in any competitive situation any executory contract of sale, lease, or license of any product may be revoked by the exhibitor at any time prior to acceptance by the producer or distributor, or within twenty days from date of the contract and if not revoked by either party within said twenty days it becomes binding; also that it shall be unlawful for any producer to give, or for a competitive exhibitor to receive, any secret rebate, or reward for showing any picture; that it shall be unlawful in any town where competition exists for any person or corporation to contract for, license, buy, own, or control the exclusive right to the product of any producer or distributor for a period of more than one year; and that any competitive exhibitor having such a contract for more than one year at the time of the passage of the act shall not participate in the alternative selection of pictures until his competitors shall have acquired a number of pictures equal to that covered by his contract; producers and distributors operating theaters for the purpose of showing their own products cannot participate in such alternative selection until competition has been equalized in a like manner, nor may a producer or distributor refuse to sell his products to a competitive exhibitor in the manner provided by the act, nor may he refuse to allow competitive exhibitors to make selections as provided; that competitive contracts shall be filed with the Corporation Commission and that producers and distributors must appoint the Chairman of the Corporation Commission as their agent to accept service of process, which shall be a prerequisite to doing business in the state; that any person violating the act shall be subject to civil liability in both actual and punitive damages to the person or persons injured. Stat. Ann. (Courtright, 1929) Sections 24-102 to 24-104, and 24-109 provide that companies engaged in the production or refining of petroleum or coal oil are subject to revocation of licenses for violation of the antitrust laws. It is further provided that the license of any retailer of petroleum or coal oil may be revoked if such retailer has entered into any combination to purchase such commodities from any company or person not authorized to do business in the state, for the purpose of bringing such commodities into the state and disposing of them in violation of the antitrust laws; that such license may be revoked if the seller enters into any combination with the producer, refiner, or dealer from whom such commodity has been purchased, in violation of the state antitrust laws; that on request of the State Commerce Commission, the Attorney General shall proceed against such retailer by injunction.2 L. 1939, c. 236 Art. XIV, Sec. 1409 provides that it shall be a violation of this act for any wholesaler of alcoholic liquors, directly or indirectly, or through an affiliate, to own, either in whole or in part, any retail establishment or dispensary. Art. XVII, Sec. 1707 (a) provides that the violation of any provision of this Act or of any valid rule or regulation promulgated under the provisions of this Act which is not herein declared to be a felony, shall be a misdemeanor, and upon conviction thereof any person shall be punished by a fine of not more than $300 or by confinement in jail for not more than seven months or by both. If a corporation be convicted of such a violation it shall be punished by a fine of not more than $1,000. See Tying Contracts and Exclusive Dealing Arrangements, infra. Stat. Ann. (Courtright, 1929) Sec. 116-704. Contracts against public policy. All contracts between railroad companies, or between any parties whatever, restricting, or abridging, or purporting, or intending to restrict or abridge the right, privilege, franchise, or power of any railroad company or companies to build or operate its, or their, road or roads, or any part thereof within this state, or any part thereof, in any direction or directions, or to any part thereof within this state, or any part thereof, in any direction or directions, or to any extent whatever; or to make any railroad connections, or to cooperate with any corporation or person in any railroad or other business, or to promote the construction or operation of any railroad, or to establish any parallel or competing line or branch, or to establish or promote any competitive business, or to deal with any railroad corporation or other corporation, firm, or individual, or to waive any corporate duty, object, or franchise, being contrary to public policy, are hereby declared to be null, void, and inoperative in this state; and no suit, action, or proceeding in law or equity shall be brought or maintained in any court to enforce any such contract, or to recover damages for any breach or nonperformance thereof. (L. 82, ch. 59, sec. 1; C. L. '97, sec. 3910; Code '15, sec. 4735.) Sec. 24-102 was held invalid as a restriction on interstate commerce. In reWilson, 10 N. M. 32, 60 Pac. 73 (1900). Sec. 24-109 amended the act to cure this defect. No provisions. 