House Bill JJo. 231, pro9idlnC thst It it conflicts 

oith State anti-trust laws it shnll bo null end void 

hold in aohfllct with such anti-trunt Iswe and there: 

l-or0 invalid. 

--^- _ 

-- 

_-_- 

- 

OFFICE C!P TRD ATTORIGY C'i~DX~L 

June 28, 1939 

conorable W. Lae,O'Daniel 

Governor of Tcxss 

hustin, Texas 

ODlnion Do. o-lC33 

Cl: Vnlidity of Route Bill Do. 231 

We hsvo for ackuowled~~ant your l~ettcr of Juuc 22, 1939, 

wheroln you eck the opi.nion of this Dcpnrtmnt upon certain 

qu?stiox rolatla:j to tha vnlldity of Ilouse Dill iio. 231, the 

*fair trade*' Act, the questions oo!:cd being as l'ollows: 

"1. Does the Caption of the bill, under the 

Constitution, enfficlcntly set out the purpose and 

cover the subfect mttrr of the bill? I call your 

particular uttention to that part or the Cnption 

which says that it la for the purpose of protcctinC 

tmdc-x?rk omors, diotributors and the Ccncrol pub110 o~aiunt injurious and uncconoxic practices in 

tho distribution of articles of standard quality 

undor diotlnCuished tmdemrk, brand or nane, etc., 

and would like for you to advise ~19 if this in suifioiently consistent with the seation of the bill 

deali% with the subject and if it does, in fact, 

amply with the Constitution in @vine notice of the 

oontents of the bill? Plcnsc also mska your nnswer 

applioable'to each and eoery part of the Caption. 

*2. Is there any pmoision of the Act in its 

purpose end final result in confliot tith Chapter 3, 

Title 19 of t?e Penal Oode of this State, or with 

Title 120 of tho Revleed Civil Statutes of 19257 

qn ooaneatlon dth the above I anderstand that 

tlkm 16 almyr ‘h q&egitiou 08 to wlmthcr or not the 

kind 0f~c0ntreot6’0ont~p~ut0a in thb Act aro in 

violation or some nati-trust stetuts. Ir the oontraota 

described are not ia vlolstlon of the statute. it 

would becoae difficult to understand the Purpose of 

this Act. 

"3. If the manufacturer or other peroon sclliu~ 

to a dealer in Texas enter into a cootreot with hln 

wiith'the provlrions stated, and he aCroon and obliCatea 

himself to oell the Coo& at a price stipulated by 

such mnufncturer, or other person, does ho, by reason 
Iron. F. Loo C'Dsnicl, June 20, 1930, l?zCo 2. 

of this Act or euch contr-ct. hwc my protection 

acninst such n4anufoctuicr or ot!lcr n~roon i'urnichinc 

[:oods to cnothcr ~lrchont in the o&c vicinity for 

Gal0 at fl dil'foront price, or no price at oil? In 

other words, if one local dcolcr LC-kes a contract 

forthc purchnao of co%.oditioo for rennle with the 

mnufocturor and arreec to sell the:: at a fixed price, 

can hc by the term of this bill h,jvu nn opreormnt 

in hia contract thct the rmnufncturcr will not sell 

to one of bit coxJP?titors ct 0 different price, or 

no Eircd price? If such provision should bo in the 

contract vtould it be a lawful provision.? 

"4. I would like for you to cdvice no the 

mooning and effect of Paragraph 2 of Seotion 1, recdine as follo,xi: 

'That v~ilfully'and knoiirin$y offerin; for 

salt or cellinS any cor3aodity at less than 

the tninixnd price ntipulotcd in any contract 

cntercd into pursuant to tho proricions of 

this Act, whether the per-on eo offcri~ for. 

sale or sellin;. is or is not a party to such 

contract, in unfair co!lpetition and is actionable nt the.suit of any person dnna::cd tboraby. . ..' 

"Do you consider this lan!:u:rco cufficiently definite and ccrtein-to bc binding7 

"5. Ilocco advise *co in Pcrticulnr if pnro~rcph 3 

of Section 2 is in violation of any Sedoral levr or, if 

effcctivc, uould it onend, uodify or repeal any of' the 

Anti-Truut 1~~s of the Stats of Terns? 

"6. Is any portion of said Act in conflict \;lth 

the Constitution end law of the Ilnitcd Ctntcc or of 

the stntn or TCXC87" 

Sincc.uz hnvo reached the conclusion that House Bill Do. 

231 is'in contrnvcntion of and conflicts 74th the anti-trust 

l~vls of the State of Texas, and thercforc, by virtue of the 

PrOViSiOns of Section 7 of House Bill No. 231, is 0 nullity 

and of no force or effect whatoocver, It becozss unneceescry 

ct this tin0 to enSaS In the extensive study neccosary in 

order to enable us lntelli~ently to ensv!er other quostlono 

of const1tutlonolity ana statutory construction proeonted 10 

your inquiry. 

