorable rates granted to other shippers.^ It is well established that at connnon law a common carrier is bound to transport freight for as many shippers as may J^pply to him, and that he must render such service for a reasonable compensation. If the charge to one shipper is less than to another it is pre- sumi)tive evidence that the higher charge is unreasonable, and, consequently, illegal. It has been maintained that at common law it is not illegal to transport freight for a favored individual at an exceptionally low rate, or even without consideration; that a simple discrimination in favor of a particular customer is not unlawful, unless the circum- stances render it an unjust discrimination. Where there is no statutory regulation relating to the subject, it has been held that connnon carriers are not absolutely l)()und to charge all customers the same price for the same service, but it is well established that they must charge only a reasonable price for their service, and this seems to imply that one custonu'r must not be favored at the expense of another. If they can afford to carry freight at the lower price, the higher is an unreasonable charge. Such discrim- ination is illegal, unless there is a special and satisfactory reason for it.- § ISl. ConihinatiiHi of InsuraMce C(niipaiiies. — In some of the States the combination of insurance companies to con- trol the rates of insurance or the commissions of their agents is prohibited by statute. In Kansas it has been held that foreign insurance companies doing business in that State, that combine to control and increase the rates of insurance on propertv within a city in that State, violate the provision- ' Cook V. ChicM^'i), K. 1. a I". K. -' Story on Hiiilinonts. ij .")()S. note Co., 81 Iowa, 5r»l; s. c, 4G N. W. :?: 1 Wood Raihvjiy Luw, .")(;(;. Rep. 1080; 45 Am. it Eng. R. Cus. 291. o9-i TRUST COMHINATIOXS. [§ 1«1. of the statute of 1881>, being "an act to declare unlawful trusts and combinations in restraint of trade and products, and to provide penalties therefor;" and their local agents, who attempt to and do enforce such combined rates are sub- ject to prosecution under the provisions of said act.^ In the ' State V. Phipps, HO Kan. G09; s. c, 31 Pac. Rep. 1097. Act of Feb. 18th, 1897, of Alabama, pro- vides: '"That every contract or policy of insurance made or issued after tb« passage of this act. shall be construed to mean that, in the event of loss or damage thereunder. the assured or beneliciary there- under may, in addition to the actual loss or damage suffered, re- cover twenty-five per cent, of the amount of such actual loss, any provision or stipulation in such contract or policy to the contrary notwithstanding: provided, at the time of the making of such con- tract or policy of insurance, or sub- sequently before the time of trial the insurer belonged to, or was a member of, or in any way con- nected with, any tariff association or such like thing by whatever name called, or who had made any agreement or had any understand- ing with any other person, corpo- ration or association engaged in the business of insurance, as agent or otherwise, about any particular rate of premium which should be charged or fixed for any kind or class of insurance risk; and. pro- vided further, no stipulation or agreement in such contract or policy of insurance to arbitrate loss or damage, nor to give notice or make proofs of loss or damage, shall in any such case be binding on the assured or beneficiary, but right of action accrues immediately upon loss or damage. § 2. That if it is shown to the reasonable sat- isfaction of the jury by a prepond- erance of the weight of the testi- mony that such assurer at the time of the making of such agreement or policy of insurance, or subse- quently before the time of trial be- longed to. or was a member of. in any way connected with any tariff association or such like thing by whatever name called, either in or out of this State, or had made any agreement or had any understand- ing either in or out of this State with any other pei'son, corporation or association engaged in the busi- ness of insurance as agent or other- wise, about any particular rate of premium which should be charged or fixed for any risk of insurance on any person or property or on any kind or class of insurance risk, they must, if they find for the as- sured or beneficiary in addition to his actual damages assess, and add twenty-five percent, of the amount of such actual loss, and judgment shall be rendered accordingly. § 3. That this act shall be liberally construed to accomplish its object. The Missouri Act relating to pools, trusts and conspiracies. Laws of Missouri. 1897. contains this ex- ception as to insurance: "Pro- -vided. liowever. that tlie provisions of this section shall not apply to agreements of fire insurance com- panies, or their agent, or boards of fire underwriters, to regulate the price or premium to l)e paid for in- suring property against loss or damage by fire, lightning, or storm, in cities in this State which now § 1«1.] TRUST COMBINATIONS. 593 opinion in this case, the court said: "At this writing, it is probable that overv State in tiie Union has i)asscd hiws upon this subject, until it may be said that the right of State regulation of the business of insurance is universally recog- nized and upheld. So it can be confidently said that this court, when it held, in In re Pinkney, that insurance was 'trade,' did not contemplate that the term used could be tortured into interstate commerce ; and it can be said with equal confidence that the settled law of this country is that the issuing of a policy of insurance is not a transaction of commerce. As we have said, neither the major nor the minor premise of the argument of counsel for the appellants is sound, and the inevitable conclusion, — that Congress alone has power to regulate interstate commerce, and to pro- vide penalties against insurance trusts and combinations, — does not follow. The court did not mean 'trade' as synony- mous with interstate commerce. The business of insurance is not interstate commerce. The State has power to regu- late and control, and to provide penalties for the transgres- sion of its regulating and controlling statutes, of the busi- ness of a foreign insurance company within its boundaries. If the theory of the counsel for the ai)i)ell:nits ever ripens into authoritative judicial decision, the power of the State hiive or which may hereafter ac- quire a population of one hundred thousand inhabitants or more; and provided, further, that if such in- surance companies or their a>;ents, or the board of tire underwriters doing business in any such city, shall combine in such city, either directly or indirectly, or agree or attempt to agree, directly or indi- rectly, to tix or regulate the price or premium to be paid for insuring property to be located wholly out- side of such city against loss or damage by tire, lightning or storm, such company so violating the provisions of this act either by it- self, its agents, or any such board of underwriters, shall be taken and 38 deemed to have forfeited its right to do business in this State, and shall become liable to all the penal- ties and forfeitures provided for by the provisions of this act." Act 1S93, chap. 107, § 1, enacting that all insurance companies shall pay losses in full and prohibiting sti[)- ulations to the contrary, and pro- viding that insurance policies upon cotton in bales, shall not be subject to the provisions of the Act, does not contlict with constitution, art. 11, § 8 prohibiting the legislature from granting special immunities or privileges. Dugger v. Mechan- ics' & Trades Ins. Co., 9.") Tenn. 24.3; s. C, 32 S. W. Kep. 5. 594 TRUST COMBINATIONS. [§ 1«1. to rogul.itc and control the business of insurance within its limits is ijone. The insurance dei)artinent and every act upon the statute books for the protection of the policy holders, and every line lookinir to the punishment of the violators of its public i)olicy in this respect, goes with it, except, possibly, as to such companies as may be organized and operated under the laws of the State. "^ In Texas a different rule has been established. While upholding the view that insurance is not commerce, it has been held that the statute, entitled "an act to define trusts, and to provide for penalties and punishment of corporations, persons, firms and association of persons connected with them, and to pro- mote free competition in the State of Texas," did not apply to a combination to fix rates of insurance, or the commis- sions of the agents of insurance companies. These com- binations are not embraced within the provisions of the act. A combination between two or more insurance conijianies to increase their rates or to diminish the rates to be paid to their agents, is, in a general sense, a comljination in restraint of trade. But, I think, that the words, "restrictions in trade," were not intended to receive that construction in the statute.2 1 State V. Phipps, 50 Kun. GOO. 619; s, c, 31 Pac. Rep. 1097. * Insurance Company v. State. 86 Tex. 2.50; s. c, 2-i S. W. Rop. 397. "Insurance is a mere contract of indenmlty against a contingent loss. Though it is an important aid to commerce, it is not a business of commerce, or one in which the public have any direct right. Xo franchise is necessary for its jiros- ecution, and no one has a right to demand of an underwriter that his property shall be insured at any rate. Any individual may execute a policy, and so any company in- corporated for the purpose of in- suring property may refuse to exe- cute one, unless it be so bound by its charter. Forced insurance, for obvious reasons, is detrimental to the public interest, and it is there- fore not probable that such restric- tions will be found in any charter. Labor is necessary to production and transportation, and therefore it is not merely an aid. but a ne- cessity of commerce. It is advan- tageous to the public, and in that sense they have- an interest in it. The services of professional xuen are likewise indispensable in most civilized commun'ties. and are pre- sumably likewise advantageous to the public. The public have an interest in them, in the same sense in which they have an interest in the business of insurance. It fol- lows, therefore, that if insurance companies are to be brought w ithin § 182.] TRUST COMBINATIONS. 595 § 182. Ri^Iit of Parties under Trust Combinations. — It is olenuMitary l;i\v that the ooui-ts will not leiul their :ii7, and is, as follows: An act to more effecti\ely protect the peo- ple against combinations, conspiracies and agreements be- tween insurers, wlicrcl>y rates of insuraiici' arc raised or fixed. Whereas existing laws have proved inade(|uate to jirotect the peoj)le against combinations, conspiracies and agreements l)etween insurers, wherein' rate of insurance are raised or fixed by >ucli i)raliall \)c lil)erally construed to accomplish its object. § 1S(>. Arkansas Anti-Trust Act. — An act of the legis- lature of the State of Arkansas, entitled "An act to prevent combinations of trusts and corporations in the State of Arkansas," was approved March KHh, 1897. It is, as fol- lows: Be it enacted by the General Assendjly of the State of Arkansas: § 1. That from and after the passage of this act all arrangements, contracts, agreements, trusts or com- binations, between persons or corporations, made with a view to lessen, or which tend to lessen, full and free compe- tition in the importation or sale of articles importetl into this State, or in the manufacture or sale of articles of domestic growth or of domestic raw material, and all arrangements, contracts, agreements, trusts or combina- tions, between persons or corporations, designed, or which tend to advance, reduce or control the price, or the cost to the i)r()ducer, or tt) the consumer of any such article or product, are hereby declared to be against j)ublic poliiy, unlawful and void. § J. Be it further enacted that any corporation chartered under the laws of this State, which shall violate the provisions of this act, shall thereby forfeit its charter and franchise, and its corporate existence shall tlu'reupon cease and determine. Every foreign corporation which shall vicjlate the provisions of this act, is hereby denied the right to do so, and is pn»liil)ited from doing busi- ness in this State. It is hereby nnide the duty of the attorney-general of this State to enforce this provision by due process of law. § 3. Be it further enacted that any violation of this act shall be deemed, and is hereby declared, destructive of full and free competition and a consjnracy against trade, and any ])erson or persons who may engage in any such con>piraliall as priiicipal, manager, director or agent, or in any other cajiacity, knowingly carry out any of the stipulations, purposes, prices, rates or orders, made in furtherance of such conspiracy, shall, on convic- 600 ANTI-TRUST LKGI8LATION. [§ 187. tion, be punished by any fine not less than fivehunch'cd dol- hirs, nor more than two thousand dollars, or by imprison- ment in the penitentiary not less than one, nor more than ten years, or, in the judgment of the court, by either such fine or punishment. § 4. Be it further enacted that the j)rovisi()ns of this act shall not Jipply to agricultural prod- ucts or to live stock while in the possession of the })roduceror raiser. § 5. Be it further enacted that any j)erson or per- sons, or corporation, that may be injured or damaged by any such arrangements, contracts, agreements, trusts or combinations, described in section one of this act, may sue for and recover in any court of competent jurisdiction in this State, of any ])erson or persons, or cor})()rations, operating such trusts or combinations, the full considera- tion or sum paid him or them for any goods, wares, merchandise or article of sale of which is controlled by such combination or trust, § (J. Be it further enacted that it shall be the duty of the judges of the circuit courts of this State to specially instruct the juries as to the provisions of this act. § 7. Be it further enacted that all laws and parts of laws in conflict with the i)rovisions of this act be and the same are hereby repealed. § 187. California Cuttle Trust. — The anti-trust legis- lation of California, at the present writing, is limited to "An act to prevent comhinatioiis to obstruct the sale of live stock in the State of California." This act was ap- proved February 27th, 1893, and is, as foUcAvs: "The peo- ple of the State of California, represented in Senate and As- seml)ly, do enact, as follows: § 1. It shall be unlnw ful for any two or more persons, or corporations, to conil)iue or agree together to do any act which will, in any res))e('t, pre- vent any person from buying live stock at any i)lace in this State from any person having the same for sale, either for himself or as the re|)resentative or agent of the owner of the same. § 2. It shall be unlawful for any corporation, organized under the laws of this State, or any board of directors or trustees, or stockholders or agents, or otliccrs of an}' corporation, to have, pass or enforce any rule, by § 187. J ANTI-TKIST I.KCISLATION. 607 law or rcirulatioii, whereby any otKcer, .sloekliokler, mem- ber, shareholder, ai^ent, servant thereof, or anv other per- son in -Auv WHY interested in or connected with sneh corpo- ration, shall in any respect be i)rohibited, })revented or en- joined from buying live stock from any other person having such live stock for sale, either as owner thereof or as the agent, representative or assistant of such owner, in any market in this State where live stock is brought to be sold. § 3. Every rule, regulation or by-law of any corporation doini; business in this State, which has for its purpose, or which, directly or indirectly, tends to prevent its nuMnbers or stockholders from freely [)urchasing live stock fi-om any person, lawfully having the same for sale, upon any live stock market of this State, are hereby declared to be con- trary to the public policy of this State, and unlawful and void; and any person or persons who shall attempt, directly or indirectly, to enforce any such rule, regulation or by-law, shall be deemed guilty of a misdemeanor, and, in addition to the penalties prescribed by this act, shall be i)ersonally liable for all d:imagcs which may arise from the enforce- ment of such rule, regulation or by-law, to any person damaged thereby. § 4. No trusts, combinations or con- spiracies shall be organized or exist in this State, to prevent an\' person or persons, or corporations, from selling live stock on commission, for such an amount of commission as any person engaged in the business may see tit to charge; and all rules, regulations, by-laws or agreements, of any corporation, association, society or combination of per- sons, wherein' any such corporation, association, society or combination of individuals are recpiired to charge not less than a given sum for commission, or whereby any person or commission merchant is, in any respect, restrained from chartrinir less than a certain tixed sum for his services as such commission merchant in the sale of live stock, are hereby declared to l)e contrary to the public policy of this State and unlawful. And any person who shall enter into any such trust, combination or conspiracy, or who shall en- force or aid, abet, a>>ist ()r encouraifc the enforcement 608 ANTI-TRUST LE(}ISLATION. [§ 188. of any such rule, rcfriilation, l)y-l:i\v or ugrcenient, shall be liable to the penalties prescribed bv this act, and, also, shall be personally lial)lc to any jxtsoh, individu::!. socii'ty (»r corporation who nia}' be injured in his })roi)erty or business thereby to the full extent of the injury resulting therefrom. § ."). Whoever shall, directly or indirectly, be a i)arty to any combination, conspirac}'^ or association, which attempts, directly or indirectly, to prevent any other person from freely selling live stock at any market in this State, for such persons as see fit to engage his services, or shall endeavor to compel, directly or indirectly, any person to charge not less than a tixed minimum sum for services in the sale of live stock, or shall, in any way, hinder or prevent another from lawfully selling live stock for another, for such rate of commission as may be agreed upon by the owner of the live stock and the commission merchant, shall be deemed guilty of a misdemeanor, and suffer the ])enalties prescribed by this act, and shall l)e personally liable to any one aggrieved thereby for the full amount of any damage sustained by such person. § (5. An}' one who shall violate the provis- ions of this act shall be punished bv a tine in any sum not less than five hundred dollars and not more than five thou- sand dollars, or by imprisonment in the county jail not ex- ceeding one year, or by either or both, in the discretion of the court, and shall be liable, in a civil action, to any jierson aggrieved, in such damages as he or she may have sustained by the violation of this act. § 7. This act shall take effect and be in force from and after its passage. § 188. Delaware Life lusiirance Law. — The anti- monopoly legislation of the State of Delaware ai)pears to be limited to a statute relating to the operations of life insurance companies in that State. It is entitled: "An act to ])revent any life insurance company or agents thereof, doing business in Delaware, from makimj or i>ermittingany (lisliiictioii or (liscriniination in faNor of iiulividuals between insurance of the same class and ecjual ex[)ectati()ns of life in the amount or payment of premiums or rates charged for policies of life or endowment insurance, and providing a § 189.] ANTI-TIU'ST LK({ISLATIOX. 009 penalty for violation thereof.'" It was jjasscd at Dover, February loth, 1891, and is, as follows: § 1. That no life insuraiiee (H)nipany, doinir business in this Slate, shall make or permit uny distinetion or diseriinination in favor of indi- viduals between insuranee of the same class and e(|ual ex- pectations of life in the amount or payment of premiums or rates charired for policies of life or endowment insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any such company, or agent thereof, make any contract of insurance or agreement as to such contract other than as plainly' expressed in the policy issued thereon ; nor shall any such company, or agent, pay or allow, or offer to pay or allow, as inducements to insurance, any rebate of premium payable on the policy, or any special favor or ad- vantage in the dividends or other benetits to accrue thereon, or anv valuable consideration or inducements whatever not specified in the policy contract of insurance. § 2. Any life insurance company, its agent or agents, violating section one of this act, shall be guilty of a misdemeanor, and upon conviction thereof the offender or offenders shall be sen- tenced to pay a fine of five hundred dollars on each and every violation, where the amount of insurani-e is twentv- fivc thousand dollars or less, and for every additional twenty-five thousand dollars insurance or less theic shall be an additional penalty of five hundred dollars. § 189. Floriila Lo^islutioii Ilelatinj; to Trusts and M<)iH»in»lies for the Control of Trade in Cattle. —The anti- trust statute of Florida, is entitled, "An act to prohibit ar- rangements, contracts, agreements, trusts or combinations and certain other acts or things intended, (U- tending to pre- vent, hinder or ol)struct the lawful sale of Florida fed l)eef or other beef, or fresh meat or cattle, or other edible animal in this State, or tending to monopolize or control the sale or price thereof." This act was approved June 11th, 1897, and is, as follows: He it enacted by the legislature of the State of Florida: § 1. That every arrangement, contract, agreement, trust or combination, between per- 39 GIO ANTI-TRUST LEGISLATION. [§ 189. sons or corporations, or between any person and any corpo- ration, made with a view to, or tending to prevent, hinder or obstruct the hiwful sale in this State, or any phice therein, of beef or other fresh meat of cattle or any other edible animal raised, fattened or fed, in the State of Florida, or any other beef or fresh meat, or with a view to or tending to prevent, hinder or obstruct the lawful sale of any cattle or other edible animal in this State, or any place therein, or which shall tend to monopolize or control the sale or i)rice of beef or other fresh meat in this State, of any place therein, is hereby declared to be against jniblic policy. § 2. Any corporation chartered under the laws of this State, which shall violate any of the provisions of this act, shall thereby forfeit its charter and franchises, and its corporate existence shall thereupon cease and determine. Every foreign cori)oration which shall violate any of the provisions of this act is hereby denied the right to do, and is prohibited from doing, business in this State. It is herebv made the dutv of the attornev-general of this State to enforce this provision by due process of law. § 3. Any violation of any provision of this act shall be deemed and is hereby declared to be destructive of full and free compe- tition and a conspiracy against trade, and any i)erson or persons who may engage in such conspiracy, or who shall, as princi})al, manager, director or agent, or in any other capacity, knowingly carry out any of the stipulations, pur- poses, prices, rates or orders made in furtherance of such conspiracy shall, on conviction, be punished by tine of not more than tive thousand dollars, or by imprisonment for not more than one year, or by both such fine and imprison- ment, in the discretion of the court, § 4. The circuit courts of this State are hereby' given jurisdiction in chancery, and it is hereby made their duty to restrain or enjoin any violation of this act in their respective circuits, and to restrain or enjoin any raising or lowering of the price or prices of beef or other fresh meat in any place or places in such several circuits, with intent to or tending to prevent, hinder or obstruct the sale of beef or other § 190.] ANTI-TRUST LEGISLATION. Gil frctili ineat of cattle or any other edible animal raised, fat- tened or fed in the State of Florida, or any other beef or fresh meat, or with intent to or tending to prevent, hinder or ol)struot the lawful sale of any cattle or other edible animal in any such {)lace or places. It is hereby made the duty of the State's attorneys to institute and prosecute all proper suits in their respective circuits in the name of the State to enforce this section. Any citizen of this State also may institute and prosecute suit in his own name to enforce this section. In case decree shall be rendered in the circuit court in favor of the complainant, whether the State or an individual, the court may decree that the de- fendant or defendants pay a reasonable fee in the cause for the State's attorney or complainant's solicitor therein. Nothing herein contained shall operate or be construed to deprive any person of any right to any damages, or of any remedy to recover damages which such person would have without this act, in order about and or from matter mentioned or included in this act. § 5. No person shall be excused from attending and testifying or from produc- ing books, papers, contracts, agreements and documents on subpoena for the State, or as witnesses for the State, or on cross-examination for the State in any prosecution, suit or proceeding, criminal or civil, under, authorized by or based upon this .act, or growing out of any violation thereof, when such prosecution, suit or proceeding is in the name of the State, and prosecuted or carried on by the attorney- general or State's attorney, on the ground or for the reason that the testimony or evidence, documentary or otherwise reipiired of him, may tend to criminate him or subject him to a penalty or forfeiture. Hut no such per- son shall be prosecuted or subjected to any penalty or forfeiture for, or on account of any transaction, matter or thing, concerning wliicli he may so testify or produce evi- dence: Provided, that no person so testifying shall be ex- empt from prosecution and punishment for perjury com- mitted in so testifying. § 190. Georgia Anti-Monopoly Act. — An act designed to prevent the creation of monopolies in any branch of 612 ANTI-TRUST LEGISLATION. [§ 190. trjide, whether by individiuils, companies or combinations of any sort or kind, passed by the legislature of Georgia, was approved December 23, 189G, and is as follows: An act to declare unlawful and void all arrano;ements, con- tracts, agreements, trusts, or combinations made with a view to lessen, or which tend to lessen, free competition in the importation or sale of articles imported into this State, or in the manufacture or sale of articles of domestic growth, or of domestic raw material ; to declare unlawful and void all arrangements, contracts, agreements, trusts or combi- nations between persons or corporations designed, or which tend to advance, reduce or control the price of such prod- uct or article to producer or consumer of any such product or article; to provide for forfeiture of the charter and franchise of any corporation organized under the laws of this State, violating any of the ])rovisions of this act; to prohibit every foreign corporation, violating an}' of the pro- visions of this act, from doing business in this State ; to require the attorney-general of this State to institute legal proceedings against any such corporations violating au}'^ of the provisions of this act, and to enforce the penalties pre- scribed; to prescribe penalties for any violations of this act; to authorize any person or corporation, danuiged by any such trust, agreement or combination, to sue for the recovery of such damage, and for other purposes. § 1. Be it enacted b}' the (Jeneral Assembly of Georgia, and it is hereby enacted by the authority of the same, that from and after the jjassage of this act, all arrangements, con- tracts, agreements, trusts or combinations between })ersons or corporations made with a view to lessen, or which tend to lessen, full and free coinpctilion in the importation or sale of articles imported into this State, or in the manufact- ure or sale of articles of domestic growth, or of domestic raw material, and all arrangements, contracts, agreements, trusts or combinations between persons or corporations de- signed, or which tend to advance, reduce or control the price or the cost to the producer or to the consumer of any such product or article, are hereby declared to be against § 190.] ANTI-TKl'ST LEtaSLATION. G13 public policy, unlawful and void. § 2. Be it further enacted by the iiuthority aforesaid, that any corporation, chartered under the laws of this State, which shall violate any of the provisions of this act, shall thereby forfeit its charter and its franchise, and its corporate existence shall thereupon cease and determine. Every foreign corporation which shall violate any of the provisions of this act is hereby denied the right to do, and is prohibited from do- ing, business in this State. It is hereby made the duty of the attorney-gen erul of the State to enforce this provision by due process of law. § .'^. Be it further enacted by the authority aforesaid, that any violation of the provision of this act shall be deemed, and is hereby declared to be, de- structive of full and free competition, and a conspiracy against trade, and any person or persons who may engage in any such conspiracy, or who shall, as principal, manager, director or agent, or in any other capacity, knowingly carry out any of the stij)ulations, pur[)oses, jirices, rates or orders nuide in furtherance of such consj)iracy, shall, on conviction, be punished by a tine of not less than one hundred dollars nor more than five thousand dollars, and by imprisonment in the penitentiary not less than one year nor more than ten years; or, in the judgment of the court, by cither such fine or such imprisonment. § 4. Be it further enacted by the authority aforesaid, that the i)rovisions of this a<'t shall not apply to agricultural products or live stock while in the possession of the producer or raiser. § "). l)f it further enacted by the authority aforesaid, that any i)erson or per- sons, or corporations that may be injured or damaged by any such arrangement, contract, agreement, trust or com- bination, described in section one of this a. Any purchaser of any article or commotlity from any individual, company or corporation transacting business contrary to any <>1(; ANTI-TRIST LEGISLATION. [§ 192. provision of the preceding sections of this act, shall not be liable for the price or payment of such article or commodity, and mav plead this act as a defense to any suit for such price or payment. § 7. The tines hereinbefore provided for may l)e recovered in an action of debt, in the name of the people of the State of Illinois. If, upon the trial of any cause instituted under this act to recover the penalties, as provided for in section three, the jury shall find for the people, and that the defendant has l)een before convicted of a violation of the provisions of this act, they shall re- turn such tlndino- with their verdict, stating the number of times they tind defendant so convicted, and shall assess and return with their verdict the amount of the fine to be imposed upon the defendant in accordance with said section three: Provided, that in all cases under the provisions of this act, a prei)onderance of evidence in favor of the peo- ple shall be sufhcient to authorize a verdict and judgment for the i)eople. § 8. It shall be the duty of the prosecut- ing attorneys in their respective jurisdictions, and the at- torney-general, to enforce the foregoing provisions of this act, and any prosecuting attorney of any county securing a conviction under the provisions of this act shall be en- titled to such fee or salary as by law he is allowed for such prosecution. AVhen there is a conviction under this act the informer shall be entitled to one-tifth of the fine recovered, which shall be paid to him when the same is collected. All fines recovered under the provisions of this act shall be paitl into the county treasury of the county in which the suit is tried, by the person collecting the same in the manner now provided by law, to be used for count v puri)oses. § 1J)2. Iiuliana Anti-Trust A-t. — The anti-trust statute of Indiana is entitled, "An act to declare unlawful and void all arrangements, contracts, agreements, trusts or combina- tions made with a view to lessen, or which tend to lessen, free competition in the importation or sale of articles im- ported into this State, oi- in the niMnufacture or sale of articles of domestic growth or of domestic raw material; to declare unlawful and void all arrangements, contracts, ^ ll'^.J AN ri-i'Kisr i.i:(iisi,ATi()N. »)17 a;iu'(l ot which UmuI to advance, reduce or control the price of such pro(hict or artich' to pi'cxhiccr oi- i'onsuiuer of anv such prochu-t or article; to })rovide fin* the ft)rfeit ui-e of the charter and franchise of any corporation, orijanized uiuUt the laws of this State, violating any of the provisions of this act, from doing business in this State; to re(|uire the attorney-general of this State to institute legal proceedings against any such corporation violating the provisions of this act, and to enforce the penalties pre- scribed; to prescribe penalties for any violation of this act; to authorize any person or corporation damaged by any such trust, agreement or combination to sue for the re- covery of such damage and for other i)urposes." The statute was approved March 5tli, 181)7, and is, as follows: § 1. lie it enacted by the (Jeneral Assembly of the State of Indiana, and it is hereby enacted by the authority of the same, that from and after the passage of tiiis act all arrangements, contracts, agreements, trusts or combina- tions, between persons or corporations, who control the output of any article of merchandise, made with a view to lessen, or which tend to lessen, full and free competition m the importation or sale of articles imj)orted into this State, aM. TjouiHiana T>:uv for the Prohibition of Trusts jiiul Couibinatioiis in ivcsti'iiint of 'l'rahall agri'c to jxjol, coml)ine or unite any interest they may have in cfninection with the sale or transportation of any such article or com- modity that its price might in any manner be affected. § 2. Be it further enacted, etc., that any cor|)oration hold- 630 AXTI-TRUST LKGISLATION. [§ liH). ing a charter under the laws of the State of Louisiana, which shall be convicted of a violation of the provisions of this act, shall thereby forfeit its rights and franchises, and its cori)()rate existence shall cease and determine, and it shall be the duty of the attorney-general, of his own mo- tion, and without leave or orders of any court or judge, to institute an action in the name of the State of Louisiana for the forfeiture of such rights and franchises and the dissolu- tion of such corporate existence. § 8. Be it further enacted, etc., that every foreign corporation, or any corporation or- ganized under or })ursuant to the laws of any Stale, who shall be convicted of a violation of the provisions of this act, is hereby denied the right and prohibited from doing any business within this State, and it shall be the duty of the attorney-general to enforce this provision by injunction or other ])roceedings in the name of the State of Louisiana. § 4. He it further enacted, etc., that any violation of cither or all the provisions of this act shall be, and is, hereby de- clared a conspiracy against trade, and any person who may be or may become engaged in any such conspiracy, or take j)art therein, or aid or advise in its commission, or who shall, as principal, manager, director or agent, knowingly carry out any of the stijfidations, purposes, jirices, rates or orders thereunder or in pursuance thereof, shall be punished hx tine not less than one hundred dollars nor more than one thousand dollars, and by imprisonment in the penitentiary not less than six months nor more than one year, or by either such tine or imprisonment, in the discretion of the court. It shall be the duty of the district attorneys in their respective jurisdictions, and the attorney-general, to enforce this provision, and any district attorney of any ))ai-ish se- curing a conviction umkn" tins ))ro\isi()n shall be entitled to such fee or salar\' as b^■ law he is allowed for such ))crsccu- tiiin. '1; ;"). P)c it further enacted, etc., that in any indict- ment lor an offense named in this act, it is sutlic-ient to state the purposes or effects of the trust or combination that the ac(;used was a member of, acted with, or in pursu- ance (tf it. without gi\ing its name or descri])t ion. or how. § 111?.] ANTI-TRUST LEGISLATION. 