It is well settled that a state has the power to impose such
conditions as it pleases upon foreign corporations seeking to do
business within it.
The statute of Texas of March 30, 1890, prohibiting foreign
corporations which violated the provisions of that act from doing
any business within the state imposed conditions which it was
within the power of the state to impose, and this statute was not
repealed by the Act of April 30, 1895, c. 83.
The Waters-Pierce Oil Company is a private corporation
incorporated under the laws of Missouri, and its principal offices
are situated in St. Louis.
It was incorporated to deal in naval stores, and to deal in and
compound petroleum and other oils and their products, and to buy
and sell the same in Missouri and other states. Its capital stock
was originally $100,000, but was subsequently increased to
$400,000.
On the 6th day of July, 1889, it filed in the office of the
Secretary of State of Texas, in accordance with the requirements of
law, a certified copy of its articles of incorporation, and secured
a permit to transact business in the state for the term of ten
years.
By virtue of the permit, the company engaged in business in the
state, and while so engaged, it is claimed, violated the statutes
of the state against illegal combinations in restraint of
Page 177 U. S. 29
competition in trade (copies of the statutes are inserted in the
margin
*), and thereby
incurred a forfeiture of its permit to do business in the
state.
Page 177 U. S. 30
This suit is brought to enforce such forfeiture, and was tried
in the District Court of Travis County, Texas, before the court
Page 177 U. S. 31
and a jury. A verdict was rendered against the company, upon
which a judgment was duly entered. The judgment was affirmed by the
court of civil appeals (19 Tex.Civ.App. 1), and this writ of error
was sued out in due course.
Page 177 U. S. 32
The pleadings are very voluminous, alleging the grounds of
action and the grounds of defense, with much elaboration and many
repetitions.
Page 177 U. S. 33
The basis of the action is an agreement which is set out in full
in the complaint, made on the second day of January, 1882,
Page 177 U. S. 34
between a great many firms and partnerships, individuals and
corporations, owning and controlling a large amount of the money
and capital invested in the production of petroleum and its
products, and in their shipment and sale.
The parties to the agreement embraced three classes: (1) certain
partnerships and corporations, of the number of eleven; (2) certain
individuals, of the number of forty-four, who are enumerated, and
(3) a portion of the stockholders and members of other corporations
and limited partnerships, twenty-five being enumerated, one of
which was the Waters-Pierce Oil Company. Other individuals,
partnerships, and corporations could afterwards
Page 177 U. S. 35
join upon the request of the trustees provided for by the
agreement.
It was mutually agreed that a corporation should be formed in
Ohio, New York, Pennsylvania, and New Jersey, or any existing
corporation could be used, to mine, manufacture, refine, and deal
in petroleum and all its products and all the materials used in
such business, and transact other business collateral thereto.
To the several corporations thus organized all the business,
rights, and stock of the parties to the agreement were to be
transferred, and trust certificates issued in consideration
thereof.
It is averred that the object of the parties in entering into
said agreement and trust was to control and monopolize the
petroleum industry in the United States and the several states
thereof, and the business of manufacturing, refining, selling, and
transporting petroleum and its products, refined, illuminating, and
lubricating oils, and that they intended to and did create, make,
and effect a combination of their capital, skill, and acts for such
purposes and for the following purposes, to-wit:
"1st. To create and carry out restrictions in trade in petroleum
and its products, refined, illuminating, and lubricating oil, in
the United States, and in the domestic trade of the states
thereof."
"2d. To increase the price of petroleum and its products, same
being commercial commodities and of prime necessity to the
people."
"3d. To prevent competition in the manufacture, sale, and
purchase of petroleum and its products."
"4th. To fix at a standard figure the price of petroleum and its
products, whereby the price of the same to the public shall be
controlled and established, petroleum and its products being
commodities of merchandise, intended for use and sale in the State
of Texas as well as other states."
"5th. For the purpose of agreeing, obligating, and binding
themselves not to sell, dispose of, or transport petroleum and its
said products below a common standard figure, and to keep the price
of petroleum and its products at a fixed or graded figure, and
establish and settle the price of petroleum and its products
Page 177 U. S. 36
between themselves and others, and to preclude a free and
unrestricted competition among themselves and others in the sale of
petroleum and its products, and for the purpose of pooling,
combining, and uniting any interest they should and did have in
connection with the sale of petroleum and its products, that the
prices of same might be affected."
That the trustees provided for in said agreement proceeded to
execute it, and are still executing it, and for such purpose have
divided the markets of the United States in various subdivisions,
and one of them is composed of southwestern Missouri, Arkansas,
Texas, Indian Territory, Oklahoma Territory, and a part of
Louisiana.
That the means employed to effect the purpose of the agreement
is to reduce prices below what is reasonable in order to destroy
competition, and when it is destroyed, raise them again above the
market price. A member of the trust is indemnified against loss by
the combined power and wealth of all of its parties.
