§ 145. Discrimination by carrier as between members of general public.—A discrimination by a carrier as between members of the general public seeking accommodations, stands on a different ground from a grant of an exclusive privilege by way of selection of the instrumentality to be employed in serving the public. A reason for condemning such discrimination as between members of the general public has been found in their tendency to build up monopolies. The general subject of such discriminations is, however, outside the scope of this treatise. § 146. Grant of right to establish line of telegraphic communication along right of way of railroad.-Another class of cases City Ry. Co. v. State, 99 Tex. 34; 87 S. W. 336; 70 L. R. A. 950 (1905; see under Tex., § 232). See, for instance, as to such, Hays v. Pennsylvania Co., 12 Fed. 309 (C. C. Ohio, 1882); Burlington, C. & N. Ry. Co. v. Northwestern Fuel Co., 31 Fed. 652 (C. C. Minn., 1887); Kinsley v. Buffalo, N. Y. & P. R. R. Co., 37 Fed. 181 (C. C. Pa., 1888); West Coast Naval Stores Co. v. Louisville & N. R. R. Co., 121 Fed. 645; 57 C. C. A. 671 (5th C., 1903); Blair v. Sioux City & Pacific Ry. Co., 109 Iowa, 369; 80 N. W. 673 (1899); Louisville & N. R. Co. v. Pittsburg & K. Coal Co., 111 Ky. 960; 64 S. W. 969; 55 L. R. A. 601; 98 Am. St. Rep. 447 (1901); State V. Southern Ry. Co., 125 N. C. 666; 34 S. E. 527 (1899); Scofield v. Railway Co., 43 Ohio St. 571, 600; 3 N. E. 907, 918; 54 Am. Rep. 846, 853 (1885); Baltimore & Ohio R. R. Co. v. Diamond Coal Co., 61 Ohio St. 242; 55 N. E. 616 (1899); Memphis News Pub. Co. v. Southern Ry. Co., 110 Tenn. 684; 75 S. W. 63 L. R. A. 150 (1903); Hill 941; v. St. Louis Southwestern Ry. Co., 75 S. W. 874 (Tex. Civ. App. 1903); Northwestern Warehouse Co. v. Oregon Ry., etc., Co., 32 Wash. 218; 73 Pac. 388 (1903). In nearly all the States (and see § 2 of the Interstate Commerce Act) there are express constitutional or statutory prohibitions against discrimination by railroad or other carriers; in some instances against discrimination by others engaged in business of a public character, such as that of transmitting messages by telegraph or telephone. of As to discrimination by industrial combinations generally; e. g., one manufacture controlling the paper, see 2 Eddy on Combinations, § 1055. 5 This was conspicuously the case in Scofield v. Railway Co., supra, a case of discrimination in favor of the Standard Oil Company; and see Messenger v. Pennsylvania R. R. Co., 37 N. J. Law, 531, 535; 18 Am. Rep. 754, 757 (1874);, Louisville, Evansville, etc., R. R. Co. v. Wilson, 132 Ind. 517; 32 N. E. 311; 18 L. R. A. 105 (1892). As to effect of exclusive arrangements by means of rebates and other devices for less than lawful rates of transportation, as an element of illegal combinations under Federal anti-trust act, see Swift v. sometimes erroneously placed under the definition of monopolies is that of grants by railroad corporations of the exclusive right of establishing lines of telegraphic communication along their right of way. 6 Assuming the railroad corporation to otherwise have the power to make such a grant, the objection that it creates a monopoly would seem to be equally applicable to, for instance, a lease of its road that otherwise it has power to make. The real question in such a case is whether the grant was within the corporate powers.7 U. S., 196 U. S. 375, 401; 25 Supm. 276, 281; 49 L. Ed. 518 (1905). 