Day v. Zimmerman.

388; Hill v. Kroft, 29 id. 186; Ludlow v. Bingham, 4 Dall. 47; Maine Ins. Co. v. Weeks, 7 Mass. 439; Enos v. Tuttle, 3 Conn. 27; Huff v. Mills, 7 Yerg. 42; Hinsdill v. Stafford, 11 Verm. 309; Little v. Hale, id. 482; Eunson v. Healy, 2 Mass. 32; Grant v. Shaw, 16 id. 341; Cushman v. Hayne, 20 Pick. 132.

J. G. Shipman (of New Jersey) and L. D. Vail, for defendant in

error.

WILLIAMS, J. The law is well settled that a promissory note is liable to be attached before maturity in the hands of the maker, at the suit of a creditor of the payee. Though not due, it is a debt within the meaning of the attachment laws, and, therefore, as between the payee and attaching creditor, it is bound by the service of the attachment on the maker; and if, after being attached, it remains in the hands of the payee until maturity, it is bound by the attachment as against all persons into whose hands it may thereafter come. But the attachment is unavailing, as against a bona fide holder or indorsee, for value, to whom it has been transferred before maturity, without actual notice of the attachment. The doctrine of notice by lis pendens is not applicable to such a case. Kieffer v. Ehler, 18 Penn. St.388; Hill v. Kroft, 29 id. 186; and, therefore, a subsequent holder is not affected with constructive notice of the attachment.

In the case before us, the evidence shows that Yohe & Depue purchased the note in controversy of the payee, at their banking-house in Easton, shortly before its maturity, for $5,450, without any notice of the attachment whatever. The fact that they had heard that the payee had failed and gone west was not sufficient to put them upon inquiry, as to his right to dispose of the note. It was no notice of the attachment, nor of any thing from which it could be inferred. It is clear, then, that they took a good title to the note as against the plaintiff's attachment. There was no evidence that the defendant assisted the payee in selling the note, or that he knew of his intention to dispose of it until after the sale had taken place. Nor was there any evidence that the defendant colluded with the payee for the purpose of enabling him to hinder or defraud his creditors. So far as the defendant's cross-examination shows, and this is all the evidence on the subject, he did not purchase the property for which the note in part payment was given, for less than its value, nor with intent to cover it up and conceal it from the payee's creditors. The

Morris' Run Coal Co. v. Barclay Coal Co.

defendant was clearly entitled, under the uncontradicted evidence in the case, to an affirmative answer to the points which were submitted by his counsel. Instead of declining to charge as requested, the court should have instructed the jury that there was no evidence that the defendant, in any way, assisted the payee in passing the note to Yohe & Depue; and if they bought it without actual notice of the attachment, before its maturity, the payment to them by defendant was a good and valid defense to the attachment, and their verdict must be for the defendant.

It is clear that under the law and the evidence, the plaintiff was not entitled to recover.

Judgment reversed, and a venire facias de novo awarded.

MORRIS' RUN COAL Co., plaintiffs in error, v. BARCLAY COAL CO.

(68 Penn. St. 173.)

Restraint of trade. Conspiracy. Illegal contract.

Five coal corporations of Pennsylvania entered into an agreement, in New York, by which they agreed to divide the market for the bituminous coal, from the two coal regions of which they had control, in certain proportions; to appoint a committee to take charge of the business of all the corporations, and to appoint a general sales-agent, to be stationed at Watkins, New York. By the agreement, it was further provided, that each company was to deliver its proportion of the coal at such times and to such parties as the committee should, from time to time, direct; that the committee should adjust the prices of coal in the different markets; that the general agent should direct a suspension of shipment or delivery of coal by any of the companies making sales or deliveries beyond its proportion. By a statute of New York, "If two or more persons shall conspire to commit any act injurious to trade or commerce, they shall be deemed guilty of a misdemeanor." In an action on a draft, given in furtherance of this agreement, held, that the agreement was in contravention of the statute and against public policy, and, therefore, illegal and void; also, that the draft was tainted with the illegality, and could not be recovered upon.

ACTION by the Morris' Run Coal Company against the Barclay Coal Company upon an accepted draft on the defendants, in favor

Morris' Run Coal Co. v. Barclay Coal Co.

of plaintiffs, for $2,466.99. The opinion states the facts. Judgment for defendants. Plaintiffs took out a writ of error.

U. Mercur (with whom was E. Overton, Jr.), for plaintiffs in error. The agreement was but for a year, and to operate in but a limited portion of the State of New York; it was not a general restraint of trade, and, therefore, was good. Chitty on Contracts, 591, 597, 599. The restraint is valid, unless plainly beyond what the party's interests require. Wickens v. Evans, 3 Yerg. & J. 318. The action is on the draft, and the contract was not needed to establish it. Swan v. Scott, 11 Serg. & Rawle, 161; Thomas v. Brady, 10 Penn. St. 164; Scott v. Duffy, 14 id. 20. The contract was executed. Lestapies v. Ingraham, 5 Penn. St. 71; Fox v. Cash, 11 id. 207. The defendant's acceptance was on a new consideration. Tole v. Armstrong, 4 Wash. C. C. 299.

