members, or lists of nonmembers, and from boycotting manufacturers for having sold to nonmembers, and from preventing jobbers from engaging in business; or from engaging in any agreement which restricts the "free and unrestrained" flow of commerce.1 The decree in the Southern Wholesale Grocers' case (above referred to) enjoined members from combining or conspiring to prevent manufacturers from selling to nonmembers, from publishing a white list, from coercing manufacturers into refusing to sell to price cutters, and from boycotting manufacturers for having sold to nonmembers. The members of the Philadelphia Jobbing Confectioners' Association were likewise enjoined from conspiring to withhold their patronage from any manufacturer for having sold to nonmembers, or from conspiring to prevent manufacturers from selling freely in the open market, or from publishing white lists of members of the association for the purpose of influencing manufacturers not to sell to nonmembers, and from conspiring to induce manufacturers not to sell to retailers or jobbers who were not members of the association.2 Certain manufacturers were enjoined from entering into any agreement or understanding with each other or with the National Association of Retail Druggists or the National Wholesale Druggists' Association in refusing to sell, or from discriminating in sales, to persons whose names appeared on any list of persons purporting to adhere or not to adhere to their contracts, or to maintain or refuse to maintain prices, and from blacklisting manufacturers and wholesale contract proprietors. The members of the "Association of Coaster Brake Licensees," an association of owners of patent rights relating to coaster brakes, were bound under patent and license contracts to maintain uniform and noncompetitive prices and resale prices. The agreement also covered certain other unpatented parts of bicycles and motorcycles. The association sought to prevent, among other things, sales to manufacturers, jobbers, and dealers, who were not listed by the joint action of members. By consent decree the defendants were enjoined from soliciting, making up, ratifying, or confirming any lists of manufacturers, or jobbers, or dealers, with whom trade should or should not be carried on.* Section 24. Limitation of output. As noted in the first part of this chapter, agreement to control prices by curtailing output is frequently found in particular combinations, but not primarily as an association activity. This is borne out by an examination of the decisions, many of which condemn this 1 Consent decree In United States v. Pacific Coast Plumbers' Supply Assn. et al. (1912). * Consent decree, United States v. Philadelphia Jobbing Confectioners' Association (1913). * Consent decree, United States v. National Association of Retail Druggists (1907). • Consent decree, United States v. New Departure Mfg. Co. (1913). ## the therssongs onrsigered as a wbie ur no 1 Section 27. Mutual protection against delinquent story. Blacklists in the form of bad-pay lists, ca-1-SALE abstracts of unsettled accounts, lists of delize like, adopted by trade associations to lessen erelt te A constitutions or by-laws of the assonans 36 se,son reported as long as his name remains a ze ielo serpe cases there has been a refusal to give reled at a v „17 mens forind members to sell for cash to the demor socod the claim for which he has been listed. whose business or credit has been thus o ordinarily succeed in an action for be . shed is, in the absence of special statutes, 1.2", sanction. And where the members can yog vd protect as to render the statement Association, 63 V. Y. Supp., 303- 1900, Melntyre r. We'ner Xants 24 TIL App., 233 (1894), 42 fied dealers quite common to association purposes is found in attempts to prevent sales by others in territory supplied by any member. Of the decisions previously treated in this chapter, one of early date, rendered by a State supreme court, and a later one by a Federal court, indicated that association activities of this nature were formerly permissible. Other decisions, and especially those of recent date, however, quite generally condemn them. Section 26. Means of accomplishing association purposes. Since the legality of the means adopted has been noted in connection with the four purposes already treated, it is sufficient here to treat this phase of the subject in a general way only. Probably the means most frequently used to enforce commercial relations sought to be established by trade associations is the boycott, and the most common form of boycott is the actual or threatened withdrawal of patronage. While some of the earlier decisions at common law seem to have held this to be a legitimate means of enforcing associations rules, the weight of authority, at common law and numerous statutes, condemn such actions as unlawful.