IN THE Supreme Court of Missouri. imw OF THE mmmr of (JANUARY CALL, 1910.) No. 15471. ^ EN BANC. OCTOBER TERM, 1909. STATE OF MISSOURI, ON THE RELATION OF EL¬ LIOTT W. MAJOR, ATTORNEY-GENERAL, Re¬ lator, vs.. THE MO. PAC. R’Y CO., ST. L., I. M. & SO. R’Y CO., ST. L. S. W. R’Y CO., ST. L. & SAN FRANCISCO R. R. CO., THE K. C. SO. R’Y CO., K. C., C. & S. R’Y CO., Q., 0. & K. C. R. R. CO., M. K. & T. R’Y CO., THE ST. L., K. C. & COL. R. R. CO., C., B. & Q. R. R. CO., THE C. & A. R’Y CO., C., M. & ST. P. R’Y, CO., THE C., R. I. & P. R’Y. CO., THE ST. J. & G. I. R’Y CO., WABASH R. R. CO., THE A., T. & SANTA FE R’Y CO., Respondents. QUO WARRANTO. STATEMENT, ABSTRACT AND BRIEF FOR RE¬ LATOR. ELLIOTT W. MAJOR, Attorney-General. CHARLES G. REVELLE, Assistant Attorney-General. JAMES T. BLAIR, Assistant Attorney-General. THE HUGH 3TEPHENS PRTG. CO., JEFFERSON OifT. IN THE Supreme Court of Missouri. EN BANC. OCTOBER TERM, 1909. (JANUARY CALL, 1910.) No. 15471. STATE OF MISSOURI, ON THE RELATION OF EL¬ LIOTT W. MAJOR, ATTORNEY-GENERAL, Re¬ lator, vs. THE MO. PAC. R’Y CO., ST. L., I. M. & SO. R’Y CO., ST. L. S. W. R’Y CO., ST. L. & SAN FRANCISCO R. R. CO., THE K. C. SO. R’Y CO., K. C., C. & S. R’Y CO., Q., 0. & K. C. R. R. CO., M. K. & T. R’Y CO., THE ST. L., K. C. & COL. R. R. CO., C., B. & Q. R. R. CO., THE C. & A. R’Y CO., C., M. & ST. P. R’Y, CO., THE C., R. I. & P. R’Y. CO., THE ST. J. & G. I. R’Y CO., WABASH R. R. CO., THE A., T. & SANTA FE R’Y CO., Respondents. QUO WARRANTO. STATEMENT, ABSTRACT AND BRIEF FOR RE¬ LATOR. STATEMENT. This is a proceeding, by information in quo warranto, instituted in this court against sixteen railway companies. 2 seven of which are alleged to be domestic corporations, and nine foreign corporations, duly licensed and admitted to do business in Missouri. The information contains two counts. Each count sets up that the sixteen respondents, and one other road (which is in the hands of a receiver and not included in this suit) are competing carriers and lawful competitors for business in this State. The first count charges the seventeen companies with having unlawfully confederated, combined and conspired to fix and regulate passenger rates in Missouri and be¬ tween the several towns and cities of the State for the purpose of destroying competition in the passenger-carry¬ ing business. The second count charges a like conspiracy, for a like purpose, with respect to freight rates in this State. To this information respondents filed separate de¬ murrers. The issues of law then raised involve the suf¬ ficiency of the information and the jurisdiction of this court. RECORD. At the April term, 1909, the Attorney-General filed with the clerk of this court the following information in quo warranto: In the Supreme Court of Missouri, en Banc. April Term, 1909. State of Missouri, on the relation of Elliott W. Major, Atomey-General, Relator, vs. The Missouri Pacific Railway Company, St. Louis, Iron Mountain and Southern Railway Company, St. Louis Southwestern Railway Company, St. Louis and San r > 3 Francisco Railroad Company, The Kansas City Southern Railway Company, Kansas City, Clinton and Springfield Railway Company, Quincy, Omaha and Kansas City Railroad Company, Missouri, Kan¬ sas and Texas Railway Company, The St. Louis, Kan¬ sas City and Colorado Railroad Company, Chicago, Burlington and Quincy Railroad Company, The Chi¬ cago and Alton Railway Company, Chicago, Milwau¬ kee and St. Paul Railway Company, The Chicago, Rock Island and Pacific Railway Company, The St. Joseph and Grand Island Railway Company, Wabash Railroad Company, The Atchison, Topeka and Santa Fe Railway Company, Respondents. INFORMATION IN QUO WARRANTO. Now comes the State of Missouri by Elliott W. Major, Attorney-General, who, in this behalf, prosecutes for and in the name of the State of Missouri, and informs the court that respondents, The Missouri Pacific Railway Company, St. Louis, Iron Mountain and Southern Rail¬ way Company, St. Louis Southwestern Railway Com¬ pany, St. Louis and San Francisco Railroad Company, The Kansas City Southern Railway Company, Kansas City, Clinton and Spring-field Railway Company, and Quincy, Omaha and Kansas City Railroad Company are corporations duly organized and existing under and by virtue of the laws of the State of Missouri, and that re¬ spondents, Missouri, Kansas and Texas Railway Com¬ pany, The St. Louis, Kansas City and Colorado Railroad Company, Chicago, Burlington and Quincy Railroad Com¬ pany, The Chicago and Alton Railway Company, Chicago Great Western Railway Company, Chicago, Milwaukee and St. Paul Railway Company, The Chicago, Rock Island and Pacific Railway Company, The St. Joseph and Grand O V '1 < 4 I 4 Island Railway Company, Wabash Railroad Company, The Atchison, Topeka and Santa Fe Railway Company, are corporations duly organized and existing under and -m by virtue of the laws of states other than the State of Missouri, and are authorized and licensed to do business in this State as foreign railroad companies; that all of the above named corporations are railroad companies duly authorized to, and are doing business in this State, as such, and as common carriers are engaged in the trans¬ portation of passengers in this State for hire; that the lines of railway owned and operated by the several de¬ fendants, as aforesaid, are the main trunk lines and lead¬ ing railways in this State, and so traverse the State as to touch and penetrate her commercial centers and other cities, towns and communities and become and are lawful competitors for the passenger trade and traffic in this State, reaching and serving many cities, towns, points, centers and communities in common as competing lines. Relator further informs the court that respondents have formed and entered into an unlawful agreement, confederation, combination and conspiracy wherein and whereby they have agreed, confederated, combined and conspired among themselves and with each other, to fix, regulate and maintain passenger rates within this State, and to determine, regulate and fix the rates to be charged by the several competing lines for the transportation of passengers between the various cities, towns, points, cen¬ ters and communities located in this State, and on and along the lines of railway owned and operated by respond¬ ents, and for the unlawful purpose of limiting and de¬ stroying competition in the transportation of passengers over their several lines in this State, and for the unlawful purpose of depriving the public and people of this State of the benefits of full and wholesome competition, and for the 5 unlawful purpose of destroying, limiting and restraining open and independent action on the part of each of the respondents in the matter of passenger rates to be charged the people of this State. Relator further says that by means of the said un¬ lawful agreement, confederation, combination and con¬ spiracy, the trade, traffic and commerce in this State has been hindered, injured and retarded, and that full and free competition in the transportation of passengers and the traveling public in this State has been limited and restrained, to the great damage and detriment of the public. Relator further states that by reason of the acts and things done by respondents, as hereinabove set out, said respondents have been guilty of a willful, wrongful, ille¬ gal and malicious perversion and abuse of the franchises, licenses, and authority severally granted to them by the State of Missouri, and of illegal and unlawful usurpations of privileges, franchises and powers not granted them, all of which is to the great detriment of the public and in violation of the laws and Constitution of the State of Mis¬ souri. Wherefore relator prays that respondent corpora¬ tions, each and all of them, severally, be excluded from all corporate rights, privileges and franchises enjoyed or exercised by them under the laws of the State of Mis¬ souri, and that their rights, authority, licenses, franchises and certificates to do business in the State of Missouri be declared forfeited, or in lieu thereof a fine be imposed upon them in punishment of the offense, as above set out. For other and second count, Elliott W. Major, Attor¬ ney-General, aforesaid, who in this behalf prosecutes for and in the name of the State of Missouri, informs the court that respondents, The Missouri Pacific Railway 6 Company, St. Louis, Iron Mountain and Southern Rail¬ way Company, St. Louis Southwestern Railway Company, St. Louis and San Francisco Railroad Company, The Kan¬ sas City Southern Railway Company, Kansas City, Clin¬ ton and Springfield Railway Company, and Quincy, Omaha and Kansas City Railroad Company are corpora¬ tions duly organized and existing under and by virtue of the laws of the State of Missouri, and that respondents, Missouri, Kansas and Texas Railway Company, The St. Louis, Kansas City and Colorado Railroad Company, Chi¬ cago, Burlington and Quincy Railroad Company, The Chi¬ cago and Alton Railway Company, Chicago Great West¬ ern Railway Company, Chicago, Milwaukee and St. Paul Railway Company, The Chicago, Rock Island and Pacific Railway Company, The St. Joseph and Grand Island Railway Company, Wabash Railroad Company, Atchison, Topeka and Santa Fe Railway Company are corporations duly organized and existing under and by virtue of the laws of states other than the State of Missouri, and are authorized and licensed to do business in this State as for¬ eign railroad companies; that all of the above named cor¬ porations are railroad companies duly authorized to and are doing business in this. State as such, and as common carriers are engaged in the transportation of freight in this State for hire; that the lines of railway owned and operated by the several defendants are the main trunk lines and leading railways in this State, and so traverse the State as to touch her commercial centers and other cities, towns and communities, and become and are law¬ ful competitors for the freight trade and traffic in this State, reaching and serving many cities, towns, points, centers and communities in common as competing lines. Relator further informs the court that respondents have formed and created, entered into and become mem- 7 bers of and participated in an unlawful agreement, com¬ bination, confederation, understanding and conspiracy wherein and whereby they have agreed, confederated, combined and conspired among themselves and with each other to fix, regulate and maintain freight rates within this State, and to determine, regulate and fix the rates to be charged by said several competing lines for the transportation of products, commodities, articles and other freight between the various cities, towns, points, centers and communities located on and along their said lines in this State, and with a view and for the unlawful purpose of limiting, lessening and destroying full and free competition in the transportation of products, commodi¬ ties, articles and other freight over and along their several lines in this State, and with a view and for the unlawful purpose of depriving the people of this State of the bene¬ fits of full, free and wholesome competition in such trans¬ portation, and with a view and for the unlawful purpose of destroying, restricting and limiting free, open and in¬ dependent action on the part of each of the respondents in the matter of freight rates to be charged the people of this State. Relator further states that said respondents by means of said unlawful agreement, confederation, combi¬ nation and conspiracy have fixed, determined and regu¬ lated the rates now charged and the rates to be charged hereafter for the transportation of products, commodi¬ ties, articles and other freight over and along their sev¬ eral lines in this State, and are now unlawfully maintain¬ ing the rates so fixed and determined by the unlawful means aforesaid, and have limited and lessened and are now restraining full and free competition in the trans¬ portation of products, commodities, articles and other freight, and are hindering, injuring and retarding the 8 trade, traffic, and commerce in this State, to the great damage and detriment of the people. Relator further states that by reason of the acts and things done by respondents, as hereinabove set out, said respondents have been guilty of a willful, wrongful, il¬ legal and malicious perversion and abuse of the fran¬ chises, licenses, and authority severally granted to them by the State of Missouri, and of illegal and unlawful usurpations of privileges, franchises and powers not granted them, all of which is to the great detriment of the public and in violation of the laws and Constitution of Missouri. Wherefore relator prays that respondent corpora¬ tions, each and all of them, severally, be excluded from all corporate rights, privileges and franchises enjoyed or exercised by them under the laws of the State of Mis¬ souri, and that their rights, authority, licenses, franchises and certificates to do business in the State of Missouri be declared forfeited, or in lieu thereof a fine be imposed upon them in punishment of the offense, as above set out. ELLIOTT W. MAJOR, Attorney-General of the State of Missouri. After due service the respondents appeared and filed the following demurrers: The Missouri Pacific Railway Company, St. Louis, Iron Mountain and Southern Railway Company, St. Louis, Southwestern Railway Company, St. Louis & San Francisco Railroad Company, The Kansas City Southern Railway Company, Kansas City, Clinton & Springfield Railway Company, Quincy, Omaha & 1 Kansas City Rail¬ road Company, The St. Louis, Kansas City & Colorado Railroad Company, Chicago, Burlington & Quincy Rail¬ road Company, The Chicago, Rock Island & Pacific Rail- ( 9 ■ i way Company, The St. Joseph & Grand Island Railway Company and the Wabash Railroad Company filed the following 1 demurrer (omitting caption) to each count of the complaint: The respondent, the-- Company, comes and demurs to the first count of the information filed herein, for the follow¬ ing grounds and objections: (Note: The de¬ murrer to the second count being the same.) (a) The information does not state facts suf¬ ficient to constitute a cause of action against this respondent. (b) An agreement between railroad companies, such as is charged in the information, is not an unlawful agreement. (c) The information does not state facts which show that respondent has committed any acts which are not authorized by its charter; or that it has violated the Constitution, the laws or the public policy of the State of Missouri, but such information affirmatively shows that respond¬ ent has exercised only such powers as it might lawfully exercise under the laws of this State. (d) The information shows on its face that re¬ spondent has not been guilty of any abuse, mis- 10 use or perversion of its franchises granted to it by the State of Missouri, or of any illegal or unlawful usurpations of privileges, franchises and powers granted it. Wherefore, and for divers other good causes of demurrer appearing in the informa¬ tion, this respondent demands the judgment of this court whether it shall be compelled to make any further or other answer to the said infor¬ mation, and prays to be hence dismissed with its costs and charges in this behalf most wrong¬ fully sustained. The demurrers filed by the Chicago, Milwaukee & St. Paul Railway Company and the Atchison, Topeka & Santa Fe Railway Company are substantially the same as that of the Chicago & Alton Railway Company, which is (omitting caption), as follows: The respondent, the Chicago & Alton Rail¬ way Company, comes and demurs to the first count of the information filed herein, upon the following grounds and objections: (Note: The demurrer to the second count being the same.) (a) The petition or information filed herein by the Attorney-General does not state facts suf¬ ficient to constitute a cause of action or entitle relator to the relief sought against this respond¬ ent. (b) An agreement between railroad companies, such as is charged in the petition or information, is not an unlawful agreement. 11 (C) The petition or information does not state facts which show that respondent has com¬ mitted any acts which are not authorized by its charter; or that it has violated the Constitution, the laws or the public policy of the State of Mis¬ souri, but such petition or information affirma¬ tively shows that respondent has exercised only such powers as it might lawfully exercise under the laws of this State. (d) The petition or information shows on its face that respondent has not been guilty of any abuse, misuse or perversion of its franchises granted to it by the State of Missouri, or of any illegal or unlawful usurpation of privileges, franchises and powers granted to it. (e) The petition or information shows on its face that the respondent is a foreign railway corporation engaged in interstate commerce, and as such is not subject to the jurisdiction of this court or amenable to the laws of this State in respect to the matters charged in said petition or information. Wherefore, and for divers other good causes of demurrer appearing in the petition or infor¬ mation, the respondent prays the judgment of this court whether it shall be compelled to make any further or other plea to the said petition or information; and if not it prays to be hence dis- < missed with its costs and charges in this be¬ half most wrongfully sustained, otherwise, that it be granted leave to answer over as to all the charges and allegations in said petition or in¬ formation contained. The Missouri Kansas & Texas Railway Company filed the following demurrer (omitting caption) to each count: Now comes the respondent, Missouri, Kan¬ sas & Texas Railway Company, and demurs to the first count of the information filed in this cause, and for grounds of demurrer, assigns the following: (Note: The demurrer to the sec¬ ond count being the same.) (a) The information does not state facts sufficient to constitute a cause of action against this respondent. (b) The allegations of the information do not charge the making of any contract that is prohibited by or is in violation of any law of this state, and do not set forth any terms or stipulations of any alleged contract in order that the court may determine from such allega¬ tions whether or not the same would be in viola¬ tion of any law of this State; nor do the said al¬ legations show whether or not the rates con¬ cerning which it is alleged an agreement was entered into by the several railroad companies named were in excess of rates authorized by the laws of this State nor whether or not the alleged agreement is of such character as that it could have injured, hindered or retarded the trade, traffic or commerce of this State, or have limit- IB ed or restrained full and free competition in the transportation of passengers and the traveling public in this State* (c) The information does not state facts which show that respondent has committed any acts which are not authorized by its charter; or that it has violated the constitution, the laws or the public policy of the State of Missouri, but such information affirmatively shows that re¬ spondent has exercised only such powers as it might lawfully exercise under the laws of this State. (d) The information shows on its face that respondent has not been guilty of any abuse, misuse or perversion of its franchises granted to it by the State of Missouri, or of any illegal or unlawful usurpation of privileges, franchises and powers granted it. Wherefore, and for divers other good causes of demurrer appearing in the informa¬ tion, this respondent prays the judgment of this court whether it shall be compelled to make any further or other answer to the said information, and prays to be hence dismissed with its costs and charges in this behalf wrongfully sustained. QUESTIONS PRESENTED. These demurrers collectively present in substance the following questions: First: Is a conspiracy, combination or agreement entered into by all the main compet¬ ing railway companies in the State for the pur¬ pose of fixing and maintaining the rates and fares to be charged by each of said companies 14 for the transportation of freight or passengers between cities and towns located wholly in this State, and along the lines of railway owned by said companies, and to thereby destroy and pre¬ vent competition between such companies, viola¬ tive of the common, statutory or constitutional law of this State? Second: Are the allegations of the com¬ plaint sufficient to charge such a conspiracy, combination or agreement? Third: Are companies entering into a conspiracy, combination or agreement of the nature alluded to guilty of such a perversion and abuse of their franchises and authority as to authorize the State to invoke the relief it seeks by this action? Fourth: Are domestic and foreign rail¬ way companies, while doing business within this State, and transporting persons or prop¬ erty between cities and communities located wholly within this State, and in fixing and maintaining rates and fares applicable solely to traffic within this State, subject to State juris¬ diction and amenable to the State laws govern¬ ing such matters? 15 POINTS AND AUTHORITIES. I. Section 17, article|2 of the Constitution and section 1062, R. S. 1899, are violated when competing railway companies enter into an agreement and combination for the purpose of fixing, regulating and maintaining freight rates or passenger fares to be charged between points located in this State. Such agreements restrain and prevent competition, and the chief purpose sought to be accomplished by the above sections is to preserve free and open competition between and among railway com¬ panies and prohibit any and all arrangements which de¬ feat such competition. G. C. & Sa. Fe R. R. Co. vs. State, 72 Tex. 404. Northern Security Co. vs. U. S., 193 U. S. 1. c. 351. Pearsall vs. Great Northern Ry. Co., 161 U. S. 1. c. 676. Morrill vs. Railroad, 55 N. H. 1. c. 537. Currier vs. Railroad, 48 N. H. 1. c. 325. St. L., K. & S. R. R. vs. Wear, 135 Mo. 230. II. Such agreements are also illegal at common law as being in restraint of trade and commerce, against public policy, and violative of the law of the corporation's crea¬ tion. 16 State ex rel. vs. Portland Nat’l Gas Co., 153 Ind. 1. c. 488, 489. Railway Co. vs. Southern Ry. Co., 38 Ind. App. 1. c. 244, 245, 238. - h H. & N. H. Ry. Co. vs. N. Y. & N. H. Ry. Co., 3 Robertson 1. c. 415. C. C. C. & I. Ry. Co. vs. Closser et al, 126 Ind. 348. Anderson vs. Jett, 89 Ky. 375. Stanton vs. Allen, 5 Denio 434-49 Am. Dec. 282. Hooker et al. vs. Vandewater, 4 Denio 349-47 Am. Dec. 258. Tex. & Pac. Ry. Co. et al vs. Southern Pac. Ry. Company, 41 La. Ann. 970. People vs. Sheldon, 139 N. Y. 251. E. T. V. & G. Ry. Co. vs. Interstate Com. Com¬ mission, 39 C. C. A. 422, 423. Pratt vs. Tapley, 3 Pugsley N. B. 171. Sanford vs. Ry. Co., 24 Pa. St. 1. c. 382. Cravens vs. Rogers, 101 Mo. 247. Clemens vs. Meadows, 29 Ky. Law Rep. 619. Dueber Mfg. Co. vs. Watch & Clock Co., 14 C. C. A. 14, 66 Fed. Rep. 637. U. S. vs. Trans. Mo. Freight Ass’n., 166 U. S. 290. Joint Traffic Ass’n. vs. U. S., 171 U. S. 505. State vs. Stewart, 59 Vt. 286. R. R. vs. Collins et al, 40 Ga. 582. U. S. vs. Frt. Ass’n, 7 C. C. A. 15, 88. Peoria & R. I. Ry. Co. vs. Coal Valley Mining Co., 68 Ill. 1. c. 494. / 17 Northern Security Co. vs. U. S., 193 U. S. 1. c. 351. Mobile vs. Kimbrell, 102 U. S. 691. Gloucester vs. Pa., 114 U. S. 196. Gibbons vs. Ogden, 9 Wheat 1 c. 215. People vs. Raymond, 34 Calif. 1. c. 497. U. S. vs. Addyston Pipe & Steel Co., 54 U. S. App., 723. State ex rel vs. Firemen’s Fund Ins. Co., 152 Mo. 1. c. 42. State ex rel. vs. Standard Oil Co., 218 Mo. 1. Gibbs vs. Baltimore Gas Co., 130 U. S. 1. c. 408. Morris Run Coal Co. vs. Barclay Coal Co., 68 Pa. St. 173. Heim Brewing Co. vs. Belinder, 97 Mo. App. 1. c. 71. Commonwealth vs. Carlisle, Brightley (N. P.), 36, 38. Bailey vs. Master Plumbers, 103 Tenn. 118. State vs. Glidden, 55 Conn. 75. State ex rel. vs. Stock Exchange, 211 Mo. 1. c. 193. Beach on Monopolies and Industrial Trusts, par. 149, p. 469. Noyes on Intercorporate Relations, p. 372 and 373. Spelling on Trusts and Monopolies, pr. 82, p. 127. Greenhood on Public Policy, p. 2,661, 662 and 663. 15471-2 18 First Hawkins, P. C., p. 470, Sec. 2. Stewart vs. Erie & Western Trans. Co. et al., 17 Minn. 1. c. 895. Knight & Jilson Co. vs. Miller, 87 N. E. 1. c. 830-831. State vs. Board of Trade, 107 Minn. 505 and 506. State ex rel. vs. Armour Packing Co. et al, 173 Mo. 1. c. 388. III. The common law in respect to such unlawful agree¬ ments has not been abrogated by statutory provisions, but the same is in full force and effect in this State. State vs. Norton et al., 23 Zabr. (N. J.) 33. C. W. & B. Coal Co. vs. People, 214 Ill. 421. Branden vs. Carter, 119 Mo. 1. c. 581. Evans vs. McFarland, 186 Mo. 1. c. 723. State ex rel. vs. Standard Oil Co., 218 Mo. 1. c. 359, 360. Humphreys vs. Davis, 100 Ind. 1. c. 284. Sec. 8970, p. 379, Laws 1907. Currier vs. Railroad, 48 N. H. 329. IV. The Anti-Trust Act, found at page 377, Laws 1907, applies to and covers the transportation of freight by railway, and the agreement which the second count seeks to condemn violates its provisions. Sections 8965, 8968, pp. 377, 378, Laws 1907. U. S. vs. Frt. Assn, 166 U. S. 1. c. 324. 19 State ex rel. vs. Standard Oil Co., 218 Mo. 1. State ex rel. vs. Armour Packing Co., 178 Mo. 356. State ex rel. vs. Firemen’s Fund Ins. Co., 152 Mo. 1. V. The information, whether measured by the require¬ ments of the common, constitutional or statutory law, is amply sufficient to state an unlawful combination. Sec. 8977, p. 381, Laws 1907. C. W. & V. C. Co. vs. People, 214 Ill. 421. State vs. Dreany et al, 69 Pac. 182. State vs. Stewart, 59 Yt. 1. c. 286. State vs. Shaw, 42 N. H. 393. U. S. vs. Gardner, 42 Fed. Rep. 829. Hazen vs. Commonwealth, 23 Pa. St. 363. State ex rel. vs. Standard Oil Co., 218 Mo. 1. State ex rel. vs. Firemen’s Fund Ins. Co., 152 Mo. 1. c. 40. Knight & Jilson Co. vs. Miller, 87 N. E. 1. c. 827. State ex rel. vs. Mo. Pac. Ry. Co., 206 Mo. 28. VI. The charter of a private or public corporation will be forfeited for any willful misuser or abuse of its fran¬ chise which injures or menaces the interests or welfare of the State, or the community in which it transacts busi¬ ness, whether the misuser or abuse consists in the exer¬ cise of a franchise or power not conferred on the cor- poration by its charter, or in the violations of prohibi¬ tions in its charter, or in the violations of the com¬ mon, statutory or constitutional laws to which it is sub¬ ject, or in the violation of established principles based upon the ground of public policy. State ex rel. vs. Standard Oil Co., 218 Mo. 1. State ex rel. vs. Delmar Jockey Club, 200 Mo. 1. c. 70. Eel R. R. Co. vs. State ex rel., 155 Ind. 1. c. 456. Spelling on Extra. Remedies, Vol. 2 pr. 1820. Stockton vs. Central R. R. Co., 50 N. J. Equity, 5 Dick, 52. Attorney-General vs. Delaware Bound Brook Ry. Co., 12 C. E., Gr. 631-633. VII. Both domestic and foreign railway companies, while doing business within this State and transporting per¬ sons and property between cities and communities located wholly within this State, and in fixing and maintaining rates and fares applicable solely to traffic within this State, are subject to State jurisdiction and amenable to the State laws governing such matters. L. & N. R. R. vs. Kentucky, 161 U. S. 1. c. 701. State ex rel. vs. Standard Oil Co., 218 Mo. 1. c. 376. Orient Ins. Co. vs. Daggs, 172 U. S. 1. c. 566. Com. Co. vs. Spencer, 205 Mo. 1. c. 118. Gibbons vs. Ogden, 9 Wheat. 1. c. 194-195. Thorp vs. R. & B. Co., 27 Vt. 142. 21 Covington, etc., Bridge Co. vs. Ky., 154 U. S. 1. c. 209. Sec. I, Interstate Commerce Act, Appr. Feb. 4, 1887. Sec. 5, Art. 12, Constitution of Mo. Sec. 14, Art. 12, Constitution of Mo. Tenth amendment to the Constitution of the U. S. Hammond Packing Co. vs. Ark., 212 U. S. 322. ARGUMENT. I. The first question properly presented by the de¬ murrers is whether an agreement and combination entered into by practically all the competing railroad companies in the State for the purpose of fixing, regu¬ lating and maintaining freight rates and passenger fares to be charged by such companies, between points in this State, and thereby to destroy competition, are in viola¬ tion of the constitutional, common or statutory law of this State? In considering the question thus presented, it is well to bear in mind that railways are public corporations, organized for public purposes, granted valuable fran¬ chises and privileges, among which is the extraordinary right of eminent domain. These privileges are granted by the Legislature, not as a favor to those composing the company—for it has no power to confer personal favors —but for the benefit of the public, and to enable such companies to provide facilities necessary to the public convenience. In this State such companies have been the donees of large tracts of public lands and of gifts of money by 22 municipal corporations. The rendition of public service on the part of such companies is the condition of such corporate privileges and public grants, and, these having been accepted, the obligations involved cannot be avoided. v Such companies primarily owe duties to the public of a nature higher, even, than their obligations to the stock¬ holders, and, as is said by the United States Circuit Court in McCutcheon vs. Merz Capsule Company, 71 Fed 787: “Any conduct which maims and cripples their separate activity by taking away the right to freely and independently exercise the func¬ tions of their franchises is contrary to sound public policy.” For these reasons it has ever been considered the very highest public policy to keep strict watch upon such companies and to confine them to their appointed bounds, and especially to guard against the accumulation of large interests under one control. As has been said in Railroad vs. Collins et al, 40 ? Ga. 582 (1. c. 630) : “Without doubt much of the prosperity of this coun¬ try is due to the large number of corporations which have been created, and especially have we to be thank¬ ful for the good effected by railroad companies. But I am strongly impressed with the conviction, that much of their success in developing the resources of the country is due to the very jealousy which has ever held them strictly to their charters, and has constantly been care¬ ful to prevent an undue accumulation of interests under one management. The certainty that each stockholder has, that his funds will be applied to known and declared purposes, have made them favorite investments for pru¬ dent men, whilst the rivalry which opposing interests 23 engender begets an energy, economy, skill and enterprise that have had much to do with the remarkable progress which such enterprises have made. A colossal enter¬ prise, assured of handsome dividends by the possession of a monopoly, may well rest upon its position, knowing that however the country may suffer from its exactions, its own profits are secure. It is the rivalry of opposing interests, the struggle for success, nay, even for life, with dangerous opposition, that gives life, enterprise and success to railroads as to other human undertaking. It has been the conflict with thirty State lines, each with its opposing interests, and with numerous seaboard cities, each seeking to attract the rich outpourings from the great interior that has begotten the mighty net work of iron which interlaces our extensive territory, and I am convinced that there is no public policy more striking than that which, whilst it fosters every such undertaking, is yet careful ever to keep in view the danger of a mon¬ opoly, and the good effect of rivalry and conflict between different companies.” And as was said by Judge Shiras in his able dis¬ senting opinion in U. S. vs. Freight Associations, 7 C. C. A. 1. c. 91: “As to the majority of the community liv¬ ing along its line, each railway company has a monopoly of the business demanding transpor¬ tation as one of its elements. By reason of this fact the action of the corporation in establish¬ ing the rates to be charged largely influences the net profit coming to the farmer, the manu¬ facturer and the merchant from the sale of the products of the farm, the workshop and manu¬ factory, and of the merchandise purchased and resold, and also largely influences the price to 24 be paid by every one who consumes any of the property transported over the line of railway. There is no other line of business carried on in our midst which is so intimately connected with the public as that conducted by the railways of the country. * * * A railway corporation engaged in the transportation of the persons and property of the community is always carry¬ ing on a public business which at all times di¬ rectly affects the public welfare. All contracts or combinations entered into between railway corporations intended to regulate the rates to be charged the public for the service rendered, must of necessity affect the public interests. By reason of this marked distinction existing be¬ tween enterprises inherently public in their character and those of a private nature, and further by reason of the difference between private persons and corporations engaged in private pursuits, who owe no direct or primary duty to the public, and public corporations created for the express purpose of carrying on public enterprises, and which, in consideration of the public powers exercised in their behalf, are under obligation to carry on the work in¬ trusted to their management primarily in the interest and for the benefit of the community, it seems clear to me that the same test is not applicable to both classes of business and cor¬ porations in determining the validity of con¬ tracts and combinations entered into by those engaged therein.” * * * “Competition, free and unrestricted, is the