ington, 88 Texas 562, 53 Am. St. Rep. 778. And also may recover_for its share of benefits conferred: 1831, N. Y. & S. Canal Co. v. Fulton Bank, 7 Wend. 412; 1899, Wilson v. Carter Oil Co., 46 W. Va. 469, 33 S. E. Rep. 249. See, infra, corporations as joint tenants and tenants in common, §§ 292, 293. THE CLEVELAND, COLUMBUS, CINCINNATI AND INDIANAPOLIS RAILWAY COMPANY v. CLOSSER ET AL.1 1890. IN THE SUPREME COURT OF INDIANA. 126 Ind. Rep. 348369, 22 Am. St. Rep. 593. ELLIOTT, J. The appellees were partners, under the name of Closser & Co., and as such prosecute this action against the appellant. They base their right of action upon contracts made with the appellant wherein it undertook to transport grain from Indianapolis to the seaboard, and they charge that the appellant agreed to receive, at the time of the shipment, a designated sum as compensation for the transportation of the grain, and to refund to them a certain part of the sum received. They demand that the appellant be compelled to respond in damages for a breach of the agreement to refund part of the money paid to it as freight on the grain carried under the contracts. The second paragraph of the complaint alleges that the defendant is, and long has been, a common carrier of goods, and that its custom of long standing is to make contracts for carrying grain from Indianapolis to the eastern cities; that the plaintiffs have long been engaged in the business of buying, selling and shipping grain; that on the first day of November, 1884, the plaintiffs, under the firm name of Closser & Co., entered into a contract with the defendant whereby it undertook to transport grain from a station on its road, known as Union City, to the city of New York; that at the time this contract was made "there was no open and established rate of freight charges for carrying such grain, except a certain rate agreed upon between the defendant and other railway companies owning competing lines; the rate so fixed by the competing companies was established by an agreement made by them for the purpose of preventing competition," and was enforced and maintained, in so far as it was enforced and maintained, by an agency of such companies established for that purpose, and called a "pool"; that the "pool" was managed by a person selected by the companies for that purpose, and called a "pool commissioner"; that at the time mentioned all the railway companies that "were so located or situated as to be competitors for such freight were parties to said arrangement and "pool"; that the rate established by the combination of common carriers was 211⁄2 cents per hundredweight; that the defendant, "notwithstanding such combination and pool, offered and gave to Closser & Co. an inducement for shipping 1 Statement abridged; only part of opinion given. freight over its lines at a rate lower than that fixed by the combination and 'pool', but, in order to do this and be able to report to the pool commissioner that such pool rate had been charged," the defendant "requested Closser & Co., when shipping freight over its lines, to pay the pool rate, and agreed at the same time with Closser & Co. to pay a certain portion of the pool rate so charged, as a rebate, in order that the shippers might, in the end, be only required to pay the rate fixed by the defendant"; that "in this manner and for this purpose the defendant did, on the same day, agree with Closser & Co., in respect to the shipment of grain, that Closser & Co. should pay the pool rate of 211⁄2 cents per hundred-weight, and that the defendant would thereupon repay to them 42 cents on every hundred-weight of grain so shipped as a rebate, so that they should, in the end, pay as freight upon such shipment but 17 cents per hundred-weight, which was then, in fact, the rate of defendant for such freight between said points as then agreed upon, which rebate the defendant agreed to pay promptly after such shipment." It is also alleged that grain was shipped by Closser & Co., under the contract, and that they paid the "pool" rate. Decision below for plaintiff. The central question is as to the validity of the contracts between the rival railroad companies. We preface our discussion of the central question by saying that we are not, at this point, dealing with the case where a combination is formed for the purpose of preventing ruinous competition, and in which there is no design to stifle fair competition. We are not required to decide, nor do we decide, that combinations fair to the public, untainted by any sinister design, and formed solely to prevent the destruction of business by unregulated competition, may not be valid. There are, we know, cases sanctioning the doctrine that combinations may be formed where the purpose is lawful, and the means employed not forbidden by positive law or high considerations of public policy. Central Trust, etc., Co. v. Ohio Central R. Co., 23 Am. & Eng. R. Cases 666; Boston Chamber of Commerce v. Lake Shore, etc., R. Co., 32 Am. & Eng. R. Cases 618; Hare v. London, etc., R. Co., 2 J. & H. 80; Leslie v. Lorillard, 110 N. Y. 519; Manchester, etc., R. Co. v. Concord