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TRUSTS AND CONSPIRACIES AT COMMON LAW. 119

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commerce were defined as the offense of forestalling the market," the offense of "engrossing" and "monopolies."

The offense of "forestalling the market" would, in modern parlance, be declared a trust, as it relates to public trade generally, while "engrossing" was confined to breadstuffs and victuals. Blackstone declares that the offense of forestalling the market, and of engrossing, were offenses at common law, indictable and finable. He says the offense is described by Statute 5 & 6 Edward VI., chap. 14, "to be the buying or contracting for any merchandise or victual coming in the way to market; or dissuading persons from bringing their goods or provisions there; or persuading them to enhance the price when there; any of which practices make the market dearer to the fair trader." (Book IV, page 158.) Engrossing he defines as "buying up large quantities of corn or other dead victuals with intent to sell them again. This must, of course, be injurious to the public, by putting it in the power of one or two rich men to raise the price of provisions at their own discretion." The punishment for these offenses, as in other minute misdemeanors, was, at common law, discretionary fine and imprisonment. (1 Haw. P. C. 235.) Monopolies, he declares, are contrary to public policy and void.

Criminal conspiracies at common law were defined by Lord MANSFIELD, one of England's greatest judges, on a motion made before him for leave to file an information against defendants for conspiracy to raise the price of salt. The defendants owned salt works at Droitwitch, and were charged with raising the price of that commodity. The motion was granted. In his opinion, granting the motion, LORD MANSFIELD observed: "If an agreement was made to fix the price of salt, or any other necessary of life, by people dealing in that commodity, the court would be glad to lay hold of an opportunity, from what quarter soever the complaint came, to show their sense of the crime, and that at what rate soever the price was fixed, high or low, made no difference, for all such agreements are of bad consequence and ought to be discontinued." (King v. Morris, 2 Kenyon's Notes of Cases,

It has been held that this rule of the common law still prevails in the United States, in those States which have enacted no statutory regulations governing the subject. The modern cases, and later authorities, fully sustain the doctrine that any association of two or more persons combining for the dishonest purpose of creating monopolies in those commodities which comprise the necessaries of life, or to enhance their market price, to the prejudice and injury of the general public consumer, is a criminal conspiracy at common law, subjecting the offenders to fine and imprisonment. In States where there are no statutes, or Anti-Trust Laws punishing conspiracies in restraint of trade, this rule of the common law has been frequently applied. (Commonwealth v. Carlisle, Bright's N. P. (Pa.) 36; Commonwealth v. Miskey, 15 Phila. (Pa.) 356; Nester v. Continental Brewing Co., 161 Pa. St. 473; Chicago, etc., Coal Co. v. People, 114 Ill. App. 75; People v. The Milk Exchange, 145 N. Y. 267; People v. Sheldon, 139 N. Y. 251; People v. Fisher, 14 Wend. 9.)

In the Illinois case, defendants were indicted for conspiracy to regulate and fix the price of coal. In September, 1902, they fixed the price at $2.90 a ton. In the following month, October 13, 1902, they increased the price about $1 a ton. Defendants were held guilty of conspiracy, and the court, among other things, observed: "All combinations among persons or corporations, for the purpose of raising or controlling the prices of merchandise or any of the necessaries of life, are monopolies. * * * Where the act to be done by such combination necessarily tends to prejudice the public, or to oppress individuals, the combination has always. been held to be criminal."

The plea that a trust may be beneficial because the result may reduce, or does reduce, the price of the commodity, was answered by the New York Court of Appeals in the Milk Exchange case (145 N. Y. 267), by this pertinent observation:

"It may be, as claimed, that the purpose of the combination was to reduce the price of milk, and that it being an

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article of food, such a reduction was not against public policy. But the price was fixed for the benefit of the dealers, and not the consumers, and the logical effect upon the trade of so fixing the price by the combination, was to paralyze the production and limit the supply, and thus leave the dealers in the position to control the market, and, at their option, to enhance the prices to be paid by the consumers. This brings the case within the authorities to which we have referred."

A reference to the Anti-Trust Laws of the various States are given infra, indicating those, also, in which the common law prevails. The authorities in those States which have no statute bearing on the subject will be obliged to resort to the common-law rule to invoke a remedy for criminal conspiracies in restraint of trade to control the price of the necessaries of life.

