An agreement not to "in any way or manner deal in grain within a radius of 10 miles of the gristmill for 10 years" ancillary to the sale of the gristmill was held valid. Defendant breached his covenant by selling grain on commission as a traveling salesman within the restricted territory. Clark v. Britton, 76 N. H. 64, 79 Atl. 494 (1911).

Restrictive Covenants Ancillary to the Sale of Professional Practice.

A contract ancillary to the sale of a physician's practice contained a provision that the vendor will not compete with the vendee in the town of "Fisherville." The court held that the question of the existence and territorial limits of the village is one of fact for the jury to decide. A demurrer to an action for damages for breach of the contract was overruled. Blanding v. Sargent, 33 N. H. 239 (1856). Restrictive Covenants Ancillary to Employment.

A covenant by an employee dentist not to engage in the practice of dentistry in a certain town so long as plaintiff employer was engaged in such practice in that town was not violated when he accepted employment as an agent for a competing dentist in town. Bowers v. Whittle, 63 N. H. 147 (1884).

A contract ancillary to employment not to engage in the undertaking business in the same city in competition with the plaintiff employer is reasonably restrictive and is enforceable. Spaulding v. Mayo, 81 N. H. 85, 122 Atl. 899 (1923).

Restrictive Covenants not Ancillary to Sale of a Business Interest.

Where the owners of embossing machines entered into a contract granting exclusive rights to manufacture such machines for a period of 20 years, their covenants not to make, vend, or use any embossing machines during this period were held valid as not being an unreasonable restraint of trade. Bancroft & Rich v. Union Embossing Co., 72 N. H. 402, 57 Atl. 97 (1903). See Tying Contracts and Exclusive Dealing Arrangements, infra.

In consideration of $800, defendant agreed to withdraw as expressman from certain railroad depots and "to do no business in any way or be interested in any express business running to such railroads or to connect with any express company running to such railroads." This agreement was held not violated when defendant was engaged as agent and worked for daily wages for another express company.

Defendant did not in any way share in the profits or become an expressman, but acted only in the capacity of agent. Eastern Express Co. v. Meserve, 60 N. H. 198 (1880).

III. TYING CONTRACTS AND EXCLUSIVE DEALING ARRANGEMENTS

Pub. Laws (1926), c. 224
Cooperatives

Sections 31 and 46 provide that an agricultural cooperative marketing association organized under chapter 224, sections 1 to 50, may make marketing contracts, with its members, requiring the members to sell, for any period of time, 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, as such, or in unlawful restraint of trade, or as 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.

Judicial Decisions

Exclusive Dealing Arrangements.

An agreement by a manufacturer, selling blankets to a retailer, that he will not sell to anyone else in the same city, there being no agreement as to further purchases or any limitations as to time, will continue only for such length of time as will afford the buyer a reasonable opportunity to sell, in the usual course of trade, the merchandise purchased on the faith of the contract. Saddlery Hardware Co. v. Hillsboro Mills, 68 N. H. 216, 44 Atl. 300 (1894).

An exclusive privilege granted to a teamster to solicit the patronage of passengers on the railroad property is valid. The rival teamsters were enjoined. Hedding et al. v. Gallagher et al., 74 N. H. 377, 57 Atl. 225 (1903). Reversing 69 N. H. 650, 45 Atl. 96 (1899), and 70 N. H. 631, 47 Atl. 614 (1900). See also Bancroft & Rich v. Union Embossing Co., 72 N. H. 402, 57 Atl. 97 (1903).

In an action for damages for breach of a contract granting a dealer the exclusive agency for sale of taxicabs, recovery was denied on the ground that the question of whether the exclusive agency feature of the original written contract continued after the expiration thereof was one of fact. The presumption that the relations would be governed by the expired written contract was rebutted by oral evidence to the effect that the provisions relating to the exclusive arrangements would not be carried over in the new agreement. Park Auto Station v. American Locomotive Co., 79 N. H. 497, 111 Atl. 689 (1920).