R., 8 R. & Corp. Law Journal 443. The doctrine of these cases we neither affirm nor deny; we do, however, declare that they are not relevant to the matter here in dispute. It is, however, both appropriate and necessary to adjudge that a combination between common carriers to prevent competition is, at least, prima facie illegal. The doubt is as to whether any ultimate purpose can save it from the condemnation of the law; there can be no doubt that, unexplained, such a combination for such a purpose is condemned by public policy. If such a combination can, in any event, be admitted to be legal, it can only be so where it is affirmatively shown that its object was to prevent ruinous competition, and that it does not establish unreasonable rates, unjust discriminations or oppressive regulations. If such a contract can stand it must be upon an affirmative showing, and one so full, complete and clear, as to remove the pre61-WIL. CASES. sumption (to which its existence, in itself, gives rise) that it was formed to do mischief to the public by repressing fair competition. The burden is on the carrier to remove the presumption, and until it is removed the agreement providing for the combination gives way before this presumption, and the agreement must be held to be within the condemnation directed against all contracts which violate public policy. Coming to the question which awaits our judgment, and to which we have cleared our path, we affirm that a contract between corpora tions charged with a public duty, such as is that of, common carriers, providing for the formation of a combination having no other purpose than that of stifling competition, and providing means to accomplish that object, is illegal. The purpose to break down competition poisons the whole contract, and there is here no antidote which will rescue it from legal death. The element which destroys the contract is the purpose to stifle competition, for a combination of rival carriers, moved and controlled by that purpose alone, is destructive of public interest, and, to the last degree, antagonistic to sound public policy. The principle on which this rule rests is a very old one, and its place in the law is very firm. The overshadowing element in this case, and in kindred cases, is the purpose which influences the parties in uniting themselves in a combination, and concerting means to make its purpose effective, for the law abhors a combination which has for its principal object the suppression of competition in matters of commerce in which the public have an interest. 1 Relevant and striking illustrations of the scope and force of the general principle are supplied by what are known as "The Sugar Trust Cases," decided by the courts of New York-cases rich in argument and authority. People v. North River Sugar Refining Co., 22 Abbott N. Cases 164; see, also, Law Literature of Trust Combinations, etc., 23 Abbott N. Cases 317; People v. North River Sugar Refining Co., 121 N. Y. 582. The authorities collected in those cases demonstrate the proposition that a trust, or combination, having for its purpose the suppression of free competition, can not live where the common law prevails. There are, however, cases which, on their facts, bear a closer resemblance to the present than the sugar trust cases; but, after all, it may be said with propriety the important thing to be secured is a sound and salutary general principle, and not merely cases with closely resembling facts. There is no difficulty in securing the principle we seek, for cases almost without number assert and enforce it in an almost endless variety of forms and phases. One of the cases near akin to the one before us is that of Hooker v. Vandewater, 4 Denio 349. In that case competing canal companies combined, and agreed to fix an established rate of freight, and to divide profits. The agreement was adjudged illegal, the court saying, among other things, that "It is a general proposition that an agreement to do an unlawful act can not be supported at law-that no right of action can spring out of an illegal contract; and this rule applies 1 Supra, p. 100. not only when the contract is expressly illegal, but whenever it is opposed to public policy." Still closer is the resemblance between this case and that of Texas, etc., R. Co. v. Southern Pacific R. Co., 41 La. Ann. 970. The court there held a "pooling contract" substantially the same as the one described in the appellees' complaint to be void, and in support of its ruling referred to the cases of Gibbs v. Consolidated Gas Co., 130 U. S. 396; Woodstock Iron Co. v. Richmond, etc., Extension Co., 129 U. S. 643; Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173; Arnot v. Pittson, etc., Coal Co., 68 N. Y. 558; Craft v. McConoughy, 79 Ill. 346; Morrill v. Boston, etc., R., 55 N. H. 531; Jackson v. McLean, 36 Fed. Rep. 213; Santa Clara Valley, etc., Co. v. Hayes, 18 Pac. Rep. 391; Fireman's Charitable Association v. Berghaus, 13 La. Ann. 209; Indiana Bagging Association v. Kock, 14 La. Ann. 168; Glasscock v. Wells, 23 La. Ann. 517, and Cummings v. Saux, 30 La. Ann. 207. The authorities