       House Bill JJo. 231, pro9idlnC thst It it conflicts
       oith State anti-trust laws it shnll bo null end void
       hold in aohfllct with such anti-trunt Iswe and there:
       l-or0 invalid.


--^-                _        --            _-_-
   -
                   OFFICE C!PTRD ATTORIGY C'i~DX~L

                                                  June 28, 1939

conorableW. Lae,O'Daniel
Governorof Tcxss
hustin,Texas

                             ODlnion Do. o-lC33
                            Cl:   Vnlidity of Route Bill Do. 231
     We hsvo for ackuowled~~ant your l~ettcrof Juuc 22, 1939,
wheroln you eck the opi.nionof this Dcpnrtmnt upon certain
qu?stiox rolatla:j to tha vnlldity of IlouseDill iio.231, the
*fair trade*'Act, the questions oo!:cdbeing as l'ollows:

            "1. Does the Caption of the bill, under the
       Constitution, enfficlcntly set out the purpose and
       cover the subfect mttrr  of the bill? I call your
       particular uttention to that part or the Cnption
       which says that it la for the purpose of protcctinC
       tmdc-x?rk omors,   diotributors and the Ccncrol pub-
       110 o~aiunt injurious and uncconoxic practices in
       tho distribution of articles of standard quality
       undor diotlnCuished tmdemrk,   brand or nane, etc.,
       and would like for you to advise ~19 if this in sui-
       fioiently consistent with the seation of the bill
       deali% with the subject and if it does, in fact,
       amply with the Constitution in @vine notice of the
       oontents of the bill? Plcnsc also mska your nnswer
       applioable'to each and eoery part of the Caption.

           *2.   Is there any pmoision of the Act in its
       purpose end final result in confliot tith Chapter 3,
       Title 19 of t?e Penal Oode of this State, or with
       Title 120 of tho Revleed Civil Statutes of 19257
              qn   ooaneatlon dth   the above I anderstand that
       tlkm   16       ‘h q&egitiou 08 to wlmthcror not the
                   almyr
       kind 0f~c0ntreot6’0ont~p~ut0a in thb Act aro in
       violationor some nati-truststetuts. Ir the oontraota
       describedare not ia vlolstlonof the statute.it
       would becoae difficultto understandthe Purposeof
       this Act.
            "3. If the manufacturer   or other peroon sclliu~
       to a dealer in Texas enter into a cootreot with hln
       wiith'the provlrions stated, and he aCroon and obliCatea
       himself to oell the Coo& at a price stipulated by
       such mnufncturer, or other person, does ho, by reason
Iron.F. Loo C'Dsnicl, June 20, 1930, l?zCo2.


     of this Act or euch contr-ct. hwc my protection
     acninst such n4anufoctuicr or ot!lcrn~roon i'urnichinc
     [:oods to cnothcr ~lrchont in the o&c vicinity for
     Gal0 at fldil'foront price, or no price at oil? In
     other words, if one local dcolcr LC-kes a contract
     forthc purchnao of co%.oditioo for rennle with the
     mnufocturor   and arreec to sell the::at a fixed price,
     can hc by the term of this bill h,jvu nn opreormnt
     in hia contract thct the rmnufncturcr will not sell
     to one of bit coxJP?titorsct 0 different price, or
     no Eircd price? If such provision should bo in the
     contract vtould it be a lawful provision.?

         "4. I would like for you to cdvice no the
    mooning and effect of Paragraph 2 of Seotion 1, recd-
    ine as follo,xi:

         'That v~ilfully'and knoiirin$yofferin; for
         salt or cellinS any cor3aodityat less than
         the tninixnd price ntipulotcd in any contract
         cntercd into pursuant to tho proricions of
         this Act, whether the per-on eo offcri~ for.
         sale or sellin;. is or is not a party to such
         contract, in unfair co!lpetitionand is action-
         able nt the.suit of any person dnna::cdtbora-
         by. ...'
         "Do you consider this lan!:u:rco
                                        cufficiently defi-
    nite and ccrtein-to bc binding7

         "5. Ilocco advise *co in Pcrticulnr if pnro~rcph 3
    of Section 2 is in violation of any Sedoral levror, if
    effcctivc, uould it onend, uodify or repeal any of'the
    Anti-Truut 1~~s of the Stats of Terns?
         "6. Is any portion of said Act in conflict \;lth
    the Constitution end law of the IlnitcdCtntcc or of
    the stntn or TCXC87"

     Sincc.uz hnvo reached the conclusion that House Bill Do.
231 is'in contrnvcntion of and conflicts 74th the anti-trust
l~vlsof the State of Texas, and thercforc, by virtue of the
PrOViSiOns of Section 7 of House Bill No. 231, is 0 nullity
and of no force or effect whatoocver, It becozss unneceescry
ct this tin0 to enSaS In the extensive study neccosary in
order to enable us lntelli~ently to ensv!erother quostlono
of const1tutlonolity ana statutory construction proeonted 10
your inquiry.