general rule which governs all the ordinary 25 business pursuits and transactions of life. Evils, as well as benefits, result therefrom. In the fierce heat of competition the stronger competi¬ tor may crush out the weaker; fluctuations in prices may be caused that result in wreck and disaster; yet, balancing the benefits as against the evils, the law of competition remains as a controlling element in the business world. That free and unrestricted competition in the matter of railroad charges may be productive of evils does not militate against the fact that such is the law now governing the subject. No law can be enacted nor system be devised for the control of human affairs that in its enforce¬ ment does not produce some evil results, no matter how beneficial its general purpose may be. There are benefits and there are evils which result from the operation of the law of free competition between railway companies. The time may come when the companies will be relieved from the operation of this law, but they cannot, by combination and agreements among themselves, bring about this change.” In discussing the power of railroad companies to contract with each other when viewed in the light of their duties to the public, the Supreme Court of Illinois, in the case of Peoria & Rock Island Ry. Co. vs. The Coal Valley Mining Co., 68 Ill. 1. c. 494, said: “By their charters they are empowered, be¬ sides building and maintaining their roads, to carry passengers and property for compensa¬ tion ; and at the same time a correlative duty is 26 imposed, that they shall receive and carry pas¬ sengers and freight over their roads, as they may be offered for the purpose. And when they accept their charters it is with the implied un¬ derstanding that they will fairly perform these duties to the public, as common carriers of both persons and property, under the responsibility which that relation imposes. And this is a duty they cannot escape by neglect , refusal or by agreement with other persons or corporations that they will disregard or refuse to perform them. These are duties they owe the public, and it was in consideration that they would be performed that their charters were granted. They have no power to absolve themselves from ' performing these charter obligations, and any effort to do so by contract, or otherwise, is void. Whilst railroads must be protected in ail of their rights with the same exactness that individuals are, they must at the same time be held to a rigid performance of their duties to the public.” In the opinion the court gives its assent to the propo¬ sition that railway companies cannot use the courts to enforce an agreement which “would destroy all competi¬ tion and leave the public at the mercy of” the companies (p. 498). If the respondents complain that the rule of compe¬ tition is harsh or warfare over rates is fraught with evil to their shareholders, it should be sufficient to reply that the welfare of the public, which is promoted by such competition, is paramount to the interests of the selected few who compose the companies, and that at the time they accepted their franchises and their corresponding and con¬ sequent advantages, competition was the prime factor and 27 governing law in the business world, and the obligations assumed by them, and the law under which they operate, require that they engage in it during the life of their grant, and that it is asking entirely too much to demand that the public be made to suffer because through their own actions in reducing rates, giving better service, being more active and endeavoring to get the bulk of business, they may, perchance, cause evil to themselves. With respect to the argument, usually put forward in cases of this character, to the effect that the conse¬ quences of the enforcement of anti-trust laws would be injurious to business, etc., the Supreme Court of the United States in Northern Securities Co. vs. United States, 193 U. S. 1. c. 351, gave expression to its views as follows: “Many suggestions were made in argu¬ ment based upon the thought that the Anti- Trust Act would in the end prove to be mis¬ chievous in its consequences. Disaster to busi¬ ness and wide-spread financial ruin, it has been intimated, will follow the execution of its pro¬ visions. Such predictions were made in all the cases heretofore arising under that act. But they have not been verified. It is the history of monopolies in this country and in England, that predictions of ruin are habitually made by them when it is attempted, by legislation, to restrain their operations and to protect the public against their exactions. In this, as in former cases, they seek shelter behind the re¬ served rights of the states and even behind the constitutional guarantee of liberty of contract. But this court has heretofore adjudged that the act of Congress did not touch the rights of the 28 states, and that liberty of contract did not in¬ volve a right to deprive the public of the ad¬ vantages of free competition in trade and com¬ merce. Liberty of contract does not imply liberty in a corporation or individuals to defy the national will, when legally expressed. Nor does the enforcement of a legal enactment of Congress infringe, in any proper sense, the gen¬ eral inherent right of every one to acquire and hold property. That right, like all other rights, must be exercised in subordination to the law. But even if the court shared the gloomy forebodings in wdiich the defendants indulge, it could not refuse to respect the action of the legislative branch of the Government if what it has done is within the limits of its consti¬ tutional power. The suggestions of disaster to business have, we apprehend, their origin in the zeal of parties who are opposed to the policy underlying the act of Congress or are interested in the result of this particular case; at any rate, the suggestions imply that the court may and ought to refuse the enforcement of the provisions of the act if, in its judgment, Congress was not wise in prescribing as a rule by which the conduct of interstate and inter¬ national commerce is to be governed, that every combination, whatever its form, in restraint of such commerce and the monopolizing or at¬ tempting to monopolize such commerce, shall be illegal. These, plainly, are questions as to the policy of legislation Swhich belong to another department, and this court has no function to supervise such legislation from the standpoint of wisdom or policy. ,, 29 II. THIS COMBINATION VIOLATES SEC. 17, ART. 12, OF THE CONSTITUTION, AND SEC. 1062, R. S. 1899. Combinations for increasing and maintaining prices made their appearance under ancient forms of civiliza¬ tion, and the motives inducing their formation and ends sought then, as now, were to advance selfish, pecuniary interests by taking advantage of the necessities of others. Recognizing this tendency on the part of large interests, appreciating the wholesome effects of rivalry and compe¬ tition between such forces as railroad companies, and endeavoring to avoid the dangers which experience had demonstrated follow the combination of such powerful corporations, the organic law of this State provided: “No railroad or other corporation, or the lessees, purchasers or managers of any rail¬ road corporation, shall consolidate the stock, property or franchise of such corporation with, or lease or purchase the works or franchises of, or in any way control, any railroad corpora¬ tion owning or having under its control a parallel or competing line; nor shall any officer of such railroad corporation act as an officer, of any other railroad corporation owning or having the control of a parallel or competing line. The question whether railroads are parallel or competing lines shall, when demand¬ ed, be decided by a jury, as in other civil issues.” Sec. 17, Art. Xl^Const. of Mo. The Constitution of Texas contained the following provision: 30 “No railroad, or managers of any railroad corporation, shall consolidate the stock, prop¬ erty or franchise of such corporation with, or in any way control any railroad corporation owning, or having under its control a parallel or competing line.” In Gulf, Colorado and Santa Fe Railroad Company vs. State, 72 Texas, 404, it developed that one of the pur¬ poses of the Texas Traffic Association was to prevent “sudden and extreme fluctuations in Texas rates.” The Association was managed by an executive committee composed of the representatives from each of its mem¬ bers. This committee was charged with the power to and did classify and fix uniform freight rates to be charged by the members of the Association. In an action instituted by the State against the sev¬ eral railroad companies composing the Association, the court said: “We think it apparent that a leading object, if not the sole object of the association, is by the appointment of a common governing committee to fix rates of transportation so as to prevent competition among the several parties to the contract. We think it also apparent from the language of the section of the State Constitu¬ tion that its leading object was to prevent com - petiting lines of railroad in the State from so fettering themselves by consolidation, lease or other agreement by which one should in any way subject itself to the control of another so as to stifle competition for the traffic of the State. The section prohibits any railroad com¬ pany, or the managers of any such company, 31 from controlling in any way another company owning a competing line. If one is prohibited from making such contract, we think two or more are so prohibited, and that when one com¬ pany enters into an agreement with others any one of which owns or controls a competing line of railroad by which it subjects itself to the government of a body appointed by all parties to the agreement, that such company places it¬ self under the control of the other to a definite extent and acts in violation of the Constitution of the State. The manner and extent of the control are immaterial. The language of the Constitution clearly evinces that control in any manner and to any extent was intended to be prohibited, provided that it was such as is cal¬ culated to enable the one railroad by means of a contract or agreement for an interference in the other's affairs to keep down competition be¬ tween them.” It is to be noted that the language used in the con¬ stitutional provision on which this agreement was de¬ clared illegal, while strikingly similar to, is not as sweep¬ ing as that contained in our own Constitution. For the purpose of enabling the Legislature to make adequate provision for the control of combinations among railroad companies, and to properly meet such methods as might be devised by them for the accomplishment of such forbidden purposes, the Constitution further pro¬ vided : “The exercise of the police power of the State shall never be abridged, or so construed as to permit corporations to conduct their busi- 32 ness in such manner as to infringe the eqwal rights of individuals, or the general well-being of the State” Sec. 5, Art. 12. And that “Railways heretofore constructed, or that may hereafter be constructed in this State, are hereby declared public highways, and railroad companies common carriers. The General As¬ sembly shall pass laws to correct abuses and prevent unjust discrimination and extortion in the rates of freight and passenger tariffs on the different railroads in this State, and shall from time to time pass laws establishing rea¬ sonable maximum rates of charges for the transportation of passengers and freight on said railroads, and enforce all such laws by adequate penalties.” Sec. 14, Art. 12. These sections are a clear reservation of power over railroad corporations, and are designed to secure due subordination of the companies to the rights of individ¬ uals and the general welfare. The Legislature is not only authorized but directed to enact laws for the sup¬ pression and prevention of all new forms of combinations and to enforce the same by adequate penalties. In furtherance of this purpose of the organic law to prohibit anything which destroyed or lessened competi¬ tion between railroad companies, the Legislature in 1887 (Laws 1887, p. 102), enacted the following section : (Sec¬ tion 1062, R. S. 1899) : “It shall be unlawful for any railroad com¬ pany, corporation or individual owning, operat¬ ing or managing any railroad in the State of 33 Missouri, to enter into any contract, combina¬ tion or association, or by any manner of means whatever consolidate the stock, property or franchise of such company, corporation or in¬ dividual, or to lease or purchase the works or franchises of, or in any way whatever to any degree exercise control over, any railroad com¬ pany, corporation or individual owning or hav¬ ing under his or their control or management a parallel or competing line in this State, but each and every such railroad, whether owned, oper¬ ated or managed by a company, corporation or individual, shall be run, operated and managed separately by its own officers and agents, and be dependent for its support on its own earnings from its local and through business in connec¬ tion with other roads, and the facilities and ac¬ commodations it shall afford the public for travel and transportation under fair and open competition” This section provides in explicit terms against every form of agreement, or others means, by which any degree of control is exercised by one road over another, and plainly requires separate and independent action on the part of each road in all matters pertaining to its busi¬ ness, including that of fixing both freight and passenger rates, and lays its prohibition against everything which tends to destroy or lessen open competition. If respondents have entered into a combination or agreement, as alleged in both counts of the complaint, how can it be contended that this statutory inhibition is not violated. The business of railway companies consists of the transportation of person and commodities, and such 15471—3 34 companies are dependent for their earnings on the rates charged for such transportation. Upon their rates di¬ rectly depend the business, prosperity and even life of such companies, and it must therefore follow that if an¬ other company has a voice in determining a matter so vital and material, such company is exercising over the other the highest and most important <( degree of con¬ trol,” and the road thus controlled is not “operated and managed separately by its own officers and agents” but jointly by the officers or agents of its competitors. It is also apparent that under such an arrangement each road is not “dependent for its support on its own earnings from its business and the facilities and accommodations afforded the public for travel and transportation under fair and open competition” The “accommodations” in so far as rates are concerned are the same on all these roads, and instead of being determined under fair and open competition, are fixed by collusion, combination and conspiracy . This character of a combination is as effect¬ ual to accomplish the purposes forbidden by the law and to bring about the public menace against which protec¬ tion has been designed as would a direct and open consoli¬ dation of all these powerful interests in one corporation, officered, managed and controlled by one set of directors. The chief reason for the constitutional and statutory pro¬ hibition against a consolidation and common manage¬ ment of such corporations is to preserve competition, and its resultant benefits, and if this purpose can be de¬ feated by subterfuges or flimsy or even clever devices, the law was written to no purpose. In such cases courts will look to the substance and not merely the outward form, and if it appears that the arrangement accomplishes that which the law prohibits, its condemnation must follow, regardless of the form or I 35 structure of the arrangement, its indirect operation or the manner in which the company became a party. If such a combination as that formed by these respondents be not destroyed, the objects of the constitutional and statutory provisions above set out are defeated, and the advantages that would naturally come to the public under their enforcement and the operation of the general laws of competition will be lost and the public left at the mercy of one powerful and mercenary concern. That the real purposes of constitutional provisions prohibiting consolidations of railways is to preserve com¬ petition among the roads is manifest from the decisions dealing with attempted consolidations. In the case of Pearsall vs. Great Northern R. Co., 161 U. S. 1. c. 676, it was said by the Supreme Court of the United States: “Whether the consolidation of competing lines will necessarily result in an increase of rates, or whether such consolidation has generally resulted in a detriment to the public, is beside the question. Whether it has that effect or not, it certainly puts it in the power of the consolidated cor¬ poration to give it that effect—in short, puts the public at the mercy of the corporation. There is and has been, for the past three hundred years, both in England and in this country, a popular prejudice against monopolies in general, which has found expression in innumerable acts of legislation. We cannot say that such pre¬ judice is not well founded. It is a matter upon which the legislature is entitled to pass judg¬ ment. At least there is sufficient doubt of the propriety of such monopolies to authorize the 36 legislature, which may be presumed to represent the views of the public, to say that it will not tolerate them unless the power to establish them be conferred by clear and explicit language. While, in particular cases, two railways by con¬ solidating their interests under a single manage¬ ment, may have been able to so far reduce the ex¬ penses of administration as to give their cus¬ tomers the benefit of a lower tariff, the logical effect of all monopolies is an increase of price of the thing produced, whether it be merchandise or transportation. Owing to the greater speed and cheapness of the service performed by them, railways become necessarily monopolists of all traffic along their lines; but the general senti¬ ment of the public declares that such monopolies must be limited to the necessities of the case, and rebels against the attempt of one road to con¬ trol all traffic between terminal points, also con¬ nected by a competing line. There are, more¬ over, thought to be other dangers to the moral sense of the community incident to such great aggregations of wealth, which, though indirect, are even more insidious in their influence, and such as have awakened feelings of hostility which have not failed to find expression in legis¬ lative acts. The consolidation of these two great cor¬ porations will unavoidably result in giving to the defendant a monopoly of all traffic in the northern half of the State of Minnesota, as well as of all transcontinental traffic north of the line of the Union Pacific, against which pub¬ lic regulations will be but a feeble protection. 37 The acts of the Minnesota legislature of 1874 and 1881 undoubtedly reflected the general sen¬ timent of the public, that their best security is in competition.” Under a New Hampshire statute (Morrill vs. Rail¬ road, 55 N. H. 1. c. 537), a bill was filed to cancel a con¬ tract between a railroad organized under the laws of Massachusetts, but operating roads chartered in New Hampshire, and a railroad organized and operating in New Hampshire, whereby a division of forty per cent, of gross receipts was provided for. In this case, 55 N. H. 1. c. 539, Judge Cushing said: “The injurious effect of a consolidation is the prevention of competition, and that whole¬ some restraint upon exorbitant fares which can only be secured by free competition. A con¬ tract which provides for dividing the earnings, after deducting a certain percentage for ex¬ penses, and which, therefore, makes it indiffer¬ ent to the parties to the contract in which of the lines the passengers or freight are carried, con¬ tains in itself the most essential element of con¬ solidation, and is, therefore, in violation of the law.” In Currier vs. Railroad, 48 N. H. 1. c. 325, the Su¬ preme Court of New Hampshire, with reference to an act of the Legislature of that State, prohibiting consoli¬ dation of railways and the running or operating of one rival road by another, said: “The object of the law is to prevent the consolidation of rival competing lines of rail¬ road by contracts or arrangements between 38 them, by means of which competition is re¬ moved; the purpose being to prevent the in¬ crease of the charges of such railroads beyond what might be expected under the influence of a free competition. In the promotion of this object every citizen having occasion to use such roads, or to purchase articles transported over them, has an interest; but his interest is not of the character that may be protected by a suit to recover damages. It is much like the interest which every citizen has in a common highway— in its being kept in repair—and there, inde¬ pendent of statute provisions, he can maintain no action on account of any defect in its con¬ dition; and by statute he can maintain an ac¬ tion only in case he suffer special damages while in the use of the road, but not for being de¬ prived of the use of it altogether by its being permitted to become impassable; as held in Griffin vs. Sanbornton, 44 N. H. 246. Upon the same principle no person has such an inter¬ est in preserving a free competition between rival railroads as to be entitled to maintain a suit for diminishing or removing such compe¬ tition; but the wrong which arises from the violation of the provisions of the statute is essentially a public wrong in which no citizen has a special or private interest.” In construing the constitutional and statutory pro¬ visions heretofore referred to, this court in St. Louis, K. & S. R. R. Co., vs. Wear, 135 Mo. 230, decided that the president of a railroad company is not eligible to ap¬ pointment as receiver of a parallel and competing line. 39 III. In pooling contracts, which are undoubtedly pro¬ hibited by every consideration of public policy, as well as by the Constitution and Statute, there is but one ele¬ ment which infringes the rights of the public, and that is the one which eliminates competition. Out of it grows the condemnation visited by the courts upon such agree¬ ments. The mere division of profits between two or among several carriers could not effect the public, how¬ ever injurious it might be to the stockholders of some of the companies, if the sums divided accrued from charges lawfully made for services properly rendered. It is the fact that pooling agreements eliminate compe¬ tition which renders them obnoxious to public policy, subjects them to the condemnation of the law, which has invoked legislative action and has led to constitutional prohibitions against them. The provisions in pooling agreements respecting the division of profits are included for the purpose and alone for the purpose of enforcing the provisions eliminat¬ ing competition. The ingenuity of the framers of these agreements is exerted toward hedging about the parties thereto in such manner as to effectuate the purpose to destroy competi¬ tion, and an examination of the agreements of this char¬ acter which have found their way into the reports, dis¬ close that the complex provisions which they usually con¬ tain are but the means which the parties deem most ef¬ fectual to remove every temptation to engage in com¬ petition with each other. The division of profits is not a necessary element of “pooling agreements.” That this is true is clear from the purpose to be accomplished by prohibitions against pool¬ ing agreements. 40 In Tift vs. Southern Ry. Co., 138 Fed. Rep. 1. c. 761, Judge Speer, in upholding a finding of the Interstate Commerce Commission that the “Southern Freight As¬ sociation,” which included a number of southern rail¬ roads, in agreeing to advance rates, had acted unreason¬ ably, unjustly and in violation of the act regulating com¬ merce, said: “The commission concludes that it is its duty to consider this joint, or concert of, action of the defendants as bearing upon the reason¬ ableness and validity of the advanced rate which results. It holds that the element of competi¬ tion is eliminated. In the absence of legitimate competition, destroyed, as we shall presently see, by methods obviously illegal, the commis¬ sion presumes that the advanced rates are higher than legitimate competition would produce. In other words, the marked increase for charges for transportation of that commodity which, save one other, affords the largest tonnage of freight to the respondent roads, did not originate from a normal or reasonable exigency of the respond¬ ents’ business. On the contrary, it was an arbitrary exaction imposed by a combination of railroad agents made in restraint of the natural movement of the product in the lumber trade. This combination or concert of action on the part of the respondent railroads is plainly vio¬ lative of that provision of the interstate com¬ merce law which forbids pooling. This was enacted among other things, for the purpose of securing competition. Pooling may be as well effected by a concert in fixing in advance the ! rates which in the aggregate would accumulate L 41 the earnings of naturally competing lines, as by depositing all of such earnings to a common account and distributing them afterwards. That such an association and concert of action be¬ tween agents of naturally competing lines is destructive of competition is equally unanswer¬ able. To entertain any other view is to ignore reiterated decisions of the Supreme Court of the United States, and many rulings of the circuit courts and of the state courts.” The opinion from which the above quotation is taken was approved by the Circuit Court of Appeals in Tift vs. So. Ry., 79 C. C. A. 1. c. 536. It is fair to say that the fact that several decisions rendered by Judge Speer, to which he modestly adverts, laid down principles respecting unlawful combinations which afterwards found approval in decisions of the Su¬ preme Court of the United States, entitles his opinion in the case cited to more than ordinary respect. Section 1135, R. S. 1899, constitutes a legislative recognition of the fact that pooling agreements need not necessarily include a provision for a division of profits. Pooling agreements and agreements for the division of profits are prohibited by distinct clauses of this section: “It shall be unawful for any common car¬ rier subject to the provisions of this article to enter into any contract, agreement or combi¬ nation with any other common carrier or car¬ riers for the pooling of freights of different and competing railroads, or to divide between them the aggregate net proceeds of the earnings of such railroads, or any portion thereof; and in case of an agreement for the pooling of freights as aforesaid, each day of its continuance shall be deemed a separate offense.” IV. THIS COMBINATION IS ALSO ILLEGAL AT COM¬ MON LAW. IT OPERATES TO RESTRAIN TRADE AND COMMERCE, IS AGAINST PUBLIC POLICY AND VIOLATES FRANCHISE OBLIGA¬ TIONS. In seeking to condemn this agreement and to guar¬ antee the public the benefits of competition between rail¬ road companies, we are not invoking new principles or making new applications. Whether regarded with ref¬ erence to principles adopted by text-books or to specific judicial decisions from early times to the present, such agreements, aside from constitutional and statutory pro¬ visions, are against public policy, in restraint of trade and commerce, violative of franchise obligations and il¬ legal at common law. It is alleged that the purpose and effect of the com¬ bination is to fix and maintain both freight and passen¬ ger rates and to prevent and lessen competition in the transportation of freight and persons. The transporta¬ tion of freight and persons is commerce. Mr. Justice Field, in County of Mobile vs. Kimbrell, 102 U. S. 691, said: “Commerce with foreign countries and among states consists in intercourse and traffic including in these terms navigation and the transportation and transit of persons and prop¬ erty.” And this definition has been adopted by the court in Hopkins vs. United States, 171 U. S. 578. 43 United States vs. Freight Association, 166 U. S. 290. United States vs. Joint Traffic Association, 171 U. S. 505. Gloucester vs. Pennsylvania, 114 U. S. 196. United States vs. Addyston Pipe & Steel Co., 54 U. S. App. 1. c. 766. In Gibbons vs. Ogden, 9 Wheat, 1. c. 215, the Su¬ preme Court of the United States held that the term “commerce” included the transportation of passengers, as well as the transportation of freight. In this case the validity of an exclusive grant by the State of New York to Livingston & Fulton to navigate the waters of the State named, with vessels propelled by steam, was in question. The particular vessel over which the controversy arose was used for transportation of passengers. The argument was made that the power to regulate “commerce” did not include a power to regulate the transportation of persons. The court, however, said: “The boats of the appellant were, we are told, employed in the transportation of passen¬ gers ; and this is no part of that commerce which Congress may regulate. If, as our whole course of legislation on this subject shows, the power of Congress has been universally understood in America, to com¬ prehend navigation, it is a very persuasive, if not a conclusive argument, to prove that the construction is correct; and, if it be correct, no clear distinction is perceived between the power to regulate vessels employed in transporting men for hire, and property for hire. The sub¬ ject is transferred to Congress, and no excep- 44 tion to the grant can be omitted, which is not proved by the words or the nature of the thing. A coasting vessel employed in the transporta¬ tion of passengers, is as much a portion of the American marine, as one employed in the trans¬ portation of a cargo; and no reason is perceived why such vessel should be withdrawn from the regulating power of that government, which has been thought best fitted for the purpose generally. The provisions of the law respect¬ ing native seamen, and respecting ownership, are as applicable to vessels carrying men, as to vessels carrying manufactures; and no reason is perceived why the power over the subject should not be placed in the same hands. The argument urged at the bar, rests on the founda¬ tion, that the power of Congress does not ex¬ tend to navigation, as a branch of commerce, and can only be applied to the subject inciden¬ tally and occasionally. But if that foundation be removed, we must show some plain, intelli¬ gible distinction, supported by the constitution, or by reason, for discriminating between the power of Congress over vessels employed in navigating the same seas. We can perceive no such distinction. If we refer to the constitution, the infer¬ ence to be drawn from it is rather against the distinction. The section which restrains Con¬ gress from prohibiting the migration or im¬ portation of such persons as any of the states may think proper to admit, until the year 1808, has always been considered as an exception from the power to regulate commerce, and cer- 45 tainly seems to class migration with importa¬ tion. Migration applies as appropriately to vol¬ untary, as importation does to involuntary, ar¬ rivals ; and, so far as an exception from a power proves its existence, this section proves that the power to regulate commerce applies equally to the regulation of vessels employed in transport¬ ing men, who pass from place to place volun¬ tarily, and to those who pass involuntarily.” In his concurring opinion in this case, Mr. Justice Johnson said: “When speaking of the power of Congress over navigation, I do not regard it as a power incidental to that of regulating commerce; I consider it as the thing itself; inseparable from it as vital motion is from vital existence. Commerce, in its simplest signification, means an exchange of goods; but in the advance¬ ment of society, labour, transportation, intelli¬ gence, care and various mediums of exchange, become commodities, and enter into commerce ; the subject, the vehicle, the agent and their var¬ ious operations become the subject of commer¬ cial regulation. Ship building, the carrying trade, and propagation of seaman, are such vital agents of commercial prosperity, that the nation which could not legislate over these subjects, would not possess power to regulate commerce.” ****** “But it is almost labouring to prove a self-evident proposition, since the sense of mankind, the practice of the world, the contemporaneous assumption, and continued ex¬ ercise of the power, and universal acquiesence. 