That the Waters-Pierce Oil Company has become a party to said
agreement through the control that the trustees acquired by a
transfer of stock of the oil company to them, and that the company
has taken no corporate action against the transfer of such stock or
such control, but has acquiesced in both, and,
"through its directors, officers, and agents conforms its
corporate action to the policy fixed by said nine trustees, . . .
and pursues . . . and executes the purposes and objects of said
trust agreement above set out in this state."
That, in pursuance of the policy of said agreement, it confines
its business in the subdivision aforesaid; does not invade or
transact business in any other; that no other party to the
agreement transacts business in the territory allotted to and
accepted by the Waters-Pierce Oil Company, and the latter adopts
and pursues the methods of driving out and overcoming competition
in the sale of oils that are adopted and pursued by the other
members in the territory allotted to them; that in the market of
Texas there is no competition between the Waters-Pierce Oil Company
and such other parties, and that, by reason of the facts stated,
the Waters-Pierce Oil Company has monopolized and still
Page 177 U. S. 37
monopolizes the trade in petroleum and its products in Texas,
and performs the unlawful purpose of said trust agreements "in
reference to the trade in said commodities which are of prime
importance and necessity to the people of the state."
That since the 6th day of July, 1889, the oil company has made
contracts, sometimes in writing and sometimes verbally, with
merchants and others through its agents in this state, in
consideration of a small rebate on the oil purchased, or for other
considerations unknown to the plaintiff, whereby the said merchants
have contracted not to buy any oil from any other person, or
corporation, but will "deal with and buy and sell oils obtained
from said defendant company exclusively," and in some instances
agreed with said company not to sell the oils so bought to anyone
buying from or dealing with any other person or corporation dealing
in oils in competition with the defendant.
The names of some of the persons and merchants are given.
That about the year 1890, the defendant company entered into
contracts with certain jobbers and merchants of the City of
Brownsville, whereby they respectively agreed to buy all the oil
needed in their respective businesses of the defendant company for
various rebates on the box or gallon, and they were respectively to
sell such oil to retail dealers at the invoice price fixed by the
company, and various penalties were agreed to be paid to the
company if oil should be purchased from anyone else, and that
business was done under said contracts until certain dates in the
latter part of December, 1896.
That the company is seeking to renew all of said contracts, and
is seeking to carry on its business in said city under the
same.
That the Eagle Refining Company is a corporation legally
incorporated in Ohio for the purpose of manufacturing, refining,
compounding, and dealing in all kinds of oils, greases, and
petroleum and its various products, and duly obtained a permit to
do such business in the State of Texas on the 6th day of November,
1891, and began to transact such business in the state "in honest
and sharp competition with the Waters
Page 177 U. S. 38
Pierce Oil Company," and continued to do so up to the 13th day
of October, 1894, when the two companies "entered into a certain
combination and trust," the exact terms of which are unknown to
petitioner, whereby the oil company secured the control of all the
property, business, and franchises of the Eagle Company, and the
latter agreed to withdraw from doing any business in the state in
competition with the oil company for fifteen years.
That since said date, the oil company has been doing business in
the name of the Eagle Company in apparent, but not real,
competition with itself, and that said contract has affected the
production of petroleum and has affected also the sale of its
products.
It is also averred that, prior to the year 1890, one C. W.
Robinson was engaged in the oil business in competition with the
oil company, and that some day in that year, the company entered
into an agreement with him by the terms of which the company
secured the control and management of his business, although it is
conducted in his name; that, by the terms of the agreement, he is
to buy and sell exclusively the oils of the company, and the
agreement is still in force.
That the contracts and agreements with the merchants aforesaid
and with the Eagle Refining Company and said Robinson were for the
purposes hereinbefore enumerated, and resulted in effecting such
purposes.
That the oil company, since its permit to do business in the
state, has abused its franchises and privileges; has monopolized
the oil trade in the state; has unlawfully entered into the
contract mentioned above, and is engaged in making similar ones;
has lowered the price of its oils against competing oils below a
reasonable and fair market price; either has refused to sell or
would sell only at an exorbitant figure to any person who dealt in
competing oils; has pursued and carried out a system of threats and
intimidations and bribery to prevent parties from buying or selling
competing oils; has threatened those dealing in such oils with a
ruinous reduction of price; has given rebates to buyers from it as
an inducement not to patronize a competitor; has offered money or
the payment
Page 177 U. S. 39
of expenses incident thereto, to get and induce parties ordering
competing oils to countermand the orders, and refuse to take the
same after contracting therefor. That this is the general course of
dealing pursued by the oil company, and when competitive oils are
driven out of the market thereby, it raises the price of oil far
above the true and reasonable market value of the same.
