and the rights incident thereto are not, necessarily at least, affected by the circumstance of the owner of the patent being a party to an agreement with the owners of other patents in restriction upon competition,24 yet, as will hereafter be seen, 25 it is, or may be, a distinct question whether the monopoly enjoyed by the owner of a patent prevents the application to combinations among such owners, of the rules applicable generally to restrictions upon competition. § 113. Constitutional restrictions upon power of legislature to create monopolies.-The better view would seem to be that in the absence of constitutional restriction, there is no limitation upon the power of the legislature to create a monopoly.26 In nearly all the States, however, have been established constitutional prohibitions against granting special or exclusive privileges. 27 in American Rapid Telegraph Co. v. Connecticut Telephone Co., 49 Conn. 352; 44 Am. Rep. 237 (1881). 24 Edison Electric Light Co. v. Sawyer-Man Electric Co., 53 Fed. 592; 3 C. C. A. 605 (2d C., 1892). 25 See § 148 and dissenting opinion in Park v. National Wholesale Druggists' Assoc., 175 N. Y. 1, 43; 67 N. E. 136, 157; 62 L. R. A. 632, 650; 96 Am. St. Rep. 578 (1903). See under Tex. (§ 232) as to owner or lessee of patent. 26 In Norwich Gas-Light Co. v. Norwich City Gas Co., 25 Conn. 19, 38 (1856), a monopoly created by legislative grant was held illegal, even in the absence of constitutional restriction. Compare People ex rel. Tyroler v. Warden of City Prison, 157 N. Y. 116, 126; 51 N. E. 1006, 1009; 43 L. R. A. 264, 269; 68 Am. St. Rep. 763 (1898); Thrift v. Elizabeth City, 122 N. C. 31; 30 S. E. 349; 44 L. R. A. 427 (1898). See, however, Saginaw Gas-Light Co. v. City of Saginaw, 28 Fed. 529, 535 (C. C. Mich., 1886). 27 See Stimson's American Statute Law, § 17; Skinner v. Garnett Gold-Mining Co., 96 Fed. 735 (C. C. Cal., 1899); Interstate Stockyards Co. v. 'Indianapolis N. Ry. Co., 99 Fed. 472, 482 (C. C. Ind., 1900); Omaha Water Co. v. City of Omaha, 147 Fed. 1, 6; 77 C. C. A. 267, 272; 12 L. R. A. N. S. 736, 739 (8th C., 1906); Ex parte Gerino, 143 Cal. 412; 77 Pac. 166; 66 L. R. A. 249 (1904); Johnson v. Goodyear Mining Co., 127 Cal. 4; 59 Pac. 304; 47 L. R. A. 338; 78 Am. St. Rep. 17 (1899); Starr Burying Ground Assoc. v. North Lane Cemetery Assoc., 77 Conn. 83, 90; 58 Atl. 467, 470 (1904); N. Y., New Haven & Hartford R. R. Co. v. Offield, 77 Conn. 417; 59 Atl. 510 (1904); People ex rel. v. Clean Street Co., 225 Ill. 470; 80 N. E. 298; 9 L. R. A. N. S. 455; 116 Am. St. Rep. 156 (1907); Dunbar v. American Tel. & Tel. Co., 87 N. E. 521, 533 (Supm. Ct. Ill., 1909); Zumpfe v. Gentry, 153 Ind. 219; 54 N. E. 805 (1899); Matter of § 114. Monopoly as resulting from act of municipal corpora tion. The power of creating a monopoly is not possessed by a Flukes, 157 Mo. 125; 57 S. W. 545; 51 L. R. A. 176; 80 Am. St. Rep. 619 (1900); Farmers' Canal Co. v. Frank, 72 Neb. 136; 100 N. W. 286, 293 (1904); Matter of Union Ferry Co., 98 N. Y. 139 (1885); Thousand Island Park Assoc. v. Tucker, 173 N. Y. 203, 210; 65 N. E. 975, 976; 60 L. R. A. 786, 789 (1903); City of Brooklyn v. Nassau Electric R. R. Co., 44 App. D. 462; 61 N. Y. Suppl. 