* In the cases herein treated the usual method of effecting boycotts was to circulate periodically a printed list containing the names of those who had violated association regulations, or to convey similar information by letter, or to effect the same result by publishing a list limited to names of those with whom members were permitted to deal. The first two methods are known as blacklisting and the last as whitelisting. Various specific names, such as Blue Book, Red List, Bad-Pay List, etc., have been given to lists of this nature or to similar expedients. The successful accomplishment of the four purposes above treated— (1) price control, (2) prevention of sales, (3) limitation of output, and (4) allotment of customers and division of territory-have depended largely upon the exercise of restraint, sometimes confined to the members but usually applied also to nonmembers; and 1 Bohn Manufacturing Co. v. Hollis, 54 Minn., 223 (1893). * Montgomery Ward & Co. e. South Dakota Merchants & Hardware Dealers' Association, 150 Fed., 413 (C. C., 1997). Bohn Mfg. Co. e. Hollis et al., 54 Minn., 223 (1893); Montgomery Ward & Co. v. South Dakota Rtal Merchants & Hardware Dealers' Association, 150 Fed., 413 (1907); Macauley Brome Tutsen et al, 19 R. I., 255 (1895). • Brown & Alien et al., e, Jacobs Pharmacy Co., 115 Ga., 429 (1902); Klingel's Pharmacy. Stary & Ime et al., 104 Md., 218 (1906); Employing Printers' Club et al. v. Dr. Blosser ES 12.61, 309 (1905); Funck e. Farmers' Elevator Co. of Gowrie et al., 142 Iowa, €21 (140. See also Continental Insurance Co. v. Board of Fire UnderPirington r. Hinchcliff, 120 Ill. App., 523, affirmed Les et al. . Bennett et al., 63 Kans., 653 (1901); Olive & Sternberg • 123 Part 7 Tex. Civ. App., 630 (1894); Park & Sons Co. v. National Who'assi» Trygging Aamuriqeton of al. 56 NY. Supp., 1060 (1896); Straus v. American Pub writers 219 IL, 16 ་ ་ $3 1366; Walsh v. Association of Master Plumbers, Tamber Imal ra' Association v. State of Miss., 95 Miss., to date, 292 (1902). while the decisions considered as a whole are not in accord, yet it fairly may be concluded that boycotting for the most part, under most circumstances, is illegal. There is, however, a fifth class of purposes (designated below as "mutual protection against delinquent debtors"), usually enforced by a species of boycott, which, in the absence of statutory prohibition, has in many instances escaped judicial condemnation. Section 27. Mutual protection against delinquent debtors. Blacklists in the form of bad-pay lists, cash-before-delivery lists, abstracts of unsettled accounts, lists of delinquent debtors, and the like, adopted by trade associations to lessen credit risks by the interchange among members of accurate information concerning the financial standing of their customers, are usually held to give no ground of action at law for damages to the retail dealer or private citizen who thereby suffers a loss of credit. And this is true even where the constitutions or by-laws of the associations forbid the members, under penalty of fine or expulsion, to extend further credit to the person reported as long as his name remains on the delinquent list. In some cases there has been a refusal to give relief even where the regulations forbid members to sell for cash to the debtor until he has settled the claim for which he has been listed. The party whose business or credit has been thus curtailed or destroyed can not ordinarily succeed in an action for libel. Proof of the statement published is, in the absence of special statutes, a good defense to such an action. And where the members can show such a common interest to protect as to render the statement qualifiedly privileged, the aggrieved party, in order to succeed, must show not only that the statement is false but also that it was made with express malice. As to the degree of common interest necessary