The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1899-07-08
TRUSTS UPHELD.
Court Of Errors and Appeals
Makes q Sweeping
Decision.
POWER 10 ABSORB INDUS RIES
One Corporation May Tai
Over Another Sanitary
Wave Not a Necessity.
POWER 10 ABSORB INDUS RIES

+.
TRENTON, July $, 1899. IN q decfsionl
handed down today the New Jersey
Court Of Errors and Appeals, which il
the Court OF last resort. NOT only held
the formation of industrial trusts as LEI
gal, but thar ONE corporation may ah-
sorb another and enforce contracts
whereby those selling out bind then~
selves not to enter into compositions
against those 20 whom they have sold
out The Court holds that these abb
sorptions and contracts are valid re-
gardless of the result in the matter of
resstraining trade
The decision was rendered in the much
Initiated case wherein the Trenton pot
teries- -the so-called Sanitary Ware Trust
sought to have Richard q Oiiphant ana
others restrained from operating an op-
position plant. The OIiphants hpa sold
out their original plant to the trenton
Potteries Company, and entered Into
stipulated agreement not to engas$ agant
in the pottery business for long perdod
of years in any part Of the United States
outside Of Arizona and Nevada vice
Chancellor Grey some time ago rendered
a decision in which the bill Of the Trenton
Potteries Company was dismissed, on the
by the Olphants was in restraint Of trade
and against public policy and therefore
illegal.
Today's decision of the Court Of Errors
and Appeals reverses the decision OF the
Individual defendants who were not
tract.
,rt,o Gems t11.4x. 4u,.+ ,.a.t,. -, -. =, -
pottery ware has become a necessity "a
life is open to question, but that It is cer-l
tain that many persons manage TO exist
without using it. The Court adds, how
ever, that if its use is so Important 10
health and comfort, judicial interference
may be justified to prevent the enforce
ment Of Illegal conabinataons to enhancs
its price The Court admits that the elm
nation of competition may produce sticln 1
eni1ancement of price. but says the CON
tract entered into by the Oltpaarts was
not intended to withdraw a single work.
man from the Industry. and that thez
contract restrained bupt a small portion
Of the capitalists who had previously en-
gagged in pottery manufactures
The Court bases It's opinion upon two
grounds:-tD That a corporation IN New
Jersey has legislative authority for the
purchase of the stock of other corpora
tions and that the contract with the
Oliphants was a necessary condition to
obtain the full benefit of the purchase OF
their plant and business; and {21 that the
proofs in the present case do not show
the public viii suffer If the ELEPHANTS are
held to their bargain
Upon tn eDoints as to the legislative
power of one corporation to purchase
and hold the stock ferraoinnnnnuuupp
and hold the stock of other corpora-
tionS the Court says <
Under such powers It IS obSious that
a corporation may purchase the plant ana
business of competing individuals and
concerns The Legislature might hava
withheld such powers or imposed Hnal-
OF any prohibition or limitation on theig
powers in this respect. it is impossible
for the Courts to pronounce acts done
under the legislative grant to be inimtcaI
to public policy. The grant of the Legis~
lature authorizing and permitting sueH
and limit of public policy in thar regard
It follows that a corporation empowered
to carry on a particular business may
lawfully purchase the plant and bus{-
ness of competitors, although such puf-
chase may diminish, or for time destroy,
competition. Contracts for such purchases
canont be refused enforcement.
Contracts reasonably required to mako
such purchases effective by protectln8
the purchaser in the use and enjoymsn4
of the thing purchased cannot be de4
clared by the Courts to be repuguanf to1
public policy. The interference with corn4.
petition resulting from such purchases;
under legislative commission being found
not to invalidate contracts for such pHr4
chases the ike interference by contracf4
the purchaser cannot be held to invaIi9,
da tf them VI