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prices at such auctions is made an offense by article 555 of the Penal Code.

The Civil Code makes contracts which are repugnant to good morals null and void (arts. 1116, 1271, and 1275). Article 1275 combines in substance the provisions of articles 1131 and 1133 of the French Civil Code (see p. 272), while the provisions of articles 1116 and 1261 of the Spanish law are similar to those of articles 1172 and 1108, respectively, of the French law. Article 1902 of the Civil Code, which is substantially similar to article 1382 of the French Civil Code, is applicable to unfair competition, but no instance of its application to combinations has been noted.

Section 15. Portugal.

2

The Penal Code of Portugal, in a section of the code entitled "Monopolies," in article 275, makes it an offense for merchants to conceal supplies of daily necessities or to refuse to sell them to any purchaser. In article 276 penalties are provided for those who by fraudulent means succeed in altering the prices of commodities or public securities which would result from free competition; in case of a combination of individuals the offense occurs with the commencement of its execution. Article 278 makes it an offense to keep anyone away from an auction authorized by law or by the Government by means of gifts or promises or to embarrass or disturb free action. by violence or threats.

There are certain provisions of the Civil Code which relate to the validity of agreements. Article 10 declares that acts committed contrary to the prohibitions or commands of the law are void unless it is otherwise provided, but the parties interested may make them valid by mutual consent if the law which is infringed thereby does not affect public policy. Article 671 provides in part that acts contrary to public morals or to obligations imposed by the law can not be made the objects of a legal contract.

Article 2361 of the Civil Code, like article 1382 of the French Civil Code (see p. 273), is applicable to unfair competition.

Section 16. Switzerland.

There is, as yet, no general criminal law in Switzerland, this matter being largely within the jurisdiction of the several confederated Cantons.

The civil law of Switzerland contains several provisions, the interpretation of which is important with relation to industrial combinations.

CIVIL LAW.-Pertinent provisions of the civil law are found both in the Civil Code and in the Law of Obligations. Article 27 of the

1 Código Civil.

2 Código Penal, 16. de Setembro 1886.

3 Código Civil, 1867, arts. 10, 671.

Civil Code1 declares that no one may restrict the use of his liberty to an extent which is repugnant to law or good morals. Article 20 of the Law of Obligations provides:

ART. 20. An agreement which has an impossible or unlawful content, or which is repugnant to good morals is void.2

Certain other articles of the Law of Obligations affect the validity of acts or agreements which are contrary to good morals, namely, articles 19, 66, 163, 230, and 326. In particular it may be noted that according to article 66 whatever has been given in order to obtain an illegal or immoral result can not be demanded back, that according to article 163 a conventional penalty can not be demanded if it is intended to enforce an immoral promise, and that according to article 230, if an auction is interfered with in an unlawful or immoral manner, anyone who has an interest therein can attack it within a period of 10 days.

In a case decided in 1911,3 a milk dealing company had broken an agreement with a milk producers' cartel which had restricted competition, and it set up in defense that the agreement was contra bonos mores and invalid under section 17 of the Law of Obligations of 1881, which provided: "Only a performance which is possible and not unlawful or immoral can be the subject of an agreement." The court said in part (p. 211):

* *

It is, however, not apparent how the agreed apportionment of the milk sales between the producer and dealers * is immoral. For evidently neither the interests of the milk consumers are endangered in a manner that can be called an insupportable monopolization of a general indispensable article of food on account of artificial price regulation, nor is the claim of the defendant true that the maintenance of the prohibition would make the dealing in milk impossible for it.

An interesting case, of which a detailed statement has been made in the press, concerned the breach of a grain millers' cartel. A member, contrary to the cartel agreement, sold his flour directly. The Federal court in deciding the matter considered the application of section 20 of the Law of Obligations, referred to above, and declared that this did not constitute a defense merely because the conventional penalty imposed was very large. Judgment was given for the plaintiff, and the conventional penalty which was applicable was also determined by the court."

Protection against unfair competition is found in sections 41 and 48 of the Law of Obligations, but no application of these rules has been noted with respect to combinations.