631 wlu'ii or where it was created, provided that no contract or agreeineut or arrangemeut which does uot include, or which canuot be held to include a stipulation between the parties tt) share in the protits of any such contract, agreement or arrangement, or which contract, agreement or arrangement does not provide for, or does not contemi)late, a })rofit or pool to be divided between the parties to such contract, agreement or arrangement, shall be held or construed to be in violation of the provision of this act. § (>. Be it further enacted, etc., that in prosecutions under this act it shall not be necessary to prove who constitute all the members belonging to the trust or combination. § 7. Be it further enacted, etc., that any contract or agreement in violation of the provisions of this act shall be absolutely void. § 8. Be it further enacted, etc., that the provisions of this act shall not apply to agricultural products or live stock while in the hands of the producer or raiser, nor be so construed as to affect any combination or confederation of laborers for the purpose of procuring an increase of their wages or redress of grievances. § 9. Be it further enacted, etc., that this act shall take effect from and after its passage, and that all laws and parts of laws conflicting with same are hereb}^ re- pealed. § 197. Maine Anti-Trust Law. — The anti-trust statute of the State of Maine is entitled *'An act to prevent such formation of trusts, combination of business tirms, incor- porated or unincorporated. conii)anies, or association of persons or stockholders, as may be contrary to pul)lic policy." This act was approved March 7, 1889, and is, as follows: Be it enacted by the Senate and House of Repre- sentatives in legislature assembled, as follows : § 1. It shall be unlawful for any tirm or incorporated company, or any numl)er of tirms or incorporated comi)anies, orany unincor[)o- rated company, or association of j)ersons or stockholders, organized for the piirpos(> of manufacturing. i)roducing, refining or mining any article or j)roduct which enters into general use and consmnption by the people, to form or or- ganize any trust, or to cuter int(» any combination of firms, 632 ANTI-TRUST LEGISLATION. [§ li>7. incorporated or unincorporated companies, or association of stockholders, or to delegate to any one or more board or l)oards of trustees or directors the iiower to conduct and di- rect the business of the whole number of tirins, corponi- tions, companies or associations which may have or which may propose to form a trust, com))ination or association in- consistent with the provisions of this section and contrary to public policy. § 2. No certificate of stock, or other evi- dence of interest, in any trust, combination or association, as named in section one of this act, shall have le^al recog- nition in any court in this State, and any deed to real estate given by any person, firm or corporation, for the purpose of becoming interested in such trust, coml)ination or asso- ciation, or any mortgage given by the latter to the seller, as well as all certificates arrowing out of such transaction, shall be void. § 3. Any incorporated company now oper- ating under the laws of this State, and which at the date of the passage of this act ma}' be interested in any trust, combination or association, named in section one of this act, or any firm, incorporated or unincorporated comi)any, or association of persons or stockholders, who shall enter into or become interested in such trust, combination or as- sociation, after the passage of this act, shall be deemed guilty of a misdemeanor, and be sul)ject to a fine of not less than five nor more than ten thousand dollars : Provided, that nothing in this section shall be so construed as to api)ly to such incorporated comiKinies as shall, within ninety days from the date of the passage of this act, withdraw from and sever all connections with such trust, combination or association. § 4. It shall be the duty of the secretary of state, as soon as may be after the passage of this act, to for- ward to the president, secretary or treasurer, of each incorpo- rated company, organized for the j)urpos(> of nianufacturing, producing, refining or mining any article or product which enters into general use and consumption by the people, and doing business within this State, a copy of this act, and, also, a letter of inquiry as to whether said corporation has merged all or any |)art of its business or interests in oi- wit h § 1*J8.] ANTI-TRUST LEGISLATION. 633 any trust, combination or association of pi'rsons, or stock- holders, as named in section one of this act, and to rc(iuire an answer, under oath, of the president, secretary, treas- urer or directors of said company; a form of attidavit, together witii (jucstions to be answered, shall be prescribed by the secretary of state, and forwarded with said letter, and on neglect or refusal to make answers, under oath, to such questions for the term of ninety days from the date of this act, the secretary of state shall notify the attorney- general, whose duty it shall be forthwith to file an informa- tion in the nature of a writ of rpio warranto, with the Supreme Judicial Court, against said corporation, and the court may, upon hearing and proof of such neglect or re- fusal, decree the dissolution of said corporation, and its corporate rights and powers shall be terminated. § 198. 3Iichigaii Anti-Trust Act. — The anti-trust stat- ute of Michigan is entitled, "An act declaring certain contracts, agreements, understandings and combinations unlawful, and to provide punishments for those who shall enter into the same or do any act in performance thereof." This statute became a law July 1st, 18y*J, and is, as follows: § 1. The people of the State of Michigan enact that all contracts, agreements, understandings and combinations made, entered into, or knowingly assented to by and be- tween any parties capable of making a contract or agree- ment, which would be valid at law or in et|uity, the purpose or object or intent of which sh;ill he to limit, control, or in any manner to restrict or regulate the amount of i)roduction or the (luantity of any article or commtxlity to be raised or produced by mining, manufacture, agriculture or any other branch of business or labor, or to enhance, control or regu- late the market price thereof, or in any manner to prevent or restrict free competition in the production or sale of any .irticlc or commodity, shall be utterly illeg:>l and void. ;ind e\ery such contract, agreement, understanding and eom- bination shall constitute a criminal conspiracy, and every person, who, for himself, personally, or as a member or in the name of a partnership, or as a member, 634 ANTI-TRUST LEGISLATION. [§ 198. iigeut or officer of a corporation, or of any association for business purposes of any kind, who shall enter into or knowingly consent to any such void and illegal contract, agreement, understanding or combination, shall be deemed a party to such conspiracy. And all parties so offending shall, on conviction thereof, be punished by a fine of not less than fifty dollars nor more than three hundred dollars, or by imprisonment in the county jail not more than six months, or by both such fine and imprisonment, at the dis- cretion of the court. And the prosecution for offenses under this section may be instituted and the trial had in any county where any of the conspirators became parties to such conspiracy, or in which any one of the conspirators shall reside: Provided, however, that this section shall in no manner invalidate or affect contracts for what is known and recognized at common law and in equity as contracts for the "good will of a trade or business," but all such contracts shall be left to stand upon the same terms and within the same limitations, recognized at common law and in equity. § 2. Every contract, agreement, understanding and combination declared void and illegal by the first sec- tion of this act shall be equally void and illegal within this State, whether made and entered into within or without this State. § 3. The carrying into effect, in whole or in part, of any such illegal contract, agreement, understanding or combination, as mentioned in the first section of this act, and every act which shtdl be done for that purpose by any of the parties, or through their agency or the agency of any one of them, shall constitute a misdemeanor, and, on conviction, the offenders shall be punished by imprisonment in the State prison not more than one year, or in the county jail not more than six months, or by a fine not less than one hundred dollars nor more than five hundred dollars, or by bolh such fine and imprisonment, in the discretion of the court. § 4. Any corjioration, now or hereafter, organized under the laws of this State, which shall enter into any con- tract, agreement, understanding or combination, declared illegal and criminal bv the first section of this act, or shall § 11*9.] ANTl-TUrST LKCJISLATTON. 635 (.lo any act towards or t'tir the purpose oC cari-xiiiu- tlu'saiuc into effect, in whole or in part, and who sliall not, within thirty days from the time when this act shall take effect, withdraw its assent thereto and repudiate the same, and file in the ottice of the secretary of state such refusal and re- l)udiation, under its corporate seal, shall forfeit its charter and all its rights and franchise thereunder. § T). It shall he the duty of the attorney -general, upon his own relation or upon the relation of any private person, whenever he shall have good reasons to believe that the same can be es- tablished by proof, to lile an information in the nature of a quo warranto, against any cor})oration offending against any of the provisions of this act; and, thereupon, the same proceedings shall be had, as i)rovided by chajjter 2!>S, of Howell's Annotated Statutes, relating to proceedings by in- formation in the nature of quo warranto, against corpora- tions offending against any of the provisions of the act, or acts creating, altering or renewing such corporations, and in other cases. § 6. The provisions of this act shall not apply to agricultural products or live stock, while in the hands of the jn'oducer or raiser, nor to the services of laborers or artisans, who are formed into societies or organizations for the benefit and protection of their mem- bers. § 1 . It shall be the duty of the secretary of state to cause this act to be published for four successive weeks in some daily paper in each of the cities of Lansing, Detroit, Grand Rapids and Mar(|uette, commencing within ten days after this act shall take effect, and he shall also within the same time cause to l)e mailed to each of the corporations, whose articles of association are on file in his office, a printed copy of this act, with a notice calling >))e(ial attention thereto. Approved .July 1st, 18Si». § 11)9. Miiiiicsotii Law to Prohibit Pools hihI Trusts. — The anti-monopoly and trust statute of Minnesota is en- titled. "An art to i)r ai)i)roved Aj)ril 20th, 18!*1, and is, as follows: lie it enacted by the legislature of the State of Minnesota: § 1. If any corporation, organized under the 636 ANTI-TRUST LEGISLATION. [§ 200. laws of this State, or any other State or country, for trans- acting or conducting any kind of business in this State, or any partnershij) or individual shall create, enter into, be- come a member of, or a party to, any pool, trust, agreement, combination or confederation with any other corporation, partnership or individual to regulate or fix the price of oil, lumber, coal, grain, flour, provisions or any other commod- ity or article whatever, or shall create, enter into, become a member of, or a party to, any pool, agreement, combination or confederation to fix or limit the amount or quantity of any commodity or article to be manufactured, mined, pro- duced or sold in this State, shall be deemed guilty of a con- spiracy to defraud, and be subject to indictment. § 2. Any person or corporation found guilty of a violation of this act shall be punished by a fine of not less than one hundred ($100) dollars nor to exceed five thousand ($5,000) dol- lars. § 3. Upon the trial of an indictment against a corpo- ration or a co-partnership for a violation of the first section of this act, all oflScers and agents of such corporation or co- partnership shall be competent witnesses against the de- fendant on trial, and such officers and agents may be com- l)c>lk'd to testify against such defendant, and produce all books and papers in his custody or under his control, perti- nent to the issue in such trial, and shall not be excused from answering any such questions or from producing any books or papers, because the same might tend to criminate such witness; but nothing to which such witness shall testify and no books or i)apers produced by him shall in any manner be used against him in any suit, civil t)r criminal, to which he is a party. § 4. All acts and parts of Hcts in conflict with this act bo and the same are hereby re- pealed. § ft. This act shall take effect and be in fon-e from and after its passage. § 200. MisNissippi Law Proliibitiuj; Trusts and Com- bines. — The original act relating to this subject is a part of the "Annotated Code of the General Statute Laws of the State of Mississipj)!." This code was adopted by the legislature at its regular session in 1892. An amendment § 200.] ANTI-TRUST LEGISLATION. ()37 to this act was approved March 11th, 1896. As amended, the statute is, as follows, the sections l)eiag the sections of the code: § 4437. A trust and combine is a combination, contract, understandinir or ajrreement, express or implied, between two or more persons, corporations, or firms or associations of persons, or between one or more of either, with one or more of the others, (a) In restraint of trade; (b) to limit, increase or reduce the price of a commodity; (c)to limit, increase or reduce the i)roduction or output of a commodity; {d) intended to hinder competition in the production, im|)ortation, manufacture, transportation, sale or purchase of a commodity; (e) to engross or fore- stall a commodity ; (f) to issue, own or hold the certificates of stock of any trust or combine; (g) to place the control, to any extent, of business, or of the products or earnings thereof, in the power of trustees, by whatever name called; (h) })}■ which any other j)ers()n than themselves, their proper officers, agents and employes shall, or shall have, the power to, dictate or control the management of busi- ness; or (i) to unite or pool interests in the importation, manufacture, production, transportation or price of a com- modity, and is inimical to the ])ublic welfare, unlawful and a criminal conspiracy. But this shall not ajjply to the associations of those engaged in hu>baii(!r\- in llicir (Icaliiiirs with commodities in the hands of the producer, nor to the societies of artisans, employes and laborers, formed for the benefit and protection of their members. § 4438. Every contract or agreement, to enter into or pursue any trust and coml)ine, and every contract or agreement, made by another with any trust and combine, or with any member of a trust and combine, for any purpose relative to the busi- ness of such trust and comltine, is void, and cannot be en- forced in any court. ^ 4439. Every corporation which shall enter into, be concerned in or share the profit or loss of any trust and combine shall forfeit its charter and fran- chise, and, if a foreign corporation, shall forfeit its right to do business in this State. § 4440. The producer and owner t)f any commodity, whose cost or j)rice is affected l)y 638 ANTI-TRUST LEGISLATION. [§ 2UU. any unlawful trust or couibine, may recover the nmnicipality or Icvec board thereof, when the provisions of the hist section have been viohited, shall not be collectible, nor shall the same be paid by any officer or board having the payment thereof. The constitution of the State con- tains the following provisions, viz, : § 198. The legisla- ture shall enact laws to prevent all trusts, combinations, contracts and agreements inimical to the public welfare. § 201. Missouri Anti-Trust Act. — The anti-trust law of Missouri was enacted in l(>leninl\' swear that I am the (president, secretary [treasurer] or director) of the corpo- ration known and styled . duly incorporated under the laws of , on the day of 18 — , and now transactincf or conducting business in the State of Mis- (544 AXTi-TursT legislation, [§ 201. souri, and that I am duly authorized to represent said corporation in the making of this affidavit, and I do fur- ther solemnly swear that the said , known and styled as aforesaid, has not, since the day of ( namino: the day upon which this act takes effect), created, entered into or became a member of, or a party to, and was not on (lay , nor any day since that date, and is not now a member of, or a party to, any pool, trust, agreement, combination, confederation or understanding with any other corporation, partnership, individual, or any other person or association of persons, to regulate or fix the })rice of any article of manufacture, mechanism, merchan- dise, commodity, convenience, repair, anv product of mining, or article or thing whatsoever, or the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm ; and that it has not en- tered into or become a member of, or a party to, any pool, trust, agreement, contract, combination or confederation to fix or limit the amount or quantity of any article of manu- facture, mechanism, merchandise, commodit}', convenience, repair, any product of mining or any article or thing what- soever,' or the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm; and that it has not issued, and does not own any trust cer- tificates; and for any corporation, agent, officer or employe, or for the directors or stockholders of any corporation, has not entered into and is not now in any combination, con- tract or agreement with any person or persons, corporation or corporations, or with any stockholders or directors thereof, the purpose and effect of which said combination, contract or agreement would be to place the managcinent or control of such combination or combinations, or the manufactured product thereof, in the hands of any trustee or trustees, with the intent to limit or i\\ the })rice or les- sen the production and sale of any article of commerce, use or consumption, or to prevent, restrict or diminish the manufacture or output of any article; and that it has not made or entered into an}' arrangement, contract or agree- § 201. J ANTI-TKUST LEGISLATION. 645 ment with iiny })er.son, ussofiation of persons or corpora- tion desitjned to lessen, or which tend to lessen, full and free competition in the importation, manufacture or sale of any article, product or commodity in this State, or under the terms of which it is pr()[)osed, stipulated, })rovitlcd, agreed or understood that any })articular or specified article, product or commodity shall be dealt in, sold or offered for sale in this State to the exclusion, in whole or in part, of any competing article, product or commodity. [President, secretary, treasurer or director.] Subscribed and sworn to before me, a , within and for the county of , this day of , 18—. [seal] And on refusal to make oath in answer to said in(|uiry. or on failure to do so within thirty days from the mailing thereof, the secretary of state shall certify said fact to the prosecuting attorney of the county (the circuit attorney in the city of St. Louis) wherein said corporation is located, and it shall be the duty of such prosecuting or circuit at- torney, at the earliest practicable moment, in the name of the State, and at the relation of said prosecuting or circuit attorney, to proceed against such corporation for the re- covery of the nu)iu'y forfeit, provided for in this act, and also for the forfeiture of its charter or its certificate of in- corporation, or its right and privilege to do business in this State. § >(. It shall be the duty of the secretary of state, at any time, upon satisfactory evidence that any company or association of i)ersons, duly incorporated under the laws of thi^ Slate. liM>^ enteicd into any ti'u.>t. comldnat ion or association, in violation of the j)rece(liiig sections of this act, to demand that it shall nudrosccution of such suits, to be paid l)v the defendant or defendants, when judgment is I'cndered for the State. The circuit and ])rosecuting attorneys shall re- ceive for their compensation one-fourth of the penalty col- lected. § 10. In all suits instituted under this act, to for- feit the charter of corporations or to forfeit the right of a cor])oration to do business in this State, where a judgment of forfeiture is obtained and the cause is not appealed to the supreme court or courts of appeals, the ciicuit court rendering such judgment shall allow the circuit or i)rosecut- ing; attorney a fee of not less than twentv-tive dollars nor more than live hundred "dollars, to be paid out of the assets of said corporation, and when the attorney-general takes part in said prosecution he shall be entitled to his actual I'X- ))ense, to be paid in like manner. vf H . It is hereby made the duty of all county otlicers in the State to furnish to the secretary (»f state any information which he may re»|uest of them, to enable him the more fully to execute the duties imposed upon him by this act, and for such services the said county officers shall be paid l)y their respective coun- ties, upon allowance In' the count \- court, such fees as would accrue for like sei-viees for the county . § 12. Chap- ter 128. Revised Statutes 1889, entitled '-Pools and Trusts," is hereby I'cpealed. § 202. Montana St:)tiite Against .>lono|)<>Iies and Trusts. — The anti-trust and monopoly legislation of Mon- § -^Oi>.] ANTI-TKIST I.KCISI.ATIoN. ()47 t.-iiiM is found ill the AiiiiotMtcd Code of ISii'). Thnt por- tion of the statuto ri'Iatiiiir to this subject is, as follows : The sections are the sections of the c()(U\ § 321. Every person, corporation, stock coin|)anv or association of per- sons in this St.-ite who, directlv or in(nrectl\ , conihine ov form what is known as a trust, or make any contract with any person or persc)ns, corporations or stock companies, foreiirn or domestic, through their stockholders, directors, officers, or in any manner whatever, for the purpose of tixing the price or reiridating the i)ro(hiction of anv article of commerce, or of the prochict of the soil for consumption hy tlie peoj>le. or to create or carry out anv restriction in trade, to limit productions, or increase or reduce the jirice of merchandise or commodities, or to prevent comjx'ti- tion in merchandise or connnodities, or to fix a standard or tigure whereby the jjrice of any article of merchandise, commei'ce or produce, intended for sale, use or consump- tion, will be in any way eont rolled, or to create a m()noj)ol\' in the inamifact ui-e, sale or transportation of am" such article, or to enter into an obligation by which they shall l)ind others or themselves not to manufacture, sell or trans- port any such article below a common standard oi- Hgnre, or by which they agree to kecj) such article or transporta- tion at a Hxed or gi-aduated Hgure, or bv whicii they settle the price of such aiticle so as to preclude unrentricti'd competition, is piini-liaMc by inipi-i>onnienl in the State |)rison not exceeding live years, or by tine not exceeding ten thousaml dollars, or both. Every corpoiation violating the provisions of this section forfeits to the State all its property and franchises, and. in ca-e of a foreign ineroduce or manufacture of any kind iiiteniiinpl ion in this Slut*-: to establish any pretended agency wheri'by the sale of any such article, commodity, merchandise or product shall be covercnl up, concealed or made to apjiear to be for the original vendor, for a like purpose or purposes, and to enable such original Ncndor. producer or manufacturer § 203.] AMI-TKIST LEGISLATION. (549 to control the wholosalo or retail \)Virc of am- such article of inerohandise, j)r()(liict or coiiiiuodity after the title to the same shall have passed from such vendor or manufacturer. 5. To make or enter into, carry on or carry out anv con- tract, obligation or agreement of any kind or descrip- tion by which they shall bind or have heretofore bound themselves not to sell, dispose of, traffic in or transport any article of merchandise or commod- ity, or article of trade, product, use, merchandise, cod- sunn)tion or commerce, below a common standard figure, card or list })rice, or by which they shall agree in any man- ner to keep the price of such article, product, commodity or transportation at a fixed or graduated figure or price, or by which they shall in any manner establish or settle the price of any article of merchandise, commodity, or of in- surance, fire, life or accident, or transportation between them or between themselves and others, or with the intent to i)reclude or the tendency of which is to prevent or pre- clude a free and unrestricted competition among themselves or others or the people generally in the production, .sale, traffic or transportation of any such article of merchandise, product or commodity, or conducting a like l)usiness, or bv which they shall agree to pool, coujbine oi- imite anv intei- est they may have in connection with the sale, production or transportation of any such article of merchandise, product or commodity, or the carrying on (»f any such business that its price might in any ui.iiiucr lie affected therein'. § 2. That any and all :iri> \)\ anv |)erson or persons carrying <>n, creating or MttemptiiiLT to create, either directly or iiidirc a consj)iracv against trade and l)usiness and unlawfid, and any person who mav be or mav l)ecome enjjajjed in anv ^uch con- spiracy, or take part therein, or aid or advise, in its com- mission, or who shall as principal, manager, director, agent, servant or employe, or in any other caj)acity, know- ingly aid or advise, or attempt to carry out or cairv out any of the stipidations. puri)oses, prices, rates, orders there- 650 ANTi-TKiST i.i;(;isi.ATi<>x. [§ 203. micU'r or in j)iirsu:iiice thereof, shall be deemed guilt v of a ini.sdeineunor, and upon conviction thereof shall be punished by a tine of not less thun twenty-Hvc dollars, nor more than five thousand dollars. § 3. That any corpo- ration, organized under the laws of this State, which violates any of the jirovisions of this act shall thereby for- feit its charter and franchise, and its corporate existence shall thereupon cease and determine. And for a violation of any of the provisions of this act by any corporation it shall be the duty of the attorney-general of the State, or county attorney, within his county, uj)on bis own motion, to institute suit or (jho ivarraiifo i)roceedings in aiiv rountv in this State, in which such corporation was organized or is engaged in transacting business, for the forfeiture of its charter rights and franchise, and the dissolution of its corporate existence. There shall be taxed against the de- fendant, as part of the cost in any such suit of jiroceeding, upon the forfeiture of its charter and franchise, as provided herein, a fee for the services rendered l)y the count v attorney, a sum not less than one hundred dollars ($1()()) and not more than tive hundred dollars (§500), to be tixed by the court rendering the judgment. § 4. Every foreign corporation or person, not a resident of this State, violating any of the provisions of this act, is hereliy denied the right and prohibited fi'om doing any l)usiness within this State; and it shall be the dutv of the attoinev-general and each county attorney within his county to enforce this provision, by injunction or other })roper proceeding, in any county in which such foreign corporation or non-resident person does business, in the name of the State on his relation. And for services rendered by the county attorney, in any such suit or proceedings, the court rendering judgment shall allow a reasonable sum to Ix' taxed against the defendant as part of the costs in case judgment is rendered against the de- fendant. For the jjurpose of obtaining service upon any foreign corporation or non-resident person in any suit or proceedings brought, as provided in this act, it shall be suf- ficient to serve a sunnnons ujK)n anv person in an\' county § 203.] AXTI-TKLST LK(iISLATl()N. (Jol within the St;ito who iiiav \)v the Miiciit of >;ii(l I'ort'iirii corporation or non-rt'si(h'nt person for the purpose of solicitini; l)usine.ss or trnnsactinij: or doini; husincss for said corporation or non-resident person at the time when suni- moiis is issued upon petition tiled against said cor{)oration or non-resident person or when summons is served on such agent. § 5. In any indictment or information for any offense named in this act it shall !)