Sec. 4. Penalty for violation of act.-Any violation of either or all of the provisions of this act shall be and is hereby declared a conspiracy against trade, and any person who may become engaged in any such conspiracy or take part therein, or aid or advise in its commission, or who shall as principal, manager, director, agent, servant, or employee, or in any other capacity, knowingly carry out any of the stipulations, purposes, prices, rates, or furnish any information to assist in carrying out such purposes, or orders thereunder or in pursuance thereof, shall be punished by a fine of not less than fifty ($50) dollars nor more than five thousand ($5,000) dollars, or be imprisoned not less than six months nor more than one year, or by both such fine and imprisonment. Each day's violation of this provision shall constitute a separate offense.

Sec. 5. What indictment must set out.-In any indictment, information, or complaint for any offense named in this act, it is sufficient to state the purpose or effects of the trust or combination, and that the accused is a member of, acted with, or in pursuance of it, or aided or assisted in carrying out its purposes, without giving its name or description, or how, when, and where it was created.

Sec. 6. Prosecutions, what to prove-Books and papers must be produced when ordered.—In prosecutions under this act, it shall be sufficient to prove that a trust or combination, as defined herein, exists, and that the defendant belonged to it, or acted for or in connection. with it, without proving all the members belonging to it, or proving or producing any article of agreement, or any written instrument on which it may have been based; or that it was evidenced by any written instrument at all. The character of the trust or combination alleged may be established by proof of its general reputation as such. In case any court of record, or in vacation any judge of said court in which is pending any civil, criminal, or other action or proceeding brought or prosecuted by the attorney general or any district attorney for the violation of any of the provisions of this act or in any action or proceeding for the violation of the law of this state, against conspiracy or combination in restraint of trade so orders, no person so ordered shall be excused from attending, testifying, or producing books, papers, schedules, contracts, agreements, or any other document in obedience to the subpoena or under the order of such court or any commissioner or referee appointed by said court to take testimony or any notary public or other person or officer authorized by the laws of this state to take depositions when the order made by such court or judge thereof includes a witness whose deposition is being taken before such notary public or other officer on the ground or for the reason that the testimony or evidence required of him may tend to

criminate him or subject him to any penalty; but no individual shall be prosecuted or subjected to any penalty for or on account of any transaction, matter, or thing concerning which he may so testify or produce evidence, documentary, or otherwise, before any such court, person, or officer.

Sec. 7. Penalty, after notice by attorney general.-Each and every firm, person, partnership, corporation, or association of persons, who shall in any manner violate any of the provisions of this act, shall be for each and every day that such violations shall be committed or continued, after due notice given by the attorney general or any district attorney, forfeit and pay the sum of fifty ($50) dollars, which may be recovered in the name of the people of the state of California, in any county where the offense is committed, or where either of the offenders resides; and it shall be the duty of the attorney general, or the district attorney of any county on the order of the attorney general to prosecute for the recovery of the same. When the action is prosecuted by the attorney general against a corporation or association of persons, he may begin the action in the supreme court of the county in which defendant resides or does

business.

Sec. 8. Contracts in violation of act void.-That any contract or agreement in violation of the provisions of this act, shall be absolutely void and shall not be enforceable either in law or equity.

Sec. 9. Provisions cumulative.-That the provisions hereof shall be held cumulative of each other and of all other laws in any way affecting them now in force in this state.

Sec. 10. Trust certificates not lawful.-It shall not be lawful for any person, partnership, association or corporation, or any agent thereof, to issue or to own trust certificates, or for any person, partnership, association or corporation, agent, officer, or employee, or the directors or stockholders of any corporation, to enter into any combination, contract or agreement with any person or persons, corporation, or corporations, or with any stockholder or director thereof, the purpose and effect of which combination, contract or agreement shall be to place the management or control of such combination or combinations, or the manufactured product thereof, in the hands of any trustee or trustees with the intent to limit or fix the price or lessen the production and sale of any article of commerce, use or consumption, or to prevent, restrict or diminish the manufacture or output of any such article, and any person, partnership, association or corporation that shall enter into any such combination, contract

or agreement for the purpose aforesaid shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine not less than fifty dollars, nor more than five thousand dollars.

Sec. 11. Persons injured in business by trust may sue.-In addition to the criminal and civil penalties herein provided, any person who shall be injured in his business or property by any other person or corporation or association or partnership, by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any court having jurisdiction thereof in the county where the defendant resides or is found, or any agent resides or is found, or where service may be obtained, without respect to the amount in controversy, and to recover twofold the damages by him sustained, and the costs of suit. Whenever it shall appear to the court before which any proceedings under this act may be pending, that the ends of justice require that other parties shall be brought before the court, the court may cause them to be made parties defendant and summoned, whether they reside in the county where such action is pending, or not.

Sec. 12. "Person" defined. The word "person" or "persons" whenever used in this act, shall be deemed to include corporations, partnerships and associations existing under or authorized by the laws of this state or any other state, or any foreign country.

Sec. 13. Labor not a commodity.-Labor whether skilled or unskilled is not a commodity within the meaning of this act. [New section added by Stats. 1909, p. 594.]

Civ. Code (Deering, 1937)

Section 1673 provides that contracts whereby anyone is restrained from exercising a lawful profession, trade, or business of any kind are void. See Contracts Not to Compete, infra.