1 Schweizerisches Zivilgesetzbuch vom 10. December 1907.

2 Bundesgesetz betreffend das Obligationenrecht v. 30. März 1911.

* Entsch. d. Schweizerischen Bundesgerichts, 1911, Teil II., S. 205. Urt. v. 24. Juni 1911 in Sachen Verband nordwestschweizerische Milchgenossenschaften gegen Birsecksche Produktions- und Konsumgenossen

schaft.

'Arrêt du 31 mai 1913; Kartell-Rundschau, Nov. 1913, pp. 903–905.

Section 17. Belgium.

Formerly both the Civil and Penal Codes in Belgium were the same as in France. The provisions of the Civil Code are still the same (see p. 281), but the provisions of the Penal Code were, in 1866, modified in part, particularly by the abrogation of the prohibitions contained in articles 419 and 420 of the French law. Monopolizing (l'accaparement) is, therefore, no longer punishable.1

CRIMINAL LAW.-The principal provisions of the present Penal Code of Belgium which are pertinent are articles 310, 311, and 314. Article 314, which forbids combinations to prevent competition at auctions, is substantially the same as the first paragraph of article 412 of the French Penal Code (see p. 272), except that the word "acts" is not included in the means employed, which embrace only force and threats, and need not be quoted here. Article 311 is a modification of article 419 of the French code, and reads as follows:

Persons who by whatever fraudulent means shall have caused an increase or decrease of the prices of produce or merchandise or of public securities shall be punished with imprisonment of one month to two years and with a fine of three hundred to ten thousand francs.2

This Belgian law, unlike the French law (art. 419), applies only in case fraudulent methods are used.

Of more special interest is the first paragraph of article 310 of the Penal Code, namely:

Every person, who with the purpose of compelling the increase or decrease of wages, or of interfering with the free operation of industry or of labor, shall have committed violence, proffered insults or threats, adjudged fines, prohibitions, interdictions or any proscription whatever, either against those who labor or against those who employ labor, shall be punished with imprisonment from one year to two years and with a fine of fifty to one thousand francs, or with one of these penalties only.3

An additional paragraph of this article relates to actions of assemblages of labor, etc.

An interesting case involving an interpretation of this law was briefly as follows: A combination of glass-makers made an agreement in 1904, which organized a lockout and the shutting down of the works. A member thereof was alleged to have infringed the agreement, and the question of authority being disputed, it was agreed to submit the matter to arbitration. The defendant company declared that it had the right not to establish a lockout without being fined, and especially that such fines could not be adjudged

1 Pandectes Belges, Bruxelles, 1878, T. I., p. 995. Prior to 1866 a combination of forty brewers in Ghent was indicted for increasing the price of beer; they were found guilty and the judgment of condemnation was confirmed in the highest court of appeal. De Leener, Organisation Syndicale des chefs d'industrie. Bruxelles, 1909, Vol. II, p. 217.

* Code Pénal, art. 311.

3 Code pénal, art. 310, as amended by the law of May 30, 1892. Nearly similar provisions are found in article 416 of the French Penal Code.

without violation of article 310. The last claim, however, was subsequently withdrawn. The arbitration court decided against the defendant member. Of its own motion the local magistracy intervened ex officio to annul the arbitration on the ground that under article 1004 of the Code of Civil Procedure an arbitration court could not disregard the criminal law.1

The court finally annulled the arbitration decision in 1909, after having determined as a necessary preliminary thereto that the law as expressed in article 310 did prohibit the imposition of a fine."

Speaking of the resolutions of this combination with relation to article 310, the court said in part (p. 86):

That the resolutions were highly restrictive of the liberty of the participants to the agreement, and of their workmen;

*

*

CIVIL LAW.-As already intimated, the Belgian Civil Code in articles 6, 1108, 1131, 1133, and 1172 preserves in identical language the articles of the French Civil Code, bearing the same numbers which have been quoted above (see p. 272), and need not be repeated here.