46 having so clearly established the right of Con¬ gress over navigation, and the transportation of both men and their goods, as not only in¬ incidental to, but actually of the essence of, the power to regulate commerce. As to the trans¬ portation of passengers, and passengers in a steamboat, I consider it as having been solemn¬ ly recognized by the State of New York, as a subject both of commercial regulation and of revenue. She has imposed a transit duty upon steamboat passengers arriving at Albany, and unless this be done in the exercise of her control over personal intercourse, as incident to internal commerce, I know not on what principle the in¬ dividual has been subjected to this tax. The subsequent imposition upon the steamboat it¬ self, appears to be but a commutation, and oper¬ ates as an indirect instead of a direct tax upon the same subject. The passenger pays it at last.” And at pages 189-190 is was said: “Commerce undoubtedly is traffic, but it is more, it is intercourse. It describes the com¬ mercial intercourse between nations, and parts of nations, in all its branches, and is regulated by prescribed rules for carrying on that inter¬ course.” In People vs. Raymond, 34 Cal. 1. c. 497, it was said: “The term ‘commerce’ as employed in sec¬ tion 8 (Constitution of the United States) which is under discussion, is not to be construed as limited to an exchange of commodities only, but 47 includes as well ‘intercourse’ with foreign na¬ tions and between the several states, and the term 'intercourse 1 includes the transportation of passengers ” In Anderson vs. L. & N. R’y. Co., 62 Fed. 1. c. 49, it is said: “The transportation of passengers is com¬ merce.” It is none the less commerce because it consists of the transportation of persons and property wholly with¬ in the State. One is domestic and the other interstate, but its commercial features are identical. The means or distance or place of transportation does not change the character of the business as one of commerce. Such a business is trade and commerce itself, as the transporta¬ tion of persons, as well as property, is inseparably con¬ nected with and indispensable to that intercourse and traffic which constitutes trade and commerce. Take from trade and commerce the transportation of either persons or property and but little remains. It being apparent that the business of railroad com¬ panies is trade and commerce, we shall consider the ef¬ fect of the common law and the doctrine of public policy when applied to combinations and agreements of the na¬ ture set out in both counts of the complaint. We do not hesitate to say that at common law all agreements entered into by two or more parties for the sole purpose of restraining competition in any branch of trade or commerce, or to fix or maintain prices, are unlawful. In such cases the question of reasonableness or partial restraint is not an element and cannot be con¬ sidered. There is in such contracts no main, lawful pur¬ pose to which the restraint is ancillary, and which is 48 reasonably necessary to protect the parties in the enjoy¬ ment of the benefits of the main, lawful purpose, but in such contracts the main purpose is to avoid competition and, therefore, unlawful. Judge Taft in United States vs. Addyston Pipe & Steel Company, 54 U. S. App., 723, after an able and ex¬ haustive review of the adjudicated cases, said: “It would certainly seem to follow from the tests laid down for determining the validity of such an agreement that no conventional restraint of trade can be enforced unless the covenant em¬ bodying it is merely ancillary to the main pur¬ pose of a lawful contract and necessary to pro¬ tect the covenantee in the enjoyment of the legi¬ timate fruits of the contract or to protect him from the dangers of an unjust use of those fruits by the other party. In Homer vs. Graves, 7 Bing. 735, Chief Justice Tindal, who seems to be regarded as the highest English judicial au¬ thority on this branch of the law (See Lord Macnaghten’s judgment in Nordenfeldt vs. The Maxim Nordenfeldt Guns and Ammunition Company, Limited (1894) A. C., 535, 569), used the following language: ‘We do not see how a better test can be applied to the question whether reasonable or not than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public. Whatever restraint is larger than the necessary protection of the party, can be of no benefit to either; it can only be oppressive, and if oppres¬ sive, it is, in the eye of the law, unreasonable. 49 Whatever is injurious to the interests of the public is void, on the grounds of public policy/ This very statement of the rule implies that the contract must be one in which there is a main purpose, to which the covenant in restraint of trade is merely ancillary. The covenant is in¬ serted only to protect one of the parties from the injury which, in the execution of the contract or enjoyment of its fruits, he may suffer from the unrestrained competition of the other. The main purpose of the contract suggests the meas¬ ure of protection needed and furnishes a suffi¬ ciently uniform standard by which the validity of such restraints may be judicially determined. In such a case, if the restraints exceeds the ne¬ cessity presented by the main purpose of the contract, it is void for two reasons: First, be¬ cause it oppresses the covenantor without any corresponding benefit to the covenantee, and, second, because it tends to a monopoly; but where the sole object of both parties in making the contract, as expressed therein, is merely to restrain competition and enhance or maintain prices it would seem that there was nothing to justify or excuse the restraint—that it would necessarily have a tendency to monopoly, and therefore would be void. In such a case there is no measure of what is necessary to the pro¬ tection of either party except the vague and varying opinions of judges as to how much, on principles of political economy, men ought to be allowed to restrain competition. There is in such contracts no main lawful purpose, to sub¬ serve which partial restraint is permitted, and 15471—4 50 by which its reasonableness is measured, but the sole object is to restrain trade in order to avoid the competition which it has always been the policy of the common law to foster. Much has been said in regard to the relax¬ ing of the original strictness of the common law in declaring contracts in restraint of trade void as conditions of civilization and public policy have changed, and the argument drawn there¬ from is that the law now recognizes that com¬ petition may be so ruinous as to injure the pub¬ lic, and, therefore, that contracts made with a view to check such ruinous competition and reg¬ ulate prices, though in restraint of trade and having no other purpose, will be upheld. We think that this conclusion is unwarranted by the authorities when all of them are considered.” And in the same case Mr. Justice Peckham, in af¬ firming the decision of the circuit court, 175 U. S. 211, quoted, with approval, from United States vs. E. C. Knight Company, 156 U. S. 16, as follows : “It has been earnestly pressed upon us that the prices at which the cast iron pipe was sold in ‘pay’ territory were reasonable. A great many affidavits of purchasers of pipe in ‘pay’ territory, all drawn by the same hand or from the same model, are produced, in which the af¬ fiant says that in their opinion the prices at which pipe has been sold by defendants have been reasonable. We do not think the issue an important one, because, as already stated, we do not think that at common law there is any question of reasonableness open to the courts 51 with reference to such a contract . Its tendency was certainly to give defendants the power to charge unreasonable prices, had they chosen to do so.” In this connection Judge Marshall, in State ex inf. vs. Firemen’s Fund Ins. Co., 152 Mo. 1. c. 42, said: “It is not necessary here to review the cases where courts have held contracts valid which only partially restrained trade. It is only nec¬ essary to call attention to the fact that in excep¬ tional cases the main purpose of the contract was lawful and the restraint was only a neces¬ sary incident or ancillary to the contracts, ‘to protect the covenantee in the enjoyment of the legitimate fruits of the contract or to protect him from the dangers of an unjust use of those fruits by the other party.’ (United States vs. Addyston Pipe & Steel Co., 54 U. S. App. 1. c. 747.) In the case just quoted, Taft, circuit judge, delivered the opinion of the court, which was concurred in by Mr. Justice Harlan and Lurton, circuit judge, and we might well leave the law of the case at bar to depend upon that decision, for it is a most lucid, learned and luminous ex¬ position of all the law, ancient and modern, up¬ on the question here under consideration, so much so in fact, that any attempt to enlarge upon the authorities cited and reviewed and the reasoning employed by the learned judge, would prove futile, feeble and foolish. After review¬ ing the instances where pools and trusts have undergone judicial scrutiny and condemnation, 52 Judge Taft says: ‘Upon this review of the law and the authorities, we can have no doubt that the association of the defendants, however reas¬ onable the prices they fixed, however great the competition they had to encounter, and, however great the necessity for curbing themselves by joint agreement from committing financial sui¬ cide by ill-advised competition, was void at common law because in restraint of trade and tending to a monopoly/ ” In State ex rel. vs. Standard Oil Company, 218 Mo. 1. c. 378, this court, while discussing the subject, said: “In support of that contention, learned counsel for respondents argue that under that section of the Federal Constitution they had the legal right to make contracts in reasonable re¬ straint of trade, and that the sections of the statutes mentioned prohibit the making of all contracts in restraint of trade, those that are reasonable as well as those that are unreason¬ able and unjust, consequently the statute must fail. In answer to that contention it may be said that counsel do not correctly state the rule of law regarding such contracts. The universal rule is that two or more parties may enter into any lawful contract regarding any matter, and if that otherwise legal contract only incidentally limits trade or fixes prices, then that legal con¬ tract will not be held void on the ground that it incidentally operated in restraint of trade. (Shawnee Compress Co. vs. Anderson, 209 U. 53 S. 423, 434; Phillips vs. lola Cement Co., 61 C. C. A. 1. e. 20; Whitwell vs. Continental Tobacco Co., 60 C. C. A. 1. c. 299.) But if the primary purpose of the contract ivas to limit and restrain trade , then the contract would he void at com¬ mon law y and would not he protected hy the con¬ stitutional provision mentioned , however slight that interference or restraint might have heen.” In U. S. vs. Freight Association, 166 U. S. 1. c. 328, the Supreme Court of the United States said: “Proceeding, however, upon the theory that the statute did not mean what its plain language imported, and that it intended in its prohibition to denounce as illegal only those contracts which were in unreasonable restraint of trade, the courts below have made an exhaustive in¬ vestigation as to the general rules which guide courts in declaring contracts to be void as be¬ ing in restraint of trade, and, therefore, against the public policy of the country. In the course of their discussion of that subject they have shown that there has been a gradual, though great, alteration in the extent of the liberty granted to the vendor of property in agreeing, as part consideration for his sale, not to enter into the same kind of business for a certain time or within a certain territory. So long as the sale was the bona fide consideration for the promise and was not made a mere excuse for an evasion of the rule itself, the later authorities, both in England and in this country, exhibit a strong tendency towards enabling the parties to make such a contract in relation to the sale of 54 property, including an agreement not to enter into the same kind of business, as they may think proper, and this with the view to granting to a vendor the freest opportunity to obtain the largest consideration for the sale of that which is his own. A contract which is the mere ac¬ companiment of the sale of property, and thus entered into for the purpose of enhancing the price at which the vendor sells it, which in effect is collateral to such sale, and where the main purpose of the whole contract is accomplished by such sale, might not be included, within the letter or spirit of the statute in question.” The agreements set out in the two counts are not the accompaniments of any purchase or sale or any other contract or purpose which would justify a partial or reasonable restraint even if the agreement were between private corporations. But, if the agreements complained of were but ancillary to some main lawful purpose and the restraint imposed were reasonable and partial, which it is not, they would yet be against public policy when the public nature of these corporations is considered. In Gibbs vs. Baltimore Gas Co., 130 U. S. 408-409, it was said: “The supplying of illuminating gas is a business of a public nature to meet a public ne¬ cessity, it is not a business like that of an ordi¬ nary corporation engaged in the manufacture of articles that may be furnished by individual effort (citing cases), hence, while it is justly urged that those rules which say that a given contract is against public policy should not be arbitrarily extended so as to interfere with the 55 freedom of contract, yet in an instance of busi¬ ness of such character that it presumably can¬ not be restrained to any extent whatever with¬ out prejudice to the public interests, courts de¬ cline to enforce or sanction contracts imposing such restraint, however partial, because in con¬ travention of public policy.” In United States vs. Freight Assn., 1. c. 334, after quoting the above extract from the Gibbs case, the court said: “The above extract from the opinion of the court is made for the purpose of showing the dif¬ ference which exists between a private and a public corporation—that kind of a public cor¬ poration which, while doing business for remun¬ eration, is yet so connected in interest with the public as to give a public character to its busi¬ ness—and it is seen that while, in the absence of a statute prohibiting them, contracts of pri¬ vate individuals or corporations touching upon restraints in trade must be unreasonable in their nature to be held void, different consider¬ ations obtain in the case of public corporations like those of railroads, where it well may be that any restraint upon a business of that character as affecting its rates of transportation must thereby be prejudicial to the public interests.” * * * In the able dissenting opinion of Judge Shiras, in the case of U. S. vs. Trans-Missouri Freight Association, 7 C. C. A. 1. c. 92, the distinction between the rule appli¬ cable to private persons, and that applicable to railways, with respect to combinations, is stated in the following language: 56 “The right to freely contract and combine possessed by private parties engaged in private pursuits is limited and denied when they come to deal with staple commodities, because the whole community is interested in these articles of prime necessity, and any contract affecting them affects the public; and clearly public cor¬ porations are under a more stringent rule in this particular. Unlike private parties engaged in private pursuits, which only incidentally, if at all, af¬ fect the public welfare, corporations created for the purpose of constructing and operating the modem form of public highways owe pri¬ marily a duty to the public. They are created to subserve a public purpose, to wit, to furnish the means for the transportation of the people and property of the country, and they are under constant obligations to use their corporate pow¬ ers in the interest of and for the benefit of the community from which these powers have been derived. The right to demand transportation for one’s self or property over such highways be¬ longs to every member of the community, and the rate to be paid for such service is a ques¬ tion which affects every one using the high¬ way, and, in addition, every member of the community is affected by the rates charged, for the amount thereof enters into and affects the price of every article that is bought and sold in the community. The duty of transporting persons and property over a line of railway is a public duty, assumed by the corporation oper- 57 ating the particular line, and in the proper per¬ formance thereof the public has a direct in¬ terest. The proper performance of this duty includes the rate of compensation to be charged for the services rendered, and this is a question in which the public has a direct and most im¬ portant interest, and all contracts or combina¬ tions intended to affect the rate to be charged directly affect the public welfare. Clearly, therefore, railway transportation of persons and property, comes within the classes of busi¬ ness, which, in the language of the Supreme Court in Gibbs vs. Gas Co., supra, are of such a public character that presumably they cannot be restrained to any extent whatever without prejudice to the public interest? In the opinion of the majority it is prac¬ tically assumed that the same freedom to con¬ tract or combine with others is possessed by the public corporation engaged in railway trans¬ portation as belongs to private parties engaged in private pursuits. It does not so seem to me, either upon principle or authority. Private corporations are not created for the primary purpose of furthering the public interests, nor do they assume the performance of a public duty. Conducting private enterprises for private gain, there is no presumption that their acts will affect the public welfare, and hence their freedom of contract and action is not to be limited or denied, unless it clearly appears that the interests of the community will be in¬ juriously affected by the action proposed to be taken. On the other hand, in the case of public corporations engaged in carrying on a public enterprise, it is apparent that every course of action intended to affect the business trans¬ acted by the corporation must of necessity af¬ fect the public interests.” * * * “In my judgment, the community is abso¬ lutely entitled to the protection against unfair rates which is afforded by free and unre¬ strained competition between the companies engaged in the transportation business of the country, and any contract or combination which is intended to restrict competition in this par¬ ticular is inimical to the public welfare, and is therefore illegal.” But waiving for the moment all of these considera¬ tions and applying the most favorable test that respond¬ ents under any phase could contend for, the agreements are yet condemned, as the restraint imposed is general and unreasonable. That this combination is imposing in array, wide in scope, general in its influence and injuri¬ ous in effect on the public, can admit of no doubt. By it, all freight and passenger rates in this State are controlled and made to bring sums they would not command if left to the natural laws of trade and commerce and the legiti¬ mate factors in the business world. These sixteen lines traverse the State, touching its towns and communities, penetrating its cities and commercial centers, and are complete in their control of traffic and transportation, and the facilities and instruments essential to trade and commerce. In such cases any restraint on competition and free and independent action on the part of each company is baleful, but the hinderance set up by this powerful com¬ bination and its conduct is cyclopean. Its held of opera- 59 tion is too wide, and its influence and effects too general to be justified on any theory. It is none the less unlaw¬ ful and baneful, because the rates fixed and maintained by this method may be within the maximum prescribed by law. The laws fixing maximum rates do not undertake to deterine the specific rate to be charged, but leave this to competition and business elements, and, as was said in Gulf, Colorado & Santa Fe vs. Texas, supra, after hold¬ ing that a combination and agreement between railroad companies to fix and maintain rates were unlawful: “But it is further argued that because it has not been shown that they have made charges for freight or passengers in excess of the limits al¬ lowed by law, their action is not illegal. But we do not understand that the State seeks to re¬ strain them for illegal charges made under the direction of the association, but for doing an illegal thing in entering into and carrying out the terms of the agreement for the association.” In United States vs. Freight Association, 166 U. S. 1. c. 339, the United States Supreme Court, in discussing this proposition, said: “The claim that the company has the right to charge reasonable rates, and that, therefore, it has the right to enter into a combination with competing roads to maintain such rates, can¬ not be admitted. The conclusion does not fol¬ low from an admission of the premise. What one company may do in the way of charging rea¬ sonable rates is radically different from enter¬ ing into an agreement with other and competing roads to keep up the rates to that point. If there 60 be any competition the extent of the charge for the service will be seriously affected by that fact. Competition will itself bring charges down to what may be reasonable, while in the case of an agreement to keep prices up, competition is allowed no play; it is shut out, and the rate is practically fixed by the companies themselves by virtue of the agreement, so long as they abide by it.” ****** * The gist of the offense charged is the combination and conspiracy, and not the particular rates agreed upon. The offense would be the same, in so far as this action is concerned, whether the rates agreed upon were un¬ reasonably low or in excess of the maximum rates pre¬ scribed by law. If each of these companies, acting separately and independently of each other andl in open competition, saw fit and was able to charge the maximum rates: fixed, the State could not complain, although its officers believed such rates too high. These respondents with their fran¬ chises are “entitled each to its pound of flesh, and, if it be so nominated in the bond, the commonwealth must bare her bosom to all their knives and let them cut nearest the heart,” but their powers are clearly marked, and be¬ tween the privileges granted to them and those reserved to the State, the line is distinctly drawn, and, if they cross it, they should be driven back under the lash of the law. In Morris Run Coal Company vs. Barclay Coal Com¬ pany, 68 Pa. State, 173, five companies combined together to govern the supply and price of coal in all the markets from the Hudson to the Mississippi river and from Penn¬ sylvania to the lakes. V 61 In that case the Court said: “Singly each company might have sus¬ pended deliveries and sales of coal to suit its own interest, and might have raised the price, even though this might have been detrimental to the public interest. There is a certain free¬ dom which must be allowed to every one in the management of his own affairs. When compe¬ tition is left free, individual error or folly will generally find its correction in the conduct of others, but here is a combination of all the com¬ panies operating in the Blossburg and Barclay mining regions: and controlling their entire prod¬ ucts. This combination has a power in its con¬ federated form which no individual action can confer. The public interest must succumb to it, for it has left no competition free to correct its baneful influence. * * * Such a combination is more than a contract; it is an offense. T take it/ said Gibson, J., ‘a combination is criminal whenever the act to be done has a necessary tendency to prejudice the public, or to oppress individuals by unjustly sub¬ jecting them to the power of confederates and giving effect to the purpose of the latter, whether of extortion or of mischief/ “In all such combinations where the pur¬ pose is injurious or unlawful, the gist of the of¬ fense is a conspiracy. Men can often do by the combination of many what, severally, no one could accomplish, and even what, when done by by one, would be innocent. It was held in Commonwealth vs. Eberle, 3 S. N. R. 9, that it was an indictable conspiracy 62 for a portion of a German Lutheran congrega- gation to combine and agree together to prevent another portion of the congregation, by force and arms, from using the English language in the worship of God among the congregation. So a confederation to assist a female infant to escape from her father’s control, with a view to marry her against his will, is indictable as a con¬ spiracy at common law, while it would have been no criminal offense, if one alone had induced her to elope with and marry him. Miffin vs. Commonwealth, 5 W. & S. 461. One man, or many, may hiss an actor, but if they conspire to do it, they may be punished. Per Gibson, C. J., Hood vs. Palmer, 8 Barr 238; 2 Russell on Crimes, 556. And says Coulter, J., ‘The concentrated energy of several combined wills, operating simultaneously and by concert, upon one indi¬ vidual, is dangerous, even to the cautious and circumspect, but, when brought to bear upon the unwary and unsuspecting, it is fatal.’ There is potency in numbers, when com¬ bined, which the law cannot overlook where in¬ jury is the consequence.” In Heim Brewing Company vs. Belinder, 97 Mo. App. 3. c. 71, Judge Ellison said: “There are acts which become wrongful on account of the number doing such acts; mani¬ festly, the right of a single individual is of no consequence in determining the character of the act of the whole number. Thus, it is not un- 63 lawful for one mant to stop on a highway re¬ served for pedestrians, yet it is clearly unlawful for a number to do so, especially by concerted action. In such instance the act of the one man was not harmful to any appreciable extent, while the act of the number obstructed the highway and became unlawful. And so it is not unlaw¬ ful, nor appreciably harmful, for one dealer to raise the price of an article of absolute neces¬ sity; for in the natural course of trade, other dealers will supply the necessity at a price fixed by competition. But it is unlawful and harm¬ ful for all dealers to combine and by agreement raise the price. The act of the one dealer passes unnoticed by the public, while the same act by the combination interferes with trade and cre¬ ates distress.” In Commonwealth vs. Carlisle, Brightly [N. P.] 36, Judge Gibson said: “There is between the different parts of the body politic a reciprocity of action on each other, which, like the action of antagonizing muscles in the natural body, not only prescribes to each its appropriate state and condition, but regulates the motion of the whole. The effort of an indi¬ vidual to disturb this equilibrium can never be perceptible, nor carry the operation of his in¬ terest on that of any other individual, beyond the limits of fair competition; but the increase of power by the combination of means, being in geometrical proportion to the number concerned, an association may be able to give an impulse, 64 not only oppressive to individuals, but mischiev¬ ous to the public at large; and it is the employ¬ ment of an engine so powerful and dangerous, that gives criminality to an act that would be perfectly innocent, at least in a legal view, when done by an individual.” In Bailey vs. Master Plumbers, 103 Tenn. 118, the Supreme Court of Tennessee said: “A combination has hurtful powers and in¬ fluences not possessed by the individual. It threatens and impairs rivalry in trade, covets control in prices, seeks and obtains its own ad¬ vancement at the expense and in the oppression of the public.” In State vs. Glidden, 55 Conn. 75, it was said by the Supreme Court of Connecticut on the same subject: “Any one man, or any one of several men, acting independently, is powerless; but when several combine and direct their united energies to the accomplishment of a bad purpose, the com¬ bination is formidable. Its power for evil in¬ creases as its numbers increase.” In State ex rel. vs. Stock Exchange, 211 Mo. 1. c. 193, Judge Valliant, speaking for the Court, said: “It is the combination or agreement that results in restraint of trade that the statute de¬ nounces, whether the result is accomplished by the act of each individual on his own account doing as he agreed to do, or by the joint action of all. The result may be the same whether each individual acting for himself pursues the 65 course marked out by the combination, or whether they all join in a united transaction. It is the combination to accomplish that result that the statute is aimed to prevent.” The whole law, whether statutory or common, against monopoly and combinations in restraint of trade, com¬ merce and competition, is based upon the common knowl¬ edge that there is great danger in confederated power that does not attach to individual action. If this were not true, no justification could be offered for anti-trust laws, or any of the countless court decisions applying such laws. In but few, if any, of the numberless cases where combinations have been condemned by the courts, have the decisions been on the ground that the rates or prices fixed were, in themselves, unlawful, but, almost invaria¬ bly, it has been because they were fixed by unlawful agreement and combination. And here we pause to in¬ quire what reason can exist why railroad companies, whose business is trade and commerce, should not be sub¬ jected to the rules and laws governing commerce; why should they be singled out from all the great interests of the State and alone be authorized to combine and pre¬ vent competition; why should not men who put their means, capital and skill in manufactories, wholesale and retail stores and other industries; why should not the farmer, the artisan, the laborer and trader be just as much entitled to protection against competition as the railroad company? The natural result of preventing such competition is to keep up rates, to weaken and impair the service and destroy the chief inducement for improved facilities, as, when competition is free and open the best equipped and managed road, the one giving the lowest rates and best service will get the bulk of business, and 15471—5 66 the poorer roads must put themselves in better condition, if they get business. Under such circumstances each road is on the alert, active and progressive, courteous and accommodating, ever struggling to attract to it the traffic of the State, and holding out inducements by giving the lowest rates and superior service. The public is thus benefited; but, remove this competition and let rates be fixed by agree¬ ment—this healthful condition changes. To raise or maintain rates above those which would exist under open competition is to decrease the business of the whole coun¬ try, including that of railroads, to extort from the people, for the benefit of the company, unnatural and unfair rates, and to deprive the whole public of rights and ben¬ efits to which they are entitled from the “life of trade” and industrial conditions. We repeat that there can exist no reason in either principle or practice why such companies should be per¬ mitted to combine and destroy competition, or any reason why the public should not protect itself against such a menace. In Northern Securities Co., vs. United States, 193 U. S. 1. c. 342-343, the Supreme Court of the United States said: “Now, the court is asked to adjudge that, if held to embrace the case before us, the Anti- Trust Act is repugnant to the Constitution of the United States. In this view we are unable to concur. The contention of the defendants could not be sustained without, in effect, over¬ ruling the prior decisions of this court as to the scope and validity of the Anti-Trust Act. If, as the court has held, Congress can strike down a combination between private persons or private 67 corporations that restrains trade among the states in iron pipe (as in Addyston Pipe & Steel Co. vs. United States), or in tiles, grates and mantels (as in Montague vs. Lowry), surely it ought not to be doubted that Congress has power to declare illegal a combination that restrains commerce among the states, and with foreign nations, as carried on over the lines of compet¬ ing railroad companies exercising public fran¬ chises, and engaged in such commerce. We can¬ not agree that Congress may strike down com¬ binations among manufacturers and dealers in iron pipe, tiles, grates and mantels that restrain commerce among the states in such articles, but may not strike down combinations among stock¬ holders of competing railroad carriers, which restrain commerce as involved in the transpor¬ tation of passengers and property among the sev¬ eral states. If private parties may not, by com¬ bination among themselves, restrain interstate and international commerce in violation of an act of Congress, much less can such restraint be tolerated when imposed or attempted to be imposed upon commerce as carried on over pub¬ lic highways. Indeed, if the contentions of the defendants are sound, why may not all the rail¬ way companies in the United States, that are engaged, under state charters, in interstate and international commerce, enter into a combina¬ tion such as the one here in question, and by the device of a holding corporation obtain the absolute control throughout the entire country of rates for passengers and freight, beyond the power of Congress to protect the public against 68 their exactions ? The argument in behalf of the defendants necessarily lead to such results, and places Congress, although invested by the people of the United States with full authority to regu¬ late interstate and international commerce, in a condition of utter helplessness, so far as the protection of the public against such combina¬ tions is concerned/' Beach on Monopolies and Industrial Trusts, para¬ graph 149, page 469, says: “Any combination of railway companies, the object of which is to restrain competition by establishing and maintaining a uniform charge for the transportation of freight or of passen¬ gers, is illegal and void. It is the rule that con¬ tracts or agreements of this character are void as in contravention of public policy, and in many states such agreements are rendered nugatory by constitutional and statutory enactments." Noyes on Intercorporate Relations, in paragraph 372, says: 9 d 01 i'j. “The combination is injurious to public wel¬ fare, because it is inimical to public policy; if involving quasi public corporations, it breaks the primary contract with the state ” onx; And paragraph 373: -Bind moo & o: 7 r “A private corporation in entering such combination exceeds its powers in a manner v- ;rrt■■ ; prejudicial to the public interests. A quasi pub - ^ J ~ . .