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 ofApril 2, 1940, wherein you request our opinion on the applloatlon of theAntiTrust Laws~to oertain praotioes of the San Saba Light & 100 Company, set out in your letter.

The so-aalledAntl+Prust Laws of Texas oomprlse both the oriminal and the civil statutes on the aubjeot. The criminal statutes are .oontalnedIn 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 obnstitutionalityof the civil. statuteshave been establishedbeyond question by the Texas Supreme Court In the oaae~ of Standard 011 Co. v:§tate, 107 S. W.~ (2d) 550. The ooast~tutionalltyof the oriminal statuteswas affirmed by the Texas Court of CriminalAppeals in the case ofRx ParteTi nor, 132 9. W: (2d)-885. This aaae wasp affirmedMay 6, 1 0 by theUnited !3 States Supreme Court. We delayed in answeringyour questlon~untilwe reosived the decisloa of the United States Supeme Court In the Tlgner case.

~Unquestionably;agreementsbetween a wholesaler and a retailer fixing the'reaaleprioe 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 shouldbe sold at the sum ofHonorable 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 wholesalermay not Six the resale price of a product when he sells-the-same 'toa dealer, it must be remembered that this rule doeshot ,applg to agency contracts. The principlemay speclSJr the priceat which his agent shall sell goods, and may designate the, territory.

within which the agent shall operate. As stated by theAustin Court of CivilAppeals ln~ Lafon, et al v. Falls Rubber Co.,.242~3.W. 

### 346 (reversedby Comm. of Apps. on other grounds, 

### 256~ S.'.W.

### 577):

,.'But the appellee (FallsRubber Cornpang) ,asthe owner offthe 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 .&ontractsto dealers are likewise in violatlon.oSthe..Texas~Anti-TrustStatutes.. Henderson Tire & Rubber Oo.,:v.Roberts, Tex. Comm.‘oSApps. 1929, 12 3. W. (2d) 

### 154;Wood:‘v~'Texaa'Ioe~&~ Cold Storage Co., 171 3. W. 497;Rogers v..WeatlnghouseElec. Supply Co., 

### 116-~§.'W., (2d) 1886;J. R. ~WatkinsMedical co. v. Johnson, et al, 

### 162
s.w..394.

Aspstatedby 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~agiven 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 ,statuteitself. Star FlourMill & Elev. Co. v. Ft. Worth @rain & Elev..Co.,~

### 1463. 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 theAnti-Trust Statute In the absence of an.agreement to sell exclusively to that one customer. As statedby the Texas ,CommissionofAppeals Fn GrFfS1n v. Palatine Ins. Co., 231 3. 8. 202 at p. 

### 205:

"Aman may lawfullyrePuse to have buslneas relations with.another for any reason - on account of whim, ,,caprIce, prejudke or ill will.'I

Thenfact that the San Saba Light & Ice Company sells-atwholesale to only two customers does not per 'seconstitutea 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 determinedby 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 categorloalanswer to your queetion but have sought to set out above some of the authoritiesapplicable 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