found on every hand not only fully support our conclusion that a contract between competing carriers, forming a combination for the purpose of stifling competition, is prima facie illegal, but many of them carry the principle to a much greater length; it is enough for us, however, that the law, as it has long existed, sustains the conclusion we here affirm, since it is neither necessary nor proper for us to go beyond the case before us for judgment. Judgment affirmed. Note. The following cases hold pooling contracts void: 1848, Stanton v. Allen, 5 Denio (N. Y.) 434; 1871, Morris Run, etc., Co. v. Barclay Coal Co., 68 Pa. St. 173; 1875, Morrill v. Railroad Co., 55 N. H. 531; 1877, Wilson v. Harlem & N. Y. Nav. Co., 52 How. Pr. (N. Y.) 348; 1881, Burke, etc., v. Concord, etc., R., 61 N. H. 161; 1883, Denver & N. O. R. Co. v. A., T. & S. F. R. Co., 15 Fed. Rep. 650, 110 U. S. 667; 1883, State v. Concord, etc., R., 13 Am. & Eng. R. Cas. (N. H.) 94; 1888, Gibbs v. Gas Co., 130 U. S. 396; 1889, Anderson v. Jett, 11 Ky. L. Rep. 570, 12 S. W. Rep. 670; 1889, Texas & Pac. R. v. Southern Pac., etc., R., 41 La. Ann. 970; 1894, C. M. & St. Paul R. v. Wabash, St. L. & P. R., 61 Fed. Rep. 993; 1896, United States v. Trans-Missouri Frt. Assn., 166 U. S. 290; 1898, United States v. Joint Traffic Assn., 171 U. S. 505, 19 Sup. Ct. 25, reverses 76 Fed. Rep. 895 (C. C.), and 89 Fed. Rep. 1020 (C. C. A.); 1899, State v. Fireman's Fund Ins. Co., 152 Mo. 1, 52 S. W. Rep. 595. See note at end of the next case. Sec. 277. Same. MANCHESTER AND LAWRENCE RAILROAD v. CONCORD 1889. IN THE SUPREME COURT OF NEW HAMPSHIRE. 66 New Hampshire Rep. 100-134. [Bill in equity for a discovery and an accounting. Defendants filed special pleas, to which the plaintiffs demurred. Defendants demurred to the parts of the bill not covered by the pleas.] 1 1 Only part of opinion given. * BLODGETT, J. The second plea avers, and the demurrer admits, that at the time of the making of the contracts between the parties and of the dealings thereunder, their respective roads "were rival and competing railroads, by the competition of which the prices of transportation thereon were, and but for said supposed contracts, dealings, transactions, operations and business, would have continued to be, materially reduced, and said alleged contracts, dealings, transactions and business were made and had for the purpose of destroying and preventing such competition, and did destroy and prevent it." It will be noticed that there is no averment in the plea that the purpose of the contracts was to raise the prices of transportation above a reasonable standard, or that they did have this effect, or that the public were prejudiced by their operation in any manner; and the naked question presented then is, whether all contracts between rival railway corporations which prevent competition are necessarily contrary to public policy, and therefore mala prohibita and illegal in them selves. To state this question is to answer it in the negative, because it is obvious that the answer depends upon circumstances. While, without doubt, contracts which have a direct tendency to prevent a healthy competition are detrimental to the public and consequently against public policy, it is equally free from doubt that when such contracts prevent an unhealthy competition and yet furnish the public with adequate facilities at fixed and reasonable rates, they are beneficial and in accord with sound principles of public policy. For the lessons of experience, as well as the deductions of reason, amply demonstrate that the public interest is not subserved by competition which reduces the rate of transportation below the standard of fair compensation; and the theory which formerly obtained, that the public is benefited by unrestricted competition between railroads has been so emphatically disproved by the results which have generally followed its adoption in practice, that the hope of any permanent relief from excessive rates through the competition of a parallel or rival road may, as a rule, be justly characterized as illusory and fallacious. Upon authority, also, arrangements and contracts between competing railroads, by which unrestrained competition is prevented, do not contravene public policy. Hare v. Railway Co., 2 Johns. & H. 80, is directly in point. In that case a bill in chancery had been brought by a stockholder in the defendant company to annul an agreement between two railway companies to divide the profits of the traffic in fixed proportions; and it was admitted there, as it is here, that the purpose of the agreement was to prevent competition. In dismissing the bill, Vice-Chancellor Wood said, page 103, "With regard to the argument against the validity of the agreement, I may clear the ground of one objection by saying that I see nothing in the alleged injury to the public arising from the prevention of competition. *** It is a mistaken notion that the public is benefited by pitting two railway companies against each other till one is ruined, the result being at last to raise the fares to the highest possible standard." So, also, |