     We-have presentcd in thie House Bill emote& by the
,Je&lelatureai the Stite'oi Texm the novel aa& peoullar
 rltustfonof a lecidatlve body prwldin(:that the Aot deslGn-
ed to relieve oortaln types of oontracts iron tho prohlbltlons
contained in the anti-trust laws of tbe State of Texas. shell
be decned null and void and of no force and offcct WhntsOaVcr
if it is effective to eccozpllsh the desired Purpose. IiOVCl
and poculinr though thlc situation nay bc, it is neverthsleos
the duty of this Dcportncnt and of all officers of the Sov-
erment charged with the duty of cnforcinC such lew to Give
full efEcct to the cxprocsad lntcntlon of the Le~isloturo.
    Section 7 of F!ouseBill No. 231 reads 0s follows:
non.   :‘I.
          Lee O~Dzc~icl,Zuno 78, 1939, I’a~o3.


            lWothin;:in this Act ohnll cvcr bc conotrtied
       as arzndin3, no::ifyin::, saspcndlnf*or rcpeslln:;
       any of the la::-sof this St.ato dzflnlnficm) pro-
       hibitinC trirts, nono~olicc, and concpiracics
       against trudc, viith p~rticulnr rcfcrencc to C!lapter
       3, Title 19, Fenol Code cl’the Stctc of Tcms, nnd
       Tl.tlc126, Heviscd Civil Ctctutct of Tercs, 1925,
       aud if any provision of this Act is hc1.dto bc in
       oont~cvontion of or coni‘lictoltiiany of said
       lcwa, tbon said provision shall be null and void
       aridof no force or effect.”
       Sections 1, 2, 3, and 4 of DoufieBill No. 231 read as
follms:

            “Section 1. That no contrcct rolatinC to the
       sale oz rcrclo of a commodity which bonrs, or the
       label cr cohtcnt of which bcsrs, the trade-r&ark,
       brand, or no::8of the producer or cri:ncrof such
       oomodity, nnd which is in fuir oud open coxpetl-
       tion v:ith coxioditicn oi”the s*r:cCcnaral class
       produced by others, if not in violation of Clmpter
       3, Title 19, Penal Code of the State of Texas or
       Title 126, Rcvincd Civil Statute3 of Texgr,, 19%
       and if mic I’ora period not in oxc3s:iof two (21
       y.:srsfro:1the date of its execution, shnl.1be
       dconed in violation of my I.&I; of the State of
       Texas by ro~coh of any of t!ic~Yollo?:ln;:
                                                provisions
             xay bo coctained in Each contract:
       vr!~ich

                 “1. That the buyer will not resell
       such cora~o~ity,belo:! the mininur~ grice stipulated
       by the vendor.
                 “2.  That vrilfullyand knov?inClyoffer-
       ir;Sror sale or sellin::any comodity at less than
       the z&niml: Drice stipulated in any contract entered
       into purcuant to the provisions of this Act, whether
       the person so offering,for sale or sclli~ is or is
       not a party to such contract, lo unfair coapctition
       and is actiomble at the suit of any person dcxaged
       thereby.

                      Tbat the vendee or produoor require
       any dealer%   rrhozshe nay roooll such camodity to
       agree that ho ~~111not, in turn, resell,balm the
       nin5x~ruprice +xulatob by such reador or by rnab .
       tendee.




                   “1. ic OlO.SinJJ OUt the Oimer’s GtOC@
       for the purpose of dlscontlnulnS dellvery of any
       such comodlty; provided, homver. that such stock
       is first oficrcd to the rmmfccturcr of such stock
       Gt thf? O*i~iIl7ll lnvoicc price, at lenst ten (10)
       (Jr.ys
            b,,ro:.co,:c>stock shall bi: ofl’orodfor sale to
       the public.
                 ”2 . Khen the Coodn are dns$Ccd or ‘dater-
       iorntod 111 qunlity, and notlca io ;:ivcb to the
       public thereof.
IfOli.Y.   Lot o’rl~nlol,June 2C, 1989, lnC,e4.