J. De Witt, for defendant in error.

AGNEW, J. This was an action on a bill, drawn upon one party in favor of another party, to a contract between five coal companies, for a sum found due in the equalization of prices under the contract. It raises a question of great importance to the citizens of this State and the State of New York, where the contract was made, and was in part to be executed, to wit: Whether the contract was illegal as being contrary to the statute of New York, or at common law, or against public policy. The instrument bears date the 15th day of February, 1866. The parties are five coal companies, incorporated under the laws of Pennsylvania, to wit: The Fall Brook Coal Company and Morris' Run Coal Company, of the Blossburg coal region; and the Barclay Coal Company, Fall Creek Bituminous Coal Company and Towanda Coal Company, of the Barclay coal region. By the agreement, the market for the bituminous coal from these two regions is divided among these parties in certain proportions. A committee of three is appointed to take charge and control of the business of all these companies, to decide all questions by a certain vote, and to appoint a general sales agent, to be stationed at Watkins, New York. Provision is made for the mining and delivery of coal, their kinds, and for its sale through the agent, subject, however, to this important restriction, that each party shall, at its own costs and expense, deliver its proportion of the different kinds of coal in the

Morris' Run Coal Co. v. Barclay Coal Co.

different markets at such times and to such parties as the committee shall, from time to time, direct. The committee is authorized to adjust the prices of coal in the different markets and the rates of freight, and also to enter into such an agreement with the anthracite coal companies as will promote the interests of these parties. Then comes an important provision that the companies may sell their coal themselves, but only to the extent of their proportion, and only at the prices adjusted by the committee. It is also provided that the general sales agent shall direct a suspension of shipment or deliveries of coal by any party making sales or deliveries beyond its proportion, and thereupon such party shall suspend shipments until the committee shall direct a resumption. Detailed reports of the business are to be made by the companies to the general sales agent at fixed and short intervals, and settlements are to be made by the committee monthly, prices averaged, and payments made by the companies in excess to those in arrear; and, finally, each party binds itself not to cause or permit any coal to be shipped or sold otherwise than as the same has been agreed upon, and that all rules and regulations by the executive committee, in relation to the business, shall be faithfully carried out.

In regard to the relation these companies hold to the public, the field of their mining operations, the markets they supply, the extent of their coal fields, and the general supply of coal, the distinguished referee, Judge ELWELL, finds as follows: "The Barclay and Blossburg coal mines are the only coal mines furnishing the kind of coal mined and shipped by these companies, except the Cumberland coal, which latter, in order to reach the same markets north, would have to be shipped by tide-water. There was some of the same kind of coal mined in McKean and Elk counties, in this State, but in quantities so small as that it was not considered by these companies as coming into competition with them. The coal of the Blossburg and Barclay regions is adapted to mechanical purposes and for generating steam. Wherever sold, it comes into competition with anthracite coal, and also with the Cumberland coal sent by tide-water to Troy, N. Y., to which point both kinds of bituminous coal are shipped."

During the season of 1866, these companies made sales of coal at Oswego and Buffalo, to parties who shipped to Chicago, Milwaukie and other western cities. It there came into competition to some extent with Pittsburg coal. The latter is used for making gas, but the coal of these companies cannot be used for that purpose.

VOL. VIII. 21

Morris' Run Coal Co. v. Barclay Coal Co.

The referee found that the statute of New York is, "if two or more persons shall conspire," first, "to commit any offense;" second, "to commit any act injurious to the public health, to public morals, or to trade or commerce, they shall be deemed guilty of a misdemeanor."

The referee found, as his conclusion upon the whole case, that the contract was void by the statute, and void at common law, as against public policy. The restraint of the contract upon trade and its injury to the public is thus clearly set forth by the referee: "These corporations," he says, "represented almost the entire body of bituminous coal in the northern part of the State. By combination between themselves they had the power to control the entire market in that district. And they did control it by a contract not to ship and sell coal otherwise than as therein provided. And, in order to destroy competition, they provided for an arrangement with dealers and shippers of anthracite coal. They were thereby prohibited from selling under prices to be fixed by a committee representing each company. And they were obliged to suspend shipments, upon notice from an agent that their allotted share of the market had been forwarded or sold. Instead of regulating the business by the natural laws of trade, to wit: Those of demand and supply, these companies entered into a league, by which they could limit the supply below the demand, in order to enhance the price. Or, if the supply was greater than the demand, they could, nevertheless, compel the payment of the price arbitrarily fixed by the joint committee. The restraint on the trade in bituminous coal was, by this contract, as wide and extensive as the market for the article. It already embraced the State of New York, and was intended and no doubt did affect the market in the western States. It is expressly stipulated that the parties to this contract shall not be considered as partners. The agreement was not entered into for the purpose of aggregating the capital of the several companies, nor for greater facilities for the transaction of their business, nor for the protection of themselves by a reasonable restraint, as to a limited time and space, upon others who might interfere with their business."

The plaintiff in error's reply to this vigorous statement of the purpose of the contract, and its effect upon the public interest, alleges that its true object was to lessen expenses, to advance the quality of the coal, and to deliver it in the markets it was to supply, in the best order to the consumer. This is denied by the defend