State v. Central of Georgia Ry. Co. et al., 109 Ga. 716, 35 S. E. 37 (1900). It does not follow that because the number of competitors in a given business is diminished, that competition is lessened to the injury of the public. Ibid. There was ample evidence in this case to authorize the conclusion that the consolidation of the two railroads did not and was not intended to defeat or lessen competition or to encourage monopoly within the meaning of Const. art. IV, sec. 2, par. 4, since one road was a feeder of the other; these roads were not competing lines; and since the public interest was not injured by the consolidation. Ibid. Purchase by one railroad of a majority of the stock of a road capable of acting as a feeder to it was held not to lessen, but to create competition. Weed et al. v. Gainesville, Jefferson & Southern Railroad Co. et al., 119 Ga. 576, 46 S. E. 885 (1903). The meaning of Const. art. IV, sec. 2, par. 4 is that contracts and agreements between corporations to buy shares of stock in another corporation in Georgia which tend to defeat or lessen competition in the business of such corporation, or which may have the effect or tend to encourage monopoly are illegal and void. Hamilton et al. v. Savannah, F. & W. Railroad Co. et al., supra. This clause of the Constitution is self-operative and needs no legislation to enforce it, and the import of the clause may be regarded as prohibiting the legislature from changing the common law upon the subject. Ibid. Const. art. IV, sec. 2, par. 4 is applicable to street railways as well as to other corporations but does not forbid a consolidation of two competitive companies to a limited extent when it appears that the result will be to provide better and cheaper facilities for the public. Trust Co. of Georgia et al. v. State of Georgia, 109 Ga. 736, 35 S. E. 323 (1900). This section is declaratory of the common law and does not prohibit all corporations from buying stock in other corporations. Id. See also Winter et al. v. Southern Securities Co. et al., 155 Ga. 590, 118 S. E. 214 (1923). Application of Statutes. In General. A combination of the members of a retail drug association coercing a nonmember to sell merchandise at prices fixed by the association is contrary to public policy and void under section 20-504. Brown & Allen et al. v. Jacobs' Pharmacy Co., 115 Ga. 429, 41 S. E. 553 (1902). A conspiracy by 58 retail drug stores against 1 cannot be justified by the contention that they are seeking to defend themselves against price cutting by a single proprietor, and it does not follow from the freedom of individual dealers that all members of an association may lawfully enter into a general and unlimited agreement to purchase only from such dealers as will sell to members exclusively. The defendants were enjoined from carrying the conspiracy into effect. Ibid. A combination of a group of printers in a city conspired to fix maximum prices, compel all printers in the city not to cut these prices, and divide the city's printing business among themselves was held void as their aim was to create a monopoly and stifle competition in the industry. The conspirators were held liable for damages sustained by a third person and were enjoined from continuing such practices. Employing Printers Club et al. v. Doctor Blosser Co., 122 Ga. 509, 50 S. E. 353 (1905). A provision in the bylaws of an insurance agents' association preventing business transactions with nonmembers constituted an illegal combination in restraint of trade, and an injunction issued to prevent its enforcement. Atlanta Association of Fire Insurance Agents et al. v. McDonald, 181 Ga. 105, 181 S. E. 822 (1935). An agreement between an insurance company and an undertaking establishment that burial policies sold by the insurance company specifically provide that in case of death all funeral services be performed by the undertaking establishment was declared void in violation of section 20-504. The plaintiffs, undertakers in the area where such policies were sold, obtained an order restraining such practices. Blackmon et al. v. Gulf Life Insurance Co. et al., 179 Ga. 243, 175 S. E. 798 (1934). Agreement by one partner in a medical partnership to retire from the practice in consideration that the other partners pay him a fixed sum monthly, which payment was to be suspended in the event he subsequently reengaged in the practice, was valid and not within the prohibition provided for under section 20-504. Scott v. Hull et al., 56 Ga. App. 467, 192 S. E. 920 (1937). Franchises and Ordinances. The legislature may authorize the public service commission to prescribe the conditions on which a public highway may be used by a carrier for the transportation of goods provided such regulation does not tend to create a monopoly in violation of section 20–504. Georgia Public Service Commission et al. v. Saye & Davis Transfer Co., 170 Ga. 873, 154 S. E. 439 (1930). A city ordinance fixing a maximum fare to be charged by busses and minimum and maximum fares to be charged by taxicabs was held not void as an attempt to create a monopoly or restrain trade. Clem et al. v. City of La Grange et al., 169 Ga. 51, 149 S. E. 638 (1929). Where jewelry dealers combined to secure passage of a city ordinance limiting the hours for sale of jewelry at auction and requiring the deposit of bonds by such auction sellers, the ordinance was held not invalid as in restraint of trade. Clein et al. v. City of Atlanta et al., 164 Ga. 529, 139 S. E. 46 (1927). An ordinance granting to private individuals an exclusive 25-year franchise for the slaughter of all except federally inspected meat in the city was held invalid as an attempt