We- have presentcd in thie House Bill emote& by the 

,Je&lelature ai the Stite'oi Texm the novel aa& peoullar 

rltustfon of a lecidatlve body prwldin(: that the Aot deslGned to relieve oortaln types of oontracts iron tho prohlbltlons 

contained in the anti-trust laws of tbe State of Texas. shell 

be decned null and void and of no force and offcct WhntsOaVcr 

if it is effective to eccozpllsh the desired Purpose. IiOVCl 

and poculinr though thlc situation nay bc, it is neverthsleos 

the duty of this Dcportncnt and of all officers of the Soverment charged with the duty of cnforcinC such lew to Give 

full efEcct to the cxprocsad lntcntlon of the Le~isloturo. 

Section 7 of F!ouse Bill No. 231 reads 0s follows: 
non. :‘I. Lee O~Dzc~icl, Zuno 78, 1939, I’a~o 3. 

lWothin;: in this Act ohnll cvcr bc conotrtied 

as arzndin3, no::ifyin::, saspcndlnf* or rcpeslln:; 

any of the la::-s of this St.ato dzflnlnfi cm) prohibitinC trirts, nono~olicc, and concpiracics 

against trudc, viith p~rticulnr rcfcrencc to C!lapter 

3, Title 19, Fenol Code cl’ the Stctc of Tcms, nnd 

Tl.tlc 126, Heviscd Civil Ctctutct of Tercs, 1925, 

aud if any provision of this Act is hc1.d to bc in 

oont~cvontion of or coni‘lict oltii any of said 

lcwa, tbon said provision shall be null and void 

arid of no force or effect.” 

Sections 1, 2, 3, and 4 of Doufie Bill No. 231 read as 

follms: 

“Section 1. That no contrcct rolatinC to the 

sale oz rcrclo of a commodity which bonrs, or the 

label cr cohtcnt of which bcsrs, the trade-r&ark, 

brand, or no::8 of the producer or cri:ncr of such 

oomodity, nnd which is in fuir oud open coxpetltion v:ith coxioditicn oi” the s*r:c Ccnaral class 

produced by others, if not in violation of Clmpter 

3, Title 19, Penal Code of the State of Texas or 

Title 126, Rcvincd Civil Statute3 of Texgr,, 19% 

and if mic I’or a period not in oxc3s:i of two (21 

y.:srs fro:1 the date of its execution, shnl.1 be 

dconed in violation of my I.&I; of the State of 

Texas by ro~coh of any of t!ic ~Yollo?:ln;: provisions 

vr!~ich xay bo coctained in Each contract: 

“1. That the buyer will not resell 

such cora~o~ity, belo:! the mininur~ grice stipulated 

by the vendor. 

“2. That vrilfully and knov?inCly offerir;S ror sale or sellin:: any comodity at less than 

the z&niml: Drice stipulated in any contract entered 

into purcuant to the provisions of this Act, whether 

the person so offering, for sale or sclli~ is or is 

not a party to such contract, lo unfair coapctition 

and is actiomble at the suit of any person dcxaged 

thereby. 

Tbat the vendee or produoor require 

any dealer% rrhozs he nay roooll such camodity to 

agree that ho ~~111 not, in turn, resell, balm the 

nin5x~ru price +xulatob by such reador or by rnab . 

tendee. 

“1. ic OlO.SinJJ OUt the Oimer’s GtOC@ 

for the purpose of dlscontlnulnS dellvery of any 

such comodlty; provided, homver. that such stock 

is first oficrcd to the rmmfccturcr of such stock 

Gt thf? O*i~iIl7ll lnvoicc price, at lenst ten (10) 

(Jr.ys b,,ro:.c o,:c> stock shall bi: ofl’orod for sale to 

the public. 

” 2 . Khen the Coodn are dns$Ccd or ‘dateriorntod 111 qunlity, and notlca io ;:ivcb to the 

public thereof. 
IfOli. Y. Lot o’rl~nlol, June 2C, 1989, lnC,e 4. 

“3. Ry any oi’ficcr actin: under the ordorn 

or any court. 

‘!EOC. 3. The follozin2 terms, as urod in this 

Act, am hereby dafincd as follo~;s: 

~~Froduccr~ mz3ns Cromr, bn?ccr, maker, manufacturor, nor publisher. 

“‘Co:.>nodity’ means ony rubjoct of oozmerco. 

“SCC. 4. This Act shall not npply to any contraot 

or cqrccmont betv:ocn the produco?s or bctricen vrholcsalero 

or betv;son rotallers,’ 

is furt!xr 

a6 to sole or resale priors. It 

specificslly provided that suoh contracts 

betwcn said parties are horcby declared void.” 