                  “3.   Ry any oi’ficcractin: under the ordorn
     or any court.
          ‘!EOC.3. The follozin2 terms, as urod in this
     Act, am hereby dafincd as follo~;s:
          ~~Froduccr~ mz3ns Cromr,     bn?ccr,maker, manu-
     facturor, nor publisher.
             “‘Co:.>nodity’
                          means ony rubjoct of oozmerco.
          “SCC. 4. This Act shall not npply to any contraot
     or cqrccmont betv:ocn the produco?s or bctricenvrholcsalero
     or betv;sonrotallers,’a6 to sole or resale priors. It
     is furt!xr specificslly provided that suoh contracts
     betwcn said parties are horcby declared void.”
     Title 12G, I&vised Civil Statuteo of the Stat.0 of Texas,
is the Title of our Civil Stntutos rclotinC to trusts an&
conspiraoico a:rainsttrudo. The ~wovisiono of such title,
applicable.to the oP.aract?r of c~rsmonta with *:ihichXouse
Bill No. 231 is conoerncd, are quoted belo?~:
         “Article 7426 . A ‘trust’ is a oombinotion
    of capital, skill, or acts by t?:o or morn parsons,
    .firms, corporations, or oseoolations of perzons,
    or cith.orTao or more of the::, for cithor, nny,
    or all OF tho folloulnC purpocos:

          “1. To crents, or which may tond to create,
     or carry out rsatrictions in trade or oo~meroo
     ... or to crcato or onrry out restrictions in the
     free pursuit of any businoco authorized or permitted
     by laws of this.Etato.

          “2. To fix, maintain, increase, or reduce the
     price of’merchcndiao, produce, or commodities ...
          ‘c5. To arovont or lessen competition in tho
     manufacture, mnk,inC, trnnsportation, sale or pur-
     ohaso of acrohandicc, produce, or commodities ...
          “4. To fix or naintoin any standnrd or tiguro
     whcroby the price of any article or cor~lodityof
     morohandiso, produce, or ooFzzroo ... shall be in
     any manner nffootod, controlled, or established.
          “5.. To make, enter into, maintain, execute
     or carry out any contract, obligation or uCreemsnt
     by which the parties thereto bind, or havo bound
     themselves not to oell, dispose of, trans_oortor
     to prepnrc for riirkct or trunsportation any article
     or commodity ... or by whlc!rthey shsll aCrea in
     any manner to !ceepthe prioo of suoh article or
     commodity ... nt a fixed or Crndod figure, or by
     which they shsll in any mannor affect or maintain
     the price of any commodity or article ... to pre-
     clude a froo and unrestricted competition amonf:
     tberlcclvcsor others in the sale ... of any ouch
     article or co>!!lodity,or by :;hichthay shill aCroc
     to pool, co:lbine,or unite ony intorostn tboy may
     have in connection with the r:alaor purchase Of
     any article or co:-modity ... whereby its prioo or
     such oharp  ml&. br? in any n::nncr nffcctcd.
Bon. !?.Lee O’Daniol,
             -
                      June CC, 1939, Face 5.



          “6. To rqulate, fix or l.indttho outpat of
     my nrticlo or co.mmodityv:hichmay be monufoctur-
     ed, mined, produced or sold, ...
         “7. To~cbstoin from enCagi.nCin or contlnuins
    busincos ,,or rron the purchase or sale 0r nbrchan-
    disc, prcduco or oo?modities psrtially or entirely
    within tho Stat0 of Texas, or any portion thereof.”
    hrticle 7429 provides as i’olla;vs:
         “Any and all trusts, nonopolies and oou-
    spiraoics in reotrnint of trade, as heroin dofined,
    ara prohibited and declsrod to be illeCa1.”
     hrticle 7430 providoo in effect ‘that tho charter of an,y
corporntion c:rwtor+d under tho law of Texan which may be     .
euilty of violotin3 any provision of the Title 1X, may be
forfeited at th? rcquost oi’tho httornsy General, if in the
judcxent of tho Court trying the 0~159,the public int.erost
requires such forfeiture.

    Article 7437 provides:
           “Any contract or sCroer:ont in violation of
    any provision of this subdivision shull be absolute-
    ly void   and not enforcible either in low or oqulty.~~

     Tha balance of Title 13!0contains msny othor provisions
dotiGncd to make offectivo the prohibitions contained in
subdivinion 1 of the Tit1.e.
      Articles 1632, lG33, 1634, oontainod in Chapter 3,
Title 19, of our Fanal Code, arc but verbatim copiss of
Az%icles  7426, 742.7,and 7428 ol’our Revised Civil Statutes,
referred to abova.
     Article 1635 of our Penal Codo provides that whoever
vlolntoc any provision of such Chsptor shnll be confined
in ths ponitontiory not loss than two nor more than ten
Years, The belanca of the Titla contains provisions not
hecessnry to bo notiood in connection with the discussion
involved horoin.
     Even a cosunl reading; of the provisions of the above
statutes disclo;:csthat thoy wre dcnignod to prevent the
lixir~~of prioas of artiolos of ooxxrco in any mannor by
the combined efforts of tv:o or more individuals, firms,
Corporations, or associations or pcrcons. Tho anti-truet
lnws oonstituto a 1oCislativn reooznition that oombinstions,
hzvlnC ror thoir purpo-c or effcctin;:by their acts the fir-
inC of prices, nro obnoxious to the public interest, and
dicplny a desire to enact ooaprohcncivo laws to render suoh
             i113(;ol,uncnforoiblc, and puoichoblc criminally,
l’rice-l=ixin~
no rzrttorhov it may be souCht to bu ncconplishod, rrhothcr
dlxotly or indir3ctly.

