Opinion · Supreme Court of the United States
Waters-Pierce Oil Co. v. Texas
177 U.S. 28
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1900-03-19
- Topic
- general
*42 Mr. Justice McKenna, after making the above statement, 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 Transactions of interstate commerce were withdrawn from the consideration of.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.
Citator
UpLaw has not yet analyzed Waters-Pierce Oil Co. v. Texas. The absence of a flag is not a finding that it is good law.
- Authority status
- pending
- Cited by
- 119 opinions
Headnotes
- Business & Corporate Law — Foreign Corporations — Power of the State to Impose Conditions A State has the power to impose such conditions as it pleases upon foreign corporations seeking to do business within its borders. 177 U.S. 28, 47
- Business & Corporate Law — Foreign Corporations — Acceptance of Conditions A Texas statute prohibiting foreign corporations that violated its provisions from doing any business within the State imposed conditions within the State's power to impose, and those conditions became part of the permit to do business and were accepted with it, so that the corporation could not claim an exemption on the ground that its permit was a contract inviolable against subsequent legislation. 177 U.S. 28, 47
- Statutory Interpretation — Repeal — Effect of Unconstitutional Act Where a later act either is constitutional, in which case the party has no cause to complain of it, or is unconstitutional, in which case it does not affect the earlier valid act, the earlier statute imposing valid conditions upon a foreign corporation remains in force and its violation subjects the corporation's permit to forfeiture. 177 U.S. 28, 47
WATERS-PIERCE OIL COMPANYv. TEXAS,177 U.S. 28(1900)
20 S.Ct. 518
WATERS-PIERCE OIL COMPANYv. TEXAS.
ERROR TO THE COURT OF CIVIL APPEALS FOR THE THIRD SUPREME JUDICIAL DISTRICT
OF TEXAS.
No. 97.
Argued January 8, 9, 1900.
Decided March 19, 1900.
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 one hundred thousand dollars, but was
subsequently increased to four hundred thousand dollars.
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 29
competition in trade, (copies of the statutes are inserted in the
margin,)1and thereby incurred a forfeiture of its permit to
do business in the State.
Page 30
This suit is brought to enforce such forfeiture, and was tried
in the district court of Travis County, Texas, before the court
Page 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 Texas Civ. App. Rep. 1,) and this
writ of error was sued out in due course.
Page 32
The pleadings are very voluminous, alleging the grounds of
action and the grounds of defence, with much elaboration and many
repetitions.
Page 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 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 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 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 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 any one 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 any one
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-Pierce
Page 38
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
contracts 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 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 with 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 the 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 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 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 offences by a preponderance of proof.
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 contentionUnited Statesv.Reese,92 U.S. 214,221;Trade Mark Cases,100 U.S. 82;United Statesv.Harris,106 U.S. 629;Baldwinv.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 thePage 43statutes 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.Tullisv.Lake ErieWestern Railroad,175 U.S. 348;St. Louis, Iron Mountain, c.,Railroadv.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.Clarkv.Kansas City,176 U.S. 114;Tullisv.Lake ErieWestern 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 power 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 Augustav.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 ofPage 44exchange, 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, p. 587:
"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 ofHeadv.Providence InsuranceCompany, 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 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 ofDartmouth Collegev.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 theBank of the United Statesv.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 45by 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.
InPaulv.Virginia, 8 Wall. 168, 181, the dependent and derivative rights of corporations were again declared.Bank ofAugustav.Earlewas 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 4, 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 alsoPembina Mining Co. v.Penn,125 U.S. 181;Ducatv.Chicago, 10 Wall. 410. And it has since been held inBlakev.McClung,172 U.S. 239, and inOrient Insurance Companyv.Daggs,172 U.S. 557, that the prohibitive words of the Fourteenth Amendment have no broader application in that respect.
InBlakev.McClung, a Virginia corporation was denied thePage 46right 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.
InOrient 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 alsoPembina Mining Co. v.Penn,125 U.S. 181.
InHooperv.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 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 onHooperv.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 aPage 47period 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 act 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, p. 18:
"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.Page 48
- Page 29 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 or 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 orquo warrantoproceedings 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 domicile, 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. Page 30 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 byquo warranto, etc., shall, except in so far 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 employe, 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. Page 31 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 live stock while in the hands of the producer or raiser.
Approved March 30, 1889. Acts of 1889, p. 141, c. 177.The Act of1895.
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 State of 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 Page 32 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 orquo warrantoproceedings 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 domicile, 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 byquo warranto, etc., shall, except in so far 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. Page 33 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 employe, 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 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 Page 34 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 live stock 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. ↩