combination or its members which are collateral to and independent of the unlawful contract by which the trust or monopoly was created. and not in furtherance of its purpose, are valid and enforceable.20 And it is generally agreed that the mere fact that the plaintiff is a member of a trust or combination, created with the intent and purposes of restraining trade or establishing a monopoly, will not disable or prevent it in law from selling goods or services within or affected by the provisions of such trust or combination, and recovering their price or value, either at common law, or under the Sherman Act, or under state statutes making unlawful contracts in restraint of trade or commerce.1 So far as the substantive law is concerned, these principles, as generally understood and applied, suffice reasonably well for the protection of even the complex industrial society of to-day from the evils thereby denounced. But the common law remedy of refusing to enforce such contracts proved insufficient, and hence it has been found necessary by the national and state legislatures to enact drastic laws against trusts, pools, unlawful combinations and conspiracies, which will prevent and punish them, and not leave them to exist, and enforce their contracts among themselves, denying them

20. Continental Wall Paper Co. v. Louis Voight, etc., Co., 212 U. S. 227, 29 S. Ct. 280, 53 U. S. (L. ed.) 486 and note; Dennehy v. McNulta, 86 Fed. 825, 59 U. S. App. 264, 30 C. C. A. 422, 41 L.R.A. 609; Harrison v. Glucose Sugar Refining Co., 116 Fed. 304, 53 C. C. A. 484, 58 L.R.A. 915; Chicago Wall Paper Mills v. General Paper Co., 147 Fed. 491, 78 C. C. A. 607, 8 Ann. Cas. 889 and note; International Harvester Co. of America v. Eaton Circuit Judge, 163 Mich. 55, 127 N. W. 695, Ann. Cas. 1912A 1022 and note, 30 L.R.A.(N.S.) 580 and note; C. H. Albers Commission Co. v. Spencer, 205 Mo. 105, 103 S. W. 523, 11 L.R.A. (N.S.) 1003; Jackson v. Akron Brick Ass'n, 53 Ohio St. 303, 41 N. E. 257, 53 A. S. R. 638, 35 L.R.A. 287.

Notes: 64 L.R.A. 722, 735; 11 L.R.A. (N.S.) 368 et seq.; 30 L.R.A. (N.S.) 581; 41 L.R.A.(N.S.) 1034 et seq.; 8 Ann. Cas. 892 et seq.; Ann. Cas. 1916A 122 et seq.

And see infra, par. 50, 51.

1. Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 S. Ct. 431, 46 U. S. (L. ed.) 679; Continental Wall Paper Co. v. Louis Voight, etc., Co.,

212 U. S. 227, 29 S. Ct. 280, 53 U. S.
(L. ed.) 486 and note; D. R. Wilder
Mfg. Co. v. Corn Products Refining
Co., 236 U. S. 165, 35 S. Ct. 398, 59
U. S. (L. ed.) 520, Ann. Cas. 1916A
118 and note; Dennehy v. McNulta,
86 Fed. 825, 59 U. S. App. 264, 30
C. C. A. 422, 41 L.R.A. 609; Chicago
Wall Paper Mills v. General Paper
Co., 47 Fed. 491, 78 C. C. A. 607,
8 Ann. Cas. 889; International Har
vester Co. v. Eaton Circuit Judge, 163
Mich. 55, 127 N. W. 695, Ann. Cas.
1912A 1022 and note, 30 L.R.A. (N.S.)
580 and note; Freed v. American Fire
Ins. Co., 90 Miss. 72, 43 So. 947, 122
A. S. R. 307, 11 L.R.A. (N.S.) 368
and note; McCall Co. v. Hughes, 102
Miss. 375, 59 So. 794, 42 L.R.A. (N.S.)
63; Arnot v. Pittston, etc., Coal Co.,
68 N. Y. 558, 23 Am. Rep. 190; Na-
tional Distilling Co. v. Cream City
Importing Co., 86 Wis. 352, 56 N. W.
864, 39 A. S. R. 902.

