holds is utterly without recourse in such

case.

The Court has much to say about "freedom of speech," but we fail to understand why that question is involved in this case any more than it is in any other case of libel.

The opinion of the Court is unsatisfactory and unconvincing.

NOTES OF IMPORTANT DECISIONS

THE OBLIGATION TO ACCEPT A CUSTOMER.-Mr. Justice Bailhache's decision in Western Bank, Limited, v. Ernest Beck & Co. Limited, has just been affirmed by a strong Court of Appeal consisting of Bankes, Scrutton and Younger, JJ., Times, 28th ult. The defendant company had sold a quantity of cloth to the plaintiff bank, but had undertaken, as a term of the sale, to endeavor to sell it on commission for the plaintiffs, and if they could not do so, after a certain lapse of time, to repurchase it from the bank on certain agreed terms. The company received an offer for the cloth from the Krassin Delegation, then in England, but the bank would not have any dealings with Bolsheviks. The defendants refused to repurchase the cloth at the expiry of the agreed time on the ground that the plaintiff bank had unreasonably refused a customer tendered by them as agents, and had therefore prevented the carrying out of a sale. It was shown, however, that a private person called Paley had also offered to purchsae the cloth, and that the bank had refused to accept him because he admitted that he intended to re-sell to the Krassin Delegation. Mr. Justice Bailhache held that the bank was entitled to refuse the Krassin Delegation, an impecunious customer, but was not entitled to refuse Paley, whose financial stability no one doubted, merely on the political ground that he was going to re-sell to the Delegation. The bank had, therefore, unreasonably prevented the agent from earning his commission, and must be held liable in damages accordingly. -Solicitors' Journal (Eng.), April 7, 1923.

POWERS OF FEDERAL TRADE COMMISSION.-The powers of the Trade Commission are limited to matters directly relevant to interstate commerce, so that the corporation under investigation must not only be engaged in such commerce; but the subject under investigation must be so related to interstate commerce that its regulation may be

accomplished by an act of Congress, or so interwoven with interstate commerce that the whole subject is necessarily brought within the jurisdiction of Congress. The manufacture or production of goods is not "commerce", but where manufacture and production are a part of, and essential to, the operation of an instrumentality of interstate commerce, they may be so intimately associated with the instrumentality itself as to be an accessory thereto, whose regulation is necessary to insure regulation of the instrumentality.

Where corporations maintained manufacturing plants in a single state, but purchased their raw materials or produced them at points without the state, and had them shipped by interstate carriers to their plants, and then sold the manufactured product in interstate commerce, the intrastate portion of the business was separable from the interstate so as not to be subject to regulation by Congress.

The Federal Trade Commission is not invested by Federal Trade Commission Act, § 6, empowering it to gather and compile information concerning corporations engaged in commerce, etc., with authority to inquire into any business of nation-wide extent, and has no visitatorial powers coextensive with the constitutional functions of Congress; but its activities are strictly limited to the field of interstate commerce, outside of the portions of that field occupied by the act to regulate commerce and the Federal Reserve Act.-Federal Trade Commission v. Claire Furnace Co., 285 Fed. 936.

NATIONAL PROHIBITION ACT REPEALED REVENUE STATUTES RELATING TO INTOXICATING LIQUORS.-The National Prohibition Act repealed Rev. St. § 3258 (Comp. St. § 5994), imposing a penalty for possessing a still without having registered it, section 3282 (Comp. St. § 6022), imposing a penalty for manufacturing a mash fit for distilling on premises not an authorized distillery, and section 3242 (Comp. St. § 5965), imposing a penalty for carrying on the business of a rectifier or liquor dealer without having paid the special tax.-United States v. Stafoff, 43 Sup. Ct. 197.