«' sutKcient to state the purpose and effects of the trust or coml»ination in a general way, and that the accused was a member of, aidetl or advised, or acted with or in pursuance of such trust or combination without giving its name or description, or how, where or w hen it was created. § (). In prosecutions under this act it shall be sufficient to prove that a trust or coml)ination. as defined herein or under the common law, exists, and that the defendant Ix'longcd to it or acted for or in connection with it, or aided or advised such trust or com- bination, or attempted to, or did fidly carry out any of the stipulations, purposes, j)rices, rates or orders of any per- son connected therewith, and it shall not be necessary to make any proof of all the membeis belonging to such trust, combination or conspiracy, or to j)rove or produce any article of agreement or any written in>!runient on wliich it may have l)een based, or when, where or how such trust, coud)ination or ('onsj)iracv was foinied or that it wa.s evidenced l)y any written instrument, or eame into existence by any agreement of any kind or character, whethei- in parol or written. § 7. Prosecutions may be brought by any person in the name of the State of Nebraska against any person or pei>ons violating any of the provisions of this act, and it sliall l)e ilic duty of all county attorneys, in their respective counties, to j)rosecutc all criminal suits on behalf of the State arising under the provisions of this act, and there shall l)e taxed by the court a fee for the county attorney of not less than twenty-five dollars ( $2.5) nor more than one hundred dollars {$1()()) as services for trying said >uit, and -^anie >hall be taxed a^ part of the costs against the defendant or defendants. § S. That anv contract or 052 ANTI-TRUST LEGISLATION. [§ 203. agreement, in violation of the provisions of this act, shall be absolutely void and not cMiforcoable either in law or equit}'. § 9. Nothing herein contained shall be construed to prevent any assemblies or associations of laboring men from passing and adoi)ting such regulations as they may think proper, in reference to wages and the compensation of labor, and such assemblies and associations shall retain, and there is hereby reserved to them the rights and i)ri\ ilcgcs now accorded to them by law, anything herein contained to the contrary notwithstanding, § 10. Any purchaser of any article, commodity, matter or thing purchased or contracted for within or without this State from any person, firm, corporation or association of persons, or of two or more of them, transacting business contrary to any provision of the preceding sections of this act, shall not be liable for the price or ])ayment of such article, commodity, matter or thing, and nuiy plead this act as a defense to any suit for such price or payment. § 11. Any person who shall be in- jured in his business, employment or property by any other person, firm, association or corporation by reason of anything forbidden or declared to be unlawful by this act, may have his right of action and sue therefor in any court of competent jurisdiction, and he shall recover the damages by him sustained, and the cost of suit together with a reasonable attorney's fee, to be fixed by the court in every case of recovery, which attorney's fee shall be taxed and collected as part of the costs in the case. § 12. In any action brought under any of the provisions of this act the court before whom the same shall be pending may compel any |)erson or persons, partnership. com))any, association or cor])()ration so proceeded against, or any of the meml)ers of any such ))artnership or corporation, or any director, officer, receiver, trustee, agent, empl()3'e or clerk of them, or either of them, to attend, appear and testify in such suit or proceeding, and may compel the production of the books and papers of any such ixtsoii. persons, paitiicrship. coin- pany, association or corporation ])arty to any such i)roceed- ing. No person shall be excused from attending aiul testify- § 204.] ANTi-TRisT m:(;islati()n. ()o3 inir, or producing; books and papers, in any prosecution under this act, for the reason that the testimony, docu- niontarv or otherwise, retjuired of him, may tend to crim- inate him, or subject him to a penalty or forfeiture, but no person >liall be prosecuted or subject to any i^enalty or for- feiture for or on account of any transaction, matter or thing concerning which he may testify or produce evidence, documentary or otherwise, in any prosecution under the provisions of this act: Provided, that no person so testify- ing shall be exempt from prosecution for perjury committed in so testifying. § lo. That the word "i)erson" or "per- sons," whenever used in this act, shall be deemed to include firm, tirms, corporation, corporations, partnerships, co-part- nerships and associations existing under, permitted or authorized hy the laws of the United States, this State or any other State, or the laws of any foreign country or ter- ritory of the United States, § 14. That chapter ninety- one a (91a), entitled "Trusts" of the Compiled Statutes of Nebraska for the year 181)5, be and the same is hereby re- pealed. § •2<)4. Now 3Iexlco IjJVW Doolarin}; Trust Coiiibina- tioiis Illegal. — The statute of New ^Mexico for declaring trusts illegal is entitled "An act declaring certain trusts, pools and combinations illegal, and providing for the punish- ment thereof." It was approved February 4th, 1891, and is, as follows: Be it enacted by the legislative assembly of the territory of New Mexico : § 1. Kvery contract or com- bination between imlividuals, associations or corporations, having for its object or which shall operate to restrict trade or commerce, or control the quantity, price or exchange of any article of manufacture or product of the soil or mine, is herein' declared to be illegal. Every person, whether as indivitlual ov agent, or olficer or stockholder, of any corpo- ration or association, who shall make any such contract or engage in any such combinations, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine not exceeding one thousand dollars nor less than one hundred dollars, and by imprisonment at hard 654 AXTI-TRIST r.KCISLATION. [§ 1^05. labor not exceeding one year, or until such fine has been paid. § 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other per- son or persons to monopolize any part of the trade or c(.)m- merce of this territory, shall be deemed iruilty of a misde- meanor, and on conviction thereof shall be punished by a fine not exceeding one thousand dollars, or by imprison- ment not exceeding one year, or by both said punishments, in the discretion of the court. § 3. All contracts and agreements in violation of sections one and two of this act shall be void, and any [)urcliaser of any commodity from any individual, corporation or association transacting busi- ness in violation of this act shall be liable for the payment for such commodity. § 4. This act shall take effect and be in force from and after its passage and publication three times in the Daily New Mexican. § 205. New York Law to Prevent Muiiopolies. — The anti-monopoly law of New York is "An act to prevent monopolies in articles or commodities of common use, and to prohibit restraints of trade and commerce, providing penalties for violations of the provisions of this act, and procedure to cnMl)le the attorney-general to se- cure testimony in relation thereto." This act became a law May 7th, 18i>7, and is, as follows: The people of the State of New York, represented in senate and assembly, do enact as follows: § 1. Every contract, agreement, arrangement or c()ml)ination, whereby a monojioly in the manufacture, production or sale in this State of any article or commodity of common use is or may be created, established or main- tained, or whereby com|)etition in this State in the supply or price of any such article or commodity is or may be re- strained or prevented, or whereby for the purpose of creat- ing, establishing or maintaining a monopoly w'ithin this State of the manufacture, production or sale of any such article or connnodity the free pursuit in this State of any lawful business, trade or occupation, is or may be restricted or prevented, is hereby declared to be against public jiolicy. illegal and void. § 2. Every person or corporation, or any § 205.] ANTI-TUrsT I.KCISLATION. (!.').') otlircT or :i>;ont thereof, wlio shall luakf, or altt'inpl to make, or enter into, any sueh eontraet, iigreement, arrangement or comhination, or who. within this State, shall do any act pursuant thereto, or in. toward or for the consummation thereof, wherever the same mav have been made, is guilty of a misdemeanor, and on conviction thereof shall, if a natural person, be punished by a fine not exceeding tive thousand dollars, or by imprisonment for not longer than one year, or by both such tine ;md inii)risonmeut ; and if a corporation, by a tine of not exceeding tive thousand dol- lars. § 8. The attorney -general may bring an action in the name and in behalf of the people of the State against any l)erson, trustee, director, manager, or other officer or agent of a corporation, or against a corporation, foreign or domestic, to restrain and ])revent the doing in this State of 'Awv act herein declared to be illegal, or any act in, toward or for the making or consummation of any contract, agree- ment, arrangement or combination herein prohibited wherever the same may have been made. § 4. The pro- visions of article one of title three of chapter mnv of the code of civil proceduie, relating to the api)licatit)n for an order for the examination of witnesses before the com- mencement of an action and the conduct of such examina- tion sh:dl ai)i)ly, so far as practicable, to an action or pro- ceeding l)v the attorney-general instituted pursuant to this chapter; and for the j)urpose of determining whether an action or |)roceeding should be commenced hereunder, the attorney-general may <'xamine and procure the testimony of witnesses in the manner herein prescribed. § ."». ^^'hen- ever the attorney-generel deems it necessary or |)roper to procure testimony before beginning any action or j)r(K-eed- ing under this chapter, he nuiy present to any justice of the sui)reme court an apjjlication in writing for an order direct- ing such persons as the attoi ney-general may re»juire to ap- pear before a justice of the su|)reme court, or a referee designated in such order, and answer such relevant and material questions as may be put to them, concerning any alleored illegal contract, arrangement, agreement or com- HoG ANTI-THl'ST LKcfSLATIOX. [§ 2(1"). bination, in violation of this chapter, if it appears to the satisfaction of the justice of the supreme court to whom the api)lication for an order is made that such an application is necessary, then such order shall l)c granted. Such orders shall be granted without notice, unless notice is required to be given by the justice of the supreme court to whom the application is made, in which event an order to show cause why such application should not be granted shall be made containing such ])reliminarv injunction or stay as may appear to said justice to be proi)er or expedient, and shall specify the time when and place where the witnesses are re(juired to appear, and such ex- amination shall be held either in the city of Albany or in the judicial district in which the witness resides or in which the principal office within this State of the corporation affected is located. The justice or referee may adjourn such examination from time to time and witnesses must at- tend accordingly. § (5. The order for such examination must be signed by the justice making it, and the service of a copy thereof, with an indorsement by the attornev- general, signed by him, to the effect that the person named therein is required to ai)pear and be examined at the time and place, and before the justice or referee specitied in such indorsement, shall be sufficient notice for the attendance of witnesses, such indorsements mav con- tain a clause requiring such person to i)r()(lucc on such examination all books, papers and documents in his possession, or under his control, relating to the subject of such examination. The order shall be served ui)on the person named in the indorsement aforesaid by showing him the original order, and delivering to and leav- ing with him, at the same time, a copy thereof, indorsed as above provided, and by paying or tendering to him the fee allowed by law to witnesses subpccnaed to attend trial of civil actions in a court of record in this State. § 7. The testimony of each witness nuist be subscribed by him, and all testimony taken by sut^ justice, or referee appointed, must be certified and delivered to the attoruej^-general at § 2(>t).] ANTi-riasr i.kcisi.ation. (>.')7 the c'lo.se of the cxaiiiiiiatioii. Tlu- tfstiinony ijiveii by a witness in a proceeding or examination nnder this act shall not be given in evidence against him in any criminal a( lion or proceeding, nor >hall any criminal action or proceeding be bronght against >iicli witness on account of the testi- mony so given by him, nor shall any person l)e excused from answering any (piestions that may be i)ut to him on the ground that it may tend to convict him of a violation of the provisions of this act. § 8. A referee appointed, as provided in this act, possesses all the powers and is subject to all the duties of a referee appointed under section ten hundred and eighteen of the code of civil })rocedure, so far as practicable, and may {ninisli for contemj)t a witness duly served, as prescribed in this act, for non-altcndancc or re- fusal to l)e sworn or to testify, or to produce books, [)apers and documents, according to the direction of the indorse- ment aforesaid, in the sanu' manner and to the same extent as a referee appointed to hear, try and determine an issue of fact or of law. § i). Chapter seven hundred and sixteen of the laws of eighteen humh-i'd and ninety-three and chap ter two hundred and sixty-seven of the laws of eighteen hundred and ninety-six are herein' repealed. ■§ 10. This act shall take effect immediately. § 20(». Xt»rth Carolina l.a\v for the Prohibition of Trusts. — The statute of thi> Slate for the prohibition of trusts is entith'd "An act to prohibit trusts in the State of North Carolina, and to provide for the punishment of per- sons connected with them." It was ratified March 11th, l^iSH, and is, as fi>ll()w>: The (Jeiieral A>>eml)ly of North Carolina d(» enact: vj 1. That all coml)inations and tru>ts, as detined l)y this act, an* unlawful, dangerous to the lil>erty of thepeople and are hereby forbidden to l)e formetl or carried on inthis State. § 2. That a trust is an arrangement, under- standing or agreenjcnt, either private or i)ublic, entered into by two or more persons or corporations for the purpose of increasing or reducing the price of the shares of stock of any company or corjioration, or of any class of products, materials or mamifacturi'd articles beyond the price that A -2 (jf)8 ANTI-rUUST LEOISLATION. [§ 206. would ))e Hxcd t)\ the natural (Icniaud for or the sujjplv of such shares, |)roducts, nuiterials or uianufacturcd articles ; and any attcuipl to carry out such purpose shall he evidence that such arrangement, understanding or agreement exists. § 3, That any person, coniijanx' or corporation who shall form, or attempt to form, a trust in this State, or the agent or representative of any trust in any State or county, who shall attcin})t to carry on operations in this State, shall be guilty of a misdemeanor, and upon convic- tion may be fined not more than ten thousand dollars, or may be imprisoned not more than ten years for each offense. § 4. That any person, companv^ or corporation who enters into an arrangement, understanding or agreement not to mine, manufacture, buy, sell or transport more than a cer- tain specified amount of any goods, products or commodi- ties within a specified time, will have violated section three of this act, and will be liable to indictment therefor; and any person, compan}'^ or corporation who gives bond or makes a forfeit of any kind not to break such ariangement, understanding or agreement, shall be guilty of a misde- meanor, and on conviction thereof shall be fined or impi'is- oned, or both, in the discretion of the court. § "). That any merchant, broker, manufacturer or dealers in raw materials of any kind, or the agent of such jH'rsons, who shall sell any particular chiss of goods, raw materials or manufactured articles, for less than actual cost for the purpose of break- ing down competitors, shall l)e guilty of a misdemeanor, and ujjon conviction may be tiued or imprisoned, or i)oth, in the discretion of the court : Pi'ovidcd. tliat nothing con- tained in this act shall operate or be construed so as to for- bid or prevent any pei'son or persons who desire and intend to purchase any article or connnoditA for his or their own use or consum|)tioii, from combining or otherwise lawfully acting so as to protect or helj^ them>clves from imposition in the cost or i)urchase price of such arlich'> (W commodi- ties as they or either of them may design and intend t(» use or consunu'. § (!. That this act shall be in full force and effect from and after the first day of May of the year one thousand ei.')I> vj '207. Xortli D.ikota T^siw Oeolariu}; C'ortaiii Trusts ami Coiiihiiiatioiis Unlawful. — lliv statute of North Da- kota relating to this subject is eutitk'd "An act to dcchire unhiwful and void all arrantrenicnts, contracts, agreements, trusts or combinations, made with a view to lessen, or which tend to lessen, free competition in the importation or sale of articles imported into this State, or in the manu- facture or sale of articles of domestic growth or of domestic raw material, to declare unlawful aiul void all arrangements, contracts, agreements, trusts or combinations between per- sons or corporations designed, or which tend to advance, re- duce or control the price of such i)roduct or article to pro- ducer or consumer of any such product or article, to pro- vide for forfeiture of the charter and franchise of any cor- poration organized under the laws of this State, violating any of the provisions of this act: to prohibit every foreign corporation violating any of the j)rovisions of this act from doing business in this State; to recpiire the attorney-general of this State to institute legal proceedings against any such corporations violating the provisions of this act, and to en- force the penalties prescribed ; to prescribe penalties for ar.y violation of this act ; to authorize any person or corpora- tion damaged by any such trust, agreement or eonil)inalion, to sue for the recovery of such damage, and foi- other pur- poses." This act was approved March I'th, l-SDT, and is, as follows: Be it enacted by the Legislative Asseml)ly of the State of North Dakota: § 1. That all arrangements, con- tracts. agi"eement>. tru>ts oi- combiiiation> between persons or corporations ni:i(h' with a view to lessen, or which tend to lessen, full and free comijctition in the im|)ortation or sale of arti State, or in (he manuf:i(t- ure or sale of :irtieles of dome>tic growth, or of domestic raw material, and :ill arrangements, contracts, agreements, trusts or combinations between persons or corporations, de- signed or which tend to advance, reduce or control (he price or the cost to the jirodueer or to the consumer of any >ueh product or articles, are hereby declared to be against public policy, uidawful and void. § '2. That any corporation 660 ANTI-TKLST LP:(JISLATH)N. [§ 208. chartered uiulcr \\iv hiws of this State, which shall violate any of the provisions of this act, shall therein' forfeit its charter and its franchise, and its cori)orate existence shall thereupon cease and determine. Every foreign corporation which shall violate any of the provisions of this act is hereby denied the right to do, and is prohibited from doing busi- ness in this State. It is hereby made the duty of the attor- ney-general of this State to enforce this provision by due process of law. § 3. That an>' violation of the provisions of this act shall be deemed, and is hereby declared to be destructive of full and free competition, and a conspiracy against trade, and any person or persons who may engage n any such conspiracy, or who shall, as {principal, man- ager, director or agent, or in any other capacity, knowingly carry out any of the stipulations, pur[)()S(_'s. prices, rales or orders made in furtherance of such conspiracy, shall, on conviction, be punished i)y a tine of not less than one hiui- dred dollars nor more than live thousand dollars, and by im- prisonment in the penitentiary not less than one year nor more than ten years, or, in the judgment of the court, l\v either such fine or such imprisonment. § 4. That any per- son or jiersons, or c(jri)oration that may be injured or dam- aged by any such arrangement, contract, agreement, trust or conil)ination, descriljcd in section one of this act, may sue for, and recover in any court of competent jurisdiction in this State, or any person, persons or coriiorations oper- ating such trusts or combinations, the full consideration or sum paid by him or them for any goods, wares, nu'rchan- di^e or arlides. the sale tif which is controlled by any such combination or trust. § 5. That it shall be the duty of (he judges of the district courts of this State specially to in- struct the grand juries as to the provisions of this act. § 208. Oklahoma I^aw to f'revent Conibiiiatioiis in Ite- Ktraiiitof Tra the anutunt of the first tine, and such corporation shall forfeit it - for|>orate right and franchise, and its cor|K)rate existence in this territory shall thereupon cease and determine. § H. Any person purchas- ing provisions, feed, material, articles of merchandise, or any commodity fron» any individual, firm, partnership oi- corporation, transacting business in violation of the provi>- ions of this act. such person so purchasing shall not be liable for the price or payment of any such article or comnuxlity, and may plead this act as a defense in any suit for price or paynjent. In any civil action brought under the provisions of this section the court before whom such 662 ANTI-THUST LKdISI.ATK »X. [§ 209. suit shall be ixMidiui:; may coiiipcl the plaintiff to testify, but if the phiintiff be a corporation then the court may compel any olfiecr, ajrent or em})loye of such corporation to attend, appear and testify, or compel the production of any contract or })ai)ers in evidence in such civil action : Pro- vided, the evidence so ol)tained shall not be used in any criminal prosecution against the person so testifying except in a criminal prosecution for perjury committed in giving such testimony. § 4. Any person who shall have pur- chased from any individual, firm, partnership or corpora- tion, doing business in violation of the provisions of this act, any provisions, feed, fuel, lumber or other building material, articles of merchandise or other commodity, and paid for the same, may maintain a civil action to recover the full amount of damages sustained in consequence of any such violation of the provisions of this act, together with a rejisonable attorney's fee, to be fixed by the court, which attorney's fee shall be taxed and collected as part of the costs in such case. In any civil action, brought under the |)rovisi()ns of this section, the court before whom such suit be })ending may com})el the defendant to testify; but if the defendant be a corporation, then the court may comjx'l any officer, agent or eniplo3'e of such corpcn-ation to attend, appear and testify, or compel the production of any con- tract or paper, as evidence in such civil action : Provided, the evidence so obtained shall not be used in any criminal action against the })erson so testifying e\cc))t in a criminal prosecution for perjury committetl in giving such testimony. § 5. It shall be the duty of the prosecuting attorneys, in their respective counties, to enforce the foregoing provisions of this act, and any prosecuting attorney securing a convic- tion, under the provisions of this act, shall be entitled, in addition to such fee or salary, as by law he is allowed for such prosecution, to one-lifth of the line received. § 2()J>. South Carolina Proliihition of Trusts and Combinations. — The anti-trust legislation of South Caro- lina is of very recent date. It consists of ''An act to pro- hibit tru>ts and combinations and to provide penalties," § 2()1>.] AN ri-TRlsr I.KlilSI.ATlON. »)(»;} .•ipprovoci Febnuiry I'olh. I-SI'T. The act i.s, :is follow > : § 1. He it enacted by the (Jeiieial Assembly of the State of South Carolina that from and after the passage of this act all arrangements, contracts, agreements, trusts or combina- tions, l)et\veen two or more persons, as individuals, tirms or corporati( ns, made with a \ iew to lessen, or which tend to lessen, full and free conn)etition in the importation or sale of articles imported into this State, or in the manu- facture or sale of articles of domestic growth or of domestic raw material, and all arrangements, contracts, agreements, trusts or combinations, between persons or corporations, designed or which tend to advance, reduce or control the price or tlu' cost to the producer or to the consumer of any such i)roduct or article, are hereby declared to be against public policy, unlawful and void. § 2. Whenever com- plaint is made ui)on sufficient affidavit or affidavits, showing a prima facie case of violation of the provisions of the first section of this act by any corporation, domestic or foreign, it shall be the duty of the attorney-general to begin an action against such domestic corporation to forfeit its charter, antl in case such violation shall be established, the court shall adjudge the charter of such corporation to be forfeited, and such corporation shall be dissolved, and its charter shall cease and determine ; and in the case of such showing as to a foreign corporation, an action shall be begun by tiie attorney-g(Mieral in said court against such coi'ixjra- tion to (leteriiiine the truth of such charge; and in case such charge shall l)e considered established, the effect of the judgment of the court shall be to deny to such corpora- tion the recognition of its corporate existence in any court of law ()re(|uity in this State. Hut nothing in this section shall be const lued to affect any right of action then exist- ing against said corporatiim. § .5. Any violation of the provisions of this act shall be deemed, mikI i- in rcl»y dcclMi'ed to be, destructive of full and free competition and a con- s[)iracy against trade, and any person or persons who may engage in any such conspiracy, or, who shall, as jirincipal, manager, director or agent, or in anv othci' caj)acit\', know- 664 ANII-TKLST LKUISLATION. [§ 210. ingly carry out any of tlu- stipulations, purposes, prices, rates or orders made in furtherance of such conspiracy shall on conviction be punished by a tine of not less than one hundred dollars nor more than five hundred dollars, and by imprisonment in the penitentiary not less than six months nor more than ten years, or, in the judgment of the court, by either such tine or such imprisonment. § 4. That any person or })ersons, or corporation, that may be injured or damaged by any such arranaement, contract, airreement, trust or coml)ination, described in section one of this jict, may sue for and recover, in any court of competent jurisdic- tion in this State, of any person, persons or corporation ojH'rating such trust or combination the full consideration or sum paid l)v him or them for any goods, wares, merchan- dise or articles, the sale of which is controlled l)v such com- bination or trust. § '). That any and all j)ersons may be compelled to testify in any action or prosecution under this act : Provided, that such testimony shall not be used in any other action or prosecution against such witness or wit- nesses, and such witness or witnesses shall forever be exem])t from any prosecution for the act or acts concerning which he or they testify. § (J. Nothing contained in this act shall be taken or construed to apply to any person or persons acting in the discharge of'otticial duties undci' the laws of this State. § 7. All acts in conliirt with this act be and the same are hereby repealed. § 210. South Dakota. — The latest legislation of South Dakota relating to monopolies and industrial trusts, is en- titled "An act to enforce section twenty, of article seven- teen, of the constitution of the State of South Dakota." The act was api)roved March 1st. 181*7. and is as follows: Be it enacted by the legislature of the State of South Dakota: 1. That within the meaning of this act, a trust or a monopoly is a combination of capital, skill, or acts of two or more ])ersons, tirms. corporations or associations of persons; first, to create or carry out nvstrictions in trade; second, to limit the production, or to increase or reduce the price of connnodities ; third, to prevent competition in the § 210.] ANTI-TRUST LKC ISLATK )N . lilij iii:iiiiif;ictiiri', tr;iiisj)()r(;iti(>ii, >;il(' or piircliMsc of iin'ichan- dix'. pi-Dtluco or coiuinoditics ; fourth, to Hx ;iiiy staiidartl or tiiTure whorehy the price to the pul)lic shall be in any manner established or controlled, provided that nothinir in this act shall be construed so as to include labor orirani/a- tions. 'J. Tli.-il it >li;ill I)(" uidawful for any iiic()r|)orated company, co-partncrsliip or association of jterson-^ in this State, directly or otherwise, to fix prices. limit the produc- tion (»!• r('u.iilatc the ti'aiisportation of any j)r<)(lucl (tr com- modity, so as to obstruct, or delay or prevent conii)etition in such production or trans})ortation, or limit transjiortation of commodities, or to fix prices therefor. '^. That it shall be unlawful for any incorporated company, co-i)arlnership or association of persons in any other State, to directly or otherwise combine, or make any contract, with any incorpo- rated company, co-part niM-ship or association of persons in this State to combine or make any contract tt) fix prices, limit the production of connnodity, or regulate the trans- portation, directly or otherwise, of any product or com- modity so as to ()l)struct or prevent com[)etition. or limit transi)ortation or to fix prices therefor, 4, Any jjcrson or j)ersons, oiHcers (»r servants of any company, co-partner- ship or Mssocialion of i)ersons, convicted of viol.atinir any provisions of this act, shall be deemed iruilty of a misde- meanor, and upon conviction thereof, for the first offense, shall l)e fined not less than one thousand dollars, nor more than Wvv thousand dollars, and upon conNiction for the sec- ond offense, not less than tive thousand dollars nor more than ten thousand dollars. ,"). All lines rec(tvered under this act shall be paid one-half to the per>on or persons airirrieved. and the other half shall be paid into the county treasury of the county in which the conviction may be made, to the credit of the iicneial county fund of said county. •;. Il -hall be the sjiecial duty (»f the State's attor- ney of each county in the State, upon the affidavit of any peison or persons airirrieved showiiiL^ that any i)erson or per>ons has violated any provision of thi- act. to make com- plaint and cause the arrest of sueh person or j)ersons, and iHiii ANTI-TUrsT Li:(iISI,ATl()N. [§ 211. to prosfciitc iiiiii or lliciii !