39 Pocahontas Coke Co. v. Powhatan Coal & Coke Co., 60 W. Va. 508, 56 S. E. 264, 10 L. R. A. (N. S.) 268, 116 Am. St. Rep. 901, 9 Ann. Cas. 667; Charleston Natural Gas Co. v. Kanawha Natural Gas, Light & Fuel Co., 58 W. Va. 22, 50 S. E. 876, 112 Am. St. Rep. 936, 6 Ann. Cas. 154. See "Contracts;' Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
40 United States v. Addyston Pipe & Steel Co., 85 Fed. 271, 29 C. C. A. 141, 46 L. R. A. 122. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
41 Morris Run Coal Co. v. Coal Co., 68 Pa. 173, 8 Am. Rep. 159. See, also, Craft v. McConoughy, 79 I11. 346, 22 Am. Rep. 171; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666; Arnot v. Coal Co., 68 N. Y. 558, 23 Am. Rep. 190; Richardson v. Buhl, 77 Mich. 632, 43 N. W. 1102, 6 L. R. A. 457; People v.
Such agreements as these tend to create monopolies and stifle competition. They are not only void at common law, but in most jurisdictions have been expressly declared void by statute, and to the extent that they affect interstate or foreign commerce they are declared void by the act of congress commonly called the Sherman, or anti-trust, act.42
Some combinations between dealers are legitimate, and have been sustained, though the object was, to a certain extent, to prevent competition and enhance prices.48 The line between combinations that are lawful and those that are unlawful is not clear, and the cases are not uniform. It has been held that an agreement between partners not to sell below a certain price is not unlawful where there is no intention to create a monopoly and control prices.44
Refining Co., 121 N. Y. 582, 24 N. E. 834, 9 L. R. A. 33, 18 Am. St. Rep. 843; Urmston v. Whitelegg, 63 Law T. 455; De Witt Wire-Cloth Co. v. Wire-Cloth Co., 16 Daly, 529, 14 N. Y. Supp. 277; Judd v. Harrington, 139 N. Y. 105, 34 N. E. 790; Strait v. Harrow Co. (Sup.) 18 N. Y. Supp. 224; Nester v. Brewing Co., 161 Pa. 473, 29 Atl. 102, 24 L. R. A. 247, 41 Am. St. Rep. 894; State v. Oil Co., 49 Ohio St. 137, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St Rep. 541; Santa Clara Valley Mill & Lumber Co. v. Hayes, 76 Cal. 387, 18 Pac. 391, 9 Am. St. Rep. 211; Leonard v. Poole, 114 N. Y. 371, 21 N. E. 707, 4 L. R. A 728, 11 Am. St. Rep. 667; People v. Milk Exchange, 145 N. Y. 267, 39 N. E. 1062, 27 L. R. A. 437, 45 Am. St. Rep. 609; Milwaukee Masons' & Builders' Ass'n v. Niezerowski, 95 Wis. 129, 70 N. W. 166, 37 L. R. A. 127, 60 Am. St Rep. 97; Trenton Potteries Co. v. Oliphant 58 N. J. Eq. 507, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St. Rep. 612. See "Contracts" Dec. Dig. (Key-No) § 116; Cent. Dig. §§ 542-552.
42Act Cong. July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St 1901, p. 3200), by which every contract or combination in the form of a trust or otherwise, or conspiracy in restraint of trade or commerce among the several states or with foreign nations, is declared illegal; and every person who monopolizes, or attempts or combines or conspires with another to monopolize, any part of such trade or commerce is made guilty of a misdemeanor. This act, as construed by the United States supreme court in the celebrated case of STANDARD OIL CO. OF NEW JERSEY v. UNITED STATES, 221 U. S. 1, 31 Sup. Ct 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734, Throckmorton Cas. Contracts, 274, has been held to render illegal and void only contracts in "unreasonable" restraint of trade. See, also, United States v. American Tobacco Co., 221 U. S. 106, 31 Sup. Ct 632, 55 L. Ed. 663; United States v. E. C. Kight Co., 156 U. S. 1, 15 Sup. Ct. 249, 39 L. Ed. 325; Hopkins v. United States, 171 U. S. 578, 19 Sup. Ct 40, 43 L. Ed. 290; Anderson v. United States, 171 U. S. 604, 19 Sup. Ct. 50, 43 L. Ed. 300; Northern Securities Co. v. United States, 193 U. S. 197, 24 Sup. Ct 436, 48 L. Ed. 679. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552; "Monopolies," Dec. Dig. (Key-No.) §§ 12-20; Cent. Dig. §§ 10-14,.
43See Bohn Mfg. Co. v. Hollis, 54 Minn. 223, 55 N. W. 1119, 21 L. R. A. 337, 40 Am. St. Rep. 319. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542-552.
The rule that combinations to prevent competition and enhance prices are illegal has been held, in the absence of statute, not to apply to a combination between manufacturers of an article which is not a necessity, where the agreement puts no restraint on the production and sale of the article. In a Massachusetts case several rival manufacturers and sellers of a certain fixture, under patents owned by them, who were the principal dealers in the article, and substantially supplied the market with it, entered into a combination to prevent competition between them, and it was upheld. "In effect," it was said, "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 does 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, but to a particular curtain fixture of the parties' own manufacture. It does not look to affecting competition from outside (the parties have a monopoly by their patents), but only to restrict competition in price between themselves. 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 contracts and to put a price on the products of their own industry. But we cannot assume that the purpose and effect of the combination are to unduly raise the price of the commodity. A natural purpose and a natural effect are to maintain a fair and uniform price, and to prevent the injurious effects, both to producers and customers, of fluctuating prices caused by undue competition. When it appears that the combination is used to the public detriment, a different question will be presented from that now before us. The contract is apparently beneficial to the parties to the combination, and not necessarily injurious to the public, and we know of no authority or reason for holding it to be invalid, as in restraint of trade or against public policy." 45
44 Marsh v. Russell, 66 N. T. 2S8. See "Contracts," Dec. Dig. (Key-No.) $ 116; Cent. Dig. §§ 542-552.
45 Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629. And see Dolph v. Machinery Co. (C. C.) 28 Fed. 553; Skrainka v. Scharringhausen, 8 Mo. App. 522; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723, 46 L. R. A. 255, 78 Am. St Rep. 612. A contract by which three of four companies engaged in the manufacture of oleomargine consolidate as a corporation, for the purpose of stopping the sharp competition between them, and
On the other hand, however, if it clearly appears that the object of the contract is not the reasonable protection of a business or profession, but rather to create a monopoly and control the price of an article of common utility or common consumption, the contract is illegal, even though the article is not one of the prime necessaries of life.46 "Corners" in the Market
There are few combinations more clearly contrary to public pol-icy^than agreements to create what are known as "corners" in the market, as where several persons enter into a combination to buy up more of a commodity than there is in the market, so as to force a fictitious and unnatural rise in values, with a view of taking advantage of dealers and purchasers whose necessities compel them to buy.*7 A combination to create a corner in one of the necessaries of life is not only illegal, but is criminal. A combination to acquire a controlling interest in the stock of a corporation for the purpose of creating a corner in the stock market, though probably not criminal, is at least illegal.*8