Civil Code1 declares that no one may restrict the use of his liberty to an extent which is repugnant to law or good morals. Article 20 of the Law of Obligations provides:

ART. 20. An agreement which has an impossible or unlawful content, or which is repugnant to good morals is void.2

Certain other articles of the Law of Obligations affect the validity of acts or agreements which are contrary to good morals, namely, articles 19, 66, 163, 230, and 326. In particular it may be noted that according to article 66 whatever has been given in order to obtain an illegal or immoral result can not be demanded back, that according to article 163 a conventional penalty can not be demanded if it is intended to enforce an immoral promise, and that according to article 230, if an auction is interfered with in an unlawful or immoral manner, anyone who has an interest therein can attack it within a period of 10 days.

In a case decided in 1911, a milk dealing company had broken an agreement with a milk producers' cartel which had restricted competition, and it set up in defense that the agreement was contra bonos mores and invalid under section 17 of the Law of Obligations of 1881, which provided: "Only a performance which is possible and not unlawful or immoral can be the subject of an agreement." The court said in part (p. 211):

* *

It is, however, not apparent how the agreed apportionment of the milk sales between the producer and dealers * is immoral. For evidently neither the interests of the milk consumers are endangered in a manner that can be called an insupportable. monopolization of a general indispensable article of food on account of artificial price regulation, nor is the claim of the defendant true that the maintenance of the hibition would make the dealing in milk impossible for it.

pro

An interesting case, of which a detailed statement has been made in the press, concerned the breach of a grain millers' cartel. A member, contrary to the cartel agreement, sold his flour directly. The Federal court in deciding the matter considered the application of section 20 of the Law of Obligations, referred to above, and declared that this did not constitute a defense merely because the conventional penalty imposed was very large. Judgment was given for the plaintiff, and the conventional penalty which was applicable was also determined by the court.1

Protection against unfair competition is found in sections 41 and 48 of the Law of Obligations, but no application of these rules has been noted with respect to combinations.

1 Schweizerisches Zivilgesetzbuch vom 10. December 1907.

* Bundesgesetz betreffend das Obligationenrecht v. 30. März 1911.

Entsch. d. Schweizerischen Bundesgerichts, 1911, Teil II., S. 205. Urt. v. 24. Juni 1911 in Sachen Verband nordwestschweizerische Milchgenossenschaften gegen Birsecksche Produktions- und Konsumgenossen

schaft.

• Arrêt du 31 mai 1913; Kartell-Rundschau, Nov. 1913, pp. 903-905.

Section 17. Belgium.

Formerly both the Civil and Penal Codes in Belgium were the same as in France. The provisions of the Civil Code are still the same (see p. 281), but the provisions of the Penal Code were, in 1866, modified in part, particularly by the abrogation of the prohibitions contained in articles 419 and 420 of the French law. Monopolizing (l'accaparement) is, therefore, no longer punishable.1

CRIMINAL LAW.-The principal provisions of the present Penal Code of Belgium which are pertinent are articles 310, 311, and 314. Article 314, which forbids combinations to prevent competition at auctions, is substantially the same as the first paragraph of article 412 of the French Penal Code (see p. 272), except that the word "acts" is not included in the means employed, which embrace only force and threats, and need not be quoted here. Article 311 is a modification of article 419 of the French code, and reads as follows:

Persons who by whatever fraudulent means shall have caused an increase or decrease of the prices of produce or merchandise or of public securities shall be punished with imprisonment of one month to two years and with a fine of three hundred to ten thousand francs.2

This Belgian law, unlike the French law (art. 419), applies only in case fraudulent methods are used.

Of more special interest is the first paragraph of article 310 of the Penal Code, namely:

Every person, who with the purpose of compelling the increase or decrease of wages, or of interfering with the free operation of industry or of labor, shall have committed violence, proffered insults or threats, adjudged fines, prohibitions, interdictions or any proscription whatever, either against those who labor or against those who employ labor, shall be punished with imprisonment from one year to two years and with a fine of fifty to one thousand francs, or with one of these penalties only.3

An additional paragraph of this article relates to actions of assemblages of labor, etc.

An interesting case involving an interpretation of this law was briefly as follows: A combination of glass-makers made an agreement in 1904, which organized a lockout and the shutting down of the works. A member thereof was alleged to have infringed the agreement, and the question of authority being disputed, it was agreed to submit the matter to arbitration. The defendant company declared that it had the right not to establish a lockout without being fined, and especially that such fines could not be adjudged

1 Pandectes Belges, Bruxelles, 1878, T. I., p. 995. Prior to 1866 a combination of forty brewers in Ghent was indicted for increasing the price of beer; they were found guilty and the judgment of condemnation was confirmed in the highest court of appeal. De Leener, Organisation Syndicale des chefs d'industrie. Bruxelles, 1909, Vol. II, p. 217.

Code Pénal, art. 311.

Code pénal, art. 310, as amended by the law of May 30, 1892. Nearly similar provisions are found in article 416 of the French Penal Code.

without violation of article 310. The last claim, however, was subsequently withdrawn. The arbitration court decided against the defendant member. Of its own motion the local magistracy intervened ex officio to annul the arbitration on the ground that under article 1004 of the Code of Civil Procedure an arbitration court could not disregard the criminal law.1

The court finally annulled the arbitration decision in 1909, after having determined as a necessary preliminary thereto that the law as expressed in article 310 did prohibit the imposition of a fine.2

Speaking of the resolutions of this combination with relation to article 310, the court said in part (p. 86):

That the resolutions were highly restrictive of the liberty of the participants to the agreement, and of their workmen;

*

CIVIL LAW.—As already intimated, the Belgian Civil Code in articles 6, 1108, 1131, 1133, and 1172 preserves in identical language the articles of the French Civil Code, bearing the same numbers which have been quoted above (see p. 272), and need not be repeated here.