      so fer nc o:,xranti-truct 1~s condemn co-collod “VW-
t.iC.11”                                :,uts lc~iolativc adoption
        price-fixin::, they ‘coilr:tituto
    rocoyition of the otntemnnt rondoby the SUprO:lOCOUl’t
t!n:l
of the United States   in tho cam of Strauo VS. Victor Tnlk-
in- !.:achine Co., 243 lJ. S. 490, Gl L. Ed. Oi,O, that attempts
to 0011 property for o full price and yet to place rcotraints
upon its lurthor olicnstion, have hem obnorioun and hstoful
to the law frcilthe days of Lord Co‘ze,bcaaurs obnozioua
to t!lcpublic interest.
     In order to'undorstsnd thoro;t::hlY thu nnturr of tho
problm prosontcd in conncctio!lr:ith such lwc es the ohs
under consideration, it is perhnpn cdvicablo thnt vzo rcvicw
the ar~umnts ih favor of and a~alnst such 1n:vs. It is
contcndcd by ndvocntos of such lo,:iolntionthat the mum-
fncturer of'trsdo-marked or broddcd nrticlcs of co:mxco hao
a vital intcrc::tin tho Coo3 vzill cnCendcred by the sale
of such Coo& vith his brand or tmdc-sark upon thorrl;that
price-cuttiaz in such goods by rct.cilorsto v/ha71 ths r*onu-
fccturcr or distributor has ~olc?t!:cmresults in danaCe to
the r~nufaCtul~CP'~: COO4 Uill; thst the dn:mCc thus sustained
inoronoss the mnufactursr's costs and,iaRnirs his ability
to nsrket his coodo and ronults in incrsaccd prices for such
,-oodsto the buyin: ~mbllo. (7 A.L.R.    453-43a).  It lo
argued that Vertical" price-fixing;--thatis, price-firing,
on a bran&xl co:n;odityin coxpetition v!ith other branded
commodities of a similar class, by a~recnont botwon the
r~anufnctureror the distributor and the dealers in such
cocmodity, cs to the oricas for which his coxodity alone
nay be sold, is bcncficinl to tho public Ccncrelly; vrhcrcns,
it is cdnittod tht '*horizontnl'price-fixing aCro-s.ntc--
that is, price-fixinC botv;ocnr:anu1eoturoro or dealers in
similsr cox:odi.tissnnrmnlly in cor:petitionr&oh vith the
other, is decidedly ininioul to the public Interest.

     On ths contrary, the arCumentc npninst such price-fixing
arc phrased as folloxs by the l'odcrclTrade Carzlissionreport
for the ficonl ycor ending Juno ZO, 1910:

          "I. The powr to fix prices will usually be
     abused by the OlkW2C  Of too 10~   Proms;

          "2. Renslc prioo r~aintenanco protects and
     ancouracas inofficicnt jobbcrs and prevents elinina-
     tion in the over-crorldcdfield of r&ldlc;wn;

          "3.  It tends to secure cooperation of Ccnlors
     and to prcjudicc the:4a&net   brands xhose prices
     are not fixed;

          "4.  It forces other dealers to atteapt the
     control of prices;
          n5.  It oncournces Ccneral otandurdization of
     prices end elimination of normal COnpetitiOn among
     dedsrs; and,
          "6.  It forcas the ultinato oonsuzsr to Roy
     hidhcr prices and leaves him no borPinin3 Powr
     with rocpect to tho article concerned." (7 A.L.R.     45s)