Title 12G, I&vised Civil Statuteo of the Stat.0 of Texas, 

is the Title of our Civil Stntutos rclotinC to trusts an& 

conspiraoico a:rainst trudo. The ~wovisiono of such title, 

applicable. to the oP.aract?r of c~rsmonta with *:ihich Xouse 

Bill No. 231 is conoerncd, are quoted belo?~: 

“Article 7426 . A ‘trust’ is a oombinotion 

of capital, skill, or acts by t?:o or morn parsons, 

.firms, corporations, or oseoolations of perzons, 

or cith.or Tao or more of the::, for cithor, nny, 

or all OF tho folloulnC purpocos: 

“1. To crents, or which may tond to create, 

or carry out rsatrictions in trade or oo~meroo 

. . . or to crcato or onrry out restrictions in the 

free pursuit of any businoco authorized or permitted 

by laws of this. Etato. 

“2. To fix, maintain, increase, or reduce the 

price of’ merchcndiao, produce, or commodities . . . 

‘c5. To arovont or lessen competition in tho 

manufacture, mnk,inC, trnnsportation, sale or purohaso of acrohandicc, produce, or commodities . . . 

“4. To fix or naintoin any standnrd or tiguro 

whcroby the price of any article or cor~lodity of 

morohandiso, produce, or ooFzzroo . . . shall be in 

any manner nffootod, controlled, or established. 

“5.. To make, enter into, maintain, execute 

or carry out any contract, obligation or uCreemsnt 

by which the parties thereto bind, or havo bound 

themselves not to oell, dispose of, trans_oort or 

to prepnrc for riirkct or trunsportation any article 

or commodity . . . or by whlc!r they shsll aCrea in 

any manner to !ceep the prioo of suoh article or 

commodity . . . nt a fixed or Crndod figure, or by 

which they shsll in any mannor affect or maintain 

the price of any commodity or article . . . to preclude a froo and unrestricted competition amonf: 

tberlcclvcs or others in the sale . . . of any ouch 

article or co>!!lodity, or by :;hich thay shill aCroc 

to pool, co:lbine, or unite ony intorostn tboy may 

have in connection with the r:ala or purchase Of 

any article or co:-modity . . . whereby its prioo or 

such oharp ml&. br? in any n::nncr nffcctcd. 
Bon. !?. Lee O’Daniol, June CC, 1939, Face 5. 

- 

“6. To rqulate, fix or l.indt tho outpat of 

my nrticlo or co.mmodity v:hich may be monufoctured, mined, produced or sold, . . . 

“7. 

busincos ,, 

To~cbstoin from enCagi.nC in or contlnuins 

or rron the purchase or sale 0r nbrchandisc, prcduco or oo?modities psrtially or entirely 

within tho Stat0 of Texas, or any portion thereof.” 

hrticle 7429 provides as i’olla;vs: 

“Any and all trusts, nonopolies and oouspiraoics in reotrnint of trade, as heroin dofined, 

ara prohibited and declsrod to be illeCa1.” 

hrticle 7430 providoo in effect ‘that tho charter of an,y 

corporntion c:rwtor+d under tho law of Texan which may be . 

euilty of violotin3 any provision of the Title 1X, may be 

forfeited at th? rcquost oi’ tho httornsy General, if in the 

judcxent of tho Court trying the 0~159, the public int.erost 

requires such forfeiture. 

Article 7437 provides: 

“Any contract or sCroer:ont in violation of 

any provision of this subdivision shull be absolutely void and not enforcible either in low or oqulty.~~ 

Tha balance of Title 13!0 contains msny othor provisions 

dotiGncd to make offectivo the prohibitions contained in 

subdivinion 1 of the Tit1.e. 

Articles 1632, lG33, 1634, oontainod in Chapter 3, 

Title 19, of our Fanal Code, arc but verbatim copiss of 

Az%icles 7426, 742.7, and 7428 ol’our Revised Civil Statutes, 

referred to abova. 

Article 1635 of our Penal Codo provides that whoever 

vlolntoc any provision of such Chsptor shnll be confined 

in ths ponitontiory not loss than two nor more than ten 

Years, The belanca of the Titla contains provisions not 

hecessnry to bo notiood in connection with the discussion 

involved horoin. 