Notes: 11 L.R.A. (N.S.) 368; 8 Ann.
Cas. 892; Ann. Cas. 1916A 123.
And see supra, par. 51.

As to state statutes rendering even collateral contracts of illegal combinations unenforceable in state courts, see infra, par. 69.

only the aid of the courts as at common law. In other words, antitrust laws, however drastic, do little more than furnish a more adequate procedure for the enforcement of common law principles governing unlawful combinations.

18. Monopolies.-A practical monopoly may exist without the aid of a legislative grant, as it may result from the control of a trade or industry, brought about by means of contracts and combinations between competitors. Like the ancient monopolies, the practical monopoly is under the ban of the law because it tends to prevent competition and enhance the price or deteriorate the quality of the commodity or service to which it relates. Accordingly, it is a principle of universal application that every agreement, combination or association, the purpose or effect of which is to create a virtual monopoly in the production, manufacture or sale of a useful commodity, either generally or in a given locality, making it possible to control output or prices, or to suppress competition, is contrary to publie policy and hence unlawful, both at common law and under the antitrust statutes, and regardless of its form, methods, or incidents.

2. Cumberland Telephone, etc., Co. v. State, 100 Miss. 102, 54 So. 670, 39 L.R.A. (N.S.) 277; State v. Firemen's Fund Ins. Co., 152 Mo. 1, 52 S. W. 595, 45 L.R.A. 363. And see infra, par. 155 et seq.

3. State v. Duluth Board of Trade, 107 Minn. 506, 121 N. W. 395, 23 L.R.A. (N.S.) 1260.

4. Standard Oil Co. v. United States, 221 U. S. 1, 31 S. Ct. 502, 55 U. S. (L. ed.) 619, Ann. Cas. 1912D 734, 34 L.R.A.(N.S.) 834; United States v. Jellico Mountain Coal, etc., Co., 46 Fed. 432, 12 L.R.A. 753; United States v. Trans-Missouri Freight Ass'n, 58 Fed. 58, 19 U. S. App. 36, 7 C. C. A. 15, 24 L.R.A. 73, overruled on another point in 166 U. S. 290, 17 S. Ct. 540, 41 U. S. (L. ed.) 1007; United States v. Addyston Pipe, etc., Co., 85 Fed. 271, 54 U. S. App. 723, 29 C. C. A. 141, 46 L.R.A. 122; Continental Wall Paper Co. v. Lewis Voight, etc., Co., 148 Fed. 939, 78 C. C. A. 567, 19 L.R.A. (N.S.) 143; Tuscaloosa Ice Mfg. Co. v. Williams, 127 Ala. 110, 28 So. 669, 85 A. S. R. 125, 50 L.R.A. 175; 'Pacific Factor Co. v. Adler, 90 Cal. 110, 27 Pac. 36, 25 A. S. R. 102; Herriman v. Menzies, 115 Cal. 16, 44 Pac. 660, 46 Pac. 730, 56 A. S. R. 82, 35 L.R.A. 318; Grogan v. Chaffee, 156

This

Cal. 611, 105 Pac. 745, 27 L.R.A. (N.S.) 395; Stewart v. Stearns, etc., Lumber Co., 56 Fla. 570, 48 So. 19, 24 L.R.A. (N.S.) 649; Brown v. Jacobs' Pharmacy Co., 115 Ga. 429, 41 S. E. 553, 90 A. S. R. 126, 57 L.R.A. 547; Craft v. McConoughy, 79 Ill. 346, 22 Am. Rep. 171; People v. Chicago Gas Trust Co., 130 Ill. 268, 22 N. E. 798, 17 A. S. R. 319, 8 L.R.A. 497 and note; Distilling, etc., Co. v. People, 156 Ill. 448, 41 N. E. 188, 47 A. S. R. 200; Bishop v. American Preservers' Co., 157 Ill. 284, 41 N. E. 765, 48 A. S. R. 317 and note; Harding v. American Glucose Co., 182 Ill. 551, 55 N. E. 577, 74 A. S. R. 189 and note, 64 L.R.A. 738; Dunbar v. American Telephone, etc., Co., 224 Ill. 9, 79 N. E. 423, 115 A. S. R. 132, 8 Ann. Cas. 57 and note; Union Trust, etc., Bank v. Kinloch Long Distance Telephone Co., 258 Ill. 202, 101 N. E. 535, Ann. Cas. 1914B 258, 45 L.R.A. (N.S.) 465; Chapin v. Brown, 83 Ia. 156, 48 N. W. 1074, 32 A. S. R. 297, 12 L.R.A. 428; Reeves v. Decorah Farmers' Cooperative Soc., 160 Ia. 194, 140 N. W. 844, 44 L.R.A. (N.S.) 1104; Clemons v. Meadows, 123 Ky. 178, 94 S. W. 13, 124 A. S. R. 339, 6 L.R.A. (N.S.) 847 and note; Merchants' Ice, etc., Co. v. Rohrman, 138 Ky. 530, 128 S. W. 599,

