Page images
PDF
EPUB

of the acts has been commonly expressly applied to combinations of "skill or acts," or the like, as well as of "capital."

§ 131. Articles of necessity.-The view has been frequently expressed that the doctrine against restrictions upon competition is limited to articles of necessity, as distinguished from what may be termed articles of luxury.57 If such a dis

57 The limitation seems to have crept in without much observation, and to be based on the view expressed in Pettamberdass v. Thackoorseydass, 7 Moore P. C. C. 239, 262 (1850), that "ingrossing can be committed only with respect to the necessaries of life." In Cummings v. Union Blue Stone Co., 164 N. Y. 401; 58 N. E. 525; 52 L. R. A. 262; 79 Am. St. Rep. 655 (1900), a distinction was suggested between a civil action and a criminal proceeding, it being here said that "in a civil action prime necessity need not be shown." Applying the limitation above stated, a restriction upon competition in the production of curtain fixtures known as "wood balance shade rollers," was sustained in Central Shade Roller Co. V. Cushman, 143 Mass. 353; 9 N. E. 629 (1887). So of fish glue, in Gloucester Isinglass & Glue Co. v. Russia Cement Co., 154 Mass. 92, 94; 27 N. E. 1005, 1006; 12 L. R. A. 563, 564; 26 Am. St. Rep. 214, 216 (1891). So of washingmachines. Dolph v. Troy Laundry Machinery Co., 28 Fed. 553 (C. C. N. Y., 1886). See as to tobacco, Whitwell V. Continental Tobacco Co., 125 Fed. 454, 460; 60 C. C. A. 290, 296; 64 L. R. A. 689, 697 (8th C,. 1903). See remarks of Lacombe. J., in Dueber Watch-Case Manuf. Co. v. Howard Watch & Clock Co., 66 Fed. 637, 644; 14 C. C. A. 14, 21 (2d C., 1895); also

Queen Ins. Co. v. State, 86 Tex. 250, 271; 24 S. W. 397, 404; 22 L. R. A. 483, 494 (1893), holding the limitation inapplicable to a combination among insurance companies to fix rates of insurance and agents' commissions. In Meredith v. N. J. Zinc & Iron Co., 55 N. J. Eq. 211, 221; 37 Atl. 539, 543 (1897); affirmed in 56 N. J. Eq. 454; 41 Atl. 1116 (1897), it was held applicable to zinc ore, characterized as "property which in its natural state is of no use to mankind, and which, after it has been manufactured and made fit for use, can hardly be classed as a necessity."

The following are cases where restrictions have been held invalid as relating to articles of necessity: As to coal: Chicago, Wilmington, etc., Coal Co. v. People, 114 Ill. App. 75, 116 (1904); Drake v. Siebold, 81 Hun, 178; 30 N. Y. Suppl. 697 (1894); Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173, 184; 8 Am. Rep. 159, 163 (1871); see State v. Eastern Coal Co., 70 Atl. 1 (Supm. Ct. R. I., 1908). Wheat: Samuels v. Oliver, 130 Ill. 73; 22 N. E. 499 (1889); Raymond v. Leavitt, 46 Mich. 447; 41 Am. Rep. 170 (1881). Corn: Cummings v. Foss, 40 Ill. App. 523 (1891); confirmed in subsequent decision in Foss v. Cummings, 149 Ill. 353; 36 N. E. 553 (1894). Friction matches: Richardson v. Buhl, 77 Mich. 632, 657;

tinction exists, its application would seem to be somewhat difficult and to depend on varying conditions, such, for instance, as those of climate. But the distinction seems never to have been very firmly established in our jurisprudence, and the present tendency seems to be in favor of repudiating it as inapplicable to any lawful business.58

43 N. W. 1102, 1110; 6 L. R. A. 457, 466 (1889). Alcohol: State v. Nebraska Distilling Co., 29 Neb. 700, 718; 46 N. W. 155, 161 (1890). Harrows: National Harrow Co. v. Bement, 21 App. D. 290, 296; 47 N. Y. Suppl. 462, 467 (1897). Ice: Tuscaloosa Ice Manuf. Co. v. Williams, 127 Ala. 110; 28 So. 669; 50 L. R. A. 175; 85 Am. St. Rep. 125 (1900).