RECENT DECISIONS IN THE BRITISH

COURTS

An important state law judgment was given in Duff Development Co. (Lim.) v. The Government of Kelantan and others, in which the crucial point involved was whether certain debts owing to the Government of Kelantan by the Crown Agents for the Colonies could be

garnisheed at the instance of the plaintiffs, who were creditors of the Kelantan Government in respect of a considerable sum due to them, as costs of an arbitration with that government. The government had submitted itself to the arbitration and had accepted the award, and it was, therefore, maintained by the plaintiffs that this involved a submission for all purposes by the government to the courts of this country, but Russell, J., overruled this contention, holding that the submission to arbitration did not preclude Kelantan from invoking the principle of international comity, whereby the courts decline to exercise their jurisdiction over the property of a sovereign State in this country; and the learned Judge found that the Government of Kelantan was in fact a sovereign State on the evidence furnished by a letter from the Foreign Office celtifying to that effect. This judgment has been affirmed on the plaintiffs' appeal to the Court of Appeal, but with expressions of doubt and regret which justify the expectation that it I will not be allowed to stand without a further appeal to the ultimate tribunal of appeal.

Another application of the rule in Rylands v. Fletcher was made in Hoare & Co. (Lim. v. McAlpine & Sons in which the plaintiffs, lessees of an old hotel at the corner of Fish Street Hill, in the city, sought an injunction to restrain the defendants, a firm of building contractors, from carrying out works on the site of a proposed new building on the opposite side of the street, so as to cause injury by subsidence, vibration or loss of support to their premises, and they also claimed damages; and Mr. Justice Astbury, finding that the driving of piles which was necessary for the construction of the defendants' proposed great building had caused the structural injury complained of, dismissed the defendants' contention that in view of the old condition of the plaintiffs' hotel they were not responsible for the damage so caused. He preferred to apply the principle of the leading case on the ground that the defendants had let loose a force which got beyond their control, the condition of the property affected having nothing to do with the plaintiffs' resulting right.

Partnership and company matters have lately furnished one or two notable decisions. The House of Lords overruled the judgments both of the Court of Appeal and of the Judge of the first instance in Cruickshank and others v. Sutherland and others on a partnership question which, on the face of it, was of a very elementary character, but which evidently, from the difference of judicial opinions, involved serious legal difficulties. A member of

a firm, whose partnership articles provided that the share of a partner dying or retiring was to be ascertained by reference to the last annual account, died, and the question was whether the value of his share in the partnership assets was to be taken at the value at which it was put in the last annual account or at its actual market value at the date of his death. Both the Courts below took the former view, but the Lords held unanimously that the assets must be taken at their actual value; and it will be interesting to read the grounds for this rather startling result when the judg ments are reported at length.

A curious dispute arising out of the depreciation in foreign currencies was dealt with in In Re British-American Continental Bank (Lim.); Lesser and Rosencrantz's Claim which was a summons taken out in the winding up of the Bank by L. and R., a German firm, asking for a declaration that they were entitled to prove for a sum of 20,138 1. for damages for a breach of contract on December 31, 1920, that sum representing the value at the rate of exchange on January 25, 1921 (the date of the winding-up order, of 4,339,919 German marks which were expended by the applicants on that date in purchasing certain currencies contracted by the bank to be delivered on December 31, 1920, but which the bank having failed to do so, the applicants purchased to meet their obligations and minimize their loss. The proof was lodged by L. & R. at the request of the liquidator in May, 1921, and subsequently dividends amounting in the aggre gate to 7s. 11d. in the 1. were declared in the winding-up, but no dividends were paid to L. & R. on their claim, and, the mark having greatly depreciated, the liquidator on December 20, 1921, obtained leave on an ex parte application under Sec. 214 of the Companies Act, 1908, to purchase out of the bank's assets such an amount as would be sufficient to pay to L. & R. the full amount of their original claim (4,339,919 marks), with interest in satisfaction of the liability. The requisite marks were bought for about 5,423 1., and were tendered by the liquidator to L. & R. at Hamburg, but were refused by them, and they insisted on their right to the dividends on their claim in English currency. P. O. Lawrence, J., held (following another decision against the same bank, In re Golozieher and Perso's Claim (1922) 91 L. J., Ch. 160) that the amount of the damages sustained by the applicants by the breach of the contract must be determined on the date of the breach, and as those damages had, in the first instance, to be assessed in foreign currency, the correct date for their