2. Public Contract Provisions 3. Anticoercive Financing Statutes Stat. Ann. (Courtright, Supp. 1938) Sections 11-2101 to 11-2114 are identical in text with the Colorado statute. See Colo. Stat. Ann. (Michie, Supp. 1938), c. 16, secs. 407 to 419, set forth in full at pp. 72–76, supra. Cooperatives. Judicial Decisions Exceptions to General Antitrust Laws In an action by a cooperative society to enjoin a member from breaching an exclusive marketing agreement, the court held that while an exclusive marketing agreement between a cooperative association and its members may be contrary to the general antitrust law, it is expressly permitted by the Cooperative Marketing Act, section 352904. This act having been enacted subsequent to the antitrust law, must, to that extent, be held to modify the law. Elephant Butte Alfalfa Ass'n. v. Ronault, 33 N. M. 136, 262 Pac. 185 (1928). Special Antitrust Laws Petroleum and Coal Oil. Section 24-102 has been held invalid in that the licensing provision thereof is an unlawful interference with interstate commerce as applied to sales of coal oil in the original package. In re Wilson, 10 N. M. 32, 60 Pac. 73 (1900). II. CONTRACTS NOT TO COMPETE Stat. Ann. (Courtright, 1929) Railroads See section 116-704, under Special Antitrust Laws, supra. Judicial Decisions Restrictive Covenants Ancillary to the Sale of a Business. A contract, ancillary to the sale of a business and its goodwill, not to compete with purchaser in the neighborhood for a period of 3 years, is not in restraint of trade. The agreement is limited in time and space and is no broader than necessary to protect the goodwill of the business. Gonzales et al. v. Reynolds et al., 34 N. M. 35, 275 Pac. 922 (1929). After liquidating his debts with other creditors at 35 cents on the dollar, defendant agreed to give plaintiff creditor promissory notes for the full amount of his indebtedness, providing plaintiff agreed not to engage in business in competition with defendant. In dismissing an action brought to recover the sums due on the notes, the court held the consideration illegal as a promise not to compete was in restraint of trade. Gross, Kelley & Co. v. Bibo et al., 19 N. M. 495, 145 Pac. 480 (1914). III. TYING CONTRACTS AND EXCLUSIVE DEALING ARRANGEMENTS Laws 1939, c. 236 Art. XIV, sec. 1405 provides that it shall be unlawful for any importer, distiller, brewer, rectifier, winer, nonresident licensee, or any kind or class of wholesale licensee, directly or indirectly, or through an affiliate (a) to require by agreement or otherwise that any wholesale, retail, dispensary, or club licensee engaged in the sale of any alcoholic liquor in this State, purchase any such products from such person to the exclusion in whole or in part of liquors sold or offered for sale by other persons; or (b) to induce such exclusive dealing through any of the following means: (1) By acquiring or holding any interest in any license with respect to the premises of any such wholesale or retail liquor dealer, dispenser, or club; or (2) by acquiring any interest in any real or personal property owned or used by them in the conduct of their business, subject to such exemptions as the Chief of Division of Liquor Control shall prescribe; or (3) by furnishing, giving, renting, lending, or selling to any of the above licensees any equipment, fixtures, signs, supplies, money, services, or other thing of value, subject to such exceptions as the Chief of Division of Liquor Control shall by regulation prescribe; or (4) by paying or crediting them for any advertising, display or distribution services; or (5) by extending credit to them in any amount to aid or allow such person to commence business or to secure any part of a stock of merchandise with which to commence business in the first instance; or (6) by requiring any of them to take and dispose of a certain quota or combination of alcoholic liquor products; or (7) by commercial bribery, or by offering or giving any bonus, premium, or compensation to any officer, employee, agent, or representative of any such wholesale or retail liquor dealer, dispenser, or club; and (c) to sell, offer for sale, or contract to sell any retail liquor dealer, dispenser, or club any alcoholic liquors of any kind or class on consignment or under conditional sale or on any basis other than bona fide sale; provided, that this subsection shall not apply to transactions involving solely the bona fide return of merchandise for ordinary and usual commercial reasons arising after the merchandise has been sold. See Special Antitrust Laws: Liquor, supra. Stat. Ann. (Courtright, Supp., 1938) Section 31-216 provides that members of cooperative marketing associations may be required by such association, as a condition of admission thereto, to execute contracts whereby the member agrees to sell all or part of his products to the association or buy all or part of his supplies from or through it. Section 31-218 provides that such agreements shall not be deemed to be in restraint of trade nor part of an illegal conspiracy or combination, nor contrary to any statute enacted against pooling or combinations. See Cooperatives in projected study. Stat. Ann. (Courtright, 1929) Section 32-1006, subsection 4, provides that cooperative marketing associations shall have the power to enter into contracts with their members for periods of not over 10 years requiring them to sell or market all or a special part of their products to or through the association. See Cooperatives in projected study. |