By contract the city of Paris leased and agreed eventually to sell its light and power plant, including the goodwill, to private individuals. The contract provided that the city could reenter the business of generating electric current and could grant a franchise to a third party to compete with the lessee, providing such grant did not prejudice any of the rights of lessee as prescribed in the terms of the contract. Such contract did not grant exclusive rights to lessee, and lessee's successor in interest could not enjoin the city from selling light and power through its own distribution system. Ky.-Tenn. Light & Power Co. v. City of Paris, 173 Tenn. 123, 114 S. W. 2d, 815 (1938). Restrictive Covenants Ancillary to the Sale of a Professional Practice.

A practicing physician sold his medical practice to plaintiff and agreed to refrain from competing with him in the county. Defendant, resuming his practice in breach of the contract is liable for the actual amount of damages suffered by plaintiff. Johnson v. Jones, 1 Tenn. App. 24 (1925).

Restrictive Covenants Ancillary to Employment.

A dentist, who had practiced for 7 years, took into his employment a young dentist. There was a parol agreement, as part of the contract of employment, that defendant at the termination of such employment would not practice his profession in such town in competition with plaintiff. The contract, even though orally made, was reasonably restrictive. It is valid and enforceable. Turner v. Abbott, 116 Tenn. (8 Cates) 718, 94 S. W. 64 (1906).

A contract is valid whereby an employee of a rent-a-Ford company, who had access to lists of customers and an opportunity to learn business secrets, agreed not to become an employee of any competing company within a certain county for 5 years after leaving the employment. The contract may be enforced, though no specific injury is shown. Matthews v. Barnes, 155 Tenn. 110, 293 S. W. 993 (1927). Restrictive Covenants Not Ancillary to the Sale of a Business Interest.

A contract provided that a mining company should furnish a merchant the trade of its employees, and in consideration therefor the mining company should receive 8 percent on sales to its employees. Either party could terminate the contract on 6 months' notice. The mining company opened its own store without giving such notice. The contract was not in restraint of trade and since it was breached, plaintiff is entitled to damages. George & Chapman v. E. Tenn. Coal Co., 83 Tenn. (15 Lea) 454, 54 Am. Rep. 425 (1885).

III. TYING CONTRACTS AND EXCLUSIVE DEALING

ARRANGEMENTS

Code Ann. (Michie, 1938)
Cooperatives

Section 3816 provides that a cooperative marketing association and its members may make and execute marketing contracts, requir ing the members to sell all or any specified part of their products to or through the association for any period of time, not over 10 years. Such marketing contracts between the association and its members shall not be considered in unlawful restraint of trade. See Exceptions to General Antitrust Laws, supra. See also Cooperatives in projected study.

Judicial Decisions

Exclusive Dealing Arrangements.

The Tobacco Growers' Co-operative Association was organized under the Bingham Co-operative Marketing Act (Ky. Acts 1922, c. 1). It entered into contract with its members requiring all tobacco produced or acquired by the growers during certain years to be pooled and resold through the association at best prices obtainable. The contracts for exclusive dealing conformed with the statutory enactment, and do not violate either the Federal or State Anti-Trust Acts. Dark Tobacco Growers' Co-op. Ass'n. v. Mason, VEJ Tenn. (23 Thomp.) 228, 263 S. W. 60 (1924); Same v. Dunn, 150 Tenn. (23 Thomp.) 614, 266 S. W. 308 (1924).

TEXAS

I. TRUSTS, COMBINATIONS, AND MONOPOLIES

A. GENERAL ANTITRUST LAWS

CONSTITUTIONAL PROVISIONS

Const. art. 1, sec. 26. Perpetuities and monopolies are contrary to the genius of a free government, and shall never be allowed nor shall the law of primogeniture or entailments ever be in force in this State.

STATUTORY PROVISIONS

Stat. (Vernon, 1936)

Conspiracies Against Trade

Art. 7426. "Trusts."-A "trust" is a combination of capital, skill, or acts by two or more persons, firms, corporations, or associations of persons, or either two or more of them for either, any or all of the following purposes:

1. To create, or which may tend to create, or carry out restrictions in trade or commerce or aids to commerce or in the preparation of any product for market or transportation, or to create or carry out restrictions in the free pursuit of any business authorized or permitted by laws of this State.

2. To fix, maintain, increase, or reduce the price of merchandise, produce, or commodities, or the cost of insurance, or of the preparation of any product for market or transportation.

3. To prevent or lessen competition in the manufacture, making, transportation, sale, or purchase of merchandise, produce, or commodities, or the business of insurance, or to prevent or lessen competition in aids to commerce, or in the preparation of any product for market or transportation.

4. To fix or maintain any standard or figure whereby the price of any article or commodity of merchandise, produce, or commerce, or the cost of transportation, or insurance, or the preparation of any product for market or transportation, shall be in any manner affected, controlled, or established.

5. To make, enter into, maintain, execute, or carry out any contract, obligation, or agreement by which the parties thereto bind, or have bound themselves not to sell, dispose of, transport, or to prepare for market or transportation any article or commodity, or to make any contract of insurance at a price below a common standard or figure or by which they shall agree in any manner to keep the price of such article or commodity or charge for transportation or insurance, or the cost of the preparation of any product for market or transportation at a fixed or graded figure, or by which they shall in any manner affect or maintain the price of any commodity or article or the cost of transportation or insurance, or the cost of the preparation of any product for market or transportation between them or themselves and others, to preclude a free and unrestricted competition among themselves or others in the sale or transportation of any such article or commodity, or business of transportation or insurance, or the preparation of any product for market or transportation, or by which they shall agree to pool, combine, or unite any interest they may have in connection with the sale or purchase of any article or commodity, or charge for transportation or insurance or charge for the preparation of any product for market or transportation whereby its price or such charge might be in any manner affected.

6. To regulate, fix, or limit the output of any article or commodity which may be manufactured, mined, produced, or sold, or the amount of insurance which may be undertaken, or the amount of work that may be done in the preparation of any product for market or transportation.

7. To abstain from engaging in or continuing business, or from the purchase or sale of merchandise, produce, or commodities partially or entirely within the State of Texas, or any portion thereof. (Acts 1903, p. 119.)1

Art. 7427. "Monopoly" defined.—A monopoly is a combination or consolidation of two or more corporations when effected in either of the following methods:

1. When the direction of the affairs of two or more corporations is in any manner brought under the same management or control for the purpose of producing, or where such common management or control tends to create a trust as defined in the first article of this chapter.

2. Where any corporation acquires the shares or certificates of stock or bonds, franchise or other rights, or the physical properties or any part thereof, of any other corporation or corporations, for the purpose of preventing or lessening, or where the effect of such acquisition tends to affect or lessen competition, whether such acquisition is accomplished directly or through the instrumentality of trustees or otherwise. Id.

'For further treatment of art. 7426 (7), see Contracts not to Compete, infra.