conversion into English money for the purpose of ascertaining the amount due at the time of the winding-up order was the date of the breach, December 31, 1920. The applicants were not bound to accept the tender of German marks made by the liquidator on January 5, 1922, as the marks then tendered did not represent the full amount of the damages for which they were entitled to be admitted as creditors in the winding-up; and so, in the result, it was declared that the applicants were entitled to be admitted as creditors in the winding up for such an amount as represented the 4,339,919 marks converted into English money at the rate of exchange ruling on December 31, 1920, and to receive the dividends already declared, and thereafter to be declared on that amount.

A riot damages case before Swift, J. (Pitchers v. Surrey County Council, ibid), raised some interesting points. The claim arose out of the Canadian mutiny at Whitley Camp, in the course of which the plaintiff's shop in the camp area was wrecked, and it was contended by the local authority that no compensation was payable by them under the Riot (Damages Act, 1886, because (a) the camp was under military control, and not under that of the Surrey Police, and (b) the damage had been caused during a "riot" and not a "mutiny." The learned judge found, however, that the fact that the damage was done by soldiers under circumstances which might amount to a mutiny did not prevent the disturbance from being a riot; that there was nothing to pre vent a riot occurring in a private place (the camp area); and that it could not be said that the police were not in control of the place, even though it might have been physically impossible for them to quell the disturbance.

In contract there were several cases of outstanding importance. The House of Lords decided, but by a majority only (Lord Sumner dissenting, that the use of the word "etcetra" at the end of an exemption clause in a charter-party specifying a number of particular causes over which the charterers might have no control, was sufficient to cover a strike of dock laborers preventing loading of the vessel, the doctrine of ejusdem generis not applying where, as in this case, the general words came first, and the particular words, used as examples, followed (Ambatielos v. Jurgens).

A novel question of principle was decided by the same tribunal in a case of sale of goods (British & Bennington's (Lim.) v. N. W. Cuchar Tea Co., ibid 426), in which the purchasers had repudiated the contract on the ground that delay in delivery caused by orders of the Shipping Controller directing the ves

sels containing the goods (tea) to other ports, amounted to a frustration of the commercial adventure, the award of the arbitrator to whom the dispute was referred in favor of the vendors being upheld on the ground that "when the purchaser has repudiated a contract of sale, the onus is not on the vendor, in order to recover damages, to prove that he was ready and willing to deliver the goods in accordance with the terms of the contract."

In matters of Tort there were also a number of interesting decisions. The House of Lords held in Fairman V. Perpetual Investment Building Society-a claim by a lodger against the owner of a block of flats for injuries caused by the defective condition of the common staircase that, there being nothing in this case in the nature of a "trap," and there being no contractual relation between the lodger and the landlords, the duty of the landlord did not involve a guarantee of the safety of the building, nor an obligation to keep it in repair, and that an obvious defect which on the face of it showed to any reasonable person that there was danger, did not give rise to any liability on the part of the landlord. Another negligence question of a different and novel character was decided by McCardie J., in Hawes v. Williams, where the action was by guests against their host, who took them out for a motor-car ride which ended in a collision. claiming damages for the negligent driving of the car. The contention for the defense was that a host is only liable to take such care of his guests as he would take of himself, a standard of care which the learned judge declined to accept, as being a standard of individual care resting upon personal idiosyncrasy, with the result that, in a finding by the jury of a want of "reasonable care," judgment was entered for the plaintiffs, and to conclude there may be noted the cases of two married women's torts, Edwards v. Porter before Bailhache, J., and McNeall v. Hawes before Lush, J., in which in each case, money had been fraudulently obtained by the defendant's wife, and the question to be decided was whether the wife's fraudulent representation was merely parcel of the making of a contract which the wife was legally incapable of contracting, or was an independent or naked tort for which, alone, the husband would be liable. Bailhache, J., decided in the case before him that there was no independent tort, so that the husband was exempt from liability; but Lush, J., came to a contrary view in the second case though the facts were very similar and it is left to the appellate tribunal to determine the doubtful point. DONALD MACKAY.

