The Indianapolis journal., 1884-04-24

house. the work It's erection, uphOlu
contract that will prevent competition in insuring IT.
is to lose sight of substance and pursue a shadow
The law by reason of its adapabiity is able to meet
the varying phases of all business transactions That
competition is the life of trade is not the language OF
the street alone it is proverb in law Justice ewett
in 4 DEMO, 353, says 1T is a familiar maxim that
competition is the life Of trade 1t follows that what
ever destroys, relaxes competition IN trade is
injurious fatal to it, That the tendency OF the con
tract to destroy rivalry the business and to prevent
that active competition would otherwise exist Is 700
plain for serious controversy But it is sad IN TINS
case that the arbitrary rate SO established IS on
sound business principle and IN the interest," Oh Ohe
insured in this, that it enables the insurance com
panies to do a safe business, and prevents their in
solvency. That is not the principle by which the
business of this trading and commercial age is gov
erned The merchants the tailors, the grocers, or
the manufacturers, do not esta6hsh an mheAlole
standard of prices and place them low, that the pay
ing power of the customer may not be impaired, and
it may be that such insurance companies as loan Their
surplus in the various states do not make such invest
ments at the lowest possible rate of interest that the
borrower may be better able to pay the principal.
However fair the phrase used by the pleader, may
SEEM that the contract in the interest of the in
sured the judicial vision must not be obscured by the
declaration of such purpose, but, as have sald
must ascertain the tendency aim and general scope OF
the contract from the whole of its provisions. The
law favors trade and its first aim is to promote the
public interest, and after that to preserve mdlVaoa
rights and it will not permit any one to restrain
person from doing what the public welfare requires
that he should do If all the insurance companies had
the same amount of capital and organized under
the same laws made the same investments, dld the
same amount of business, offcered with the same
number of men, paid the same salaries and taxes ana
maintained their companies at the same expense gen
orally, it might then be said, with more proprlety
that there was for competition, or varying
standard of rates and that the laws OF safe business
required an iron standard of prices to which all
should adhere. But for reasons that readily occur
to anyone and as suggested in the suPposlton nave
made it can be clearly dscerned that there is much
and need for competition in that as in any other
branch Of business. Courts act upon such contract
as this without proof of injury to the public Folger
J. in 43 N Y 149 says: 'The true inquiry isis it the
natural tendency of such contract to nJurousy al
feet the public interests The rule is that agreements
which in their necessary operation upon the actions OF
the parties to them tend TO restrain their rivalry ana
competition and these result in advantage to the pub
lie third persons against the principles OF sound
public policy and are void" Would there be strong
competition under the agreement without it'll The
same rule was held in 35 Ohio St. R., 672 in which it
not in fact destroyed, that prices not unrea-
sonably advanced Courts will not stop to inquire
into all the degrees of injury inflicted upon P
the inevitable tendency of such contracts is
injurious to the public" In DEMO- 353, theparties
being owners of five separate and powerful lines of
boats provided for transportation of property,
chandse and passengers canals and in active II
valry made agreement, as it declared to estabhsh
and maintain fair and uniform rates of freight and to
equaze the business of forwarding on the Erie and
Oswego canals among themselves and to avoid unnec-
essary expenses in doing the same The court says,
though the agreement fair enough on Its face yet
the effect of it destroy rivalry and keep the
prices of certain rates fixed by themselves and for
that reason the contract held void Recognizing
the right of the public to unrestricted competition
in trade that great monopoes shall not be permitted
to control prices and rule labor in their own interests
and to that end many States have attempted by egs
lative enactments forbid the consultation
of parallel lines of railroad and Telegraph
companies; that competition may not be destroyed
ard that the public may be protected from an arbl
trary standard of prices, which established land
naturally enough) from motives of selfnterests
than desire to promote the public welfare The dl-
visibility of this contract is argued that If some por
tions OF it are against public policy. there are ot1ef
provisions in it which may be sustained It is hardly
necessary determine that question, the contract
must be declared invalid in The provisions for VIC
lation of which this suit is brought But may say
the whole contract has but one tendency that all its
provisions distinctly point to end that OF main
tanning arbitrary standard of rates which inevta
bly, tend to prevent that competition that would
otherwise exist. 1t well aimed and hit the mark
as for example, the provision that limits the number
of solicitors to five for each company without regard
to its business providing how clerks shall be paid and
that any employe violating the agreement as to
rates second time shall be discharged and
shall not thereafter be employed in the business by
any party to this ccEpact that no one can Sc
cure employment except upon certificate OF the mana
ger thus leaving the details to the caprice OF mana
ger well the establishing of all rating proper
ty so issued and further providing that on a third
violation of the agreement by party thereto that he
shall have all his companies taken from him and be
Considered In connection with the fact that the com
pact itself has limit in point of time, am not able
to see how any part of it may be enforced.
have carefully read and examined all the authori-
too numerous to review, and no good purpose would
be served by doing so here The great weight of the
authorities sustains the views l have expressed !
cite few only and those most directly in point. (43
N T., 149; IA Wend., 1920; 4 Denio. 353 SO Pa
St, 173 Am, R. 159; Did. III; Is Ohio St, 203;
IS i'd. go; % i'd, $40; Parsons Contracts, 4th
ed, 254, and authorities there cted.) Parties to
agreements of this kind may voluntarily execute them
themselves, if they proper. Lawyers and .physi
clans may establish and maintain uniform prices in
fee-bls on the same principle, but courts will not
lend their aid TO enforce them Relief is not refused
on a breach of such agreements that the party who
made and violated the agreement may escape damages
on account of any injustice hardship to him, nor
will the court award damages notwithstanding the at
titude Of sympathy before the COURTS but, have
said because the first purpose of the to look
to the welfare of the public and if any of the enforce
rnent of the agreement would be ninical to its in
terests relief could be granted to the party injur
ed, and even though it might thereby result beneh-
caiY to the party who made and violated the agree
ment.
The demurrer to the complaint is sustained and
Judgment will be entered accordingly.