or if the investigation is on petition it shall be held in the county where the petitioners reside. The expense of such investigation shall be paid from the appropriation provided by section eighty-seven of chapter ninety-one. If upon investigation, it appears to the attorney general that the laws of this state, including the provisions of sections thirty-one to thirty-three, inclusive, have been violated in any respect, he shall forthwith prosecute the guilty parties, and present all available information bearing upon such apparent violation to the proper prosecuting officer of the United States. Any justice of the superior court may by order, upon application of the attorney general, compel the attendance of witnesses, the production of books and papers, including correspondence, and the giving of testimony, before the attorney general in the same manner and to the same extent as before said courts; and any failure to obey such order may be punished by such court as a contempt thereof. 1919, c. 256, sec. 3. 1921, c. 76, sec. 2. L. 1937, c. 12 This act provides in part that it is illegal to conspire to injure the business or property of another or to commit any act injurious to trade or commerce. B. EXCEPTIONS TO GENERAL ANTITRUST LAWS Rev. Stat. (1930) c. 56 Section 60 provides that no association or corporation organized for the sole purpose of marketing fish or agricultural products of this state, the members or stockholders of which are actually engaged in the production of such products, shall be deemed to be a conspiracy or a combination in restraint of trade or an attempt to lessen competition or to fix prices arbitrarily. See General Antitrust Laws, supra; Tying Contracts and Exclusive Dealing Arrangements, infra. Rev. Stat. (1930) c. 59 Section 28 provides that cooperative agricultural marketing associations organized under this chapter shall be exempt from the operations of antitrust laws. See Tying Contracts and Exclusive Dealing Arrangements, infra. See also Cooperatives in projected study. C. SPECIAL ANTITRUST LAWS 1. Special Industry Antitrust Acts L. 1933, c. 268 Section 12-G, as amended by L. 1937, c. 235, sec. 8, provides that no person shall be issued a license or renewal if in any manner indebted for liquor, malt liquor, wine, or spirits; that it shall be unlawful for any licensee, or applicant, directly or indirectly to receive any money, credit, thing of value, endorsement of commercial paper, guarantee of credit or financial assistance of any sort from any person within or without the State if such person shall be engaged directly or indirectly in the manufacture, distribution, sale, storage, or transportation of liquors, malt liquors, wines, or spirits, or of any commodities, equipment, materials, or advertisements used in connection therewith; and that no license shall be issued for any premises in which any interest whatsoever is owned or controlled, directly or indirectly, by any person within or without the State engaged or interested directly or indirectly in the manufacture, distribution, sale, or transportation of liquor, malt liquors, wines, or spirits. This section does not prohibit any wholesaler from receiving normal credits for purchase of malt liquors from manufacturers thereof. L. 1937, c. 235 Section 1, as amended by L. 1939, c. 107, provides that all applications for a license shall disclose the complete and entire ownership in the establishment for which a license is requested. Untruthful answers shall constitute the crime of perjury. L. 1933, c. 268 Section 24 provides that whoever violates any of the provisions of this act shall be punished by a fine of not more than $500 or by imprisonment for a term of not more than eleven months, or both. L. 1937, c. 140 This provides that no officer, director, or stockholder of a corporation holding a manufacturer's certificate of approval, shall in any way be interested, either directly or indirectly, as a director, officer, or stockholder in any other corporation holding a wholesaler's license for the sale of malt liquors; nor lend any money, credit, or equivalent thereof to any wholesaler in equipping, fitting out, maintaining, or conducting, either in whole or in part, an estab lishment of business where malt liquors are sold, excepting only the usual and customary commercial credit of malt liquor sold and delivered. L. 1937, c. 237 Section 15 provides that licenses may be revoked at the discretion of the commission for violation of any law or of any rule or regulation issued by the commission. After an award of a competitive bid to carry mail, defendant subsequently agreed to pay plaintiff certain sums and save him harmless from action by the Post Office Department, if plaintiff repudiated the contract. Thereafter defendant sought and was awarded the mail contract at a higher rate. In an action to recover the promised sum, plaintiff was nonsuited. Contracts made for illegal purposes are void, and to prevent fair competition in bidding is an illegal purpose. This contract not only had a tendency to prevent competition, but was entirely destructive of it and to the interests of government. Weld v. Lancaster, 56 Me. 453 (1868). II. CONTRACTS NOT TO COMPETE No statutory provisions. Judicial Decisions Restrictive Covenants Ancillary to Sale of Business. Contracts not to compete, ancillary to the sale of a business and its goodwill, are valid if the restraints are reasonable. Emery v. Bradley, 88 Me. 357, 34 Atl. 167 (1896) (photographic business); Flaherty v. Libby, 108 Me. 377, 81 Atl. 166 (1911) (trucking business); Whitney v. Slayton, 40 Me. 224 (1855) (iron foundry); Augusta Steam Laundry Co. v. Debow, 98 Me. 496, 57 Atl. 845 (1904) (laundry business). There is no restriction as to the limitation of time that may be specified in contracts not to compete, other than that they be reasonably necessary for the protection of the obligee. Thus, a contract for an unlimited time has been upheld. Emery v. Bradley, supra. Contracts of definite duration have been upheld in the following cases: Flaherty v. Libby, supra (5 years); Whitney v. Slayton, supra (10 years); Augusta Steam Laundry v. Debow, supra (5 years). The area covered by contracts not to compete must be reasonable under the circumstances of each case. Contracts restricting activity within city limits have been held valid in Emery v. Bradley, supra; Flaherty v. Libby, supra; Augusta Steam Laundry Co. v. Debow, supra. A defendant who sold his photographic business together with the goodwill and agreed never to resume the business in the same city was restrained from engaging in the business as the agent of another person. The contract was held to envisage indirect as well as direct violations. Emery v. Bradley, supra. In an action for damages on a bond "not to engage in the business" of iron casting, defendant was held to have violated his agreement where he became a stockholder in an iron foundry corporation, and was employed by it as foreman. Whitney v. Slayton, supra. A receipt for the sale of a soap manufacturing business was the only written evidence of the contract. It contained the phrase "all my trade and customers." In a suit for damages, because the vendor entered into a similar business in the same territory, the phrase was interpreted to mean that the vendor would not interfere with the plaintiff within "the circuit of his usual custom." Such an agreement is not against public policy. Warren v. Jones, 51 Me. 146 (1862). Where a contract not to compete provides for liquidated damages for breach, the vendee has the option of proceeding in equity for an injunction or at law for damages. Augusta Steam Laundry v. Debow, supra. III. TYING CONTRACTS AND EXCLUSIVE DEALING ARRANGEMENTS Rev. Stat. (1930) c. 59 Sections 17 and 28 provide that agricultural marketing cooperatives may make marketing contracts with their members requiring the members to sell, for any period not over ten years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association, or any facilities to be created by the association, and that such marketing contracts shall not be deemed illegal or in unlawful restraint of trade or part of a conspiracy or combination to accomplish an improper or illegal purpose. See Exceptions to General Antitrust Laws, supra. See also Cooperatives in projected study. Rev. Stat. (1930) c. 56 Section 60 provides that no marketing contract between an association and its members organized for the sole purpose of marketing fish or agricultural products shall be considered illegal or in unlawful restraint of trade. See General Antitrust Laws, supra; Exceptions to General Autitrust Laws, infra. |