to create a monopoly thereby preventing all other butchers from slaughtering their own animals. City of Waycross et al. v. Caulley, 163 Ga. 372, 136 S. E. 139 (1926). Persons Not Parties to Agreement or Combination. Where a lease of water power provided for its assignment, the lessor could not obtain cancellation of the lease on the ground that the assignment tended to create a monopoly. Columbus Railroad Co. et al. v. City Mills Co., 135 Ga. 626, 70 S. E. 242 (1911). Plaintiff not being a party to the contract nor engaged in a similar business at the time could not secure injunctive relief against its provisions although it was in restraint of trade and he was allegedly damaged thereby. Palmer v. Atlantic Ice and Coal Corporation et al., 178 Ga. 405, 173 S. E. 424 (1934). See also Blackmon et al. v. Gulf Life Insurance Co. et al., 179 Ga. 343, 175 S. E. 798 (1934); Southern Ice and Coal Co. v. Atlantic Ice and Coal Corporation, 143 Ga. 810, 85 S. E. 1021 (1915). B. EXCEPTIONS TO GENERAL ANTITRUST LAWS Code Ann. (Park et al., Supp. 1938) Resale Price Maintenance Sections 106-401 to 106-409 validate contracts fixing the resale price of branded commodities. The statute is expressly inapplicable to contracts between producers, between wholesalers, or between retailers. Sec. 106-408. See Vol., State Price Control Legislation: Resale Price Maintenance, MARKETING LAWS SURVEY Series. Code Ann. (Park et al., 1936) Section 65-220 provides that no agricultural cooperative association organized under sections 65-201 to 65-226 shall be deemed to be a combination in restraint of trade, an illegal monopoly, or an attempt to lessen competition or fix prices arbitrarily. See Tying Contracts and Exclusive Dealing Arrangements, infra. See also Cooperatives in projected study. C. SPECIAL ANTITRUST LAWS 1. Special Industry Antitrust Acts Code Ann. (Park et al., 1936) Section 94-311 provides that railroads other than competing lines may consolidate, and forbids contracts among them designed to lessen competition. Section 94-318 provides that a railroad may sell to or consolidate with other railroads, except in the case of competing lines. Street Railways Section 94-1013 provides that street railway companies may consolidate if such action does not lessen competition or encourage monopoly. Section 94-1014 provides that electric railway corporations may consolidate if the effect is not to lessen competition or encourage monopoly. 2. Public Contract Provisions No provisions. No provisions. 3. Anticoercive Financing Statutes Cooperatives. Judicial Decisions Section 65-220 does not violate the Constitution in that it contains matter not expressed in the title. Harrell v. Cane Growers' Cooperative Association, 160 Ga. 30, 126 S. E. 531 (1925). Public Contract Provisions. Where two contractors wanted to do separate parts of work on a bridge, it was not illegal for A to agree not to bid in consideration that B give him the contract for that part of the work should he become the successful bidder. Virginia Bridge & Iron Co. v. Crafts, 2 Ga. App. 126, 58 S. E. 322 (1907). A city, though not required to let contracts for public work te the lowest bidder, has no authority to adopt an ordinance requiring that all the city's printing be done by union labor. Such an ordinance is in restraint of trade and illegal. City of Atlanta et al. v. Stein, 111 Ga. 789, 36 S. E. 932 (1900). II. CONTRACTS NOT TO COMPETE No statutory provisions. Judicial Decisions Restrictive Covenants Ancillary to the Sale of a Business. A contract incident to sale of a grocery business that the vendor would "not operate any business that will compete in the least with the business sold" held void because unlimited as to space. Everett v. Boone, 157 Ga. 372, 121 S. E. 240 (1924). See also Bonner v. Bailey et al., 152 Ga. 629, 110 S. E. 875 (1922); Seay v. Spratling, 133 Ga. 27, 65 S. E. 137 (1909); Floding v. Floding, 137 Ga. 531, 73 S. E. 729. These cases seem contra to the earlier case of Brewer & Co. v. Lamar, Rankin & Lamar, 69 Ga. 656, 47 A. R. 766 (1882). Where a contract in connection with sale of a business is otherwise reasonable, it has been upheld in the following cases though unlimited as to time. Goodman et al. v. Henderson, 58 Ga. 567 (1876); Swanson v. Kirby, 98 Ga. 586, 26 S. E. 71 (1896); McAuliffe v. Vaughn, 135 Ga.852, 70 S. E. 322 (1911); Morris-Forester Oil Co. v. Taylor et al., 158 Ga. 201, 122 S. E. 680 (1924); Hood v. Legg et al., 160 Ga. 620, 128 S. E. 891 (1925); and Holloway v. Brown, 171 Ga. 481, 155 S. E. 917 (1930). Cf. Brown v. Williams, 166 Ga. 804, 144 S. E. 256 (1928). An agreement to retire from the business of purchasing hides "in the Savannah market" held not too indefinite and enforceable. Goodman et al. v. Henderson, supra. A contract not to enter into the wholesale gasoline and oil business within 20 miles of a city was held enforceable, even though unlimited as to time. The vendor was enjoined from becoming an employee of a competing firm. Morris-Forester Oil Co. v. Taylor et al., supra. A contract by a vendor not to engage in a simila business, if reasonable as to time and space, is enforceable. Jefferson v. Markert & Co., 112 Ga. 498, 37 S. E. 758 (1900). A covenant not to compete with the vendee of a produce business for a period of 5 years in B County held valid and enforceable. Bullock v. Johnson, 110 Ga. 486, 35 S. E. 703 (1900). In the following cases covenants not to engage in businesses in a single city or town for periods of from 1 to 5 years were upheld. Jenkins v. Temples, 39 Ga. 655, 99 Am. Dec. 482 (1869) (grocery business); Newman v. Wolfson, 69 Ga. 764 (1882) (saloon); Busk v. F. 210235°-40-vol. 1- -13 |