The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-04-22
SHOE
MACHINERY
TRUST BY COURT
Supreme Court Decides That
Tying Clause in Contract
i'm Invalid

Washington, April 1.-THE t'ty-;
ing clauses in the leases OF the
United Shoe Machinery corpora
ton and it's associated companies.
challenged by the government un-
der the CLAYTON act were today de-
clared invalid by the supreme
court. in an opinion delie by
Justice Day Justice Me9>>..na. dis
sented and Justice Brandeis did not
participate in the consideration or
decision of the case.
This system Of tying restric-
tons is quite as effective as express
ed covenants could be- the court
declarded, "and practically com
pels the use Of the machinery Of the
lessor except upon risks which
manufacturers Will not Willingly in.
cur. The power to enforce them
! is ornnipresent and their restrain
| ing influence, constantly operates
upon competitors and lessees. The
{ fact that the lessor in many in
stances forebore to enforce thece
provisions does not make them any.
| less agreements within the ;eofl-
! domination. Of the Clayton act.
Thirty Days Notice.
Referring to the contention cs
the corporation that the form. es
lease it adopted after the Clayton
act became effective is free from.
the restrictive and tying ciaiises.,
and is, therefore unobjeetion;ahle,
the opinion pointed out that those
/, leases are terninable upon 80 days
notice and stated they were evi-.
/ dently framed in view Of the Clay:
ton act and litigation likely to arise.
over the former leases in view OF
that enactment.
The district court expressed the
opinion that should the shoe ma
chinery company's contention be
sustained leases containing them
+, would again be insisted upon, JUS
tice Day said. declaring that the
earnestness and zeal with which
the right to use these clauses has
hbeen insisted upon throughout
confirms conclusion Of trial judge.
The fate Of these substituted forms
of leases evidenti. depends on the
outcome OF this suit.
While the clauses Of the lease en-
ioined by the district court do not
+; contain SPECIFIC agreements not Ito
use the machinery Of a competitor,
the supre,ue court found that s.tae
practical effect cf these drastic pro-
visions is 70 prevent such use. That,
su, I restrictive ard tying agree
ments must necessarily lessen COM
petition ana tend to n1onopeiize, we
believe. is e.luall1 apparent.
In Dominant Position.
when it is considered that the
United company occupies doni-
nant position in supplying shoe.
machinery of the classes involved, :
il added. these covenants signed
by the lessee and binding upon
him effectually prevent him from.
acquiring the maeflinery-of COM
petitor of the lessor except at the
risk of forfeiting the right to.uses
the machines furnished by the
United company which may besab-S
soIutely essential to the prosecu-
ton and success of his business.
Considerable space IN the opin-
ion is devoted to disposins OF the
claim by the company that the su-
preme courts decision in the Sher-
man act. which was against the
government. precluded the Gay
ton act case on the ground that
the issues had been fully adJada-
Gated.
a patent grant does not hnlitsthe
right of congress to enact ieglsia-
ton not interfering with the les7tI-
mate rights secured by the patent.
the court asserted, and 1t may PRO-
hibit in the public interest. Justice
Day said. the making of agree.
ments which may lessen compeE1
-;o,, aod biIiId t1D mOn0SC..