That such course of dealing has resulted in the complete
monopolization by the oil company of the oil trade of the state,
and is still stifling and threatening legitimate competition, to
the great injury of the people of the state.
That, by reason of the acts detailed, the oil company has
forfeited its right and permit to do business in the state.
To the petition of the state, the oil company demurred and
answered. In its demurrer it urged the repugnancy of the statutes
of 1889 and 1895 to the Fourteenth Amendment of the Constitution of
the United States and the insufficiency of the allegations of the
petition as a ground of forfeiture of its permit to do business in
the state. In its answer, it denied generally and specifically
those allegations, claimed the permit as a contract, and invoked
the Constitution of the United States against its impairment by a
subsequent law of the state; claimed to be engaged in interstate
commerce, and denied the jurisdiction of the state to regulate
it.
There was evidence submitted on the issues, but the court
instructed the jury that the evidence was not sufficient to show
that the oil company became a member of or entered into the
Standard Oil Trust agreement. Also that the contracts with the
Eagle Refining Company and with C. W. Robinson were not in
violation of the laws of the state, and confined their
consideration to their bearing upon the course of dealing of the
company in the state.
The court also withdrew transactions of interstate commerce from
the consideration of the jury, and submitted only those of local
business.
Applying the facts of the case to the definitions of the
statutes, the court instructed the jury as follows:
"Now, if you find from the evidence that the defendant
company,
Page 177 U. S. 40
acting through its duly appointed and authorized agents, entered
into and performed a contract in the State of Texas with any of the
parties dealing in, buying, and selling oils, as named and set out
in plaintiff's petition, since July 6, 1889, by the terms of which
contract it was agreed that said parties were to buy oil from the
defendant company exclusively for a specified time and from no
other source, in consideration of rebates allowed them by defendant
company, or for any other valuable consideration, or if you find
that said company, so acting through its duly appointed and
authorized agents since said date, made, entered into, and carried
out a contract in this state with any of the persons named and as
stated in plaintiff's petition, by the terms of which said parties
bound and obligated themselves for a valuable consideration to buy
all the oils from defendant company, and not to buy oils from any
other source for any specified time, and not to sell said oils so
bought from defendant company to any person handling or dealing in
oils in competition with defendant company, or if said defendant
company, so acting since said date, made and entered into and
carried out in this state a contract with any of the parties as
stated and named in plaintiff's petition, by the terms of which
said parties, for a valuable consideration, bound and obligated
themselves to said company, either verbally or in writing, to buy
all their oils exclusively from defendant company and from no other
source, and to sell said oils so bought to other parties desiring
to purchase the same at a price fixed by said company's officers or
agents, and you further find that said sales of oils were not
interstate commerce, as that is hereinafter explained to you, and
that said officers or agents so acting for said company in making
said contracts, if any were so made, were acting in the scope of
their employment and duty, and were authorized to make such
contracts by the governing officers of said company, or that said
governing officers, with a knowledge that said contracts had been
made, consented to and ratified or carried out the same after they
were made, then you are instructed that the defendant would be
guilty of violating the laws against trusts of this state, and if
you so find the facts to be as above stated you will return a
verdict for the plaintiff against the defendant Waters-Pierce Oil
Company. "
Page 177 U. S. 41
The jury rendered a verdict against the defendant company, but
in favor of the individual defendants, upon which the following
judgment was entered against the company:
"It is therefore ordered, adjudged, and decreed by the court
that the defendant, the Waters-Pierce Oil Company, be, and is
hereby, denied the right and prohibited from doing any business
within this state, and that its permit to do business within this
state, heretofore issued July 6, 1889, by the secretary of State of
this state, be, and the same is hereby, cancelled and held for
naught, and that said defendant, the Waters-Pierce Oil Company, its
managers, superintendents, agents, servants, and attorneys, be, and
are hereby, perpetually enjoined and restrained from doing business
within this state."
"Nothing herein shall be construed to in any way affect or apply
to or prohibit said defendant's right to engage in interstate
commerce within this state."
On appeal to the court of civil appeals, the judgment was
affirmed, the court holding that the statutes were valid exercises
of the police power of the state. It also held that the statute of
1889 was a condition of the permit of the Waters-Pierce Oil Company
to do business in the state. A rehearing was denied. A writ of
error to the supreme court of the state was denied, and the case
was then brought here.
The assignments of error express in various ways the alleged
discriminations of the statutes between persons and classes of
persons and the alleged deprivation of many persons of the right
and liberty of contract, while permitting such right and liberty to
others; the denial to foreign corporations of the right to do any
business in the state, interstate or otherwise; the assumption by
the State of the power to punish acts done out of the state, and
authorizing a conviction of what are claimed to be criminal
offenses by a preponderance of proof.
Page 177 U. S. 42
MR. JUSTICE McKENNA delivered the opinion of the Court.