In Bailey v. Master Plumbers, 103 Tenn. 99; 52 S. W. 853; 46 L. R. A. 561 (1899), the doctrine was applied to articles ordinarily furnished by plumbers; so as to work done by them. Here, however, the use of many such articles was required by a municipal ordinance. But in Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507; 43 Atl. 723; 46 L. R. A. 255; 78 Am. St. Rep. 612 (1899), it was regarded as doubtful whether sanitary pottery ware is an article of necessity. As to whether proprietary drugs and medicines are such articles, see Park v. National Wholesale Druggists' Assoc., 54 App. D. 223, 226; 66 N. Y. Suppl. 615, 617 (1900); affirmed in 175 N. Y. 1 (see pp. 15, 41); 67 N. E. 136 (see pp. 141, 151); 62 L. R. A. 632 (see pp. 639, 649); 96 Am. St. Rep. 578 (1903). In Pocahontas Coke Co. v. Powhatan Coal & Coke Co., 60 W. Va. 508, 519; 56 S. E. 264, 269; 10 L. R. A. N. S. 268. 280; 116 Am. St. Rep. 401 (1907), it was held unnecessary to

determine whether coke is such an article. In Cravens v. Carter-Crume Co., 92 Fed. 479; 34 C. C. A. 479 (6th C., 1899), the restriction was held invalid as relating to wooden dishes, "articles in common use." See Herriman v. Menzies, 115 Cal. 16, 21; 46 Pac. 730, 731; 35 L. R. A. 318, 319; 56 Am. St. Rep. 82 (1896).

58 It was repudiated in Hoffman v. Brooks, 23 Am. Law Reg. (N. S.) 648 (Super. Ct. Cin., 1884), where an agreement for fixing rates for services by tobacco warehousemen, was held void, and the court said: "Although courts may be inclined to apply this rule more strictly in cases involving the necessaries of life or services of a quasi-public nature, there is no authority for excepting from its operations any legitimate trade or business." See also, as to tobacco, Commonwealth v. Strauss, 191 Mass. 545; 78 N. E. 136; 11 L. R. A. N. S. 968 (1906). It was also repudiated in U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 286; 29 C. C. A. 141, 156; 46 L. R. A. 122, 133 (6th C., 1898), where, however, it was regarded as unnecessary to decide the question, the articles under consideration, viz., water, gas and sewer pipes, being regarded as articles of necessity. So in Brown v. Jacobs Pharmacy Co., 115 Ga. 429, 437; 41 S. E. 553, 556; 57 L. R. A. 547, 552; 90 Am. St. Rep. 126 (1902); Chip

§ 132. Business of public character.-The illegality of a restriction upon competition has not infrequently been regarded as based on the circumstance of such competition being in business of a public character, that is to say, irrespective of whether it would be illegal according to the test of extent. In this view a restriction not illegal according to the test of extent might be so on the ground of being upon competition in business of a public character. "Whatever tends to prevent competition between those engaged in a public employment, or business im

pewa Lumber Co. v. Tremper, 75 Mich. 36; 42 N. W. 532; 4 L. R. A. 373; 13 Am. St. Rep. 420 (1889; intoxicating liquors); De Witt Wire-Cloth Co. v. N. J. WireCloth Co., 16 Daly, 529; 14 N. Y. Suppl. 277; affirmed, it seems, in 38 N. Y. State Reporter, 1023 (1891; wire cloth); People v. Duke, 19 Misc. 292 (N. Y. Co. Gen. Sess. 1897; cigarettes); Nester v. Continental Brewing Co., 161 Pa. St. 473; 29 Atl. 102; 24 L. R. A. 247; 41 Am. St. Rep. 894 (1894; beer). See also Pocahontas Coke Co. v. Powhatan Coal & Coke Co., note 57, supra. But in Anheuser-Busch Brewing Assoc. v. Houck, 27 S. W. 692 (Tex. Civ. App., 1894); affirmed as Houck v. Anheuser-Busch Brewing Assoc., 88 Tex. 184; 30 S. W. 869 (1895), where a restriction as to beer was held unlawful under the statute, it was said that it would not have been invalid at common law, the policy of the laws of the State not being toward the unrestricted or general sale of beer. Compare Nester V. Continental Brewing Co., supra. In Cummings v. Union Blue Stone Co., 15 App. D. 602; 44 N. Y. Suppl. 787 (1897), a combination to control the bluestone trade was held void, though there is no such general need or

