II. CONTRACTS NOT TO COMPETE No statutory provisions. Judicial Decisions Covenants Ancillary to Sale of a Business. The defendant, vendor of a business and owner of the realty, covenanted not to rent adjoining stable and lot for a period of 5 years to any other person handling horses or mules. Held error to admit evidence to the effect that the defendant built and rented a stable in another part of town to parties engaged in the livery business. Pitts v. Montgomery, 79 Miss. 250, 30 So. 649 (1901). Defendant, ancillary to the sale of an insurance agency, agreed not to engage in that business in four counties for a period of 10 years. In an action for breach of the contract, plaintiff failed to show that the restriction was reasonable and necessary for the protection of its goodwill. As section 3437 is declaratory of the common law, the court, in applying the rule of reason, held the limitation unwarranted. Sively v. Cramer, 105 Miss. 13, 61 So. 653 (1913). An agreement by a seller of a restaurant not to engage in a like business in the same city although unlimited in time, is reasonable and not in violation of the antitrust law. Contracts in restraint of trade are not unlawful unless also shown to be "inimical to the public welfare." Jackson v. Price et ux., 140 Miss. 249, 105 So. 538 (1925). Covenants Ancillary to Employment. The contract of an assistant physician not to engage in the practice of medicine in a city, or within 5 miles thereof, from the date of the termination of employment, was held valid. The limitation was reasonably necessary for the protection of the employer without imposing undue hardship on the employee. Wilson v. Gamble, 180 Miss. 499, 177 So. 363 (1937). Covenants Ancillary to the Lease of Property. An agreement by a lessor not to engage in the moving-picture business in the same city for the duration of the lease would have been valid at common law. Applying the rule of reason, the court held the restriction valid under section 3437. Plaza Amusement Co. et al. v. Rathenberg, 159 Miss. 800, 131 So. 350 (1930). Sively v. Cramer, 105 Miss. 13, 61 So. 653 (1913). Restrictive Covenants Not Ancillary to Sale of a Business Interest. An agreement between two competing cottonseed-oil companies not to compete for the purchase of certain cottonseed in a specific territory was held in violation of section 3437 (L. 1900 p. 126, c. 88, sec. 30, Kosciusko Oil, Mill & Fertilizer Co. v. Wilson Cotton Oil Co., 90 Miss. 551, 43 So. 435, 8 L. R. A. (NS) 1053 (1907). III. TYING CONTRACTS AND EXCLUSIVE DEALING ARRANGEMENTS Code Ann. (1930) Sections 4114 and 4115 provide that a cooperative marketing association organized under sections 4099 to 4129 may enter into contracts with its members requiring them to sell, for any period of time not over ten years, all or any specified part of their agricultural products or of specified commodities exclusively to or through the association and that such marketing agreements shall not be considered illegal or in restraint of trade or in violation of the antitrust statutes of the state. See Exceptions to General Antitrust Laws, supra. See also Cooperatives in projected study. Judicial Decisions Exclusive Dealing Arrangements. Application of the Common Law. At common law an exclusive right granted by a railroad to a "hackman" to solicit business at its depot was held invalid. State v. Reed, 76 Miss. 211, 24 So. 308 (1898). Application of Statutes. An exclusive grant by a railroad to a telegraph company over its right-of-way is in violation of section 3437 (Code 1892, c. 140) as a restraint on trade. Mobile & O. R. Co. v. Postal Tel. Cable Co., 76 Miss. 731, 26 So. 370 (1899). An exclusive right to sell manufacturer's pianos within a specific territory does not violate section 3437. (Dictum.) That such a contract was illegal could not be interposed as a defense to an action for the purchase price of a piano sold as this sale is collateral to the seller's contract with the manufacturer. Hauck v. Wright, 77 Miss. 476, 27 So. 616 (1899). An agreement by one telephone company to handle all of another's long-distance calls exclusively is not in violation of section 3437. Cumberland Tel. & Tel. Co. v. State, 100 Miss. 102, 54 So. 670 (1911). An arrangement prohibiting the dealer from selling patterns of any but manufacturer's company is in violation of section 3437. McCall v. Hughes, 102 Miss. 375, 59 So. 794 (1912). The illegality of the contract, however, does not prevent the manufacturer from recovering for the reasonable value of products delivered under such illegal contract. Ibid. See also McCall v. Parsons-May Oberschmidt Co., 107 Miss. 865, 66 So. 274 (1914) (recovery of the contract price). The grant of an exclusive privilege by a railroad company to load logs at points between stations was upheld. Since the railroad company itself could engage in the business of logging to the exclusion of all others, it could grant that right to a third person. Yazoo & M. V. R. Co. v. Crawford, 107 Miss. 355, 65 So. 462 (1914). An agreement by members of a cooperative marketing association organized under section 4114 to sell its produce exclusively through the association is not in violation of the antitrust laws. The member breaching such contract is liable for the penalties provided for by the Cooperative Marketing Act. Brown v. Staple Cotton Cooperative Association, 132 Miss. 859, 96 So. 849 (1923). MISSOURI I. TRUSTS, COMBINATIONS, AND MONOPOLIES A. GENERAL ANTITRUST LAWS CONSTITUTIONAL PROVISIONS No provisions. STATUTORY PROVISIONS Stat. Ann. (1932) Sec. 8700. Combinations in restraint of trade declared a conspiracy. Any person who shall create, enter into, become a member of, or participate in any pool, trust, agreement, combination, confederation, or understanding with any person or persons in restraint of trade or competition in the importation, transportation, manufacture, purchase, or sale of any product or commodity in this state, or any article or thing bought or sold whatsoever, shall be deemed and adjudged guilty of a conspiracy in restraint of trade, and shall be punished as provided in this article. (R. S. 1919, sec. 9655.) Sec. 8701. Pool and trust agreements defined.-Any person who shall create, enter into, become a member of or participate in any pool, trust, agreement, combination, confederation, or understanding with any other person or persons to regulate, control, or fix the price of any article of manufacture, mechanism, merchandise, commodity, convenience or repair, or any product of mining, or any article or thing whatsoever, of any class or kind bought and sold, or the price or premium to be paid for insuring property against loss or damage by fire, lightning, or storm, or to maintain said price when so regulated or fixed, or shall enter into become a member of or participate in any pool, trust, agreement, contract, combination, confederation, or understanding, to fix or limit the amount or quantity of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever of any |