Transactions of interstate commerce were withdrawn from the
consideration of the jury and were also excepted from the judgment.
The transactions of local commerce which were held by the state
courts, trial and appellate, to be violations of the statutes
consisted in contracts with certain merchants by which the
plaintiff in error required them to buy oils exclusively from it,
"and from no other source," or buy oils exclusively from it and not
to sell to any person handling competing oils; or to buy
exclusively from it and to sell at a price fixed by it.
The statutes must be considered in reference to these contracts.
In any other aspect, they are not subject to our review on this
record, except the power of the state court to restrict their
regulation to local commerce, upon which a contention is raised. It
is based on the following provision:
"Every foreign corporation violating any of the provisions of
this act is hereby denied the right and prohibited from doing any
business within this state, and it shall be the duty of the
attorney general to enforce this provision by injunction or other
proceedings in the District Court of Travis County in the name of
the State of Texas."
The claim is, if we understand it, that the statute prohibits
all business of foreign corporations, and hence is unconstitutional
as including interstate business, and cannot be limited by judicial
construction to local business, and the unconstitutional taint
thereby removed. To sustain the contention,
United States v.
Reese, 92 U. S. 221;
Trademark Cases, 100 U. S. 82;
United States v. Harris, 106 U. S. 629;
Baldwin v. Franks, 120 U. S. 678, and
some other cases are cited. They do not sustain the contention. The
interpretation of certain statutes of the United States was
involved, and the court, finding the meaning of the statutes plain,
decided that it could not be changed by construction even to save
the statutes from unconstitutionality. This was but an exercise of
judicial interpretation.
The courts of Texas have like power of interpretation of the
Page 177 U. S. 43
statutes of Texas. What they say the statutes of that state mean
we must accept them to mean, whether it is declared by limiting the
objects of their general language or by separating their provisions
into valid and invalid parts.
Tullis v. Lake Erie & Western
Railroad, 175 U. S. 348;
St. Louis, Iron Mountain &c. Railroad v. Paul,
173 U. S. 404.
We may return, therefore, to the propositions which were
submitted to the jury.
They have been broadly discussed, and considerations have been
presented which transcend them, and relate to grievances which do
not affect plaintiff in error. We are confined to its grievance.
Clark v. Kansas City, 176 U. S. 114;
Tullis v. Lake Erie & Western Railroad, 175 U.
S. 348/
What is it? It is said that the statutes of Texas limit its
right to make contracts and take away the property or liberty
assured by the Fourteenth Amendment of the Constitution of the
United States. Besides, it is asserted that the statutes make many
discriminations between persons and classes of persons, and able
arguments are built upon their alleged injustice and oppression. We
are not called upon to answer those arguments or to condemn or
vindicate the statutes on this record.
The plaintiff in error is a foreign corporation, and what right
of contracting has it in the State of Texas? This is the only
inquiry, and it cannot find an answer in the rights of natural
persons. It can only find an answer in the rights of corporations
and the powers of the state over them. What those rights are and
what that power is has often been declared by this Court.
A corporation is the creature of the law, and none of its powers
are original. They are precisely what the incorporating act has
made them, and can only be exerted in the manner which that act
authorizes. In other words, the state prescribes the purposes of a
corporation and the means of executing those purposes. Purposes and
means are within the state's control. This is true as to domestic
corporations. It has even a broader application to foreign
corporations.
Bank of Augusta v.
Earle, 13 Pet. 519, involved the power of the Bank
of Augusta, chartered by the State of Georgia, and invested by its
charter with a function of dealing in bills of
Page 177 U. S. 44
exchange, to exercise that function in the State of Alabama. In
passing on the question, certain principles were declared which
have never since been disturbed.
A contract of the corporation, it was declared, is the contract
of the legal entity, and not of its individual members. Its rights
are those given to it in that character, and not the rights which
belong to its constituent citizens.
Its charter confers its powers and the means of executing them,
and such powers and means can only be exercised in other states by
the permission of the latter.
Chief Justice Taney said, delivering the opinion of the
Court:
"The nature and character of a corporation created by a statute,
and the extent of the powers which it may lawfully exercise, have
upon several occasions been under consideration in this Court. In
the case of
Head v. Providence Insurance
Company, 2 Cranch 127, Chief Justice Marshall, in
delivering the opinion of the Court, said:"
"Without ascribing to this body, which in its corporate capacity
is the mere creature of the act to which it owes its existence, all
the qualities and disabilities annexed by the common law to ancient
institutions of this sort, it may correctly be said to be precisely
what the incorporating act has made it, to derive all its powers
from that act, and to be capable of exerting its faculties only in
the manner in which that act authorizes. To this source of its
being, then, we must recur to ascertain its powers, and to
determine whether it can complete a contract by such communications
as are in this record."