to establish a privilege, however, the decisions are not in harmony, and in some of them the effect of the privilege seems to be either denied or disregarded. Where all dealings by the members with the debtor, for cash as well as on credit, are prohibited until his claim is settled, there is a tendency to recognize an element of coercion that is repugnant to 1 Reynolds r. Plumbers' Material Protective Association, 63 N. Y. Supp., 303 (1900); affirmed by Court of Appeals, 169 N. Y., 614 (1902); Trapp v. Dubois, 78 N. Y Supp. 505 (1902); Weston v. Barnicoat, 175 Mass., 454 (1900); McIntyre r. Weinert, 1 Pa., 52 (1900); Ulery v. Chicago Live Stock Exchange, 54 Ill. App., 233 (1894); White r. Parks, 93 Ga., 633 (1894), 20 S. E., 78. 2 Muetze v. Tuteur, 77 Wis., 236 (1890); Woodhouse v. Powles, 43 Wash., 617 (1906): Denney v. Northwest Credit Association, 55 Wash., 331 (1909), 104 Pac., 769; Western Union Telegraph Co. v. Pritchett, 108 Ga., 411 (1899); Werner v. Vogeli, 10 Kans. App. 536 (1901); Cleveland Retail Grocers Association r. Exton, 18 Ohio Circuit Court, 321 (1899); Windisch-Muhlhauser Brewing Co. v. Bacom, 21 Ky. L. R, 928 (1899); Jola Brenner Brewing Co. r. McGill, 23 Ky. L. R., 212 (1901); Nettles v. Somervell, 6 Tex Civ. App., 627 (1894). the existence of the privilege;1 and in a case in Wisconsin in which the restriction was not carried to the extent of prohibiting cash dealings, the court said that communications sent to members of an organization to compel delinquent debtors to pay, showing the name of debtor on the delinquent list, are libelous and not privileged, where the object is not to protect members from trusting such debtors, but merely to aid them in coercing payment, and the members of the association are not interested in the communications in any other way than to make their own debtors pay. Actions for damages caused by such combinations have apparently thus far, with few exceptions, also been unavailing. In one of the New York cases cited above the Plumbers' Material Protective Association was incorporated under a law that, among other things, authorized it to "diffuse accurate and reliable information among its members as to the standing of merchants and builders." Upon failure to settle a claim against him or to either give the association satisfactory reason for the failure or submit to arbitration, the plaintiff was listed, with the result that he could buy no further supplies from the members except for cash before delivery. It was urged that the statute under which the association was incorporated operated in restraint of trade and against public policy and hence was void. But, in view of the growth and development of commercial enterprise, the court regarded combination for mutual protection against irresponsible parties as a necessity and held such combination among the members of the corporation not to be unlawful. In one Kentucky case in which recovery was denied, the position was taken that the plaintiff might recover in such an action if the statement published was untrue, but in a later case in the same State it is intimated that there can be no recovery in such an action even if the statement is false and made by a combination operating in violation of an antitrust statute which absolves persons from liability for payment for goods bought from members of unlawful combinations. Recovery is also denied in Illinois and Texas." In Missouri, however, an agreement among Kansas City brewers not to sell beer to anyone who was in debt to either of the others for beer previously purchased until he paid such debt, was held to be in violation of the State antitrust statute. And by virtue of a provision 1 Weston v. Barnicoat, 175 Mass., 454 (1900); Denney v. Northwest Credit Association, 55 Wash., 331 (1909), 104 Pac., 769. See also Hartnett v. Plumbers' Supply Association, 169 Mass., 229 (1897); and Arbour v. Pittsburgh, etc., Association, 35 Pa. County Rep., 595 (1907). 2 Meutze r. Tuteur, 77 Wis., 236 (1890). 3 Reynolds v. Plumbers' Material Protective Association, 63 N. Y. Supp., 303 (1900), affirmed 169 N. Y., 614 (1902). 4 New York Laws, 1886, chap. 333. Schulten v. Bavarian Brewing Co., 96 Ky., 224 (1894). Brewster v. Miller's Sons Co., et al., 101 Ky., 368 (1897). Ulery v. Chicago Live Stock Exchange, 54 Ill. App., 233 (1894); Delz v. Winfree, S Tex. Civ. App., 11 (1894). |