網頁圖片
PDF
ePub 版

§ 74 (66). Restraint of trade in interstate commerce under the common law. This act of 1890, the supreme court has definitely decided in the Standard Oil and Tobacco cases, must be construed with reference to the common law of interstate commerce, as recognized and enforced at the time of its enactment. Contracts in interstate commerce and subject as such to the regulating power of congress, in the absence of congressional regulation, are controlled by the rules of the common law.1

There are no common-law crimes in the United States, and common-law contracts in restraint of trade, that is in gereral restraint of trade, are not illegal except in the sense that the law will not enforce them. "It does not prohibit the making of such contracts; it merely declines after they have been made to recognize their validity."2

This statute of 1890, therefore, enforces rather than changes the common law, in that it makes contracts in restraint of trade in interstate commerce both illegal and criminal.

3

It was declared by the supreme court however in the Debs case, that the power of the national government over interstate commerce and its right to invoke the power of the courts to remove any obstructions to such commerce did not depend upon the statute of 1890, but on the broader ground of the attributes of sovereignty possessed by the government within the limit of its enumerated powers. The national government was therefore empowered, irrespective of the statute, to protect interstate commerce and the right of the citizens to freely engage therein against injurious combinations in

the Payne-Aldrich Act, and are therefore still in force. (See Secs. 73, 77, 3rd Comp. Stat. 3202.)

1 See Western Union Tel. Co. v. Call, 46, supra.

It was said by the court in the Standard Oil Case that the debates showed the doubt as to whether there was a common law of the United States which governed the subject which in the absence of legislation was among the influences leading to the pas sage of the act. There had been

diverse rulings in the circuit courts, but it was not definitely decided by the supreme court until 1901 that interstate commercial transactions were subject to the rules of the common law except so far as they were modified by congressional enactment.

2 Lord Bowen in Mogul Steamship Co. v. Macgregor, 23 Q. B. Div. 598 (1889).

3 158 U. S. 564, 39 L. Ed. 1092 (1895).

restraint of trade or monopolies, and to invoke the powers of a court of equity for that purpose. It seems also that there is a jurisdiction in equity irrespective of the statute, which may be invoked by private citizens on general principles of equity jurisprudence, to afford preventive relief against threatened injury from any unlawful agreement combination or conspiracy in restraint of trade in interstate commerce.1

It would therefore follow that without the statute of 1890, or if that statute was repealed, the public interests and private property rights could be protected by the civil courts against injurious combinations in interstate commerce.

§ 75 (67). Constitutionality of the act.-The constitutionality of the Anti-Trust Act has been sustained by the supreme court. Even under its early construction in the Freight Association cases, that it not only enforced the common law but created a new rule of action, the act was adjudged not violative of the freedom of contract guaranteed by the fifth amendment of the constitution of the United States.2 The court said that notwithstanding the general liberty of contract possessed by citizens under the constitution, there were many kinds of contracts which were not in themselves immoral or mala in se, which may yet be prohibited by the legislatures in the states, or in certain cases by congress. The power existed in congress and the statute was the legitimate exercise of the power of congress to regulate interstate commerce, and the question for the court was one of power only and not of policy, as the latter was the one determined by congress.

3

Under the later construction of the act, whereunder it is brought in harmony with the common law and enforces rather than changes the common law of restraint of trade, any possible question of the validity of the statute is removed, as its whole purpose is directed to the protection of the individual freedom of contract.

1 See Gulf, Colo. & S. F. R. Co. v. Miami S. S. Co., Fifth Circuit Court of Appeals, 30 C. C. A. 142, 1. c. 156, and 86 Fed. 407, decided in 1898; see supra, § 43.

2 See United States v. Joint Traffic Association, 171 U. S. 505,

1898, and 43 L. Ed. 259; and Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. Ed. 136, decided in 1899.

3 See Standard Oil Case, 221 U. S. 1, 55 L. Ed. (1911).

§ 76. Railroads included in the act.-The first important enforcement of the act was in relation to the Railroad Freight Associations, in 1897 and 1899.1 It was strongly urged that the act did not apply to railroads as they were not named therein and the combinations of railroads had been specifically regulated by the Interstate Commerce Act. It was further urged that one house of congress had refused to include the railroads in the act. This question was presented to the court before the amendments of the Interstate Commerce Act had made effective the public regulation of the reasonableness of rates, and after the decision in the Knight case, which had created grave doubts as to the efficacy of the act in the control of monopolies in the manufacturing industries in the states. It was also claimed in these railroad cases that the associations were only for the purpose of securing a reasonable stability in rates and that the act of 1890 had no application to other than an unreasonable restraint upon trade.

2

The court, however, held that transportation was commerce, that the Interstate Commerce Act and Anti-Trust Act were not inconsistent, that both statutes could stand together, and that railroads were therefore included in the Anti-Trust Act.