** A y * —a m w* r lie corporation fails in the discharge of its public * obligations and transgresses the law of its crea¬ tion 69 Spelling, on Trusts and Monopolies, paragraph 82, page 127, says: “No agreement can be fraught with more serious import to the material interests of the community than one whereby a monopoly, with all the power for evil the term implies, is created among those upon whom the state has conferred important privileges of a public nature, and upon whom the public are dependent for com¬ mon service, whether in the form of transpor¬ tation or other necessities and conveniences. Such agreements are viewed with great jealousy by the courts, and the rule of public policy is rigidly applied to them.” Greenhood, on Public Policy, p. 2, says: “By public policy is intended that principle of the law which holds that no subject can law¬ fully do that which has a tendency to be in¬ jurious to the public, or against the public good, which may be termed the policy of the law, or public policy in relation to the administration of the law.” This definition seems well supported by the case cited by the author (pp. 172, et seq.) “There can be no doubt, but that all con¬ federacies, whatsoever, wrongfully to prejudice a third person, are highly criminal at common law.” 1 Hawkins, P. C. 72, Sec. 2. In discussing a contract between a railroad company and lake transportation company, the Supreme Court of 70 Minnesota, in the case of Stewart vs. The Erie & Western Transp. Co. et al., 17 Minn. 1. c. 395, said: “A monopoly is not necessarily unlawful, for it may be created, permitted or tolerated by law. But we agree with the plaintiff's counsel, and with the cases cited by him, that it is against the general policy of the law to destroy or interfere with free competition, or to permit such destruction or interference." That any agreement which relaxes in any degree competition among quasi public corporations is ilegal is clear from the cases. The rule is stated in the case of State ex rel. vs. Portland Nat. Gas. Co., 153 Ind. 1. c. 488-489, the court saying: Tt is an old and familiar maxim that ‘Com¬ petition is the life of trade,' and whatever act destroys competition, or even relaxes it, upon the part of those who sustain relations to the public, is regarded by the law as injurious to public interests, and is therefore deemed to be unlawful, on the grounds of public policy. Greenhood on Public Policy, pp. 654, 655; Chi¬ cago, etc., Co. vs. People's, etc., Co., supra; Gibbs vs. Consolidated, etc., Co., 130 U. S. 396; Hooker vs. Vandewater, 4 Denio, 349; Con¬ sumers Oil Co. vs. Nunnemaker, 142 Ind. 560; Beach on Pr. Corp., pr. 54, 55." “The authorities affirm, as a general rule, that, if the act complained of, by its results, will restrict or stifle competition, the law will re¬ gard such an act as incompatible with public policy, without,, any proof of evil intent on the 71 part of the actor or actual injury to the public. The inquiry is not as to the degree of injury in¬ flicted upon the public; it is sufficient to know that the inevitable tendency of the act is injuri¬ ous to the public. Central Ohio, etc., Co. vs. Guthrie, 35 Ohio St., 666; Swan vs. Chorpen- ning, 20 Cal. 182; State vs. Standard Oil Co., 49 Ohio St., 137; Gibbs vs. Smith, 115 Mass. 592; Richardson vs. Buhl, 77 Mich. 632; Pacific Factor Co. vs. Adler, 90 Cal. 110; Beach on Monop. and Ind. Trusts, pr. 82.” With reference to the rule condemning unlawful combinations, it was said in Knight & Jilson Co. vs. Miller, 87 N. E. 1. c. 831, that: “The true test is whether the contract or combination, in its apparent purpose or natural consequence, places a restriction upon competi¬ tion, or tends to create a monopoly, or is inimi¬ cal to trade or commerce, and it is not necessary that a pure monopoly is effected, or that the re¬ straint is a complete one.” In the same case, page 830, it is said that: “The law supplies the intent, and will not inquire into the extent of the tendency, but puts the ban on the act, upon the ground of its ten¬ dency, and does not await the accomplished fact, nor does it depend upon the fact as to whether a complete monopoly results. The very exist¬ ence of a power to restrain competition is a re¬ straint on competition.” In State vs. Duluth Board of Trade, 107 Minn. 506, et seq., the Supreme Court of Minnesota had under con- 72 sideration the anti-trust statute of Minnesota with re¬ spect to its applicability to the association mentioned. The court reviewed the authorities at length and in detail, and though holding that the Duluth Board of Trade was not a combination within the meaning of the Minnesota act, laid down the general rule as follows: (1. c. 543.) “Where the statute prohibits a specific thing, that fact, of course, furnishes an all-suffi¬ cient reason for the decision, and, as the State statutes generally go more into detail than the Federal statutes, the State decisions are less controlled by general considerations. When the legality of the particular act is to be tested by whether it violates general statutory prohibi¬ tions upon restraints of trade or commerce, the courts give various reasons for their conclu¬ sions. Different forms of expression are used; but, when reduced to the lowest terms, it seems that if any one thing may be said to be the test, it is the effect upon competition. Combinations are not per se illegal, any more than are con¬ tracts, agreements and understandings gener¬ ally; but when the purpose of either is to de¬ stroy competition in trade or commerce, the par¬ ticular transaction falls within the prohibitions of the anti-trust statute. The acts which are specifically forbidden by the statute are contrary to the public policy of the state, because they are thus forbidden (Stewart vs. Erie & W. Transp- Co., 17 Minn. 348 (372), and the effect upon competition furnishes a reasonably accu¬ rate test for cases which arise under the general language of the statute. The definition of mo- * 73 nopoly involves the same principle, and con¬ tracts and combinations which tend to create a t monopoly are against public policy, and there¬ fore illegal, because they deprive the community of the benefits of competition and thus place the power to control production or fix prices in the hands of a few persons.” And in the same case the court held that “restrain¬ ing trade” and “preventing competition” were convertible terms. The court, discussing the articles of association of the Duluth Board of Trade and the bearing of the Minnesota Anti-Trust statute upon the agreement evi¬ denced by them, said (1. c. 523) : “To say that a combination restrains trade and prevents competition is a repetition of the same idea—the giving of two names to the same thing. Whatever restrains trade prevents com¬ petition, and whatever prevents competition in trade necessarily restrains trade. The word i y 'monopoly/ which plays so great a part in the law, conveys the same idea, because where there is monopoly there can be no competition. Pro¬ duction, and hence prices, are under the control of the monopolist, to the possible and probable injury of the public. Freedom of trade requires competition. Without one the other cannot ex¬ ist, and whatever restrains one restricts the other. It is true that unrestrained and unregu¬ lated competition may destroy what it is de¬ signed to preserve; but the theory of law and legislation still is that the welfare of the public requires that competition in trade and commerce shall exist, in order that freedom of trade may be maintained.” 74 In State ex inf. vs. Firemen's Fund Insurance Co., 152 Mo. 1. c. 43, this court said: “A trust is a contract, combination, con¬ federation or understanding, express or implied, between two or more persons to control the price of a commodity or service, for the benefit of the parties thereto, and to the injury of the public, and which tends to create a monopoly. As was said by Chief Justice Fuller in United States vs. Knight Co., 156 U. S. 1. c. 16, ‘Again all the authorities agree that in order to vitiate a contract or combination it is not essential that its result should be a complete monopoly; it is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition.’ In the United States vs. Trans-Missouri Freight Association, 166 U. S. 1. c. 342, it was said: ‘For these reasons the suit of the government can be maintained with¬ out proof of the allegation that the agreement was entered into for the purpose of restraining trade or commerce or for maintaining rates above what was reasonable. The necessary ef¬ fect of the agreement is to restrain trade or commerce, no matter what the intent was on the part of those who signed it.’ Just so here, the practice of the members of the Social Club had the effect of maintaining the Fetter rates, and hence constituted it a trust, no matter whether the members intended it to have that effect or not [and we have no doubt they did so intend it], and no matter whether they also in¬ tended it to be ‘social’ in the manner hereinbe¬ fore indicated or not. 75 In the oldens times such practices were called contracts in restraint of trade. Nowa¬ days they are called trusts. There is no differ¬ ence in the principle. There is a difference in the extent and methods. Those the courts con¬ demned long ago were as mere saplings com¬ pared to the mammoth oaks, when considered alongside of those of today. When the evils to the public interests that flow from these trust com¬ binations are attempted to be described, words become mere weaklings in their power of ex¬ pression, and one stands appalled at the help¬ lessness of the people outside of judicial aid.” In the case of Chicago, etc., R. Co. vs. Southern R. Co., 38 Ind. App. 1. c. 244-245, in discussing the duty of courts to condemn contracts void as against public policy, it is said: “The present action is one in which it is not only appropriate for the court to consider the contract made by these parties, but the duty of the court to the public, against whom the con¬ tract in question is directed, calls upon it to do so. That duty cannot be put aside until appel¬ lant comes into court asking that the illegal clause be enforced. The presumption is that it will not need ever to do this. It cannot be de¬ ferred until some quarryman or citizen insti¬ tutes a proceeding to declare its invalidity. The fallacy of such an idea can in no way be so clearly exposed as by an illustration, extreme in terms, but equivalent in principle. Preliminary to the illustration, it may be recalled that this 76 / court has declared: ‘It is now settled here, that contracts which are void at common law, be¬ cause they are against public policy, like con¬ tracts which are prohibited by statute, are ille¬ gal as well as void. They are prohibited by law because they are considered vicious, and it is not necessary to impose a penalty in order to render them illegal.” Nave vs. Wilson (1895), 12 Ind. App. 38.” Mr. Greenhood, pages 662 and 663 of his work on Public Policy, dealing with agreements among railroads, the tendency of which is to restrict competition, says: “A few of the reasons urged by the railroad advocates are certainly entitled to no slight con¬ sideration. But it is also true that the difficul¬ ties which are urged as justifying these arrange¬ ments are capable of being estimated before the investment of the capital, the possible loss of which they so much deplore; that they have reaped advantages which private capital and common carriers generally have not enjoyed, not the least of which is taxation for their benefit, and, if any enterprise is public, and under the deepest obligations to the public, and duty bound to shape its course to subserve the public inter¬ est, it is that which prompts the maintenance of railroads. Experience teaches us that in union there is strength, and that we have more to fear from associated capital than from indi¬ vidual capital; that capitalists generally sympa¬ thize with each other, and that no regard for public interest will allay any desire on their part to make their investment more profitable; that 77 were we to recognize the power of these corpor¬ ations to ally themselves in the manner planned for us, we would be obliged to satisfy ourselves that there was cause for them, i. e., that their object was to put an end to ruinous competition, and it is plain that upon public agents would de- 4 volve the duty of ascertaining this fact; and when we know of the comparative facility with which an honest financial showing could be withheld, and a discouraging account produced, and of the comparative ease with which such public agents could be corrupted, it may be well to ask whether it would not be more advisable to withhold from them judicial sanction entire¬ ly, and let all come within the ban of the law, as is the course pursued with regard to strikes.” Chief Justice Cooley, writing upon the subject of railway pooling arrangements, indicated his belief that combinations calculated to restrict competition were ille¬ gal. Judge Cooley, in the Railway Review of April 26, 1884, used the following language: “A pooling arrangement is a combination; and all combinations in a business which so inti¬ mately concerns the public look like attempts to establish a monopoly, and may sometimes re¬ sult in establishing one. To monopoly the pub¬ lic is instinctively hostile, because it takes from them the power of dealing on equal terms with those who control it. Besides, a combination that has for its object to check competition, seems to stand in hostility to the industrial max¬ im that competition is the life of trade, a maxim which from time immemorial has been generally 78 prevalent, and is commonly supposed to be one admitting of no question, and of universal appli¬ cation. The advantages of unrestricted com¬ petition are apparent to the public in industrial life all about us; and while in some kinds of business this is sharp, yet selfishness is general¬ ly sufficiently active and sufficiently intelligent to prevent its becoming ruinous. It does not detract from the worth or soundness of the maxim that under the operation of unrestricted competition individual disasters must occur; for when this hapens it is very likely to be found either that the parties did not understand the business they were engaged in, or managed bad¬ ly, or lacked the necessary capital, or in some other particulars were inadequately equipped. Against ruin from these causes protection is im¬ possible. The maxim referred to is so common¬ ly acepted that courts have made it a basis for important judgments; and it is not to be won¬ dered at, therefore, that the question should be made whether it is competent to erect barriers to free competition in a business so important to the public as that which is carried on by the railroads.” Greenhood on Public Policy, pp. 661, 662. The public is entitled to all the rights and improved facilities which competition will yield. Public policy condemns any contract, agreement or understanding between railroads which infringes this right of the public. In the case of Hartford & New Haven R. R. Co. vs. New York & New Haven R. R. Co., 3 Robbertson 1. c. 415, it was said by the court: 79 “It is conceded by both parties that the con¬ tract of March, 1850, is void, as being opposed to public policy. An inspection of the contract, satisfies me it is so. It is a compact between the parties, intended to affect the facilities for public travel over a route of railroad, which has been, or might be, authorized by law. The de¬ fendants were lessees of the New Haven and Northampton railroad, then in part constructed. The lessors had covenanted not to extend the road northerly beyond Granby station (a point a little north of the Connecticut line), without the consent of the defendants, and had given over to the defendants all the franchises and cor¬ porate powers of such lessors, for the purpose of locating or constructing any railroad or ex¬ tension of any railroad northerly from Granby station. By the agreement with the plaintiffs of March 16, 1850, the defendants covenanted to hold the franchises and corporate powers conveyed to them by such lease, until the 1st of July, 1869, and during such time not to extend such railroad north of Granby station. Such an arrangement was intended to prevent the ex¬ tension of the New Haven and Northampton railroad, to any point north of its terminus at Granby; and to prevent any competition in travel, detrimental to the interests of the plain¬ tiffs’ road, which had a monopoly of the carry¬ ing trade from Springfield and points north of Springfield via the Northampton and Springfield road, which such extension might afford. The completion of the New Haven and Northampton railroad to Northampton, would open a new line 80 for travel southward, and would be a competitor and rival of the road of the plaintiffs. Such com¬ petition and rivalry it was not lawful for these parties to prevent, or attempt to prevent; and any contract to effectuate such a purpose is void. Public policy is opposed to any infringement of the rights of travel, or of any of the facilities which competition may furnish; and the law will not uphold any agreement which does or may injuriously affect such rights or facilities.” In Cleveland, Columbus, Cincinnati & Indianapolis Railway Co. vs. Closser et al., 126 Ind. 348, the petition alleged that the defendant railway company had thereto¬ fore entered into a contract with other competing com¬ mon carriers for the establishment and maintenance of freight rates, forming what was known as a pool, the same being a combination for the purpose of preventing competition in the transportation of freight. The peti¬ tion also alleged that while said contract between said competing common carriers was in force, complainant made a contract with the defendant railway company, whereby said railway company agreed to transport for complainant between certain points at a special rate, the complainant stipulating, however, to pay a greater rate (the rate fixed by the combination), it being agreed that complainant should be entitled to a certain rebate to be repaid promptly to complainant after its shipments. The defendant railway company refused to repay to complain¬ ant the amount to which he was entitled in the way of a rebate according to said agreement, and this action was instituted to compel such payment. The case hinged on the question whether the arrangement existing between the railroad companies to fix and maintain rates was legal. 81 In this case the Supreme Court of Indiana says: “Coming to the question which awaits our judgment, and to which we have cleared our path, we affirm that a contract between corpora¬ tions charged with a public duty, such as is that of common carriers, providing for the formation of a combination having no other purpose than that of stifling competition, and providing meams to accomplish that object, is illegal. The pur¬ pose to break down competition poisons the whole contract, and there is here no antidote which will rescue it from legal death. The ele¬ ment which destroys the contract is the purpose to stifle competition, for a combination of rival carriers, moved and controlled by that purpose alone, is destructive of public interest, and, to the last degree, antagonistic to sound public policy. The principle on which this rule rests is a very old one, and its place in the law is very firm. The overshadowing element in this case, and in kindred cases, is the purpose which influences the parties in uniting themselves in a combination, and concerting means to make its purpose effective, for the law abhors a combina¬ tion which has for its principal object the sup¬ pression of competition in matters of commerce in which the public have an interest. Among the early cases establishing and enforcing the general principle which now occupies our atten¬ tion are those wherein it is held that an agree¬ ment to prevent, or hinder, competition at public sales is void. For illustrations, although there is a vast number of cases, we need not look be- 15471—6 82 yond our own reports. Our court has again and >» •- again enforced the general principle we have stated. Hunter vs. Pfeiffer, 108 Ind. 197; Board, etc., vs. Verbarg, 63 Ind. 107; Maguire vs. Smock, 42 Ind. 1; Gilbert vs. Carter, 10 Ind. 16; Forelander vs. Hicks, 6 Ind. 448; Plaster vs. Burger, 5 Ind. 232; Bunts vs. Cole, 7 Blackf. 265. ‘No one/ said the Court, in Hunter vs. Pfeif¬ fer, supra, ‘can predicate an enforceable right upon such an agreement/ In support of this statement the court cited Atcheson vs. Mallon, 43 N. Y. 147 (3 Am. Rep. 678) ; Woodworth vs. Bennett, 43 N. Y. 273 (3 Am. Rep. 706) ; Gibbs vs. Smith, 115 Mass. 592; Hannah vs. Fife, 27 Mich. 172. Relevant and striking illustrations of the scope and force of the general principle are supplied by what are known as “The Sugar Trust Cases,” decided by the courts of New York—cases rich in argument and authority. People vs. North River Sugar Refining Co., 22 Abbott N. Cases, 164; see, also, Law Literature of Trust Combinations, etc., 23 Abbott N. Cases, 317; People vs. North River Sugar Refining Co., 121 N. Y. 582. The authorities collected in those cases demonstrate the proposition that a trust, or combination, having for its purpose the sup¬ pression of free competition, cannot live where the common law prevails. There are, however, cases which, in their facts, bear a closer re¬ semblance to the present than the sugar trust cases; but, after all, it may be said with pro¬ priety the important thing to be secured is a sound and salutary general principle, and not merely cases with closely resembling facts. 83 There is no difficulty in securing the principle we seek, for cases almost without number assert and enforce it in an almost endless variety of forms and phases. One of the cases near akin to the one be¬ fore us is that of Hooker vs. Vandewater, 4 Denio 349. In that case competing canal com¬ panies combined, and agreed to fix an estab¬ lished rate of freight, and to divide profits. The agreement was adjudged illegal, the court saying, among other things, that Tt is a general proposition that an agreement to do an unlawful act cannot be supported at law—that no right of action can spring out of an illegal contract; and this rule applied not only when the contract is expressly illegal, but whenever it is opposed to public policy/ Still closer is the resemblance between this case, and that of Texas, etc., R. W. Co. vs. Southern Pacific R. W. Co., 41 La. Ann. 970. The court there held a 'pooling contract' substantially the same as the one described in the appellees' complaint to be void, and in sup¬ port of its ruling referred to the cases of Gibbs vs. Consolidated Gas Co., 130 U. S. 396; Wood- stock Iron Co., vs. Richmond, etc., Extension Co., 129 U. S. 643; Morris Run Coal Co. vs. Barclay Coal Co., 68 Pa. St. 173; Amot vs. Pitt- son, etc., Coal Co., 68 N. Y. 558; Craft vs. Mc- Conoughy, 79 Ill. 346; Morrill vs. Boston, etc., Railroad, 55 N. H. 531; Jackson vs. McLean, 36 Fed. R. 213; Santa Clara Valley, etc., Co. vs. Hayes, 18 Pacif. Rep. 391; Firemen's Charitable Association vs. Berghaus, 13 La. Ann. 209; India Bagging Association vs. Kock, 14 La. Ann. 168; 84 Glasscock vs. Wells, 23 La. Ann. 517, and Cum¬ mings vs. Saux, 30 La. Ann. 207. The authorities found on every hand not only fully support our conclusion that a contract between competing carriers, forming a combina¬ tion for the purpose of stifling competition , is prima facie illegal , but many of them carry the principle to a much greater length” In Anderson vs. Jett, 89 Ky. 375, the owners of two competing boats agreed, in order to stop the rivalry in their business, to pool in mixed proportions the net profits earned by each, each boat bearing its own expenses. In discussing this contract, the Court says: “And another feature detrimental to the public interest, consisting in the fact that they were not only deprived of frequent means of shipments and passenger travel, but subjected to extortionate charges. It is the competition, or fear of competition, that makes these carriers efficient, attentive, po¬ lite and reasonable in charges; remove the com¬ petition, or the fear of it, and they become ex¬ tortionate, inattentive, impolite and negligent. The writing sued on by the appellant tended to inspire just such state of case. It is said that neither was bound to charge the same as the other. That is true; but either could extort with impunity, and the other would be an equal recipient of the fruit of the extortion; there would be no motive power—rivalry in trade—to circumvent the extortion; on the contrary, self- interest would prompt not only the encourage¬ ment of the extortion, but an imitation of the 85 nefarious example. It is true that their con¬ tract did not, in so many words, bind them to any given charges; but it made it to the interest of each, not only to charge, but to encourage and sustain the other in charges that would amount to confiscation. The coal merchant, whose only means of transportation is by the Kentucky river, may not be able, if compelled to pay exorbitant freight charges, to compete with his rivals in business who have other means of transporta¬ tion; or if such competition should not exist, the consumers of his coal would be taxed with these charges; and, more pitiable than all the rest, would be the condition of the agriculturist, whose only means of transportation would be by said river. Bivalry is the life of trade; the thrift and welfare of the people depend upon it; monopoly is opposed to it all along the line; the accumulation of wealth out of the brow sweat of honest toilers by means of combina¬ tions is opposed to competing trade and enter¬ prise. That public policy that encourages fair dealing, honest thrift and enterprise among all the citizens of the Commonwealth, and is op¬ posed to monopolies and combinations because unfriendly to such fair dealing, thrift and en¬ terprise, declares all combinations whose object is to destroy or impede free competition between the several lines of business engaged in, utterly void. The combination or agreement, whether or not in the particular instance it has the de¬ sired effect, is void. The vice is in the combina¬ tion or agreement. The practical evil effect of 86 the combination only demonstrates its charac¬ ter; but if its object is to prevent or impede free and fair competition in trade, and may, in fact, have that tendency, it is void as being against public policy. For the foregoing rea¬ sons, the agreement is against public policy, and is, therefore, void. In Stanton vs. Allen, 5 Denio 434, 49 Am. Dec. 282, all the transportation lines on the Erie & Oswego Canal formed a voluntary association for the purpose of estab¬ lishing fair and uniform rates of freight and equalizing the business among the members. To this end the members agreed upon the conver¬ sion of their properties into shares to be distributed among themselves in certain proportions entitling each to an income from the entire earnings of the association in accordance with the proportion of shares held by him. It was further agreed that rates were to be determined by a committee, and were to extend to the transportation of freight and passengers. Each member bound himself to run all the boats he then had according to the agree¬ ment, and to turn their earnings into the common stock at the rates agreed upon, and at which he was to be charged in the final distribution. Each member also bound himself to offer to his as¬ sociates such freight as he was unable to carry, and if such associates did not take same, he was then author¬ ized to procure its transportation without limitation as to rates, and, after taking out the freight and certain charges, to turn in the balance to the common stock. In an action upon a note given under this arrange¬ ment, it was held: “The association was formidable and impos¬ ing, consisting as it did of the members of all 87 the transportation lines on the Erie and Oswego canals at the time. Its professed object and purpose was the establishment of fair and uni¬ form rates of freight, and to equalize the busi¬ ness among the members. These rates were to be determined by a committee, and to extend to the transportation of both freight and pasengers. While the introductory terms of the agree¬ ment proposed nothing apparently objectiona¬ ble, the ultimate object is very manifest and is of a different character. It is nothing less than the attainment of an exemption of the standard of freights and the facilities and accommoda¬ tions to be rendered to the public from the wholesome influence of rivalry and competi¬ tion. * * * “As these canals are the property of the state, constructed at great expense, as facilities to trade and commerce, and to foster and en¬ courage agriculture, and are at the same time a munificent source of revenue, whatever con¬ cerns their employment and usefulness deeply involves the interests of the whole state. * * * “Though the branch of the law relating to public policy is liable to be misunderstood and extended beyond its proper dimensions, still it must not on that account be neglected or dis¬ paraged. The rule that contracts and agree¬ ments are void when contrary to public policy, when properly understood and applied, is one of the great preservative principles of a state. * * * “Finally, I conclude that the association in question had a manifest and necessary tendency 88 to diminish the revenue of the state, impair the utility of a great public work intimately con¬ nected with the interests of the whole people, and that it must be eminently injurious to trade. The articles of association, therefore, in our judgment, unquestionably contravene public policy, and are manifestly injurious to the in¬ terest of the state. Hence, they are void at the common law. It has heretofore been decided by this court that an association among carriers on the Erie canal, with provisions in its articles very similar to the present, though of far less extent, was a conspiracy to commit an act in¬ jurious to trade, contrary to 2 R. S., 691, sec¬ tion 8, and was therefore utterly void: (Hooker vs. Vandewater, 4 Denio 349, 47 Am. Dec. 258.) That decision being conclusive on the main point in the present case, I might have rested upon that authority alone, if I had not supposed that the occasion called for an opinion as to the legality of such an association upon the prin¬ ciples of the common law” In Hooker et al. vs. Vandewater, 4 Denio 349, 47 Am. Dec. 258, five of the most important owners of distinct and independent lines of boats entered into an arrange¬ ment or contract to establish and maintain uniform rates of freight, to equalize their forwarding business, and to avoid all unnecessary expense in conducting the same for a limited period. To accomplish these purposes, the respective lines were converted into shares of stock, each party being given a certain proportion in the earnings of all the lines, computed upon the number of shares of stock allotted to him. f 89 The statute of that state provided, “if two or more persons shall conspire to commit any act injurious to trade or commerce, they shall be deemed guilty of a mis¬ demeanor.” This statute was but declaratory of the com¬ mon law, and in applying it to the contract above re¬ ferred to, the Court says: “The object of this combination was ob¬ viously to destroy competition between the sev¬ eral lines in the business engaged in. It was a conspiracy between the individuals contract¬ ing, to prevent a free competition among them¬ selves in the business of transporting merchan¬ dise, property and passengers upon the public canals. The question arises, is such a conspiracy to commit such an act 'injurious to trade or commerce/ within the meaning of the statute, and therefore illegal? The words trade and commerce are said by Jacobs, in his law dic¬ tionary, not to be synonymous; that commerce relates to dealings with foreign nations; trade, on the contrary, means mutual traffic among- ourselves, or the buying, selling or exchanging of articles between members of the same com¬ munity. That the raising of the price of freights f6r the transportation of merchandise or passengers upon our canals is a matter of public concern, and in which the public have a deep interest, does not admit of doubt. It is a familiar maxim, that competition is the life of trade. It follows, that whatever destroys, or even relaxes, competition in trade, is injuri¬ ous, if not fatal to it. The People vs. Fisher, 14 Wend. 9 (28 Am. Dec. 501). The object of the agreement as expressed in the written con- 90 tract, was plausible enough; but it is impossible to conceal the real intention. It is evident that the parties were the owners of five separate and powerful lines of boats, provided for the trans¬ portation of property, merchandise and passen¬ gers on the canals, then in use and in active rivalry in the business affecting more or less the price of freights; to destroy which rivalry and keep up the price to certain rates fixed by them¬ selves, was the great, if not the sole object of that agreement. The transaction amounted, as I think, to a conspiracy to commit an act in¬ jurious to trade, within the legal meaning of the statute denouncing it as a crime, and was there¬ fore illegal and void.” In Texas & Pacific Ry. Co. et al. vs. Southern Pacific Ry. Co., 41 La. Ann. 970, one party owning and control¬ ling a system of six railroads and another party as owner and in control of a railway system consisting of a like number of railroads, entered into an original agreement and later a modified agreement on behalf of the railroad companies represented by them, respectively, for the pur¬ pose of adjusting certain differences then existing be¬ tween their companies, and to put an end to certain litiga¬ tion arising therefrom. With one exception the systems of railroads thus made parties to the agreement were independent and competing. The agreement entered into contained a provision pooling the earnings of such rail¬ roads in certain proportions. In an action against some of the railroad companies based exclusively on the pool¬ ing provision of the agreement to recover excesses of earnings, it was held that: “It cannot be doubted that shippers who desired, without the existence of the agreement 91 contained in article 6, to consign goods either from El Paso to New Orleans, or the reverse, or from Galveston to El Paso, or the reverse, had the option to select either of the two lines in accordance with the most favorable terms which he could obtain from either. He would then have had the advantage of the natural com¬ petition existing between the two rival systems. But under the effect of the arrangement now under discussion, the shipper could derive no advantage as a result of his choice between the two, as the terms would be the same with either or both. It is, therefore, too clear for further argu¬ ment or illustration that the first, the lasting and the inevitable result of the agreement to the public was to stifle competition, and as com¬ petition is the life of trade, the effect of the contract must necessarily and inevitably have been injurious to public interests, and hence it was contrary to public policy. We have been at great pains, and have de¬ voted long and tedious labor to examine all the authorities, consisting mainly of opinions ren¬ dered on this point by courts of last resort in this country, which were submitted to us by counsel in this case, and we reach the conclusion that American jurisprudence has firmly settled the doctrine that all contracts which have a palpable tendency to stifle competition, either in the market value of commodities or in the car¬ riage or transportation of such commodities, are contrary to public policy. 