     It io, of course, tho proroeativo of tbo LcCislal;urO, in
the oxercico of its conctitutiorml authority to oriCinoto such
lerislo'tio:l  tb!n, ana of t!loCovomor, in the crsrcise of
            .I.s
AIo oonstitut;.onol.outhorityto vcto,or npprove, to Salonce
thcco argumnt,s and concidorntions tho on0 ayalnst .tha other,
ootor:linetheir validity, end to tnko such octlon es, to tllanl,
eppesrs to bo in the intcrcst of the public ConerallY.
In LhC Ob~O!lCO Of Oily COilstitution:~l inhi:,ition;noitber
this DCPa~V:.etLt nor the courtn uould h?vc any rl.i;htful eon-
corn :-At!1t!:cq~l0~3tioll
                         of ptlbliopolJcy irvolvcd, Since
t!:ur:;?to~:~;i~xtion
                    or th?.t question or pubL!,io pa,cy is
~:ovmn xl by fioilin;:~of fact, ::nc: iJ!O?o:!i:r
                                                to r:2koSllCll
fiAi::;s of f::ot is by our Comtitutlon c~01uSi~ly vOStOd
in ti'.cLo~i;.lntureSnd in tho Cbi-f X:cooutlve of the St3t9.
     It folls:iStbct if the Act h2d uilcqL"ivocallgolesptcd
r.achqyozi2:nt.o3 s nra contmplntod by it:;term fron the
provisionc of the anti-trust 108s of the Stat!: of Tome,
this Dcgartr.cntshouldbe concernsd only xith t:-.equmtion
of its conctiV~tion2lity. The Act, hcwevor, does not mire
such uocquirocal oxmption,~but cxprcssly provides tbot
if t.?
     0 contr:ictcsanctio;xd ty it era vior:,tivr?or t!:ose
State anti-tlust lovs clreuly onzctcd rind in full force
nnd cfl'c0t t!:oAct itself, not tbo imti-trus ln!Ys,r.l!all
be null Sn(:1
            void nnd of no force Sad ol'feot. ‘0 that it
becoxos nocexi;ry for this Dzpnrtxnt r?ttho k 1tsct to
conriidcrthe qxstion of vhcth.crt!E Act by 'it's own tori:3
12;a nullity, and thl:,qucttion bcin~; dutcrninzd in t:?o
affir3stire, Soy quOtAion of conotitutiocclify  baoozos rloot.
     By nu::::rousdocioionn in tho St.nteof Texas, our courts
have detcr:.:icaii
                 t!xL 03r Stat.0anti-trust lo?;Sro:ld3r
absolutely n:lllant:void VSrtionl" pl.lcc-fixfnf;  cqroezzonts
ontwcd into b:lt!:cen xionufucturors or dir?.ri~ultors
                                                     ond re-
tailers, :;heri;bythe rotoilcr n;,7,rcec
                                       to roS,ollon Srticlc
of oome1'co in tJ:iaState only St e xioo fissd by the
I:onufScturer or dirtributor of Such nrticlc of cc:xsroo.
     In the ci:seof Coddoll VS. ::Stkins (C.C.A. Son Antonio)
227 9. V!.m't, t.l?C
                   court mid:
            "If by the fores of this contract qnd the
        controlciven thcreun<cr, th3 rosSlc of the pro-
       duct in thic Stat0 iS linitcd to Sny prcxribcd
       telTitoly, or to o fixed _orlcc,Oi’ the rctuilcr
       is required to devote all hiS tixe to tho Sole
       of those particular r,ood..:;
                                 and my not cn.pCe
       in any othzr busiwsr;, t!l:n*ED eny tbst cwh
       contract'... is in contravention of 0'2ranti-trust
       StStutcrrend :l,crSforoinvalid."
     In the oaeo of ScCnll VS. ::CCnll CO., 104 6. !:;.
                                                      W3, t?le
Supra:~ Cowt of the State of TexSS hSld 8 contract for S
                             So;Sll to Sol1 no othw pattcrx
Enlo or ~mLtcr!ls,o'bli::stln::
exoept :'c~all~t:,
                 and to rcccll ot pricoS fixed by !.'oCall,
                                                          to
be void, in uiolfitionof Tcxas onti-trust luVl;rr.,
                                                 suyin:::

             WT~I~oolltrnctfixes the price St which tho vendee
        Shall Sell in TOxSr.and provides t.hntho Shsll re-
        frain fro;:r.cllin~at retnil in Toxns nny ot!icr
        pattern tbnn the I.:oCnllpattern. Thin brines it
        under the juriohiction of the TcXuS 1~~3."
                    effect, UpOll SiIdlSr foCtS Se0 Pictorial
        To the c;(,y:,~
RQV~W     co. vs. Pate Eros. (C.C.I..Ft. :..orti,j,
                                                 1e3 3. 7:.509.

     yjlf3o:rc-r:j<
                  fro::tl:,c
                           opinion in Cr:~:Z~oll
                                              VL‘.:IutlCi3S
j::edioineCO. cited aboxc, is quotnd ~ltl'r
                                          npi:rowl in the
Ron. Yf. Loo O~iJsniol,Juno 223, 1959, DoSo S.



