Honorable Q. A. Walters
County.Attorneg .~
San Saba .Countg
§an,§aba, Texas :
Dear Sir:                 Opinion Ro. O-2165
                          Re: construotion of
                               Anti-Trust Laws.
          We have Pour letter of April 2, 1940, wherein
you request our opinion on the applloatlon of the Anti-
Trust Laws~to oertain praotioes of the San Saba Light &
100 Company, set out in your letter.
          The so-aalled Antl+Prust Laws of Texas oomprlse
both the oriminal and the civil statutes on the aubjeot.
The criminal statutes are .oontalnedIn oh. 3, Title 19 of
the Penal Code of Texas; wherean, the civil statutes are
contained in title 126, articles 7426 to 7447, Ino., ReI-
vised Civil Statutbs, 1925. The obnstitutionality of the
civil.statutes have been established beyond question by
the Texas Supreme Court In the oaae~of Standard 011 Co.
v:§tate, 107 S. W.~ (2d) 550. The ooast~tutionallty of
the oriminal statutes was affirmed by the Texas Court of
Criminal Appeals in the case of Rx Parte Ti nor, 132 9. W:
(2d)-885. This aaae waspaffirmed May 6, 1!30 by the United
States Supreme Court. We delayed in answering your ques-
tlon~until we reosived the decisloa of the United States
Supeme Court In the Tlgner case.
         ~Unquestionably; agreements between a wholesaler
and a retailer fixing the'reaale prioe ofaommodltles con-
stitute a violatFoh of the Texas Anti4Wxit Laws: Hubb-
Digga Co. v. Mitchell, 231 9. W. ~427;Diekerson;et al v.
MoConnon & Co., 248 S. W. 1084.~.As said by Judge'Brady
in Huge-Diggs Co. v. Mitohell,
         "It was'alleged that the market value of
    the traotors at the residence of appellee wa6
    at all times $930.00 each and it was expressly
    averred that 'the said defendant then and there
    and at the time of said sale agreed with plaln-
    tiff that the same should be sold at the sum of
Honorable Q. A. Walters, Page 2   (O-2165)


     $930.00’. The plain effect of this aver-
     ment is that the parties had agreed tom
     Six and maintain the prioe for the sale
     of a commodity or article of commerce."
          Whereas, a manufacturer or wholesaler may not Six
the resale price of a product when he sells-the-same 'toa
dealer, it must be remembered that this rule doeshot ,applg
to agency contracts. The principle may speclSJrthe price-
at which his agent shall sell goods, and may designate the,
territory.within which the agent shall operate. As stated
by the Austin Court of Civil Appeals ln~Lafon, et al v.
Falls Rubber Co.,.242~3. W. 346 (reversed by Comm. of Apps.
on other grounds, 256~S.'.W.577):
          ,.'Butthe appellee (Falls Rubber Cornpang)
     ,as the owner offthe goods had the right to
      determ,ine~
                to.whom,.itwould sell the same.and
     at what price, and had~,the.samerlgbt when '~
      selling through its agent as if it had been
     making such'sales~~itself~.Such~restriotion'-
      upon itsagent would not 'violate'our statutes
      forbidding contracts In restriotlon of trade?
                                 .
           Exclusive sales .&ontractsto dealers are likewise
in violatlon.oSthe..Texas~Anti-TrustStatutes.. Henderson
Tire & Rubber Oo.,:v. Roberts, Tex. Comm.‘oS Apps. 1929, 12
3. W. (2d) 154; Wood:‘v~'Texaa'Ioe~&~Cold Storage Co., 171 3.
W. 497; Rogers v..Weatlnghouse Elec. Supply Co., 116-~§.'W.,
(2d) 1886; J. R. ~WatkinsMedical co. v. Johnson, et al, 162
s. w..394.
          Asp stated by Rasburg, J. in Wood v. Texas Ice &
Cold,.§torageCo.; supra,:
          "By the statute it Is unlawful for two
     persons to.agree that one of them willbuy
     from,the other,exclusively of a given com-
     modity as it .lsFn5'likemanner unlawSul~Sor
     one of them to~agree to sell exolusively tom
     the other~a given commodity. It is unlawful
     to do either or both and it is not neoessary
     to do both In order to constitute the offense
     and the reason,thereSor is the ,statuteitself.
     Star FlourMill & Elev. Co. v. Ft. Worth @rain
     & Elev..Co.,~146 3. W. 604.",
Honorable G. A. Walters, Page 3 (0-2165)


          We wish to point out, however, that the mere Sadt
that a manufacturer sells to only one customer L.na given
terrltorg is not per se a vFolati.onof the Anti-Trust Stat-
ute In the absence of an.agreement to sell exclusively to
that one customer. As stated by the Texas ,Commissionof Ap-
peals Fn GrFfS1n v. Palatine Ins. Co., 231 3. 8. 202 at p.
205:
           "A man may lawfully rePuse to have busl-
     neas relations with.another for any reason -
     on account of whim, ,,caprIce,prejudke or ill
     will .'I
Then fact that the San Saba Light & Ice Company sells-at whole-
sale to only two customers does not per 'seconstitute a viola-
tion of the AhtP-Trust Law in the absence of an agreement to
sell to no one else.
          Your question of necessity resolves itself to a
question of fact to be determined by the court or jury Ln the
event of a suit Snvolving the application of the Texas AntT-
Trust LBws to'the situation outlined in your letter."We can-
not;thereSore, give a categorloal answer to your queetion
but have sought to set out above some of the authorities ap-
plicable to the situation.
                                    Yours very truly,
                               ATTORRRYGEI+?ALOFTEKA§
                               By   /s/Walter R. Koch
                                        Walter~R.'Koch
                                             Assistant
WRKzR§:mjs
APPROVED MAY 17, 1940
/a/ Gerald C. Mann
ATTORRRYGERERALOFTRKAS
APPROVED OPIRION COMMITTEE
BY /s/RWF CHAIRMAR