Even a cosunl reading; of the provisions of the above 

statutes disclo;:cs that thoy wre dcnignod to prevent the 

lixir~~ of prioas of artiolos of ooxxrco in any mannor by 

the combined efforts of tv:o or more individuals, firms, 

Corporations, or associations or pcrcons. Tho anti-truet 

lnws oonstituto a 1oCislativn reooznition that oombinstions, 

hzvlnC ror thoir purpo-c or effcctin;: by their acts the firinC of prices, nro obnoxious to the public interest, and 

dicplny a desire to enact ooaprohcncivo laws to render suoh 

l’rice-l=ixin~ i113(;ol, uncnforoiblc, and puoichoblc criminally, 

no rzrttor hov it may be souCht to bu ncconplishod, rrhothcr 

dlxotly or indir3ctly. 

so fer nc o:,xr anti-truct 1~s condemn co-collod “VWt.iC.11” price-fixin::, they ‘coilr:tituto :,ut s lc~iolativc adoption 

t!n:l rocoyition of the otntemnnt rondo by the SUprO:lO COUl’t 

of the United States in tho cam of Strauo VS. Victor Tnlkin- !.:achine Co., 243 lJ. S. 490, Gl L. Ed. Oi,O, that attempts 
to 0011 property for o full price and yet to place rcotraints 

upon its lurthor olicnstion, have hem obnorioun and hstoful 

to the law frcil the days of Lord Co‘ze, bcaaurs obnozioua 

to t!lc public interest. 

In order to'undorstsnd thoro;t::hlY thu nnturr of tho 

problm prosontcd in conncctio!l r:ith such lwc es the ohs 

under consideration, it is perhnpn cdvicablo thnt vzo rcvicw 

the ar~umnts ih favor of and a~alnst such 1n:vs. It is 

contcndcd by ndvocntos of such lo,:iolntion that the mumfncturer of' trsdo-marked or broddcd nrticlcs of co:mxco hao 

a vital intcrc::t in tho Coo3 vzill cnCendcred by the sale 

of such Coo& vith his brand or tmdc-sark upon thorrl; that 

price-cuttiaz in such goods by rct.cilors to v/ha71 ths r*onufccturcr or distributor has ~olc? t!:cm results in danaCe to 

the r~nufaCtul~CP'~: COO4 Uill; thst the dn:mCc thus sustained 

inoronoss the mnufactursr's costs and,iaRnirs his ability 

to nsrket his coodo and ronults in incrsaccd prices for such 

,-oods to the buyin: ~mbllo. (7 A.L.R. 453-43a). It lo 

argued that Vertical" price-fixing;--that is, price-firing, 

on a bran&xl co:n;odity in coxpetition v!ith other branded 

commodities of a similar class, by a~recnont botwon the 

r~anufncturer or the distributor and the dealers in such 

cocmodity, cs to the oricas for which his coxodity alone 

nay be sold, is bcncficinl to tho public Ccncrelly; vrhcrcns, 

it is cdnittod tht '*horizontnl' price-fixing aCro-s.ntc-- 

that is, price-fixinC botv;ocn r:anu1eoturoro or dealers in 

similsr cox:odi.tiss nnrmnlly in cor:petition r&oh vith the 

other, is decidedly ininioul to the public Interest. 

On ths contrary, the arCumentc npninst such price-fixing 

arc phrased as folloxs by the l'odcrcl Trade Carzlission report 

for the ficonl ycor ending Juno ZO, 1910: 

"I. The powr to fix prices will usually be 

abused by the OlkW2C Of too 10~ Proms; 

"2. Renslc prioo r~aintenanco protects and 

ancouracas inofficicnt jobbcrs and prevents elinination in the over-crorldcd field of r&ldlc;wn; 

"3. It tends to secure cooperation of Ccnlors 

and to prcjudicc the:4 a&net brands xhose prices 

are not fixed; 

"4. It forces other dealers to atteapt the 

control of prices; 

n5. It oncournces Ccneral otandurdization of 

prices end elimination of normal COnpetitiOn among 

dedsrs; and, 

"6. It forcas the ultinato oonsuzsr to Roy 

hidhcr prices and leaves him no borPinin3 Powr 

with rocpect to tho article concerned." (7 A.L.R. 45s) 

It io, of course, tho proroeativo of tbo LcCislal;urO, in 

the oxercico of its conctitutiorml authority to oriCinoto such 

lerislo'tio:l .I.s tb!n, ana of t!lo Covomor, in the crsrcise of 

AIo oonstitut;.onol.outhority to vcto,or npprove, to Salonce 

thcco argumnt,s and concidorntions tho on0 ayalnst .tha other, 

ootor:line their validity, end to tnko such octlon es, to tllanl, 

eppesrs to bo in the intcrcst of the public ConerallY. 
In LhC Ob~O!lCO Of Oily COilstitution:~l inhi:,ition; noitber 

this DCPa~V:.etLt nor the courtn uould h?vc any rl.i;htful eoncorn :-At!1 t!:c q~l0~3tioll of ptlblio polJcy irvolvcd, Since 

t!:u r:;?to~:~;i~xtion or th?.t question or pubL!,io pa,cy is 

~:ovmn xl by fioilin;:~ of fact, ::nc: iJ!O ?o:!i:r to r:2ko SllCll 

fiAi::;s of f::ot is by our Comtitutlon c~01uSi~ly vOStOd 

in ti'.c Lo~i;.lnture Snd in tho Cbi-f X:cooutlve of the St3t9. 

