New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-07-08
DECISION FAVORS TRUSTS.
MEMBERSHIPS HIGHEST COURT SUS-
TAINS THE OLIPHANT CONTRACT.
VICE CHANCELLOR GRAY's OPINION AGAINST THE
TRENTON LOTTERIES COMPANY REVERSED
AND AN APPEAL. WILL. BE TAKEN

VICE CHANCELLOR GRAY,s OPINION AGAINST THE
TRENTON LOTTERIES COMPANY REVERSED
AND AN APPEAL WILL BE TAKEN
Trenton N j. July (SpecaD.-The New-'erses
Court of Errors and Appeals to-day III d nei'
sweeping opinion reversed the decision OF Wv
Chancellor Gray I'm the cases of the trenton io.
teries Company. known as the Sanitary ware rus
against Richard Oliphant and others The decision
Is Of great Importance. 1t sustains the ris"' Vi
trusts organized under the laws of New-Jerse! u
absorb corporations and 10 bind them 10 ae'ee
ments TO stay out OF business
The defendants some years ago sold their pottery
to this trust and entered into an agreement not 10
engage again in the pottery business for a long
period Of years in any part Of the Umteu states
outside OF Arizona and Nevada. Subsequently inc
defendants again started in the pottery business
here and the trust sought an in)uncuoh as''''
them in the Court OF Chancery. ,
Vice-Chancellor Gray some time ago ueO'uoN
that such agreements as this one were a restraint
of trade and against public policy. and therefore
illegal He dismissed the bill of complaint and
thereupon the trust took the case TO the Court OF
Errors and Appeals, and its decision to-day re-
verses that of the Nice-Chanceor.
The Court bases its opinion upon two grounds;
FYrst-That a corporation in New-Jersey has legis-
lative authority for the purchase of the stock OF
other corporations and that the contract win the
ELEPHANTS necessary condition to obtain the
full benefit of the purchase Of their plants and ouSi
ness: and secondly that the proofs in the present
case do not show that the public Will suffer inc
ELEPHANTS are held to their bargain.
As 10 the legislative power Of one corporation
to purchase and hold the stock OF other corpora
tions the Court says:
Under such powers II is obvious that a corpora
ton may purchase the plant and business OF COM
peting individuals and concerns. The Leg1sIature
might have withheld such powers, or imposed nm
itations upon their In the absence or any
prohibition or limitation their powers in this
respect II Is impossible for the courts TO pronounce
acts done under leg s,ative grant to be ininlcal
10 public policy. The grant OF the Legislature au-
thorizng and permitting such acts must fix FOR the
courts character and limit of public policy IN
that regard. II follows that a corporation empoW-
cred 10 carry on particular business may lawfully
purchase the plant and business OF competitors,
although such purchases may diminish. or FOR
time destroy competition. ,
Contracts for such purposes cannot be refused
enforcement. Contracts reasonably required 10
make such purchases effective by protecting the
purchased cannot be declared by the courts to be
repugnant 10 public policy. The Interference with
competition resulting from such purchases under
legislative commission being found not TO invajdate
contracts for such purchases. the like interference
by reasonably required for the protection
OF the purchaser cannot be held to invadate them.
The Qliphant Company will appeal the case to the
United States Supreme Court. The decision in their
favor by Vice-Chancellor Gray followed the argu-
Jnent Of Joseph ChOate. now Ambassador TO Great
Britain, who of counsel for the Ohphant COM