demand for bluestone, as to bring it within the category of articles of necessity, in the ordinary sense. On affirmance in 164 N. Y. 401; 58 N. E. 525; 52 L. R. A. 262; 79 Am. St. Rep. 655 (1900), it was said: "The stone had been for many years and still is in use for sidewalks, crossings, curbings and gutters in the eastern and southern cities of the United States, and in the construction of bridges, fountains, basins, floors and for trimmings in the exterior walls of buildings and for various other purposes. Its fitness and serviceability for these purposes were shown and the evidence also tended to show that in these respects it had no superior in the New York market." In Straus v. American Publishers' Assoc., 177 N. Y. 473; 69 N. E. 1107; 64 L. R. A. 701; 101 Am. St. Rep. 819 (1904), a restriction relating to books was held invalid under the act of 1899, apparently without reference to the distinction.

As to effect of Texas act, see § 232.

In the New York act (§ 224), is specified "any necessary of life." Compare the frequent specification of articles of common (or general) use, or the like. See under the different acts, c. XX.

pressed with a public character, is opposed to public policy and therefore unlawful." 59 "In the instance of business of such character that it presumably cannot be restrained to any extent whatever, without prejudice to the public interest, courts decline to enforce or sustain contracts imposing such restraint, however partial, because in contravention of public policy." 60 Just what a business of a "public character" is, has perhaps not been

59 People ex rel. v. Chicago Gas Trust Co., 130 Ill. 268, 293; 22 N. E. 798, 803; 8 L. R. A. 497, 505; 17 Am. St. Rep. 319, 332 (1889). In many cases where the doctrine is recognized as applying to "contracts in restraint of trade," the statement may be understood as intended to apply to restrictions upon competition, in view of the frequent confounding of these two classes of cases; or if this be not the case, the courts applying it to contracts in restraint of trade would doubtless apply it to restrictions upon competition pure and simple.

60 Gibbs v. Consolidated Gas Co. of Baltimore, 130 U. S. 396, 408; 9 Supm. 553, 557; 32 L. Ed. 979 (1889). To similar effect, West Virginia Transp. Co. v. Ohio River Pipe Line Co., 22 W. Va. 600, 625; 46 Am. Rep. 527, 535 (1883), where it was held illegal for the corporation to make a grant of an exclusive right of way and privilege, to construct and maintain lines of tubing, for the transportation of oil through certain lands. See Calor Oil & Gas Co. v. Franzell, 109 S. W. 328 (Ct. App. Ky., 1908). And the same doctrine was recognized or applied in South Chicago City Ry. Co. v. Calumet Electric Street Ry. Co., 171 Ill. 391, 397; 49 N. E. 576, 578 (1898); Dunbar v. American Telephone, etc., Co., 87 N. E. 521, 533 (Supm. Ct. Ill., 1909); Texas & Pa

cific Ry. Co. v. Southern Pacific Ry. Co., 41 La. Ann. 970; 6 So. 888; 17 Am. St. Rep. 445 (1889); Cowan v. Fairbrother, 118 N. C. 406; 24 S. E. 212; 32 L. R. A. 829; 54 Am. St. Rep. 733 (1896); Queen Ins. Co. v. State, 86 Tex. 250, 269, 274; 24 S. W. 397, 403, 406; 22 L. R. A. 483, 493, 495 (1893). It seems to be recognized in U. S. v. Trans-Missouri Freight Assoc., 166 U. S. 290, 335; 17 Supm. 540, 556; 41 L. Ed. 1007 (1897), though there the restriction under consideration was held illegal by virtue of statute. Here, where the question was as to the legality of an agreement among railroad companies for the establishment of rates, the court said: "The general reasons for holding agreements of this nature to be invalid, even at common law, on the part of railroad companies, are quite strong, if not entirely conclusive." It seems also to be recognized in State ex rel. v. Portland Natural Gas & Oil Co., 153 Ind. 483; 53 N. E. 1089; 53 L. R. A. 413; 74 Am. St. Rep. 314 (1899), though the decision is sustainable on the ground that the restriction was complete. In Chicago, Indianapolis, etc., Ry. Co. v. Southern Indiana Ry. Co., 38 Ind. App. 234; 70 N. E. 843 (1904), was condemned an agreement between two competing railroad corporations by which one precluded itself from furnishing fa

