Page images
PDF
EPUB

5

binations to raise wages." Criminal liability for acts producing or tending to produce restrictions upon competition, now very generally exists in this country by virtue of statute.

§ 164. Civil liability.-Leaving out of consideration remedies as between parties to an agreement in restriction upon competition, it seems to have been the strict rule of the common law that no civil liability results merely from the existence of such a restriction. The reason of this rule

inal Law, § 520: "It is reasonably plain that the common law of our States has not adopted these offenses in terms as thus defined. Yet it does not follow that the principle from which the law proceeded has not become an inheritance with us. Modified, therefore, and thus adapted to our altered situation and circumstances, there is ground for deeming them criminal misdemeanors in States that recognize common-law crimes." Otherwise, of course, where common-law crimes are not recognized. See State ex rel. Monnett v. Buckeye Pipe Line Co., 61 Ohio St. 520; 56 N. E. 464 (1900). See the elaborate discussion in Stickney's "State Control of Trade and Commerce." In 2 Wharton's Precedents, No. 658, is a case of an indictment for a conspiracy among carriers to regulate the prices of transportation, sustained by Judge Grier, afterwards of the United States Supreme Court. As to sufficiency of information on prosecution for conspiracy in restraint of trade, see State v. Dreany, 65 Kan. 292; 69 Pac. 182 (1902).

In Etna Ins. Co. v. Commonwealth, 106 Ky. 864; 51 S. W. 624; 45 L. R. A. 355 (1899), where the authorities were elaborately reviewed, it was held not an indictable offense at common law to combine

for the purpose of maintaining rates of insurance.

5 See, for instance, Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173, 187; 8 Am. Rep. 159, 166 (1871). In Chicago, Wilmington, etc., Coal Co. v. People, 214 III. 421; 73 N. E. 770 (1905), where was sustained a conviction for a conspiracy in restriction upon competition, common-law grounds were regarded as sufficient, though the indictment also contained counts framed under statutes. The common law on this subject was held not repealed by statute. See also Sanford v. People, 121 Ill. App. 619 (1905).

6 See under the various anti-trust acts, cc. XIX, XX.

7 Transportation Co. v. Standard Oil Co., 50 W. Va. 611, 617; 40 S. E. 591, 593; 56 L. R. A. 804, 808; 88 Am. St. Rep. 895 (1902). See Olmstead v. Distilling & Cattle-Feeding Co., 77 Fed. 265 (C. C. Ill., 1896). So held that no action would lie against the members of a combination illegal as in restriction upon competition, for a refusal to sell to the plaintiff. Brewster v. Miller, 101 Ky. 368; 41 S. W. 301; 38 L. R. A. 505 (1897). Analogous are the decisions to the effect that a contract in restraint of trade is not actionable at the instance of third parties; thus,

is that while it is true that an injury is regarded as resulting to a large number of persons vaguely designated as "the public," nevertheless, the injury to any given individual is comparatively insignificant, and great inconven

Bohn Manuf. Co. v. Hollis, 54 Minn. 223, 234; 55 N. W. 1119, 1121; 21 L. R. A. 337, 339; 40 Am. St. Rep. 319 (1893), where the court said: "The courts sometimes call such contracts 'unlawful' or 'illegal,' but in every instance it will be found that these terms were used in the sense merely of 'void' or 'unenforceable' as between the parties; the law considering the disadvantage so imposed upon the contract a sufficient protection to the public." See also remarks of Lord Watson in Mogul S. S. Co. v. McGregor, App. Cas. (1892) 25, 42; also Continental Ins. Co. v. Board of Underwriters, 67 Fed. 310, 318 (C. C. Cal., 1895); Dueber Watch-Case Manuf. Co. v. Howard Watch & Clock Co., 3 Misc. 582; 24 N. Y. Suppl. 647 (Supm. Ct., Sp. T., 1893); U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 279; 29 C. C. A. 141, 148; 46 L. R. A. 122, 128 (6th C., 1898); Tanenbaum v. N. Y. Fire Ins. Exchange, 33 Misc. 134; 68 N. Y. Suppl. 342 (Supm. Ct., Sp. T., 1900); Park v. National Wholesale Druggists' Assoc., 54 App. D. 223; 66 N. Y. Suppl. 615 (1900); Walsh v. Dwight, 40 App. D. 513; 58 N. Y. Suppl. 91 (1899); State ex rel. Monnett v. Buckeye Pipe Line Co., 61 Ohio St. 520; 56 N. E. 464 (1900). See also, article in 19 Law Quart. Rev. 37, 182 (1903) by D. R. Chalmers Hunt. In Dittman v. Distilling Co. of America, 64 N. J. Eq. 537, 544; 54 Atl. 570, 572 (1903), where a stockholder was denied equitable relief against the

