market or not to do so; hence, an agreement is valid giving its exclusive use to defendants, although it may result in the article not being put into use at all.

SECTION THIRTEEN.

Sundry instances.

But if a patented article is put into a public use, then all who apply must be accommodated, provided such use be a common use; as for instance, the carrying of freight or passengers, or in this case of news and communications by means of telephones and wires. D. & A. T. & T. Co. v. Delaware, 2 C.

C. A. 1.

Upon a consolidation, alleged to be illegal, of four rolling mills associations, only about one-tenth of the stockholders dissenting, the court refuses injunction and receiver; the consolidation is probably for the best interests of all; no fraud nor danger to the property is shown; the legal questions should not be gone into upon mere motions and affidavits. Mills v. Hurd, 29 Fed. Rep. 410.

Opinion by the vice-chancellor sustaining a contract in partial restraint of trade. Ellerman v. Chicago Junction R. & U. S. T. Co. (Pork Packers' Contracts), - N. J., - 23 Atlantic 287.

A lease between a water company and an ice company, both having essentially the same directors, is held valid; complainants, stockholders in the former, had an equal opportunity with the others to take stock in the ice company, but refused to do so; they waited till the enterprise proved profitable and then attempted to avoid the lease. Appeal of Shaaber (Pa.), 17 Atlantic 209.

SECTION FOUrteen.

Thorsten Nordenfelt v. The Maxim Nordenfelt Guns and Ammunition Company, limited, July 31, 1894 (House of Lords). Appeal cases 535 to 574 (Part V, December 1). The Law Reports.

The English doctrine, past and present, concerning restraint of trade.

Agreement unrestricted as to space, not to re-engage, etc., for twenty-five years.

Lord Herschell, L. C., rendering an opinion which is unanimously concurred in, says, inter alia, as to a restriction. unlimited as to area and hence claimed to be void: "I think it was long regarded as established as part of the common law of England, that such a general covenant could not be supported."

"In early times all agreements in restraint of trade, whether general or restricted to a particular area, would probably have been held bad; but a distinction came to be taken between covenants in general restraint of trade and those where the restraint was only partial. The distinction was recognized and given effect to by Lord Macclesfield in his celebrated judgment in Mitchel v. Reynolds."

1

The Lord Chancellor then makes an exhaustive analysis of the former decisions, and formulates the principle that the changed conditions of affairs, especially in commerce, require different rulings; restraint extending over the entire kingdom might now be no more efficient than formerly was one limited. to London.

Any covenant which is reasonably necessary to secure to the purchaser the benefit of his purchase is valid; provided the restraint be not so extensive as to interfere with the interests of the public. "If there be occupations where a sale of the good will would be greatly impeded, if not prevented, unless a general covenant could be obtained by the purchaser, there are no grounds of public policy which countervail the disadvantage which would arise if the good will were in such cases. rendered unsalable." The restraint may be world wide in its operation; certainly it can not be against the public policy of the United Kingdom to protect a purchaser who there carries on business against the vendor's establishing a rival business in a foreign country.

And so his lordship concludes that our altered conditions. justify the courts in not adhering to the rules laid down at a time when a restraint, unlimited in area was not, and could not be, reasonable; as commercial dealings then were not, and could not be, as now, world-wide.

Lord Watson, concurring: "A series of decisions based 11 P. Williams, 181; 1 Smith's L. C. pt. 2, page 508.

upon grounds of public policy, however eminent the judges. may be by whom they were delivered, can not possess the same binding authority as decisions which deal with and formulate principles which are purely legal."

He concludes his opinion that "it is not a matter of practical importance whether the admission of a restraint, unlimited in space, be regarded as a novel exception from the general rule which forbids all restraints, or as an extension of the exception upon that rule which has admitted limited restraints." "I am content to state that, in my opinion, the judgment which your lordships are about to pronounce, goes no farther than to adapt to new circumstances an old and sound exception to the general rule."