In the case of
Dartmouth College v.
Woodward, 4 Wheat. 636, the same principle was
again decided by the Court. "A corporation," said the Court,
"is an artificial being, invisible, intangible, and existing
only in contemplation of law. Being a mere creature of the law, it
possesses only those properties which the character of its creation
confers upon it, either expressly or as incidental to its very
existence."
And in the case of
Bank of United States v.
Dandridge, 12 Wheat. 64, where the question in
relation to the powers of corporations and their mode of action
were very carefully considered, the Court said:
"But whatever may be the implied powers of aggregate
corporations,
Page 177 U. S. 45
by the common law, and the modes by which those powers are to be
carried into operation, corporations created by statute must depend
both for their powers and the mode of exercising them upon the true
construction of the statute itself."
The power of the bank to deal in bills of exchange in the State
of Alabama was sustained, but it was put upon the ground that
neither the policy of the state nor its laws forbade it, and that
the law of international comity which prevailed there sustained
it.
In
Paul v.
Virginia, 8 Wall. 168, the dependent and derivative
rights of corporations were again declared.
Bank of Augusta v.
Earle was quoted from, and it was again decided that a
corporation is the mere creation of local law, and can have no
legal existence beyond the limits of the sovereignty where created,
and the recognition of its existence in other states and the
enforcement of its contracts made therein depend purely upon the
comity of those states.
"Having no absolute right of recognition in other states, but
depending for such recognition and enforcement of its contracts
upon their assent, it follows as a matter of course that such
assent may be granted upon such terms and conditions as those
states may think proper to impose. They may exclude the foreign
corporation entirely, they may restrict its business to particular
localities, or they may exact such security for the performance of
its contracts with their citizens as in their judgment will best
promote the public interest. The whole matter rests in their
discretion."
And it was also decided that a corporation did not have the
rights of its personal members, and could not invoke that provision
of Section 2, Article IV, of the Constitution of the United States,
which gave to the citizens of each state the privileges and
immunities of citizens of the several states.
See also Pembina
Mining Co. v. Pennsylvania, 125 U. S. 181;
Ducat v.
Chicago, 10 Wall. 410. And it has since been held
in
Blake v. McClung, 172 U. S. 239, and
in
Orient Insurance Company v. Daggs, 172 U.
S. 557, that the prohibitive words of the Fourteenth
Amendment have no broader application in that respect.
In
Blake v. McClung, a Virginia corporation was denied
the
Page 177 U. S. 46
right to participate upon terms of equality with Tennessee
creditors in the distribution of the assets of a British
corporation in the hands of a Tennessee court.
In
Orient Insurance Co. v. Daggs, the right of the
company, a Connecticut corporation, to limit by contract its
liability to the actual damages caused by fire, notwithstanding a
provision in a statute of Missouri making the measure of damages in
case of total loss the value of the property stated in the policy,
was denied.
See also Pembina Mining Co. v. Pennsylvania,
125 U. S. 181.
In
Hooper v. California, 155 U.
S. 648, conditions upon a foreign corporation were
considered and a statute of California sustained making it a
misdemeanor for a person in that state to procure insurance for a
resident in the state from an insurance company not incorporated
under its laws, and which had not filed a bond required by the law
of the state. All preceding cases were cited, and it was assumed as
settled
"that the right of a foreign corporation to engage in business
within a state other than that of its creation depends solely upon
the will of such other state."
And the exception to the rule was stated to be
"only cases where a corporation created by one state rests its
right to enter another and to engage in business therein upon the
federal nature of its business."
This exception was recognized in the case at bar, and the
business of the plaintiff in error of a federal nature excluded
from the operation of the judgment.
The pending case might be rested on
Hooper v.
California, simply as authority, and we have entered upon the
reasoning upon which it was based because its application to the
contentions of the plaintiff in error is not properly estimated in
the arguments of counsel.
Nor can the plaintiff in error claim an exemption from the
principle on the ground that the permit of the company was a
contract inviolable against subsequent legislation by the state.
That contention was presented to the court of civil appeals, and
the court properly replied:
"After the act of 1889 went into effect, the state granted to
appellant [plaintiff in error here] authority to engage in its
business within the state for a
Page 177 U. S. 47
period of ten years. The act of 1889, as well as that of 1895,
provides for the forfeiture of the permit of a foreign corporation
which may violate any of the provisions of the statute. . . . The
action in force when the appellant entered the state informed it
that, for a violation of its terms, the permit to do business here
would be forfeited. This provision of the law was as much a part of
the obligation, and as binding upon the appellant, as if it had
been expressly made part of the permit."
The statute of 1889 therefore was a condition upon the plaintiff
in error within the power of the state to impose, and whatever its
limitations were upon the power of contracting, whatever its
discriminations were, they became conditions of the permit and were
accepted with it.