§ 57a. State Anti-Trust Laws Upheld.-A State has power to enlarge the rule of the common law, and to prohibit combinations in restraint of trade within its borders, where such combinations limit competition in the production or sale of articles, or increase or reduce prices, in order to preclude free and unrestricted competition. The Legislature of a State has power to declare that competition, and not combination, shall be the law of trade. It may lawfully prohibit combinations to control prices. Held accordingly that a State Anti-Trust Law, containing such provisions (Laws of Texas, 1889, 1895, and 1899), was constitutional and binding, and did not deprive persons of property without due process of law. (Waters-Pierce Oil Co. v. Texas, 177 U. S. 28; National Cotton Oil Co. v. Texas, 197 U. S. 115.)

§ 58. Kansas Anti-Trust Law Sustained.--The Supreme Court of the United States has held that a State has power to pass a law forbidding persons within its borders to combine with others or to create a pool to fix the price of necessaries of life, to divide the net earnings, and to prevent competition in the purchase of such articles, and sustained an act of the Legislature of the State of Kansas, passed for

that purpose, on the 8th of March, 1897. The act in question provides as follows:

Kansas Anti-Trust Act.- Sec. 1. A trust is a combination of capital, skill, or acts, by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any or all of the following purposes: First. To create or carry out restrictions in trade or commerce or aids to commerce, or to carry out restrictions in the full and free pursuit of any business authorized or permitted by the laws of this State. Second. To increase or reduce the price of merchandise, produce or commodities, or to control the cost or rates of insurance. Third. To prevent competition in the manufacture, making, transportation, sale or purchase of merchandise, produce or commodities, or to prevent competition in aids to commerce. Fourth.— To fix any standard or figure, whereby its price to the public shall be, in any manner, controlled or established, any article or commodity of merchandise, produce or commerce intended for sale, use or consumption in this State. Fifth. 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 to bind themselves not to sell, manufacture, 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 price of such article, commodity or transportation at a fixed or graded figure, or by which they shall in any manner establish or settle the price of any article or commodity or transportation between them or themselves and others, to preclude a free and unrestricted competition among themselves or others in transportation, sale or manufacture of any such article or commodity, or by which they shall agree to pool, combine or unite any interest they may have in connection with the manufacture, sale or transportation of any such article or commodity, that its price may in any manner be affected. And any such combinations are hereby declared to be against public policy, unlawful and void." (Laws of Kansas, 1897, p. 481.)

The defendant was convicted by a jury under this statute for combining with others to fix the price of grain, to divide the net earnings, and to prevent competition in the purchase and sale of grain. The court sustained the validity of the Kansas statute, and held that its provisions were not in conflict with the Fourteenth Amendment to the Federal Constitution. The court held that there was a certain freedom of contract which cannot be destroyed by legislative enactment, and that it is not always easy to draw the line between

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those contracts which are beyond the reach of the police power and those which are subject to prohibition or restraint. The court observed, however, that "a secret arrangement by which, under penalties, an apparently existing competition. among all the dealers in a community, in one of the nccessaries of life, is substantially destroyed without any merging of interests, through partnership or incorporation, is one to which the police power extends." The court observcd further that the defendant could not object to the statute merely because it operated oppressively upon others. The hurt must be to himself." (Smiley v. Kansas, 196 U. S. 447.)

§ 59. Missouri Anti-Trust Law - Purchaser Relieved in Suit by the Trust.- One of the most drastic provisions of State anti-trust legislation is that which seeks to relieve a purchaser from liability for goods purchased from the trust. The law authorizes the purchaser, in an action brought by the trust to recover the price of goods, to plead that plaintiff is a trust, as a complete defense to the action. This provision will be found in the laws of many States. It is incorporated in the Missouri statute, which provides as follows:

"Any purchaser of any article or commodity from any individual, company or corporation transacting business contrary to any provision of the preceding sections of this article shall not be liable for the price or payment of such article or commodity, and may plead this article as a defense to any suit for such price or payment." (Laws 1891, chap. 143. Mo. Rev. Stat. 1899, § 8977.)

In an action brought in the Circuit Court, City of St. Louis, by the Cahill-Swift Manufacturing Company against Joseph F. Walsh, to recover the value of materials furnished. the defendant, the latter set up as a defense to the action, that plaintiff was a member of a "trust" or conspiracy in restraint of trade, known as the "Plumbers' Trust." The case was tried before Judge Ryan on the 25th of June, 1906, who sustained the defense under the provision of the Anti-Trust Law above quoted, and held that the plaintiff could not recover the price of the goods sold, even although

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