rule is applicable to every monopoly whether the supply be restricted by nature or susceptible of indefinite production. The difficulty of effecting the unlawful purpose may be greater in the one case than in the other, but it is never impossible. If the contract or combination actually results in the effective creation of a mutual monopoly, whether local or general, its illegality is beyond question, particularly

Notes: 1 L.R.A. 852; 2 L.R.A. 34; 9 L.R.A. (N.S.) 450.

137 A. S. R. 390 and note, 30 L.R.A. L.R.A. 145 and note; Lufkin Rule (N.S.) 973; Brent v. Gay, 149 Ky. Co. v. Fringeli, 57 Ohio St. 596, 615, 149 S. W. 915, 41 L.R.A.(N.S.) 49 N. E. 1030, 63 A. S. R. 736, 1034; Klingell's Pharmacy v. Sharp, 41 L.R.A. 185; Anderson v. Shaw104 Md. 218, 64 Atl. 1029, 118 A. S. nee Compress Co., 17 Okla. 231, 87 R. 399, 9 Ann. Cas. 1184, 7 L.R.A. Pac. 315, 15 L.R.A. (N.S.) 846 and (N.S.) 976; United Shoe Machinery note; Morris Run Coal Co. v. BarCo. v. La Chappelle, 212 Mass. 467, clay Coal Co., 68 Pa. St. 173, 8 Am. 99 N. E. 289, Ann. Cas. 1913D 715; Rep. 159; Oakdale Mfg. Co. v. Garst, Richardson v. Buhl, 77 Mich. 632, 43 18 R. I. 484, 28 Atl. 973, 49 A. S. N. W. 1102, 6 L.R.A. 457 and note; R. 784, 23 L.R.A. 639; Fisher Flouring Lovejoy v. Michels, 88 Mich. 15, 49 Mills Co. v. Swanson, 76 Wash. 649, N. W. 901, 13 L.R.A. 770 and note; 137 Pac. 144, 51 L.R.A. (N.S.)_522; Clark. Needham, 125 Mich. 84, 83 Charleston Natural Gas Co. v. KanaN. W. 1027, 84 A. S. R. 559, 51 L.R.A. wha Natural Gas, etc., Co., 58 W. Va. 785; Atty.-Gen. v. National Cash 22, 50 S. E. 876, 112 A. S. R. 936, 6 Register Co., 182 Mich. 99, 148 N. Ann. Cas. 154; Pocahontas Coke Co. W. 420, Ann. Cas. 1916D 638; Na- v. Powhatan Coal, etc., Co., 60 W. Va. tional Ben. Co. v. Union Hospital Co., 508, 56 S. E. 264, 116 A. S. R. 901, 45 Minn. 272, 47 N. W. 806, 11 L.R.A. 9 Ann. Cas. 667, 10 L.R.A. (N.S.) 268; 437 and note; State v. Duluth Board Weidman v. Shragge, 46 Can. Sup. Ct. of Trade, 107 Minn. 506, 121 N. W. 1, Ann. Cas. 1912D 919. 395, 23 L.R.A. (N.S.) 1260; Cumberland Telephone, etc., Co. v. State, 100 Miss. 102, 54 So. 670, 39 L.R.A. (N.S.) 277; State v. Firemen's Fund Ins. Co., 152 Mo. 1, 52 S. W. 595, 45 L.R.A. 363; Finck v Schneider Granite Co., 187 Mo. 244, 86 S. W. 213, 106 A. S. R. 452; Home Telephone Co. v. Sarcoxie Light, etc., Co., 236 Mo. 114, 139 S. W. 108, 36 L.R.A. (N.S.) 124; Stockton v. Central R. Co., 50 N. J. Eq. 52, 24 Atl. 964, 17 L.R.A. 97; People v. North River Sugar Refining Co., 54 Hun 354, 355, 3 N. Y. S. 401, 7 N. Y. S. 406, 2 L.R.A. 33 and note, 5 L.R.A. 386 and note, affirmed 121 N. Y. 582, 24 N. E. 834, 18 A. S. R. 843, 9 L.R.A. 33; Cummings v. Union Blue Stone Co., 164 N. Y. 401, 58 N. E. 525, 79 A. S. R. 655, 52 L.R.A. 262 and note; Straus v. American Publishers' Ass'n, 177 N. Y. 473, 69 N. E. 1107, 101 A. S. R. 819, 64 L.R.A. 701; State v. Standard Oil Co., 49 Ohio St. 137, 30 N. E. 279, 34 A. S. R 541, 15