The statute was not repealed by the act of 1895. The only
substantial addition made by the latter was to exclude from its
provisions organizations of laborers for the purpose of maintaining
a standard of wages. The court of civil appeals said of it:
"If the clause in the act of 1895 which exempts from its
operation labor organizations for the purpose of maintaining their
wages would render that statute obnoxious to the Fourteenth
Amendment to the Constitution (which we do not think the case), the
entire act would be void, and could not operate as a repeal of the
former law of 1889, and so that, if it should be determined that
this latter act was unconstitutional, the former act would be in
force, and would not be subject to the objections urged against it,
for the reasons stated by us in passing upon these objections, and
therefore the state could maintain a case under this act."
In other words, as to that act, the situation is this: it is
either constitutional or unconstitutional. If it is constitutional,
the plaintiff in error has no legal cause to complain of it. If
unconstitutional, it does not affect the act of 1889, and that, as
we have seen, imposes valid conditions upon the plaintiff in error,
and their violation subjected its permit to do business in the
state to forfeiture.
Judgment affirmed.
MR. JUSTICE HARLAN dissented.
*
"SEC. 1. Be it enacted by the Legislature of the State of Texas
that a trust is a combination of capital, skill, or acts by two or
more persons, firms, corporations, or associations of persons, or
of either two or more of them, for either, any, or all of the
following purposes: First -- To create or carry out restrictions in
trade. Second -- To limit or reduce the production, or increase or
reduce the price of merchandise or commodities. Third -- To prevent
competition in manufacture, making, transportation, sale, or
purchase of merchandise, produce, or commodities. Fourth -- To fix
at any standard or figure whereby its price to the public shall be
in any manner controlled or established, any article or commodity
of merchandise, produce, or commerce intended for sale, use, or
consumption in this state. Fifth -- To make or enter into or
execute or carry out any contract, obligation, or agreement of any
kind or description by which they shall bind or have bound
themselves not to sell, dispose of, or transport any article or
commodity, or article of trade, use, merchandise, commerce, or
consumption below a common standard figure, or by which they shall
agree in any manner to keep the price of such article, commodity,
or transportation at a fixed or graduated figure, or by which they
shall, in any manner, establish or settle the price of any article
or commodity or transportation between them or themselves and
others to preclude a free and unrestricted competition among
themselves or others in the sale or transportation of any such
article or commodity, or by which they shall agree to pool,
combine, or unite any interest they may have in connection with the
sale or transportation of any such article or commodity that its
price might in any manner be affected."
"SEC. 2. That any corporation holding a charter under the laws
of the State of Texas which shall violate any of the provisions of
this act shall thereby forfeit its charter and franchise, and its
corporate existence shall cease and determine."
"SEC. 3. For a violation of any of the provisions of this act by
any corporation mentioned herein, it shall be the duty of the
attorney general or district or county attorney, or either of them,
upon his own motion, and without leave or order of any court or
judge, to institute suit or
quo warranto proceedings in
Travis County at Austin, or at the county seat of any county in the
state, where such corporation exists, does business, or may have a
domicil, for the forfeiture of its charter rights and franchise,
and the dissolution of its corporate existence."
"SEC. 4. Every foreign corporation violating any of the
provisions of this act is hereby denied the right and prohibited
from doing any business within this state, and it shall be the duty
of the attorney general to enforce this provision by injunction or
other proper proceedings in the district court of Travis County in
the name of the State of Texas."
"SEC. 5. That the provisions of chapter 48, General Laws of this
state, approved July 9, 1879, to prescribe the remedy and regulate
the proceedings by
quo warranto, etc., shall, except
insofar as they may conflict herewith, govern and control the
proceedings when instituted to forfeit any charter under this
act."
"SEC. 6. Any violation of either or all of the provisions of
this act shall be and is hereby declared a conspiracy against
trade, and any person who may be or may become engaged in any such
conspiracy, or take part therein, or aid or advise in its
commission, or who shall, as principal, manager, director, agent,
servant, or employee, or in any other capacity, knowingly carry out
any of the stipulations, purposes, prices, rates, or orders
thereunder, or in pursuance thereof, shall be punished by fine not
less than fifty dollars nor more than five thousand dollars and by
imprisonment in the penitentiary not less than one nor more than
ten years, or by either such fine or imprisonment. Each day during
a violation of this provision shall constitute a separate
offense."
"SEC. 7. In any indictment for an offense named in this act, it
is sufficient to state the purposes or effects of the trust or
combination, and that the accused was a member of, acted with, or
in pursuance of, it, without giving its name or description, or
how, when, or where it was created."