3

The courts, apparently, have generally upheld the validity of cartel agreements. A combination of glass manufacturers in 1872 agreed that the works should be shut down for a certain period and that those conforming thereto should participate in certain contributions agreed to by all of the members. One of the concerns refused to pay its contribution and was sued therefor. The court held that the contribution was a lawful obligation, and said in part (p. 177):

That the agreement between the parties was not an attack on the free exercise of industry and labor; that it had for its cause an excess of production which would involve an abnormal decline of prices; that the shutdown, freely agreed to, of a limited number of furnaces during a fixed period in order to reestablish a fair proportion between production and the needs of consumption is not at all contrary to the public interest.

The legality of combinations of employers and laborers to fix the price or conditions of labor is shown in a recent judicial decision.5 The essential facts of the case, as well as the chief legal distinctions made by the court, are sufficiently indicated in the following excerpt from the opinion (p. 266):

Although employers and laborers have the right to combine in order to fix the price, the conditions of labor, etc., the use of this right is limited and the abuse of it is repressed by the laws which protect the liberty of the laborer and his work; that it is permitted to trades-unionists to make by-laws which govern the members of the

1 De Leener, op. cit., Vol. II, pp. 225–226.

* Procureur général etc. c. Société anonyme des verreries de L'ancre etc., Cour d'appel de Liége, 24 février, 1909. Pasicrisie Belge, 1909, II, p. 84.

Cf. De Leener, op. cit., Vol. II, p. 222.

Hansotte et Cie. c. Mondron et consorts, Bruxelles, 29 mars 1877; Pasicrisie Belge, 1877, Pt. II, p. 175. * De Béozières c. De Paepe, Cour d'Appel de Gand, 9 janvier 1907; Pasicrisie Belge, 1907, Pt. II, p. 264.

The Brian Girl Code also cerrams in article 1382 precisely the salle Moyishi at plasble to wifir overpetite, which is found in the salute article of the French Grill Code, Sep 2731

The agent of an assoviat, n of daders in dragsts goods, which alled to enforce fixed resale pros tied members of the association that a certain dealer was interdicted because of nonobservance of the regulations of the association. The association announced in its publications is intention to proceed vigorously against the delinqut dea'er and to "quarantine“ him. quarantine" him. The said dealer was not a member of the association and had no general agreement with them,

mga di malas, Cour d'Appel de Bruxa es, 3 mai 10× Pasarisse Beige, 1:04, Pt. II,

grante la sente amory theď vymesprimont, Cour d'Appel

Yakka ay isi, 11. jp. 314, 318.

though with respect to certain articles he had made agreements with the manufacturers not to sell below the established price, and claimed that he had kept his agreements. The dealer brought an action for damages against the agent of the association for procuring the refusal by manufacturers to supply him. The court declared that the free exercise of trade and industry was a principle of public order according to the decree of March 17, 1791, article 7, and that an infringement of that principle was unlawful even though the acts committed were not those prohibited in articles 310 and 311 of the Penal Code. The court held that the defendant was not permitted to resort to practices to induce all or a certain number of manufacturers to refuse to sell to the plaintiff or to sell only at a price which made it impossible to resell at a profit. The court held further that there was ground for an action for damages, but referred the case to an expert accountant for conciliation and eventually the determination of how much damage, if any, had been sustained by the plaintiff. The defendant was also required to pay the cost of publication of the judgment for the benefit of the plaintiff.1

Section 18. The Netherlands.

The Penal Code of the Netherlands, in article 334, prohibits, under penalty of imprisonment, all those who seek by spreading false reports to obtain an unlawful advantage over another in the increase or decrease of the price of commodities or securities.2

The Civil Code in articles 1371 and 1373 declares that an agreement without ground or based on a false or unlawful ground is invalid, and that under unlawful grounds are comprehended whatever is forbidden by law or is contrary to good morals or public order.3

These provisions of the Civil Code are not construed, apparently, to render invalid a combination agreement.

The validity of a cartel contract was involved in the following case: A combination of glass manufacturers known as the "Kartel van Glasfabrikanten in Nederland" was formed in 1905. The articles of agreement provided that the members should not alienate their factories except under certain conditions and that the nonobservance of this provision should be punishable by fine. A company called the Naamlooze Vennootschap Zuid-Hollandsche Glasblazerij, which was a party to this agreement, sold out and went into liquidation in a manner contrary to the provisions of the agreement, and was sued for the penalty. An arbitration court (which has a legal status) held that this company should pay the fine.'

1 Gripekoven c. S

aire, 1907, p. 1405.

Tribunal de Commerce de Bruxelles, 12 novembre 1907; La Belgique Judici

* Wetboek van Strafrecht, art. 334.

* Burgerlijk Wetboek, arts. 1371, 1373.

Arbitrale Uitspraken; Beslissing van 11 Nov. 1909; van Deventer tegen Maseland en N. V. Zuid-Hollandsche Glasblazerij. Weekblad van het Recht, 1910, No. 8968, p. 2.