92 In support of the conclusions thus announced, the court quoted approvingly from Hooker vs. Vandewater, 4 Denio 349; Stanton vs. Allen, 5 Denio 434; Salt Co. vs. Guthrie, 35 0. 666; Gibbs vs. Baltimore, 130 U. S. 408. In People vs. Sheldon, 139 N. Y. 251, a number of retail coal dealers associated themselves as the Lockport Coal Exchange, under a constitution and by-laws. The objects expressed in this instrument were to foster trade and commerce in coal, wood and other products and to protect from unjust and unlawful exactions, to diffuse information concerning customers, to settle differences, to produce uniformity and certainty in the customs and usages of the trade, and to establish rules and regula¬ tions which might be proper and necessary for their mutual co-operation, interest and protection. It was also agreed that the price of coal should, as far as practicable, be kept uniform, and that the same should not be more than a fair and reasonable advance over the wholesale rates. In a prosecution for conspiracy based on said con¬ tract, the court said: “But the question here does not, we think, turn on the point whether the agreement be¬ tween the retail dealers in coal did, as a matter of fact, result in injury to the public or to the community in Lockport. The question is, was the agreement, in view of what might have been done under it and the fact that it was an agree¬ ment the effect of which was to prevent com¬ petition among the coal dealers, one upon which the law affixes the brand of condemnation. It has hitherto been an accepted maxim in political economy that 'competition is the life of trade/ The courts have acted upon and adopted this 93 maxim in passing upon the validity of agree¬ ments, the design of which was to prevent com¬ petition in trade, and have held such agreements to be invalid. It is to be noticed that the organ¬ ization of the “exchange” was of the most formal character. The articles bound all who became members to conform to the regulations. The observance of such regulations by the mem¬ bers was enforced by penalties and forfeitures. A member accused by the secretary of having violated any provision of the constitution or by¬ laws was required to purge himself by affidavit, although evidence to sustain the charge should be lacking. The shippers of coal were to be notified in case of persistent default by the member, that ‘he is not entitled to the privileges of membership in the exchange/ No member was permitted to sell coal at less than the price fixed by the exchange. The organization was a carefully devised scheme to prevent competi¬ tion in the price of coal among the retail deal¬ ers, and the moral and material power of the combination afforded a reasonable guaranty that others would not enage in the business in Lockport except in conformity with the rules of the exchange. The cases of Hooker vs. Vandewater (4 Den. 349), and Stanton vs. Allen (5 id. 434), are, we think, decisive authorities in support of the judgment in this case. They were cases of combinations between transportation lines on the canals, to maintain rates for the carriage of goods and passengers, and the court, in those cases, held that the agreements were void, on 94 the ground that they were agreements to pre¬ vent competition, and the doctrine was affirmed that agreements having that purpose, made be¬ tween independent lines of transportation, were in law, agreements injurious to trade. In those cases it was not shown that the rates fixed were excessive. In the case in 5th Denio, the judge delivering the opinion referred to the effect of the agreement upon the public revenue from the canals. This was an added circumstance, tending to show the injury which might result from agreements to raise prices or prevent com¬ petition. (See, also, People vs. Fisher, 14 Wend. 10; Arnot vs. P. & E. Coal Co., 68 N. Y. 558.) The gravamen of the offense of con¬ spiracy is the combination. Agreements to pre¬ vent competition in trade are in contemplation of law injurious to trade , because they are liable to be injuriously used. The present case may be used as an illustration. The price of coal now fixed by the exchange may be reasonable in view of the interests both of dealers and con¬ sumers, but the organization may not always be guided by the principle of absolute justice. There are some limitations in the constitution of the exchange, but these may be changed and the price of coal may be unreasonably advanced. It is manifest that the exchange is acting in sympathy with the producers and shippers of coal. Some of these shippers were present when the plan of organization was considered, and it was indicated on the trial that the producers had a similar organization between themselves. If agreements and combinations to prevent com - 95 'petition in prices are or may be hurtful to trade, the only sure remedy is to prohibit all agree¬ ments of that character. If the validity of such an agreement was made to depend upon actual proof of public prejudice or injury, it would be very difficult in any case to establish the in¬ validity, although the moral evidence might be very convincing. We are of opinion that the principal upon which the case was submitted to the jury, is sanctioned by the decisions in this state, and that the jury were properly instructed that if the purpose of the agreement was to prevent competition in the price of coal be¬ tween the retail dealers, it was illegal and justi¬ fied the conviction of the defendants.” It is true that this prosecution was based upon a statute, but that statute was nothing more than declara¬ tory of the common law, its provisions being “If two or more persons conspire to commit any act injurious to trade or commerce they shall be guilty of a misde¬ meanor.” In State ex rel. vs. Armour Packing Company, 173 Mo. 1. c. 388, this court quoted at length from the cases, supra , People vs. Sheldon, Hooker vs. Vandewater and Stanton vs. Allen, and approved the principles therein announced. In Chicago, etc., Ry. Co. vs. Southern Ind. Ry. Co., 38 Ind. App. 1. c. 238, the court had under consideration a contract between two railroad companies whereby one agreed, for certain considerations, not to serve quarries the output of which the other was transporting. After declaring this to be “a stipulation, the effect of which is to deprive the shipper of the benefits of com¬ petition, should he demand that the second party dis- I 96 charge its public duty by furnishing transportation facili¬ ties to him,” the court said: “The policy of the law is to prevent the creation of monopolies and to foster fair com¬ petition. Eel River R. Co. vs. State ex rel. (1900), 155 Ind. 433; Indianapolis Union R. Co. vs. Dohn (1899), 153 Ind. 10, 45 L. R. A. 427, 74 Am. St. 274; State ex rel. vs. Portland Nat. Gas Co. (1899), 153 Ind. 483, 53 L. R. A. 413, 74 Am. St. 314; Board, etc. vs. Lafayette, etc., R. Co. (1875), 50 Ind. 85; 2 Elliott, Railroads, pr. 359. 'A contract between corporations charged with a public duty, such as that of common car¬ riers, providing for the formation of a combina¬ tion having no other purpose than that of sti¬ fling competition, and providing means to ac¬ complish that object, is illegal. The purpose to break down competition poisons the whole con¬ tract, and there is here no antidote which will rescue it from legal death/ Cleveland, etc., R. Co. vs. Closser (1890) ; 126 Ind. 348, 361, 9 L. R. A., 754, 22 Am. St. 593. The important thing to be secured was, the court declared in the case above cited, a sound and salutary gen¬ eral principle, and not merely cases with closely resembling facts. The principle declared, as heretofore quoted, accords with the necessities of commerce and development, and is supported by a vast volume of authority, including the fol¬ lowing: Louisville, etc., R. Co. vs. Sumner (1886) 106 Ind. 55, 59, 55 Am. Rep. 719; St. Louis, etc., R. Co. vs. Mathers (1874), 71 Ill., 592, 22 Am. Rep. 122; Greenhood, Public Policy, i 97 p. 626; Kettle River R. Co. vs. Eastern R. Co. (1889), 41 Minn. 461, 43 N. W. 469, 6 L. R. A. Ill; W. Va. Trans. Co. vs. Ohio River, etc., Co. (1883), 22 W. Va. 600, 626, 46 Am. Rep. 527. It is contended in argument that it was , competent to make the contract in question, in order to prevent destructive competition. There is no basis of fact justifying the proposition. A combination between common carriers to pre¬ vent competition is prima facie illegal. ‘The burden is on the carrier to remove the presump¬ tion, and until it is removed the agreement goes down before the presumption, and the agreement must be held to be within the condemnation directed against all contracts which violate public policy/ That the restriction of competition by agreement among carriers is violative of the common law, is again declared in the case of E. T. V. & G. Ry. vs. Int. Com. ConTn, 39 C. C. A. 1. c. 422-423, in which case the circuit court of appeals, said: “The interstate commerce law, it is conced¬ ed, was intended to encourage normal competi¬ tion. It forbids pooling for the very purpose of allowing competition to have effect. But it is not in accord with its spirit or letter to recog¬ nize, as a condition justifying discrimination against one locality, competition at a more dis¬ tant locality, when competition at the nearer point is stifled or reduced, not by normal re¬ strictions but by agreement between those who otherwise would be competing carriers. The difference in conditions thus produced is ef- 15471—7 98 fected by a restraint upon trade and commerce which is not only violative of the common law, but of the so called federal anti-trust act.” In Pratt vs. Tapley, 3 Pugsley (N. B.) 171, the court condemned a contract among sixteen tug owners of the port of St. Johns, whereby the parties thereto bound themselves to a uniform rate of tonnage (page 164) (3) and to tow arriving vessels in regular “turn,” any tug towing out of “turn” to pay over the towage and deliver the vessel to the tug whose “turn” it happened to be under the agreement. In the course of the opinion it was said: “Can it be said that this combination does not directly and immediately interfere with the free course of trade and navigation at the port of St, John? In view of its population and the extent of its commerce, the number of tugboats controlled by this combination must obviously embrace the great, if not the whole, body of tug owners, who thus bind themselves to carry on the towing business in accordance with the provisions of the agreement till death or change of ownership, or until the agreement is revoked by a majority of the parties. And the manner in which this is to be done is such that the own¬ ers or masters of vessels to be towed can have no voice in the selection of the tug to be em¬ ployed or the price to be paid or in any matter connected with the towing; and the ship-owner is not only debarred from having a voice in the contract, but there is taken from the inividual tug owner (except subject to the forfeiture or penalty involved in an infraction of the agree- 99 ment) all freedom of action to tow or not to tow, and on such terms as may be for his interest or the interest of the public * * And the court held the agreement to be “Unreasonable, against the public interests, in restraint of trade, and a violation of public policy.” (Page 173.) In discussing a contract between a railroad company and express company, whereby the latter was granted by the former the exclusive right to do an express business on such railroad, the Supreme Court of Pennsylvania, in Sanford vs. R. R. Co., 24 Pa. St. 1. c. 382, said that: “Competition is the best protection to the public, and it is against the policy of the law to destroy it by creating a monopoly of any branch of business.” The contract was held void as against public policy. This court, in Cravens vs. Rodgers, 101 Mo. 247, held that an agreement upon the part of a railroad company to give to the owner of an omnibus line the exclusive use of an approach to the railroad platform was against public policy, and in the course of the opinion, said: “The business of both parties is that of com¬ mon carriers for hire, on the same line, and by their connection with the railroad forming one continuous line, by which passengers are trans¬ ported to the same general destination, the rail¬ road company carrying them to its station near the city, and plaintiffs and defendants carry¬ ing them to their several destinations in the city. As common carriers it is the duty of each 100 of the parties to transport all persons who offer to take and pay for passage with them, and they are charged with grave and responsible duties to such persons when they have once taken passage. They must make the trip whether they have one or many passengers. As a corollary of this duty to carry all, there ought to be a corresponding right upon the part of each to have the same facilities afforded them to obtain the passage in their respective vehicles of all such passengers as are brought to the point of connection by the connecting carrier, the railroad company, on the same general route. In this way the enterprise of each is encouraged , competition is stimulated, the price of trans¬ portation is kept within reasonable bounds; the safest, best and most comfortable means of con¬ veyance, a rapid passage and polite and agree¬ able service are apt to be secured to the travel¬ ing public. On the other hand, if better facilities are afforded to one carrier than another by the con¬ necting carrier, competition is discouraged, a monopoly created, and the traveling public are apt to receive a slow, uncomfortable, slovenly, negligent and expensive service. Monopolies are obnoxious to the spirit of our laws, and ought to be discouraged. This is the spirit of our con¬ stitutional provision which prohibits ‘discrimina¬ tion in charges, or facilities in transportation * * * between transportation companies and individuals or in favor of either.’ ” In the case of Clemons vs. Meadows, 29 Ky. Law Reporter, 619, the question involved was the legality of a V 101 contract between proprietors of rival hotels whereby one attempted to obligate himself, for a fixed sum per month payable by the other, to close his hotel and withdraw from the business for a period of three years. After indicating that, under the laws of Kentucky, hotels were “quasi-public institutions,” the court held the agreement void. Judge Paynter, in delivering the decision, using the following language in conclusion: “The contract was not for the purpose of protecting the appellants in the legitimate use of something, which they acquired by it, for nothing was conveyed to them. The purpose and effect of the contract was to enable the ap¬ pellants to enjoy an illegitimate use of some¬ thing which they already had. Our conclusion is, that the contract is against public policy, and the demurrer to the answer should have been overruled. (Chapman vs. Brown, 32 Am. St. Report 297; Clark vs. Neeham, 51 L. R. A. 785; Tuscaloosa Ice Mfg. Co. vs. Williams, 85 Am. St. Rep. 125; Anderson vs. Jett, 89, Ky. 375). In Anderson vs. Jett, 89 Ky. 375, this court well said: ‘Rivalry is the life of trade; the thrift and welfare of the people depend upon it; monopoly is opposed to it all along the line; the accumulation of wealth out of the brow sweat of honest toilers, by means of combinations, is opposed to competing trade and enterprise. That public policy that encourages fair dealing, hon¬ est thrift and enterprise among all the citizens of , the Commonwealth, and is opposed to mon¬ opolies and combinations because unfair to fair dealing, thrift and enterprise, declares all com- 102 binations whose object is to destroy or impede free competition between the several lines of business engaged in, utterly void. The combi¬ nation or agreement, whether or not in the particular instance it has the desired effect, is void. The vice is in the combination or agree¬ ment. The practical evil effect of the combina¬ tion only demonstrates its character; but if its object is to prevent or impede free and fair competition in trade, and may, in fact have that tendency, is void as being against public policy.” The Federal Anti-Trust Act passed by Congress in 1890, provided: “Every contract, combination in the form of trust, or otherwise, or conspiracy in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal.” It is apparent from the authorities heretofore cited that this act, in so far as it applies to public service cor¬ porations, is nothing more than declaratory of the com¬ mon law which prevails in the several states. The sole effect of this act, in its application to public service corporations, is to make what was, and yet is, the common law of the states, the statutory law of the nation in matters of interestate commerce. In Dueber Mfg. Co. vs. Watch and Clock Co., 14 C. C. A. 1. c. 20, 66 Fed. 637, Judge Laeombe said: “The phrase used in the act of 1890, viz.: ‘restraint of trade/ is no new one. It had there¬ tofore been used by courts applying the doc¬ trines of the common law in determining the va- 103 lidity of contracts. It is to be presumed that the lawmakers, when they chose this phrase, intend¬ ed that it should have, when used in the statute, no other or different meaning from that which had always been given to it in judicial decisions and in the common understanding. ,, In United States vs. Trans-Missouri Freight Associ¬ ation, et al, 166 U. S. 290, eighteen competing railway companies entered into an association whose affairs were managed by a board consisting of representatives from each of the railway companies. By agreement, power was conferred on the association to establish and maintain rules, regulations and rates on all competitive traffic, through and local, and to punish by fine all members who failed to live up to the established schedule. In an action instituted by the government against the association and its members for the purpose of having the contract declared illegal, the association dissolved and the members prohibited from further agreeing and acting together in the maintenance of rates, the United States Supreme Court held that a contract between competing common carriers which effects traffic rates for the inter¬ state transportation of persons and property, was within the Federal Anti-Trust Law, and that all agreements and combinations in restraint of trade or commerce, whether reasonable or unreasonable, were illegal, and that an agreement between railroads to fix and maintain rates was in such restraint of trade and commerce. In discussing this agreement, and the application of the Anti-trust Act to it, the United States Supreme Court said: “The bill shows here an agreement entered into (as stated in the agreement itself) for the 104 purpose of maintaining reasonable rates to be received by each company executing the agree¬ ment.” * * * “Coming to the merits of the suit, there are two important questions which demand our examination. They are, first, whether the above-cited act of Congress (called herein the Trust Act) applies to and covers common car¬ riers by railroad; and, if so, second, does the agreement set forth in the bill violate any pro¬ vision of that act? As to the first question: The language of the act includes every con¬ tract, combination in the form of trust or other¬ wise, or conspiracy, in restraint of trade or com¬ merce among the several states or with foreign nations. So far as the very terms of the stat¬ ute go, they apply to any contract of the nature described. A contract, therefore, that is in re¬ straint of trade or commerce is by the strict language of the act prohibited even though such contract is entered into between competing com¬ mon carriers by railroad, and only for the pur¬ pose of thereby affecting traffic rates for the transportation of persons and property. It such an agreement restrain trade or commerce, it is prohibited by the statute, unless it can be said that an agreement, no matter what its terms, relating only to transportation cannot restrain trade or commerce. We see no escape from the conclusion that if any agreement of such a nature does restrain it, the agreement is condemned by this act. It cannot be denied 105 that those who are engaged in the transporta¬ tion of persons or property from one State to another are engaged in interstate commerce, and it would seem to follow that if such persons enter into agreements between themselves in re¬ gard to the compensation to be secured from the owners of the articles transported, such agreement would at least relate to the business of commerce, and might more or less restrain it. The point urged on the defendants' part is that the statute was not really intended to reach that kind of an agreement relating only to traffic rates entered into by competing com¬ mon carriers by railroad; that it was intended to reach only those who were engaged in the manufacture or sale of articles of commerce, and who by means of trusts, combinations and con¬ spiracies were engaged in affecting the supply or the price or the place of manufacture of such articles. The terms of the act do not bear out such construction. Railroad companies are in¬ struments of commerce, and their business is commerce itself. State Freight Tax case, 15 Wall. 232, 275; Telegraph Co. vs. Texas, 105 U. S. 460, 464. An act which prohibits the making of every contract, etc., in restraint of trade or commerce among the several States, would seem to cover by such language a contract between competing railroads, and relating to traffic rates for the transportation of articles of com¬ merce between the States, provided such con¬ tract by its direct effect produces a restraint of trade or commerce. What amounts to a re¬ straint within the meaning of the act if thus construed need not now be discussed." * * * / 106 “It is said that Congress had very different matters in view and very different objects to accomplish in the passage of the act in question; that a number of combinations in the form of trusts and conspiracies in restraint of trade were to be found throughout the country, and that it was impossible for the state governments to successfully cope with them because of their commercial character and of their business ex¬ tension through the different states of the Union. Among these trusts it was said in Con¬ gress were the Beef Trust, the Standard Oil Trust, the Steel Trust, the Barbed Fence Wire Trust, the Sugar Trust, the Cordage Trust, the Cotton Seed Oil Trust, the Whiskey Trust and many others, and these trusts it was stated, had assumed an importance, and had acquired a power which were dangerous to the whole coun¬ try, and that their existence was directly antago¬ nistic to its peace and prosperity. To combina¬ tions and conspiracies of this kind it is contend¬ ed that the act in question was directed, and not to the combinations of competing railroads to keep up their prices to a reasonable sum for the transportation of persons and property. It is true that many and various trusts were in existence at the time of the passage of the act, and it was probably sought to cover them by the provisions of the act. Many of them had rend¬ ered themselves offensive by the manner in which they exercised the great power that com¬ bined capital gave them. But a further investi¬ gation of “the history of the times” shows also that those trusts were not the only associations controlling a great combination of capital which 107 had caused complaint at the manner in which their business was conducted. There were many and loud complaints from some portions of the public regarding the railroads and the prices they were charging for the service they rend¬ ered, and it was alleged that the prices for the transportation of persons and articles of com¬ merce were unduly and improperly enhanced by combinations among the different roads. Whether these complaints were well or ill found¬ ed, we do not presume at this time and under these circumstances to determine or to discuss. It is simply for the purpose of answering the statement that it was only to trusts of the nature above set forth that this legislation was directed, that the subject of the opinions of the people in regard to the actions of the railroad companies in this particular is referred to. * * * “Many of the foregoing assertions (refer¬ ring to reasons assigned by companies why the law should not include them), may be well found¬ ed, while at the same time the correctness of the conclusions sought to be drawn therefrom need not be conceded. The points of difference be¬ tween the railroad and other corporations are many and great. It cannot be disputed that a railroad is a public corporation, and its busi¬ ness pertains to and greatly affects the public, and that it is of a public nature. The company may not charge unreasonable prices for trans- poration, nor can it make unjust discrimina¬ tion, nor select its patrons, nor go out of business when it chooses, while a mere trading or manufacturing company may do ail these things. But the very fact of the public char- 108 acter of a railroad would itself seem to call for special care by the legislature in regard to its conduct, so that its business should be carried on with as much reference to the proper and fair interests of the public as possible. While the points of difference just mentioned and others do exist between the two classes of cor¬ porations, it must be remembered they have also some points of resemblance. Trading, manu¬ facturing and railroad corporations are all en¬ gaged in the transaction of business with regard to articles of trade and commerce, each in its special sphere, either in manufacturing or trad¬ ing in commodities or in their transportation by rail. A contract among those engaged in the latter business by which the prices for the trans¬ portation of commodities traded in or manu¬ factured by the others is greatly enhanced from what it otherwise would be if free competition were the rule, affects and to a certain extent restricts trade and commerce, and affects the price of the commodity. Of this there can be no question. Manufacturing or trading companies may also affect prices by joining together in forming a trust or other combination, and by making agreements in restraint of trade and commerce, which when carried out affect the interests of the public. Why should not a rail¬ road company be included in general legislation aimed at the prevention of that kind of agree¬ ment made in restraint of trade, which may exist in all companies, which is substantially of the same nature wherever found, and which tends very much towards the same results, whether put in practice by a trading and manu- 109 facturing or by a railroad company? It is true the results of trusts, or combinations of that nature, may be different in different kinds of corporations, and yet they all have an essential similiarity, and have been induced by motives of individual or corporate aggrandizement as against the public interest.” * * * ‘‘Neither is the statute, in our judgment, so uncertain in its meaning, or its language so vague, that it ought not to be held applicable to railroads. It prohibits contracts, combinations, etc., in restraint of trade or commerce. Trans¬ porting commodities is commerce, and if from one State to or through another it is interstate commerce. To be reached by the Federal stat¬ ute it must be commerce among the several States or with foreign nations. When the act prohibits contracts in restraint of trade or com¬ merce, the plain meaning of the language used includes contracts which relate to either or both subjects. Both trade and commerce or in¬ cluded so long as each relates to that which is interstate or foreign. Transportation of com¬ modities among the several states or with foreign nations falls within the description of the words of the statute with regard to that subject, and there is also included in that lan¬ guage that kind of trade in commodities among the states or with foreign nations which is not confined to their mere transportation. It in¬ cludes their purchase and sale.” * * * Under the name of Joint Traffic Association, a ma¬ jority of the railroad companies, engaged in the trans¬ portation of persons and property between Chicago and 110 the Atlantic coast, entered into an agreement whereby it was stipulated that reasonable schedules of rates, fares and charges were to be established and thereafter ad¬ hered to by each member, subject to such reasonable and fair changes as might thereafter be made by the different boards, and that no railroad should deviate from such rates until it first gave notice of the change to the As¬ sociation. In a bill by the government, it was charged that the agreement was made to prevent competition, and that it unlawfully restrained trade and commerce in the several states and territories. On final hearing the United States Supreme Court held that the combination, having been entered into for the purpose of establishing and maintaining interstate rates and fares for the transpor¬ tation of freight and passengers, was within the prohibi¬ tion of the Federal Anti-Trust Law, even though the rates and fares charged were reasonable. (171 U. S. 505.) In the course of the opinion, the court said: “The expressed purpose of the agreement in this case is, among other things, ‘to establish and maintain reasonable and just rates, fares, rules and regulations on state and interstate traffic.' * * * “So far as the establishment of rates and fares is concerned we do not see any substantial dif¬ ference between this agreement and the one set forth in the Trans-Missouri case. In that case the rates were established by the agreement, and any company violating the schedule of rates as established under the agreement was liable to a penalty. A company could withdraw from the asociation on giving thirty days' notice, but while it continued a member it was bound to Ill charge the rates fixed, under a penalty for not doing so. In this case the companies are bound to charge the rates fixed upon originally in the agreement or subsequently recommended by the board of managers, and the failure to observe their recommendations is deemed a violation of of the agreement. The only alternative is the adoption of a resolution by the board of direc¬ tors of any company providing for a change of rates so far as that company is concerned, and the service of a copy thereof upon the board of managers as already stated. This provision for changing rates by any one company is absent from the other agreement.” * * * “In order, therefore, not only to prevent secret competition, but also to prevent any com¬ petition whatever among the companies parties to the agreement, the provision is therein made for the prompt action of the board of managers whenever it receives a copy of the resolution adopted by the board of directors of any one company for a change of the rates as established under the agreement. By reason of this pro¬ vision the board undoubtedly has authority and power to enforce the uniformity of rates as against the offending company upon pain of an open, rigorous and relentless war of competition against it on the part of the whole association. “A company desirous of deviating from the rates agreed upon and which its associates de¬ sire to maintain is at once confronted with this probability of a war between itself on the one side and the whole association on the other, in the course of which rates would probably drop 112 lower than the company was proposing, and lower than it would desire or could afford, and such a prospect would be generally sufficient to prevent the inauguration of the change of rates and the consequent ; competition. Thus