caeo of F. Y!.Cooke vs. PaS.0 (C.C.A. San Xntonio),~294 S. 71.
934, as well as in many other Texas caooo.
     In the 9aoe of Rubb-Dices Co. VS. l~!ibohell(C. c. k.
AmtAn), -231 C. ::'.425, it was held t!mt a oontroct bctwoen
a wholesale and a rutail dealcr providin=.that the rotailor
should resell tractors at a price fixed by tho rmnufacturer,
R;nry Ford, for solo to the retail trade, and requiring the
viholcsaler.torolxiburso the retailer for any docrcaso in the
retail price of tho troctoro, ~a* nn qrocmcnt to fix and
aalntafn the price for tho sale of such conaodity, and
Sherafore violative of our Stato nnti-trust laws, honoe void.
     In tbo oasa.of Cooa Cola Co. YE. The Stnto,.?PS S. ;?. 791,
tbc court announced tho rule that our State anti-t,rJstlaw
xre &pplioable to sales of wtented, copyrighted, or tmde-
~mr%od articles, statlnS:
          "The owner of'an article protectad by a patent,          .p .
                or trsde-rark, v!hen hs hns rsnufacturad
     co:,y1~gllt,
     anO cold the soae, .osnnot inpocc restrlotlons on
     his vcndca OS to tho future sale of sane. R..vinS
     marted with his ovmershlp tberain.s it entcrs tho
     ohannolo of trade as en article of oo~znorce,and Is
     thorcaftor beyond his control."

     This rule of lnr?WC cltod v;ithapproval in ths ease of
Rowers Y. ':iostinghouso
                       Electric Supply Co., 116 S. If. (2.6)SBG,
writ of error rofuoed by our Suprexc Court, by the Austin
Court of Civil Appeals in tbc ca*e of Notional Autormtic
IkkchineCo. vs. Enith, 32 S. Y. (23) 679, and by the Toxcrkana
Court of Civil A?>>als in ths OQCO of Tri-State Soles Co. Vs.
Rational Autoxltio ::ochina Co., 38 8. iY. (2d) 059.

     In each of the follozinS cases, tho contracts with
vhlch the courts v,oro dealing prorllnontlylnvolvod acre+
ncnts bctv:oonnaaufocturars  or distributors and dcelsrs to
whom they wxo sellinS their yoods that such dcolaro should
resell such Sooda only et retail prices fixed by the maw-
focturer or dietributor. In oath cnso, such "vortioal'
price-fixing q (;roaxentwas held to be void because in Vlo-
lation of our Ststo anti-trust laws:
     vi.T. RawloiSh Co. vs. Ds?:cr, et al (C.C.A. Texarkena).
117 s. R. (2d) 1117.

     Karathon Oil Co. vs. Rodlay, et al (C.C.A. Ft. ?iorth),
107 5. V'. (2d) Oes, writ di~!ri~scd.
     EcConnon vs. Ralston, et al, 275 8. 1?. 165.
     XoConnon vs. I!nrshnll, et al (C.C.A. Texnrkana), 280
s. iY.323.
     a. T. Rav:lcieh Co. vs. BraCberry'(C.C.A. Ar,erillo),
290 S. >I.870.
     71. T. Rnwloigh Co. vs. Rudeon, et 01 (C.O.A. Rl IOOO),
200 3. iv. 775.
      v. T. RnviloiShCo. vs. Gober, ct nl*(C.C.A- ?aco),
I3 S. 71. (2d) S45.
     J. R. v;atkinoI:cdionl Co.~va. Johnson, ot al (C.C.A.
Son Antonio), lG:!S. L:.394.
     In each of the sbovo cltod oo!xs Jurl refwr.:d to,
there ycro ‘oth.?rvioli:tlouco!'tho out!-tmst lo\~:s,j.nvol.vod
finsuch contracts, SUOh 65 ~O~l211?~2IIt!; t?;:.:t ti7.ac.OOci:i
                                                               bo
sold by the rctcllor  only in c czrtnin  tcixlt.crry,    or t&t
the dcalor should bind hi:Gclf to co11 no otbm {;oods of
o sllnllarchnractcr, or th;t the dmler dfl.1'ota      his ontire
tlr:eonly to the hole of the p2::ticulnrccr.i;6il:*'c    :mrchnn-
dloe; but it is oppcront i'roi;l
                               tho follo;.lr.::  c:lcesreforrcd
to balm t!,:lt tho stipulotinn In tl:ocoutx,.ct>i.:hich      chiofly
conccrnod tho courts wus thnt fixlfizprice::,      and ti::ltthe
othor Ptlpul5tionc roforra~ to mro rcfcrdr3 Vi tho courts,
es they are by the anti--trustloo;:,ao viu:ous ond coatrnry
to tho public iMcrc:t becnuce they afford ef'fectivc:~xm
by Yzhlch pri63 control nay bc mlntolnod.
      In tha csse of J. R. !%tkino !~:odicalCo. vs. Johnson
et al (C.C.2. Son Antonio), lG2 S. VT.384, t?m Cm-t,     in
di6tfntl\ishillC the :'U~;'cmCourt c2coo of Idb6i%y;16 CD.
vr. Feist GO., nnQ Fuqa    78. Fiwrin~ Co., ro::clks:

           'I...they nrc clomly dlntingsi:5hnblo. In
     the Fuqnn caao the fmrtics sourht to con!.rol
     th6 Pl'iCC nlld SirlC Of t!lc b.:cr oftcl t!lu title
     theroto v~stxl f.n the purchd::x?, ns ~011~ 6% to
     dopriro the buyer end sollor ol t!w r,i~htto (:s:l
     wit3 any other jx?rsonowith roforcnce to the EWZB
     cozziodltyin the oc::wtarritory durlw: the tsm
     of the cont.rnct. In tho F'eist cast?no cfrort me
     rude to co:;troloi'lixit tho Ciq~orition of tke
     (;ooas ... but to bind the soiler to 3511 tiresme
     class of GOOR:: to no other pxrson in the ~'s;:o
     territory i'orn lirlltcdtlxa. The contrwt clcnrly
     shirjlcthat Feint P-.Cwp?ruy vw1'0 in no :mmm      lirlitcd
     in ttc?irri::htto cull or to fix the prim or the
     (:oods or in my mmcr      to coriLro1or llr.:lt  tho
     free  and Unro6tXIiIlsd  tiTffi6   in th0 :~OOds cold
     oftor thc.titlu thcrzto v3stcd in l‘clst;: Coqmy,
     The corn con be mid of'the coca of Xclipoc i%iat
     Cmpnny vs. NW Froccso rtoo?ln;.      Co:'1>ouy."

      In the 6660 of Double Seal Hin;:Co.x:mnyvs. Keith,
(C.C.A. Pt. ;:'orth), 107 S. i'l.(2d) 428, writ roi'uoed,the
Court rooo,';nirud thnt if the oontroct there undm consid-
orotlon bsd boon oue of rslo, rnthnr then one of ogonoy,
and hn(lfixed the rcsalc prlco$ at vihlohthe 00n'~10cliti6~
!nust bo rold, it would I!;vobcon in violetion of our Statc
anti-trust laws.
      In the OGL:C of tiu Enmel Point Co. Vs. Davis (G.C.A.
Ft. Korth), G3 S. IV. (7.d)RCl, the Court, lu holdin!!that
a contract  for the sale of paint not ctipulntinz tbot thz?
distributor S1oulG be tho co1.0dlntributor in tho torrltory
deolC:nateduor binding him to ccl].at o fl:ml prloo, did
not rioloto Stato,nnti-trust law, rennrks:
              VW     Century ;.:anufnctiirin: Co. vs. Bohouror
     (VOXOS    CC:X!~:::~O~   6r   hp   61.:;) 45   L;. .::. (?a)   560,
     is not in pglnt, slnc2 the contmct tllorc conctruud
     dld stipuloto 8 fixed price for which the articles
     oontrnctcd for should bo cold.*
     It nuct bz notod, of oourcc, tlat tho ceeo of Rcw
cc!:tury'JInnui"acturlny,
                      Co. VS. Cohourar ho3.dD contract to
p?~rchesepoint contoinln: proVl;:io:wrixilg:tho mm10
price Of point to bn in violation of the l?o&rcl enti-
trust 1~s; but it is api:nrciIttlmt the Fo;t Yorth Cwrt
of CiVll Ap?cnlo conntracd tl:rct
                                03s::as equally n~plfcnblc
to our State anti-trust lnxo.

     In the moo of :I. T. Rarlei~b Co. VS. Flotohcr, et cl,
(C.C.A. Tcxlrkana), 275 S. 1. 210, the Coupt ctatcd thot
the fact Wet D.buyer, puro!acl~~ nrtlclcs ootrl:;ht,Vas
ln~i'ely~ovorncd by the scllcr*c "l;u:::L'.?3tcG
                                            prlcob" in dir;-
posing of articlea bou;ht did not 111and of itself ooneti-
tuto 6 viol;:tionof State m&l-trust lew.    The Court says:
          There lb no find.lngthat it UUB a part of the
     contract l-orrlotcksr to ye;011 the r,oodcat-
     p~lcas listed to hl&. The fmre feet that 'in
     di~po~lu::of‘the products purclasod by hlx,'
     TletchJr 'I:23lcrcely ~OV0XIlGd by 'n B'Ji~~\OSted
     retell grim list of JI1‘OduCtcq v;ouldnot, In
     i,tcolf,bc .=I
                  vlol:jtlon of'tho ctatutec."