33 (1899); Territory v. De Wolfe, 13 Okla. 454; 74 Pac. 98 (1903); State ex rel. v. Frazier, 36 Oreg. 178; 59 Pac. 5 (1899); Supreme Lodge United Benevolent Assoc. v. Johnson, 98 Tex. 1; 81 S. W. 18 (1904). As to effect of statute prohibiting coercion of employee by discharge or threatening to discharge because of connection with any “lawful organization," see Gillespie v. People, 188 Ill. 176; 58 N. E. 1007; 52 L. R. A. 283; 80 Am. St. Rep. 176 (1900). As to significance of "franchise" in prohibition against grant of exclusive franchise, see Lasher v. People, 183 Ill. 226; 55 N. E. 663; 47 L. R. A. 802; 75 Am. St. Rep. 103 (1899); Board of Trade v. People, 91 Ill. 80 (1878); and compare Chicago City Ry. Co. v. People, 73 Ill. 541, 547 (1874); Bank of Augusta v. Earle, 13 Peters, 519, 595; 10 L. Ed. 274 (1839); Morgan v. Louisiana, 93 U. S. 217, 223; 23 L. Ed. 860 (Oct. T., 1876); City of Bridgeport v. N. Y. & New Haven R. R., 36 Conn. 255, 266; 4 Am. Rep. 63, 71 (1869); People v. Utica Ins. Co., 15 Johns (N. Y.), 358, 387; 8 Am. Dec. 243, 257 (1818); Slingerland v. International Con tracting Co., 43 App. D. 215, 223; 60 N. Y. Suppl. 12, 17 (1899); City of Brooklyn v. Nassau Electric R. R. Co., 44 App. D. 462; 60 N. Y. Suppl. 33 (1899). As to prohibition against making any irrevocable grants of special privileges or immunities, see Bienville Water Supply Co. v. Mobile, 186 U. S. 212, 219; 22 Supm. 820, 823; 46 L. Ed. 1132 (1902); Birmingham & Pratt Mines St. Ry. Co. v. Birmingham Street Ry. Co., 79 Ala. 465; 58 Am. Rep. 615 (1885); Dickinson v. Cunningham, 140 Ala. 527; 37 So. 345 (1904); against grants of "special privileges or immunities, that may not be altered, revoked or repealed." Humphreys v. State, 70 Ohio St. 67, 84; 70 N. E. 957, 961; 65 L. R. A. 776, 782; 101 Am. St. Rep. 888 (1904); against granting "privileges or immunities which upon the same terms shall not equally belong to all citizens," etc., Ex parte Whitley, 144 Cal. 167; 77 Pac. 879 (1904); Ferner v. State, 151 Ind. 247; 51 N. E. 360 (1898); Matter of Bank of Commerce, 153 Ind. 460; 53 N. E. 950; 47 L. R. A. 489 (1899); Boomershine v. Uline, 159 Ind. 500; 65 N. E. 513 (1902); Hoop v. Affleck, 162 Ind. 564; 70 N. E. 978 (1904); Brady v. Mattern, 125 Iowa, 158; 100 N. W. 358; 106 Am. St. Rep. 291 (1904); White v. Holman, 44 Oreg. 180; 74 Pac. 933 (1904); Sandys v. Williams, 46 Oreg. 327; 80 Pac. 642 (1905); Re Watson, 17 S. D. 486; 97 N. W. 463 (1903); Fleetwood v. Read, 21 Wash. 547; 58 Pac. 665, 47 L. R. A. 205 (1899); McDaniels v. Connelly Shoe Co., 30 Wash. 549, 555; 71 Pac. 37, 39; 60 L. R. municipal corporation in the absence of statutory authority,28 A. 947, 949; 94 Am. St. Rep. 889 (1902). As to application of such prohibition to provision as to time of payment of wages, see Seelyville Coal & Mining Co. v. McGlosson, 166 Ind. 561; 77 N. E. 1044; 117 Am. St. Rep. 396 (1906); to provision as to number of hours of labor, State v. Muller, 48 Oreg. 252; 85 Pac. 855; 120 Am. St. Rep. 805 (1906). As to effect of such provisions upon restrictions created in exercise of police power, see § 111. For instances of legislative grants of the exclusive privilege to supply gas to cities, held invalid under such provisions, see St. Louis Gas-Light Co. v. St. Louis Gas, Fuel, etc., Co., 16 Mo. App. 52 (1884); Citizens' Gas-Light Co. v. Louisville Gas Co., 81 Ky. 263 (1883). In People ex rel. Tyroler v. Warden of City Prison, 157 N. Y. 116; 51 N. E. 1006; 43 L. R. A. 264; 68 Am. St. Rep. 763 (1898), a statute limiting to certain persons the right to buy and sell passage tickets seems to have been regarded as contravening a constitutional provision against "depriving of any of the rights and privileges secured to any citizen thereof," though the decision was mainly on the ground that it contravened the provision against depriving of "liberty." To the contrary, see Jannin v. State, 42 Tex. Crim. App. 631; 51 S. W. 1126; 53 L. R. A. 349; 96 Am. St. Rep. 821 (1899). As to effect of exclusive privileges sought to be obtained under general laws, see § 151. As to effect of exception as to power to grant charters of incorporation, see City of Memphis v. Memphis Water Co., 5 Heisk. (Tenn.) 495, 530 (1871). For constitutional prohibitions against "perpetuities and monopolies," see