<• conviction, if proNrd lo l)o guilty, and it sliall he tlie duty of the attorney-ireneral of the State, ujion the re(|ue.st of any iState's attorney for any eounty, to aid in the prosecidion of action> umU'r this aet. 7. That all acts, or parts of acts, in conliict with this act are herehy repealed. § 211. Tennessee Law to Pr«)hibit Conspiracies and Trusts. — The first statute enacted l)y the leirislature of Tennessee on this subject is entitled, "An act to prevent conspiracies and formation of trusts against leiritiinate trade and connnerce, and to sujipress illeijal coinhinations against the same." It was approved April (Jlh, ISSil, and is, as follows: § 1. Be it enacted by the General Assembly of the State of Tennessee that it shall not be lawful for any person or persons, or associations of })ersons or any corj)o- ration in this State, or doing business in this State, to foini or agree to, or to conspire to form any trust, pool, or cor- ner or combination, or any other arrangement or device, in or about any article of legitimate traffic, the production or manufacture or sale of such article that may injuriously affect, and for the purpose of injuriously affecting the legitimate trade and commerce of the country, or to limit the supply or production of said articles, wherein' thej)rice of such produce or numufatttured articles or other articles of legitimate trade may be undidy de|)ressed and put down, or unduly raised or increased, for the pur})ose of s})ecula- tion, either by pooling or purchasing said articles for the purpose of withdrawing them from market to destroy legitimate competition, or to create a monojioly or corner in the same, or to produce an uiuhu' demand for the same, antl that to unduly raise the price of said articles, or by throw- ing the same on the market when so accunudated or pur- chased, for the puipose of creating an undue depression in the price of such article, and by such means to destioy or limit legitimate competition in the production, manufacture or sale of such articles, as by any other device or arrange- ment for such purpose. All such agreements, trusts, pools, corners and cond)inations are hereby prohibited: § lUl.] ANTI-TKl\ST LKCISLATION. •"••iT Provided, nothinii' luMcin ('((Mtaiiicd >liall Ix' const iiu-d to prevent or interfere with parties engaged in legitimate trade and speculation. § 2. Be it further enacted that any per- son or persons or corporation violating the first section of this act, for the first offense, shall, on conviction, pay a fine of not less than two hundred and lifty dollars, and for the second offense a fine of not less than five hundreel dollars, and the attorney-general, for each conviction, shall have a taxed fee of fifty dollars, and shall have, in addition, fifty per cent, of the money actually received on such fine, and he shall prosecute all such cases, ex officio , without any other prosecutor, and the courts shall give this act in charge, and the grand jury shall ha\(' full in(iuisitorial jiower in such cases. ^ o. He it further enacted that no contract made by any person or persons, or incorporations, whereb}' to carry out, or agree to carry out, an}' of the agreements or combinations enumerated in and prohibited in the fore- ffoinof act shall be enforced in anv of the courts of this State, whether the same be made by citizens of this or any other State. § 4. Be it further enacted that any corjjora- tion, created or incor})orated by or under the laws of this State, which violates any provisions of this act, shall thereby forfeit its corporate rights and franchises, and its corporate existence shall thereupon cease and determine, and it shall be the duty of the attorney-general of the State, of their own motion and without leave or order of any court or judge, to institute an action in ix-half of t ho people and in the name of the State for the forfeiture of such rights and franchise, and the dissolution of such corporate existence, or any citizen of tlu- State nniy insti- tute such suit by proceedings in a court of chancery in the name of the State, and said corpoiations may l>e enjoined from violation of this act, i)ending such proceedings: Pro- vided such citizen may not Ix-gin >uih proceedings without giving security for cost in such ca>es. This law was fol- lowed in IS'Jl by a statute which is su})plementary to it. It is entitled, "An act to declare unlawful all trusts, pools, contracts, arramrements and lombinations in the restraint 6(58 ANTI-TKIST LK(;iSL\T10N. [§ 211. of ti'ade, production, in;inufactiire or sale, to fix t ho liat)ilitv of and punish persons antl corjjorations concerned therein." This act was approved March 80th, 181*1, and is, as fol- lows: § 1. Be it enacted by the General Assembly of the State of Tennessee that all trusts, pools, contracts, arrange- ments or combinations now existing or hereafter made with a view or which tend to i)revcnt full and free competition in the production, manufacture or sale of any article of domestic growth, production or manufacture, or in the im- portation or sale of any article of domestic growth, production or manufacture, or in the importation or sale of any article growed, produced or manufactured in any other State or country, or which are desig- nated or tend to fix, regulate, limit or reduce the price of any article of growth, production or n)anufacture, or which are designed or tend in a way to create a monopoly, are hereby declared to be unlawful, against public })olicv a'nd void. § 2, Be it further enacted that all persons, entering into or continuing in any trust, pool, contract, arrange- ment, agreement or combination, either in his own account or as agent or attorney for another, or as an officer, agent or stockholder of any corporation, or in any capacity wiiat- ever, shall be deemed guilty of a felony, and on conviction thereof shall be i)unished l)y a fine of not less than five hundred ($500) dollars nor more than five thousand ($5,000) dollars, and imprisonment in the penitentiary not less than one ( 1 ) year nor more tlum five ( 5 ) years. § 3. Be it further enacted that all persons and corporations, and the officers and the stockholders of all corporations that shall become or continue to be members of, or in any way con- nected with, or concerned in any such trust, contract, agreement or coiiil)ination. shall be jointly and severally lial)le to pay all the debts, obligations ami lial)ilities of each and every person and corporation that may become or con- tinue a member thereof, connected therewith ov concerned therein, as fully as if all were partners in the creation of such debts, obligations and liabilities. § 4. Be it further enacted that if any corporation, organized under the laws § lUL] ANTI-TKl'.ST I.E(i ISI, ATM )N . (if.!) of this State, or any otKi-oi' or stockholder thereof, as siuli, sliall become or continue to l)c a meniher of any such trust, j)ool, contract, agreement, ari:inhall be tile duty of tlie attorney-tjenerai of the county wliercllio same is located, or having its j)rinci|)al otlice, to Ijring suit against such cori)orati()n in the circuit court of such county to have its said charter declared forfeited for that reaM»n, and to wind up the same under the order of such courts. § ;'). Be it further enacted that where action at law or suit in e()uitv shall l)e commenced in any court of this State it shall be lawful in the defense thereof to plead in bar or in abatement of the action that the [)laintiif or any other per- son or corporation interested in the prosecution of the action is a member or connected with and the cause of action grows out of some business or transaction with such trust, pool, contract, agreement, arrangement or combina- tion, as described in the first section of this act. § (i. Be it further enacted that any person or cori)oration injured or damaged by any such trust, i)ool, contract, agreement, arrangement or combination may sue and recover tines in any court of competent jurisdiction double the amoiuit of damages suffered by such person or corjjoration. § 7. Bo it further enacted that upon the trial of any r'wW ;ution against any corporation, person or co-partnership for a violation of any section of this act all otlicers, stockholders and agents of such corporation, person or co-partnership shall be competent witnesses against the defendant as such on trial, and such officers, stockholders and agents may be comi)elle(l to testify against such defeiulant , anil jiroduce all books ;iii(l pMpcrs in tlicii- cnstocitiiiciit to the issues in such action at or before the time of trial, and shall not be excused from producing any books or papers, l)ecause the same might tend to criminate such witnesses, l)ut nothing which such witness shall testify to and no books or papers produced by him shall in any manner be used against him in any criminal action to which he is a })arty, § .s. Be it further enacted that all acts ;md part of 670 ANTI-TRLST LKGISLATION, [§ 212. acts of tho (ioncral Assembly of the State of Tennessee in conflict with this act be and the same are hereby repealed. § 9. Be it further enacted that this act take effect from and after its passage, the public welfare requiring it. § 212. Texas Law for the Suppression of Trusts and the Promotion of Free Competition. — The original statute enacted by the legislature of the State of Texas was ap- proved March 3Uth, 1889. It was entitled, "An act to de- fine trusts, provide for penalties and punishment of corpo- rations, persons, firms and associations of persons con- nected with them and to promote free competition in the State of Texas, and to repeal all laws and parts of laws in conflict with this act." In 1895 this act was amended. The amendment took effect A})ril 80th, 1895. As amended the statute is, as follows: § 1. Be it enacted by the legis- lature of the State of Texas that a trust is a combination of capital, skill yr acts b}' two or more persons, firms, corpo- rations or association of persons, or either two or more of them, for either, any or all of the following purposes: 1. To create or carry out restrictions in trade or commerce, or aids to commerce, or to create or carr}- out restrictions in the full and free pursuit of any business authorized or per- mitted by the laws of this State. 2. To increase or reduce the price of merchandise, jiroduce or commodities. 3. To prevent competition in manufacture, making, transporta- tion, sale or purchase of mci-chandisc, produce or com- modities, or to prevent com|)ctition in aids to commerce. 4. To fix at any standard or figure, whcrcl)y its price to the public shall be in any manner controlled or established, any article or coiuniodity of merchandise, produce or commerce intended for sale, use or consumption in this State. 5. To make or enter into or execute or carry (Mit any contract, obligation or agreement of any kind or description by which thev shall bind or have bound thcmsclvc'< not to sell, dispose of or tninsport any article or c()innu)dity, or article of trade, use, merchandise, commerce or consumption below a common standard flgure. or by which they shall agree in anv manner to keep the price of such article, commodity or § L'Il\] ANTl-TiaST LK(iISI,ATI(>\. li71 ti':uisj)()rt;iti()M at a tixed or oracU'd Hgiire, or Wy which they shall in any maniu'r establish or settle the })riee of any article or coniniodity or transportation l)etween thcni or themselves and others to preehide a free and nnrestrieted competition among themselves or others in the sale or transportation of any sneli tirticle or commodity, or by wliich they shall agree to pool, combine or nnite any inter- est they may have in connection with the sale or transporta- tion of any such article or commodity that its price might in any manner be affected. § '1. Tliat any corporation holding a eharter under the laws of the State of Texas which shall violate any of the provisions of this act shall thereby forfeit its charter and franchise, and its corporate existence shall cease and determine. § 8. For a violation of any of the provisions of this act by any corporation mentioned herein it shall be the duty of the attorney- general or district attorney, or either of thcni, ui)on his own motion and without leave or order of any court or judge, to institute suit or quo wancDilo })roceedings in Travis county, at Austin, or at the county seat of any county in the State where such corporation exists, does business or may have a domicile, for the forfeiture of its charter rights and franchise and the dissolution of its cor|)orate existence. § 4. Every foreign corporation violating any of the jiro- visions of this act is hereby denied the right and prohil)ilcrribc the remedy antl regulate the i)roceedings bv f/uo irtirranfn, etc., shall, except in so far as they may conflict herewith, govern and control the proceedings when instituted to forfeit any char- ter under this act. § i). If any person shall be or may be- come engaged in any combination of cai)ital. skill or acts by two or more persons, firms, corporations or association of persons, or of either, two oi- more of them, for eithei". any 672 ANTI-TKUST LEC.ISLATION. [§ 'Jl'2. or all of the foijowinir purposes: I. To create or carrv out restrictions in trade or commerce, or aids to commerce, or to create or carry out restrictions in the full and free pur- suit of any business authorized or permitted by the hiws of this State. 2. To increase or reduce the price of nierchan- dise, produce or commodities, 3. To prevent com|)etiti()n in manufacture, making, transportation, sale or purchase of merchandise, produce or commodities, or to iirevent com- petition in aids to commerce. 4. To fix at any standard or figure, whereby its price to the public shall he in any man- ner controlled or estal)lished, any article or commodity of merchandise, produce or commerce intended for sale, use or consumption in this State, a. To make or enter into or execute or carry out any contract, obligation or agreement of any kind or description by which they shall bind or have bound themselves not to sell, dispose of or transport any article or commodity, or article of trade, use, merchandise, commerce or consumption below a common standard figure, or by which they shall agree in any manner to keep the ])rice of such article, commodity or transjjortation at a fixed or graduated figure, or by which they shall in any man- ner establish or settle the price of any article or commodity or transportation between them or themselves antl others to [)reclude a free and unrestricted competition among them- selves and others in the sale or transportation of any such article or commodity, or by which they shall agree to jjooI, combine or unite any interest they may have in connection with tlie sale or transportation of any such article or com- modity that its prices may in any manner be affected, or aid or ailvise in the creation or carrying out of any such t-om- binatiijn, or who shall, as j)rincipal, manager, director, agent, servant or employe, or in any other capacity, know- ingly carry out any of the stipulations, puri)oses, ^irices, rates, directions, conditions or orders of such combination, shall be j)unished bv a fine of not less than fifty nor more than tive ihousaiid t or combination, and tliat the accused was a member of, acted with or in pursuance of it, without i^iving its name or de- scription, or how, when or where it was created. § 8. In prosecutions under this act it shall be sufficient to prove that a trust or combination, as defined herein, exists, and that the defendant Ijelonged to it or acted for or in connec- tion with it, without i)rovinii: all the nuMubcrs bclongin«^ to it or proving or producing any article of agreement or any written instrument on which it may have been based, or that it was evidenced by any written instrument at all. The character of the trust or combination alleged may be estab- lished by i)roof of its general reputation as such. § J>. Per- sons out of the State may commit and be liable to indict- ment and couvictiou for committing any of the offenses enumerated in this act, which do not in their commis- sion necessarily require a" personal presence in this State, the object being" to reach and punish all persons offending against its provisions, whether within or without the State. § 10. P^ach and every firm, person, corporation or associa- tion of j)ersons who shall in any manner violate any of the provisions of this act shall for each and every day that such violation shall be committed or continued forfeit and pay the sum of fifty dollars, which may be recovered in the name of the State of Te.xas in any county where the offense is committed, or where either of the offenders reside, or in Travis county, and it shall be the duty of the attorney-gen- eral or the district or county attorney to prosecute for and recover the same. § 11. That an\ ((tutract or agrceuicnt in violation of the |)rovisi()ns of this act shall be al)solutely void and not enforceable either in law or e(|uity. § 12. That the provisions hereof shall be held climulative of each other and of all other laws in any way affecting them now in force in this State : Provided, this act shall not be held to a})ply to live stock and agricultural products in the hands of the producer ">r raider, nor shall it l)e understood or construed 43 f)74 ANTI-TRUST LK(;iSLATIOX. [§ 213. to prevent the organization of laborers for the puri)ose of maintaining any standard of wages, § 13. That nothing in this act shall be held or construed to affect or destroy any rights which luav have accrued or to affect the riijht of the State to recover ))cnalties or to affect the I'ight of the State to forfeit chartei's of domestic corporations and prohibit foreign corporations from doing business in this Stale, or affect the right of the State to maintain prosecutions for violations thereof, under any law of this State relating to trusts, for acts heretofore done. § 14. Any court, otlicer or tribunal, having jurisdiction of the offense detined in this act. or any district or county attorney or grand jury may subpa'ua j)ersons and compel their attendance as witnesses to testify as to the violation of any of the provisions of the foregoing sections. Any person so summoned and ex- amined shall not be liable to prosecution for any violation of said sections about which he may testify fully and with- out reservation. § 15. All laws or parts of laws in contlict with this act are hereby repealed. ^ IG. Whereas the peo- ple of this State are without an adc(|uato remedy against trust, therefore an emergency and imperative pul)lic neces- sity exists requiring that the constitutional rule which re- quires that all bill shall be read on three several days be suspended, and it is so enacted. § 21.*5. Utah Law Pi-oIiibitinvT Pools and Triisls. — The legislature of the State of Utah, relating to pools and trusts, consists of, "An act pi-ohil)it iiig and })ro\"iding for the punishment of jjcrsons, co-partnerships, associations and corporations forming i)ools, trusts, combinations or €onspiracies to affect or control the price of professional services or to affect or control the price, or limit or lessen the production, manufacture, consumjition, use or sale of any article or commer.ce, nninufacture or product of the soil, means for the suppression of such evils and remedies for persons injured thereby." This act was approved March i)th, l.SilG, and is, as follows: Be it enacted by the legislature of the State of Tlah: ^ 1. Anv combination bv persons, having for its object or effect the controlling of § iJ? !.'>.] ANTI-TIJIST LKCISLATION. (IT') the prices of any profcssioiuil services, any products of the soil, or of any article of manufacture or commerce, or the cost of exchange or transportation, is prohibited and hereby declared unlawful. Any persons who shall violate the fore- goin*; provisions shall l)i' subject to ])rosecution and punish- ment as hereinafter provided, § 2. If any })crson (jr as- sociation of pi'r>ons >1im11 create, cnti-r into, become a mem- ber of, or a party to, any pool, trust, aureement, combina- tion, confederation or understanding with any other person or peisons to regulate or fix the price of any article of mer- chandise or commodity, or shall eirter into, become a mem- ber of, or a })arty to, any ))ool, trust, agreement, contract. Combination or confederation to fix or limit the amount or (plant ity of any article, commodily or merchandise to be manufactured, mined, produced or sold in this State, such person or persons shall be deemed and adjudged guilty of a conspiracy to defraud, and be subject to punishment as hereinafter provided. § 3. It shall not be lawful for any corporation to issue or to own trust certificates, or for any corporation, agent, officer or emj^loye, or the directors or stockholders of any corporation, to enter into any combina- tion, contract or agreement with any jierson or i)ersons, the purpose and effcM-t of which combination, contract or agree- ment shall i)e to ])lah the manufacture or output of any such article, or to mom)polize any part of the trade or commerce within this State. § 4. If a corporation, a com- |)any, a firm or as>ociation >liall be found guilty of a \ iola- tion of this a<'t it shall be punished by a tine in any sum not less than one hundred dollars nor more than two thousand dollars for the tir>t offense: and for the second offense not less than Hve hundred dollars nor more than five thousand dollars; and for the third offense not less than tive thousand dollars nor more than ten thousand dollars ; and for everv 676 ANTI-TUIST LK(;iSLATION. [§213. subsequent offense shall 1)0 liahlc to :i tine of tiftecn thou- sand dollars. § 5. Any president, manager, direetor or other officer, agent or receiver of any corporation, com- pany, firm or association, or any member of any com- pany, tirm or association or any individual, found guilty of a violation of this act may be punished by a fine of not less than one hundred dollars nor to exceed one thousand dollars, or by confinement in the county jail not to exceed one year, or both, in the discretion of the court before which such conviction may be had. § (5. Any contract or agreement in violation of any provision of the preceding sections of this act shall be absolutely void. § 7. Any cori)oration created or organized by or under the laws of this State, which shall violate any of the provisions of the preceding sections of this act, shall thereby forfeit its corpo- rate right and franchise, and its corporate existence shall thereupon cease and determine. § 8. It shall be the duty of the secretary of state, upon satisfactory evidence that any corporation or association of persons, incorporated or operating under the laws of this State, have entered into any trust, combination or association, as provided in the preceding provisions of this act, to give notice to such corporation that unless they withdraw from iind sever all business connections with said trust, combination or associa- tion, their corporate right and franchise will be revoked at the expiration of thirty days from the date of such notice. § 9. At the expiration of the thirty days mentioned in the last preceding section, the secretary of state shall cause a certified statement of the facts to l)o tiled in the office of the attorney-general of the State, who shall procure or direct such proceedings by any county attoi'uev in the State, to commence an action in the district cdiut of ;iny county in the State of competent jurisdiction, to forfeit mid revoke the corporate right and franchise of such cdrporntion. When such ])r()ceedings are instituted they sh:ill be con- ducted as orderly law actions, trial)le by court or juiy. On the final decision of the same, should the defendant be found guilt v of a violation of any of the provisions of this § 214.] ANTI-TRUST LEGISLATION. ()77 act ^^^lid court shall render :i judiriin'iil, and ortlcr u rcvoi-a- tion of the charter, corporate riirhts and franchises of said corporation a> a |)enaltN' for the NJolation oi- \ iolations of which the said eorixiration shall l)e found uuilty, and the secretarv of stnte shall thei'eupon make i)uI)lica1ion of such revocation in four n('\\s])apers in o-cncral circulation in four of the iarijest cities of the State. § 10. In case any jjerson or persons sliall do, cause to be done or permit to be done any act, matter or thin^ in this act, prohibited or dechired to be unlawful, sui'h person oi- persons shall be liable to the person or persons injured thereby for treble the amount of damages sustained in conse(juence of any such violation of the provisions of this act, §11. The words "person'" or "persons," wherever used in this act, shall be deemed to incUide corporations, companies and associations existing under or authorized by the laws of either the United States or any of the territories, any State or any foreign country. § 214. Wasliiiijjton I^aw Forbirtdiiij;' Trusts and Mo- iHtpolics. — Section '2'2d, of article XII., of the constitution of tlie State of \\'ashington, {provides that monopolies and trusts shall never be allowed in this State, and no incorpo- rated company, co-])artncrship or association of persons in this State shall, directly or indirectly, cond)ine or makeany contract with any other incorporated comj)any, foreign or domestic, through their >tockliolder> or the trustee^ or assignees of such stockholders, or with any co-partni'rshi|) or association of persons, or in any nianiu'r whatever, for the purpose of fixing the price or limiting the i)roduction or regulating the transportation of any product or commodity. The legislature shall pass hiws for the enforcement of this section by adetpuite penalties, and, in case of incorpo- rated companies, if necessary for that purpose, may ion is included in a statute, entitled, "An act to regidate the sale of farm, dairy, orchard or garden produce on conunission." This act was approved March 21st, 181>.'>, and is, as follows: The section here given is the secti<»n of chapter CXLVIII. of the Session 678 ANTI-TRUST LEGISLATION. [§ 215. Laws of \V;ishiiiirl()ii for 1SS"»: § n. It >li:ill he unlawful for persons cnirairt'tl in the business of coniniission mer- chants to enter into any eonihination, conspiracy or jjool for the purpose of artificially raisinij or depressing the mar- ket prices of any farm, dairy, orchard or jrarden produce, or of excluding from the market the produce of any particu- lar locality, — grown or manufactured by any person. § 215. Wiscorisiii Statute Proliibitiiijf Trusts and Com- binations ill Restraint of Trade. — The law of Wisconsin on this subject is entitled, "An act to prevent corporations organized under the laws of this State from entering into any combination, conspiracy, trust, agreement or contract intended to operate in restraint of any lawful trade or com- merce carried on in this State." This act was approved April 27th, 1897, and is, as follows: The people of the State of Wisconsin, represented in senate and assembly, do enact, as follows: § 1. Corjiorations organized under the laws of this State are prohil)itcd from entering into any combination, conspiracy, trust, pool, agreement or contract intended to restrain or prevent competition in the supply or price of any article or commodity in general use in this State, or constituting a subject of trade or commerce therein, or to control the price of any such article or com- modity, to regulate or tix the price thereof, to limit or fix the amount or (pianlity thereof to be manufactured, mined, produced or sold in this State, or to tix any standard or figure by which its price to the jniblic shall l)e in any man- ner controlled or established. § 2. Whenever the attorney- general of this State shall be notified or shall have reason to believe that any cor|)oration, organizeil under the laws of this State, has violated any jjrovision of section one of this act. it shall be his duty forthwith to address to any such corporation, or to anv director or ofliccr thereof, such in- (|uiries as he may deem necessary for tlic purpose of de- termining whether or not such corporation has violated any provisions of section one of this act, and it shall be the duty of suui'li iii(|iiiri('s, and in case such coritoral ion, or direc- tor or ofliccr I hereof, >hall fail or nei^h'ct to (h» >o wit hin sixty days from the rei'eij)t of siieh in(|uiries. unless such time is extended in writing by the attorney-general, it shall l)e the duty of the attorney-general to proceed against such corpoi'at ion. a'- lu'rciiiafter pro\iilee >hown, to bring an action for the purpose of vacating the charter and annullinir the existence of such corporation. >; 4. No per- son shall be excused from answering any of the iiupiiries herein providetl for, nor excused from attending and testi- fying, nor from producing any books, papers, contracts, agreements or documents in obedience to a sul)pcena issued by any lawful authority in any case or |)rocee(liug based upon or growing out of any alleged viohition of any of the provi>i<)ns of this chapter, or of any law of this State in re- gard to tru'^ts, monopolies oi- illegal combiual i('n>. on the ground of (»r for the reason that the answer, testimony, evideni'c, documentary or otherwise, re(juired of him, may tentl to criminate him, or subject him to a penalty i>v for- feiture, itiit no person >liall be prosecuted or subjected to any penalty or foi'feiture for or on account of any transac- tion, ujatter or thing concei'ning which he may answer, testifv oi- produce evidence, documeiitarv or otherwise, in ol)edience to any re(|uc-t under this chapter, or any sul)- jKcna. or either of them, in any Warranto.— The (n'igin of the writ of quo iif'irrrni/o is traceable to a very early i)eriod of English jurisprudence. The earliest case that has been cited is that of Darley v. The Queen, in A. D. IIHS.^ During the centuries which followed it c:imc into frequent ' Darlay v. The (^uoen. 12 CI. Ot Fin. 520. s^ 217.^ gro WAKIiANTO AND IN.llNCTION »;«i ii>e. aiitl was .soinoliiiics u.st'cl to .slrtMiulhe'ii the power of llie crown at the expense of the barons. But where these en- croachments had been in a deijree restrained by statute, an)biti()us princes resorted to the orifrinal writ of (juo irar- vnnto. Roth the oriirinal writ and the information in the nature' of the writ were remedies of the crown, and thouirh they were not infieciuently abused they have always been recognized as the proper remedies for the abuse or for the usurpation of franchises.' This writ is defined by 1 ••In times of feudal barbarity which accompanied and followed, for many years, the overgrown power of the nobles, there was constant occasion to apply the corrective of the quo icarranto. It was the only effectual remedy, even if it could be called a remedy in itself; for monopolies had be- come so numerous, and so fortified by interest and power, that the application of the writ depended in greater measure on the personal character of the prince, than moral submission to the law. This was especially so. when the writ was brought to bear upon manorial claims residing in the hands of the barons or lords, either temporal or spiritual. Looking at Keilwey's report of cases in Eyre, in time of the memorable king. Richard the Third, fol. 137 to Mrl. one would be led to believe that a good deal of his reign was devoted to this sort of judicial contest with his noV)les. Indeed, his jiredecessor. Edward the First, had found single writs too slow; and caused a stat- ute to be passed under which his noblemen were called by procla- mation and obliged to come by squadrons l)efore his immediate court or his justices in Kyre. when- ever they entered the county. 2 Reeves' Hist. i-io. Duhl. «'d. 1787: Com. Dig. (^uo Warranto (C. 2); L"rabb"s History of the Engl. Law, 174. 175. This bearing too much the appearance of plunder, another statute was passed somewhat mod- erating the proceeding, and bring- ing it back to about the common law course. 2 Keeves' Hist, ed., bi'fore cited. 221 ; Crabb. ?<< supra. This is the statute on which Sir Edward Coke has furnished us with a labored commentary in his 2 Inst. 294. Still, as appears from the history of the times, the writ continued to be a very common resort, and to have \nen almost avowedly used to strengthen the crown at the expense of the l)arons. It was sometimes extended even to lands, though Coke shows that its proper otHce respected fran- chises only. Pursued in such a spirit, it may be true that tlic consecjuences claimed were occa- sionally severe and disproportioned to the offenses alleged. The pur- suit being also sometimes more stringent, and sometimes more lax. wlien the case of the city of Lon- don came to lie argued, it is not surprising that authorities should be foimd conflicting on the ques- tion whether you could go merely for correcting some particular abuse, or claim a forfeiture of the whole franchise on that groimd. Several distinct franchises, though in the same hand, might be sev- 682 gUO WARRANTO AND INJINCTION. [§ 217, BlacUstoiu', as follows: "A wiit of '/no wy lU'tiU'ct or abuse. This was oi-jsrjiiallv rc'turual)k' ln'fore the kiiisr's justices at West- minster, l)iit afterwards only before tlie justices in Eyre, by virtue of the statutes of t/uo warranto; but since those jus- tices have given phice to the king's temporary commis- sioners of Assize, the juducs in the scNcral circuits, tiiis branch of the statutes hath h)st its effect ; and writs of (luo warranto jnust now be prosecuted and (k'termiiied before thi' king's justices at \\\'st minister. And in case of judg- ment for the defendant, he shall have an allowance of his franchise; but in case of judgment for the king, for that the party is entitled to no such franchise, or hath disused officers, judicial and ministerial. 'I'liere the takinuj of an ille<;al toll with proper instnnnents of pun \va- held siilHcient to work a total isbment. or oniitiinir legal punish- forfeiture of the city charter, with ments after conviction. PI. 8. 13. its thousand franchises. Vide, a lie winds up with the general re- summary of that case. 2 Show. 2tJ3 mark of Lord Holt, which I before to 279, marg. page and note {t), cited from 12 Mod, 271. Underthe Loud. ed. 1794. The entire roll is same title (A) pi. 3. he lays down given in (5 Harg. St, Tr. App. 15 to what must be a very general if not 39, including at the last page an universal rule, that franchises judgment of general and absolute cannot be divided if they are en- seizure. The corporate abuse tire. To all the cases put he cites which is to work a forfeiture, the authorities. In p]arl of .Shrew- therefore, need not be of any par- bury 's Case, 9 Kep. 50. much of ticular measure or extent. The the doctrine as noticed in Viner, writ and information were known is summed up and what acts of remedies; and in the historical non-feasance shall operate as a sketch already given, will be seen forfeitine is examined with refer- to have been sometimes pushed be- ence to the nature of the franchise, yond their proper bearing against In Baggs' Case, 11 Rep. 98.it is the subject. So far they should i»e said of misfeasanee and non-feas- taken wiih grains of allowance, ance, that in order to found a pro- Sometimes, however, they wore ceeding for forfeiture, there mu.-t unreisonably narrowed in the be an act or such neglect as is hands of weak princes, but they tMnt.-imotmt : and an instance of have l>een steadily recognizfd .ns the last is a game keeper, and game in general of most saltUary effect being killed in consequence of his in favor of the commonwealth, and negligence. There he shall lose in a view to this have been sus- his office. The ancient authorities tained by the courts as important when looked into on the point of remedies, in nature of right." divisibility, and applied to a ror- Cowen. •!.. in I'rople v. Bristol it poration, must now all be received Kenssclaerville Turnpike Co., 23 subject to the city of London. VVend. 222. 240. 684 iilO WARRANTO AM) IN.irNTTION. [§ 218. or abused it, the fr;iii Anne, cliap. 