General Laws (Deering, 1937) Act 8781
Discriminations

Section 1 provides that it shall be unlawful for any person engaged in the production, manufacture, distribution, or sale of any article or product to discriminate as to price between different localities with the intent of destroying the competitor of any regular established dealer of such articles, or to prevent the competition of any person. Motion picture films when licensed are exempt from the provisions of this article. This act does not apply to any service controlled by the railroad commission of the State of California. See Vol. State Price Control Legislation: Antidiscrimination Legislation.

Judicial Decisions

GENERAL ANTITRUST LAWS

The Cartwright Antitrust Act is not inconsistent with the criminal conspiracy statute, Penal Code, sections 182-184, and is constitutional. People v. Sacramento Butchers' Protective Ass'n, 12 Cal. App. 471, 107 Pac. 712 (1910).

The 1909 amendment to the antitrust law permitting contracts to market commodities at a reasonable profit is invalid since it leaves the statute without a fixed standard of guilt. The entire Cartwright Act is unconstitutional by reason of the invalid amendment, the amendment not being severable. Blake v. Paramount Pictures Inc., 22 Fed. Supp. 249 (Dist. Ct. Cal. 1938), citing and following Cline v. Frink Dairy Co., 274 U. S. 445, 47 Sup. Ct. 681, 71 L. Ed. 1146 (1927), which dealt with an identical statute in Colorado.

Application of Statutes.

In General.

The gravamen of the offense defined in the Cartwright Act is the combination to prevent competition in prices. It is not necessary to allege that the defendants controlled the trade or had a monopoly in the particular commodity. People v. Sacramento Butchers' Protective Ass'n, 12 Cal. App. 471, 107 Pac. 712 (1910).

A contract fixing the resale price of a commodity is valid where the vendor does not control the trade in the particular commodity. Ghirardelli Co. v. Hunsicker, 164 Cal. 355, 128 Pac. 1041 (1912) (ground chocolate); Munter v. Eastman Kodak Co., 28 Cal. App. 660, 153 Pac. 737 (1915) (photographic supplies).

A contract providing for traffic arrangements to prevent ruinous competition between two water companies having connecting water mains is valid. San Diego Water Co. v. San Diego Flume Co., 108 Cal. 549, 41 Pac. 495 (1895).

Contracts between an association of stevedores and its members, fixing prices and providing for the distribution of profits are valid since the prices fixed are reasonable and the restraint of trade is limited to the members of the association. Herriman v. Menzies, 115 Cal. 16, 46 Pac. 730 (1896).

Several employers entered into an agreement with four hospitals for "hospital protection" by deducting $1 per month from employees' wages. The agreement was held valid and not a conspiracy to injure

the business of plaintiff, a hospital not included in the plan, as the employees were not prohibited from going to the plaintiff hospital. Union Labor Hospital Ass'n v. Vance Redwood Lumber Co., 158 Cal. 551, 112 Pac. 886 (1910).

A contract between a trade association and labor union providing that the union shall allow its members to work only for members of the association is valid where membership in the association is open to all and where the object is to secure proper wages and hours for union members. A labor contract is not within the provisions of the antitrust law. Overland Publishing Co. v. Union Lithograph Co., 57 Cal. App. 366, 207 Pac. 412 (1922).

The antitrust law was violated where an associate of butchers by agreement sold meat to nonmembers at higher prices than paid by members. People v. Sacramento Butchers' Protective Ass'n, 12 Cal. App. 471, 107 Pac. 712 (1910). See also Overland Publishing Co. v. Crocker Co., 193 Cal. 109, 222 Pac. 812 (1924).

An agreement between wholesale bakers to boycott retailers not maintaining certain retail prices for bread is in violation of the Cartwright Act. People v. Jevne Co., 179 Cal. 621, 178 Pac. 517 (1919).

Under Civil Code section 1673 prohibiting contracts whereby persons are restrained from exercising a lawful trade, an agreement between competing companies by which sale areas were divided, quotas of total business fixed and prices controlled, is void as in restraint of trade. Vulcan Powder Co. v. Hercules Powder Co., 96 Cal. 510, 31 Pac. 581 (1892).

Contracts between a trade association of cleaners and its members fixing minimum prices and eliminating competition between members of the association are invalid under Civil Code section 1673. Endicott v. Rosenthal, 216 Cal. 721, 16 Pac. (2d) 673 (1932), aff'g. 6 Pac. (2d) 321 (Dist. Ct. App. 1931).

Procedure and Remedies.

To bring an action under the Cartwright Act, the party "injured in husiness or property" must have been injured not only by actions. of the alleged illegal combination but "by the unlawful restrictions in trade and commerce." A mere combination by defendant will not sustain action under the antitrust law unless the injury is suffered because of an illegal restraint on plaintiff directly in furtherance of the combination. Krigbaum v. Sbarbo, 23 Cal. App. 427, 138 Pac. 364 (1913); Munter v. Eastman Kodak Co., supra.

An allegation that defendant conspirators combined with a labor union to destroy the business of plaintiff by boycott states a cause of action under the Cartwright Act for double damages. Overland Publishing Co. v. Crocker Co., supra.