very clearly defined, but it seems to involve the conception of a business the right to exercise which depends on a legislative grant,61 in particular, in particular, of the power of eminent

cilities for transportation by means of the location of certain side tracks. So in Keene Syndicate v. Wichita Gas, Electric Light & Power Co., 69 Kan. 284; 76 Pac. 834; 67 L. R. A. 61; 105 Am. St. Rep. 164 (1904), of a lease between corporations engaged in furnishing electricity for public and private use, it being provided therein that the lessor should not for ten years engage in such business or dispose of property for use in such business. Compare Dueber Watch-Case Manuf. Co. v. Howard Watch & Clock Co., 66 Fed. 637, 644; 14 C. C. A. 14, 21 (2d C., 1895); Whitwell v. Continental Tobacco Co., 125 Fed. 454, 460; 60 C. C. A. 290, 296; 64 L. R. A. 689, 697 (8th C., 1903). In Cleveland, Columbus, Cincinnati, etc., Ry. Co. v. Closser, 126 Ind. 348, 360; 26 N. E. 159, 163; 9 L. R. A. 754, 760;

61 Thus, supplying illuminating gas by means of pipes laid in the streets of a city. People ex rel. v. Chicago Gas Trust Co., note 59, supra; Gibbs v. Consolidated Gas Co. of Baltimore, note 60, supra; State ex rel. v. Portland Natural Gas & Oil Co., note 60, supra. So of supplying natural gas. Charleston Gas Co. v. Kanawha Gas Co., 58 W. Va. 22; 50 S. E. 876; 112 Am. St. Rep. 936 (1905). In Gibbs v. Consolidated Gas Co., it was said (130 U. S. 411; 9 Supm. 558): “These gas companies entered the streets of Baltimore, under their charters, in the exercise of the equivalent of the power of eminent domain, and are to be held as having assumed an obligation to fulfill the public pur

22 Am. St. Rep. 593, 603 (1890), the court, while inclined to take the same view, contented themselves with the presumption that the restriction in that case (upon competition by common carriers) was illegal. See dissenting opinion of Shiras, J., in U. S. v. Trans-Missouri Freight Assoc., 58 Fed. 58, 84; 7 C. C. A. 15, 88; 24 L. R. A. 73, 91 (8th C., 1893). See also Wilmington City Ry. Co. v. Wilmington & B. S. Ry. Co., 8 Del. Ch. 468, 517; 46 Atl. 12, 24 (1900); Over v. Byram Foundry Co., 37 Ind. App. 452; 77 N. E. 302; 117 Am. St. Rep. 327 (1906); National Benefit Co. v. Union Hospital Co., 45 Minn. 272; 47 N. W. 806; 11 L. R. A. 437 (1891); Meredith v. N. J. Zinc & Iron Co., 55 N. J. Eq. 211, 221; 37 Atl. 539, 543 (1897); affirmed in 56 N. J. Eq. 454; 41 Atl. 1116 (1897).

poses to subserve which they were incorporated." So, transportation of oil in tubes. West Virginia Transp. Co. v. Ohio River Pipe Line Co., 22 W. Va. 600; 46 Am. Rep. 527 (1883). So, transportation by railroad. Texas & Pacific Ry. Co. v. Southern Pacific Ry. Co., 41 La. Ann. 970; 6 So. 888; 17 Am. St. Rep. 445 (1889); U. S. v. TransMissouri Freight Assoc., infra. See Michigan Central R. R. Co. v. Pere Marquette R. R. Co., 128 Mich. 333; 87 N. W. 271 (1901). So furnishing electricity. Keene Syndicate v. Wichita Gas, Electric Light & Power Co., note 60, supra. That the business of conducting a hotel is not a business of a public character, see Wittenberg v. Mollyneaux,

« PreviousContinue »