tities purchased than for smaller quantities, and was arranged to prevent merchants not belonging to the association from availing themselves of the highest rate of discount. Certain association merchants appointed one of their number to buy for them, and thus by pooling their purchases they obtained the highest rate of discount, while a nonassociation merchant buying smaller quantities was refused as large a discount. The evidence also showed that the association merchants obtained control of the distribution of sugar in New Zealand and kept prices at a higher level than they would otherwise have been. The sugar company, the association, and certain association merchants were made defendants in a criminal suit under the Commercial Trusts Act, 1910. The court held (1) that all of the defendants were guilty of an offense under section 5 which forbids conspiracy to monopolize.contrary to the public interest, etc.; (2) that the sugar company was guilty under section 3 with respect to the prohibition against giving rebates, because the person receiving them is a member of a commercial trust, etc.; (3) that the sugar company was also guilty under section 4 with respect to the prohibition against refusing to sell to persons who will not follow the directions of a commercial trust in the purchase or sale of goods, etc.; and (4) that the merchants' association was guilty under section 9, which forbids any person to aid or abet offenses against the act, etc. The court distinguished this New Zealand law from the Australian law (see p. 243) and said, in part (p. 1267):

In the present case the Sugar Company had clearly a monopoly in the manufacture of refined sugar in New Zealand, and practically a complete monopoly in the sale of it, as the amount of imported refined sugar so far as regards competition was negligible. The company wished to preserve that monopoly and to exclude foreign competition. It also wished to secure the co-operation of the merchants as a distributing agency. The object of the merchants was to secure the exclusive control of the sugar trade, to keep the distribution of sugar in their own hands, and to prevent competition. The company and the merchants combined to carry out their objects, and in order to carry them out committed the offences which we have already dealt with. So far as can be judged from the evidence, to carry out these objects necessarily involved the commission of these offences. If the monopoly or control sought to be obtained can only be obtained by breaches of the law it is, in our opinion, of such a nature as to be contrary to the public interest, although if it could have been obtained without breaches of the law it might not have been contrary to the public interest. Apart, however, from the above considerations, it appears to us that the monopoly or control sought to be established was of such a nature as to be contrary to the public interest. It is not necessary, as in The Coal Vend case, to prove an intent to control the supply or price to the detriment of the public, or to show that any detriment has happened to the public.

PATENTS, DESIGNS, AND TRADE-MARKS.-The law relating to patents, trade-marks, etc., was amended in 1908 (Act No. 140, sec. 28), and provision made for the granting of compulsory licenses in case it is

proved to the governor that (a) the patent is not being worked in New Zealand, or (b) the reasonable requirements of the public with respect to the invention can not be supplied, or (c) any person is prevented from working or using to the best advantage an invention of which he is possessed. The governor may order the patentee to grant licenses on such terms as he deems just under the circumstances.

Section 6. Union of South Africa.

An act of the Legislature of the Cape of Good Hope of 1907 with respect to the meat trade and an act of the Union of South Africa of 1911, relating to the post office are of interest in this connection.

THE MEAT-TRADE ACT, 1907.-The Meat-Trade Act of 1907 provides for the payment of a license fee by butchers, which is lower for those who sell meat from, stock raised in South Africa than for others. It also makes the following provisions concerning restraint of trade which, however, shall become operative in the particular divisions of the colony only after proclamation by the governor:

Every act, contract, combination or conspiracy in unreasonable restraint of the trade of a butcher is hereby declared to be illegal, and every person who shall commit any such act or make any such contract or engage in such combination or conspiracy shall be guilty of a criminal offence, and subject on conviction to a penalty not exceeding £500, and in default of payment thereof to imprisonment with or without hard labour for a period not exceeding twelve months.

It is expressly provided, however, that the establishment of bona fide partnerships to carry on the business more economically, or contracts made in connection with bona fide sales to enhance the value of the property sold, shall not be regarded as illegal.

It is further provided that

All contracts and undertakings in support of any combination the object of which is to secure the control of the sale of meat, so as to enable such combination to arbitrarily control or regulate the price thereof, shall be held to be illegal and void.

The use of threats or intimidation to compel a butcher to sell at other prices than those he was selling at when such threats or intimidation was used is also made a criminal offense.

A license issued to a butcher who has been convicted of violating the criminal prohibitions shall be canceled and not reissued within two years after conviction.

THE POST OFFICE ADMINISTRATION AND SHIPPING COMBINATIONS DISCOURAGEMENT ACT, 1911.-The governor general is forbidden by the Post Office Administration and Shipping Combinations Discouragement Act of 1911 to make ocean-mail contracts with any person who

(1) is connected directly or indirectly with any such shipping or other combination as the Governor-General may deem detrimental to, or likely to affect adversely, South

African trade or industries; or (2) gives, offers, or promises to any person any rebate, refund, discount, or reward upon condition that such person shall ship, or in consideration of such person having shipped, goods by vessels of particular lines to the exclusion of any others.

Section 7. British India.

The Indian Contract Act of 1872 contains two sections which have been judicially interpreted with respect to restraint of trade.

Section 23 describes certain conditions under which a contract may be unlawful as follows:

SEC. 23. The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

1

The relation of public policy to contracts involving monopoly were adjudicated in a case 1 where the defendant, a municipal council, had granted to the plaintiff and another, who had released his rights to the plaintiff in consideration of a certain sum of money, the exclusive privilege of selling flesh within the limits of the municipality for one year. The court held that certain powers conferred on the municipality to issue licenses, including licenses for the sale of flesh, did not give it the power to create in advance a monopoly such as the one in question, because such power was not expressly conferred and was contrary to public policy under section 23 of the Indian Contract Act.