Specific performance will be granted to enforce an exclusive dealing contract between a milk producer and a cooperative marketing association although liquidated damages are provided for in the contract. There was evidence that milk could be procured on the open market. Manchester Dairy System v. Hayward, 82 N. H. 193, 132 Atl. 12 (1926).

NEW JERSEY

I. TRUSTS, COMBINATIONS, AND MONOPOLIES

A. GENERAL ANTITRUST LAWS

CONSTITUTIONAL PROVISIONS

No provisions.

STATUTORY PROVISIONS

Stat. Ann. (1940)
Corporations

Section 14: 3-10 provides that no domestic corporation engaged in trade or commerce shall acquire any part of the capital stock of one or more corporations also engaged in trade or commerce where the effect of such acquisition or the use of such stock may be to substantially lessen competition between them, or to restrain trade or commerce in any section or community, or tend to create a monopoly in any line of trade or commerce. This section does not apply to public utilities, corporations purchasing stock solely for investment purposes or holding stock of subsidiaries or branches, provided that there is no substantial lessening of competition.

Judicial Decisions

Application of the Common Law.

In General.

A railroad company of New Jersey leased its franchises and roads to a railway corporation of another State for a period of 999 years. Both roads were extensive producers and carriers of anthracite coal. The lessee controlled three of the six great coal carriers of the State and nearby States, and through stock holding in coal companies, also controlled more than one-half of all the anthracite coal fields of

Pennsylvania. In a suit brought by the attorney general to restrain defendant railway company from executing the provisions of this lease, the court in granting the restraining order held that this combination tended to create a monopoly of the anthracite coal trade, a staple commodity, within the State. And, as it tended to stifle competition by increasing the price of such product to the public, the agreement was invalid and unenforceable. Stockton v. Central Railroad Co., 50 N. J. Eq. 52, 24 Atl. 964 (1892).

Two rival mining corporations interested in the same mineral deposits, entered into a contract to consolidate their respective interests. In an action by a stockholder of one of the corporations to enjoin the execution of such proposed consolidation, the court held that as the corporations exercised no public franchises and were simply owners of a species of property, certain linite and zinc ores, "which, in its natural state, was of no use to mankind," and as their entire output comprised of but a small fraction of the production in the United States, such contract did not tend to create a monopoly and was therefore valid. Meredith v. N. J. Zinc & Iron Co., 55 N. J. Eq. 211, 37 Atl. 539 (1897), aff'd 56 N. J. Eq. 454, 41 Atl. 1116 (E. & App., 1897).

Eight manufacturers of sanitary pottery ware, who produced nearly all of the ware manufactured in the United States, formed an association and agreed to regulate the price of such ware according to the vote of the majority of the members. The complainant purchased five of the companies from persons, who were members of the association, in an attempt to acquire control of the industry. In an action by the purchaser to enforce the covenant against one of the vendors, the court in passing on the validity of the entire contract held that the agreement, insofar as it permitted complainant to acquire control of the association, thereby being empowered to fix all prices, is void and unenforceable. Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723 (1899), modifying Trenton Potteries Co. v. Oliphant, 56 N. J. Eq. 680, 39 Atl. 923 (1898). Cited with approval in U. S. v. Trenton Potteries Co., 273 U. S. 392, 47 Sup. Ct. 360, 71 L. Ed. 706 (1926). For validity of the remaining provisions of this agreement see, Contracts not to Compete, infra, page 474.

Eight domestic and one hundred and thirteen foreign fire insurance companies, by contract, formed an association with power to fix rates for all insurance policies to be sold by members within the city of Newark and adjacent districts in Essex and Hudson Counties. In a suit by the attorney general, the court in restraining the defendant insurance company from enforcing the terms of this agreement held that the contract was an illegal restraint on trade. The necessary effect and actual result of such agreement was to control business within a certain area, to fix and regulate prices, and to