Milwaukee Masous and Builders' Association v. Niezerowski.

95 Wis., 129. Statement.

January, 1897.

About six-sevenths of the mason contractors of Milwaukee, Wis., belonged to plaintiff association, which passed a private by-law that all bids for work by its members should be first made to the association and that six per cent should be added to the lowest bid and that the lowest bidder should give his note for this six per cent to the association; but if the bids were for repairs and building over, the one who did the original job should be awarded the work and all the others should bid over him to make the builder suppose there was competition. Defendant gave his note for the said six per cent, and it is now sued upon. He pleads illegality of consideration.

Opinion.

The six per cent scheme was in restraint of trade to so great an extent as to make it against public policy and illegal. No recovery can be had upon the note.

1

ENGLAND.

COMMON-LAW DECISIONS.

1 P. Wms., 181. Statement.

Mitchel v. Reynolds.

1711.

Reynolds assigned a lease of a bakery for five years to Mitchel, and agreed not to enter the bakery business in that parish during the said term; and if he did, to pay fifty pounds as damages. Reynolds did enter the business in that parish within five years, and this suit is brought to recover the fifty pounds. Reynolds claims the contract was void, it being in restraint of trade.

Opinion.

If a promise in restraint of trade is founded upon a good consideration, partial as to territory, and reasonable, it will be enforced, but not so if it is general, not to exercise a trade throughout the Kingdom, because it could be no benefit to either party.

Plaintiff can recover damages.

Mogul Steamship Co. v. McGregor, Gow & Co.

1892, Appeal Cases, 25.

Statement.

The defendants are firms and companies operating steam vessels, during the whole year, some on the Great River of China between Hankow and Shanghai and others between Shanghai and European ports. The plaintiffs send vessels to Hankow during the tea season to share the tea-carrying trade. Defendants combined to prevent plaintiffs and other outsiders fom obtaining a share of the trade. The means used were the sending of ships to compete with plaintiffs' ships; the lowering of freights; a rebate to those who dealt exclusively with them; the indemnifying other vessels that would compete with the plaintiffs; and the dismissal of agents who were acting for both plaintiffs and defendants.

Plaintiffs bring this suit to recover the damages they have sustained by reason of this combination.

Opinion.

Lord Halsbury delivered the principal opinion, and in it said:

"I am of opinion * that the whole matter comes around to the original proposition, whether a combination to trade, and to offer, in respect of prices discounts and other trade facilities, such terms as will win so large an amount of custom as to render it unprofitable for rival customers to pursue the same trade is unlawful, and I am clearly of opinion that it is not."

No action lies.

CANADA.

COMMON-LAW DECISION.

The Ontario Salt Co. v. The Merchants' Salt Co.

18 Grant's Ch. (Upper Canada), 540.

Statement.

1871.

Several incorporated companies and individuals, engaged in the manufacture and sale of salt, entered into an agreement, whereby the several parties combined under the name of the "Canadian Salt Association" for the purpose of carrying on the salt business. It was agreed that all salt manufactured by them should be sold through the trustees of the association, and that no salt should be sold otherwise. Opinion.

The court held that this agreement was not void as contrary to public policy; that it was not ultra vires of the incorporated companies, and that it would be enforced by an equity court.

263

Plaintiff brings suit on promissory notes given by defendant for balance due on purchases of sewer pipe. Defendant gives notices of three special defenses, all based upon the theory that plaintiff was a combination in restriction of trade, contrary-(1) to the common law; (2) to the so-called Sherman Act; (3) to the statute of Illinois taking effect July 1, 1893. Opinion.

As to the first special defense: "The fact that one party to a contract is engaged in illegal acts will not, at common law, avail the other party as a defense to the enforcement of a contract in itself legal."

As to the second special defense: The so-called Sherman Act does not affect contracts which "merely indirectly, remotely, incidentally, or collaterally regulate to a greater or lesser degree interstate commerce among the States."

As to the third special defense: The statute of July 1, 1893, provides, in section 9, that "the provisions of this act shall not apply to agricultural products or live stock while in the hands of the producer or raiser."

The statute, by virtue of this clause, contains both class and special legislation, and is in contravention of the fourteenth amendment of the Federal Constitution, which forbids any State to deprive any person of the equal protection of the laws, and also in contravention of section 22 of article 4 of the constitution of Illinois, which says: "In all other cases where a general law can be made applicable no special law shall be enacted."

It is suggested that the said ninth section may be declared void without affecting the validity of the remaining clauses of the act. By such a decision the courts would make the act binding upon those classes of persons which the legislature especially exempted from its provisions. This would be judicial legislation of the most flagrant character. Clause 9 taints the whole act and renders it all void.

Verdict must be given for the plaintiff.