The Bridgeport evening farmer., 1909-07-03

based on three breaches of the by laws; first, the failure of the compan- ies to pen their shops on Feb g, 1909, to the individual operator as such; second, the use of the union label which is forbidden by the association; and third, the settlement of the trou- ole between the companies and the strikers by dealing directly with the labor union, the United Hatters of North America, instead of arbitrating all questions through the employers union, the Associated Hat Manufac- turers, as agreed. sum of $5,000 is first count. This sum should be more properly termed "an agreed penalty instead of damages, as contrac ctual forfeiture cannot be. enforced. Only damages which can be estimated and proved can be recovered.
 Twenty thousand dollars is sued for on the last two counts and these are considered by the plaintiffs. as one general breach. This idea of paying $20, GOO. IS nothing more than a mutual agreement to obey all the laws of the organization and damages are provided for on the theory that whatever sum, not exceeding 10000 the companies who remain faithful may suffer, should be paid by those committing the breaches, In the writ which was is- sued June 16, the plaintiffs claim that the alleged breaches were committed on June S, and state that they have suffered no. damage since that date, but are suing for losses sustained be- fore the breach. This is novel legal point and will probably be passed on eventually by the Supreme court of Connecticut. The broad general prin- cipal of contravt law permits the col lection of damages that flow from the date of breach only. and does not pro- vide for the speculative damages ac- cruing before that tfme.
 The first line of defense will be ba sed on the theory that in Connecticut it is not permissible for the officers of a stock company to delegate the control side body. The manufacturers asso- citation is organized not for the pur- pose of carrying on any business but, 'as stated in the bylaws, it is ain or ganization for the mutual protection and advice and social intercourse among its members, it being a common meeting ground for the representa- lives of the corporations which consti- tue it's membership. The bylaws of the association dictate what it's corpo- ration members shall do under certain circumstances, and if the officers of the corporation agree to follow such dictates their acts are not binding on the shareholders of the companies, as it is beyond the scope of business cor porations in this State to delegate con- trol of their actions to some outside body.
 If that line of defence be overruled by the court, it will be maintained that the organization is exercising an unlawful restraint of the powers and Gutic~ Of each corporation in that it is forbidding them from actively carry ing on business in orderly methods. Specifically, the defendant companies were prohibited from going into the market for a certain kind of labor, and for the production of a particular kind of goods. Permission to do either of these things had to come from an out side body, and was not left at all to the discretion of the corporation in volved- Therefore the whole agree ment is void. being in restraint of trade.