6 Such grants were held void as monopolies in Western Union Tel. Co. v. American Union Tel. Co., 65 Ga. 160; 38 Am. Rep. 781 (1880); Western Union Tel. Co. v. Burlington & S. W. Ry. Co., 11 Fed. 1 (C. C. Iowa, 1882); Baltimore & Ohio Tel. Co. v. Western Union Tel. Co., 24 Fed. 319 (C. C. La., 1884). Compare Western Union Tel. Co. v. Baltimore & Ohio Tel. Co., 23 Fed. 12 (C. C. Ind., 1885); Georgia R. & Banking Co. v. Atlantic Postal Tel. Co., 152 Fed. 991 (C. C. Ga., 1907). See, however, Western Union Tel. Co. v. Atlantic & Pacific Tel. Co., 7 Bissell, 367 (1877); St. Louis & Cairo R. R. Co. v. Postal Tel. Co., 173 Ill. 508, 524; 51 N. E. 382, 387 (1898); Mobile & Ohio R. R. Co. v. Postal Tel. Cable Co., 76 Miss. 731; 26 So. 370; 45 L. R. A. 223 (1899). 7 Indeed it would seem that the decisions (or at least that in 11 Fed. 1, supra) might have rested solely on the ground that the grants were in conflict with the act of Congress of July 24, 1866. See also, as to the prohibition contained in such act, Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1; 24 L. Ed. 708 (1877); Western Union Tel. Co. v. American Union Tel. Co., 9 Bissell, 72 (1879); Western Union Tel. Co. v. Baltimore & Ohio Tel. Co., 19 Fed. 660 (C. C. N. Y., 1884); Mercantile Trust Co. v. Atlantic & Pacific R. R. Co., 63 Fed. 513 (C. C. Cal., 1894); Union Trust Co. v. Atchison, Topeka & Santa Fe R. R. Co., 8 N. M. 327; 43 Pac. 701 (1895). See as to prohibition in Texas act, Western Union Tel. Co. v. Baltimore & Ohio Tel. Co., 22 Fed. 133 (C. C. Tex., 1884). In a note by Francis Wharton to Western Union Tel. Co. v. Burlington & S. W. Ry. Co. (11 Fed. 1), supra, it is said (p. 12): “If an opposition company could run its wires on a parallel line, without incurring an expense which would be prohibitive, it is hard to see why the railroad company that makes a contract of this kind should not be bound to it." And in Western Union Tel. Co. v. Chicago & Paducah R. R. Co., 86 Ill. 246, 252; 29 Am. Rep. 28, 31 (1877), the validity of such a contract was sustained, the court saying: "So long as any other company is left free to erect another line of poles, we see no just ground of complaint on the score of monopoly or the repression of competition." In Pacific Postal Tel. Cable Co. v. Western § 147. Agreements not to bid.-Another class of cases that seem erroneously classed with restrictions illegal as tending to produce monopolies, is that of agreements not to bid at sales, public or private,8 or for public contracts. The superficiality of the analogy may be indicated by the circumstance that while referent lines by a dozen different companies for their own exclusive use respectively?" Union Tel. Co., 50 Fed. 493 (C. C. Wash., 1892), a telegraph company having a grant of such exclusive right was not allowed an injunction against the construction of another telegraph line on the same road. In Canadian Pacific Ry. Co. v. Western Union Tel. Co., 17 Canada Supm. Ct. 151, 161 (1889), a grant of such exclusive right was sustained against the objection that it created a monopoly. The court said: "The argument that an exclusive right to erect a telegraphic line along the line of railway is against public policy would seem to rest necessarily on this delusion, if it has any foundation at all, that the public generally have a right to erect telegraphic lines along and on the line of railroad, and therefore their exclusion of any such right may cripple and prevent competition and tend to creat monopolies; but as the public have clearly no such rights, and as there is nothing to prevent telegraph lines from being erected contiguous to and parallel with railroads, provided the right of way is secure, how can it be said to cripple and prevent competition, and tend to create monopolies, any more than the erection of the line of telegraph unconnected with the railway