transfer of a controlling interest in the stock of the corporation to another corporation, such relief being sought on the ground that the organization of the latter corporation and such transfer of stock involved the creation of an illegal restriction upon competition, it would seem that the decision might well have rested on the doctrine stated in the text, and that it was unnecessarily based on the doctrine involved in Stockton v. American Tobacco Co., 55 N. J. Eq. 352; 36 Atl. 971 (1897). See § 150. In Bigelow v. Calumet & Hecla Mining Co., 155 Fed. 869, 880 (C. C. Mich., 1907), relief was allowed a stockholder under like conditions, he being regarded as having suffered injury "distinct from such as would be suffered by the general public."

Nor, though an act is by statute declared a crime, is any private action therefor thereby created. Downes v. Bennett, 63 Kan. 653; 66 Pac. 623; 55 L. R. A. 560; 88 Am. St. Rep. 256 (1901). To the contrary, however, seems Rourke v. Elk Drug Co., 75 App. D. 145; 77 N. Y. Suppl. 373 (1902); and see Kellogg v. Sowerby, note 9, infra.

The distinction between mere acts in restriction upon competition, resulting in no civil liability, and acts resulting in such liability, was considered in Brown v. Jacobs Pharmacy Co., 115 Ga. 429, 438; 41 S. E. 553, 557; 57 L. R. A. 547, 552; 90 Am. St. Rep. 126 (1902), where, however, the acts held illegal constituted a boycott. See § 34.

ience would result from the recognition of a remedy in favor of each one of so large a number. Thus it has been said: "It would be unreasonable to multiply suits, by giving every man a separate right of action, for what damnifies him in common only with the rest of his fellow subjects." 8 There seems manifest, however, a strong disposition to relax the strictness of this rule, and in the anti-trust acts a right of action is commonly

8 4 Blackstone's Commentaries, p. 167.

It seems to have been overlooked or ignored in Gatzow v. Buening, 106 Wis. 1, 13; 81 N. W. 1003, 1006; 49 L. R. A. 475, 480; 80 Am. St. Rep. 17 (1900). See, however, State ex rel. Durner v. Huegin, 110 Wis. 189, 253; 85 N. W. 1046, 1063; 62 L. R. A. 700, 742 (1901). It seems also to have been overlooked or ignored in Liverpool & London & Globe Ins. Co. v. Clunie, 88 Fed. 160, 177 (C. C. Cal., 1898), where the decision in Continental Ins. Co. v. Board of Underwriters, 67 Fed. 310 (C. C. Cal., 1895), was regarded as authority for the proposition that the combination there under consideration was not illegal as in restriction upon competition; it is, however, simply authority for the proposition that, in the case under consideration, no civil liability resulted from the existence of such combination. It may also have been overlooked or ignored in the elaborate dissenting opinion 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); and see dissenting opinion in Park v. National Wholesale Druggists' Assoc., 175 N. Y. 1; 67 N. E. 136; 62 L. R. A. 632; 96 Am. St. Rep. 578 (1903). See also Klingel's Pharmacy v. Sharpe, 104 Md. 218; 64 Atl. 1029; 7 L.

R. A. N. S. 976; 118 Am. St. Rep. 399 (1906).

In Employing Printers' Club v. Doctor Blosser Co., 122 Ga. 509; 50 S. E. 353; 69 L. R. A. 90; 106 Am. St. Rep. 137 (1905), where was allowed an injunction against acts of a combination of trade competitors, although the right to relief was largely based on their influencing labor organizations to obstruct plaintiff's business, such right was based in part on the circumstance that such competitors had entered into a combination "to create a monopoly and stifle competition"; that is, by a conspiracy to fix and control the price of printing. The right to relief was held not barred by the circumstance of the plaintiff having been a party to such combination, membership in which it had, however, repudiated before commencement of the suit. See also 2 Eddy on Combinations, §§ 1048, 1049, 1055. In Leonard v. AbnerDrury Brewing Co., 25 App. D. C. 161 (1905), was allowed equitable relief against "the execution of the objects of" what was declared to be a conspiracy in restraint of trade, said to be illegal under § 3 of the Federal anti-trust act, but "equally violative of the common law" which prevails in the District of Columbia," § 3 being merely declaratory thereof. The injury against which relief was allowed seems to have

given to one damaged by an act in restriction upon competition.10

§ 165. Proceeding on behalf of public.-In accordance with the general doctrine allowing, on behalf of the public, a remedy against an act producing injury to the public, as in case of what is known as a public nuisance,11 it would seem to follow that a proceeding may be maintained on behalf of the public for relief against a restriction upon competition. The attorney-general is the proper officer to institute such a proceeding.

if

loss that 'would not have been actionable at common law,' see § 203.