Section 27 of the Indian Contract Act contains certain provisions regarding contracts which restrain a person from exercising an occupation, and these have been interpreted in connection with the lawfulness of trade combinations. Section 27 reads as follows:

SEC. 27. Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1.-One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.

Exception 2.-Partners may, upon or in anticipation of a dissolution of the partnership, agree that some or all of them will not carry on a business similar to that of the partnership within such local limits as are referred to in the last preceding exception. Exception 3.-Partners may agree that some one or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership. 1 Somu Pillai v. Municipal Council, Mayavaram, Indian Law Rep., Madras Series, XXVIII, 1905, p. 520.

1

The first important case was that of a trade combination formed by four cotton ginning concerns which, for a term of four years, agreed that the price of ginning should be Rs. 4-8-0 per palla of cotton, or such other price as might be agreed on, and that, in their accounts, they would charge Rs. 2-8-0 per palla to cost of ginning and the remainder of the price to profit, which profit should be divided among the parties in proportion to the number of gins they possessed. One of the parties refused to pay to the others the amounts due under the agreement as shown by the accounts and was sued for payment by one of the other parties to the agreement. The court held that the plaintiff was entitled to recover; that the only agreement sought to be enforced was the agreement to divide profits and that such an agreement was lawful.

A similar case 2 arose in connection with a combination of ice manufacturers in 1902 wherein all the ice manufacturers of Bombay agreed to carry on their business in concert until the end of 1903 and thereafter unless the agreement was terminated by notice. The agreement provided, among other things, for minimum selling prices for ice, for fixed quotas of production and sale, for restricting additions to the plant and machinery of members, and for contributions from profits on sales to a general fund or pool for division among the participants. It was provided further that if a competing ice factory should be started the agreement would be terminated. By a supplementary agreement the price of ice for certain wholesale dealings was fixed at Rs. 58 per ton, and prices were agreed on for other classes of customers, except steamers, which in no case were less than Rs. 58 per ton. A few months after this pool began operations one of the members notified the pool managers that it was advised that the agreement was void and that it would sell ice at Rs. 22-8-0 per ton, which was below the agreed prices. Suit was brought by other members of the pool which prayed the court to restrain the sale of ice contrary to the terms of the agreement, to order the payments due under the agreement to the pool fund, to award damages, etc. The only issue which requires attention here was the defense. set up that the agreement was void. The court held, per Jenkins, C. J., that so far as the obligation to contribute to the pool fund was concerned, which was the only issue the court needed to decide, there was no unlawful restraint of trade within the meaning of section 27 of the Indian Contract Act, nor was it void as contrary to public policy under section 23 of the same act, because so far as such restraints of trade are concerned those which are contrary to public policy are covered by section 27. The court held further that the

1 Haribhai Maneklal v. Sharafali Isabji, Indian Law Rep., Bombay Series, Vol. XXII, 1898, p. 861. 2 Fraser & Co. v. Bombay Ice Manufacturing Co., Indian Law Rep., Bombay Series, XXIX, 1905, p. 107.

only relief which could be given under the circumstances of the case was damages for the nonpayment of contributions to the pool fund.

Section 8. Egypt.

The Egyptian Penal Code for mixed tribunals1 in article 308 provides a penalty against interfering with free competition in auctions almost identical with article 412 of the French Penal Code (see p. 272), and in articles 309 and 310 combinations which tend to effect changes in the prices of commodities or securities are prohibited in practically the same terms as in articles 419 and 420, respectively, of the French Penal Code. (See pp. 269–270.)

Section 9. Germany.

There are no general laws specifically applicable to trusts or combinations (cartels) in Germany, except with respect to bidding on public contracts, but some of the general legislation, as well as certain local laws and acts affecting specific industries, are of importance.

CRIMINAL LAW.-The Penal Code for the German Empire" contains no provisions specifically affecting cartels. Of some interest in this connection is section 253 of the Penal Code, which prohibits extortion. The following case illustrates the application of this law where a cartel was involved: A powder manufacturing combination refused to supply dealers who failed to patronize it exclusively, and threatened to discontinue the supply of a customer who had purchased such goods from a competitor. The Imperial Court condemned the powder combination under this section of the Penal Code.3

In section 302e of the Penal Code penalties are imposed on those who exploit the necessity, thoughtlessness, or inexperience of another in order to obtain for themselves or a third party a pecuniary advantage which is strikingly disproportional to the service rendered.

The criminal law of Alsace-Lorraine, however, preserves the prohibitions of articles 419 and 420 of the French Penal Code (see pp. 269–270), but no cases appear to have occurred of the application of this law. Furthermore, the States of the German Empire have supplementary criminal laws of local application, and several of them have laws prohibiting agreements to avoid competition in bidding on public contracts, as, for example, Prussia, Hessen, and Alsace-Lorraine. The Prussian Criminal Code of April 14, 1851, section 270, provides as follows:

Whoever by force or threats or by the promise or guarantee of an advantage, restrains another from bidding or overbidding in an auction undertaken by public authorities

1 Code Pénal des Tribunaux Mixtes; Codes des Tribunaux Mixtes d'Egypte, Alexandrie, 1907.

2 Strafgesetzbuch für das deutsche Reich.

Urt. v. 29. Nov. 1900, Entscheidungen des Reichsgerichts in Strafsachen, Bd. 34, S. 15 ff.

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