Glasgow, Scotland.

ANTI-TRUST LAWS A PROTECTION TO MONOPOLY

By Edgar Watkins

Between the tyranny of an autocracy, whether enforced by an emperor, a class or a dominant electorate, and the extreme of individualism, which is anarchy, lies liberty. The impulse of mankind is towards liberty, which to some means unrestrained license. Liberty, however, in its true sense, means the right to do only those things the doing of which infringes on no other man's rights.

Liberty thus delimited applies to all social activities, and among these activities, especially with English-speaking peoples, liberty of contract has always been highly cherished. Says Mr. Justice White:1

"Freedom to contract and to abstain from contracting, and to exercise every reasonable right incident thereto, became the rule in the English law."

Liberty of contract does not and should not mean the right to make all contracts. That all may enjoy liberty to contract, some contracts must be prohibited. Thus contracts unduly restraining trade may properly be prohibited in order that another's freedom to contract shall not be destroyed. This principle is an essential part of our common law.

In England kings granted the exclusive right to one or a specified class to deal in a named commodity or commodities. This was called a monopoly, and by such grants others than the monopolist were restricted in their liberty to contract.

By a natural transition monopoly came to be applied to the effect rather than to the grant. This is stated with his usual force and with a clearness more than usual, by Chief Justice White as follows:3

(1) Standard Oil Co. v. United States. 221 U. S. 1, 56; 55 L. Ed. 619, 643; 31 Sup. Ct. 502. 34 L. R. A. N. S. 834; Ann. Cas. 1912D. 734; 4 Fed. Anti-trust Dec. 79.

(2) For the original meaning of the word "monopoly," see Coke, 3 Inst. 181; Hawkins P. C. bk. 1, chap. 79.

(3) Note 1. supra.

"In this country also the acts from which it was deemed there resulted a part if not all of the injurious consequences ascribed to monopoly, came to be referred to as a monopoly itself. In other words, here as had been the case in England, practical common sense caused attention to be concentrated not upon the theoretically correct name to be given to the condition or acts which gave rise to a harmful result, but to the result itself and to the remedying of the evils which it produced."

It is in this secondary sense that the word "monopoly" is used in our antitrust laws.

The ruthless way by which large aggre gations of capital sought to obtain that monopoly which gave power to restrain trade aroused the fears of the American

people, ever jealous of this freedom to contract, and public opinions demanded prohibitory statutes. The first result was the Sherman Act of 1890, followed by the Elkins Amendment of 1903 to the Act to Regulate Commerce. The Elkins Amendment prohibited railroads from rebating their charges to favored shippers and thus properly prevented one of the means used by aggregations of capital in building up a monopoly.

The evil sought to be prevented by the Sherman Anti-Trust Law was old, the statutory description and the prohibition of the causes of the evil and the remedies provided extend the common law. The Clayton Act and the Federal Trade Commission Act passed in 1914 are largely supplementary of the Sherman Act, although construction of the Federal Trade Commission Act, as later herein shown, gives the words "unfair methods of competition" prohibited thereby a broader meaning than such words had at common law.

(4) Act Feb. 19, 1903, chap. 708, 32 Stat. 847; Watkins' Shippers & Carriers 3rd. Ed.. sections 371, 372. (5) 38 Stat. 730 (1914) Watkins Op. Cit. p. 1310 seq.

Has the public benefited from these laws? Seeking an answer to this question it is perhaps necessary separately to consider the anti-trust laws and the Federal Trade Commission Act.