§ 166. Injunction in proceeding on behalf of public.-Rarely, ever, is an action at law for damages an adequate remedy to been in effect a mere inducing of refusal to deal, the combination being among brewers who sought to coerce another brewer to join the combination. The complaint was of injury that would result to retail dealers from the termination of their established trade relations with the brewer thus sought to be forced into the combination.

In Kellogg v. Sowerby, 190 N. Y. 370; 83 N. E. 47 (1907); reversing 93 App. D. 124; 87 N. Y. Suppl. 412 (1904), was sustained civil liability for conspiracy to prevent from competing with others engaged in the same kind of business, such conspiracy being declared to be within the prohibition of the statute imposing criminal liability for conspiracy "to commit any act injurious to trade or commerce."

10 See cc. XIX, XX. In some instances twofold or threefold damages are allowed. So the remedy by injunction is sometimes provided for in such acts. See Currier v. Concord R. R. Co., 48 N. H. 321 (1869), as to relief in equity to an individual under the New Hampshire statute against railroad monopolies. As to Federal act allowing right of action for damage or

11 As to the remedy in case of a public nuisance, see 1 High on Injunctions (3d ed.), §§ 759-771. But the existence of such remedy was denied in McCarter (Attorney General) v. Firemen's Ins. Co., 70 N. J. Eq. 291; 61 Atl. 705 (1905), holding not maintainable a proceeding by the attorney-general to enjoin certain corporations from regulating and maintaining rates of premium for insurance. Reliance was had on the general rule that a contract in restraint of trade is not "illegal in the ordinary sense of the word, but merely as being unenforceable." But this conclusion seems a result of the frequent error elsewhere considered (§ 160), of confusing the doctrine against restrictions upon competition with that against contracts in restraint of trade. Such a proceeding was, however, held maintainable under like conditions in People v. Aachen & Munich Fire Ins. Co., 126 Ill. App. 636 (1906). See under Okla. (§ 228) as to application of statute allowing injunction against "a common nuisance."

the public against acts in restriction upon competition, and, in accordance with the rules applicable to the granting of injunctions, an injunction on the application of the attorney-general is ordinarily the proper proceeding. Although there appears to be in the nature of things no reason why such relief should not be granted against acts of a mere individual, in practice it is only acts of a corporation against which such relief seems ever to have been sought.1

12

§ 167. Non-enforcibility of agreement.-The remedy by injunction just considered is available against a corporation or a mere individual, independently of whether the restriction is the result of an agreement. But such restrictions are commonly the result of agreement, and the existence of such an agreement gives rise to the question of the existence of remedies as between the parties thereto.13 In accordance with the doctrine applicable generally to agreements illegal as against public policy, no proceeding, whether legal or equitable, can be maintained, as between such parties, to enforce any provision of the agree ment.1 14

12 See § 175; article in 16 Harv. Law Rev. 389 (1902-3) by E. S. Mack.

13 Of course such questions do not arise in case of a restriction resulting solely from the action of an individual, as distinguished from a combination. See Oliver V. Gilmore, 52 Fed. 562 (C. C. Mass., 1892).

14 Bement v. National Harrow Co., 186 U. S. 70, 88; 22 Supm. 747, 754; 46 L. Ed. 1058 (1902; agreement in violation of Federal anti-trust act); Burlington, C. & N. Ry. Co. v. Northwestern Fuel Co., 31 Fed. 652 (C. C. Minn., 1887); National Harrow Co. v. Hench, 76 Fed. 667 (C. C. Pa., 1896); Cravens V. Carter-Crume Co., 92 Fed. 479; 34 C. C. A. 479 (6th C., 1899); Indiana Manuf. Co.

v. J. I. Case Threshing Mach. Co., 148 Fed. 21 (C. C. Wis., 1906); McConnell v. Camors-McConnell Co., 152 Fed. 321; 81 C. C. A. 429 (5th C., 1907); Stewart v. Stearns & Culver Lumber Co., 48 So. 19 (Supm. Ct. Fla., 1908); More v. Bennett, 140 Ill. 69; 29 N. E. 888; 15 L. R. A. 361; 33 Am. St. Rep. 216 (1892); 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); Chippewa Lumber Co. v. Tremper, 75 Mich. 36; 42 N. W. 532; 4 L. R. A. 373; 13 Am. St. Rep. 420 (1889; covenant in deed against sale of liquor); Richardson v. Buhl, 77 Mich. 632, 651; 43 N. W. 1102, 1108; 6 L. R. A. 457, 464 (1889; action for amount claimed to be

« PreviousContinue »