Honorable Q. A. Walters 

County.Attorneg .~ 

San Saba .Countg 

§an,§aba, Texas : 

Dear Sir: Opinion Ro. O-2165 

Re: construotion of 

Anti-Trust Laws. 

We have Pour letter of April 2, 1940, wherein 

you request our opinion on the applloatlon of the AntiTrust Laws~to oertain praotioes of the San Saba Light & 

100 Company, set out in your letter. 

The so-aalled Antl+Prust Laws of Texas oomprlse 

both the oriminal and the civil statutes on the aubjeot. 

The criminal statutes are .oontalned In oh. 3, Title 19 of 

the Penal Code of Texas; wherean, the civil statutes are 

contained in title 126, articles 7426 to 7447, Ino., ReIvised Civil Statutbs, 1925. The obnstitutionality of the 

civil. statutes have been established beyond question by 

the Texas Supreme Court In the oaae~ of Standard 011 Co. 

v:§tate, 107 S. W.~ (2d) 550. The ooast~tutionallty of 

the oriminal statutes was affirmed by the Texas Court of 

Criminal Appeals in the case of Rx Parte Ti nor, 132 9. W: 

(2d)-885. This aaae wasp affirmed May 6, 1 !3 0 by the United 

States Supreme Court. We delayed in answering your questlon~until we reosived the decisloa of the United States 

Supeme Court In the Tlgner case. 

~Unquestionably; agreements between a wholesaler 

and a retailer fixing the'reaale prioe ofaommodltles constitute a violatFoh of the Texas Anti4Wxit Laws: HubbDigga Co. v. Mitchell, 231 9. W. ~427; Diekerson;et al v. 

MoConnon & Co., 248 S. W. 1084.~. As said by Judge'Brady 

in Huge-Diggs Co. v. Mitohell, 

"It was'alleged that the market value of 

the traotors at the residence of appellee wa6 

at all times $930.00 each and it was expressly 

averred that 'the said defendant then and there 

and at the time of said sale agreed with plalntiff that the same should be sold at the sum of 
Honorable Q. A. Walters, Page 2 (O-2165) 

$930.00’. The plain effect of this averment is that the parties had agreed tom 

Six and maintain the prioe for the sale 

of a commodity or article of commerce." 

Whereas, a manufacturer or wholesaler may not Six 

the resale price of a product when he sells-the-same 'to a 

dealer, it must be remembered that this rule doeshot ,applg 

to agency contracts. The principle may speclSJr the priceat which his agent shall sell goods, and may designate the, 

territory. within which the agent shall operate. As stated 

by the Austin Court of Civil Appeals ln~ Lafon, et al v. 

Falls Rubber Co.,. 242~3. W. 346 (reversed by Comm. of Apps. 

on other grounds, 256~ S.'.W. 577): 

,.'But the appellee (Falls Rubber Cornpang) 

,as the owner off the goods had the right to 

determ,ine~ to.whom, .itwould sell the same. and 

at what price, and had~,the.same rlgbt when '~ 

selling through its agent as if it had been 

making such' sales~~itself~. Such~ restriotion'- 

upon itsagent would not 'violate' our statutes 

forbidding contracts In restriotlon of trade? 

. 

Exclusive sales .&ontracts to dealers are likewise 

in violatlon.oSthe..Texas~Anti-Trust Statutes.. Henderson 

Tire & Rubber Oo.,:v. Roberts, Tex. Comm.‘oS Apps. 1929, 12 

3. W. (2d) 154; Wood:‘v~'Texaa'Ioe~&~ Cold Storage Co., 171 3. 

W. 497; Rogers v..Weatlnghouse Elec. Supply Co., 116-~§.'W., 

(2d) 1886; J. R. ~WatkinsMedical co. v. Johnson, et al, 162 

s. w.. 394. 

Asp stated by Rasburg, J. in Wood v. Texas 

Cold,.§torage Co.; supra,: 

"By the statute it Is unlawful for two 

persons to.agree that one of them willbuy 

from,the other, exclusively of a given commodity as it .lsFn5 'like manner unlawSul~Sor 

one of them to~agree to sell exolusively tom 

the other~a given commodity. It is unlawful 

to do either or both and it is not neoessary 

to do both In order to constitute the offense 

and the reason,thereSor is the ,statute itself. 

Star FlourMill & Elev. Co. v. Ft. Worth @rain 

& Elev..Co.,~ 146 3. W. 604.", 

Ice & 
Honorable G. A. Walters, Page 3 (0-2165) 

We wish to point out, however, that the mere Sadt 

that a manufacturer sells to only one customer L.n a given 

terrltorg is not per se a vFolati.on of the Anti-Trust Statute In the absence of an.agreement to sell exclusively to 

that one customer. As stated by the Texas ,Commission of Appeals Fn GrFfS1n v. Palatine Ins. Co., 231 3. 8. 202 at p. 

205 : 

"A man may lawfully rePuse to have buslneas relations with.another for any reason - 

on account of whim, ,,caprIce, prejudke or ill 

will .'I 

Then fact that the San Saba Light & Ice Company sells-at wholesale to only two customers does not per 'se constitute a violation of the AhtP-Trust Law in the absence of an agreement to 

sell to no one else. 

Your question of necessity resolves itself to a 

question of fact to be determined by the court or jury Ln the 

event of a suit Snvolving the application of the Texas AntTTrust LBws to' the situation outlined in your letter."We cannot;thereSore, give a categorloal answer to your queetion 

but have sought to set out above some of the authorities applicable to the situation. 

Yours very truly, 

ATTORRRYGEI+?ALOFTEKA§ 

By /s/Walter R. Koch 

Walter~R.'Koch 

Assistant 

WRKzR§:mjs 

APPROVED MAY 17, 1940 

/a/ Gerald C. Mann 

ATTORRRYGERERALOFTRKAS 

APPROVED OPIRION COMMITTEE 

BY /s/RWF CHAIRMAR