by private individuals for their own exclusive use, on a line they have procured at their own expense, would prevent competition on a line parallel or contiguous thereto? What is there to prevent the erection of a dozen dif 8 See Cleveland, Columbus, Cincinnati, etc., Ry. Co. v. Closser, 126 Ind. 348, 361; 26 N. E. 159, 163; 9 L. R. A. 754, 761; 22 Am. St. Rep. 593, 604 (1890). For instances of illegal restrictions upon competition in bidding at a sale, see Re Blake, 150 Fed. 279; 80 C. C. A. 167 (8th C., 1906); McClelland v. Citizens Bank, 60 Neb. 90; 82 N. W. 319 (1900); Coverly v. Terminal Warehouse Co., 70 App. D. 82; 75 N. Y. Suppl. 145 (1902); 85 App. D. 488; 83 N. Y. Suppl. 369 (1903); Daily v. Hollis, 27 Tex. Civ. App. 570; 66 S. W. 586 (1901). See, for instance, McMullen v. Hoffman, 174 U. S. 639; 19 Supm. 839; 43 L. Ed. 1117 (1899); Pendleton v. Asbury, 104 Mo. App. 723; 78 S. W. 651 (1904); Whalen v. Harrison, 26 Mont. 316; 67 Pac. 934 (1902); Baird v. Sheehan, 38 App. D. 7; 56 N. Y. Suppl. -28 (1899); affirmed in 166 N. Y. 631; 60 N. E. 1107 (1901); Jageman v. Necco, 59 S. W. 822 (Tex. Civ. App. 1900). See also Trentman v. Wahrenburg, 30 Ind. App. 304; 65 N. E. 1057 (1903); Re Salmon, 145 Fed. 649 (D. C. Mo., 1906). So of agreement for withdrawal of bid. Conway v. Garden City Paving, etc., Co., 190 Ill. 89; 60 N. E. 82 (1901). For statutory provisions relating to such agreements, see Ala. Civil Code (1907), §§ 3334-7; Ill. R. S. (Starr & Curtis' Ed., 1896), c. 38, strictions tending to produce monopolies are regarded as objectionable on the ground that they advance prices, agreements not to bid are so regarded on the ground that they reduce them. The true ground of the condemnation of agreements not to bid seems rather to be that they operate as a fraud upon the person for whose benefit the sale is made.1 10 § 148. Combinations among owners of patents.-As has been seen, the doctrine condemning restrictions upon competition does not apply, as a rule, to either patents, or restrictions imposed in granting a license.11 It is now to be considered whether the monopoly enjoyed by the owner of a patent prevents the application to combinations among such owners of the rules applicable generally to restrictions upon competition. Thus far the prevailing opinion seems to have been that such rules are applicable thereto,12 but this conclusion may not be free from doubt.13 § 96; c. 127, § 9; also under Ind. (§ 210); Miss. (§ 219). In U. S. v. Addyston Pipe & Steel Co., 85 Fed. 271, 293; 29 C. C. A. 141, 162; 46 L. R. A. 122, 137 (6th C., 1898), the term "conspiracy in restraint of trade," as used in the Federal anti-trust act, was held to apply to an agreement not to bid at a public letting. This decision was affirmed in 175 U. S. 211; 20 Supm. 96; 44 L. Ed. 136 (1899). 10 See 1 Bigelow on Fraud, c. 8, § 3, p. 580; 1 Story's Equity Jurisprudence, 293. That such an agreement is not necessarily illegal, but that its legality depends on the intention of the parties and the effect of the arrangement, see Barnes v. Morrison, 97 Va. 372; 34 S. E. 93 (1899) and decisions cited. As to validity of such agreements, as being for mutual benefit, 18 In Columbia Wire Co. v. Freeman Wire Co., 71 Fed. 302 (C. C. Mo., 1895), however, a corporation organized under the laws of Illinois, see, for instance, Venner v. Denver Union Water Co., 40 Colo. 212, 240; 90 Pac. 623, 632; 122 Am. St. Rep. 1036 (1907); Starkweather v. Jenner, 27 App. D. C. 348 (1906); Virginia Bridge & Iron Co. Crafts, 58 S. E. 322 (Ct. App. Ga., 1907); Mallon v. Buster, 121 Ky. 379; 89 S. W. 257; 123 Am. St. Rep. 201 (1905); Satterfield V. Kindley, 144 N. C. 455; 57 S. E. 145; 15 L. R. A. N. S. 399 (1907); Henderson v. Henrie, 61 W. Va. 183; 56 S. E. 369 (1907); Fidelity Ins., etc., Co. v. Roanoke St. Ry. Co., 98 Fed. 475 (C. G. Va., 1899). 