"SEC. 8. In prosecutions under this act, it shall be sufficient
to prove that a trust or combination as defined herein exists, and
that the defendant belonged to it or acted for or in connection
with it, without proving all the members belonging to it, or
proving or producing any article of agreement or any written
instrument on which it may have been based, or that it was
evidenced by any written instrument at all. The character of the
trust or combination alleged may be established by proof of its
general reputation as such."
"SEC. 9. Persons out of the state may commit and be liable to
indictment and conviction for committing any of the offenses
enumerated in this act, which do not in their commission
necessarily require a personal presence in this state, the object
being to reach and punish all persons offending against its
provisions whether within or without the state."
"SEC. 10. Each and every firm, person, corporation, or
association of persons who shall in any manner violate any of the
provisions of this act, shall for each and every day that such
violation shall be committed or continued forfeit and pay the sum
of fifty dollars, which may be recovered in the name of the State
of Texas in any county where the offense is committed, or where
either of the offenders reside, or in Travis County, and it shall
be the duty of the attorney general or the district or the county
attorney to prosecute for and recover the same."
"SEC. 11. That any contract or agreement in violation of the
provisions of this act shall be absolutely void and not enforceable
either in law or equity."
"SEC. 12. That the provisions hereof shall be held cumulative of
each other and of all other laws in any way affecting them now in
force in this state."
"SEC. 13. The provisions of this act shall not apply to
agricultural products or livestock while in the hands of the
producer or raiser."
Approved March 30, 1889. Acts of 1889, p. 141, c. 177.
"
The Act of 1895"
"Chapter 83. -- [H.B. No. 404.] An Act to Define Trusts, Provide
for Penalties and Punishment of Corporations, Persons, Firms, and
Associations of Persons Connected with them, and to Promote Free
Competition in the State of Texas, and to Repeal all Laws and Parts
of Laws in Conflict with this Act."
"SEC. 1. Be it enacted by the Legislature of the State of Texas,
That an act entitled 'An Act to Define Trusts and to Provide for
Penalties and Punishment of Corporations, Persons Firms, and
Associations of Persons Connected with them, and to Promote Free
Competition in the Texas,' approved March 30, 1889, be so amended
as to hereafter read as follows:"
"SEC. 1. That a trust is a combination of capital, skill, or
acts by two or more persons, firms, corporations, or associations
of persons, or either two or more of them, for either, any, or all
of the following purposes:"
"1. To create or carry out restrictions in trade (or commerce,
or aids to commerce, or to create or carry out restrictions in the
full and free pursuit of any business authorized or permitted by
the laws of this state)."
"2. To increase or reduce the price of merchandise, produce, or
commodities."
"3. To prevent competition in manufacture, making,
transportation, sale, or purchase of merchandise, produce, or
commodities (or to prevent competition in aids to commerce)."
"4. To fix at any standard or figure, whereby its price to the
public shall be in any manner controlled or established, any
article or commodity of merchandise, produce, or commerce intended
for sale, use, or consumption in this state."
"5. To make or enter into or execute or carry out any contract,
obligation, or agreement of any kind or description by which they
shall bind or have bound themselves not to sell, dispose of, or
transport any article or commodity or article of trade, use,
merchandise, commerce, or consumption below a common standard
figure, or by which they shall agree in any manner to keep the
price of such article, commodity, or transportation at a fixed or
graded figure, or by which they shall in any manner establish or
settle the price of any article or commodity or transportation
between them or themselves and others to preclude a free and
unrestricted competition among themselves or others in the sale or
transportation of any such article or commodity, or by which they
shall agree to pool, combine, or unite any interest they may have
in connection with the sale or transportation of any such article
or commodity that its price might in any manner be affected."
"SEC. 2. That any corporation holding a charter under the laws
of the State of Texas which shall violate any of the provisions of
this act shall thereby forfeit its charter and franchise, and its
corporate existence shall cease and determine."
"SEC. 3. For a violation of any of the provisions of this act by
any corporation mentioned herein, it shall be the duty of the
attorney general or district or county attorney, or either of them,
upon his own motion and without leave or order of any court or
judge, to institute suit or
quo warranto proceedings in
Travis County at Austin, or at the county seat of any county in the
state where such corporation exists, does business, or may have a
domicil, for the forfeiture of its charter rights and franchise and
the dissolution of its corporate existence."
"SEC. 4. Every foreign corporation violating any of the
provisions of this act is hereby denied the right and prohibited
from doing any business within this state, and it shall be the duty
of the attorney general to enforce this provision by injunction or
other proper proceedings in the District Court of Travis County in
the name of the State of Texas."
"SEC. 5. That the provisions of chapter 48, General Laws of this
state, approved July 9, 1879, to prescribe the remedy and regulate
the proceedings by
quo warranto, etc., shall, except
insofar as they may conflict herewith, govern and control the
proceedings when instituted to forfeit any charter under this
act."