The courts, apparently, have generally upheld the validity of cartel agreements. A combination of glass manufacturers in 1872 agreed that the works should be shut down for a certain period and that those conforming thereto should participate in certain contributions agreed to by all of the members. One of the concerns refused to pay its contribution and was sued therefor. The court held that the contribution was a lawful obligation, and said in part (p. 177):

That the agreement between the parties was not an attack on the free exercise of industry and labor; that it had for its cause an excess of production which would involve an abnormal decline of prices; that the shutdown, freely agreed to, of a limited number of furnaces during a fixed period in order to reestablish a fair proportion between production and the needs of consumption is not at all contrary to the public interest.

The legality of combinations of employers and laborers to fix the price or conditions of labor is shown in a recent judicial decision.5 The essential facts of the case, as well as the chief legal distinctions made by the court, are sufficiently indicated in the following excerpt from the opinion (p. 266):

Although employers and laborers have the right to combine in order to fix the price, the conditions of labor, etc., the use of this right is limited and the abuse of it is repressed by the laws which protect the liberty of the laborer and his work; that it is permitted to trades-unionists to make by-laws which govern the members of the

1 De Leener, op. cit., Vol. II, pp. 225–226.

2 Procureur général etc. c. Société anonyme des verreries de L'ancre etc., Cour d'appel de Liége, 24 février, 1909. Pasicrisie Belge, 1909, II, p. 84.

Cf. De Leener, op. cit., Vol. II, p. 222.

p. 175.

Hansotte et Cie. c. Mondron et consorts, Bruxelles, 29 mars 1877; Pasicrisie Belge, 1877, Pt. II,
De Béozières c. De Paepe, Cour d'Appel de Gand, 9 janvier 1907; Pasicrisie Belge, 1907, Pt. II, p. 264.

union and which authorize the expulsion of a member who disobeys them; but that in advising third parties of this exclusion with the threat that they will be exposed to disagreeable consequences in case they take the excluded person into their service, the secretary of the union attacked the freedom of the latter; that he ought to compensate the damage caused by that illicit act.

It is otherwise, however, with respect to combinations for bidding at public auctions. In an action for damages for breach of an oral agreement to avoid competition in making bids to furnish materials to the State railways, the court held that while article 314 of the Penal Code would not apply in this case, the agreement as shown by the record was invalid under articles 6, 1108, 1131, and 1133 of the Civil Code as contrary to public order, and based on an unlawful ground.1

In a more recent case, which did not affect bidding on public contracts, a different conclusion was reached. Certain producers of stone formed a syndicate through which they agreed to sell their product, and penalties were provided for violations of the agreement. A member of the syndicate who sold stone contrary to the agreement and was sued for the conventional penalties set up the defense that the agreement was invalid. The court of appeal of Brussels found that the prices of the syndicate were not abnormally high; that the syndicate had obtained only 54 per cent of the contracts for which it had competed; that it did not bid on public works; that the agreement was made for five years only; and that it covered only a part of the output of the members of the syndicate. The Court of Appeal, reversing the judgment of the lower court, held that the agreement was valid and said in part:

That no provision of law nor principle of public order forbids merchants to associate and to grant an exclusive agency of sale to an organization created by them; that it can not be disputed that the right to trade may be restrictea in a certain measure, that such an agreement does not violate this principle in so far as it does not stipulate a general and absolute prohibition, namely, unlimited as to time, place, and object.2

The Belgian Civil Code also contains in article 1382 precisely the same provision applicable to unfair competition which is found in the same article of the French Civil Code. (See p. 273.)

The agent of an association of dealers in druggists' goods, which aimed to enforce fixed resale prices, notified members of the association that a certain dealer was interdicted because of nonobservance of the regulations of the association. The association announced in its publications its intention to proceed vigorously against the delinquent dealer and to "quarantine" him. The said dealer was not a member of the association and had no general agreement with them,

1 Nyssens et de Buyser c. Bodart, Cour d'Appel de Bruxelles, 5 mai 1904; Pasicrisie Belge, 1904, Pt. II, p. 240. * Société coopérative pour la vente du petit granit c. la société anonyme d'Ogné-Sprimont, Cour d'Appel de Bruxelles, 24 juillet 1913; Pasicrisie Belge, 1913, II, pp. 314, 318.

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