11 See § 112. 12 For illustrations see National Harrow Co. v. Quick, 67 Fed. 130 (C. C. Ind., 1895); National Harrow Co. v. Hench, 76 Fed. 667 (C. C. Pa., 1896); affirmed in 83 Fed. 36; 27 C. C. A. 349; 3 L. R. A. for acquiring patents and granting licenses thereunder, and in possession of many, if not all, of the valuable patents for the manufacture 299 (3d C., 1897; holding it no justification that the parties are exposed to litigation); Strait v. National Harrow Co., 18 N. Y. Suppl. 224 (Supm. Ct., Sp. T., 1891; with a query whether the same rule would apply to an agreement limited to the life-time of the patents); Vulcan Powder Co. v. Hercules Powder Co., 96 Cal. 510; 31 Pac. 581; 31 Am. St. Rep. 242 (1892; distinguishing the case of an agreement by the seller of a patent-right). See also, § 120. Compare American Soda-Fountain Co. v. Green, 69 Fed. 333 (C. C. Pa., 1895); A. B. Farquhar Co. v. National Harrow Co., 102 Fed. 714; 42 C. C. A. 600; 49 L. R. A. 755 (3d C., 1900); Central Shade Roller Co. v. Cushman, 143 Mass. 353; 9 N. E. 629 (1887). As to patentee so contracting with reference to his monopoly as to create another monopoly in an unpatented article, see Heaton-Peninsular Button Fastener Co. v. Eureka Specialty Co., 77 Fed. 288; 25 C. C. A. 267; 35 L. R. A. 728 (6th C., 1896). In General Electric Co. v. Wise, of barbed wire, and the machines for so doing, and which had granted a large number of licenses under its patents, was held not subject to the anti-trust laws of Illinois, so as to defeat a suit by it for infringement of a patent. The court doubted National Harrow Co. v. Quick, supra, but held it perhaps distinguishable on the ground that in the case at bar the licensees were not restricted as to prices for wire manufactured under their licenses. This decision was cited in U. S. Consolidated Seeded Raisin Co. v. Griffin & Skelley Co., 126 Fed. 364, 370; 61 C. C. A. 334, 340 (9th C., 1903), where it was regarded as "too plain to re 119 Fed. 922, 924 (C. C. N. Y., 1903), it was thought, though not decided, that the grantee of a patent is not deprived of the right to relief against infringement thereof, because of his violation of the Federal anti-trust act. And so in case of a copyright. See Bobbs-Merrill Co. v. Straus, 139 Fed. 155, 190 (C. C. N. Y., 1905). As to proprietary medicines, see Miles Medical Co. v. Platt, 142 Fed. 606 (C. C. Ill., 1906). State anti-trust legislation was given effect in, for instance, National Harrow Co. v. Bement, 21 App. D. 290, 297; 47 N. Y. Suppl. 462, 468 (1897; as to reversal, see § 120). As to validity of proposed legislation by State designed to prevent owner of patent "from extending his power to the creation of other and further monopolies which have not been granted him by any Federal authority," see Re Opinion of the Justices, 193 Mass. 605; 81 N. E. 142 (1907). quire discussion," that "the provisions of a State law cannot affect rights acquired under a patent of the United States." See Rubber Tire Wheel Co. v. Milwaukee Rubber Works Co., infra. In Indiana Manuf. Co. v. J. I. Case Threshing Mach. Co., 148 Fed. 21 (C. C. Wis., 1906), was held invalid under the Federal anti-trust act "a combination of manufacturers to restrain competition in the make and sale of their products, with merger of the patents in one ownership as a means employed for that purpose," such monopoly being "both intended and accomplished without reference either to any spe |