20. § lM^.J *a <> WARRANTO AND IN.UNCTION . (585 looked. And, tir.st, these special })i()ceediMiis ujxmi iufonim- tion nuist not l)e eonfouiuled with :i civil action, under (ien. Stat. 187 Anne, chap. 20. The scope of the remedy furnished by it is to forfeit the franchises of a corporation for misuser or non-user. It is, therefore, necessary, in order to secure a judicial forfeiture of the resi)ondent*s charter t(j show a misuser of its franchisi' justifying such a f(»rfeiture; and, as already remarked, the object being to protect the public, and not to redress private grievances, the niisu.ser must be such as to work or threaten a substan- tial injury to the public, or such as to amount to a violation of the fundamental condition of the contract by which the franchise wa> granted, and thus defeat the purpose of the grant ; and ordinarily tin- wrong or evil must be one remedi- able in no other form of judicial i)r()ceeding. Courts always proceed with great caution in declaring a forfeiture of franchise, and re(|uire the prosecutor seeking the forfeiture to bring the case clearly within the rules of law entitling him to exact so severe a penalty. It is also neces- sary to notice the distinction frequently overlooked between franchises and powers. The definition of a 'franchise,' 686 <.>n> WAIMtANTO AM) IN.Il'NCTION . [§ 218. given l)v Fiiifli, ;id()i)t<'(l Wy Blackstono, :iiul accepted bv every authority sim-c, is 'a royal privilciro oi- hraiu-h of the king's prerogative, suhsi.stmg in the hands of a siil)ject.' To a franchise the right possessed must l)e such as cannot be excused without the express permission of the sovereign power, —a privilege or immunity of a public nature which cannot be leorallv exercised without lejrislative grrant. It follows that the right, whether existing in a natural or arti- ticial person, to carry on any particular business, is not necessarily or usually a franchise. The kinds of business which corporations, organized either under title 2, chap. 34, or under the Act of 1873 are authorized to carry on are powers, but not franchises, because it is a right possessed by all citizens who choose to engage in it without any legis- lative grant. The only franchise which such corporation possess is the general franchise to be or exist as a corporate entity. Hence, if they engage in any l)usiness not author- ized b}' the statute, it is ultra vivcs, or in excess of their powers, but not a usur})ation of franchise not granted nor necessarily a misuser of those granted. Acts in excess of power may undoubtedly be carried so far as to amount to a misuser of the franchise to be a corporation and a ground for its forfeiture. How far it nuist go to amount to tlii'- tlu' courts have wisely never attempted to detine, excc))! in very general terms, preferring the safer course of adopting a gradual pi'ocess of judicial inclusion and exclusion as the cases arise. But we think it may be safely stated as the general consensus of the authorities that, to constitute a misuser of the corporate franchise, such as to warrant its forfeiture, the tilira vires acts must be so substantial and continued as to amount to a clear violation of the condition upon which the franchise was granted, and so derange or destroy the business of the corporation that it no longer fulfills the end for which it was created. But, in case of excess of powers, it is only where some public mis- chief is done or threatened that the State, by the attorne^'-general, should interfere. If, as between the comjjany and its stockholders, there is a wrongful applica- ^ 218.1 gUO WARRANTO AM) INJINC TION , (iS7 tion of the capital, or mi illegal iiu'uiriiig of liabilities;, it is for the stockholders to complain. If the comi)aiiy is enter- ing contracts nUra vires, to the i)rejutlice of })ersons out- side the c()ri)oration, such as creditors, it is for such \)vi'- sons to take steps to protect their interests. The mere fact that acts are M//»-rt vires is not necessarily a ground for inter- ference by the State, especially by quo warranto, to forfeit the corporate franchises. It should also be borne in mind that acts ultra vires may justify interference on the part of the State by injunction to prohibit a continuance of the. ex- cess of powers, which would not be sutticient ground for a forfeiture in proceedings in quo ivarranto, and hence many of the numerous authorities cited by relator, being of that class, arc not entirely in point here."^ ' State V. Minnesota Thrcslier Mfg. Co.. 40 Minn. 213. 224. "The code rules of pleadino; do not apply to proceedings in tbe nature of quo tcarranto. Pleading in such cases is governed by the rules in force at the time of thf adoption of the code. At common law. unaided by statute, double plead- ing was not allowable; and as the proceeding by information, in the nature of 7«c» warranto, was re- garded in England as a criminal prosecution, as well to punish the usurper by fine for the usurpation of the franchise, as to oust him or seize it for the crown, such pro- ceeding was held not to be em- braced in tbe statute of 4 .\nne. chap. 1<>. § 4, allowing defendants to plead more than one plea. Cole on Criminal Informations, 112, 113. 129; Rex v. Newland. .Sayres. Ort; Rex V. Leigh, 4 Burr. 214(3. In New York, the same view has been taken as to the nature of the pro- ceedings. People V. President, etc. Manhattan Co., 9 Wend. 337. and note to People v. Richardson. 4 Cow. 113; People v. Jones, 18 Wend. (i()4. But in tills State the proceeding has been divested of its criminal character, and is treated by the statute merely in the nature of a civil proceeding. No punishment is authorized to be intlii'ted by tine or otherwise, ex- cept where the party is adjudged guilty of contempt in disobeying the order of the court."' Stale v. McDaniel. 22 Ohio St. 354. 3(;i. The jurisdiction and power of the courts was not affected by the provision of the Code of Procedure (§ 428), abolishing the writ of quo icnrranto and proceedings by in- formation in the nature thereof; it is only the form of the i)roceed- ing that was done away with. The remedies theretofore had in those forms may now be obtained by civil action. People v. Hall. 80 X. Y. 117. "A writ oi quo xcarranto is not a writ ol right. P2ven our Act of Assembly of June 14. 1S3G. recognizes this. • * * Before the Act of 1836. informations in the nature of quo xcarranto, at the instance of a private relator were always required to be with leave 688 gro WARRANTO AND INMINCTION. [§ :^li» § 211). Grouiul «»f ProceedintJfs Aji^aiiist Monopolies and IndiiKti'ial Goinbiuations. — ,Iudi;inent against a corpo- ration under procooding-s in ([ikj warranlo is an extreme penalty. It is a death sentence, and is pronounced only where the action complained of is clearly in violation of the terms of its charter. The rule by which the courts are governed is stated by Mr. .Justice Finch, with great clear- ness and force, in the case of The People v. The North River Sugar Kotining Company, as follows: "The judg- ment sought against the defendant is one of corporate of the court, and leave was not granted except on application of a competent relator. No one was held competent who had not a sufficient intt-rest to warrant his In- tel ference. and our statute has made no change in this particular. Its second section gives to courts of common pleas concurrent juris- diction with the supreme court in tive classes of cases. The first tliree relate to municipal and other corporate offices, and the act pro- vided that, in any such case, the writ miglit be issued upon the suggestion of the attorney-general or his deputy in the respective county, or of any person or per- sons desiring to prosecute the same. The other two classes re- late to usurpations of corporate rights or forfeitures of corporate privileges. As the act was re- ported by the commissioners to revise the Civil Code, it was drawn so as to provide that writs in such cases should be granted only upon the suggestion of the attorney-general or his deputy. The legislature, however, altered the provision, and enacted that writs in these cases, as in the others, might be issued upon the suggestion of any person or persons desiring to prosecute the same. But the statute of it Anne allowed information at the relation of any person desiring to sue or prosecute them, and under that statute the rule was that a private relator must have an interest. Our act which substautially incorporates the provision of the British statute has received the same construction. This court has construed the words 'any person or persons desiring to prosecute the same' to mean any person who has an interest to be affected. They do not give a private relator the writ in a case of public right involving no indi- viciual grievance. This was ruled in Commonwealth v. Allegheny Bridge Company. 20 I*a. St. 1S5, in Murphy v. Farmers' Bank, 20 Pa. St. 415, and Commonwealth v. Railroad Co.. 20 Pa. St. 518. And it is to be observed that the legis- lature has placed all five classes of cases enumerated in the act on the same footing in this particular. If a private relator cannot sue out a writ to enforce a forfeiture with- out having an interest, the statute gives him no greater right when he complains of usurpation of a county or township office." Com- monwealth v. Cluley, 5G Pa. St. 270; s. c. 9i .\m. Dec. 7.i. 70. '"A quo warranto information is a criminal proceeding only in name and in f()nii. in its nature it is § 21i>.] gUO WARRANTO AND IN.HNrTION. ()8i> death. The State, which creatctl, asks us to (.lestroy ; and the [)enalty invoked represents the extreme risfor of the law. Its intlictioM must rest upon grave cause, and l»c wairaiitcd by material misconduct. The life of a corporation is indcctl less than that of the humblest citizen, and yet it envelopes great accunuUations of property, moves and carries in large volume the business and enterprise of the people, and may not be destroyed without clear and abundant reason. That would be true even if the legislature should debate the de- struction of the corporate life by repeal of the corjioratc charter; but it is beyond dis[)utc where the State summons the offender before its judicial tribunals and submits its complaint to their judgment and review. l»y that process it jissumes the burden of establishing the charges which it has made and must show us warrant in the facts for the relief which it seeks. Two of the charges preferred in the com- plaint have tlropped out of sight. They were of liitle im- portance, and have been prudently dismissed from the inquiry for that reason; and we are left to consider the om? grave and serious accusation to which al()n<' the jjroofs and purely a civil proceeding. See 2 is true, is said to be u itti a rupias Kyd. on Corp. 439; The Kinj^ v. prufuic. Hut this is more llie form Franeis, 2 T. li. 484. In the Ian- than tiie substance of the jiidijmenl j^uage used in The King v. The as in all civil actions founded on Mayor, etc. of Cambridge, cited in tort; for when tlie proceedings 2 Kyd. on Corp. 483, the corpora- are by writ of qnn warranto, the tion is called upon to answer to no conclusion of the judgment is. that crime or offense, but only touching the defendants be in mercy, etc., as its liberties. The primary and in civil actions founded on con- only material object of the pro- tract. 2 Kyd. on ("orp. 409. The ceedings is not the inlliction of tine authorized by the Act of 1819. pains or penalties as in »;riiiiinal p. l")!!, to be intlicted in ijuo icar- proceedings. but to deprive the >7ni7. 272. The conclusion of the judgment, it 44 ()i)() giO WARRANTO AND IXJINCTION. [§ 219. argument have been directed. That accusation is adetjuate to the purpose for which it was framed, but upon two con- ditions, which dictate the line of inquiry and hmit the area of discussion. It appears to be settled that the State, as prosecutor, must show on the i)art of the corporation accused some sin against the law of its being which has i)ro- duced, or tends to produce, injury to the public. The transgression must not be merely formal or incidental, but material and serious, and such as to harm or menace the public welfare; for the State does not concern itself with the (juurrels of private litigants. It furnishes for them suf- ficient courts and remedies, but intervenes as a party only where some i)ublic interest requires its action. Corpora- tions may, and often do, exceed their authority where only private rights are affected. When these are adjusted all mischief ends and all harm is averted. But where the transgression has a wider scope and threatens the welfare of the people, they may summon the offender to answer for the abuse of its franchise or the violation of its cori)orate duty. The code of civil procedure authorizes an action for that purpose when the corporation has 'violated any pro- vision of law whereby it has forfeited its charter or become liable to be dissolved by the abuse of its powers.' In Thompson v. Pe()i)le the ground of forfeiture was tersely described as 'some misdemeanor in the trust injurious to the ))ublic:' and as recently as the case of Leslie v. Loril- lard Nve said, 'in the granting of charters the legislature is presumed to have had in view the i)ublic interest; and |)ub- lic policy is concerned in the restriction of corporations within chartered limits; and a departure therefrom is only deemed excusable where it cannot result in prejudice to the l)ubli('.' "' ' I'eople V. Xortli Kiver Sugar Where all, or a majority of tlie Refining Co., 121 N. Y. oS'i, G08. stockholders eoniposing a corpo- See also People v. Bristol, 23 ration, do an act which is designed Wend. 23.5; Ches., etc. Co. v. to affect the property :ind business Baltimore, etc. K. Co.. 4 Gill & .1. of the company, and which, 1; Leslie v. Lorillard, 110 N. Y. through the control theirmembere r)31: s. c. IS N. Fj. lleii. :{tatiites. had become essentially civil actions, commenced and i-onducted in the name (^f a public otticer, but ri-ally for the mere ascertain- ment and settlement of private rights, is a (jueslion which might justify some hesitation and consideration, if it were necessary now to determine it. The legislature, it is cer- tain, has furnished this court with none of the machinery extent and for sucb purpose do not not conferred by. but wliieb are come witbin tbe autbority to own wbolly foreign to. tbat instrument, tbe jiroi)erty necessary for the it has thus rendered itself liable to purpose of carrying on a general i)rosecution by the State by quo distillery business. In actjuiring irarra«t'(, and we are of the opinion distillery properties in the manner tbat upon the facts shown by tbe and (or tbe j)urposes shown by the information the judgment of information, the defendant has not ouster is clearly warranted." Dis- only misused and abused tbe tilling and Cattle Feeding Co. v. powers granted by its charter, but The People, 156 III. 44S. 401. has usurped and exercised powers 220.] t^l») UAKKANTO AND INMINCTK )N . 693 for trvincj issues in fuct, and in practice siioh trials are altogothcr without precedent. These 'informations are at- tended with all the forms, and nuist nroorress through all' the stages incident to any other writ. There are pleas and demurrers, issues in law and in fact, trials by jury, motions for new trials in arrest of judgment and writs of error. The issue of fact by the common law must be tried in the county where the franchise is situated. If such a proceeding is en- tertained by this court, it must be conducted solely accord- ing to the forms of the common law, for neither the statute of W. & M. nor of Anne is in force here; nor does our own statute apply to the supreme court, but is exclusively con- fined to the circuit courts."^ In New Jersey the same rule 1 State V. Stewart. 32 Mo. 379, 3S4. "As the information in this case was tiled at the relation of a private person, and as it further appears from the pleadings in the cause that the relation and re- spondent are rival claimants for the ollice of register of the city of Lexington, and that the proceed- ing is, therefore, nothing more than a contest over the title to said ottice, we are of opinion that the writ of quo loarranto has been im- providently issued, and the pro- ceeding will, therefore, be dis- missed. We see nothing in the circumstances of this case of such an exceptional nature as to induce us to dei)art from our long estab- lished custom to decline original cognizance of causes of this char- acter. State ex rel. Young v. Bus- kirk. 43 Mo. Ill, and cases there cited. They can be tried with much less expense and inconven- ience by the inferior tribunals having jurisdiction thereof, and the condition of our docket is not such as to invite accessions tliereto by the unnecessary exercise of our original jurisdiction." State v. Claggett. 73 Mo. 3S8. The su- preme court is strictly an appellate tribunal, and has no original juris- diction except in cases of habeas corpus; and consequently is not empowered to issue a writ of "In People v. Perry (79 Cal. 106), we said: 'Quo icarranto was a case at law; it afforded the legal remedy for the usurpation of an oHice, and we think this court retains juris- diction of the case, notwithstand- ing the legislature may have changed the procedure, enlarged the remedy, and given it a new name. To hold otherwise, would be to admit a power in the legis- lature to abridge our jurisdiction, and take from parties the right of appeal, l)y the easy device of a change of procedure, in many cases, where the right and juris- diction are unquestioned.' .Furls- diction in this class of cases having been conferred on the superior court by the constitution, such jurisdiction could not be taken away or abridged by the legisla- 694 QUO WARRANTO AND IN.Tl NCTION, [§ 220. is nmintained. In a leading case, the coiii-t said: "It is an established piin(ii)I(' (»f the law concerning corporations that the charter of a cor})()ration will not be declared to be for- feited, for misuse or abuse of its powers, except in a pro- ceeding instituted directl}' for that purpose, by the govern- ment irranting the charter. In such matters the courts will never act on the relation of any individual, and the reason is that the matter is one which concerns the State alone. The State may exact the forfeiture or waive it, as may seem best to it for the public interests. The (piestion whethei- a corporation has forfeited its franchises or not is one over which the common law courts have exclusive jurisdiction, and over which this court has no control whatever in the absence of lesfislations."' In Minnesota it has been held that the ture. and a statute existing at the time the constitution was adopted conferring jurisdiction on some other tribunal was superseded by such constitutional provision, so far, at least, as it could be held to have conferred exclusive jurisdic- tion upon such tribunal. Haight V. Gay. 8 Cal. 300; s. c. 48 Am. Dec. 323; Montrose v. State, 61 Miss. 42!»; High on Extraordinary Legal Remedies. § Gl.")."" People V. Bingham. 82 Cal. 238. 242. The supreme court of this State is limited in its powers to the decis- ion of such questions as properly arise in the due course of law, in a judicial proceeding within its juris- diction. Hence, in a proceeding in (juf> tcarranto to try the title of per- sons to an olhce. held under the provision of an act of the General Assembly, when its validity is (jues- tioned, it is only such provisions of said act as affect the title to the office, that are properly before the court for its judicial settlement. State V. Baughman, 38 Ohio St. 455. The legality of the organization or formation of a corporate body, such as a drainage district and its right to perform corporate acts or functions when it is a de facto corpo- ration, cannot be questioned by bill in chancery. The proper remedy to test the legality of a corporation, and its power to per- form certain acts assumed by it. is by information in the nature of a quo \carranto. Kergivin v. Drain- age Commissioners. 115 111. 347. ' Jersey City Gas Light Co. v. Consumers' Gas Co.. 40 X. J. Eq. 427, 431. The remedy by informa- tion in the nature of quo warranto. though criminal in form, is in effect a civil proceeding. A stat- ute abolishing the common law jiroceeding by information in the nature of qiio warranto, and au- thorizing an action to be brought in cases in which that remedy was applicable, makes the proceeding a civil action for the enforcement of a civil right, subject to removal from State courts to the courts of the United States when other cir- cumstances permit. Proceedings by a State against a corporation created under its own laws, in the § 220. l^ro WARRANTO AM) I N.I INCTION , (;:»f) supreme court has jurisdiction by quo warranfo to enforce the forfeiture of the charter of a corporation.^ In the de- cision in this case, the court said: "In this case the juris- diction of tiiis court to issue writs of f/uo trarrauto is for naliut' of quo warranto for the abondoniiient, relinquishment and surrender of its powers to another corporation with which it has been consolidated under a law of the United States, and proceeding's against the directors of said con- solidated company for usurping the powers of such State corpora- tion are, when in the form of civil actions, suits arisinor under the laws of the United States, within the meaning of the acts regulating the removal of causes. When a suit brought by a State in one of its own courts against a corpora- tion amenable to its own process, to try the right of the corporation to exercise corporate powers within the territorial limits of the State, presents a case arising under the laws of the United States, it may be removed to the Circuit Court of the United States, if other juris- dictional conditions exist. In view of the practical construction put upon the constitution bv Conirre.ss and the courts in the statutes and decisions, the court is unwilling to say that it is not within the power of Congress to grant to inferior courts of the United .States juris- diction in cases where the supreme court has been vested by the con- stitution with original jurisdiction. Ames V. Kansas, 111 U. S. 440. ' State V. St. I'aul it Sioux (.'ity Ry. Co.. 35 Minn. 222. The right of the supreme court to issue the writ of quo xcarrantn is recognized in general terms by our statutes. — the occasions are left to be deter- mined bv common law rules. .Vnd by those rules, it is apparent the writ is the appropriate mode in which to try any alleged usurpa- tion of offices, or franchises incon- sistent with the'State sovereignty. State V. Boston, etc. K. R. Co.. 25 Vt. 433. "Original jurisdiction in proceedings in 7«o irarrautu Is conferred upon the supreme court by the constitution of the State. (Const. Art. 3, § 3.) And this jurisdiction so conferred is just what was understood to be nuo warranto jurisdiction at the time when the constitution was adopted. As throwing light upon the last proposition, see I.eavenworth Co. V. Miller. 7 Kan. 502; The State v. W. W. Ky. Co.. 34 Wis. 197. This jurisdiction ("annot be abolished, or increased, or diminished, by the legislature. The State v. Allen, 5 Kan. 213; Graham v. Cowgill, 13 Kan. 114; State v. Graham, 13 Kan. 13G. Of course, the legislature has the power indirectly to affect the exercise of this jurisdiction, as it has the power directly or indi- rectly to affect almost every other matter or thing coming within the purview of the constitution. It may increase or diminish, or create or destroy any particular instances in which this jurisdiction may be exercised; but it cannot increase, or diminish, or abolish, or destroy the jurisdiction itself. Thus it may create additional offices, or additional grounds for forfeiture, and thereby increase the number of instances in which the court may exercise its jurisdiction: or it niav abolish some of the offices ()iHi QIO WARRANTO AND INMINCTION. [§ 220. the first time hroutrht in (luestion. Tlie act conferring on tlie court the power 'to issue the writ' was passed in 1876. The constitution (§2, art. G), prescribes that the court shall have 'original jurisdiction in such remedial cases as may be prescribed by law, and appellate juris- diction in all cases, both in law and in equity, but there shall be no trial by jury in said court.' It is evident that the term 'remedial cases' has here but a limited signification, and cannot extTrt?»to jurisdiction, as tjrounds for forfeiture already ex- quo icarranto jurisdiction was un- istinor, and thereby diminish the derslood and known at the time of number of instances in which the the adoption of the constitution, court may exercise its jurisdiction, this court may take jurisdiction of In this way it may really create or the case and determine the same, destroy instances in which the whatever may be the enactments jurisdiction may be exercised. Hut of the lesjislature upon the subject." within these limitations whenever .State v. Wilson. 30 Kan. GGl, GGf). a proper case arises for the exer- L>L>1.] Q\0 WARRANTO AND 1N.IUN(;TI0N. ♦;n7 when the Act of 187G was pu.s.sccl, and of lunirsc IIr' k'liis- lature, in passing that act, must have intended that the court should have, and also should, in proper cases, exercise jurisdiction by quo loarranto, notwithstanding the pro- visions of those ehai)ters. As between the remedy in this court by tjuo vavra^ilo and that by action in the district court, it is for the attorney-general, to whom the interests of the State in such cases are intrusted, to determine which he will pursue."^ § 221. Who May File an Information. — The misuse or the non-use of its franchise by a corporation is an offense against the public. Theoretically, at least, a franchise is granted as a public benefit. In accepting a franchise a corporation assumes certain public obligations, and it for- feits its franchise only as these obligations arc not dis- charged. The public there is the party to bring a suit for the forfeiture of a franchise, and the j)ublic can act in such a case only through the attorney-general. A private citizen will not have leave to file an information unless he has some special ground of com])laint. In order to obtain such per- mission he must have some cause of coinjilaint that is not common to other citizens similarly situated. But when in- dividuals and not the public are affected by the abuse of a franchise, a private person may obtain leave of the court to tile an information. The court has power to grant or refuse siu'h a motion in the case of a private citizen, i)ut the attorney-general or a prosecuting attorney may institute t/uo wanrnifo proceedings, rirfvtc officii, and without the permission of the <-ourt.'- In some of the States there are ' Stiite V. St. Paul it Sioux City .F. I,, r.l.'); rattfison v. [luhbs. (i."> Ry. Co., 3.") Minn. -i-i-J. N. Car. IIH; Wiiijht v. .Mien, 2 * Coinnionwealih v. Lexinjjton. Tex. IHS; State v. Schneirle, 5 etc. Turnpike, (! H. Mon. 307; Com- Rich. 299; State v. Debe.sseline, 1 inonwealth v. Union In.s. Co.. 5 McCord, r)2; Cleary v. Debesselino, Mass. 230; Houston v. Neusc 1 McCord, 3."); Teoplo v. Dernille, River, etc. Co., 8. Jones. 476; Com- 1.') Mich. 104; State v. llaiimer, 42 inonwealth v. Hurrell. 7 Pa. St. X. .1. b. 435; .State v. .Fenkins, 2.") 34; Harrison v. (i reaves, no Miss. Mo. 484: Churchill v. Walker, 08 453; State v. McConnell, 3 Lea, Ga. G81 ; Barnum v. Oilman. 27 332; Gibbs v. Somers" Point, 49 N. Minn. 4GG; State v. Bieler. 87 Ind. 698 QUO WARRANTO AND INJUNCTION. [§ 221. statutes authorizing any person who has an interest in the corporation to request the attorney-ojeneral or other prose- outing officer to institute proceedings, and in case of his re- 320; State v. London, 91 Ind. Sni ; Miller v. Palermo, 12 Kan. 14; Demarest v. Wickhuiu. 63 X. Y. 320; Robinson v. Jones. 14 Fla. 256; State v. Stein, 13 Neb. 529; State V. Tipton. 109 Ind. 73: Com- monwealth V. McCarter. 98 Pa. St. 604. "In England, the attorney- general could file (jiio warranto and other informations at his discre- tion. But in practice he seldom did so except where the preroga- tives of the crown were specially concerned. Where the interests of individuals were intermingled with those of the crown, the master of the crown office in Kings" Bench was the usual ofiicer to exhibit in- formations. In the exercise of this function he stood in a rela- tion to individuals similar to that of the attorney-general to the crown. Cole on Informations, 110; Goddard v. Smithett, 3 Gray. 116. But in 1693. Statute of 4 and 5, Wand.. M., chap. 18, relating to trespasses and batteries and other misdemeanors, was passed, for the purpose, as Mr. Justice Wilmot says, in Rex v. Mursdon, 3 Burr. 1817: 'To prevent the master of the crown ofiice from vexing and oppressing the subject, or without sufficient ground and foundation; so that the act was made to check and control the power of the master of the crown office; not to give him a right to exercise a power which he never exercised before; laint filed by a private citizen for the dissolution of a corporation under the code pro- visions relating to "actions for the usurpation of an office or franchise," alleging that the district attorney refused the to bring suit, but stating no other or different interest of the relator in the result than that common to every citizen, is insufficient to support the action, and a demurrer thereto for such cause may be properly sustained. The general rule is that prosecutions for wrongs done to the public nmst be instituted by the State, through its properly authorized agents, while an individual can sue only for injuries peculiarly affecting himself,'- In Illinois it has been held that if a public wrong is done by the abuse of a franchise, and no private injury appears, a proceeding by quo war- ranto nuist be by the i)ublic i)rosecutor or other authorized agent of the State, and a private citizen cannot in such case have the aid of this extraordinary remedy. But in cases affecting only private rights, and which merely affect the administration of corporate functions, and not the existence of the corporation, the court may interpose upon jjroper showing. The attorney-general or State's attorney, if the information affects public rights only, may act at the in- stance of any individual who may furnish him the requisite proofs to authorize him to act, whom he may name relator, but he must acj in his official capacity, under a sense of official duty, and not merely lend his name for the use of a the Kino;s" IJcnch, was the master he is not there as attorney-general, of the crown oflU-e. The statute exercising in the cause that power of 9 Anne merely regulated the which sucli officer had at common practice in some cases of this latter law, and which he still wields class, requiring the parties con- when he appears ex officio. Attor- cerned to be named as relators and ney-General v. Delaware, etc. K. to become responsible for costs, R. Co., 38 N. J. L. 282, 28G. etc. Our statute substitutes the • People v. Grand River Bridge attorney-general for this master of Co., 13 Colo. 11; s. c, 21 Pac. Rep. the crown office and extends the 898. range of the act; but in such case 'People v. Grand Kiver Bridge the attorney-general is only nomi- Co., 13 Colo. 11; s. c. 21 Pac. nally a party, — a mere officer of Rep. 898. the court. — subject to it-s control ; § 222.1 ^^^^ WARRANTO AND INJUNCTION. 701 private parly.' In the case of Murphy v. The Farmers' Bank of Schuylkill County of Pennsylvania, the court said: "The authorities show that they do not give a private rela- tor the writ of fjtio warran(<> in a case of public prerogative involving no individual grievance. On this point the authorities are full, direct and harmonious. The usurpa- tion of an office, established by the constitution, under color of an executive appointment, and the abuse of a public franchise under color of a legislative grant, are public wrongs, and not private injuries, and the remedy by quo warranto, in this court at least, must be on the suggestion of the attorney-general, or some authorized agent of the commonwealth. For the authorities I refer m^'self to those cited in the argument of. the respondent's counsel. They esral)lish this as the uniform construction in questions in- volving the existence of a coiporation. \\\ cjuestions in- volving merely the administration of corporate functions, or duties which touch only individual rights, such as the election of otticers, admission of a corporate officer or mem- ber, and the like, the writ may issue at the suit of the at- torney-general, or of any person or persons desiring to prosecute the same. » * • These are general views which harmonize with the doctrine of the cases, and, there- fore, whilst I recogui/.e the right of any relator to have a es is governed by the rules in force , at the time of the adoption of the code. At common law, unaided by statute, double pleading was not allowable; and as the proceed- ing l)y information, in the nature of quo warranto, was regarded in England as a criuiinal prosecution, as well to punisli the iisui pci- by tine for the usurpation of the fran- chise, as to oust him or seize it for the crown, such proceeding was held not to be embraced in the statute of 4 Anne. chap. 16, § 4. allowing defendants to plead to more than one plea. Cole on Criminal Information, 112, 113. 129; Rex v. Newland, Sayres. 96; Rex V.Leigh. 