In the later of these cases, that of the Northern Securities Company, it was held, four judges dissenting, and Justice Brewer concurring in a separate opinion, that a New Jersey corporation organized as a "holding company" to hold the shares of competing interstate railroads, was an illegal combination in restraint of interstate commerce.

Although the construction of the act adopted in the prevailing opinion in the two earlier of these cases has not been followed, the decision that the railroads are included in the prohibitions of the act has not been affected. It would seem from these cases, and particularly from the language of Justice Brewer in the concurring opinion in the Northern Securities case, that under any construction of the act, any combination

1 See Freight Association cases, 166 U. S. 290, 41 L. Ed. 1007 (1897), Justices White, Shiras, Field and Gray dissenting. The Joint Traffic Association case, 171 U. S. 504, 43 L. Ed. 259 (1898).

2 United States v. Knight Co., 156 U. S. 1, 39 L. Ed. 325 (1895). 3 United States v. Northern Securities Co., 193 U. S. 197, 47 L. Ed. 679 (1904).

4 See § 77, infra.

of interstate railroads resulting in the substantial suppression of competition would be violative of the act.

877. A reasonable construction, and reasonable restraints of trade distinguished. In these freight association cases, that is, in the Trans-Missouri Freight Association and the Joint Traffic Association cases, which were decided in 1897 and 1898, it was contended that the associations only aimed to secure reasonable rates, and that therefore the attempted suppression of competition and unified control was in itself not an unreasonable restraint of trade. The majority of the court, four judges dissenting, held that the prohibition of the act applied to any restraint whether reasonable or unreasonable.1 The prevailing opinion held that the prohibition of the act was not the limit of the restraint of trade as it was understood at common law, but applied to any restraint whether it would be deemed reasonable or unreasonable at common law.

In the later case of the Northern Securities Company, decided in 1904, Justice Brewer, who had concurred in the prevailing opinion of the Freight Association cases, filed a concurring opinion, wherein he said that while his conviction was not disturbed that the former cases were correctly de

1 Justice White filed a dissenting opinion (Justices Field, Gray and Shiras concurring), saying, "There can be no doubt that reasonable contracts cannot be embraced within the provisions of the statute if it be interpreted by the light of the supreme rule com manding that the intention of the law must be carried out, and it must be so construed as to afford the remedy and frustrate the wrong contemplated by its enactment.

"The plain intention of the law was to protect the liberty of contract and freedom of trade. Will this intention not be frustrated by a construction which, if it does not destroy, at least gravely impairs,

both the liberty of the individual to contract and the freedom of trade? If the rule of reason no longer determines the right of the individual to contract and secures the validity of contracts upon which trade depends and results, what becomes of the liberty of the citizens or the freedom of trade? Secured no longer by the law of reason, all these rights become subject, when questioned, to the mere caprice of judicial authority. Thus, a law in favor of freedom of contract, it seems to me, is so interpreted as to gravely impair that freedom."

2 Four judges dissented, so that his concurrence was necessary to constitute a majority of the court.

cided, he thought that in some respects the reasons given for the judgment could not be sustained; and that instead of holding that the Anti-Trust Act included all contracts in restraint of interstate trade, reasonable or unreasonable, the ruling should have been that the contracts there presented were unreasonable contracts in restraint of trade, and as such within the scope of the act. He added that the act was leveled at only unlawful restraints and monopolies. Congress did not intend to reach and destroy those minor contracts in partial restraint of trade which a long course of decisions at common law had stamped as reasonable and ought to be upheld; the purpose rather was to place the statutory prohibition with prescribed penalties and remedies upon those contracts which were in direct restraint of trade, unreasonable and against public policy.

In the recent Standard Oil and Tobacco cases (1911), this construction of the act favored by Justice Brewer has been in effect adopted by the court. That is, the act is to be construed in view of the common law as to restraints of trade, and the "rule of reason" is applied in determining, as in all other judicial controversies, the application of the law, as declared in the statute, to the facts of the contract or combination involved.

It seems a clear misconception of the rule declared in these decisions to infer that a direct restraint upon the freedom of interstate commerce, or an attempt to monopolize interstate commerce, can be reasonable in any sense. "Reason is the life of the law," said Lord Coke. "Nay, the common law itself is nothing but reason.

[ocr errors]

1 Justice Harlan dissenting. 2 The ruling or dictum of the court in the Freight Association Cases as to the construction of the statute in this respect must be considered definitely overruled by the decisions in the Standard Oil and Tobacco Cases. Thus in the Standard Oil case the court said: "And in order not in the slight est degree to be wanting in frankness, we say in so far, however, as

by separating the language used in the opinions in the Freight Association. and Joint Traffic Cases from the contest and the subject and the parties with which the cases were concerned, it may be conceived that the language referred to conflicts with the construction which we give the statute, they are necessarily now limited and qualified."

« 上一頁繼續 »