the Trust Act. It is unnecessary to discuss whether the restraint is reasonable, for the Trust Act forbids all restraints reasonable or not. Injunction is granted. Anderson v. United States. 171 U. S., 604. Statement. October 24, 1898. Plaintiff was a member of the Traders' Live Stock Exchange, an association composed of live stock buyers at Kansas City. He was enjoined by the Circuit Court from acting under the following rules of the exchange: "This exchange will not recognize any yard trader unless he is a member of the Traders' Live Stock Exchange. When there are two or more parties trading together as partners, they shall each and all of them be members of this exchange. No member of this exchange shall employ any person to buy or sell cattle unless such person hold a certificate of membership in this exchange. No member of this exchange shall be allowed to pay any order buyer or salesman any sum of money as a fee for buying cattle from or selling cattle to such party." An appeal was taken to the Supreme Court. Opinion. This association does not meddle with prices. In refusing to recognize any yard trader who is not a member of the exchange there is no purpose of thereby affecting or restraining interstate commerce. If that is affected at all, it is in a very remote manner. The rules have no direct tendency to restrain in any way interstate commerce in the cattle dealt in. Whether or not the business engaged in is interstate commerce is not decided. The bill by the United States is dismissed. United States v. Joint Traffic Association. 171 U. S., 505. Statement. October 24, 1898. Thirty-one railroad companies, engaged in transportation between Chicago and the Atlantic coast, formed themselves into an association known as the Joint Traffic Association, which was to determine what rates should be charged, and what portion of the business each company should do, so far as possible without violating the Interstate Commerce Act, or any other law applicable, or any provision of the charters of the companies. Every company was to follow the schedule of rates recommended by the managers of the association, except that any company's board of directors might disapprove the rates so fixed, and after thirty days' notice to the managers of the association, so far as the interest of that company was concerned, the rates need not be followed. The United States brought a bill in a Circuit Court to have proceedings under the agreement enjoined. The bill was there dismissed. On appeal to a Circuit Court of Appeals, the decision was affirmed. The United States now appeal again to the United States Supreme Court. Opinion. The natural, direct and necessary effect of the provisions of the agreement is to prevent any competition between the parties to it. The agreement affects interstate commerce by destroying competition. The power given Congress by the Constitution to regulate interstate commerce vests it with power to declare that no contract or combination shall be legal which restrains trade by shutting out the operation of the general law of competition; and Congress has exercised this power by passing the Trust Act of 1890. This act does not deprive the citizen of the liberty guaranteed him by the fifth amendment to the Constitution. The act is constitutional, and following the construction given it in the TransMissouri case,1 this combination is in violation of it. The judgments of the lower courts are reversed, and the case remanded to the Circuit Court with instructions to take such further proceedings therein as may be in conformity with the opinion of the Supreme Court. Harry W. Dickerman, Trustee, et al, v. The Northern Trust Company et al. U. S., Statement. January 22, 1900. The Columbia Straw Paper Company, organized under the laws of New Jersey, obtained control of forty paper mills. In doing this a mortgage was given on its property to secure the payment of bonds. The bonds passed into the hands of 1 166 U.S., 290; digested, p. 48. holders in good faith for value. The bonds not being paid, though due, a bill is filed to foreclose the mortgage. defense is that the mortgage is part of a scheme to form an unlawful combination in restraint of trade, in violation of the act of Congress of July 2, 1890. Opinion of the United States Supreme Court. * "If this were a proceeding in quo warranto to attack the organization of the corporation * * or an action against a member of the combination to enforce any of the provisions of the original contract, the validity of such contract would become an important question. But in a suit to foreclose a mortgage upon the property of the concern it is difficult to see how the purpose for which the corporation was originally organized can become a material inquiry. So long as the corporation existed it had the power to create a mortgage, and when the mortgage became due the trustee had a right to foreclose." The mortgage can be foreclosed. COMMON-LAW DECISIONS. American Biscuit and Manufacturing Co. v. Klotz et al. 44 Fed., 721. January 8, 1891. Plaintiff had purchased with its stock thirty-five large bakeries. One of these, claiming that the sale was void, took possession of its property and tendered back the stock received in payment. Plaintiff comes into equity and asks that an injunction issue. An injunction is denied. It is suggested that the combination would be illegal by the Louisiana statute or by the United States Trust Act of 1890, and that such a combination being against public policy should not be aided by an equity court in any way. It is not decided that the anti-trust acts apply. The decision rests on the ground that such a combination is not to be aided by a court of equity. Central Transportation Company v. Pullman's Palace Car Company. Plaintiff corporation held a ninety-nine-year charter "to carry on the business of manufacturing sleeping cars under its patents and of hiring or letting the cars or other personal property to other corporations." A contract was made between plaintiff and defendant whereby plaintiff transferred to defendant all its cars, contracts, patents and other property for ninety-nine years and agreed not to engage in its then business for that time; for which defendant promised to pay $264,000 rent a year. Plaintiff brings suit to recover $198,000 rent due. Opinion. Where a corporation has granted to it a franchise intended in a large measure to be exercised for the public good, the due performance of its functions being the consideration of the public grant, any contract which disables the corporation from performing its functions, or which undertakes without the consent of the state, to transfer to others the rights conferred by the charter, and to relieve the grantees of the burden which it imposes, is a violation of the contract with the state and is void as against public policy. Plaintiff can not recover. 67 Fed., 130. Statement. National Harrow Co. v. Quick et al. March 23, 1895. Plaintiff is a corporation formed to secure assignments of all patents relating to spring-tooth harrows; to grant licenses to the assignors to use the patents upon payment of a royalty; and to fix the prices at which such harrows should be sold. Defendants have infringed one of the patents thus secured, and suit is brought to have them enjoined. Opinion. * * Judge Baker: "It seems to me that such a combination is illegal. The common law forbids the organization of such combinations, composed of numerous corporations and firms. They are dangerous to the peace and good order of society. * * * It seems to me that the court can not sustain the present bill without giving aid to the unlawful combination or trust represented by the complainant. The question is not free from doubt, but in a case of doubt I feel it my duty to resolve it in such a way as will not lend the countenance of the court to the creation of combinations, trusts or monopolies. They have already grown to alarming proportions, and courts, to the extent of their power, ought to discountenance them." Equity refuses aid. CASES SHOWING POWERS OF CONGRESS AND STATE LEGISLATURES. McCulloch v. The State of Maryland et al. 4 Wheat., 316. Statement. 1819. The State of Maryland passed "an act to impose a tax on all banks, or branches thereof, in the State of Maryland, not chartered by the legislature." The Bank of the United States, a corporation organized by act of Congress, had a branch ́in Maryland, which it was sought to tax under the act aforesaid. Two main questions were raised: 1. Was the act incorporating the bank constitutional? 2. Could a state tax a corporation created by Congress? Opinion by Chief Justice Marshall. * In the Constitution "we find the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. ** But that instrument does not profess to enumerate the means by which the powers it confers may be executed; nor does it prohibit the creation of a corporation, if the existence of such a being be essential to the beneficial exercise of these powers. * * * We admit, as all must admit, that the powers of the government are limited, and that its limits are not to be transcended. But we think the sound construction of the Constitution must allow to the national legislature that discretion with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adopted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional." "Where the law is not prohibited, and is really calculated to effect any of the objects entrusted to the government, to undertake here to inquire into the degree of its necessity would be to pass the line which circumscribes the judicial department, and to tread on legislative ground." The bank is a proper agency for carrying into effect the expressed powers of the Constitution herein before mentioned, and "it is the unanimous and decided opinion of this court that the act to incorporate" it is constitutional. |