The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-07-08
DECISION FAVORS TRUSTS.
NAY BIND CONCERNS BOUGHT BY
THEM TO STAY OUT OF GUINNESS.

Court of Errors and Appeals of New Jersey
Says That Such Contracts Are binding
They Are Not RepuRnant to Public
Policy and Can lie Lawfully Enforced.
TRENTON. \. j.. July IA decision SUSTAIN
Ing the right Of trusts organized under the
laws OF New Jersey to absorb corporations and
to bind them to agreements to stay out OF BUSH
ness was handed down in the Court OF Errors
and Appeals to- day The case ia that Of the
Trenton Pottcries Company. known as the
Sanitary Ware Trust, against Richard c. Oil
phant and others. The defendants some years
ago sold their pottery to this trust and en-
tered into an agreement not to engage
again In the pottery business for a long
period Of years in anv part OF the United
States outside Of Arizona and Nevada. Suisse
qurntly the defendants again started up in the
pottery business here and the trust sought an
injunction against them in the Court Of Cham
Gerry. Vice Chancellor Grey decided that such
agreements were in restraint Of trade and
against public policy and therefore illegal. He
dismissed III" bin Of complaint, whereupon the
trust took tn" cas-" to the Court OF Errors and
Appeals, anu its DECISION to-day reverscs that
OF he Nice-t hanc"llOr
The court bases its opinion upon two
grounds: ! That corporation in New Jer-
sey has Legislative authority for the purchase
Of tn" stock Of other corporations. and that the
contract with the ELEPHANTS was IA necessary
condition TO obtain the full benefit of the pnr-
the proofs in the present cas-" do NOT show that
the public Will suffer If the ELEPHANTS are held
to their bargain. [ pom the point as To- tho
Legislative power OF ono corporation to pur-
chase and hold the stock Of other corporations.
the court SAYS:
Under such powers il is obvious that n cor
pOratOn may purchase the plant and business
Ut competing individuals and concerns. The
Legislature might hay" withheld such powers
or imposed limitations unon their use. In the
absence Of any prohibition or limitation on
their powers in this RESPECT it is impossible for
the courts to pronounce acts done under
Legislative grant To be inimical to public
policy. The grant ~ the Legislature au-
1h"riZlng and permitting such acts must
fix for the courts character and limit
81 public policy in thar regard 1t follows that
corporation empowered To- carry on q part leu
lar business may lawfully purchase the plant
and business OF competitors. although such
purchases may diminish or for n time destroy
competition. Contracts for such purchases
cannot b" refused enforcement. Contracts
reasonably required 10 max" such pur-
cha-rs effective. 10y protecting the .pur-
thing purchased. cannot l." declared hv the
courts 10 hr rcpugnant 10 public policy. The
Interference with competition resulting from
such purchases under legislative commission
being found not to invalidnt" contracts for
such purchases. the like interference" by con-
tracts. reasonably required for tn" protection
Of IN" purchaser. cannot he held to invaidate
them"
The Oiiphnnt Company will appeal the case
to- ia" nited States supreme Court The
decision III their favor hy Ni"c-t hanCpi!nr Grey
followed IN" argument ~ Joseph II. Choate.
who was ui counsel for the Oliphant Company.