And see supra, par. 2 et seq., and infra, par. 43, 89, 99, 148 et seq.

5. People v. North River Sugar Refining Co., 54 Hun 354, 355, 3 N. Y. S. 401, 7 N. Y. S. 406, 2 L.R.A. 33, 5 L.R.A. 386, affirmed 121 N. Y. 582, 24 N. E. 834, 18 A. S. R. 843, 9 L.R.A. 33.

6. Continental Wall Paper Co. v. Lewis Voight, etc., Co., 48 Fed. 939, 78 C. C. A. 567, 19 L.R.A. (N.S.) 143; Tuscaloosa Ice Mfg. Co. v. Williams, 127 Ala. 110, 28 So. 669, 85 A. S. R. 125, 50 L.R.A. 175; Craft v. McConoughy, 79 Ill. 346, 22 Am. Rep. 171; Harding v. American Glucose Co., 182 Ill. 551, 55 N. E. 577, 74 A. S. R. 189 and note, 64 L.R.A. 738; Merchants' Ice, etc., Co. v. Rohrman, 138 Ky. 530, 128 S. W. 599, 137 A. S. R. 390, 30 L.R.A. (N.S.) 973; Richardson v. Buhl, 77 Mich. 632, 43 N. W. 1102, 6 L.R.A. 457 and note; Hunt v.

if it in fact fixes and increases prices, or if one of its results is to reduce the available supply of the commodity below the needs of the locality affected, thus operating not only to enable the combination arbitrarily to maintain prices, but directly and necessarily to create a partial famine by which it can profit at will. If the object or tendency of the agreement or combination is to produce a monopoly and enable the parties to control prices of a useful commodity, it is none the less illegal because the prices actually fixed at the time may be entirely reasonable in themselves, or that it has not attempted to control the output of the few independent concerns left or the prices at which they sell their product.10 It is no answer that the monopoly has in fact improved the quality and reduced the price of the commodity. Indeed, the reduction of prices may have been adopted as necessary to crush competition.1 Ñor need the monopoly

be complete.12 It is a criminal offense for a person to obtain a monopoly of a prime necessity of life. It is no answer to say that the article may have been monopolized for a benevolent purpose.13

19. Restraint of Trade.-At a very remote period the words "contract in restraint of trade" in England came to refer to some voluntary restraint put by contract by an individual on his right to carry on his trade or calling. Originally all such contracts were considered to be illegal, because it was deemed they were injurious to the public as well as to the individuals who made them. Subsequently, changing industrial conditions and economic concepts based thereon caused a twofold development in the law on this general subject. On the one hand, it was observed that the strict rule was impracticable and productive of more harm than good in that it prevented certain combinations beneficial to the parties and not injurious to the public, and seriously interfered with ordinary everyday business transactions. It was accordingly found essential to distinguish between combinations and agreements in general restraint of trade, and those in partial and reasonable restraint of trade, and to recognize the latter as valid.14

137, 30 N. E. 279, 34 A. S. R. 541, 12 L.R.A. 428; Reeves v. Decorah 15 L.R.A. 145.