Lord Ashbourne, in the course of his opinion, remarks: "I do not know that there is a single reported case, whose facts are clearly known, where a covenant in general restraint of trade, clearly reasonable in itself and only affording a fair protection to the parties, has been held to be void."

The only test is the reasonableness of the restriction for the protection of the trade or business of the covenantee; this is "the doctrine to which the modern authorities have been gradually approximating." "I do not see anything to lead to the conclusion that the covenant is injurious to the public interests. I entirely agree with the Lord Chancellor in the propriety and prudence of not saying a word which would imply that such an important topic was ignored or lost sight of."

Lord Macnaghten summarizes his review of the situation thus: "Assuming the rule to be that general restraints are void, as being contrary to public policy, and not on any other ground, an exception must surely arise, if exceptions are admissible at all, as soon as you find that the particular case under consideration is not contrary to public policy, and so not opposed to the principle on which the rule is founded."

He narrates that in the time of Elizabeth, all restraints, whether partial or general, were void; but as this was soon found to impede sales (for no one would buy a business unless he could be protected from the competition and rivalry of the vendor), restraint, to a limited extent, was allowed. General restraints were said to be bad, merely because no one imagined that they could be reasonable. Thus, in Mitchel v. Reynolds,

restraint throughout the kingdom is said to be void "because of no benefit to either party and only oppressive," for, as there said, "what does it signify to a tradesman in London, what another does at Newcastle; and surely it would be unreasonable to fix a certain law on one side without any benefit to the other."

"The true view at the present time, I think, is this: The public have an interest in every person's carrying on his trade freely; so has the individual. All interference with individual liberty of action in trading and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule." He then gives the exceptions; restriction, reasonable "in reference to the interests of the parties concerned, and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favor it is imposed, while at the same time it is in no way injurious to the public. That, I think, is the fair result of all the authorities. But it is not to be supposed that that result was reached all at once." He then describes its evolutions, through the various prior decisions.

Lord Morris, concurring, thinks that "the weight of authority up to the present time is with the proposition that general restraints of trade were necessarily void. It appears, however, to me that the time for a new departure has arisen, and that it should be now authoritatively decided that there should be no difference in the legal considerations which would invalidate an agreement whether in general or partial restraint of trading. These considerations, I consider, are whether the restraint is reasonable and is not against the public interest."

The manufacture of guns, gunpowders, etc., for the various governments anywhere, by the seller of the business, might prove a rivalry to the purchasers; the public does not suffer by reason of the purchaser taking the seller's place as manufacturer.

CHAPTER IV.

COMBINATIONS BETWEEN CORPORATIONS, OTHER THAN RAILWAY, WHICH HAVE BEEN REGARDED UNFAVORABLY.

Combinations having the purpose of limiting the product and artificially maintaining unnaturally high prices of articles of utility, will not be sustained.

Manufacturing corporations have no power to place all their property and business into the hands of agents for "trust" purposes, giving to such agents the entire management, not only of their own affairs, but also aiding them in obtaining the control of other corporations in the same line of business.

They must retain, and themselves use, the gift of corporate life received from the state, nor disregard the conditions upon which it was given.

The aggregation of wealth, caused by individuals contributing their estates to a corporation, is allowed; but the further aggregation of corporate estates with corporate estates is not allowed.

Corporation formed for the purpose of buying up the plants of, practically, all others in the same line, is such an illegal body as to have no standing in a court of equity; the evils aimed at by the statutes against pools and trusts should not be sanctioned in a court of equity, though attempted to be accomplished by the otherwise legal form of corporate organization.

Corporations have only such powers as are to them given; they have neither the express nor implied power to enter into partnership; to so do would interfere with the exclusive management of the corporation by its own officials, impair the authority of the shareholders, and involve the company in new responsibilities through agents over whom it has no control.

The power of eminent domain, the use of public streets and similar privileges, are considerations upon which corporations, like gas and water companies, and such others, owe duties to the public, and hence, they can not enter into any arrangements limiting themselves in the performance thereof.