It folls:iS tbct if the Act h2d uilcqL"ivocallg olesptcd 

r.ach qyozi2:nt.o 3 s nra contmplntod by it:; term fron the 

provisionc of the anti-trust 108s of the Stat!: of Tome, 

this Dcgartr.cnt should be concernsd only xith t:-.e qumtion 

of its conctiV~tion2lity. The Act, hcwevor, does not mire 

such uocquirocal oxmption,~but cxprcssly provides tbot 

if t.? 0contr:ictc sanctio;xd ty it era vior:,tivr? or t!:ose 

State anti-tlust lovs clreuly onzctcd rind in full force 

nnd cfl'c0t t!:o Act itself, not tbo imti-trus 

k 

ln!Ys, r.l!all 

be null Sn(:1 void nnd of no force Sad ol'feot. ‘0 that it 

becoxos nocexi;ry for this Dzpnrtxnt r?t tho 1tsct to 

conriidcr the qxstion of vhcth.cr t!E Act by 'it's own tori:3 

12; a nullity, and thl:, qucttion bcin~; dutcrninzd in t:?o 

affir3stire, Soy quOtAion of conotitutiocclify baoozos rloot. 

By nu::::rous docioionn in tho St.nte of Texas, our courts 

have detcr:.:icaii t!xL 03r Stat.0 anti-trust lo?;S ro:ld3r 

absolutely n:lll ant: void VSrtionl" pl.lcc-fixfnf; cqroezzonts 

ontwcd into b:lt!:cen xionufucturors or dir?.ri~ultors ond retailers, :;heri;by the rotoilcr n;,7,rcec toroS,oll on Srticlc 

of oome1'co in tJ:ia State only St e xioo fissd by the 

I:onufScturer or dirtributor of Such nrticlc of cc:xsroo. 

In the ci:se of Coddoll VS. ::Stkins (C.C.A. Son Antonio) 

227 9. V!. m't, t.l?C court mid: 

"If by the fores of this contract qnd the 

control civen thcreun<cr, th3 rosSlc of the product in thic Stat0 iS linitcd to Sny prcxribcd 

telTitoly, or to o fixed _orlcc, Oi’ the rctuilcr 

is required to devote all hiS tixe to tho Sole 

of those particular r,ood..:; andmy not cn.pCe 

in any othzr busiwsr;, t!l:n *ED eny tbst cwh 

contract'... is in contravention of 0'2r anti-trust 

StStutcrr end :l,crSforo invalid." 

In the oaeo of ScCnll VS. ::CCnll CO., 104 6. !:;. W3, t?le 

Supra:~ Cowt of the State of TexSS hSld 8 contract for S 

Enlo or ~mLtcr!ls, o'bli::stln:: So;Sll to Sol1 no othw pattcrx 

exoept :'c~all~t:, and to rcccll ot pricoS fixed by !.'oCall, to 

be void, in uiolfition of Tcxas onti-trust luVl;rr., suyin::: 

WT~I~ oolltrnct fixes the price St which tho vendee 

Shall Sell in TOxSr. and provides t.hnt ho Shsll refrain fro;: r.cllin~ at retnil in Toxns nny ot!icr 

pattern tbnn the I.:oCnll pattern. Thin brines it 

under the juriohiction of the TcXuS 1~~3." 

To the c;(,y:,~ effect, UpOll SiIdlSr foCtS Se0 Pictorial 

RQV~W co. vs. Pate Eros. (C.C.I.. Ft. :..orti,j, 1e3 3. 7:. 509. 

yjlf3 o:rc-r:j< fro:: tl:,c opinion in Cr:~:Z~oll VL‘. :IutlCi3S 

j::edioine CO. cited aboxc, is quotnd ~ltl'r npi:rowl in the 
Ron. Yf. Loo O~iJsniol, Juno 223, 1959, DoSo S. 

caeo of F. Y!. Cooke vs. PaS.0 (C.C.A. San Xntonio),~ 294 S. 71. 

934, as well as in many other Texas caooo. 

In the 9aoe of Rubb-Dices Co. VS. l~!ibohell (C. c. k. 

AmtAn), -231 C. ::'. 425, it was held t!mt a oontroct bctwoen 

a wholesale and a rutail dealcr providin=. that the rotailor 

should resell tractors at a price fixed by tho rmnufacturer, 

R;nry Ford, for solo to the retail trade, and requiring the 

viholcsaler.to rolxiburso the retailer for any docrcaso in the 

retail price of tho troctoro, ~a* nn qrocmcnt to fix and 

aalntafn the price for tho sale of such conaodity, and 

Sherafore violative of our Stato nnti-trust laws, honoe void. 