Within the limits of this paper it is impossible to make reference to the many decisions arising out of the anti-trust laws, nor is a discussion of all such necessary in order to answer the question propounded above. A few cases typical and important show what have been the results. Perhaps the Standard Oil and Tobacco Cases in the extent of the business affected, in the learning displayed in the opinions and in the lack of results obtained are fairly representative and fully convincing of the futility of injunction and dissolution suits under these Federal Statutes. Although the "rule of reason" applied in these cases resulted in limiting the statutes contrary to the government's contention, it was a famous victory. Notwithstanding this victory the convicted trusts were not injured nor was there perceptible any public benefit.

The separated corporate congeners demonstrated that all the parts were more valuable than the whole and profits increased.

8

The government won in the freight association cases, but freight associations continued to function because necessity was stronger than the Supreme Court's decisions. Perhaps there were added difficulties in agreeing on rates; and in the Central Yellow Pine and Tift cases, the decisions were so far effective as to create a burden of proof on the carriers, a burden later made statutory.

The victory for the government in the Northern Securities Company case merely

(7) Note 1 supra and United States v. American Tobacco Co., 221 U. S. 106, 55 L. Ed. 663, 31 Sup. Ct. 632, 4 Fed, Anti-trust Dec. 168. (8)

Joint Traffic Assn. Case, 171 U. S. 505, 569, 571, 577, 43 L. Ed. 259, 287, 288, 290, 19 Sup. Ct. Rep. 25; 1 Fed. Anti-trust Dec. 869; U. S. v. TransMissouri Freihgt Assn., 166 U. S. 341, 41 L. Ed. 1027, 17 Sup. Ct. Rep. 540. See recent case of Hoegh v. R. R.. 43 Sup. Ct. Rep. 47.

(9) Northern Securities Co. v. United States, 193 U. S. 197, 48 L. Ed. 679, 24 Sup. Ct. 436. 2 Fed. Anti-trust Dec. 338. See related decisions 134 Fed. 331, 67 C. C. A. 245, 2 Fed. Anti-trust Dec. 618; 120 Fed. 721, 2 Fed. Anti-trust Dec. 215.

prevented what Transportation Act 192010 seeks to compel. In the Steel Trust casell the justices did not agree on all points, but all agreed, as stated in the dissenting opinion, that the anti-trust law "offers no objection to the mere size of a corporation, nor to the continued exertion of its lawful power, when that size and power have been obtained by lawful means and developed by natural growth, although its resources, capital and strength may give to such corporation a dominating place in the business and industry with which it is concerned. It is entitled to maintain its size and the power that legitimately goes with it, provided no law has been transgressed in obtaining it."

Illustrating the situation resulting from these leading cases: One aggregation of capital has the right to sell or refuse to sell to whom it pleases. Thus the Tobacco Trust, the Steel Trust, or other large business controlling certain commodities or certain well-known brands, can say to an individual or a class that sales will not be made to them; the reason, whether stated or not, being that the buyer deals in competitive goods. An association of buyers, however, cannot say in co-operation that its members will not buy from the trust except on the condition that such members also be permitted to buy other and competing goods. One trust has greater rights than two thousand individuals jointly controlling an equal amount of business. An association whose members deal in lumber cannot do what can be done by one steel corporation, with greater power to control markets, and which does a business larger than the aggregate of the business of such members.12

While criminal prosecutions have been few, some convictions have been had under the criminal provisions of the statute.

10) Watkins Op. Cit. Sec. 63-A.

(11) United States v. United States Steel Corp. 251 U. S. 417, 64 L. Ed, 343. 40 Sup. Ct. 293.

(12) Eastern States Retail Lumber Dealers Assn. v. United States, 334 U. S. 600, 58 L. Ed. 1490, L. R. A. 1915A, 788, 34 Sup. Ct. 951. American Column & Lumber Co. v. United States, 257 U. S. 377. 66 L. Ed. 42 Sup. Ct. Comp. Steel Case

Note 11, supra