thereof, brought an action for damages under section 7 of the Sherman anti-trust act against the association and its members. L recovered judgment in the trial court. On writ of error from the circuit court of appeals this judgment was affirmed. In affirming the judgment on writ of error from the United States supreme court it was held that:

(1) A combination or agreement which prevents and bars business dealings by citizens of a state with citizens of other states is in direct restraint of interstate trade or commerce, and unlawful;

(2) In determining the validity of a combination or agreement, the contract, combination, or scheme, is taken as a whole and as one single transaction; and

(3) The fixing of amount of attorney's fees in an action under section 7 of the Federal anti-trust law is within the reasonable discretion of the trial court.

26

MOORE & HANDLEY HARDWARE CO. v. TOWERS HARDWARE CO.

(87 Ala. 210, 6 So. 41, 13 Am. St. Rep. 23, 1888.)

Construction, Contracts in Restraint of Trade; Corporations, Contracts by Third Persons; Chancery Practice; Injunction.

The complainant corporation, in 1887, purchased of a certain copartnership their entire stock of goods, paying for the same $100 more than the goods were worth, and taking a stipulation from the sellers, as part of the sale, that they would not handle, with one exception, the class of goods thus sold. Afterwards, the members constituting said firm caused the organization of the defendant corporation for the purpose of engaging in the same business in which they were employed as copartners. The complainant corporation thereupon instituted injunction proceedings to prevent the defendant corporation from going into business, claiming that such company, if permitted to carry on business, would perpetrate a fraud upon complainant. After a preliminary injunction was issued the defendant answered, insisting that the contract evidencing said sale by the copartnership was illegal and void because in restraint of trade, and if valid was not binding upon the defendant. The defendant also moved for the dissolution of the preliminary injunction and to dismiss the bill. Both of these motions were overruled. In reversing the lower court and remanding with instructions, etc., it was held that:

(1) The meaning of a contract in restraint of trade is not to be gathered solely from its express terms, but from a consideration of all the circumstances surrounding the parties and attendant upon the transaction; (87 Ala. 210)

(2) Although no time or space is stated in a restrictive covenant made upon the sale of a business, where these ele

ments can be gathered from the attendant circumstances the agreement will be upheld; (p. 210)

(3) A corporation may be charged with the obligation of a contract entered into between its promoters or prospectors and third persons before incorporation, on the faith of the corporation, intended to inure to its benefit, and which in point of fact does inure to its benefit, even in the absence of an express promise to perform, or ratification on the part of the company after it is in esse, on the principle that one who accepts the benefit of a contract which another volunteers to perform in his name and on his behalf is bound to take the burden with the benefit; (p. 211)

(4) "Where associates combine together to create a paper corporation, to cover a partnership or joint venture, and where the stockholders are partners in intention, and have resorted to the fiction of separate corporate entity to free themselves from individual obligations which had attached to them, with respect to the business they propose to carry on, prior to the organization of the company, courts of equity, when the ends of justice require it, will disregard and look beyond the fiction of corporate entity, and hold the corporation to a discharge of the liabilities resting on its members; and this may be done, although some of the shareholders had not originally incurred the obligation sought to be enforced, provided they had notice of it before entering the corporation, and participated in the effort to avoid it;" (p. 211)

(5) A corporation is not bound by the personal rights, obligations and transactions of its stockholders, whether these rights have accrued or these obligations were incurred before or subsequent to incorporation, the corporation being considered a distinct entity separate and apart from the individuals composing it; (p. 210)

(6) Whenever a bill contains some allegations upon which equity jurisdiction might attach, the bill will not be dismissed for want of equity; (p. 213) and

(7) Upon motion to dissolve a preliminary injunction, such allegations as are denied by answer cannot be considered. (p.

MORE et al. v. BENNETT et al.

(140 Ill. 69, 29 N. E. 888, 15 L. R. A. 361, 33 Am. St. Rep. 216, 1892.) Restraint of Trade, Associations; Actions and Defenses. The Chicago Law Stenographers' Association was formed to promote the interests of its members and to establish and maintain reasonable, proper and uniform rates for stenographic work done by them. Underbidding and cutting of rates between members was forbidden under certain penalties. A schedule of rates was thereupon duly adopted by the association. While the plaintiffs and defendants were members of this association, the plaintiffs secured a large contract, or promise for law reporting, and while the plaintiffs were engaged in reporting, under said promise, the defendants attempted to get the work away from them by underbidding them, thereby compelling the plaintiffs to meet such bid. In an action of assumpsit against said defendants for alleged damages occasioned by their acts there was a demurrer to the declaration, which demurrer was sustained. This judgment was affirmed on appeal to the appellate court. In affirming the latter court it was held that:

(1) Any combination between a number of persons engaged in a particular business to stifle or prevent competition, and thereby enhance or diminish prices to a point above or below what they would have been if left to the influence of unrestricted competition, is contrary to public policy; (140 Ill. 79)

(2) All contracts or agreements entered into for the sole purpose of stifling competition are void as against public policy; (p. 80)

(3) Contracts made for the purpose of effecting combinations or conspiracies in restraint of trade are absolutely void and are unenforceable; (p. 79) and

(4) Where the sole object of a contract or association is to stifle competition and control prices, the fact that only a small portion of such object has been attained is no defense to the illegality of such association or contract. (p. 80)

MORRILL v. BOSTON & MAINE RAILROAD

(55 N. H. 531, 1875.)

Pooling Arrangements; Statutes; Foreign Corporations; Jurisdiction; Self-Incrimination.

A foreign railroad company obtained the control of one domestic competing railroad company and three other railroads under a contract or arrangement whereby each road was to retain sixty per cent of its gross earnings between all competing points of their respective routes, to pay their respective running expenses, the remaining forty per cent to constitute a common fund to be equally divided between them. Stockholders in one of these railroads brought a bill in equity against their company and its directors and the foreign company and its directors and managers to enjoin the performance of said contract. A special demurrer to this bill was overruled, the court holding that:

(1) A contract between several competing railroads, providing for a division of earnings after deducting a certain percentage for expenses, and making it indifferent to the contracting parties on which of the lines the passengers or freight is carried, contains in itself the most essential element of consolidation, and is unlawful where consolidation of competing railroads is prohibited by statute;

(2) Section 1, chapter 8, Laws 1867, forbidding consolidation by domestic, competing railroad corporations, and making it unlawful for one of such corporations to operate another "under any business contract, lease, or other arrangement, but each and every railroad corporation so situated shall be run, managed and operated separately by its own. officers and agents, and be dependent for its support on its own earnings from its local and through business in connec