4 Burr. 2146. * * * But in this State the proceeding has been divested of its criminal character, and is treated by the statute merely in the nature of a civil proceeding. No punishment is authorized to be inflicted by tine or otherwise, except where the party is adjudged guilty of con- tempt in disobeying the order of the court." State v. McDaniel, 22 Ohio St. 354, 360. "'In proceed- ings by information in the nature of quo tcarranto. the range of in- quiry is limited to the charges in the information; and matter set up by way of plea is only material in so far as it shows warrant in law for the exercise of the authority alleged in the information to be usurped. State v. City of Cincin- nati. 23 Ohio St. 445, 465. A plea is a sudii-iut response to an infor- mation in the nature of a quo tcar- ranto, if it sets up facts sliowing a right to exercise the otlice or fran- chise alleged to have been usiuped. Where a statute prescribes a qual- ilication for exercising an office or franchise, the plea need not be framed in the words of the law. It is sullicient if the facts set up show clearly the riglit. State ex ril. V. .Tones. l(i Kla. 'M)\\. --In MikI § 222.] QUO WARRANTO AND INJUNCTION. 703 n;inu\ its loijal existence as a corijoratioii is thereby atl- mitted. ^^'llel•e the eorporatii^ii appears and makes answer by its corporate name, it is not competent for the State, by Creek D'aining Co. v. State, 43 Ind. 23(5. the court says: 'This first paragraph was clearly bad. It is not against certain per^^ons claiming to be a corporation, but against the corporation by its cor- porate name. It i.s brought into court as a corporation to answer on allegation that it is not and never was a corporation. When a corporation is brought into court by its corporate name, its exist- ence is thereby admitted.' In this case the corporation being made a party, its existence is admitted. It must follow, therefore, that there is no cause of action stated as against it. But there are other defendants sued jointly with it, and charged with having jointly with such corporation usurped the rights of a corporation, etc. There is no question made in the record or in the briefs as to misjoinder of these parties. But we are clear that the [)eople cannot bring both a corjjoralion and the individuals who t'omi^ose it before the court, by information in the nature of quo warranto, and claim the non- existence of the corporation thus brought before the court, and that the other defendants jointly with it are claiming to be and exercise the rights and privileges of such corporation. To permit such a course would be subversive of all rules of pleading. If we are right in the position taken, that by suing the corpoiation as such its exist- ence is admitted, this is an end of the matter, so far as this count of the complaint is concerned, for the reason that the whole force of its applications, as against the indi- vidual defendants, rests upon the sole ground that no such corpora- tion exists. If the complaint can be defended on the ground that it admits that such a corporation once existed, but has ceased to exist, it is o|)en to the objection made to it that it does not state the facts .showing how and by what means it has ceased to exist. We are of the opinion that it would be sufficient, in an action against individuals charging that they are wrongfully claiming to act as a corporation, to allege, in general terms, that there never was such a corporation. In such ca.'e, the allegation that there never was such a corporation covers the whole ground. Nothing can be added to this general statement, which is itself an allegation of a fact. We are equally clear that where the existence of the corpo- ration is exi)ressly averred, or is admitted, it is not sufficient to al- lege that it has ceased to exist. The facts showing that its exist- ence has terminated must be set forth. And if the claim i>, that the corporation is acting as such, but the proceedings under which it is acting are defective, the facts showing that it is so claiming to act, and tiie dcfccls claimed to exist should beset outspecitically.'* People V. Stanford. 77 Cal. 360, 31)4. See also State v. Kupferle. 44 Mo. l.'>4; State v. Beecher, l.'jOhio. 723; People v. Bartlelt. «5 Wend. 422; Hex v. Leigh, 4 Burr. 2143; People v. Maynom. .> Mich. 14(»; State V. (ileason. 12 Fla. 2(35; Thompson v. People. 23 Wend. 538. 704 gi O WARRANTO AND INJUNCTION. [§ 222. replication, to deiiv tiu' corporate existence of the de- feiulaiit. If the franchise is to be broiiirht into the (lues- tion, the proceedings should be against the individuals who have usurped it. Where the charge is that of an unhiwf ul use of a franchise by a corporation, the information should be against the corporation, but if the charge is that of usurping the rights and privileges of a corporation, it should be directed against the individuals who have committed the offense. If the corporation has no legal existence, the parties who are setting up the claim are the offenders and not the alleged corporation. ^ In a recent and leading case in Illi nois, the modern rule is stated by the court, as follows : "The tendencv of the courts in modern times beinir to re- gard an information in the nature of a quo iran-anto in the light of a civil remedy, invoked for the determination of civil rights, although still retaining its criminal form and some of the incidents of criminal proceedings, the better doctrine now is that the i)leadings should conform, as far as possible, to the general principles and rules which govern in ordinary civil actions. And this is especially so in this State in view of section 10 of our Practice Act, which provides that in cases of this character it shall be suflicient to sum- mon the defendant to ai)pear and answer the plaintiff in an action of (/uo warrcotto, and that the issues shall be made up by answering, pleading or demurring to the petition, as in other cases. It has been repeatedh' held in this State that in proceedings of this character the defendant must ' I)raininc rendered; which is equivalent to judgment of seizure at common law. If, therefore, the information in this case had for its object to oust the defendants from acting as a corporation, and to test the fact of their incorporation, it should have been filed against individuals: if the object was to effect the dissolution of a corporation which had had au actual existence, or to oust such corporation of some fran- chise which it unlawfully exercised, then the information is corrects filed against the corporation. The distinction is well exemplified by Sir Robert Sawyer, in The King v. The City of London.^ He says the rule iis this: *\MK'n it clearly ai)pears to the court that a liberty is usurped by wrong and upon no title, judgment only of ouster shall be entered. But for the want of :in owner, on the dissolution of the corporation, — more tenable as a foundation on which to sustain this judgment. For the ownership of the corpora- tion does not cease until its disso- lution. And whether it is dis- solved by the judgment of seizure or not, until the State has execu- tion on that judgment, is not here very material. For if the corpo- ration is dissolved by the judg- ment, the judgment must be regu- larly entered, and have its full effect, before the dissolution takes place; and it is not till then that the property can be said to be without an owner. The loss of the property to the corporation is a consequence of the judgment; and it is a contradiction of the first principles of reason. — a complete reversal of effect and cause. — to make such loss of property a part of the judgment. That which can- not exist until after judgment, can never be the subject-matter on which the judgment is given. But the better opinion seems to be, that the corporation is not dis- solved by the judgment of seizure; but that it exists untiTthe fran- chises are seized by execution on that judgment. See 2 Kyd. on Corp. 409. 410. and the authorities there cited. Consequently, the last shadow of a support for this judg- ment on this ground must vanish. '" Holman. .1.. in State Hank v. State, 1 Blackf. -Jd?, 280. ' King V. City of London, 2 T. li. § 22."i.] <}[() AVAKRAXTO AND INMrXfTIDN , 707 when it appears that a liberty has been granted, but h:i> been misused, judijnient of seizure into thekinoj's hands shall be given.' The reason is given: that which came from tin" king is retunu'd there by seizure ; l)ut that which never came from him, but was usurped, shall be declared mdl and void. Judgment of ouster is rendered against individuals for un- lawfully assuming to be a corporation. It is rendered against corporations for exercising a franchise not author- ized by their charter. In such case the corporation is ousted of such franchise, but not of being a corporation. Judgment of seizure is given against a corporation for a forfeiture of its corporate [)rivileges. The information in this case is, therefore, not the proper proceeding to call in question the corporate existence of the defendant; but in so far as it seeks to oust the defendants from the exercise of any franchise not granted to them it is appropriate. When, therefore, an information is tiled under the revised statutes against a corporation by its corporate name, the e\i>tence()f the corporation is admitted, or rather that it once had a legal existence.' '' In Massachusetts the rule has ])(>en stated, as follows: ''Upon an information in the nature of a quo warranto, which in our practice has superseded the ancient writ of t/uo warranto, the judgment may l)e, that the franchise usurped be seized into the sovereigns hands, if it be one which the sovereign can repossess and enjoy, or it may be a judgment of ouster. In this commonwealth, in the case of a business corporation, where the object of the information is merely to declare the charter forfeited and to exclude the corporation from the right to further exer- cise its franchises, a judgment of ouster is a|ipropriate, strictly and technically a judgment either of seizure or of ouster, probably does not dissolve the corporation, but it at least suspends the right to exercise its franchises."^ ' People V. Kensselaer & 8ar. K. of London. 1 Sliow. 274, 280: Rex R. Co., 15 Wend. 113; s. C.,30 Am. v. Mayor tt Aldermen of Hertford. Dec. 33, 37. 1 Ld.Raym.42G; s. c, 3 Salk. 374; * Campbell V. Talbott. 132 Mass. Attorney-General v. Salem, 103 174. 177. See also Rex v. Mayor Mass. 138. 708 gUO WARRANTO AND IN.UXCTIOX. [§ 224. § 224. Application of the Rule to Illegal Combina- tions. — In :i recent and leading case in Nebraska we have the followinir ilhistration of the application of this rule iu cases of this character: "The findings in this case, to which no objections are made, clearly show that the object of the distilling company in entering into the illegal combination was to destroy coni])etition and create a monopoly, not only by limiting the production of alcohol, but by dismantling as many distilleries as the trust saw tit, absolutely prevent the manufacture of the article except in the few establish- ments controlled by the trust, and thus it would be enabled to control prices, prevent production, and create a monopoly of the most offensive character. Any contract entered into with such an object in view is, under the laws of this State, null and void, and the conveyance from the distilling com- pany to the trust was in contravention of the authority con- ferred by the statutes on that company in excess of the powers granted by its charter, and against public policy and void, and no title passed by such conveyance. Since the bringing of this action the trust has endeavored to trans- fer the title of the property, and its attorney, after making an elal)orate and al)le argument in its favor in this court, announced that lie withdrew from the case. The court, however, cannot permit the trust thus to evade the law. If it can dismantle the property, it will, in part at least, have accomplished its illegal i)uri)()se. The property is within the jurisdiction of the court, and it is the duty of the court to make such disposition of it as the ends of justice may re- (juirc. As there has been an abuse of the cor})oratc fran- chise, it will be dissolved and annulled."^ 'State V. Nel)iaskii Distilling secon(U"to purchase and hold or Co.. 29 Neb. 700. 710. The Gas .«ell the capital stock, or purchase Trii.«t Company mentioned was in- or lease or operate the property, corporated under the general law plant, good will, rights and fran- for two purposes, as exi>ressed in chises of any gas company orcom- its articles of association: First, panics, in Chicago or elsewhere,'' for the purpose of erecting and etc. The company sought to ex- operating gas works for the nianu- ercise the powers claimed under facture and sale of gas in Chicago the second clause only, and for and other places in this State: and, that purpose bought a m.ijority of § '22'). '\ (.no WAKIJANTO AM) 1 N.I INCTION . 7(1!) § 225. Ueau'd.v by liijiiiictiou. — As we have >mi. in- formation by f/uo irarnoifo is tlu' usual process where there is an appeal to an extraordinary remedy, hut there are cases where an injunetion will issue. In the ease of the United States V. The Trans-Missouri Freight Association, it was held that the fourth section of the act, — referrins: to the Federal Anti-Trust Act of July 2d, 1890, — invests the gov- ernment with full power and authority to bring such a suit as this; and if the facts alleged are jiroved, an injunction should issue.' In the opinion in this ease the rule is set forth by ^Ir. Justice Peckham, as follows: '-It is also ar- gued that the United States have no standing in court to maintain this bill; that they have no pecuniary interest in the result of the litigation, or in the (juestion (o be decided by the court. We think the fourth section of the act in- vests the government with full power and authority to bring such an action as this, and if the facts be proved, an in- junction should issue. Congress having the control of inter- state commerce, has also the duty of protecting it, and it is entirely competent for that body to give the remedy by injunction as more efficient than any other civil reinedv."^ the -hares of iill the stock of all the gas compunies in Chicago, be- ing four in number, whereby it might h;ive the control of all the gas companies in the city, and thus destroy competition and monopo- lize the gas business: Held, that the corporation so formed was not for a lawful purpose, and that all acts done l>y it toward the accom- plishment of such object were illegal and void. People v. Chi- cago Gas Trust Co., 130 111. 2158. ' ITnited States v. Trans-Missouri Freight Association. Itn; l'. 8. 290. - Ignited States v. Trans- Missouri Freight Association. 1«»; I'. S. 2i)0, 343. "We need not intpiire liow far, or imder what circumstances, considerations of public policy and of the general interests of the State may affect tlie right of a corpora- tion to discontinue the business for which it was created, and to sur- render to another corporation its property and the conduct of such business. We do decide that such a surrender of the jiroperty. and, so far as possible, of the functions, of a cori)oration. in order that, which it is still to continue in ex- istence, its business may be carried on by another corporation, to which such transfer Is made, would violate the rights of a non-assent- ing stockholder arising from the contract implied, if not expressed, in the creation of such an organiz- ation; and he would be entitled to have such acts restrained by in- junction. Stewart v. Erie it West- ern Trans. Co., 17 Minn. 348; Cook, 710 QIO WAKKANTO AM) I N.I INTTION, [§ :i2i The leading authorities eited in this opinion is th;it of the decision of this court in the case of In re Debs, The oi)in- ion in this case is referred to as a full and able discussion of the rule. In that opinion the rule is stated, as follows: "Is there no other alternative than the use of force on the l)art of the executive authorities whenever obstructions arise to the freedom of interstate conimerce or the trans})ortation of the mails? Is the armv the onlv instrument bv which Stocks. §§ 0G7. 068; 1 Mor. i'riv. Corp. §§ •413. 410; Black v. Dela- ware, etc. Canal Co., 24 X. J. Eq. 455; Zabriskie v. Huckensack & N. Y. R. Co.. 18 N. J. Eq. 178; Ab- bott V. Am. Hard Rubber Co.. 33 Barb. 578; Middlesex R. Co. v. Boston c<: Cbelsea R.Co.. 115 Mass. 347. In the absence of express provisions to the contrary, it is to be considered as the law concern- ing business corporations that their affairs are to be managed in the interest of their stockholders, and by directors or agents ap- |)ointed by them. Small v. Minne- apolis Electro Matrix Co.. 45 Minn. 204. 267. See also Central R. R. Co. V. Collins. 40 Ga. 582. '-It is well settled that where a corporate excess of power tends to the public injury or to defeat public policy it may be resti-ained in equity at his suit. In Attorney-General v. Dela- ware & Bound Brook R. R. Co., 12 C. E. Green, 031. 633. in pro- nouncing the opinion of the court of errors and appeals, Mr. Justice Dixon said : 'In ecpiity. as in the law court, the attorney-general has the right, in cases where the property of the sovereign or inter- ests of the public are directly con- cerned, to institute suit by what may be called civil information for their protection. The State is not left without redress in its own court, because no private citi/en chooses to encounter the dilliculty of defending it, but has appointed this high public otlicer. on whom it has cast the responsibility, and to whom, therefore, it has given the right of appearing in its behalf and invoking the judgment of the court on such question of public moment.' Professor Pomeroy, in his work on Equity Jurisprudence, § 1093. states the rule in this lan- quage : 'When. the managing body are doing, or are about to do. an ultra vires act of such a nature as to produce public mischief, the attorney-general, as the represen- tative of the public and of the government, may maintain an equitable suit for preventive relief.' It appears that the attorney-gen- eral has the election in his discre- tion whether, in cases of excess in corporate powers, he will proceed at law to forfeit the charter and franchises or apply in equity for a restraint of the excess. Both tribunals are open to hiui. The right of appeal to equity does not depend upon the inadecjuacy of the legal remedy. This subject is stated by Chief Justice Ryan, in Attorney -General V. Railroad Com- panies. 35 Wis. 524, in this way : 'The ecjuitable jurisdiction pre- cludes the objection that there is an adequate remedy at law. It admits the remedy at law, but ad- ministers its own remedy in jiref- § 22').] <}l() WAKIIANTO AM) 1 N.I INCTIOX . 1 1 rights of the puhlit- can We enforted and the peuee of the nation ])reserve(l ? (irant that any pubhc nuisance may he forI\ ahated, either at the instance of the anthorities or by any individnal suffeiini;' private daniaire therefrom, the existence of this riirht of forcil)le abatement is not incon- sistent with, nor does it destroy, the right of appeal in an orcU-rlv wav to the courts for a judicial (h'termination. and erence when the State seeks it in preference. It seems to proceed on the presumption that it may better serve the public interest to restrain a corporation than to per- mit it tjy penal remedies or to for- feit its charter; and that, on that view, the proper otVicers of the State should have an election of remedies. And we may as well say. in this connection, that the jurisdiction to entertain these in- formations is wholly independent of an adequate remedy at law; and that were that otherwise we could not consider the informations in the nature of a t/iio ii^arrantv,pend- \ncr in this court against these de- fendants, as an adecpiate remedy at law. which could be a substitute for or bar to the injunction asked, .ludgment of ouster on those in- formations might not only be of far more grave consecjuence to the defendants, but might be far less beneficial to the State, and less ai^cordant with its policy, and al- together less eriMital)le and proper than the injunction sougiit to re- strain the defendants from doing what is alleged to work a forfeiture of their charters.* There has been some disagreement ainong the cases as to whether an injunction will issue at the instance of the attorney-general to restrain every excess of corporate power or whether before it issues, actual threatened injury must be mani- fest. The argument which sus- tains the first class of cases is that every excess of corporate power violates the contract with the gov- ernment, and thereby invades public and governmental rights. The law deems such invasion to be a public injury. An apt illus- tration is to be found in the case of Thomas v. West .Jersey li. K. Co., 101 U. S. 71, where there was an authorized lease of a railroad. The supreme court there held, that the franchises and powers granted to a railway company are designed to be exercised by it for the i)ublic good, and this purpose enters into the consideration for the grant any contract therefore, by which the corporation disables itself to per- form those duties to the public, or attempts to absolve itself from their obligation, without the con- sent of the State, is a violation of its contract with the State and tends to the public injury. The argument to sustain the other class of cases is that a court of equity should not move upon mere legal intendment, but should be satis- tied of a real, substantial public injury which denuinds the writ of injunction in the due protection of the pul)lic. In the use at least, of a preliminary injimction. the latter class of eases aj)pears to be the better founded in fitness and rea- son, for if there be no present emergency to be diet why may not 712 <,>r<> WARRANTf) AND I N.HNCTION . [§ 22.T. an exercise of their powers, by writ of iiijuiRtioii and other- Aviso, to accomplish the same resuU. In Stamford v. .Stam- ford Horse Kaih'oad Co.,' an injunction was asked l\v the borough to restrain the company from laying down its track in a street of the borouuh. The right of the borougii to forcibly remove the track was insisted ujjon as a ground for questioning the jurisdiction of a court of ecjuity, but the court sustained the injunction, adding: 'And none the less so because of its right to remove the track by force. As a rule, injunctions are denied to those who have adeijuate remedy at law. where the choice is between the ordinarv and the extraordinary processes of law, and the former are suthcient, the rule will not permit the use of the latter. In some cases of nuisance, and in some cases of trespass, the law permits an individual to abate the one and prevent the other by force, because such permission is necessary to the complete protection of i)roperty and i)erson. When the choice is between redress or prevention of injur\- l)v force and by peaceful process, the law is well pleased if the indi- vidual will consent to waive his right to the use of force and await its action. Therefore, as between ft)rce and the extraordinary writ of injunction, the rule will permit the latter.'"'' the injunction be reserved until all the uuthoritv upon this subject.'' final hearing? The authorities .Stocliton v. Central U. II. Co., 50 ui)on this subject are numerous. N. ,). Eq. '^2. 78. .See also Cin- The followinj;. among them, ap- cinnaii. New Orleans, etc. Ry. v. pear to me to best exhibit the con- Interstate Commerce Commission, trariety of opinion that I have 102 U. 8. 184; Texas & Pacific Ky. stated: Green's Brice's Ultra v. Interstate Commerce Commis- Vires (2d ed.), 708; Attorney- sion. I(i2 U. 8. 197. General V. .Shrewsbury Bridge Co., '.Stamford v. Stamford Horse L. R. 21 Ch. D. 752; Attorney- Railroad Co.. 56 Conn. 381. General v. Coekermough Local - In re Debs. 158 U. S. 5G4. .582. Board. L. R. 18 Eq. Cas. 172; See also Attorney-General v. John- Attorney-General V. Gt. Eastern son. 2 Wils. Ch. 87; Attorney- Ry. Co., L. R. 11 Ch. D. 449; General v. Forbes. 2 Myl. & Cr. Attorney-General V, Gt. Northern 123; Attorney- General v. Terry, Ry. Co., 1 Drew. & S. 184; s. c, L. R. 9 Ch. App. 423; Attorney- 6 Jur. (N. S.) 1006; Attorney- General v. Birmingham. 4 Kay & General V. Railroads, 35 Wis. 525. J. 528; People v. Miner. 2 Lans. The last cited caSe collects almost 3%: Peojile v. Ferry Co.. 68 N. § 22)!.] (^O WAKRANTO AM) I N.I INCTION . 713 § 226. The Subject Continued. — The li^lit tu Wriiiii a suit for nil iiijuiictioii iiiuler llie Federal Anti-Trust Act of July 2cl, 18UU, is limited to the irovermnent. It is conferred by the act only on the government, and it has been held that it cannot be exercised in private suits. In the case of Greer, Mills iSc Co. v. Stoller,' l)efnre the ("ircuit Coiirl for Y. 71; Davis v. Mayor, etc.. 14 N. Y. 52G; People v. V^inderbilt, 2S X. Y. 39U; s. c. '2G N. Y. 2S7: Attorney-General v. Hunter. 1 Dev. Eq. 12; Stale v. Dayton & 8. E. R. Co.. 3G Ohio St. 434; People V. St. Louis, SGilman, 351; Gilbert V. Canal, etc. Co., 8 X. J. Eq. 495. 1 Greer. Mills & Co. v. Stoller, 77 Fed. Rep. 1. The statute against unlawful restraints and monopo- lies (Act 1890, 2U St. p. 209) does not authorize the bringing of in- junction suits or suits in etiuity by any parties exce()t thegoveiniiu'nt. Blindell v. Ilagan. .54 Fed. Rep. 40. "The demurrer challenges the jurisdiction of this court to Diaintain. under the act in ques- tion, a bill in equity tiled by a private individual and his solicitor. It is clear that the right to main- tain such a suit is not expressly conferred by the act. Indeed, such right is. by implication, denied. — first, because a private person is given (section 7) the right to main- tain an action at law; and, i^econd, the district attorneys of the United States under the direction of the attorney-general (section 4) are charged witli the duty of com- mencing suits in equity. If it were the intention of the law makers to vest in every irresponsible indi- vidual, who may deem himself aggrieved, the right to invoke the drastic and far reaching remedies conferred by the act, is it not rea- sonable to suppose that they would have said so in unambiguous terms':* The first lliree sections are penal statutes. Tiiey give no civil remedy. .Section 4. vests the right to institute proceedings in ecjuity in the district-attorneys of the United States, and, together with section 5, prescribes the procedure in such suits. Section 6, provides for the seizure and forfeiture to the United States of property il- legally owned under the provis- ions of the act. .So far. then, the act is a public act providing no private rtMiiedy. If it ended with section i! there would probably be no pretense that it sanctioned a suit like the one at bar. What follows, however, in no way strengthensthe complainant's posi- tion. The only section which gives a private remedy is the sev- entli. which is. as follows: "Any person who siiall be injured in his business or property by any other person or corporation by reason of any thing forbidden or declared to be unlawful by this act. may sue therefor in any circuit court of the United States in the district in whidi the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold tlie damages by him sustained, and the costs of suit including a reasonable attor- neys fee.' But for this section no private person would have any standing in court, and as the only right conferred by it is the right to 714 QUO WARRANTO AND INJUNCTION. [§ 227. the Western District of Missouri, it wiis held that a bill by nioiiibers of a l)usincss oxchaiiiro to enjoin the board of di- rectors from enforcing: ao^ainst them certain bv-laws of the association, on the ground that the same are illegal as be- ing in restraint of trade and commerce, cannot be based upon the "anti-trust law" of July 2d, 1890 (2G Stat. 209) ; for the rio^ht g^iven bv section four thereof, to bring: suits for injunction, is limited to suits instituted on behalf of the government. Therefore, the authority tjiven by section five, to bring in non-residents of the district, cannot be availed of in private suits, and the court can acquire no jurisdiction over them. § 227. Pniiif>hment for Contempt. — The violation of an injunction is a contempt of court, and may be punished as such. Where the court has authority to issue an injunc- tion it has power to enforce its decree by an appropriate penalty. In the case 1)1 re Debs, the rule is stated l)y the court, as follows: "The power of a court to make an order carries with it the eijual power to punish for a disobedience of that order, and the inquiry as to the question of dis- obedience has been from time immemorial the special func- tion of the court. And this is no technical rule. In order that a court may compel obedience to its orders it nuist have the right to inquire whether there has been any dis- obetlience thereof. To submit the question of disobedience to another tribunal, be it a jury or another court, would operate to dei)rive the proceeding of half its etticiency. In the case of Yates, ^ Chancellor Kent, then Chief .Justice of the Su})reme Court of the State of New York, said: 'In the case of The I''arl of Shaftcbbur}',^ who was imprisoned by the House of Lords for "high contem))ts committed against it," and l)rought into the King's Bench, the court sue for damages in a court of law. ' In the case of .F. V. X. Yates, it follows that tbe point presented 4 Johns. 314. 3G0. by the demurrer is well founded." * In the case of the Earl of Pidcock V. Ilaninuton. (54 Fed. Shaftesbury. 2 St. Trials. 61."k s. c. Rep. S2I, 822. 1 Mod. 144. § '2-Jl .] (.no WAKKANTO AM) I N.I I NCTION. 71.') held that they had no authority to JucIltc of the coiiU'iiipl, and icmaiidcd \\iv })ris()iK'r. The court in that case seem to have hiid down a |)riiK'ii)le from which they never have departed, and which is essential to the due administration of justice. This principle that every court, at least of the sujicrior kind, in which great confidence is placed, must he the soir judge, in the last resort, of cont('m))ts arising therein, is more explicith' defined and more emphatically cnforcetl in the two subsequent cases of The Queen v. P;ity and others,^ and of The King v. Crosby.'- And again, on page o71, 'Mr. Justice Blackstone pursued the same train of observation, and declared that all courts, by which he nu'.int to include the two houses of Parliament, and the courts of A\'estminister Hall, could have no control in mat- ters of contempt. That the sole adjudication of contempts, and the [)unishment thereof, belonged exclusively, and with- out interfering, to each respective court.' In Watson v. Williams,'^ it was said: 'The power to fine and imprison for contempt, from the earliest history of jurisprudence, has been regarded as a necessary incident and attribute of a court, without which it would n(j more exist than without a judge. It is a power inherent in all courts of record and co-existing with them by the wise provisions of the common law. A court without the power effectually to protect itself against the assaults of the lawless, or to enforce its orders, judgnu'iits or decrees against the recusant parties before it, woidd be a disgrace to the legislation, and a stigma u])on the age which invented it .' In Cartwrights Case.* we \'\\\(.\ this language: 'The summary power to com- mit and punish for contempt tending to obstruct or degrade the administration of justice is inherent in courts of chan- cery and other superior courts, as essential to the execution of their powers, and to the maintenance of their authority, 'Queen v. I'.ity. 2 I.d. Rayiii. 'Watson v. Williams, 30 Miss. 110.=i. 331,341. * King V. Crosby. 3 Wils. 188; * Cartwright's Case. 114 Mass. s. c. 2 Bl. Rep. 754. 230. 238. 7H) (H'O WARRANTO AND INJUNCTION. r§ 2: and is part of the law of the hind, within the ineaninir of ^lairna Charter and of the twelfth article of our Declaration of Riohts.' "1 1 In re Debs. 158 U. S. 564, 594. "The contention of these parties is, that they were entitled to a trial by jury on the question as to whether they were guilty or not of the contempt charged upon them, and because they did not have this trial by jury they say that they were deprived of their liberty without due process of law within the meaning of the Four- teenth Amendment to the Consti- tution of the United States. If it has ever been understood that proceedings according to the com- mon law for contempt of court have been subject to the right of trial by jury, we have been unable to find any instance of it. It has always been one of the attributes, — one of the powers necessarily incident to a court of justice, — that it should have this power of vindicating its dignity, of enforc- ing its orders, of protecting itself from insult without the necessity of calling upon a jury to assist it in the exercise of this power." Eilenbecker v. Plymouth County, 134 U. S. 31, 36. See also United States V. Hudson, 7 Cranch, 32; Anderson v. Dunn, 6 Wheat. 204; Ex parte Robinson, 19 Wall. 505; Mugler V. Kansas. 123 U. S. 623, 672; Ex parte Terry, 128 U. S. 2S9; Interstate Commerce Commission V. Branson. 154 U. S. 447. 488. CHAPTER XV, STATUTORY REGULATIOX OF RATES OF TRANSPORTATION. § 2-28. 220. 230. Introdiictoi-y. § 231. Statutory Enactments Sub- ject to Judicial Investi- gation. 232. Right of Railroad Corpo- rations to Legal Protec- tion. Right of Railway Compa- nies to Discriminate in Rates of Transportation. Rule for Determining what are Reasonable Rates. § 2128. Introductory. — It is now well M'ttlcd that a State Icirislaturc has the ):)o\ver to reirulate the rates of transportation of persons and property l)y railways, suh- jeet to its authority, unU'ss it lias parted with its inherent right by Ji speeial eontraet with a railway eor[)oration in granting its eharter. But this power is not absolute. It is subjeet to certain constitutional and legal limitations. A legislature has power to jiroteet the peoj)le of a State by prohil)iting the collection of unjust and o))pressive rates of tran>portation, l)ut it may m»t itself act the part of an oj)- pressor by compelling a railway coiuiiany to carry persons or property at a rate so low us to deprive it of a fair eoin- pensation for the use of its property, and thus practically to deprive it of the capital invested l>y it. without due \)V()c- ess of law and without consideration. Statutory regida- tions of railway charge.