In tbo oasa.of Cooa Cola Co. YE. The Stnto,.?PS S. ;?. 791, 

tbc court announced tho rule that our State anti-t,rJst law 

xre &pplioable to sales of wtented, copyrighted, or tmde- 

~mr%od articles, statlnS: 

"The owner of' an article protectad by a patent, 

co:,y1~gllt, or trsde-rark, v!hen hs hns rsnufacturad 

anO cold the soae, .osnnot inpocc restrlotlons on 

his vcndca OS to tho future sale of sane. R..vinS 

marted with his ovmershlp tberain .s it entcrs tho 

ohannolo of trade as en article of oo~znorce, and Is 

thorcaftor beyond his control." 

This rule of lnr? WC cltod v;ith approval in ths ease of 

Rowers Y. ':iostinghouso Electric Supply Co., 116 S. If. (2.6) SBG, 

writ of error rofuoed by our Suprexc Court, by the Austin 

Court of Civil Appeals in tbc ca*e of Notional Autormtic 

Ikkchine Co. vs. Enith, 32 S. Y. (23) 679, and by the Toxcrkana 

Court of Civil A?>>als in ths OQCO of Tri-State Soles Co. Vs. 

Rational Autoxltio ::ochina Co., 38 8. iY. (2d) 059. 

In each of the follozinS cases, tho contracts with 

vhlch the courts v,oro dealing prorllnontly lnvolvod acre+ 

ncnts bctv:oon naaufocturars or distributors and dcelsrs to 

whom they wxo sellinS their yoods that such dcolaro should 

resell such Sooda only et retail prices fixed by the mawfocturer or dietributor. In oath cnso, such "vortioal' 

price-fixing q (;roaxent was held to be void because in Vlolation of our Ststo anti-trust laws: 

vi. T. RawloiSh Co. vs. Ds?:cr, et al (C.C.A. Texarkena). 

117 s. R. (2d) 1117. 

Karathon Oil Co. vs. Rodlay, et al (C.C.A. Ft. ?iorth), 

107 5. V'. (2d) Oes, writ di~!ri~scd. 

EcConnon vs. Ralston, et al, 275 8. 1?. 165. 

XoConnon vs. I!nrshnll, et al (C.C.A. Texnrkana), 280 

s. iY. 323. 

a. T. Rav:lcieh Co. vs. BraCberry'(C.C.A. Ar,erillo), 

290 S. >I. 870. 

71. T. Rnwloigh Co. vs. Rudeon, et 01 (C.O.A. Rl IOOO), 

200 3. iv. 775. 

v. T. RnviloiSh Co. vs. Gober, ct nl*(C.C.A- ?aco), 

I3 S. 71. (2d) S45. 

.p . 

J. R. v;atkino I:cdionl Co.~va. Johnson, ot al (C.C.A. 

Son Antonio), lG:! S. L:. 394. 
In each of the sbovo cltod oo!xs Jurl refwr.:d to, 

there ycro ‘oth.?r violi:tlouc o!' tho out!-tmst lo\~:s,j.nvol.vod 

fin such contracts, SUOh 65 ~O~l211?~2IIt!; t?;:.:t ti7.a c.OOci:i bo 

sold by the rctcllor only in c czrtnin tcixlt.crry, or t&t 

the dcalor should bind hi:Gclf to co11 no otbm {;oods of 

o sllnllar chnractcr, or th;t the dmler dfl.1'ota his ontire 

tlr:e only to the hole of the p2::ticulnr ccr.i;6il:*'c :mrchnndloe; but it is oppcront i'roi;l tho follo;.lr.:: clces reforrcd 

to balm t!,:ltho stipulotinn In tl:o coutx,.ct> i.:hich chiofly 

conccrnod tho courts wus thnt fixlfiz price::, and ti::lt the 

othor Ptlpul5tionc roforra~ to mro rcfcrdr3 Vi tho courts, 

es they are by the anti--trust loo;:, ao viu:ous ond coatrnry 

to tho public iMcrc:t becnuce they afford ef'fectivc :~xm 

by Yzhlch pri63 control nay bc mlntolnod. 