the power to commence such a war on the part of the managers would operate to most effectu¬ ally prevent a deviation from rates by any one company against the desire of the other parties to the agreement. Competition would be pre¬ vented by the fear of the united competition of the association against the particular member.” * * * “The natural, direct and necessary effect of all these various provisions of the agreement is to prevent any competition whatever between the parties to it for the whole time of its exists ence. It is probably as effective in that way as would be a provision in the agreement prohibit¬ ing in terms any competition whatever.” “It is also said that the agreement in the first case conferred upon the association an un¬ limited power to fix rates in the first instance, and that the authority was not confined to rea¬ sonable rates, while in the case now before us the agreement starts out with rates fixed by each company for itself and filed with the in¬ terstate commerce commission, and which rates are alleged to be reasonable. The distinction is unimportant. It was considered in the other case that the rates actually fixed upon were rea¬ sonable, while the rates fixed upon in this case are also admitted to be reasonable. By this agreement the board of managers is in substance 113 and as a result thereof placed in control of the business and rates of transportation, and its duty is to see to it that each company charges the rates agreed upon and receives its equitable proportion of the traffic. The natural and direct effect of the two agreements is the same, viz., to maintain rates at a higher level than would otherwise prevail, and the differences between them are not suf¬ ficiently important or material to call for dif¬ ferent judgments in the two cases on any such ground.” * * * “Such an agreement directly affects, and of course is intended to affect the cost of trans¬ portation of commodities, and commerce con¬ sists, among other things, of the transportation of commodities, and if such transportation be between states it is interstate commerce. The agreement affects interstate commerce by de¬ stroying competition and by maintaining rates above what competition might produce. If it did not do that, its existence would be useless, and it would soon be rescinded or abandoned. Its acknowledged purpose is to maintain rates, and if executed, it does so. It must be remembered, however, that the act does not prohibit any railroad company from charg¬ ing reasonable rates. If in the absence of any contract or combination among the railroad companies the rates and fares would be less than they are under such contract or combina¬ tion, that is not by reason of any provision of the act which itself lowers rates, but only be¬ cause the railroad companies would, as it is 15471—8 114 # f - # > urged, voluntarily and at once inaugurate a war of competition among themselves, and thereby themselves reduce their rates and fares.” * * * “We think it extends at least to the prohi¬ bition of contracts relating to interstate com¬ merce, which would extinguish all competition between otherwise competing railroad corpora¬ tions, and which would in that way restrain interstate trade or commerce. We do not think, when the grantees of this public franchise are competing railroads seeking the business of transportation of men and goods from one state to another, that ordinary freedom of contract in the use and management of their property requires the right to combine as one consolidat¬ ed and powerful association for the purpose of stifling competition among themselves and of thus keeping their rates and charges higher than they might otherwise be under the laws of competition. And this is so, even though the rates provided for in the agreement may for the time be not more than are reasonable. They may easily and at any time be increased. It is the combination of these large and powerful corporations, covering vast sections of territory and influencing trade throughout the whole ex¬ tent thereof, and acting as one body in all the matters over which the combination extends, that constitutes the alleged evil.” * * * “The prohibition of such contracts may in the judgment of Congress be one of the reason¬ able necessities for the proper regulation of com¬ merce, and Congress is the judge of such neces¬ sity and propriety, unless, in case of a possible 115 gross perversion of the principle, the courts might be applied to for relief.” * * * “Upon the point that the agreement is not in fact one in restraint of trade, even though it did prevent competition, it must be admitted that the former argument has now been much enlarged and amplified, and a general and most masterly review of that question has been pre¬ sented by counsel for the respondents. That this agreement does in fact prevent competition, and that it must have been so intended, we have already attempted to show. Whether stifling competition tends directly to restrain commerce in the case of naturally competing railroads, is a question upon which counsel have argued with very great ability. They acknowledge that this agreement purports to restrain competition, al¬ though, they say, in a very slight degree and on a single point. They admit that if competition and commerce were identical, being but dif¬ ferent names for the same thing, then, in as¬ suming to restrain competition even so far, it would be assuming in a corresponding degree to restrain commerce. Counsel then added (and therein we entirely agree with them) that no such identity can be pretended, because it is plain that commerce can and does take place on a large scale and in numerous forms without competition. The material considerations there¬ fore turn upon the effects of competition upon the business of railroads, whether they are favorable to the commerce in which the roads are engaged, or unfavorable and in restraint of that commerce. Upon that question it is con- 116 tended that agreements between railroad com¬ panies of the nature of that now before us are promotive instead of in restraint of trade. This conclusion is reached by counsel after an examination of the pecuiair nature of rail¬ road property, and the alleged baneful effects of competition upon it and also upon the public. It is stated that the only resort open to railroads to save themselves from the effects of a ruinous competition is that of agreements among them¬ selves to check and control it. A ruinous com¬ petition is, as they say, apt to be carried on until the weakest of the combatants goes to de¬ struction. After that the survivor, being re¬ lieved from competition, proceeds to raise its prices as high as the business will bear. Com¬ merce, it is said, thus finally becomes restrained by the effects of competition, while, at the same time, otherwise valuable railroad property is thereby destroyed or greatly reduced in value. There can be no doubt that the general tendency of competition among competing railroads is towards lower rates for transportation, and the result of lower rates is generally a greater de¬ mand for the articles so transported, and this greater demand can only be gratified by a larger supply, the furnishing of which increases com¬ merce. This is the first and direct result of competition among railroad carriers.” * * * “The natural, direct and immediate effect of competition is, however, to lower rates, and to thereby increase the demand for commodities, the supplying of which increases commerce, and an agreement, whose first and direct effect is 117 to prevent this play of competition, restrains instead of promoting trade and commerce.” ^ ^ “It is not only possible but probable that good sense and integrity of purpose would pre¬ vail among the managers, and while making no agreement and entering into no combination by which the whole railroad interest as herein rep¬ resented should act as one combined and con¬ solidated body, the managers of each road might yet make such reasonable charges for the busi¬ ness done by it as the facts might justify. An agreement of the nature of this one which direct¬ ly and effectually stifles competition, must be regarded under the statute as one in restraint of trade, notwithstanding there are possibilities that a restraint of trade may also follow compe¬ tition that may be indulged in until the weaker roads are completely destroyed and the survivor thereafter raises rates and maintains them.” In Commonwealth vs. Carlisle, Brightley’s Reports, p. 38 et seq., Gibson, J., discussed the law of conspira¬ cies, with reference to its application to illegal combina¬ tions, as follows: “The unsettled state of the law of conspir¬ acy has arisen, as was justly remarked in the argument, from a gradual extension of the lim¬ its of the offense; each case having been decid¬ ed on its own peculiar circumstances, without reference to any pre-established principle. When a combination had for its direct object to do a criminal act; as to procure the conviction of an innocent man (the only case originally indict- 113 able, and which afterwards served as a nucleus for the formation of the entire law of the sub¬ ject) the mind at once pronounced it criminal. So where the act was lawful, but the intention was to accomplish it by unlawful means; as where the conviction of a person known to the conspirators to be guilty, was to be procured by any abuse of his right to a fair trial in the ordinary course. But when the crime became so far enlarged as to include cases where the act was not only lawful in the abstract, but also to be accomplished exclusively by the use of lawful means, it is obvious that distinctions as complicated and various as the relations and transactions of civil society, became instantly involved, and to determine on the guilt or in¬ nocence of each of this class of the cases, an examination of the nature and principles of the offense became necessary. This examination has not yet been very accurately made; for there is in the books an unusual want of precision in the terms used to describe the distinctive fea¬ tures of guilt or innocence. It is said the union of persons in one common design is the gist of the offense; but that holds only in regard to a supposed question of the necessity of actual consummation of the meditated act; for if combi¬ nation were, in every view, the essence of the crime, it would necessarily impart criminality to the most laudable associations. It is said in Leach’s note to Hawkins, b-i, ch. 72, pr. 3, that the conspiracy is the gist of the charge, and that to do a thing lawful in itself by conspiracy, is unlawful; but that is begging the very ques- 119 tion, whether a conspiracy exists, and leaves the inquiry of what shall be said to be doing a law¬ ful act by conspiracy, as much in the dark as ever. Mr. Chitty, in his Criminal Law, (Vol. Ill, page 1139), the best compilation on the subject extant, very truly says, there are many cases in which an act would not be cognizable by law, if done by an individual, that would, nevertheless, be the subject of an indictment if effected by several with a joint design; yet he, too, says the offense depends on the unlawful agreement, and not on the act which is to follow it; the act when done being but evidence of the agreement. From this it might be inferred that the act can operate only to show that an agree¬ ment of some sort has taken place, but not by its nature or object to stamp the character of guilt on it; but Chitty himself admits that it is impossible to conceive a combination, merely as such, to be illegal. It will, therefore, be per¬ ceived that the motive for combining, or, what is the same thing, the nature of the object to be attained as a consequence of the lawful act is, in this class of cases, the discriminative circum¬ stance. Where the act is lawful for an indi- dividual, it can be the subject of a conspiracy, when done in concert, only where there is a di¬ rect intention that injury shall result from it, or where the object is to benefit the conspirators to the prejudice of the public or the oppression of individuals, and where such prejudice or op¬ pression is the natural and necessary conse¬ quence. To give appropriate instances, respec¬ tively, referable to each branch of this classifi- 120 cation of criminal intention: if a number of per¬ sons should combine to establish a ferry, not from motives of public or private utility, but to ruin or injure the owner of a neighboring ferry, the wickedness of the motive would render the association criminal, although it is otherwise where capital is combined, not for the purposes of oppression, but fair competition with others of the same calling. So with respect to the other branch. If the bakers of a town were to com¬ bine to hold up the article of bread, and by means of a scarcity thus produced, extort an exorbitant price for it, although the injury to the public would be only collateral to the object of the association, it would be indictable; and to one or other of these, may the motive in every decided case be traced. Thus a combination to marry, under feigned names, was criminal, be¬ cause the object was to affect the interest of a particular parish under the poor laws, or to in¬ jure an individual by setting up a colorable title to his estate; an agreement between the officers of an army to throw up their commissions simul¬ taneously, in a time of public danger, or between a number to hiss a play, right or wrong, was in¬ dictable; because there was an unmixed motive of mischief to the public or an individual. So, on the other hand, in a confederacy to raise the price of the funds, to sell bad liquors, or to pro¬ cure the release of a prisoner by entering in¬ sufficient bail, the motive is not prejudice to the public or an individual, but undue gain to the confederates or their friends; which is unlawful only in reference to the means used to procure 121 it. I take it, then, a combination is criminal wherever the act to be done has a necessary ten¬ dency to prejudice the public or to oppress in¬ dividuals by unjustly subjecting them to the power of the confederates, and giving effect to the purposes of the latter, whether of extortion or mischief. According to this view of the law, a combination of employers to depress the wages of journeymen below what they would be, if there was no recurrence to artificial means by either side, is criminal. V. THE COMMON LAW UPON THE SUBJECT OF TRUSTS, MONOPOLIES AND COMBINATIONS IN THIS STATE HAS NOT BEEN ABROGATED BY THE ANTI-TRUST STATUTE. Neither by express words nor by implication is the common law repealed, but, on the contrary, its existence, effect and operation, in conjunction with the statute, are specifically recognized. Section 8970, page 379, Laws 1907, among other things, provides: “The several circuit courts of this State are hereby invested with jurisdiction to prevent * * * any corporation or association of in¬ dividuals from entering into any combination, pool * * * or understanding declared illegal by this Act, or any other law of this State re¬ lative to pools, trusts, conspiracies and unlaw¬ ful combinations, and it shall be the duty of the - Attorney-General * * * to institute pro¬ ceedings in equity to prevent * * * all vio- I 122 lations of this Act, and of any other law con - cerning pools, trusts, conspiracies and unlawful combinations.” Repeals by implication are not favored by the courts, and where, as in this matter, the statute and common law can be read together without repugnancy, absurdity or unreasonableness, effect will be given to both. This court, in Brandon vs. Carter, 119 Mo. 1. c. 581, in referring to the common law as a part of our jurispru¬ dence, said: “Moreover it is the settled law in this State that a statutory jurisdiction or remedy does not extinguish an ancient jurisdiction of the courts of equity over the same subject where there is nothing in the statute to indicate such a legis¬ lative purpose.” In Evans vs. McFarland, 186 Mo. 1. c., 728, this court said: ■ “Repeals are not favored by implication. (Manker vs. Faulhaber, 94 Mo. 430; State ex rel. vs. Walbridge, 119 Mo., 383). In the latter case this court quoted with ap¬ proval a scholarly work, Anderson’s Law Dic¬ tionary, p. 879, as laying down the right rule, thus: ‘A repeal by implication must be by neces¬ sary implication. It is not sufficient to estab¬ lish that the subsequent law or laws cover some, or even all, of the cases provided for by it; for they may be merely affirmative or accumulative or auxiliary. But there must be a positive re¬ pugnancy between the provisions of the new law 123 and those of the old; and, even then the old law is repealed by implication only pro tanto to the extent of the repugnancy.” Judge Woodson, in his able and elaborate opinion in State ex rel. vs. Standard Oil Company, 218 Mo. 1. c. 359 and 360, in discussing certain sections of our anti-trust statute and their effect on the common law, said: “While it is true the sections of the statute provide for forfeitures of charters and revoca¬ tion of licenses of corporations to do business in this State, yet they are not in derogation of the common law as the authorities heretofore cited firmly establish , but are intended to be in aid of and supplementary thereto, highly salu¬ tary and remedial in their purpose.” And as was said in Humphries vs. Davis, 100 Ind. 1. c. 284: “A statute is not to be construed as if it stood solitary and alone, complete and perfect in itself, and isolated from all other laws. * * * The completed doctrine resulting from a bringing together of its parts is that all laws written or unwritten, of whatever sorts and at whatever different dates established, are to be construed together, contracting, expanding, limiting and extending one another into one system of juris¬ prudence as nearly harmonious and rounded as it can be made without violating unyielding written or unwritten terms,” In Currier vs. Railroad, 48 N. H. 1. c. 329, while discussing, in this connection, the effect of a statute de- 124 signed to prevent consolidation of rival railroads and the destruction of competition among them, the Supreme Court of New Hampshire said: “It is well settled that the law does not favor a repeal by implication, and the reason for this is obvious. All laws are presumed to be passed with deliberation and with full knowl¬ edge of all existing ones on the same subject, and it is reasonable to conclude that the legis¬ lature in passing a statute did not intend to interfere with or abrogate any former law re¬ lating to the same matter, unless the repug¬ nancy between the two is irreconcilable. Such is the doctrine laid down in Bowen vs. Lease, 5 Hill, 221. So in Bac. Abr. Statutes D, it is said that ‘repeals of statutes and changes of the common law by implication are not favored in law; nor are they allowed except the incon¬ sistencies or repugnancies are plain, for they carry with them a reflection upon the wisdom of the legislature; and such repeals have ever been confined to the repealing as little of the preceding laws as possible;’ and the same doc¬ trine is laid down in 19 Vin. Abr. 525; and the same views are recognized in State vs. Wilson, 43 N. H., 415; Hall vs. Martin, 46 N. H. 347, per Perley, C. J., and in State vs. Otis, 42 N. H., 71, and in authorities cited in those cases.” In State vs. Norton et al. 23 Zabr. (N. J.) 1. c. 40, the Supreme Court of New Jersey said: “The offense charged in this indictment undoubtedly constitutes an indictable misde¬ meanor, within the express provision of the 125 statute of this State against conspiracy. This view of the case relieves the indictment from the substantial objections urged against it upon the argument, and renders the expression of any opinion upon those points unnecessary. Inasmuch, however, as the argument at bar proceeded mainly on the assumption that the offense charged was not within the statute, an opinion upon the principal points discussed may not be irrelevant. It was insisted, on the part of the defendant, that the offense of conspiracy, as it existed at the common law, is abrogated by the statute of New Jersey; and, if the common law offense of conspiracy still exists, it was further insisted, that the facts charged in the indictment constitute no offense at the common law. The argument proceeds upon the assump¬ tion that the act conspired to be done was not in itself criminal. The existing law relative to the crime of conspiracy was first enacted by the act of the 17th February, 1829 (Pamph. Laws 147, Sec. 5), and, by the revision of 1846, is made a part of the act for the punishment of crimes. Rev. Stat. 275, Sec. 61. The act numerates various particulars in which the crime of conspiracy may consist, and prescribes the punishment for the offense thus constituted. It contains, how¬ ever, no negative or exclusive words. It neither in terms abolishes the common law offense, nor does it declare that the cases enumerated shall alone constitute the offense. When the common law and a statute differ, the common law gives place to the statute, only where the latter is couched in negative terms, or where its matter 126 is so clearly repugnant that it necessarily implies a negative. (1 Blac. Com. 89.) It is a rule of exposition that statutes are to be construed in reference to the principles of the common law, for it is not to be presumed that the legislature intended to make any innovation upon the com¬ mon law further than the case absolutely re¬ quired. The law rather infers that the act did not intend to make any alteration other than what is specified, and besides what has been plainly pronounced, for if the parliament had had that design, it is naturally said they would have expressed it. Dwarris on Stat. 695 * * * There is nothing upon the face of the statute which either directly, or by necessary or any fair implication, abrogates the common law crime of conspiracy. Adopting the principle of construction, that the common law is no further altered by the statute than is plainly expressed in, or necessarily implied by the act, and that if the legislature had designed a further alteration, they would have expressed it, we are of opinion that the common law offense of conspiracy still exists in this state. And this court, whatever may be its views of policy or expediency, cannot treat the offense as abrogated without assuming to itself the power of abolishing a part of the penal code which is recognized and sustained by express constitutional provision.” In a criminal prosecution of certain coal companies for entering into a combination for the purpose of fixing prices and preventing competition, the Supreme Court of Illinois (C. W. & V. Coal Co. v. People, 214 Ill. 421), in discussing the sufficiency of an indictment, two counts 127 of which were based upon the common law and two on the anti-trust statute, said: ‘‘The contention is also made that the com¬ mon law on the subject of regulating and fixing prices in this State was repealed by sections 46 and 130 of the Criminal Code, and that for that reason the second and fourth counts of the in¬ dictment cannot be maintained. It is a common practice in the criminal courts to proceed against an offender either under the statute or at the common law, or under both. It is not claimed the common law upon the subject of regulating and fixing prices in this State is repealed by direct enactment. If repealed, therefore, it must be by implication. The courts do not favor repeals by implication. We have examined the sections of the statute pointed out and do not think they are so far repugnant to the com¬ mon law as to work a repeal thereof, and sec¬ tion 46 recognizes in express terms the common law of conspiracy upon the subject under con¬ sideration to be in force in this State, and pro¬ vides for the punishment thereof. There being no repugnancy between the common law and the statute, the contention that the common law has been repealed is without force.” VI. THE AGREEMENT SET OUT IN THE SECOND COUNT IS EXPRESSLY CONDEMNED BY OUR ANTI-TRUST STATUTE. In 1907 the Legislature of this State incorporated in the statutory laws (Laws 1907, p. 377) the following sections: 128 “Section 8965—Any person who shall cre¬ ate, enter into, become a member of or partici¬ pate in any pool, trust, agreement, combination, confederation or understanding with any per¬ son or persons in restraint of trade or compe- tion in the importation, transportation, manu¬ facture, purchase or sale of any product or com¬ modity in this State, or any article or thing bought or sold whatsoever, shall be deemed and adjudged guilty of a conspiracy in restraint of trade, and shall be punished as provided in this act.” “Section 8968—All arrangements, con¬ tracts, agreements, combinations or under¬ standings made, or entered into between any two or more persons, designed or made with a view to lessen or which tend to lessen lawful trade, or full and free competition in the im¬ portation, transportation, manufacture or sale in this State of any product, commodity or ar¬ ticle, or thing bought and sold, of any class or kind whatsoever, * * * are hereby declared to be against public policy, unlawful and void; and any person or persons creating, entering into, becoming a member of or participating in such arrangements, contracts, agreements, combina¬ tions or understandings shall be deemed and ad¬ judged guilty of a conspiracy in restraint of trade, and punished as provided for in this act.” Language unambiguous and admitting of but one meaning requires no construction. This act recognizes no “good trust” but puts under its ban all arrangements or agreements, whatever the form, which lessen or tend to lessen competition and re- i 129 announces the policy of this State to be that all such things are inimical to the general welfare, and this, even though the motives and designs be beneficent and the evil effect not apparent. It is based on the contempla¬ tion that all such agreements may be injuriously used and made hurtful to trade and, therefore, declares the only safe remedy is to prohibit all. Unlike most anti-trust statutes, the provisions of this act are made applicable in specific terms to the transpor¬ tation of freight by common carriers. Considering the conditions existing at the time of the passage of this stat¬ ute, its contemporaneous history, the discontent and dis¬ satisfaction manifested by the public with reference to the management and conduct of railroad companies in this State, their public character and vast powers for good or evil, there is nothing strange in the action of the Legislature in including in specific terms such com¬ panies within the purview of the act. In this connection, and while discussing the applica¬ tion of the Federal Anti-trust Act to railroad companies, the Supreme Court of the United States, in U. S. vs. Freight Association, 166 U. S. 1. c. 324, said: “The results naturally flowing from a con¬ tract or combination in restraint of trade or commerce, when entered into by a manufactur¬ ing or trading company such as above stated, while differing somewhat from those which may follow a contract to keep up transportation rates by railroads, are nevertheless of the same nature and kind, and the contracts themselves do not so far differ in their nature that they may not all be treated alike and be condemned in common. It is entirely appropriate generally 15471—9 130 to subject corporations or persons engaged in trading or manufacturing to different rules from those applicable to railroads in their transporta¬ tion business; but when the evil to be remedied is similar in both kinds of corporations, such as contracts which are unquestionably in restraint of trade, we see no reason why similar rules should not be promulgated in regard to both, and both be covered in the same statute by general language sufficiently broad to include them both. We see nothing either in contemporan¬ eous history, in the legal situation at the time of the passage of the statute, in its legislative history, or in any general difference in the na¬ ture or kind of these trading or manufacturing companies from railroad companies, which would lead us to the conclusion that it cannot be supposed the legislature in prohibiting the making of contracts in restraint of trade in¬ tended to include railroads within the purview of that act.” The provisions of this act are so plainly applicable to common carriers of freight that we leave the subject with the following extract from the Standard Oil case, supra, 1. c. 363: “No fair-minded, unbiased man can read chapter 143 of Revised Statutes of 1899, with¬ out logically coming to the conclusion that it was the intention of the Legislature to smite with a mailed hand all corporations and indi¬ viduals doing business in this State which per¬ sistently or knowingly violated any of the pro¬ visions thereof; and pointed out to the courts 131 in no uncertain terms what to do in case they found any such corporation or persons offending against the law.” VII. THE INFORMATION SUFFICIENTLY CHARGES AN UNLAWFUL COMBINATION. From the authorities heretofore cited, it is apparent that the act of combining for the purpose of fixing and maintaining rates and of preventing and lessening com¬ petition is itself illegal . The combination and its ob¬ jects and purposes being in themselves illegal, the infor¬ mation is amply sufficient to charge the offense. The information alleges the names of the corpora¬ tions, and that as common carriers they are engaged in the transportation of persons in this State as competi¬ tors and for hire. It charges the existence of a combi¬ nation and conspiracy, whose purposes are obnoxious to the common, statutory and constitutional law and the principles of public policy. It further alleges that by reason of said unlawful combination, the trade, traffic and commerce in this State has been injured and retarded and that free and open competition in the transportation of persons and property has been restrained. There is no lack of har¬ mony among the authorities that if the act which the conspirators combine to perform is unlawful, it is suffi¬ cient to state the object of the conspiracy in general terms without setting out the means to be employed in its accomplishment. In such cases the conspiracy is the of¬ fense and overt acts but proof thereof. In C. W. & V. C. Company vs. People, 214 Ill. 421, the charge was (1. c. 424) as follows : 132 i “Being then and there engaged in or in¬ terested in the business of selling coal to the general public and to consumers of said coal, did then and there wickedly and unlawfully cre¬ ate, enter into and become members of and par¬ ties to a pool, trust, agreement, combination, confederation and understanding with each other then and there to unlawfully regulate and fix the price at which coal should be sold in the State of Illinois.” In sustaining the sufficiency of this indictment, the court said, 1. c. 440: “The first point made against the indict¬ ment is that the second and fourth counts do not charge a conspiracy at common law, in this: that the acts charged are not criminal or un¬ lawful. Those counts charge that the object of the conspiracy was unlawful, and not that its object was lawful and the means for its ac¬ complishment unlawful. It was, therefore, un¬ necessary to set out the means whereby the con¬ spiracy was to be accomplished. (Thomas vs. People, 113 Ill. 531.) Neither was it necessary that the object of the conspiracy constitute an offense against the criminal law for which an in¬ dividual might be indicted and convicted. (Smith vs. People, 25 Ill. 9) ; but if the object thereof was unlawful, said counts sufficiently charge a conspiracy at common law. The term “unlawful,” as here used, does not include every act which violates the rights of a private individual and for which the law affords a civil remedy, but is held to include those acts which, by reason of 133 the combination, have a harmful effect upon society and the public; and a combination may amount to a conspiracy, although its unaccom¬ plished object be to do that which if actually done by an individual, would not amount to an indictable offense, and in that sense a conspiracy may consist of a combination to do what is mere¬ ly unlawful. The counts now under considera¬ tion charge the plaintiffs in error with having conspired together to do an illegal act injurious to the public trade—that is to say, to regulate and fix the price at which coal should be sold. A combination between independent producers of coal to prevent competition in the sale of that article, which is a necessary of life, is an act in¬ imical to trade and commerce and detrimental to the public and unlawful, and amounts to a common law conspiracy, regardless of what may be done in furtherance of the conspiracy/ In State vs. Dreany et al., 69 Pac., 182, the informa¬ tion alleged: “Defendants did then and there unlawfully enter into an agreement, contract and combina¬ tion in the county and state aforesaid, in the name of the LaCrosse Lumber and Grain Com¬ pany with divers and sundry other persons, partnerships, companies and corporations, to- wit: (naming them), who were at the said time and place competitive grain buyers and dealers at Bison, Rush county, Kansas, * * * which said agreement, contract and combination was designed and entered into with the intent then and there and thereafter, to establish, settle and 134 fix the price said grain dealers and buyers should pay for grain at said place, to divide the net earnings and proceeds of said grain buyers and dealers at said place, and to prevent com¬ petition between said grain dealers and buyers in the purchase, sale and transportation of grain by said grain buyers and dealers at said place.” In this case the court said: “We are of the opinion that these allega¬ tions contain a sufficient statement of the per¬ sons confederating together, and the nature of the contract entered into, to fully apprise de¬ fendants of the nature and character of the of¬ fense charged, and that the motion to quash was properly overruled.” / In discussing the law of conspiracy with reference to the sufficiency of an indictment for combining to pre¬ vent workmen from engaging their services to certain quarry companies, the Supreme Court of Vermont, in State vs. Stewart, 59 Vermont 1. c. 286, et seq., stated the rule, as to charging a conspiracy, as follows: “The reports, English and American, are full of illustrations of the doctrine that a com¬ bination of two or more persons to effect an il¬ legal purpose, either by legal or illegal means, whether such purpose be illegal at common law or by statute; or to effect a legal purpose by illegal means, whether such means be illegal at common law or by statute, is a common law conspiracy. Such combinations are equally il¬ legal whether they promote objects or adopt means that are per se indictable; or promote 135 objects or adopt means that are per se oppress¬ ive, immoral or wrongfully prejudicial to the rights of others. If they seek to restrain trade, or tend to the destruction of the material prosperity of the country, they work injury to the whole public. These propositions are the clear deduction of the cases cited in argument, and breathe a spirit of equality and justice that must com¬ mend itself to every intelligent mind. Counsel have cited to us no case in which it has been ruled that this crime of conspiracy does not exist at the common law. We are re¬ ferred to Mr. Wrights’ clever monograph upon Criminal Conspiracies, wherein the author, though not denying that conspiracies to injure industries and against the free exercise of one’s calling according to his own choice, were held to be criminal at the common law, still attempts to throw doubt upon the basis upon which the doctrine rests. But when in 1 Hawkins’ Pleas of the Crown, c. 27, s. 2 (a book of great authority; 2 Russell on Crimes, 674), it is laid down “that all conspiracies whatever, wrongfully to preju¬ dice a third person, are highly criminal at com¬ mon law;’ and in 2 Wharton’s Criminal Law, s. 2322, it is said that ‘a combination is a con¬ spiracy in law whenever the act to be done has a necessary tendency to prejudice the public, or oppresses individuals, by unjustly subjecting them to the power of the confederates, and giv¬ ing effect to the purposes of the latter, whether of extortion or mischief;’ and the same proposi¬ tion, in one form of expression and another, is i 136 laid down in 2 Bishop’s Criminal Law, s. 172; and in Desty’s Criminal Law, s. 11; and in 3 Chitty’s Criminal Law, 1138; and in Archbold’s Crim. Prac. & PL 1830; and it was said by Den¬ man, Ch. J., in Queen vs. Kenrick, 5 Q. B. 49: 'It was contended, in the first place, that the third count was bad by reason of uncertainty, as giving no notice of the offense charged. The whole law of conspiracy, as it has been admin¬ istered at least for the last hundred years, has been thus called in question; for we have suffi¬ cient proof that during that period any combi¬ nation to prejudice another unlawfully has been considered as constituting the offense so called. The offense has been held to consist in the con¬ spiracy, and not in the acts committed for car¬ rying it into effect; and the charge has been held to be sufficiently made in general terms de¬ scribing an unlawful conspiracy to effect a bad purpose.’ ” The court cited a multitude of cases, both in England and America, which "have all added their indorsement of the doctrine advanced as early as the work of Haw¬ kins, supra,” adding, "it is manifest that we are com¬ pelled to forsake the literature of doubt and cleave unto that of authority.” In State vs. Shaw, 42 N. H., 393, the indictment was as follows: "Ezekiel A. Shaw et al., with force and arms, being then and there possessed of evil minds and dispositions, unlawfully and wickedly did conspire, combine, confederate and agree together unlawfully, to put up and maintain 137 flash boards upon a certain dam of the * * * with intent to defraud John Harvey et al., and compelled said Harvey et al., to dispose of and part with their rights and property to the great damage of the said Harvey et al.” In speaking upon the objections urged against this indictment, the court said: “The questions arising in this case are up¬ on a demurrer to the bill. Several grounds are stated by the defendants’ counsel, upon which it is claimed that the indictment is insufficient, which objections we will notice in the same order in which they are stated. 1. The first objection is, that the indict¬ ment does not set forth in proper form any crime, because it sets forth no overt act. The gist of the offense by which the wrong is done —the putting up of the flash-boards—is not charged. It alleges a conspiracy together, but no act done to complete the conspiracy. This objection is not well founded. In in¬ dictments for conspiracy no overt acts need ever be set forth. Though it may be common to set forth such acts as having been done in pur¬ suance of the conspiracy, and in order to effect the common purpose of it, yet this is not neces¬ sary. The offense is complete on the consum¬ mation of the conspiracy, and the overt acts, though they may be set forth in the bill, may be either regarded as matters of aggravation, or discharged as surplusage. Whart. Am. Cr. Law, 498. The conspiracy itself is the offense, and provided the indictment shows either that 138 it was for an unlawful purpose, or to effect a lawful purpose by unlawful means, this will be sufficient, and whether anything has been done in pursuance of it or not, is immaterial. Broom’s Leg. Max., 147; Rex vs. Seward, 1 A. & E., 713; Regina vs. Best, 2 Ld. Ray., 1167; Arch. Cr. PI., 635; Rex vs. Gill, 2 B. & Aid. 205; 1 Salk. 174; State vs. Burnham, 15 N. H. 396. 2. Next it is objected that there is no al¬ legation in the indictment that the complainants have been compelled to dispose of their proper¬ ty, and consequently that no injury of the kind complained of has been sustained. This objection is also without foundation. This is not a civil action against the respond¬ ents for conspiring together and injuring the complainants, in which damages for the injury are sought to be recovered. The criminal of¬ fense of conspiracy may be committed not only without any overt acts, but also without any damage or injury to those conspired against. A conspiracy to commit a crime, and the commis¬ sion of that crime, are two separate and dis¬ tinct offenses. To be sure, in certain cases, when a respondent is guilty, both of conspiring with others to commit a crime, and also of committing the crime itself, the former offense is merged in the latter. But no question of that kind arises here. The offense complained of here is not that the complainants were dam¬ aged, nor is it the doing of any act by the con¬ spirators, but it is the unlawfully conspiring to¬ gether. 3. Nor is there more weight in the third objection, that the particular rights and prop- 139 erty of which said Harvey and others were to be defrauded by this conspiracy, are not de¬ scribed and set forth in the bill. It is not al¬ leged, and need not be, that said Harvey and others have been deprived of any right, or have been injured in or defrauded of any right or property. How, then, can it be necessary that the property or right should be particularly de¬ scribed, when it is immaterial whether this right or property has been in any way affected ? The most that is required is that the indictment should allege a conspiracy to do an unlawful act, or to do a lawful act by the use of unlawful means, and stating the means thus conspired to be used to accomplish such lawful object; but when this is done it is not held necessary to set forth the particular rights, property, goods or chattels of which the respondents conspired to defraud the complainant. Whart. Am. Cr. Law, 496, 497, and cases cited. In United States vs. Gardner, 42 Fed. 829, the in¬ dictment averred: “That Gardner et al., being persons of evil minds and dispositions, together with divers other evil disposed persons, whose names are to the jurors unknown, did conspire to steal cer¬ tain chattels, the property of and in possession of the United States of America, and that there¬ after said Gardner et al., in execution and fur¬ therance of said conspiracy, did unlawfully and feloniously steal, take and carry away the chat¬ tels previously described.” 140 In sustaining that portion of the indictment which charged a conspiracy, the court said: “There is no merit in the objection that the indictment fails to charge an overt act in fur¬ therance of the conspiracy. * * * It is usual to set out the overt acts, those acts which may have been done by any one or more of the conspirators in pursuance of the conspiracy, and in order to effect the common purpose; but this is not requisite if the indictment charges what is in itself an unlawful conspiracy. The offense is complete on the consummation of the con¬ spiracy, and the overt acts may be either re¬ garded as matters of aggravation or disregard¬ ed as surplusage/’ In Hazen vs. The Comonwealth, 23 Pa. St. 363, the Supreme Court of Pennsylvania said: “Where the object itself is unlawful, the means by which it is to be accomplished, are not material ingredients in the offense; and, therefore, in such a case it is never necessary to set them forth. The offense is complete the moment the conspiracy is made, whether any acts be done in pursuance of it or not. Such acts form no part of the offense, and the state¬ ment of them in the indictment is but sur¬ plusage. It is by no means necessary that the object to be accomplished should be malum in se” In Knight & Jilson Co. vs. Miller, 87 N. E. 1. c. 827, the Supreme Court of Indiana said: “The gravamen of the offense of conspir¬ acy is the combination, and this is complete at 141 common law, by the combination itself, and it is unnecessary to prove any overt act as done in pursuance of it. * * * The material question is the injurious ten¬ dency, and not whether the intent is evil.” If, in cases of this nature the same strictness were required as in criminal indictments, the information un¬ der discussion would be amply sufficient, as is established by all the authorities, but it is especially complete when measured by the rules applicable to such proceedings in this State. In State ex rel. vs. Standard Oil Company, supra, this court, in passing upon the requirements of an in¬ formation, charging an unlawful combination (1. c. 364), said: “It is also contended by counsel for respond¬ ents that the allegations of the information of the existence of the combination complained of are not sufficient to constitute a cause of action against them. If we correctly understand coun¬ sel, their contention is that the information in this case should be drawn with the same rules of strictness which are applicable to criminal indictments and informations. In other words, they contend that the information should state the facts which constitute the pool, trust or com¬ bination, and not make the charge in general terms. It is the formation of and entering into the pool, trust or combination that constitutes the usurpation of corporate powers; and in such cases, according to the text-writers and adjudi¬ cations, all that is necessary to be stated in the information is a general allegation of the facts 142 constituting the misuser, non-user or usurpa¬ tion. When the state challenges the authority of a corporation to do certain things, it must either deny the charge, or, if it is exercising the au¬ thority complained of, then it must justify its conduct by showing that it possesses that power and authority under its charter; and the state is not required to allege and prove the facts in detail constituting the mode or manner in which it is violating the law and usurping powers not granted to it by its charter. In the case of State ex inf. vs. Mo. Pac. Ry. Co., 206 Mo. 3. c. 40, this Court said: ‘In overruling the demurrers in these cases the court does not decide any of the questions touching the merits, which were discussed in the oral arguments. The only point decided is that these informations are sufficient to require the defendant to answer the charges made by the Attorney-General against them, either by specif¬ ically denying the charge or stating the facts which in the opinion of the defendants justify them in doing what they are charged with doing. ‘The pleadings in a proceeding of this na¬ ture are not governed by the rules of pleading stated in the Code of Civil Procedure; the only provision of the code that is extended to a pro¬ ceeding in quo warranto is contained in section 675, Revised Statutes 1899, relating to amend¬ ments. ‘An information in the nature of quo war¬ ranto by the Attorney-General is not of the char¬ acter of a petition in an ordinary case either in 143 law or equity; it is the official call of the law officer of the State on the corporation or indi¬ vidual to show by what authority it or he is assuming to exercise a particular franchise. The rules of pleading in such case are thus stated in 17 Ency. PL and Pr., 457-8: “The office of an information in the nature of a quo warranto is not to tender an issue of fact, but simply to call upon the defendant in general terms to show by what warrant or charter the privilege, franchise or office is held or exercised. Where the State calls upon one to show cause by what authority he exercises a corporate franchise or public of¬ fice, the allegation by the Attorney-General of intrusion or usurpation may be of the most gen¬ eral character, while the defendant is required to set forth particularly the grounds of his claim and the continued exercise of his right, except where by statute the pleadings are more nearly assimilated to those in other civil ac- * tions.” In this State we have no such statute. The same author, at page 467, says: “When one is called upon by the State to show warrant or authority for the exercise of a franchise or office pertaining to the State, the defendant must, by his plea, answer or return, disclaim all right to the franchise and deny its usurpation, or allege facts which, if true, will invest him with the le¬ gal title of pleading the charter or legislative grant of the franchise sought to be forfeited or seized, or by pleading directly and positively all the facts necessary to establish the title to the of¬ fice which the defendant is called upon to justi¬ fy; and in the absence of such an answer the 144 State will be entitled to a judgment of ouster.” There is no such plea as a general denial in a case of this kind. ‘If these defendants are not doing what the law officer of the state, in a general way, charges them with doing, let them specifically deny the charge; if they are doing it or doing something like it and think they are justified in so doing, let them specifically state it in their answers. ‘These demurrers go mainly on the idea that the informations are not sufficiently specific in detailing the facts which constitute the charge of usurpation; that idea is out of place in this kind of proceeding; the State calls on these cor¬ porations to answer, and the duty of pleading specifically the facts rests on them. ‘In these cases the Attorney-General has (doubtless induced by a practice heretofore tolerated), made more statements of facts than necessary, but they are treated as surplusage/ [2 Spelling on Extra Legal Rem., Secs. 1851, 1853, 1855; People ex rel. vs. Railroad, 12 Mich. 389; 17 Ency. Pi. and Pr., pp. 457, 458; Com¬ monwealth vs. Eastman, 1 Cush. 189; State vs. Parker, 43 N. H. 83; State ex inf. vs. Delmar Jockey Club, 200 Mo. 1. c. 55; United States vs. Gardner, 42 Fed. 831; Landringham vs. State; 49 Ind. 186; Hazen vs. Commonwealth, 23 Pa. St. 364; Cole vs. People, 84 Ill. 216.] And especially is this rule applicable in this State when such proceedings are civil in their nature; and which are not required to be stated with the same technical strictness with which crimes must be charged. [State ex inf. vs. Equitable Loan & Inv. Co., 142 Mo. 325; State 145 ex inf. vs. Delmar Jockey Club, 200 Mo. 34.] But waiving that point for the present and con¬ ceding that this proceeding is in the nature of a criminal prosecution, and that the pleader should be held to the same strict rules of plead¬ ing as is required in charging a criminal con¬ spiracy, still we are of the opinion that the in¬ formation states a good cause of action, for the reason that acts with which the respondents are charged are unlawful. In such cases the rule is, that, ‘If the act with which the conspirators combine to perform is unlawful, it is unnecessary to set out in the indictment the means employed in accomplish¬ ing it. But if the end in view is lawful or in¬ different, and the conspiracy only becomes crimi¬ nal by reason of the unlawful means whereby it is to be accomplished, it becomes necessary to show the criminality by setting out such unlaw¬ ful means/ [4 Ency. PI. and Pr., pp. 713, 714, 716, 717; Coal Co. vs. People, 214 Ill. 421.]” If, as alleged, respondents have entered into a con¬ tract to fix, regulate and maintain the rates and fares to be charged by each company in this State, their offense is complete, and proof of such a contract, regardless of its form or particular terms, establishes the offense. It is wholly immaterial whether the contract is written or verbal, or what the particular terms, provisions or stipu¬ lations may be, if its general nature and effect is as al¬ leged, and this is a matter of proof, and as is said by this court in State ex rel. vs. Firemen’s Fund Ins. Co., 152 Mo. 1 . c. 40: 15471—10 146 “Of course, there was no written agreement forming the trust, for that was ‘inexpedient/ and might make the members liable to prosecu¬ tion under the trust laws, as the president of the club well and wisely remarked when the club was formed. When people set out to do acts that are either mala in se or mala prohibita, they do not put up a sign over the door or a stamp on the act declaring their purposes and intent. 4 Concealment is generally their prime object. But as such matters exist without agreements and rest upon common understanding and prac¬ tice, so the proof of their existence may be of the same character, and while such laws are penal in their nature, and should be strictly con¬ strued [State ex rel. vs. Talbot, 123 Mo. 69; State ex inf. vs. Bland. 144 Mo. 534], neverthe¬ less a pool or trust may be as conclusively proved by facts and circumstances as by direct, written evidence, for in this regard they are like all other frauds.” Under the general rules governing such pleadings the information is amply sufficient, but if any doubt ex¬ ists, reference to section 8977, p. 381, Laws 1907, effect¬ ually removes it. This section provides: “In any suit that is now pending or which may hereafter be brought in which it is charged that any person, corporation, partnership or as¬ sociation of persons has created, entered into, become a member of or participated in any pool, trust, agreement, combination, confederation or understanding in restraint of trade or compe- 147 tition with any other person, corporation, part¬ nership or association of persons, it shall not be necessary to allege or plead the manner in which, or when or where such pool, trust, agreement, combination, confederation or understanding was made or effected.” It is to be noted that this section is general in its terms, and does not apply solely to suits instituted under the act in which it appears, but applies to all actions in¬ stituted under that act, or any other law concerning pools, conspiracies and unlawful combinations. This is made the more evident when other sections of the same act are examined. In instances in which sections there found are intended to govern proceedings instituted solely under that act, the limited effect is expressly declared. Section 8970 of the same act also recognizes this ap¬ plication, as it provides that: “The several circuit courts of this State are hereby invested with jurisdiction to prevent * * * any corporation or association of individ¬ uals from entering into any combination, pool * * * or understanding declared illegal by this act, or any other law of this State relative to pools, trusts, conspiracies and unlawful combina¬ tions, and it shall be the duty of the Attorney- General * * * to institute proceedings in equity to prevent * * * all violations of this act, and of any other law concerning pools, trusts, con¬ spiracies and unlawful combinations” 148 VIII. THE CHARTER OF A PRIVATE OR PUBLIC COR¬ PORATION WILL BE FORFEITED FOR ANY WILLFUL MISUSER OR ABUSE OF ITS FRAN¬ CHISE WHICH INJURES OR MENACES THE INTERESTS OR WELFARE OF THE STATE OR THE COMMUNITY IN WHICH IT TRANSACTS BUSINESS, WHETHER THE MISUSER OR ABUSE CONSISTS IN THE EXERCISE OF A FRANCHISE OR POWER NOT CONFERRED UPON THE CORPORATION BY ITS CHARTER, OR IN THE VIOLATION OF PROHIBITIONS IN ITS CHARTER, OR IN THE VIOLATION OF THE COMMON, STATUTORY OR CONSTITUTIONAL LAWS TO WHICH IT IS SUBJECT, OR IN THE VIOLATION OF ESTABLISHED PRINCIPLES BASED UPON THE GROUND OF PUBLIC POLICY. On this proposition we can well leave the law to de¬ pend upon the learned and lucid opinion of this court, as written by Judge Woodson in State ex rel. vs. Standard Oil Company 1. c. 345,) supra: “It would be useless and would serve no good purpose to go into the learning and dis¬ tinctions between a proceeding by quo warranto and a proceeding by information in the nature of quo warranto. The demarca¬ tion is well defined, and has been long estab¬ lished. Resort, however, is rarely ever had to the former, while the latter has grown into almost universal use. Long before the organi¬ zation of this State, the writ of quo warranto 149 had become almost, if not quite, obsolete; and when our Constitution was adopted, proceed¬ ings on information in the nature of quo war¬ ranto were well understood by the bench and bar; and the jurisdiction conferred by said con¬ stitutional provision has been construed to mean and include jurisdiction of an information in the nature of quo warranto. [State ex rel. vs. Stewart, 32 Mo. 379; State ex rel. vs. Vail, 53 Mo. 97.] In the discussion of this question, in the case of State ex inf. vs. Equitable Loan & Inv. Co., 142 Mo. 325, this court, speaking through that great jurist, Sherwood, J., said, 1. c. 335-337: ‘At common law, “the old writ of quo war¬ ranto is a civil writ, at the suit of the crown; it is not a criminal prosecution. * * * This was the true old way of inquiring of usurpations upon the crown, by holding fairs or markets, viz.: by writs of quo warranto. Then informa¬ tions in the nature of a quo warranto came into use, and supplied their place.” These observa¬ tions fell from Mr. Justice Wilmot in Rex vs. Marsden, 3 Burr. 1817, in the year 1765. [See High, Ex. Leg. Rem., Sec. 603.] In Blackstone, written in 1758, some seven years before the last-mentioned period, it is asserted that the pro¬ ceeding by quo warranto “is properly a crimi¬ nal method of prosecution.” [Cooley’s Black., book 5, Ch. 17, p. 262.] But whatever the origin of the writ, whether civil or criminal, it is certain now at the present time and for a long period anterior to this, it has been and is but a civil suit. There is a distinction, of 150 course, to be taken, a distinction pointed out by Scott, J., in State vs. Ins. Co., 8 Mo. 330, between a writ of quo warranto and an infor¬ mation in the nature of a quo warranto, but while this is true, yet it is also true, even in Blackstone’s time, the issuance of the writ itself, owing to its cumbersome length, had long fallen into disuse, which resulted in the modern sub¬ stitutionary and more speedy method of the filing of ex-officio informations by the Attorney- General. [Cooley’s Black., book 3, Chap. 17, p. 262.] ‘Our Constitution provides, in the third sec¬ tion of its sixth article, that this court “shall have power to issue writs of habeas corpus, quo warranto, certiorari and other original remedial writs, and to hear and determine the same.” Inasmuch as the issuance of a writ of quo war¬ ranto had not occurred in England for centu¬ ries; inasmuch as courts, lawyers and text- writers had been accustomed for hundreds of years to use the expression “writ of quo war¬ ranto” as the legal equivalent and synonym of “information in the nature of quo warranto,” it will be presumed that the framers of our Con¬ stitution were not unmindful or ignorant of such a common form of expression and the meaning which it bore, and, therefore, when they used the words “writ of quo warranto” they intended thereby only to convey in abbrevi¬ ated form the meaning that phrase had for so long a period and so continuously been employed to convey, to wit, “informations in the nature,” etc. 151 'Since writing the above it has been found that in other states possessing organic laws like our own, similar conclusions have been reached. [State vs. Railroad, 34 Wis. 197, and cases cited; State vs. Gleason, 12 Fla. 190, and cases cited; High’s Ex. Leg. Rem., Secs. 610, 611.]' Continuing, in the discussion of the propo¬ sition as to whether or not an information in the nature of a quo warranto could be sustained against a corporation for misuse and abuse of its franchise by reason of its failure to comply with a statute, when the Legislature had pre¬ scribed certain penalties to be imposed in other proceedings for such violation, he said: • 'And the jurisdiction of this court in this regard being conferred by the Constitution, it is beyond the power of the Legislature to take it away, and it will not be intended that a legis¬ lative enactment was designed to take such jurisdiction away, although such enactment should confer another and distinct remedy upon some inferior court or board. [State ex rel. vs. Allen, 5 Kan. 213; State ex rel. vs. Mess- more, 14 Wis. 115; Kane vs. People ex rel., 4 Neb. 509; 19 Am. and Eng. Ency. Law, 664; People ex rel. vs. Bristol Co., 23 Wend. 222; People vs. Hillsdale Turnp. Co., Ib. 254; State ex rel. vs. Baker, 38 Wis. 71; High, Ex. Leg. Rem., Sec. 615; 2 Spelling, Ex. Rif., Secs. 1772, 1873.] In consequence of this well-recognized principle, sections 7 and 8 of the Laws of 1895, pages 31 and 32, in relation to the duties of the supervisor of building and loan associations, to institute proceedings in the circuit court against 152 a delinquent building and loan association, and that such proceeding shall be conducted by the Attorney-General, cannot abate the jurisdiction conferred on this court by the Constitution, nor deprive the Attorney-General of his common law and inherent powers to file ex-officio infor¬ mations, as in the present instance/ The statutes under which the respondent in the case just mentioned was organized and do¬ ing business imposed upon it certain penalties for violating such statutes; and also provided that if any such company should violate the pro¬ visions of its charter or laws of the State, the supervisor of building and loan associations ‘shall institute proceedings in the circuit court of the city or county in which such association has, or had, its principal office, to enjoin or re¬ strain such association from the further prose¬ cution of its business, either temporarily or per¬ petually, or for such injunction and dissolution of such association and the settling and winding up of its affairs, or for any and all of said reme¬ dies combined, as the supervisor may deem necessary/ [R. S. 1899, Secs. 1385, 1392 and 1393.] It is thus seen that those sections of the statutes are just as full and explicit, in pre¬ scribing penalties, forfeitures and remedies for their violation and in designating the court in which those penalties and forfeitures are to be imposed and adjudged, as are the anti-trust laws now under consideration. But, notwith¬ standing those ample statutory provisions, this court, in that case, held that an information in the nature of quo warranto would lie to oust 153 the respondent therein of its charter rights for violating its charter powers. It was also held therein that this court derived its jurisdiction from the Constitution, and that even though the Legislature had attempted to deprive it of that jurisdiction, by express enactment, it could not have done so, for the reason that such a stat¬ ute would be unconstitutional and void. Mr. High, in his consideration of this sub¬ ject, uses the following language: “A corporate franchise is a species of incorporeal heredita¬ ment, in the nature of a special privilege or im¬ munity, proceeding from the sovereign power and subsisting in the hands of a body politic, owing its origin either to an express grant, or to prescription which presupposes a grant. It follows, therefore, that the sovereign power has the right at all times to inquire into the method of user of such franchise, or the title by which it is held, and to declare a forfeiture for mis¬ user or non-user, if sufficient cause appears, or to render judgment of ouster if the parties as¬ suming to exercise the franchise have no title thereto.” [High, Ex. Leg. Rem., Sec. 648.] The same proposition is announced by Clark and Marshall in their work on Private Corporations, Vol. 2, Sec. 314b, in the follow¬ ing language: ‘As a general rule, however, the charter of a private corporation will be for¬ feited, in proper proceedings by the State, for any wilful or fraudulent misuser or abuse of its franchise which injures or menaces the in¬ terests or welfare of the State or of the com¬ munity in which it transacts business, whether 154 the misuser or abuse consists in the exercise J of a franchise or power not conferred upon the corporation by its charter, or in violations of prohibitions in its charter, or in violations of * prohibitions in general laws to which it is sub¬ ject, or in the violation of established principles based upon the ground of public policy .' And in State ex rel. vs. Gas Co., 153 Ind. 483, 1. c. 486, 487 and 489, the right of the State to a forfeiture on account of the partici¬ pation in a combination in restraint of trade, is announced in the following language: ‘Where, however, the facts disclose that a corporation has failed in the discharge of its corporate duties by uniting with others in carrying out an agreement, the performance of which is detrimental or injurious to the public, it thereby may be said to offend against the law of its creation, and consequently forfeits its right longer to exercise its franchises, and is subject to a judgment of ouster. * * * ‘Corporations are recognized as creatures of the law, and they certainly owe obedience thereto, and when they fail to perform duties which they were created to discharge, and in which the public have an interest, or where they do unauthorized or forbidden acts, the State unquestionably has the right, and it is its duty, to object, and it may interpose by information, and wrest from the offending corporations its franchises. [Beach, Pr. Corp., Secs. 840 and 841; Cook on Stock and Corp. Law, Sec. 635; People ex rel. vs. Dashaway Assn., 84 Cal. 114.] 