- must not l)e in contravention of the constitutional rights of railway corporations, ami they mu>-t l)e within the bounds of justice and reason. The recent de- cision of the Supreme (^ourt of the Tnited States in the leading and very important case of Smyth v. Ames, pre- 11^ RATES OF TRANSPORTATION, [§ 22i>. sents a number of })oints which involve a new ap[)licati()ii of legal principles, and which are of special interest and im- portance. § 229. Statutory Enactments Subject to Judicial In- vestigation. — So far as relates to questions of legality, the enactments of legislatures are subject to investigation bv the courts. While a legislature may tix the rates of trans- portation l)y railways, subject to its authority, it must not exceed its powers in that direction, and the question of the extent of its powers is a matter for judicial investigation and decision. In the case of Smyth v. Ames, it was held by the Supreme Court of the United States that a suit against individuals for the purpose of preventing them, as officers of a State, from enforcing an unconstitutional stat- ute to the injur}^ of plaintiff's rights, is not a suit against the State, within the meaning of the Eleventh Amendment to the Federal Constitution. While rates for the transjjor- tation of persons and property within the limits of a State are, primarily, for its determination, the question whether they are so unreasonably low as to deprive the carrier of its property without such compensation as the constitution se- cures, and, therefore, without due process of law, caniu)t be so conclusively determined by the legislature of the State, or by regulations adopted under its authority, that the matter may not become the subject of judicial inquiry.^ ' Smyth V. Ames. 18 Sup. Ct. by reason of his being allowed to Rep. 418. "The adequacy or sue at law in a State court in the inadequacy of a remedy at hiw same cause of action. It is true for the protection of the rights that an enlargement of equitable of one entitled upon any ground rights, arising from the statutes of to invoke the powers of a Fed- a State, may be administered by eral court, is not to be conclu- the circuit courts of the United sively determined by the statutes States. Case of Broderick's Will, of the particular State in which the 21 Wall. 503. 520; Holland v. Chal- suit may be brought. One who is len. 110 U. S. 1524; s. c.,3 Sup. Ct. entitled to sue in the Federal court Rep. 405; Dick v. Foraker. 155 V. S. may invoke its jurisdiction in 404.415; s. c, 15Sup. Ct. Rep. 124 ; equity whenever the established Barden v. Improvement Co., 157 principles and rules of etiuity per- U. S. 327, 330; s. c, 15 Sup. Ct. mitsuchasuit in that court; and Rep. G50; Rich v. Braxton. 158 U. S. he cannot be deprived of that right 375,405; s. c 15Sup.Ct. Rep. 100(5 § 230.] RATES OF TRANSPORTATION, 719 § 230. Ki^lit of llailrojul CorporatiiUJS to Logal Pro- tection. — In oriiaiii/.iiiLi' ihcinx'lvo into a (•()r[)()rarK)ii for the const riu't ion antl operation of a lailway, individuals do not lose their rights as citizens. As a corporation, no less than as individuals, they have an unquestionable right to the equal protection of the law. As a railway corporation, to all legal intents and purposes, is a person, and as the law knows nothing of distinctions of classes among persons, a railway cori)oration has the same right as an individual to legal protection. In the leading case of Smyth v. Ames, it was held that a railroad corporation is a person, within the meaninir of the Fourteenth Amendment declarino: that no But if the case, in its essence, be one cognizable in equity, the plaintiff, — the required value being in dispute, — may invoke the equity powers of the proper circuit court of the United States, whenever ju- risdiction attaches by reason of diverse citizenship, or upon any other ground of Federal jurisdic- tion. Payne v. Hook. 7 Wall. 425, 430; McConihay v. Wright, 121 U. S. 201, 205; 8. C, 7 Sup. Ct. Kep. 940. A party, by going into a National court, does not, this court has said, lose any right or appropriate rem- edy of which he might have availed himself in the State courts of the same locality; that the wise policy of the constitution gives him a choice of tribunals. Davis v. (Jray, IG Wall. 203, 221 ; Cowley v. Rail- road Co., 159 U. S. 509. 583; S. C, 16 Sup. Ct. Rep. 127. So, whenever a citizen of a State can go into the courts of a State to defend bis property against the illegal acts of its oflicers, a citizen of another State may invoke the jurisdiction of the Federal courts to maintain a like defense. A State cannot tie up a citizen of another State, hav- ing property rights within its ter- ritory, invaded by unauthorized acts of its own ofHcers, to suits for redress in its own courts. Regan v. Trust Co., 154 U. S. 3G2. 391 ; s. c, 14 Sup. Ct. Rep. 1047; Mississippi Mill V. Cohn, 150 U. S. 202, 204; s. c. 14 Sup. Ct. Rep. 75; Cowles V. Mercer Co., 7 Wall. 118: Lin- coln Co. V. Luning, 133 U. S. 529; s. c. 10 Sup. Ct. Re|). 3t;3; Scott V. Neely. 140 U. S. lOti; s. C, 11 Sup. Ct. Rep. 712: Chicot Co. V. Sherwood, 148 U. S. .•)29; s. c, 13 Sup. Ct. Rep. 095; Cates v. Allen, 149 U. S. 451; s. c, 13 Sup. Ct. Rep. 883. 977. It is the settled doctrine of this court that a suit against individuals for the purpose of preventing them, as oHictMs of a State, from enforcing an uncon- stitutional enactment to the injury of the rights of the plaintiff, is not a suit against the State within the meaning of that amendment. Pen- noyer v. McConnaughy, 140 l". S. 1, 10: s. €., 11 Sup. Ct. Rep. 099; In re Tyler, 149 V. S. 104, 190; 8. c, 13 Sup. Ct. Rep. 785: Scott v. Donald, 105 TJ. S. 58, 08: s. c. 17 Suji. Ct. Rep. 205; Tindal v. Wesley. 107 U. S. 204, 220; s. c. 17 Sup. Ct. Rep. 770." Harlan. J., in Smyth v. Ames, 18 Sup. Ct. Rep. 418, 423. 720 KATES OF TRANSPORTATION. [§ 230. State shall deprive any person of proi)erty without due proc- ess of hiw, nor deny to any person within its jurisdiction the equal protection of the law. A State enactment, or reg- ulations made under the authority thereof, establishing rates for the transportation of ])ersons or property by rail- roads, that will not admit of the carrier earning such com- pensation as, under all the circumstances, is just to it and to the public, would deprive such carrier of its property without due process of law and deny to it the equal protec- tion of the laws, and would, therefore, be repugnant to the Fourteenth Amendment to the Constitution of the United States. ' In the opinion in this case the court said : ''By the fourteenth amendment it is provided that no State shall deprive any person of iiroperty without due process of law, nor deny to an}' person within its jurisdiction the equal pro- tection of the laws. That corporations are persons within the meaning of this amendment, is now settled.^ What J Smyth V. Ames. 18 Sup. Ct. Rep. 418. 2 Santa Clara Co. v. So. Pae. R. C0..118U. S. 394. 396; s. c. 6 Sup. Ct. Rep. 1132; Railroad Co. v. Gibbes, 142 U. S. 380. 391; s. C, 12 Sup. Ct. Rep. 255; Railway Co. V. Ellis, 165 U. S. 150, 154; s. C. 17 Sup. Ct. Rep. 255. "Rail- road Commission Cases. 116 U. S. 307. 325. 331; s. c, 6 Sup. Ct. Rep. 334. 348. 349. 388, 391. 1191. Thi^ principle was recognized in Dow V. Heidolman. 125 U. S. 680, 689: s. c..8Sup. Ct. Rep. 1028. and has been re-affirmed in other cases. In Banking Co. v. Smith. 128 U. S. 174.179; s. c.,9Sup. Ct. Rep. 47, it was said that the power of the State to proscril)e the charges of a railroad company for the c;irriage of persons and merciiandise within it« limits. — in the absence of any provision in the charter of the com- pany constituting a contract, vest- ing it with authority over those matters. — was 'subject to the lim- itation that the carriage is not re- quired without reward, or upon conditions amounting to the taking of property for public use without just compensation; and that what is done does not amount to a reg- ulation of foreign or interstate commerce.' In Chicago. M. i<: St. P. Ry. Co. v. Minnesota. 134 U. S. 418, 458; s. C. 10 Sup. Cl. Rop. 462, 702, it was said : 'If the company is de- prived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an in- vestigation by judicial machinery, it is deprived of the lawful use of its projjerty. and tiius. in substance and effect, of the property itself, without due jirocess of law, and in violation of the constitution of the United States; and in so far as it is thus injured, while other persons arc permitted to receive reasonable profits u|ion their invested capital, § 231. J KATES OF TKANSI'OKTATION. 721 {imoiints to deprivation of property without due j)roees.s of law, or what is a dcuial of the e(|ual protection of the laws, is often difficult to determine, especial!}' when the question relates to the property of a quasi public corporation, and the extent to which it may be subjected to j)ublic control. But this court, spcakiuir by Chief Justice ^^'aite, has said that while the State lias power {o tix the charges by railroad companies for the transportation of persons and ])r()perty within its own jurisdiction, unless restrained by a valid con- tract, or unless what is done amounts to a regulation of for- eign or interstate commerce, such j)ower is not without limit ; and that 'under pretense of regulating fares and freights, the State cannot require a railroad corporation to carry persons or pr()|)erty without reward, neither can it do that which in law amounts to the taking of private j)rop- erty for public use without just coni|)ensation or without due })rocess of law.' "' § 231. Ki^lit of RaiUvay CoiupaiiieN to l>iseriiuiiiate in Rates of Transportation. — It is now held by the high- est authority that where lines of railroad extend through more than one State, the numagement is not l)ound to make uniform rates of transportation. It may have one rate for domotic or local business, and another and a different rate thecompanyis (k-pi ived of llioetnuil siiuli powei was not oni"to destroy protection of the laws.' In Kail- or a power to compel, tbe doin^ of way Co. V. Welhnan. 143 U. 8. 330, the .-erviees without reward, or to 3^4; s. C, 12 Slip. C't. Kej). 400. the take private property for public coint. in answer to the suggestion use without just compensation or that the legislature had no author- without due process of law.' See ity to prescribe maximum rates for also Kcgan v. Trust Co., ir)4 U. S. railroad transportation, said that 3(>'J. 3!t!l; s. c. 14 Sup. Ct. Rep. •the legislature has i)ower to tix 1047; liailway Co. v. Gill. 15(>U. S. rates, and the extent of judicial in- ti4f». (if)?; s. c. 1;") Sup. Ct. liep. terference is protection against un- 4S4 : Koad Co. v. Sanford. I(i4 I', reasonable lates.' In Budd v. Xew S. r>7S, 584. .">n4, »!»."). 't'.tl ; s. c, 17 York, 143 U.S.. ■)17:s.c.,12Sup.Ct. Su|). Ct. Kep. 198; Chicago, B. it Rpp.4()8, thecoint,whilesustaining C^. K. Co. v. City of Chicago, l(Jt> the power of New Yoik by statute U. S. 22G, 241; 8. c, 17 Sup. Ct. to regulate charges to be exacted 581." at grain elevators and warehouses ' Smyth v. Ames. 18 Sup. Ct. in that State, took care to state, as Rep. 418. a result of former decisions, that 40 722 RATES OF TllANSl'OKTATION. [§ 231. for throuirh traffir for the same distance and over the same line. While it may not discriminate in their charges against the people of any one State, they are not necessarily bound to give absolutely the same rates to the people of all the States ; for the kind and amount of business, the cost thereof, the cost of construction and maintenance are fac- tors which determine largely the question of rates, and these vary materially in different States. When a State undertakes to prescribe maximum rates for local business done by an interstate carrier, it must do so with reference exclusively to what is just and reasonable as between the carrier and the public, in respect of domestic business alone ; and interstate business cannot be made to bear losses re- sulting from the rates prescribed for local business,^ In the opinion in the case here cited, the court said: ''In our judgment it must be held that the reasonableness or un- reasonableness of rates, prescribed by a State for the trans- portation of persons and property wholly within its limits, must be determined without reference to the interstate busi- ness done by the carrier, or to the proiits derived from it. The State cannot justify unreasonably low rates for domes- tic transportation, considered alone upon the ground that the carrier is earning large profits on its interstate business, over which, so far as rates are concerned, the State has no control. Nor can the carrier justify unreasonably high rates on domestic business upon the ground that it will be able only in that way to meet losses on its interstate busi- ness. So far as rates of transportation arc concerned, do- mestic business should not be made to bear the losses on interstate business, nor the latter the losses on domestic business. It is only rates for the transportation of persons and property between points within the State that the State can prescribe; and when it undertakes to jirescribe rates not to be exceeded by the carrier, it nuist do so with refer- ence exclusively to w hat is just and reasonable, as l)et\veen the carrier and the public in resjK'ct of domestic business. The argument that a railroad line is an entirety ; that its 'Smyth V. Ames, 18 Slip. L't. Kep. 418. § 232.] KATKS OF TUANSPOKTATION. 723 income ijoos into, and its cx})ens(\s are [jrovided for out of, a foiunion fund, and that its capitalization is on its entire line within and without the State, can iiavc no apijHcation when the State is without authority over rates on the entire line, and can only deal with local rates and make such reirula- tions as are necessary to give just compensation on local business."^ § '2',i'2. Kiile feteriniiiiuj> what iiro lieasuiiable Kates. — The manai^ement of a railway corporation has power to fix the rates of transportation of both persons and property. It may determine what charges shall be made, not only on through traffic, but also on domestic or local business. But while this right is unquestionable, it is not absolute. It must be exercised in accordance with justice and reason. It can lawfully make only fair and reasonable rates. The rule on this point involves some difficulty of application, but it is a rule that the courts undertake to en- force. Railway corporations will be held responsible for a fair and reas()nal)le discharge of their obligations in this di- rection. In the recent leading case of Smyth v. Ames, the Supreme Court of the United States laid down a rule by which courts will be governed in (Ictcnnining what is rea- sonable and just in the fixing of rates of trans})ortation. In that case it was held that if a railroad comj)any has bonded its property for an amount that exceeds its fair value, or if its capitalization is largely fictitious, it mav not inqjosc ujion the public the burden of increased rates necessary to realize |)rotits on this fictitious ca])italization. but the basis of all calculations as to the i'ea>()nableness of rates nuist be the fair value of the |n()|)erty used by the company for the con- venience of the public. In ascertaining this value, the original cost of construction, the amount expended in per- manent iniprovement>, the amount and market value of its bonds and stocks, the jiresent as coinpar«': 6 lb. (1889) 61, 101, 201. Beach (Charles F.. Jr.), Railway Federation; i)amphlet. New York. 1890. (20 pp.) Bonham (John M. ). liail- way Secrecy and Trusts. 12 Mo. Xew York. 1890. (138 j)p. i McCook's (John .1.). Pro- posed Railway "Trust" — 5 Railway & Corp. L. Jour. (1889) 165, ICG; 6 76. (1889) 201, 202; X. Y. Star, Jan. 12. 1890. Proceedings of Confer- ences of Railway and B;ink Pres- idents. Xew York City. .Ian. 8. 10. 1889; pamphlet. New York. 1889 (96 pp.); •"> Railway & Corp. L. .lour. ( 1889) 165. 16 thus employed, wliili' the profits of the small producer and dealer are proportionately diminished. In very numerous instances it converts the num who has been engaged in business on his own account into a laborer or other em- (1888) 1()'.». 1-27: iKiiiiphlet. ivpriiit. 18 pp. A Tyrant Trust — N. Y. Eve. World. June 28. 1889. After the Trust: Views of S. C. T. Dodd. John R. Dos Passos, •Fohn K. Parsons, etc. — X. Y. Mail and Express. Feb. 1, 1890. American Cotton Oil Trust. How a Million was Lost — X. Y. Evening Post, Sept. 2, 1889. Listof CorporatioDS, Cook on Trusts (2ded.) (1888). pp. 111. 113. Anaerican Cotton Oil Trust Secrets— X. Y. Times, Feb. 15, 1890. An Old Trust, ir)79. Independ- ent. June 13. 1889. Book Trust (A)— X. Y. Mail and Express. Feb. 7, 1890: N. Y. World. March 7, 1890. Butchers. Envelope. Milk. Oil and Rubber Trusts ('I'he) — N. Y. Times. Feb. 24. 29, 1888. Chicajjo (ras Trust — X. Y. Daily Times. Jan. 4.1888; ."> Railway it Corp. I.. Jour. (188'J) r>3f!. Cortin- Makers and Undertakers' Trust — Industrial Journal. Feb. 1889. Defense of Trusts — S. C. T. Dodd. X. Y. Tribune, Feb. 2, 1890. Effect of Trust Combinations — N. Y. Comm. Bull. Advertiser. April 1. 1889. Farmers' Trust of the North- west — X. Y. Comm. .Vdvertiser. March 26, 1888. Ferry Syndicate of New York City— N. Y. Star. Feb. 20, 1890. Foes of Competition — X. Y. Daily Times, Feb. 20, Feb. 27. March 19, 1888; X. Y. Daily World, Feb. 21, 1888. Frenzy for Trusts — X. Y. Even- ing Sun, June 27. 1889. ilow Fortunes are Made; Combi- nation as a Fortune Getter. Erastus Winan — X. Y. Tribune, Dec. .'>, 1SS9. Lead Trust Secrets — X. Y. Her- ald. Feb. 6. 1890. Power of Trusts — Public Opin- ion. March 1. 1890. Striking at Trusts — Congres- sional Legislation — X. Y. Tribune, J<"eb. 21. 1890: X. Y. Sun. March 1. 1890. The Law Defied— X. Y. Daily 'I'iuu'S. Xov. 21, 1887. Trusts and Syndicates — Edin- burg Scotsman, Feb. 5. 1889. Report of the Speeches at the Banquet of the Merchants' Associ- ation. Boston. Jan. 8, 1889. Boston Journal. Jan. 9, 1889; pamphlet report. Boston, 1889. (SO pp.) Report of the Addresses to the Ply moil til League; subject, "Trusts" — Brooklyn Eagle. Feb. 7. 1889. Proceedings of Conferences be- tween I'resideiits of Railroad Lines and Representatives of Banking Houses, held at Xew York City, Jan. S. 10. 1889: pimphlft. Xew York. 1SS9 (9(; pp.); .') Railwjiy & Corp. L. Jour. (1889) 1(55. Kitj. Acts Illegal by General Law — Freeman's Xote of Cases, 8 Amer. St. Rep. (1889) 191. 193. Anti-Combine Acts — 2.5 Can. Law Jour. (1889) 417. 418; 9 Lon- don Pump Court (1889). 31. 32. 780 CONCLUDING REFLECTIONS. ploye of the triitt. Hut this is not a desirable ehansfo. It is not for the public weal. In its tendency to degrade that great middle class of our people, which constitutes the strength aiul stability of our political institutions, to the Car Tnii^t Securities — 8 Atiier. Bar Assoc. Rep. (188.")) 277. 32'2; 140 Mass. Rep. (l.S8<)) 340; 29 Fed. Rep. (1887) 410; 30 76. (1880) 520. Cost-Book Mining Companies — 11 County Court Chron. 50; 10 Law Rep. Q. B. (1874) 7. Share Trusts — 70 London Law- Times (1880), 94. 9.-). Statutory Enactments Against "Tru.sts'"— 28 Cent. L. Jour. (1889) 533, 534. Stock Trusts for ttic Control of Corporations — Austin Abbott's Note of Cases, 19 Abb. N. C. (1888) 448, 466. Syndicates and Pools — Austin Abbott's Note of Cases, 10 Abb. N. C. (1886) 380. 394. The Commercial ••Trusts" in Rome— 8 Can. L. Times (1888). 299, 300; 23 Amer. Law Rev. (1889) 261; 13 N.J. Law Jour. 189. The So-Called ••Trusts"— 21 Am. L. Rev. (1887) 976, 979. Competition and Combination — 11 London Law Mag. (183-J) 143. 180; 51 London Law Times 1871), 81; 3 Albany L. Jour. (1871)405, 406; 2 Andover Rev. (18S5) 4.55; 20 Am. L. Rev. (1886) 194, 216; 21 Irish Law Times (1887), 499, 516, 5-26; 4 Railway & Corp. L. Jour. (1888) 1-J5, 241 ; ^20 Week. L. Bull. (1888) 320. 321; 22 Am. L. Rev. (1888) 873. 889; 5 Railway & Corp L. Jour. (1889) 20. '24: 6 lb. (1889) 121, 1-24; 24 London Law Jour. (1889) 430, 431 ; 25 Can. Law Jour. (1889) 417, 418; 9 London Pump Court (ISS9), 31. 32. Condition of the Law as to Combinations — Austin Ai>bott, 23 Am. L. Rev. (1889) 7.55, 7.58. ■ Constitutional and Statu- tory Provisions Affecting Combi- nations — Robt. Desty's Note of Cases. 1 Lawy. Rep. Ann. (1888) 849. 852. Adams (H. C). Relation of the State to Industrial Action — .\mer. Econ. Assoc. Publ. (1887) No. 6. Alexander (E. P.), Pools and Combinations. Railway Practice. (1887), pp. 23, 60. Co(iiielin (Chas.), Competition, 1 Lalor's Cyclo. Pol. Sci. (1881). pp. 642, 683. Farrer (T. II.), The State in lis Relation to Trade, 1, 12 Mo. Lon- don, 1883. Greenhood (Elisha), Doctrine of Public Policy (1886), pp. (i42, 683. Had ley (A. T.). Railroad Trans- portation (1886). pp. 63, 99. Iloltzendorff (Fr. von), Reehts- lexikon (1881), Band II, s. 795. Hudson (J. F.), Railways and the Republic (1886), pp. ^287, 315. Sedgwick (Henry), Political Economy (1883), Book Il.chap. X. Swann (John). Combinations and Pools, Hints to Investors (1886), pp. 44, 55. Ijimits of Competition — John B. Clark, 2 Pol. Sci. Quar. (1887). pp. 45. 61. Modern Competition — 62 Frazer Mag. 767. Modern Feudalism — Jas. F. Hudson. 144 No. Am. Rev. (1887) '277. 290. Persistence of Competition — F. CONCLUDING RKFLECTIONS. 731 position of employes, it is in a liii^h clcgrce prejudicial to the i)iiblic welfare. It materially detracts from the power and glory of the nation. The introduction of a system of business that is adapted to increase the wealth of a small H. Giddings. 2 Pol. Sei. Quar. (1887) 62. 78. Public Business Management — A. T. Had ley, 3 Pol. Sei. Quar. (1888) 572, 501. Seltisliness in Competition — C. A. Gripps, National Kev.. 1889. Criminal Conspiracies and Com- binations— 10 Wash. L.Rep. (1882) 353, 3G0. 401, 433. 449, 481. 497; IG Cent. L. Jour. (1883) 39; 21 Irish L. Times (1887), 499. 51G, 52G. Wright (H. S.), Law of Criminal Conspiracies, Amer. Ed., 8 vo., Philadelphia, 1887. X. Y. Penal Code, See. 168. subd. G. X. Y. Rev. Stats, vol. 2 (l8t ed.;, pp. 691, G92. Combination; Is it a Crime? — A. Morgan, 33 Pop. Sci.Mo. (1888) 42, 54. Conspiracy or Business-like Selfishness — 23 London Law .lour. (1888) 513. 514; 30 .Sollicitor's Journal (188G), 197. 198; Desty's Note of Cases, 2 Lawry. Kep. Ann. (1889) 33, 34. Conspiracy Prosecutions and Conspiracy Laws of New Nether- land, Xew York. etc.. — Chas. V. Peck. vol. 9. N. Y. Assembly Doc. 1888. Xo. G8, pp. 5G3, 700. Baker (Chas. W.), Monopolies and the People. 12 mo.. Now York. 1890 (2G3 pp.). Bonham (John M.), Industrial Liberty, 8 vo.. New York, 1888. pp. 9G. 221. Cloud (D. C), Monopolies and the People: Railway :ind Bank Monopolies, etc. (3d ed.), 8 vo.. Davenport. 1873 (514 pp.). Monopolies and Combinations — Barry (W.), 7 Forum. 424; Bruce (E. C), 35 Lippincott Mag. 433; Godson (Richard), Law of Patents (1st ed.), p. 42: lladley (A. T.;. 1 Quar. J. of Econ. 28; lless (J. S.), 30 Ref. Quar. Rev. 450; Hud- son (J. F.), 144 No. Am. Rev. 277; Sterne (Simon), 2 Lalor Cyclo. of Pol, Sci. 890. Agreements Creating Monopo- lies — Desty (Robt.). Notes of Cases. 11 Fed. Rep. (1882) G32, G34; 1 Lawry. Rep. Ann. (1888), 458. 849; 2 lb. (1889) 33. 34; 4 lb. (1889) 154, 1.57; Wharton (Fr.), Note of Cases, 11 Fed. Rep. (1882) 10. 14; Smith's Lead. Cas. vol. 1 (8th Amer. ed.), 777. 783; Notes of Cases, 92 Am. Dec. (1887) 7G3; 18 Pac. Rep. (1888) 391; 9 So. East. Rep. (1889). 422; 7 N. Y. Supl. (1889) 415; 22 N. E. Rep. (1890) 798. Corporations and Monopolies — E. L. Godkin. is Nation (1874), 359. 3G0. Effect of Monopolies on Value — A. L. Bolles. 117 No. Am. Rev. (1873) 319. History of a Monopoly; Trinity House Corporation — W. M. (ialtie, 45 Fortnightly Rev. (N. S.) (1889) 490. 5(K>. Industrial Monopolies — T. H. Farrer, Qiuirt. Rev. Oct.. 1870. .lobs in Cities — Ferd. Seeger; pamphlet, N. Y., 188G. (IG pp.) Lords of Industry— H. D. Lloyd. 13S No. Am. Rev. (1884) 535, 553. Monopoly in Business — 40 Mo. Rel. Mag. 202. Municipal Ordinances Creating a 732 CONCLUDING REFLECTIONS. class, while it diminishos the resources of the mass of the people, is a national evil. The prosperity and elevation of the people of the land as a whole is essential to the highest measure of national prosperity and i^reatness. The multi- plying of his millions and the corresponding increase of his power is not a personal benefit to the millionaire, and the cor- responding contraction of the pecuniary resources of the Monopoly — 34 Am. Dec. (1882) 637. 638. New Jersey Monopolies; Cam- den and Amboy Co.. etc.. — 104 Xo. Am. Rev. (1867) 428. 476. Re«;iilation of Monopolies — A. T. Iladley. Raihv. Gazette. 1890; 7 Railway & Corp. L. Jour. (1890) .^9. 60. Remedies for the Evils of Mo- nopolies— 8 West. Jur. (1874) 511. 519. Story of a Great Monopoly : The Standard Oil Co.,-,H. D. Lloyd. 47 Atlantic, Mo. (1881) 317. 334. The Spirit of Monopoly — 3 Am. L. Jour. (X. S.) (1850) 283. 286. The Telegraph Monopoly — Richard T. Ely. 149 Xo. Am. Rev. (1889) 44. 53. Consolidation of Corporations — Elliott (C. B.). 17 West. Jur. (1883) 345.3,59; Elliott (C. B.). 17 Cent. L. Jour. (1883) 382, 383: 6 X. J. Law Jour. (1883) 360. 363; Free- man (A. C.).79 Am. Dec. (1886) 422. 428; Desty (Robt.). 2 J>.iwy. Rep. Ann. (1889) 726, 728. Ainaliramation of Companies — 43 London Law Times (18(17). 209. 210; 17 Solicitor's Journal (1873). 362. 364. Forfeiture of Corporate Fran- chises—Abbott (Austin). 22 Abb. N. C. (1889) 210, 227; Black (U. C.) 21 Cent. L. Jour. (1883) 432. 435; Freeman (.\. C.).5 Am. State Rep. (1889) 803,807: 8 lb. (1889) 179. 202: Ingersoll (C. J.). 5 Dem. Rev. 99; Redrteld (L F.), 13 Am. L. Reg. (X. S.) (1874) 185, 190; Redfield (L F.). 5 Am L. Reg. (X. S.) (1866) .577, 588. Corporations — Ultra Vires Con- tracts— Aiddle (Arth.). 11 Cent. L. Jour. (1880) 81. 101: Holmes (O. W., Jr.). 5 Am. L. Rev. (1871). 272. 290: Tiedeman (C. G.). 21 Cent. L. Jour. (1885) 210. 213. Corporations Entering into Part- nership— 3 Cent. L. Jour. (1876) 668, 669; 15 Fed. Rep.. Xote of Cases (1883) 667. 678; 71 Am. Dec. (1886) 681:8 S. W. Rep. (1888) 396; Mclvinney's Xote of Cases. 20 Am. Sc Eng. Corp. Cas. (1888) 485. 486; 3 Xo. of Cases (1888), 58. 59; 4 Xo. of Cases (1889). 1,3. Points for Petitioners in lie Grant et al. on a hearing before Hon. Chas. Tabor. Attorney-General; pamphlet, X. Y.. 1888. (9 pp.) Petitions and Answers with Opinion of the Attorney-General. Hon. Chas. F. Tabor, in the Matter of Grant et al.. U. S. House of Rep. Doc. Xo. 3112 (1888). pp. 200. 209. Grain (T. C. T.), Points for Pe- titioners, etc.; pamphlet. Xew York, 1888. (24 pp.) Hawes (G. P.), Argument in the Matter of the Proposed Legislation Relative to Trusts; pamphlet. Xew York. 1888. (32 pp.) Pryor (Roger A.), Substance of an Argument before the Legisla- tive Committee of the State of CONCLUDING REB'LECTIONS. 733 mitlcllc aiul lower classes lueaus the diiuinisliiiitr of their happiness and well being and, in consequence, of their value to the State as citi/ons. The tciuleiicy and the effect are altogether evil. This evil is attract iiiii" the attention of wise and far-seeins: statesmen and, as well, of the thoughtful patriot and New York; painiihlet. Xew York. 1888. (14 pp.) (.'ase of The People v. Nortb River Sugar Kelinini^ Co., Supreme Court Circuit — Brief of Hon. Roger A. Pryor; pamphlet, New York, 1888. (39 pp.) Reply of lion. Roger A. Pryor; pamphlet. New York. 1888. (9 pp.) Additional Brief for Plaintiff by the Attorney-General and Roger A. Pryor; pamphlet. New York, 1889. (42 pp.) Brief for Appellant by John E. Parsons; pamphlet. New York, 1889. (18 pp.) Brief for Defendant by lion. Chas. P. Daly; pamphlet. New York, 1889. (24 pp.) Argument for Defendants by James C. Carter; panii)blet. New York, 1SS9 (02 pp.); reprint of the same; pamphlet. (07 pp.) Opinion of lion. Geo. C. Barrett, with Briefs of Counsel, 22 Abb. N. C. (1889) 1G4; 19 N. Y. State Rep. 8.")3; 10 N. Y. Civ. Proc. Rep. 1 : 22 .\u). & Eng. Corp. Ca.«. oil; .") Railway & Corp. L. Jour. oO; 3 N. Y. Supl. 401: 2 Lawy. Rep. .Vnn. 33. Judge Barrett and the Newspapers, 5 Railway & Corp. L. Jour. (1889) r)3, i)4. Supreme Court, General Terms — Appellant' sBrief : pamph- let. 1889. (74 pp.) Respondent's Briif : pamphlet. 1889. (74 pp.) Case on Appeal from Judgment; pamphlet, 1889 (111 PI'-) Opinion of Hon. Chas. Daniels, 7 N. Y. Supl. (1889) 406; 27 N. Y. State Rep. 282; 5 Lawy. Rep. Ann. 380; 2 N. Y. Law Jour. 1505. 1508; 30 N. Y. Daily Reg. 720. Court of Appeals Decis- ion, 1890. Sugar Trust Injunction — 23 Abb. N. C. (1889) 314; 2 N. Y. Law Jour. (1890) 2155. Commonwealth Retiu- ing Company Incorporation — Conn. Special Acts, 1889, p. 1095. Effect of Judge O'Brien's Decision, N. Y. Herald. Feb. 10, 1890. The following are more recent arlii'les : The Pool and the Trust, William L. Royall, 3 Virginia Law Regis- ter. July and August. 1897. Trusts and Monopolies, Jackson Guy, 1 Virginia Law Register, 709. 'I'rusts and .Monopolies— Reply, .John Hunter, .Jr.. 2 Virginia Law Register, 100. Boycotting. Its Legal Phase. D. H. Pingrey, 38 Cent. L. Jour. 427. Boycotting, Charles A. Dickson, 37 Cent. L. Jour. 100. Unfair Competition. Oliver R. Mitchell, 10 Harvard Law Review, 275. "Monopoly" under the National Anti-Trust Act. William F. Dana. 7 Harvard Law Review. 338. 734 CONCLUDING REFLECTIONS. philanthropist. The foHowino; well considered thoughts are from an article in a ])opular law periodical : "^^'e have heard much of the dangers of corporations in late years; but, while our publicists hud hardly whetted their swords to meet this question, we are confronted with ji new monster a thousand times more terrible. Every student knows how corporations have grown from a monas- tic institution to the predominance they now occujn' in the business world ; but American ingenuity has invented a legal machine which may swallow a hundred corporations or a hundred thousand mdividuals; and then with the corporate irresponsibility, their united power be stored, like a dynamo, in portable compass, and wielded b}- one or two Trusts. The Present Legal Status of, S. C. T. Dodcl,7 Harvard Law- Review, 157. Constitutionality of the Sherman Anti -Trust Act of 1890. as inter- preted by the United States Su- preme Court in the case of the Trans- Missouri Trafflc Association. William D. Guthrie, 11 Harvard Law Review, 80. The Trust, an Economic Evolu- tion, Charles F. Beach, Jr., 2 Northwestern Law Review, 127. The Doctrine of Lumley v. Wagner. Ernest C. C. Frith, 13 Law Quarterly Review. 300. Pooling Contracts and I'ublic Policy, Charles W. Willard. 31 American Law IJeview. 230. The Sugar 'J'riist Cases; A Legal Comedy of Errors, .Joseph Wheless, 31 .\merican I^aw Review, 560. A Newspaper Trust, Thomas W. Brown, 31 American Law Review, .■)69. The Isolation of the I'olice Power of the States to the Commerce Power of the Nation. Address Charles Carroll Bonney. before Illinois State Bar Association. .Ian. 28, 1891, American Law Pevicw, March, 1891. Federal Power to Regulate In- terstate Commerce and the Police Powers of the States, Herbert B. Shoemaker, 29 American Law Re- view. 59. How to Deal with Trusts, 29 American T^aw Review. 284. Strikes and Trusts. Address of U. M. Rose, before American Bar Association. August 31. 1893. at Milwaukee. 27 American Law Re- view. Legality of Trust Combinations. Louis Bosoit..Ir., 30 American Law Register. 751. The Case of the Trans-.Missouri Freight Association. George Stuart Patterson, 30 American Law Reg- ister and Review, 307. The Law of Labor and Trade. Address P. C. Knox, before Penn- sylvania Bar Association. 36 Amer- ican Law l^egister and Review. •117. Legal Side of the Strike Ques- tion, Ardemus Stewart. 33 Amer- ican T^aw Register and Hcview. 000. Protest against Administering Criminal Law by Injunction, A. — The Debs Case. William Draper Lewis. 33 American Law liegister and Review. 879. CONCLUDING REFLECTIONS. 735 nioi). Not c'\t'ii Miuenablc to the restrainl.s or corponitioii law, these 'trusts' may realize the Satanic ambition, — infi- nite and irresponsible power free of check or conscience. Corporations are bad enough ; it is ever of the defects of the historical uranoe act, 185. Arkansas anti-trust act. 18G. California cattle trust, 187. Delaware life insurance law. 188. Florida legislation relating to trusts and monopolies. 189. Georgia anti-monopoly act, 100, Illinois act prohibiting j)Ools, trusts and combines. 101. Indiana anti-trust act, 102. Iowa anti-pool and trust law, 193. Kansas law prohil)iting trusts. 194. Kentucky law prohibiting pools, trusts and conspiracies, 195. Louisiana law for the prohibition of trusts and combinations in re- straint of trade, lOf.. Maine anti-trust law, 197. Mii'higan anti-trust act, 198. Minnesota law to i)roliibit pools and trusts, 190. Mississippi law prohibiting trusts and combines. 200. Missouri anti- trust act. 201. Montana statute against monopolies and trusts, 202. Nebraska statute against trusts and conspiracies against trade and business, 203. New Mexico law declaring trust combinations illegal. 