"SEC. 6. If any person shall be or may become engaged in any
combination of capital, skill, or acts by two or more persons,
firms, corporations, or associations of persons, or of either two
or more of them, for either, any, or all of the following
purposes:"
"1. To create or carry out restrictions in trade or commerce or
aids to commerce, or to create or carry out restrictions in the
full and free pursuit of any business authorized or permitted by
the laws of this state."
"2. To increase or reduce the price of merchandise, produce, or
commodities."
"3. To prevent competition in manufacture, making,
transportation, sale, or purchase of merchandise, produce, or
commodities, or to prevent competition in aids to commerce."
"4. To fix at any standard or figure whereby its price to the
public shall be in any manner controlled or established any article
or commodity of merchandise, produce, or commerce intended for
sale, use, or consumption in this state."
"5. To make or enter into or execute or carry out any contract,
obligation, or agreement of any kind or description, by which they
shall bind or have bound themselves not to sell, dispose of, or
transport any article or commodity, or article of trade, use,
merchandise, commerce, or consumption, below a common standard
figure, or by which they shall agree in any manner to keep the
price of such article, commodity, or transportation at a fixed or
graduated figure, or by which they shall in any manner establish or
settle the price of any article or commodity or transportation
between them or themselves and others to preclude a free and
unrestricted competition among themselves and others in the sale or
transportation of any such article or commodity, or by which they
shall agree to pool, combine, or unite any interest they may have
in connection with the sale or transportation of any such article
or commodity that its prices may in any manner be affected, or aid
or advise in the creation or carrying out of any such combination,
or who shall as principal, manager, director, agent, servant, or
employee, or in any other capacity, knowingly carry out any of the
stipulations, purposes, prices, rates, directions, conditions, or
orders of such combinations, shall be punished by fine of not less
than fifty dollars nor more than five thousand dollars, and by
imprisonment in the penitentiary not less than one nor more than
ten years, or by either such fine or imprisonment. Each day during
a violation of this provision shall constitute a separate
offense."
"SEC. 7. In any indictment for an offense named in this act, it
is sufficient to state the effects or purposes of the trust or
combination, and that the accused was a member of, acted with, or
in pursuance of, it, without giving its name or description, or
how, when, or where it was created."
"SEC. 8. In prosecutions under this act, it shall be sufficient
to prove that a trust or combination as defined herein exists, and
that the defendant belonged to it or acted for or in connection
with it, without proving all the members belonging to it, or
proving or producing any article of agreement or any written
instrument on which it may have been based, or that it was
evidenced by any written instrument at all. The character of the
trust or combination alleged may be established by proof of its
general reputation as such."
"SEC. 9. Persons out of the state may commit and be liable to
indictment and conviction for committing any of the offenses
enumerated in this act, which do not in their commission
necessarily require a personal presence in this state, the object
being to reach and punish all persons offending against its
provisions, whether within or without the state."
"SEC. 10. Each and every firm, person, corporation, or
association of persons who shall in any manner violate any of the
provisions of this act shall for each and every day that such
violation shall be committed or continued forfeit and pay the sum
of fifty dollars, which may be recovered in the name of the State
of Texas in any county where the offense is committed, or where
either of the offenders reside, or in Travis County, and it shall
be the duty of the attorney general or the district or county
attorney to prosecute for and recover the same."
"SEC. 11. That any contract or agreement in violation of the
provisions of this act shall be absolutely void and not enforceable
either in law or equity."
"SEC. 12. That the provisions hereof shall be held cumulative of
each other and of all other laws in any way affecting them now in
force in this state: Provided, this act shall not be held to apply
to livestock and agricultural products in the hands of the producer
or raiser, nor shall it be understood or construed to prevent the
organization of laborers for the purpose of maintaining any
standard of wages."
"SEC. 13. That nothing in this act shall be held or construed to
affect or destroy any rights which may have accrued, or to affect
the right of the state to recover penalties, or to affect the right
of the state to forfeit charters of domestic corporations and
prohibit foreign corporations from doing business in this state, or
affect the right of the state to maintain prosecutions for
violations thereof, under any law of this state relating to trusts,
for acts heretofore done."
"SEC. 14. Any court, officer, or tribunal having jurisdiction of
the offense defined in this act, or any district or county attorney
or grand jury, may subpoena persons and compel their attendance as
witnesses to testify as to the violation of any of the provisions
of the foregoing sections. Any person so summoned and examined
shall not be liable to prosecution for any violation of said
sections about which he may testify fully and without
reservation."
"SEC. 15. All laws or parts of laws in conflict with this act
are hereby repealed."
"SEC. 16. Whereas, the people of this state are without an
adequate remedy against trusts, therefore an emergency and
imperative public necessity exists requiring that the
constitutional rule which requires that all bills shall be read on
three several days, be suspended, and it is so enacted."
Approved April 30, 1895.