under anti-trust acts, c. XX. 28 Birmingham & Pratt Mines St. Ry. Co. v. Birmingham Street Ry. Co., 79 Ala. 465; 58 Am. Rep. 615 (1885); Conover v. Long Branch Commission, 65 N. J. Law, 167; 47 Atl. 222 (1900); Thrift v. Elizabeth City, 122 N. C. 31; 30 S. E. 349; 44 L. R. A. 427 (1898); Clarksburg Electric Light Co. v. City of Clarksburg, 47 W. Va. 739; 35 S. E. 994; 50 L. R. A. 142 (1900). See Ludington Water Supply Co. v. City of Ludington, 119 Mich. 480; 78 N. W. 558 (1899). For an instance of a city ordinance held void as creating a monopoly, see City of Danville v. Noone, 103 Ill. App. 290 (1902). So of an ordinance requiring all printing done for the city to bear a union label, City of Atlanta v. Stein, 111 Ga. 789; 36 S. E. 932; 51 L. R. A. 335 (1900); Marshall & Bruce Co. v. City of Nashville, 109 Tenn. 495; 71 S. W. 815 (1903); Haeussler v. City of St. Louis, 35 Am. Law Rev. 97 (St. Louis C. C., 1901). So of such requirement in specifications prescrib ed according to advertisement for bid. People ex rel. Single Paper Co. v. Edgcomb, 112 App. D. 604; 98 N. Y. Suppl. 965 (1906). See also Holden v. City of Alton, 179 Ill. 318; 53 N. E. 556 (1899), and decisions cited in City of Atlanta v. Stein, supra. In National Surety Co. v. Kansas City Hydraulic Press Brick Co., 73 Kan. 196; 84 Pac. 1034 (1906); Atkin v. Wyandotte but is frequently conferred. A grant of such power is, however, strictly construed. 29 Coal & Lime Co., 73 Kan. 768; 84 Pac. 1040 (1906), was denied the validity of selection by municipal authorities of a particular paving material. As to invalidity of requirement of license to engage in particular business, as "monopolistic" in its tendency, see Gray v. City of Omaha, 114 N. W. 600; 14 L. R. A. N. S. 1033 (Supm. Ct. Neb., 1908). As to grants of right to supply gas, water, etc., see § 110. 29 Town of Kirkwood v. Meramec Highlands Co., 94 Mo. App. 637; 68 S. W. 761 (1902); Clarksburg Electric Light Co. v. City of Clarksburg, supra. CHAPTER XIV RESTRICTION UPON COMPETITION AS RESULTING FROM ACTS OF INDIVIDUALS § 115. Restriction upon competition as resulting from acts of individuals. 116. Monopoly as resulting from acts of individuals. 117. Extension of doctrine of illegality of monopoly resulting from act of government, to restriction upon competition resulting from acts of individuals. 118. Restriction upon competition, whether necessarily illegal. 119. Presumption against validity of restriction upon competition. 120. Substantial control of supply as test of legality. 121. Effect of tendency to produce illegal restriction. 122. Prospect of competition. 123. Forestalling; ingrossing; regrating. 124. Fixing, raising or lowering price. 125. Agreement to fix price. 126. Agreement to fix wages. 127. Deterioration in quality. 128. Forcing out of, or preventing from entering employment. 129. Combination as element of illegality. 130. What may be subject of illegal restriction; e. g., tangible commod ities; services. 131. Articles of necessity. 132. Business of public character. 133. Reasonableness as test of legality. 134. Agreements in restriction upon competition. 135. Agreement in restriction upon competition, whether necessarily illegal. 136. Trusts. 137. Pools. 138. Agreements for future delivery. 139. Corners. 140. Agreements for exclusive service, dealing or agency. 141. Grant by carrier of exclusive privilege. 142. Grant of exclusive privilege of soliciting patronage of passengers. 143. Grant of exclusive privilege to connecting carrier. 144. Grant by carrier of exclusive privilege of transportation. 145. Discrimination by carrier as between members of general public. 146. Grant of right to establish line of telegraphic communication along right of way of railroad. |