     That csee, themfore, turns upon the failura to be&b-
lioh either the n~roc.;:ant
                          or the cuctox i!zply:ni-
                                                 en ayrcc-
mnt., to rerzcllnt priccc fired by the co;!wny, the court
ncceccnrlly lsplyln: that lr Flotchor h?d obll;;qtodhirxolf
to rcasll at prlccs fixed by the co~ipony,tbsro v~ouldhnve
cxistcd cuch n cozblnntion 86 in redo unlwful by tho nnti-
truot lo~.zor TCXI~G,sun such contrnots v:ouldhow been
void.
     And in the mce of K. T. Rawleigh Co. vs. Fish, (C.C.A.
Xer;tlcnd),290 2. 2. 798, the Cowt, in conetruin~ b ooztract
for the snle of hoods es not limitln~ olther territory,
rccclo price, or requiring voadee to sell only vcndorfs
coed:;,and thorcforo not viol.ntin:-our ttetc cnti-trust
lavrb,a@n   hplics that if tke oontrt~ot:v:dflxod the rc-
oale pricrr,it v;ould have boon in violetion of our enti-
trust lam.
      And in the onse of Y!.T.~Rwloigh Co. vc. lIarpar (Co+
nission 0r Ap>cnls), 17 u. Y. (Pd) 455, Ia0 Corx&.sion or
hppoalo,  ~~licr- t,?ls jury found tlm t the ar,raomnt xwde pro-
vldod t!mt i!llrgrwe to dcvoto bin entfro tirnc,skill, OtC.,
to selling cooidspuro!mscd of the company by him, but t!mt
lt did not:conttzglots or provldc that hlr:torritorj %s
to be limltcd or that the rosalo price w R to be filed by
tllo co:~pci:yh&i that the oontrect did not violsto our Stnte
entl-trust Inwe, but hem n&n          the intimntion ie olonr that
if the oontract had provided for tho fixing of the remlo
,7rlce,the coul’t would hove held it to bc Void.

     Other autho~~ltloofrom thlc Et::t<!
                                       ml::ht be cltcd by us
in cunrort or the proposition Fnvolvod, but to do 60 vmdld
       lo:I+!\cnthis o,in!Lon. Il:r:muzti-Jc
ut?I:uly                                  annotatlonn unon
the bubjoct ~111 bo fou!ldin 7 ,,.i..i:.
                                      4d');19 f..L.T..9;:s;:%?
A.L.E. 1037; 103 A.t.l:.1331; 164 fr.L.R.1452; 106 A.L.P..
1486; and 110 A.L.lc. 1413.
 Won. V. Lee O'Dnniel, June 20, lBSrJ,P9ee 11.


      That the iixmdintc effect of the coxbinotion or o~rec-
 wxt r&y bo to lo:.crprices h::obwn held by o.zrcourts
 not to vit:llix or rondar valid such a~;rot:;l.~nt.r?.
                                                    In Ccn
 Antonio Gas 00. VG. State, 54 S. \i. %CI),it is oald:
           *'%tdoee not wttcr tklt tho ir&:lrrdinte
      recult of coxhitwtion x.yybe a rcductlon in
      the price os^co:xloditios. b dnnGerouo arbitrary
      poser hrs boon lodged in its bonds, by %hich
      the bualno&s of the country may be nbaolutoly
      domiriqted,and prica arbitrarily controlled,
      re&¶rdlec~ of'tbc Iwo of tredo or the rules
      of eupplg and Gcmnd.,... The object of the
      stututcs la to tunrd the coll'.iorce
                                        nnd trade
      of the ctnta so that it my floz in ito rcCulnr
      ohannels, oub.ioctto the l..;v
                                   of supply and dcmsnd,
      and untrnxwled by tha oo::!binntionn of man or
      oorporatlons which onn, nt will, control their
      OOUrGQ."
      Uc ltivebeen referred to the w~o'of Old Dearborn Din-
 tributln!:00. VI?,SeaC:rcwDietillcrs, 81 L. ed. 769, by the
 Supreme Court of thu United W.:ltcr:.Thnt onso involved
 only the validity of the Illinois Pair Trnde Act insorar
 as the Constitution of the United 3tatoc lo concerned.
 The fllinoi~ Sair Trsdc Act containad no cucb provision
 a5 is found in Section 7 Or 1:OUt.e Bill 231, hOW2 that
 authority has no bcwil;g ulronthe quontion on v:hichtho
 velidity of :!ousanil1 2.31irs turned.

      Eubxectione 1, 2 and 3 of Section 1 Or I:ousOGill 231,
 quoted above, expressly oanction end. propose to mke valid
 and biudln& oontmctn  02 D chnrwcicr  itmouncud an0 readercd
 null, void, end unenl'orcibleby the proviuions of our State
 antf-truat laws, as oont~ln~d in Chaytor 3, Tit10 10 Penal
 Code ol'the State of Toxr, RJld Title 125, Revised Civil
 Stetute3 0r TOxnr, 1925. Thorurora, by virtue of the exg%ss
 provisions contninad in Nouse Bill fro.231, Section 1 of
 %une Dill FTo.231 is sutircilynull, void, and of no force
 and effect. Since the grovlcions contained in Poction 1
 or 1Iowc Rlll.Xo. 231 constitntc the bono ond sinez of the
 entire Act, nnd withoat such provisions tho rameindor of
 the Act bocono; mcanlw~:loco, it is np:lxrcntthrt the entire
,k0t nust rdi.




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                               Dy      .
                                         R. ';1.
                                               Fairchild
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