'The authorities affirm , as a general rule. 155 that, if the act complained of, by its results, will restrict or stifle competition, the law will re¬ gard such act as incompatible with public policy, without any proof of evil intent on the part of the actor or actual injury to the public . The inquiry is not as to the degree of injury inflicted upon the public; it is sufficient to know that the inevitable tendency of the act is injurious to the public. [Salt Co., vs. Guthrie, 35 Ohio St. 666; Swan vs. Chorpenning, 20 Cal. 182; State ex rel. vs. Standard Oil Co., 49 Ohio St. 137; Gibbs vs. Smith, 115 Mass. 592; Richardson vs. Buhl, 77 Mich. 632; Pacific Co. vs. Adler, 90 Cal. 110; Beach on Monop. and Ind. Trusts, sec. 82.’] In the case of State ex inf. vs. Delmar Jockey Club, 200 Mo. 34, this same question came before this court. In that case a forfeit¬ ure of the charter was asked by the Attorney- General, because the club had so conducted its affairs as to violate the criminal laws of the State against book-making and pool-selling. In that case, as in the case at bar, counsel for re¬ spondent contended that in view of the fact that the statutes prescribed penalties for their vio¬ lation, that constituted the sole remedy for their redress, or that there must be a conviction under the statute for its violation before a judg¬ ment of forfeiture could be declared against the corporation. In the discussion of that case this court said, 1. c. 50, 51 and 55: Tt is apparent that this decision is not an authority for the contention that a corporation is not subject to an action of quo warranto to oust it of the franchises conferred upon it for 156 a misuse or perversion of them, or that a cor¬ poration is exempt from the consequences of unlawful or wrongful acts committed by its agents in pursuance of the authority derived from its charter. The information charges that respondent, “acting through its officers, agents, employees and representatives in charge of its business,” engaged in the acts of misuser charged against it in the information. It will thus be seen that the unlawful act charged is not against the officers, agents, employees and representa¬ tives of the corporation, but against the corpo¬ ration itself. There can be no doubt that a cor¬ poration may be proceeded against by quo war¬ ranto for a misuse or perversion of the fran¬ chises conferred upon it by the State, notwith¬ standing its officers and agents may at the same t time be amenable to the criminal law for of¬ fense committed by them in the perversion of such franchises. If a corporation, through its servants and agents, may be guilty of such abuses of its franchises as will subject it to ouster by quo warranto, we can conceive of no reason why such servants and agents, if the acts and abuses committed by them be in viola¬ tion of the criminal statutes, may not at the same time be prosecuted by indictment or in¬ formation. The one is not a bar to the other proceeding. Nor are we prepared to give as¬ sent to the contention that the defendant cor¬ poration could not be held to answer for such wrongful acts until its agents, guilty of the criminal offense, be tried and convicted. ‘It is argued by defendant that forfeiture 157 will not lie for an illegal act committed by a corporation. It is true, that not for every il¬ legal act will the charter of a corporation be forfeited; but the charter of the defendant is a contract with the State that it will use the fran¬ chise therein granted; that it will not misuse or pervert those franchises, and that it will not engage in the doing or carrying on any business which is unlawful or immoral. * * * 'It is alleged in the information and ad¬ mitted by the demurrer, that during the time indicated, defendant sold pools to and registered bets with minors, which was a violation of law, it having no authority to do so. To make and sell pools and book-bets to minors is expressly prohibited by statute, and any person doing so may be punished as for a misdemeanor. [Sec. 2193, R. S. 1899.] So that defendant was with¬ out authority from any source to sell pools to or register bets with minors, and in doing so it was exercising a power which it did not possess, the tendency of which was immoral, and to encour¬ age minors in dissipation and vicious habits. Defendant now contends that the portion of the petition which relates to such sales does not state violations of law, because it is not alleged that the respondent knew at the time that such persons were in fact minors. The statute is an absolute inhibition against selling pools or book- bets to minors, and it was entirely unnecessary that the petition should allege that such sales were made to minors, knowing such persons to be minors. It was the defendant's duty to know when sales were made that they were not made in violation of law/ 158 So in the case of Terrett vs. Taylor, 9 Cranch < 1. c. 51, Mr. Justice Story said: ‘A private cor¬ poration created by the Legislature may lose its franchises by a misuser or nonuser of them; and they may be resumed by the government under a judicial judgment upon quo warranto to ascertain and enforce the forfeiture. This is the common law of the land, and is a tacit condition annexed to the creation of every such corporation/ To the same effect are: High on Ex. Leg. Rem., Secs. 648 and 649; 2 Spelling on Injunc¬ tions and other Ex. Rem., Secs. 1812 to 1815; People vs. Dispensary Co., 7 Lans. (N. Y.) 304; Bank vs. State, 1 Blackf. (Ind.) 267; 5 Thomp¬ son on Corps., pp. 6615-16; 10 Cyc. p. 1281; An- gell and Ames on Corps., Sec. 774. It is thus seen that a corporation can so offend against the laws of the State as to justify the Attorney-General in proceeding against it by information in the nature of quo warranto to forfeit its corporate franchise; and those of¬ fenses may be against the common law as well as against the statute laws of the State. And it is wholly immaterial, and the cor¬ poration cannot justify or defend its conduct in that regard by a plea, that such conduct was a violation of the criminal laws of the State, by which it and its officers and agents are ren¬ dered amenable to the penalties and punish¬ ments thereof. In other words, the laws of the State au¬ thorize and direct the Attorney-General to insti¬ tute civil proceedings by information in the na- 159 ture of quo warranto against any corporation to annul its charter and forfeit its franchises whenever it has by misuser, nonuser or usur¬ pation of power, so conducted itself as to vio¬ late the laws of its being or the criminal laws of the State. If, upon trial, the corporation is found guilty, a decree of forfeiture must go, and the court has the power, in addition, to impose penalties for such violations of the laws as it may deem proper. This, however, does not pro¬ ceed upon the theory that the corporation has been guilty of a crime and that it is being pun¬ ished therefor; but upon the idea that there is an implied or tacit agreement on the part of every corporation, by accepting its charter and corporate franchises, that it will perform its obligations and discharge all its duties to the public, and that by failing to do so it commits an act of forfeiture which may be enforced by the State in the manner before suggested, [State ex inf. vs. Delmar Jockey Club, 200 Mo. 1. c. 70.] In addition thereto, the Legislature has the unquestionable power and authority to declare the acts which will work a forfeiture of the charter shall also constitute a crime, and subject the corporation and its agents and servants to punishment under the criminal laws of the State. [Stockwell vs. United States, 13 Wall. 531; Waters-Pierce Oil Company vs. State of Texas (Texas Court of Civil Appeals), 106 S. W. 918; State ex inf. vs. Delmar Jockey Club, 200 Mo. 1. c. 50 to 55.] It must, therefore, follow from what has been said, that this is not a criminal prosecu- 160 tion, as contended for by respondents; nor is the procedure provided for in section 8971, Re¬ vised Statutes, 1899, the exclusive remedy avail¬ able to the State to correct abuses and usurpa¬ tion of powers by corporations doing business in this State.” In State ex rel. vs. Delmar Jockey Club, 200 Mo. 1. c. 70, Judge Graves, speaking for the court, said: “These proceedings are no longer recognized as criminal proceedings and have not been so recognized since the early days of the common law, but we have continually imposed what are called 'fines/ a term, no doubt, coming down from the time when the proceeding was looked upon as a criminal proceeding. The implied contract with the State, when the charter was given respondent, was that it would exercise and use the granted rights; that it would use none other, or, stated otherwise, that it would not usurp other rights; that it would rightfully use the powers granted, and not misuse them. A willful failure of either of these covenants with the State will authorize a forfeiture, and why not a fine? We forfeit for nonuser, and why? Because there has been failure to perform the obligations to the State; because there has been a violation of the contract with the State. Misuser is likewise a violation of the implied agreement with the State. So is usurpation. Each are but violations of the implied contract with the State, and for these violations we de¬ clare forfeitures. Why not fix penalties and punishments in the one as in the other? The 161 gist of each in quo warranto is the willful viola¬ tion of the rights of the State under the implied contract, and not the violation of some criminal law, for we do not try criminal cases and affix criminal punishments in quo warranto proceed¬ ings. The violation of a corporation’s contract with the State by misuser or usurpation may be evidenced by the fact of the violation of some statute, criminal in character, but in this kind of proceeding we try the right of the corpora¬ tion to further hold its franchises, not the ques¬ tion of finding its guilt or innocence under the statute and fixing punishment permitted by the statute. It is the only way the State has of preventing the abuse of the confidences it has reposed in these corporate creatures which are of its own making. This abuse may be by non¬ user, misuser or usurpation, but, in our judg¬ ment, the State has the same rights in each event, both as to the forfeiture and the fine/ [Also see State ex inf. vs. Equitable Loan & Inv. Assn., 142 Mo. 325; State ex inf. vs. Ar¬ mour Packing Co., 173 Mo. 356; Waters-Pierce Oil Co. vs. State of Texas (Texas Civ. App.), 106 S. W. 918; Stockwell vs. United States, 13 Wall. 531.] Franchises may be forfeited or penalties imposed for acts in violation of public policy. Upon this question the Supreme Court of Indiana, in the case of Eel River R. Co. vs. State ex rel., 155 Ind. 1. c. 456, said: “It was not necessary that the information should aver that the delinquent company had 15471—11 162 done any act in contravention of a prohibitory statute, or of a statute imposing a definite pen¬ alty. A forfeiture of corporate existence and franchises may result, although no statute in express terms enjoins or prohibits the acts or omissions complained of. While certain specific acts and omissions may, by statute, be made causes of forfeiture of the charter or franchises of corporate bodies, yet it is generally recog¬ nized that misuser and non-user, of such fran¬ chises, even where the specific offenses are not particularly defined by statute, are sufficient grounds for proceedings for such forfeiture and dissolution. State Bank vs. State, 1 Blackf. 267, 12 Am. Dec. 234; People vs. Kingston, etc., R. Co., 23 Wend. 193; People vs. Bristol, etc., Co., 23 Wend. 222; Thompson vs. People, 23 Wend. 537; People vs. Hillsdale, etc., Co., 23 Wend. 254; People vs. Bank, 6 Cow. (N. Y.) 216; State vs. Seneca County Bank, 5 Ohio St. 171; St. Louis, etc., Co. vs. Sandoval, etc., Co., 116 Ill. 170, 5 N. E. 370; Ward vs. Sea Ins. Co., 7 Paige (N. Y.) 294; In re Jackson Ins. Co., 4 Sandf. Ch. (N. Y.) 596; 5 Thompson on Corp. pr. 6618; Dartmouth College vs. Woodward, 4 Wheat 519, 4 L. ed. 629; Morawetz on Pr. Corp., pr. 1114, 1115; N. Y., etc., R. Co. vs. Newman, 17 How. 30, 15 L. ed. 27; Territt vs. Taylor, 9 Cranch 52, 3 L. ed. 650; State vs. Minnesota R. Co., 36 Minn. 246, 30 N. W. 816; State vs. Port¬ land, etc., Co., 153 Ind. 483; Pennsylvania R. Co. vs. St. Louis, etc., Co., 118 U. S. 290, 630, 6 Sup. Ct. 1094, 7 Sup. Ct. 24, 30 L. ed. 83, 284; Board, etc, vs. LaFayette, etc., R. Co., 50 Ind. 163 85; Thomas vs. West Jersey R. Co., 101 U. S. 71, 83; Elliott on Railroads, pr. 48, 49 and 50, note 5; State ex rel. vs. Atkinson, etc., R. Co., 24 Neb. 143, 38 N. W. 43, 2 L. R. A. 564, 8 Am. St. 164, and notes.” Spelling on Extraordinary Remedies, Vol. 2, Pr. 1820, says: “There is substantial harmony between the English and American definitions of monopoly, the decisions of the two countries agreeing that contracts in restraint of trade are illegal. When corporations have entered into a combination or ‘trust/ there are two grounds upon which the corporations themselves are open to attack at suit of the state in quo warranto : (1) That they have attempted to grant away franchises conferred upon them in trust, the transfer be¬ ing a breach of the implied condition that the particular grantees shall retain and execute the trust; (2) that in making the contract, the re¬ sult of which is the creation of a monopoly, they are guilty of an abuse of their franchises in having employed them in doing an illegal act. An important rule, well established, is that in a proceeding against a corporation by quo warranto for having formed with others a mo¬ nopoly in the shape of a ‘trust/ no actual pub¬ lic injury need be proven, but it will be pre¬ sumed when an agreement is shown which, if carried out, will obviously result to the public detriment. An attempt by several combining corporations to suppress competition may well be viewed in the light of an unlawful conspiracy 164 in the name of the corporation, which is itself an illegal act warranting the state in resuming its charter aside from any contemplated injury to economic interests ” In Stockton vs. Central Railroad Company, 50 N. J., Eq. (5 Dick.) 52, 71, the court said: “Corporate bodies that engage in a public or quasi public occupation are created by the State upon the hypothesis that they will be a pub¬ lic benefit. * * * While the state confers spe¬ cial privileges upon these favorites, it at the same time exacts from them duties which also tend to the public welfare. The whole scheme of the laws of their organization is to equip and control them as instruments for the public good. Such corporations hold their powers not merely in trust for the pecuniary profit of their stock¬ holders, but also in trust for the public weal. The impress for public good is stamped upon their very being, and it becomes a duty which, though not prescribed in express language of the law is to be implied from the nature of every power conferred. When, therefore, it appears that such a corporation, unmindful of this plain duty, acts prejudicially to the public in order to make undue gains and profits for its stock¬ holders, it uses its powers in a manner not con¬ templated by the law which confers them. The use becomes abuse, and is tantamount to excess of poiver.” * * * “It appears that the Attorney-General has the election in his discretion whether, in cases of excess in corporate powers, he will proceed 165 at law to forfeit the charter and franchises or apply in equity for a restraint of the excess. Both tribunals are open to him.” In Attorney-General vs. Delaware & Bound Brook By. Co., 12 C. E. Gr., 631, 633, in announcing the opinion of the court, Mr. Justice Dixon said: “In equity as in the law court, the Attor¬ ney-General has the right in cases where the property of the sovereign or the interests of the public are directly concerned, to institute suit by what may be called civil information for their protection. The State is not left without re¬ dress in its own courts, because no private citi¬ zen chooses to encounter the difficulty of de¬ fending it, but has appointed this high public officer, on whom it has cast the responsibility, and to whom, therefore, it has given the right of appearing in its behalf and invoking the judg¬ ment of the court on such questions of public moment.” IX. ALL DOMESTC AND FOREIGN RAILWAY COM¬ PANIES, WHILE ENGAGED IN INTRA-STATE BUSINESS, ARE AMENABLE TO THE STATE LAWS GOVERNING SUCH BUSINESS. With regard to the contention that a legislative pro¬ hibition against the consolidation of parallel and com¬ peting lines of railway was an interference with the power of Congress over interstate commerce, the Su¬ preme Court of the United States in L. & N. R. R. vs* Kentucky, 161 U. S. 1. c. 701, et seq., said: 166 “All such regulations interfere indirectly, more or less, with commerce between the states, in the fact, that they impose a burden upon the in¬ struments of such commerce, and add something to the cost of transportation, by the expense incurred in conforming to such regulations. These are, however, like the taxes imposed up¬ on railways and their rolling stock, which are more or less, according to the policy of the State within which the roads are operated, but are still within the competency of the Legisla¬ ture to impose. It is otherwise, however, with respect to taxes upon their franchises and re¬ ceipts from interstate comerce, which are treated as a direct burden. There are certain intimations in some of our opinions, which might perhaps lead to an inference that the police power cannot be exercised over a subject confined exclusively to Congress by the Federal Constitution. But while this is true with re¬ spect to the commerce itself, it is not true with respect to the instruments of such commerce. It was said in Sherlock vs. Ailing, 93 U. S. 99, 103, 104, and quoted with approbation in Plumley vs. Massachusetts, 155 U. S. 461, that fin conferring upon Congress the regulation of commerce, it was never intended to cut the State off from legislating on all subjects relating to the health, life and safety of their citizens, though the legislation might indirectly affect the commerce of the country. Legislation in a great variety of ways, may affect the commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Con- 167 stitution * * * and it may be said, generally, that the legislation of a State, not directed against commerce, or any of its regulations, but relating to the rights, duties and liabilities of citizens, and only indirectly and remotely affect¬ ing the operations of commerce, is of obligatory force upon citizens within its territorial juris¬ diction, whether on land or water, or engaged in commerce, foreign or interstate, or in any other pursuits.' It has never been supposed that the domi¬ nant power of Congress over interstate com¬ merce took from the states the power of legis¬ lation with respect to the instruments of such commerce, so far as the legislation was within its ordinary police powers. Nearly all the rail¬ ways in the country have been constructed un¬ der state authority, and it cannot be supposed that they intended to abandon their power over them as soon as they were finished. The power to construct them involves necessarily the power to impose such regulations upon their opera¬ tions as a sound regard for the interests of the public may seem to render desirable. In the division of authorities with respect to interstate railways, Congress reserves to itself the superi¬ or right to control their commerce and forbid interference therewith; while to the states re¬ mains the power to create and to regulate the instruments of such commerce, so far as neces¬ sary to the conservation of the public interests. If it be assumed that the states have no right to forbid the consolidation of competing lines, because the whole subject is within the 168 control of Congress, it would necessarily follow that Congress would have the power to author¬ ize such consolidation in defiance of State legis¬ lation—a proposition which only needs to be stated to demonstrate its unsoundness. ,, In State ex rel. vs. Standard Oil Company, supra, 1. c. 376, this court, in this connection, said: “It is also contended that these anti-trust statutes violate the provisions of section 8 of article I of the Constitution of the United States, which gives Congress the power to regulate commerce with foreign countries and among the several states and Indian tribes. It was not the intention of the Legislature, - by the enactment of those statutes, to interfere with interstate commerce, but the clear inten¬ tion was to prevent the formation and main¬ tenance of pools, trusts and combinations in re¬ straint of interstate (intra- state?) commerce. The Legislature has no power or authority to prevent respondents from carrying on inter¬ state trade, for the reason that power is vested in and rests with Congress; but it does possess the power to authorize the courts to forfeit the charters of all corporations organized and ex¬ isting under the laws of this State for the usur¬ pation of powers not granted to them, or for misuser or non-user of those granted; and it is wholly immaterial whether those corporations are engaged in interstate commerce or not. The Legislature also possesses the undoubt¬ ed authority to revoke or forfeit the license is¬ sued to any foreign corporation authorizing it 169 i to do an intrastate business in this State. The revocation of such a license in no manner inter¬ feres with interstate commerce. The authority to conduct such business is obtained under the acts of Congress and not by virtue of the laws of the State. A license from the State can neither confer nor take away the authority or right of a foreign corporation to carry on in¬ terstate commerce; and, that being true, we are unable to see in what possible manner the for¬ feiture of such a license, that is, a license which only authorizes a foreign corporation to do an intrastate business, can possibly offend against section 8 of article I of the Federal Constitu¬ tion, which only applies to interstate commerce. We are, therefore, of the opinion that this contention of respondents is not well founded. Nor are we able to concur with the learned counsel for respondents in their contention that sections 8965, 8966, 8967, 8971, 8972 and 8978, Revised Statutes, 1899, are void for the reason that they violate section 10 of article I of the Constitution of the United States, which pro¬ vides that no state shall enact any law which will impair the obligations of a contract. Clearly that section of the Constitution has no application to a license issued by the State to a foreign corporation to do business herein, for the reason that when it accepted the license, it impliedly, at least, agreed to transact such busi¬ ness under and in obedience to the laws of this State in the same manner as a domestic corpor¬ ation should transact similar business, and that if it violated the laws of the State, then it would 170 thereby forfeit its rights to such license, in the same manner that the domestic corporations would forfeit their charter rights by offending against the laws.” And as is said by the U. S. Supreme Court in Orient Insurance Company vs. Daggs, 172 U. S. 1. c. 566: “That which a state may do with corpora¬ tions of its own creation it may do with foreign corporations admitted into the State. This seems to be denied, if not generally, at least as to plaintiff in error. The denial is extreme and cannot be maintained. The power of a state to impose conditions upon foreign corporations is certainly as extensive as the power over domes¬ tic corporations.” On the question of the application of our anti-trust laws to contracts to be performed in this State, the court, in Commission Co. vs. Spencer, 205 Mo. 1. c. 118, said: “It is contended in behalf of the plaintiff that the conduct on the part of the defendants in creating a corner in the market for No. 2 red winter wheat was an illegal act denounced by the act of Congress (26 U. S. Stat. at Large, p. 209) as well as by the statute of Missouri (Sec. 8978, R. S., 1899). Since the contracts we are dealing with now were made in Missouri, to be performed in Missouri, the Federal statute has nothing to do with them, and this is so, al¬ though the evidence shows that defendants made some other purchases through Chicago agencies for No. 2 red winter wheat, to be de- 171 livered in St. Louis during December, 1903, still those also were contracts made in Missouri, to be performed here.” That the regulation of a State’s internal trade and commerce is left to the State itself, and is not within the powers granted to Congress, was decided as early as 1824. In the case of Gibbons vs. Ogden, 9 Wheat., 1. c. 194- 195, Chief Justice Marshall, in discussing the interstate commerce clause of the Federal Constitution, and the power of Congress thereunder to regulate navigation, declared that “commerce” included the transportation of both freight and passengers, but added: “It is not intended to say that these words comprehend that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other states. Such a power would be in¬ convenient, and is certainly unnecessary. Comprehensive as the word among’ is, it may very properly be restricted to that com¬ merce which concerns more states than one. The phrase is not one which would probably have been selected to indicate the completely in¬ terior traffic of a state, because it is not an apt phrase for that purpose; and the enumeration of the particular classes of commerce to which the power was to be extended, would not have been made, had the intention been to extend the power to every description. The enumeration presupposes something not enumerated, and that something, if we regard the language or 172 the subject of the sentence, must be the exclu¬ sively internal commerce of a State. The ge¬ nius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States gener¬ ally; but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government. The completely internal commerce of a State, then, may be considered as reserved for the State it¬ self.” In Thorpe vs. R. & B. Co., 27 Vt., 142, the court, in discussing the right of the State to regulate corporations, said: “It has never been questioned, so far as I know, that the American legislatures have the same unlimited power in regard to legislation which resides in the British parliament, except where they are restrained by written constitu¬ tions. That must be conceded, I think, to be a fundamental principle in the political organiza¬ tions of the American states. We cannot well comprehend how, upon principle, it should be otherwise. The people must, of course, possess all legislative power originally. They have com¬ mitted this in the most general and unlimited manner to the several state legislatures, saving only such restrictions as are imposed by the Constitution of the United States, or of the par¬ ticular state in question.” * * * 173 It is a conceded point, upon all hands, that the parliament of Great Britain is competent to make any law binding upon corporations, how¬ ever much it may increase their burdens or re¬ strict their powers, whether general or organic, even to the repeal of their charters. This extent of power is recognized in the case of Dartmouth College vs. Woodward, 4 Wheaton 518, and the leading authorities are there referred to. Any requisite amount of au¬ thority, giving this unlimited power over cor¬ porations, to the British Parliament, may read¬ ily be found. And if, as we have shown, the several state legislatures have the same extent of legislative power, with the limitations named, the inviolability of these artificial bodies rests upon the same basis in the American states with that of natural persons. The discussion of the power of the states over com¬ merce in the case of Covington, etc., Bridge Co. vs. Ken¬ tucky, 154 U. S. 1. c. 209, et seq., is of some value here. In that case the Court said: “The power of Congress over commerce be¬ tween the states and the corresponding power of individual states over such commerce have been the subject of such frequent adjudication in this court, and the relative powers of Con¬ gress and the states with respect thereto are so well defined, that each case, as it arises, must be determined upon principles already settled, as falling on one side or the other of the line of demarcation between the powers belonging ex¬ clusively to Congress, and those in which the action of the state may be concurrent. The 174 adjudications of this court with respect to the power of the states over the general subject of commerce are divisible into three classes: First, those in which the power of the state is ex¬ clusive; second, those in which the state may act in the absence of legislation by Congress; third, those in which the action of Congress is exclusive, and the states cannot interfere at all. The first class, including all those wherein the states have plenary power, and Congress has no right to interfere, concern the strictly internal power of the state, and while the regu¬ lations of the state may affect interstate com¬ merce indirectly, their bearing upon it is so re¬ mote that it cannot be termed in any just sense an interference. Under this power, the states may authorize the construction of highways, turnpikes, railways and canals between points in the same state, and regulate the tolls for the use of the same, Railroad vs. Maryland, 21 Wall 456; and may authorize the building of bridges over non-navigable streams, and otherwise regulate the navigation of the strictly internal waters of the state—such as do not, by them¬ selves or by connection with other waters, form a continuous highway over which commerce is or may be carried on with other states or for¬ eign countries. Veazie vs. Moor, 14 How. 568; The Montello, 11 Wall. 411; S. C. 20 Wall. 480. This is true notwithstanding the fact that the goods or passengers carried: or traveling over such highways between points in the same state may ultimately be destined for other states, and, to a slight extent, the state regulations may be said to interfere with interstate com- 175 merce. The states may also exact a bonus, or even a portion of the earnings of such corpora¬ tion, as a condition to the granting of its char¬ ter. Society for Savings vs. Coite, 6 Wall. 594; Provident Institution vs. Massachusetts, 6 Wall. 611; Hamilton Co. vs. Massachusetts, 6 Wall. 632; Railroad Co. vs. Maryland, 21 Wall. 456; Ashley vs. Ryan, 153 U. S. 436. Congress has no power to interfere with police regulations relating exclusively to the in¬ ternal trade of the states. United States vs. Dewitt, 9 Wall. 41; Patterson vs. Kentucky, 97 U. S. 501, nor can it by exacting a tax for carry¬ ing on a certain business thereby authorize such business to be carried on within the limits of a state. License Tax Cases, 5 Wall. 462, 470, 471. The remarks of the Chief Justice in this case contain the substance of the whole doc¬ trine: 'Over this’ (the internal) 'com¬ merce and trade, Congress has no power of regulation, nor any direct control. This power belongs exclusively to the states. No inter¬ ference by Congress with the business of citi¬ zens transacted within a state is warranted by the Constitution, except such as is strictly in¬ cidental to the exercise of powers clearly granted to the Legislature. The power to au¬ thorize a business within a state is plainly re¬ pugnant to the exclusive power of the state over the same subject.’ It was at one time thought that the ad¬ miralty jurisdiction of the United States did not extend to contracts of affreightment be¬ tween ports of the United States, though the voyage were performed upon navigable waters 176 of the United States. Allen vs. Newberry, 21 How. 244. But later adjudications have ignored this; distinction as applied to those waters. The Belfast, 7 Wall. 624, 641; The Lottawanna, 21 Wall. 558, 587; Lord vs. Steamship Co., 102 U. S. 541. Under this power the states may also pre¬ scribe the form of all commercial contracts, as well as the terms and conditions upon which the internal trade of the State may be carried on. The Trade Mark Cases, 100 U. S. 82.” The Interstate Commerce Act (approved February 4th, 1887), by the proviso in section one, expressly ex¬ cepts the internal or domestic trade and commerce of each state from its provisions. In the recent case of Hammond Packing Co. vs. Ar¬ kansas, 212 U. S. 322, decided in February, 1909, the Supreme Court of the United States had under con¬ sideration the anti-trust laws of Arkansas and their ap¬ plication to foreign corporations engaged in both inter¬ state and intrastate business. In holding that the charter right of a corporation to do business in the State does not operate to deprive the State of its police power, and that the franchise to do business is qualified by the duty to do so conformably to lawful and proper police regulations thereafter en¬ acted, the Court said: “As the state possessed the plenary power to exclude a foreign corporation from doing business within its borders, it follows that if the state exerted such unquestioned power from a consideration of acts done in another juris¬ diction, the motive for the exertion of the law¬ ful power did not operate to destroy the right 177 to call the power into play. This being true, it follows that, as the power of the state to prevent a foreign corporation from continuing to do business is but the correlative of its au¬ thority to prevent such corporation from com¬ ing into the State, unless by the act of admission some contract right in favor of the corporation arose, which we shall hereafter consider, it fol¬ lows that the prohibition against continuing to do business in the state because of acts done beyond the state was none the less a valid ex¬ ertion of power as to a subject within the juris¬ diction of the state. In both the refusal to permit the coming into the state and the exclusion therefrom of a corporation previously admitted under the cir¬ cumstances stated, while it may be said that the acts done out of the state, and their antici¬ pated reflex result may have been the originat¬ ing cause for the exertion of the lawful au¬ thority to refuse permission to come into the state, or to revoke such permission previously given, that fact is immaterial in a judicial in¬ quiry as to the right either to refuse to give or to revoke a permit to do business within the state, since the power, and not the motive, is the test to be resorted to for the purpose of determining the constitutionality of the legisla¬ tive action. ,, “The chartered right to do a particular business did not operate to deprive the state of its lawful police authority, and, therefore, the franchise to do the business was inherently qualified by the duty to execute the charter 15471—12 178 powers conformably to such police regulations as might thereafter be adopted In the interest of the public welfare. Besides, it is not dis¬ puted that the state under its Constitution had a reserve power to repeal, alter and amend charters by it granted, and, therefore, even if the impossible assumption was indulged that the grant of the power to do business implied in the absence of such reservation the right to carry on the business in violation of a lawfully regulating statute, the existence of the reserve power leaves no semblance of ground for the proposition The claim of an irrepealable con¬ tract cannot be predicated upon a contract which is repealable. Citizens’ Savings Bank vs. Owensboro, 173 U. S. 636, 644.” X. We respectfully insist that by entering into a com¬ bination, as alleged in both counts of the information, respondents have sinned against the law of their crea¬ tion, transgressed the loftiest principles of public policy, and violated the common, statutory and constitutional law of the State. The information being sufficient, and the jurisdic¬ tion of this court complete, we respectfully ask that the demurrers be overruled. ELLIOTT W. MAJOR, Attorney-General. CHARLES G. REVELLE, Assistant Attorney-General. JAMES T. BLAIR, Assistant Attorney-General. INDEX. Page Argument. 21 Brief. 15 Demurrers.8-13 Information. 3 Sufficiency of. 131 State jurisdiction. 165 Common law in force. 121 Points and authorities. 15 Quo warranto proper proceeding. 148 Statement. 1 Summary of issues. 13 Violation of Constitution. 21 Violation of common law. 42 Violation of statute. 127 V i \ • i vjj \ J,y" >,y '\ j- ? • . 0'S' ■ • * ■• v . * f if L * UNIVERSITY OF ILLINOIS-URBANA ■/'V : , '•: s -j’C v /:v r -J ^ ' ' Vvfvi^ - •• ■ ; . ;v:'.nv \: : M \ - ,V!r '