20-1. 47 738 INDEX. [The references are to sections.] AXTI-TRUST LEGISLATION— Continued. New York law to prevent monoi)olie?. 205. North Caiolina law for the piohibition of trusts, 206. North Dakota law declaring certain trusts and combinations un- lawful, 207. Oklahoma law to prevent combinations in restraint of trade. 208. South Carolina prohibition of trusts and combinations, 209. South Dakota anti-trust law, 210. Tennessee law to prohibit conspiracies and trusts. 2n. Texas law for the suppression of trusts and the promotion of true competition, 212. Law of Utah prohibiting pools and trusts. 213. "Washington law forbidding trusts and monopolies. 214. "Wisconsin statute prohibiting trusts and combinations in restraint of trade, 21J5. B. BADGEKING, the offense abolished, 9. See Intkoductiox. BAKING BUSINESS, power of the State to regulate the manufacture of bread. 144. See the Poweu to Hegulate Pkivate Cokpouations. C. CATTLE TRUST. California, 187. COMBINATIONS IN RESTRAINT OF TRADE. See Restraint of Tkade. law of Oklalioma to prevent. 208. COMBINATIONS OF RAILWAY COMPANIES, subject to certain public obligations. 148. privileges of laiiway corporations. 148. granted for the benefit of the public. 148. rule stated by Supreme Court of the United States. 148. the rule in New York. 148. for suppression of competition, 149. illegal and void, 149. pooling by railway companies. 149. in contravention of public polit-y and void. 149. the rule in Indiana and in Connecticut. 149. the loading case before the United States Supreme Comt, I.'jO. principle slated by reckiiam, .Justice. l.'iO. purchase of competing lines, ir)l. object to create a monopoly. ir)l. when illegal and void. 1.')]. the rule in Texas and in New .lersev. 151. INDEX. ^ 739 [The refereuces are to sections.] COMBINATIONS OF RAILWAY COMPANIES— Continued, lease of eompctin*;; lines, l.'ri. when such k-ases will he iiplield, I'yI. provisions of charter grantinj;; such privileges strictly con- strued. I'rl. the rule in Nebrasl. still tbe doctrine of Engijind and American courts, 30. general rule relating to contracts, 37. what contract will be iipbeld, 37. courts inclined to leniency, 37. rule stated by .Justice Bradley. 37. doctrine modified by circumstances, 37 and n. rule stated by Justice Bronson, 37. tbe rule in England, 38 and n. moditication of Englisb rule, 38. Maxim-Xordenfeldt case, 38 and n. partially distinguisbed from general restraint. 3!). limitations in respect to mode and execution, 3!». limitations in respect to persons or places, 3!). limitations of area. 31t. questions of consideration, 40. contracts witbout consideration invalid, 40. question whetber bargain was judicious not to be considered, 40. limitations of time. 41. tbe rule stated, 41 and n. Lord Smith's exposition, 41. contract in general restraint not rendered valid by limitation in time, 42. void if restraint unreasonable. 42. rule stated by .lustice Black, 42 and n. territorial limitations, 43. witbout sucli limitations, illegal and void, 43. all tbe circumstances of the case to be considered, 43. rule in California. 43. rule in Alabama, 43. rule stated by the Supreme Court of tlic United States. 43. modification of the rule by some of tbe ."^late courts, 44. tbe leading erase. 44. rule stated by .Fiistice Andrews, 44. rule stated by Sir George .lessell, 44. rule in Wisconsin. 44. territorial limits determined, 4."). rule in .Michigan. 4.">. rule in Connecticut. 4."). validity of, as affected by iln-ir reasonableness, 4'1. (piestion of validity the (piestion of reasonableness. 4"i. reasonableness determined by circumstances. 40. what is held unreasonal)le. 40 ami n. the rule in New .Fersey, 40. when invalid by statute reasonableness not considered, 46. opinion of .Justice reckham. 40. divisibility of illeg.al contract, 47. when only partially illegal, may be divided. 47. 742 INDEX. [The references are to sections.] CONTRACTS IX RESTRAINT OF TRADE— Continued. the rule in England. 47. rule in Massachusetts. 47 and n. and 4S and u. rule in Indiana. 48. limitations in conveyances, 49. stipulations of use for or against a specified purpose upheld, 49. rule in New York, 49 and n. restrictions upon the right to sell li(iuor upheld. 50 and n. rule in Michigan, 50. rule in Kentucky. .50. grantee restrained by the terms of the conveyance. 51. contracts relating to trade secrets. 52. groimd of the rule. 52. rule relating to proprietary medicines. 52. the rule in New York. 52. restraint by patents. 53. rule of the Federal courts. 53. English rule. 53. the rule in Massachusetts. 53. when contracts relating to patents will not be upheld. 54. the rule in Wisconsin. 54 and n. rule applicable to sale of trade- marks. 55. the rule in Georgia. 55. restraint in contract lelating to publications. 56. the rule in Massachusetts. 50. rule in P^ngland, 56 and n. CONTRACTS RELATING TO PROFESSIONS AND TRADES, contract not to continue the practice of, 57. consideration essential. 57. restraint must be reasonable. 57. the English rule sustained in this country. 57 and n. various statements of the rule. 57. sale of physician's practice. 58. ground on which contract is upheld. 58. what is .-ulliciently dotinite. .58. doctrine of limitation in time not definitely established. 59. wheie rosiraint granted larger than necessarv. contract void. 59. professional skill not vendible. 59. contract indefinite in time may be valid. 59 and n. the rule as applied to attorneys, 60. the rule in England, 60. the rule as applied to dentists. 61. validity of contract determined by its reasonableness. 61. the doctrine as held in Connecticut. 61 and n. exclusive sale of teeth. 61 and n. application of the rule to the profession of teaching. 62. the rule in Georgia. 62 and n. restraint upon the services of artists and actors. 63. INDEX. 743 [The references iire to sections. 1 CONTRACTS RELATIXC I'O rROFEi?SIOXS AND TRADES— Continued, the general rule applicable, (i3. the rule in England, G3. the rule in Maryland, 63. the doctrine as ajjplied to trade.* and other occupation.*. 04. the rule in England. ()4 and n. the rule in Ohio, in Maine and in New York. (".4. the rule as applied to traveling salesmen, G;"). the English rule, li.") and u. constraint of trade as a limited partnership, GO. subject to partnership rules, GG. rule in South Carolina. GO. PROFESSIOXS AND TRADES. Skk Conthacts Rki-.atin(; to Vuo- FESSION:* .VN1> Tk.ADES. CONTRACTS RELATING TO RESTRICTIONS IN BUSINESS, subject to general principles governing restraint of trade. G7. contract for exclusive business piivilege, (iS. must relate to a single individual or association. OS. such contract not a monopoly, 08 and n. rule in Illinois. 08. rule in New Yorii, 68. contracts relating to a particular article. GO. not in restraint of trade and enforceable. 09. when grantor retains an interest in the business, 70. when such contract will be held void, 70 and n. sale of good will, 71. when such sale will be upheld. 71. part of the assets of a business. 71. good will defined by Justice Story, 71. contracts in restraint of trade not regarded with favor, 7'2. rule in Massachu.setts, 72. doctrine in New York, 72. doctrine in Alabama. 72. in Ohio. 72. value of good will, how determined. 73. rule in North Carolina. 73. agreement not to buy or sell a particular article. 74. when such agreement will be upheld. 74. where no consideration, contract void, 74. the rule in New Y'ork, 74. agreement to maintain prices, 75. such agreements a monopoly and void. 7."). tiio Englisli rule, 7"). the rule in Kentucky. 7."i. common law rule modified by statutes. 70. the California statute. 70. the rule in Texas. 7(). 744 ixDKX. [The references are to sections.] CORXERIXG THE MARKET. Skk the Cheatinc of a Cokneh. COVENANT NOT TO CONVEY LAND TO A CHINAMAN. See PiBLic Policy. CREATING OF A CORNER, the modern idea. 8H. how it differs from the earij- engrossing, or forestailing, 89 and n. the corner defined, 90. the rule in Illinois stated, 90. option, 91. nature of. 91. puts and calls explained. 91. when an optional contract is a wager and void. 91. common law doctrine moditied, 92. the law in England. 92. the rule in Michigan. 92. the creation of a corner in necessaries, 93. distinction between different commodities. 93. the rule in Illinois. 93. corner in stocks. 94. "tying up of stocks," what. 94. ••squeeze in the market."' what. 94. where contracts for future delivery are sustained. 95. must be a bona fide transaction. 95. when contracts are sustained. 95. when a contract is gambling in part it is wholly void, 95. the rule in Wisconsin. 95. how far a contract of this character will be su>tained. 95. the rule in Illinois, 95. rule of the federal courts. 95. rights and liabilities of third partio*. 9(5. legal position same as that of principals. 9G. the rule stated, 9(j and n. statutory prohibitions, 97. statute of Illinois, 97. followed by other States. 97. D. DEPOT GROUNDS, admission to, 150. question not definitely determined. 150. not permitted to discriminate. 150. See C0MHIXATION.S OK Railway Companies. DIAMOND MATCH COMPANY. held in contravention of public policy and void, l(i5. See IxDisTiuAL Timsts. INDKX. 745 [The references are to sections.] E. EXGIIOSSIXG. See Inih sti;iai. Tiu'STS. F. FEDERAL ANTI-TRUST ACT. an act to protect trade and commerce a*;ainst unlawful restraints and nionopolles, 184. the strike as a violation of, 110. FORESTALLING. See Origin of Indi stkial Tklsts. I. INDUSTRIAL TRUSTS, the term indefinite, 158. how employed, 1.58. the primaiy design. 158. how organized. 158. legal title to slock, 158. how held. 158. business of. 158. how conducted, 158. directors. 158. how chosen. 158. classitication of. 15!>. Urgt class, 159. how organized. 159. second class. 150. how organized. 150. third class. 1.50. how constituted, 150. title, both legal and equital)le. 150. how held. 1.50. object of combination, 150. how far legal, 1(!0. on what legality depends. IGO. trusts of first class, IGO. prominent examples, 1(10. Standard OilTru.-t. H;0. held in contravention of public policy and illegal. HJO. opinion of Jusiice Minsliall. lliO. the North River Sugar Rctining Company. Kil. object of the refiners in the combination. Kil. how organized. lt>l. law expounded by Justice Finch. ICiJ. the car trust, 1H2. described bv Allen. Justice. 1»;2 and n. 746 INDKX. [The references are to sections.] INDUSTRIAL TRUSTS— Continued, trusts of second class. 1G3. lethality of. 1G3. Ohio Gas Trust Company. 1(>3. how organized. 103. object of the orjjanization. 163. the rule in Illinuis, KiS. purpose illegal. 1(13. rule in England not in accordance with American decisions, 1G4. one limited company as shareholder in another, 164. decision in In re Barnard's Banking Company, 164 and n. rule stated by Lord Justice Sehvin, 164. trusts of third class. 165. trusts of third class defined, 165. object of this class of trusts. 165. legality of this class of trusts, 165. the leading case. 165. Diamond Match Company. 165. in contravention of public policy and void. 165. rule stated. 166; importance of the subject. Chap. XVI. bibliography of the industrial trust. Chap XVI. effects of the introduction of this method of business. Chap. XVI. dangers of the system. Chap. XVI. INDUSTRIAL TRUSTS. ORIGIN AND PROGRESS OF. a recent development. 1. idea not new. 1. understood by the ancient Hebrews. 1. motives and objects of. not new. 1. present proportions not possil)le at an earlier period. 1. origin of the term, 2. Standard Oil Trust, what. '1. joint stock com|)anies as trusts, 2. a corporation as trustee of a trust. 1. a wider significance. 3. prices maintained how. 3. trust arrangements, wiiat. 3. some early illustrations. 4. plans for suppressing trust combinations. 4. the term in its latest usage. 3. object to control prices. 3. edict of Zeno, 4. early legislation in England. 4. regrating. early act against. 4. forestalling, wiiat. 4. penalties of violating fori-stalling act. 4. engrossing, what, 4. INDEX. 747 [The refer«'iu-f9 are to sections ] IXDUSTRIAL TRUSTS, OIMCIX AND I'ROGRESS OF— CoiUimied. the trust illegal, 13. on wbat groundti, 13. power of trust combinations, 13. INJUNCTION, remedy by, '22^>. Ske Remedies hv Qio Waiusanto am> In.h nction. INSURANCE COMPANIES, combinations of. prohibited by statute, 181. Alabama insurance act. 18.5. Delaware life insurance law, 18S. See TursT Comminations. L. LABOR 0R(;AN1ZATI()NS, combinaiions for increasing or maintaining wages, 12. legal methods of obtaining redress, 12. LAUNDRY BUSINESS, may be regulated by legislative enactment, 145. See the I'owek to Re(;ilate Pijivate Coki'oi:ati<)n-. LEASE OF COMPETING LINES OF RAILWAYS, where lease will be u|)held. ir)2. See CuMHiNATioNs i)v Raii-wav Lines. M. MONOPOLIES, early English, .^. Lord Coke's definition, 5. early English statute relating to, (1. the doctrine modified, 7. vigor relaxed, t>. Lord Ken\on*s rule, (J. the leading case, 7. historical review, 8. Lord .lustice Bowen's discussion. 8. early decisions, 8. general and partial restraint of trade, s. New Yorlv law to prevent, 2U."). MONOPOLIES AND INDUSTRIAL CU.MHINAIK »NS. ground of proceeding against, 219. MONOPOLIES AND TRU.STS, Montana statute against. 2U2. MONOPOLIES FRO.M MUNICIPAL GRAN IS AND CONTRACTS, monopoly, 117. the original idea of, 117. 748 INDKX. [The references are to sections.] MONOPOLIES FROM MUXICIAPL GRANTS AND CONTRACTS— Continued. exclusive privilege not necessarily a monopoly, 117. grant of exclusive privilege a contract, 117. grant of special privileges. 117 and n. grant to a street railway. 117 and n. grant of exclusive privilege not an invasion of the private rights of a citizen. 117. grant which enables the grantee to create a monopoly illegal and void. 117. limitation of exclusive privilege, 118. duty of government to maintain highways, 117 and n. ferries parts of highways. 117 and n. perpetual franchise. 118. municip.il authorities not authorized to grant. 118. duration of grant to be determined bj' circumstances. US. the rule explained. 118. statutory regulations, 119. the rule in Texas, in Montana and in Michigan. 119. the rule in Georgia, 119. the foregoing rule not sustained in all the States. 120. the rule in Connecticut. TiO. sustained in New Hampshire, 120. rule in Iowa, 120. special privileges not favored in etpiity, 121. public prejudice not a rule in equity, 121. monopoly in street railways, 122. power of municipal corporations to grant. 122. power of the legislature, 122. in what manner exercised, 122. nothing presumed in favor of such grant, 122. grant of monopoly by inunici|)al corporations illegal and void, 122. exceptions to the rule, 122. the rule in New York, 122. rule of the federal courts. 122. rule in Louisiana. 122. power of municipal corporations fixed by statute. 122. construction of statute, 122. the rule in New York. 122. exclusive gas privilege. 123. may be a practical monopoly. 123. city government may act directly, 128. the rule in Louisiana. 123. prohibition of laws Impairing the obligation of a contract. 123. the privilege of supplying a city with water, 124. power of municipal corporation determined by its charter, 124. the rule in New Jersey and in Georgia, 124. contract between two corporations. 124. powers of a committee of a municipal corporation. 125. iM)i:.\. 741» [Tlio referi nces are to sections.] MONOPOLIES FROM MUNICIPAL GRANTS AND CONTRACTS— Continued, city government may be enjoined from carrying out an illegal con- tract, 125. rule in Minnesota. 12."). exclusive privilege of erecting a toll l)ridge or of establishing a ferry, 12t). rule in P^ngland. 12(!. rule of the federal courts. 120. power of the State. 12(5. rights of individuals. 126. not strictly a monopoly, 12(1. rule in Texas, 120. rule where a river is a State boundary. 127. the grant relates to landing, not to the watfr. 127. not a federal power, 127. power of a legislature. 127. power of a State legislature to impose a license tax. 128. rule in Kansas, 129. market franchise, 130. power of legislature to grant, 130. rule not uniform. 130. leading case in Michigan, 130. rule in Iowa, 130. exclusive privilege may be granted. 131. rule in Louisiana, 131. public power defined. 131. legislative and business power distinguished. 132. rule in Indiana. 132. MONOPOLIES AND STREET RAILW AYS. Si-.i; M<>N()i'<)i.ir.> i kom MiNicif.xi. Gkants ami Conthacts. MONOPOLIES UNDER PATENTS. a patent an es.-ential monopoly. 174. SKK TKIST CoMIilNATION.s. :\rUNI('IPAL (;RANTS and contracts. Sm .M<.n..ioi.ii- I i;<.m MlM< IfAI. (JKANT.s AND CONTl{ArT>. o. Ul'TlUNAL CONTKACTS. Skk Tin; Cwi aiim; ok a (_'(m;m.i;. P. PARALLEL RAILW.VY LINES. consolidation of. illegal at law. but subject to statutory regulations, l.i3. See CO.MIJINATIUN.S ok Railway ( >'mivmi~. 750 INDKX. [The references are to sections.] PATENTED PROrEUTY. power of i>foverniiieiit to reo^ulate. 14;i. SKE TlIK POWKK TO KKCilLATK PlMVATK CoKl'OKATIONS, PICKETING. Skk Thades Unions axi» Lahok Okganizations. POOLING BY RAILWAY' COMPANIES, in contravention of public policy and void. 170. See TursT Combinations. POOLING OF PRODUCTS, in contravention of public policy, and void. 172. See Tki'st Combinations. POOLING OF STOCKS. not necessarily illegal, 171. See Trust Combinations. POOLS AND TRUSTS, Minnesota law to prohibit, 199. law of Utah prohibiting, 213. POOLS. TRUSTS AND CONSPIRACIES, law of Kentucky prohibiting, 10."). PRIVATE CORPORATIONS, the power to regulate. See tiik Pomek to Recji late Pkmvate COKl•OI{ATIO^S. POWER TO REGULATE PRIVATE CORPORATIONS, power of the government to regulate, 183. the leading Illinois case, 133. the usage in England, 133. offlce of statutes in relation to this: subject. 133. private corporations constituted for tlie benelit of the public, 133. power of goveriiiuent to regulate the business of a railway com- pany. 134 and n. property and employment of a railway corporation a public use, 134. the rule in Wisconsin. 134 and n. the rule in Georgia. 134 and n. power of the legislature not lost by non-user. 135. rule stated by Supreme Court of the United States, 135. power to act through a commission, 13G. rule of tlie Supreme Court of the United States. 131!. power to assess damnges. 137. responsibility of lailway coiui)any fur negligence of officers oi agents. 137. power of legislature to prescribe the mode of enforcing penalties 137. warehouses and wareiiousing. 138. power of legislature to regulate, 138. not affected by the limitation of tlie powers of congress, 138 INDKX. 751 [The rrfercnc's are to sec-tiima.] POWER TO REGULATE PRIVATE CORPORATIONS— Continued. the leading case in Illinois. 13S. the law in Xew York, 138. subject to staiutory regulations, 139. the rule in Illinois, 139. telegraph companies. 1-lU. legal status analogous to that of couunon cairicrs, 140. power of legislature to regulate, 14U. the rule in Xew York. 140. the rule in Vermont, 140. the rule in Virginia, 140. when sul)ject to congressional control. 141. decision of the Supreme Court of the United States. 141. application of the law to the telephone business, 142. patented property, 143. power of the government to regulate. 143. decision in Indiana, 143. the baking business, 144. power of the State to regulate the manufacture of bread, 144. the leading case, 144. the principle expounded, 144. the laundry business, 145. may be regulated by legislative enactment, 145. right implied in municipal powers, 145. the charter of a corporation a contract, 146. may be protected from future legislative control, 14(). legislation n)ay bind itself not to interfere with tradic rates. 14G. immunitj- from governmental control never presumed, 14G. a business JHns puhlici distinguished from a business j"n".s /iriratt, 147. a piivate business not affected by a pul)lic use, by any enlarge- ment of operations, 147. rule .-tatcd by Key, Justice. 147. Pr'I'.MC POLICY. origin of the doctiim-. 11. tlie leading ca>e. 14. dillicully of applying the rule. 14. English opinions. 14. general recognition of the piinciples involved, 14. lial)ility to misapplication, 14. opinion of Lord .St. Leonards. 14 and note. "an unruly horse." 14. view of Cliief .luslice Wilmot. 14. doctrine modilied by recent decisions. 14. the doctrine defined, 15. construction of rule not uniform. 15. indicated by constitutional and statiitorj- enactments and decisions of courts. 15. 752 IXDKX. [The references are to 8«'Ctiou8.] PUBLIC POLICY— Continued. maxim on which the rule is hiised, 15. Mr. Story's explanation, 15 and n. the rule in New Jersey, 15. statement of rule by Justice Peckham, 15. contracts not invalidated by change of. 10. contracts contra bonos mores opposed to, 17. rule of the civil law, 17. upheld by the common law. 17. propagation opposed to. 17. doctrine based on Christianity. 17. contracts for influencing legislation opposed to and not enforceable, 18. the rule in New York, IS. public stations a trust. IS. American theory. IS. effort to influence legislation in contravention of public policy, in what sense. 19. ground of the rule prohibiting it, 19. lobbying contracts. 20. not per se illegal. 20. services in procuring legislation 20. not presumed to be illegal, 20. where the services of an attorney may be employed, 20. services in influencing public oflicials, 21. agreements for, opposed to public policy and void, 21. personal influence in this direction not vendible. 21. rule of public policy in Kentucky, 21. an agent may be employed to negotiate a government contract. 21. services in procuring appointments to public otflces. 22. agreements pertaining to, not enforceable, 22. principle on whicb the rule is based, 22. sale of a vote and of personal influence opposed to. 22. exception to the rule. 2H. withdrawal of opposing candidate for public cflice, 24. agreements pertaining thereto not enforceable. 24. void at connnon law. 24. grounds of the rule. 24 and n. services in procuring a pardon, 2.'). contracts relating to, not enforceable, 25. services which are in violation of public duty. 20. agreements relating to, illegal and void, 20. covenant not to convey land to a Chinaman. 20. in contravention of treaty with China, and void. 20. services in opposing a public enterprise. 27. contracts relating to, op|)Osed to j^ublic policy and void, 27. 2S. location of a railroad station not salable. 28. may not Hunt their power to locale, 28. INDKX. <;).) [The references aro to sections. ) PUBLIC rOLICY— Continued. duty of company to regard the public interest, 28. comnion curriers. 29. employment of a public obligation, 29. when a private carrier, 29. relation to his customer. 29. the rule in New York, 29. stipulation against liability, how far legal, 29. the rule in England, 29. the rule of Supreujc Court of the United States not upheld in New York. m. in that State carrier may limit hi.s liability. 30. in Missouri, New York rule sustained, 30. in some States common law rule upheld, 30. contracts in contravention of law. 31. illegal and void, 31. the rule in England, 31. services in intliiencing tiie administration of justice, 32. covenants relating to it illegal and void. 32. ground of the rule, 32. rule in relation to fees of justicres of the peace. 32. offer to iierform the duties of an office for less than legal fees, 32. changing the officers of a corporations, 33. cannot be made a matter of bargain and sale, 33. the relation that of trust and contidence, 33. ground of the rule, 33. renouncing an executorship, 34. covenant for. illegal and void. 34. tile j)rin('ipl(' stated. 34. tlie rule applies lo administrators. 34. rule in Ireland. 34. assignment of salary i)y i)ublii' officers. 3'). illegal and void, 3'!. ground of illegality. 35. Q. QUO WAIIIJ AN rt ». M-.i, IJiMi lUKs in <^»i o W vi;i; vn i o am> 1m nc- B. I{ All. WAY COMPANIES. combinations of. for tlie suppression of competition. 14'.». Skk Combinations ok Railway ("dmpamks. RAILWAY STATIONS, location of, not salable, 28. may not limit their power to locate, 28. duty of company tT> regard the public interest, 28. 48 754 INDEX. [The references iire to sectlouc . ] REASOXABLEXESS IX RESTRAIXT OF TRADE. See Conti{a< ts IN Restraint ok Trade. REBATES IX FREIGHT BILLS, in some States not illegaU 179. See Tkist Combinations. REGRATIXG. See Oki(41n of Indistkiai. Tia -ts. REMEDIES BY QUO WARRAXTO AXD INML XCTlUN. extraordinaiy relief by quo warranto and injunction, 21(5. certain phrases of the law still unsettled. 216. direction of the present trend, 216. writof 9?ni/('(l in tlic United States. '2'2\\. rule in New York. ±2'6. the rule in Massaehusetts. 223. apjilieation of rule to ille<;al combinations. ±24. leadin*; Nebraska case, 224 and n. remedy by injunction. 22."). cases wiiere an injunction will issue. 22"). tiie leadini; case. 22.'). tile rule stated. 22") and n. rule stated in Jii re Debs. 32") and n. when an injunction will be denied. 22"). injuni'tlon imder federal anti-trust act. 22(). punishment for contempt. 227. violation of injunction coiiteuipl. 227. the rule in re«;ard to contem[)f of couit. 227. rule stated in the Debs case, 227. rule in Massachusetts, 227. RENOUNCING AN EXECUTORSlllU. Skk I'ibi.k I'olicv. RESTRAINT OF TRADE. Ske CoxTifAfT.s ix Restkaint ok Tiiadk. general and i)artial. S. reasons for favorinn' partial restraint. 8. adecpiacy of consideration, 8. when unlimited prohiliition is held void, 8. modern doctrine sustained by jjopular sentiment, !•. common law modilied by statute, !). offense of badirering, etc., abolislied. It. prohibition must be reasonable, li. (•ombinations by workmen and by employees, !). American doctrine, 10, Kn;;lisii rule accepted only in part. 1(1. court win in(iuire wlietlier restraint is rea.sonable. lo. le;;ality determined l)y rea.sonableness. 10. statutory enactments, 10. rule established by federal Statute, 10. railway companies subject to general rule, lo. the Sugar Trust case. 11 and n. anti-trust laws. 1 1 . right of the Stales to enact. 11. adverse contention. 11. labor organizations, 12. combinations for increasing or maintaining wages. 12. legal methods of obtaining redress, 12. 8. SPECIAL ri:i\ ii.i:<;ks. oiiant of. skk m<)noi-.)|.ii> hcom MiMi ii-.vi, (;i;ant> am> ( onthacts. 756 INDKX. [TliP rffereiiocs are to sections J STATUTORY REGULATION OF HA'l'KS OF TRANSPORTATION, power of l<'f:;isl!itun' to rt'u^iilatc rates of transportation. 228. power not absolute, 228. must respect constitutional rights. 228. recent decision of Supreme Court of the United States. 228. statutory enactments subject to judicial investigation. 229. carrier not to be deprived of i)r<)perty without conipensation. 229. right of railway corporation to legal protection. 230. members of railway corporations do not lose their rights as citi- zens. 280. to all legal intents and ])ur]ioses a railway corporation is a person. 230. has the same right to protection as an individual. 230. power of the State to fix rates of transportation not unlimited. 230. cannot require railway companies to carry persons or property without consideration. 230. when a railway company is not bound to make uniform rates. 231. may have one rate for local and anotlier for through trallic. 231. local rates umst be determined by local business. 231. through rates not to bvar losses on local bu.siness, 231. legislation can fix only local rates. 231. rates must be reasonabh'. 231. rules for determining reasonableness of rates. 232. what to be considered in fixing value. 232. each case to be determined by itself, 232. railway corporation entitled to fair compensation for use of its prop- erty. 232. the public entitled to reasonable protection, 232. STRIKE AND LOCKOUT. Ske Ti{ai>ks Unions am> Laisoi; Oi{<;am- ZAIIONS. T. THE BOYCOTT. Sp.k Ti:ai)Ks Unions am> Lauou Uk(;am/.atk)ns. TE LE( ; R.\ ri I ( OMIW N I KS. legal status of, 140. See the I'owkk to RKfjri.ATK Piuvate Coin'ouATioNS. TKLEI'IIONH COM TAMES. applii-ation of the law governing telegrapii (■omi>anies to. 142. See the PowEit to llEral. lOO, the law stated. 100. •general princiiile on wbicb the di-eisions an- based. 101. where a strike will be upheld. 102. Kniilisb and early American derisions. 102. modilication of the rule, 102. what renders the strike an offense. 102. the rule of the federal courts, 102. rights of the parties. 102. the rule in relation to receivers and railroads. 102. where a lockout will be sustained. 103. rights of the parties. 103. right of employt'es to combine. 104. the rule in England. 104. where lockout lawful. 103. what constitutes a lockout, 103. the English rule ui)h(dd in I'ennsylvaiii.i. 101. the boycott. 105. the boycott deilned. 105. object of the boyi-ott, 105. origin of tlii' boycott. 105. historical notice. 105. nature of the offense. 10(i. the ruh' in Kngland. 10!>. the rule in Virginia, KKJ. the rule in Connecticut, lOtl. picketing, 107. the devic xplained, 107. the English rule. 107. the principle on which the American rule is based. 107. the rule in New York. 107. blacklisting, lOS. the term explained. lOS. the object of the device, los. the law stated. 108. law in North Dakota. 108. the Indiana statute, 108. 75^ IXDKX. ITlie refereiiCPS art- to sections. ) TRADES UNIONS AND LAHOK OHiJANlZATIONS— Contimied. coimiion carriers. ol)li;;ati(»ns of. as afft-cted l)y strikes. 109. the English rule. 109. the law in Illinois. 109. rule in Texas. 109. the strike as a violation of the federal aiiti-trusi act. 110. rule of the federal courts. 110. the strike in restraint of interstate coininerce. 110 and n. relation of trades unions to a receiver. 111. the authority of a receiver. 111. a representative of the court. 111. interruption in the transportation of mails, 112. powers of the generaJ government relating thereto. 112. how far the executive branch of the government may exercise this power. 112. appeal to the courts, 112. ruling of the Supreme Court of the United States. 112. contracts between employers and trades unions. 113. terms and conditions of service may be tixed hy contract. 113. the English rule, 113. sustained by American courts. 113. the rule in New York. 113. remedy by civil action. 114. action against third parties, 114. the law in Massachusetts. 114. remedy by injunction, 11."). the rule in Massachusetts. 11."). decision of the federal court. 11"). statutory regulations, 11(>. statutes of the States not uniform, lit). TRUST COM HIN ATIONS. designed to conform to the law. I(i7. object of such combinations. 1(57. illegality of, not affected by change of methods, lt)7. purpose and scope of federal legislation in regard to, 108. act of July 2, 1890, KiS. leading case, 168 and n. anti-trust act construed by .lustice Peckham. KiO and n. ai)i)lication of the act to railways. 109 and n. pooling by railroads. 170. in contravention of jiublic policy and void. 170. till' ])ool explained. 170. in J^ngland not illegal. 170 and n. American decisions not in entire harmony. 170 and n. tendency to a more rigid enforcement of American doctrine. 170. leading case in Penn.sylvania, 170. o])inion of Justice Agnew. 170. IXDKX. T.')!! [Tlie refereiici'8 are to seftlons. ] TRUST COMBINATIONS— Continued, poolinoj of stock"!, 171. not niH'essarily ilh'>(al. 171. h'lidini; case in New York, 171. poolinij of juodiK'ts, 172. in contra viMition of i)ublic policy and void. 172. the rule in Oiiio, 172. conil)ination to control tiie price of an article in common use 173. a conspiracy and void, 173. followed by overt acts a misdemeanor, 173. monopoly under a patent, 174. a patent an essential monopoly, 174. confers exclusive i)rivileges, 174. patent not an infrini^ement of the rights of another, 174. not created by a combination. 174. a patent not a permission to enter into an illegal combination, 175. leading case, 17"). the voting trust. 17ii. legality determined the object and the circumstances, 170. not essentially illegal, 176. the law in Massachusetts, 176. presumption that the end in view vitiates the act, 17ti. the princi|)le expound<'d. 17(i. the rule in Oliio, 177. the rule in New York, 177. where a voting trust will not be upheld, 17S. the rule in New York, 178. rebates on freight bills, 17J>. in some States not illegal. 17'.t. leading ca.se, 170. law in Indiana, 17!). the rule in I'ennsylvania, 170. in some States void at coumion law, ISO. . rule in Illinois, ISO. combinations of insurance companies, 181. in soMje States prohibited by statute, 181. rule in Kansas, 181. rule in Texas, 81. right of parties under trust combinations, 182. ilh'gal contract not enforced, 182. members of trust coml)inations not protected, 182. rule in New York. 182. legal position of receiver, 182. the general rule, 182. the rule in Illinois. 182. ^'Jl^ law of New Alexico declaring illegal, 204. 7<>0 INDEX. [The references are to sections J TRUST COMBIXATIOXS— Continued. Louisiana law for the prohibition of. 196. North Dakota law det-laring certain, unlawful. 207. statute of South Carolina prohibiting. 200. TRUSTS AND COMBIXATIOXS IN RESTRAINT OF TRADE. law of Louisiana prohibiting. 1%. Wisconsin statute prohibiting. 215. TRUSTS AND COMBINES, Mississippi law prohibitipjr. 200. Illinois act prohibiting, 191. TRUSTS AND CONSPIRACIES. Nebraska statute against. 203. TRUSTS AND MONOPOLIES. Florida legislation relating to. 1S'.>. law of Washington forbidding. 214. V. VOTING TRL'STS, not essentially illegal. 176. legalirj." determined by objects and circumstances. 176. See Tkist Combination:*. W. WAREHOUSES AND WAREilOUSLNG, PUBLIC, power of legislature to regulate, 138. lOAN DEPT. I LD 21A-5 (B622l8l0)476B General Library 5":-: ' /Wi|£a,^li^.^,'8«AR Yij