12. See infra, par. 23.

13. State v. Eastern Coal Co., 29 R. I. 254, 70 Atl. 1, 132 A. S. R. 817, 17 Ann. Cas. 96. See infra, par. 99

et seq.

14. Standard Oil Co. v. United States, 221 U. S. 1, 31 S. Ct. 502, 55 U. S. (L. ed.) 619, Ann. Cas. 1912D 734, 34 L.R.A. (N.S.) 834; United States v. American Tobacco Co., 221 U. S. 106, 31 S. Ct. 632, 55 U. S. (L. ed.) 663; United States v. Trans-Missouri Freight Ass'n, 58 Fed. 58, 19 U. S. App. 36, 7 C. C. A. 15, 24 L.R.A. 73, reversed on another point in 166 U. S. 290, 17 S. Ct. 540, 41 U. S. (L. ed.) 1007; United States v. Addyston Pipe, etc., Co., 85 Fed. 271, 54 U. S. App. 723, 29 C. C. A. 141, 46 L.R.A. 122; Harrison v. Glucose Sugar Refining Co., 116 Fed. 304, 53 C. C. A. 484, 58 L.R.A. 915; Stewart v. Stearns, etc., Lumber Co., 56 Fla. 570, 48 So. 19, 24 L.R.A.(N.S.) 649; People v. Chicago Live Stock Exch., 170 Ill. 556, 48 N. E. 1062, 62 A. S. R. 404, 39 L.R.A. 373; Harding v. American Glucose Co., 182 Ill. 551, 55 N. E. 577, 74 A. S. R. 189 and note, 64 L.R.A. 738; Chaplin v. Brown, 83 Ia. 156, 48 N. W. 1074, 32 A. S. R. 297, R. C. L. Vol. XIX.-3.

33

Farmers' Cooperative Soc., 160 Ia. 194, 140 N. W. 844, 44 L.R.A. (N.S.) 1104; Brent v. Gay, 149 Ky. 615, 149 S. W. 915, 41 L.R.A. (N.S.) 1034; Anchor Electric Co. v. Hawke, 171 Mass. 101, 50 N. E. 509, 68 A. S. R. 403, 41 L.R.A. 189; National Ben. Co. v. Union Hospital Co., 45 Minn. 272, 47 N. W. 806, 11 L.R.A. 437 and note; State v. Duluth Board of Trade, 107 Minn. 506, 121 N. W. 395, 23 L.R.A. (N.S.) 1260 and note; State v. Firemen's Fund Ins. Co., 152 Mo. 1, 52 S. W. 595, 45 L.R.A. 363; Bancroft v. Union Embossing Co., 72 N. H. 402, 57 Atl. 97, 64 L.R.A. 298; Leslie v. Lorillard, 110 N. Y. 519, 18 N. E. 363, 1 L.R.A. 456; Monongahela River Consol. Coal, ete., Co. v. Jutte, 210 Pa. St. 288, 59 Atl. 1088, 105 A. S. R. 812, 2 Ann. Cas. 951; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 28 Atl. 973, 49 A. S. R. 784, 23 L.R.A. 639; State v. Eastern Coal Co., 29 R. I. 254, 70 Atl. 1, 132 A. S. R. 817, 17 Ann. Cas. 96; Gwynn v. Citizens' Telephone Co., 69 S. C. 434, 48 S. E. 460, 104 A. S. R. 819, 67 L.R.A. 111; Queen Ins. Co. v. State, 86 Tex. 250, 24 S. W. 397, 22 L.R.A. 483; Fisher Flouring Mill Co. v. Swanson, 76 Wash. 649, 137 Pac. 144, 51 L.R.A. (N.S.) 522;