In tha csse of J. R. !%tkino !~:odical Co. vs. Johnson 

et al (C.C.2. Son Antonio), lG2 S. VT. 384, t?m Cm-t, in 

di6tfntl\ishillC the :'U~;'cm Court c2coo of Idb6i%y;16 CD. 

vr. Feist GO., nnQ Fuqa 78. Fiwrin~ Co., ro::clks: 

'I... they nrc clomly dlntingsi:5hnblo. In 

the Fuqnn caao the fmrtics sourht to con!.rol 

th6 Pl'iCC nlld SirlC Of t!lc b.:cr oftcl t!lu title 

theroto v~stxl f.n the purchd::x?, ns ~011~ 6% to 

dopriro the buyer end sollor ol t!w r,i~ht to (:s:l 

wit3 any other jx?rsono with roforcnce to the EWZB 

cozziodlty in the oc::w tarritory durlw: the tsm 

of the cont.rnct. In tho F'eist cast? no cfrort me 

rude to co:;trol oi' lixit tho Ciq~orition of tke 

(;ooas . . . but to bind the soiler to 3511 tire sme 

class of GOOR:: to no other pxrson in the ~'s;:o 

territory i'or n lirlltcd tlxa. The contrwt clcnrly 

shirjlc that Feint P-. Cwp?ruy vw1'0 in no :mmm lirlitcd 

in ttc?ir ri::ht to cull or to fix the prim or the 

(:oods or in my mmcr to coriLro1 or llr.:ltho 

free and Unro6tXIiIlsd tiTffi6 in th0 :~OOds cold 

oftor thc.titlu thcrzto v3stcd in l‘clst ;: Coqmy, 

The corn con be mid of' the coca of Xclipoc i%iat 

Cmpnny vs. NW Froccso rtoo?ln;. Co:'1>ouy." 

In the 6660 of Double Seal Hin;: Co.x:mny vs. Keith, 

(C.C.A. Pt. ;:'orth), 107 S. i'l. (2d) 428, writ roi'uoed, the 

Court rooo,';nirud thnt if the oontroct there undm considorotlon bsd boon oue of rslo, rnthnr then one of ogonoy, 

and hn(l fixed the rcsalc prlco$ at vihloh the 00n'~10cliti6~ 

!nust bo rold, it would I!;vo bcon in violetion of our Statc 

anti-trust laws. 

In the OGL:C of tiu Enmel Point Co. Vs. Davis (G.C.A. 

Ft. Korth), G3 S. IV. (7.d) RCl, the Court, lu holdin!! that 

a contract for the sale of paint not ctipulntinz tbot thz? 

distributor S1oulG be tho co1.0 dlntributor in tho torrltory 

deolC:nated uor binding him to ccl]. at o fl:ml prloo, did 

not rioloto Stato,nnti-trust law, rennrks: 

VW Century ;.:anufnctiirin: Co. vs. Bohouror 

(VOXOS CC:X!~:::~O~ 6r hp 61.:;) 45 L;. .::. (?a) 560, 

is not in pglnt, slnc2 the contmct tllorc conctruud 

dld stipuloto 8 fixed price for which the articles 

oontrnctcd for should bo cold.* 
It nuct bz notod, of oourcc, tlat tho ceeo of Rcw 

cc!:tury'JInnui"acturlny, Co. VS. Cohourar ho3.d D contract to 

p?~rchese point contoinln: proVl;:io:w rixilg: tho mm10 

price Of point to bn in violation of the l?o&rcl entitrust 1~s; but it is api:nrciItlmt the Fo;t Yorth Cwrt 

of CiVll Ap?cnlo conntracd tl:rct 03s:: as equally n~plfcnblc 

to our State anti-trust lnxo. 

In the moo of :I . T. Rarlei~b Co. VS. Flotohcr, et cl, 

(C.C.A. Tcxlrkana), 275 S. 1. 210, the Coupt ctatcd thot 

the fact Wet D. buyer, puro!acl~~ nrtlclcs ootrl:;ht, Vas 

ln~i'ely ~ovorncd by the scllcr*c "l;u:::L'.?3tcG prlcob" in dir;- 

posing of articlea bou;ht did not 111 and of itself oonetituto 6 viol;:tion of State m&l-trust lew. The Court says: 

There lb no find.lng that it UUB a part of the 

contract l-or rlotcksr to ye;011 the r,oodc atp~lcas listed to hl&. The fmre feet that 'in 

di~po~lu:: of‘ the products purclasod by hlx,' 

TletchJr 'I:23 lcrcely ~OV0XIlGd by 'n B'Ji~~\OSted 

retell grim list of JI1‘OduCtcq v;ould not, In 

i,tcolf, bc .=I vlol:jtlon of' tho ctatutec." 

That csee, themfore, turns upon the failura to be&blioh either the n~roc.;:ant or the cuctox i!zply:ni- en ayrccmnt., to rerzcll nt priccc fired by the co;!wny, the court 

ncceccnrlly lsplyln: that lr Flotchor h?d obll;;qtod hirxolf 

to rcasll at prlccs fixed by the co~ipony, tbsro v~ould hnve 

cxistcd cuch n cozblnntion 86 in redo unlwful by tho nntitruot lo~.z or TCXI~G, sun such contrnots v:ould how been 

void. 

And in the mce of K. T. Rawleigh Co. vs. Fish, (C.C.A. 

Xer;tlcnd), 290 2. 2. 798, the Cowt, in conetruin~ b ooztract 

for the snle of hoods es not limitln~ olther territory, 

rccclo price, or requiring voadee to sell only vcndorfs 

coed:;, and thorcforo not viol.ntin:- our ttetc cnti-trust 

lavrb, a@n hplics that if tke oontrt~ot :v:d flxod the rcoale pricrr, it v;ould have boon in violetion of our entitrust lam. 

And in the onse of Y!. T.~Rwloigh Co. vc. lIarpar (Co+ 

nission 0r Ap>cnls), 17 u. Y. (Pd) 455, Ia0 Corx&.sion or 

hppoalo, ~~licr- t,?ls jury found tlm t the ar,raomnt xwde provldod t!mt i!llrgr we to dcvoto bin entfro tirnc, skill, OtC., 

to selling cooids puro!mscd of the company by him, but t!mt 

lt did not: conttzglots or provldc that hlr: torritorj %s 

to be limltcd or that the rosalo price w R to be filed by 

tllo co:~pci:y h&i that the oontrect did not violsto our Stnte 

entl-trust Inwe, but hem n&n the intimntion ie olonr that 

if the oontract had provided for tho fixing of the remlo 

,7rlce, the coul’t would hove held it to bc Void. 

Other autho~~ltloo from thlc Et::t<! ml::ht be cltcd by us 

in cunrort or the proposition Fnvolvod, but to do 60 vmdld 

ut?I:uly lo:I+!\cn this o,in!Lon. Il:r:muzti-Jc annotatlonn unon 

the bubjoct ~111 bo fou!ld in 7 ,,.i..i:. 4d'); 19 f..L.T.. 9;:s; :%? 

A.L.E. 1037; 103 A.t.l:. 1331; 164 fr.L.R. 1452; 106 A.L.P.. 

1486; and 110 A.L.lc. 1413. 
Won. V. Lee O'Dnniel, June 20, lBSrJ, P9ee 11. 

That the iixmdintc effect of the coxbinotion or o~recwxt r&y bo to lo:.cr prices h::o bwn held by o.zr courts 

not to vit:llix or rondar valid such a~;rot:;l.~nt.r?. In Ccn 

Antonio Gas 00. VG. State, 54 S. \i. %CI), it is oald: 

*'%t doee not wttcr tklt tho ir&:lrrdinte 

recult of coxhitwtion x.yy be a rcductlon in 

the price os^ co:xloditios. b dnnGerouo arbitrary 

poser hrs boon lodged in its bonds, by %hich 

the bualno&s of the country may be nbaolutoly 

domiriqted, and prica arbitrarily controlled, 

re&¶rdlec~ of' tbc Iwo of tredo or the rules 

of eupplg and Gcmnd.,... The object of the 

stututcs la to tunrd the coll'.iorce nnd trade 

of the ctnta so that it my floz in ito rcCulnr 

ohannels, oub.ioct to the l..;v of supply and dcmsnd, 

and untrnxwled by tha oo::!binntionn of man or 

oorporatlons which onn, nt will, control their 

OOUrGQ." 

Uc ltive been referred to the w~o'of Old Dearborn Dintributln!: 00. VI?, SeaC:rcw Dietillcrs, 81 L. ed. 769, by the 

Supreme Court of thu United W.:ltcr:. Thnt onso involved 

only the validity of the Illinois Pair Trnde Act insorar 

as the Constitution of the United 3tatoc lo concerned. 

The fllinoi~ Sair Trsdc Act containad no cucb provision 

a5 is found in Section 7 Or 1:OUt.e Bill 231, hOW2 that 

authority has no bcwil;g ulron the quontion on v:hich tho 

velidity of :!ousa nil1 2.31 irs turned. 

Eubxectione 1, 2 and 3 of Section 1 Or I:ousO Gill 231, 

quoted above, expressly oanction end. propose to mke valid 

and biudln& oontmctn 02 D chnrwcicr itmouncud an0 readercd 

null, void, end unenl'orcible by the proviuions of our State 

antf-truat laws, as oont~ln~d in Chaytor 3, Tit10 10 Penal 

Code ol' the State of Toxr, RJld Title 125, Revised Civil 

Stetute3 0r TOxnr, 1925. Thorurora, by virtue of the exg%ss 

provisions contninad in Nouse Bill fro. 231, Section 1 of 

%une Dill FTo. 231 is sutircily null, void, and of no force 

and effect. Since the grovlcions contained in Poction 1 

or 1Iowc Rlll. Xo. 231 constitntc the bono ond sinez of the 

entire Act, nnd withoat such provisions tho rameindor of 

the Act bocono; mcanlw~:loco, it is np:lxrcnt thrt the entire 

,k0t nust rdi. 

Dy . 

&&&g&A+ 

R. ';1. Fairchild 

Assi otent