Texas & P. Coal Co. v. Lawson

• Decision Date: 26 March 1896
• Citation: 34 S.W. 919
• Parties: TEXAS & P. COAL CO. v. LAWSON.
• Court: Texas Supreme Court

34 S.W. 919

TEXAS & P. COAL CO. v. LAWSON.

Supreme Court of Texas.

March 26, 1896.

Error to court of civil appeals of Second supreme judicial district.

Action by the Texas & Pacific Coal Company against Thomas Lawson. From a judgment of the court of civil appeals (31 S. W. 843) affirming a judgment for defendant on his counterclaims, plaintiff brings error. Reversed.

Hunter, Stewart & Dunklin and W. T. League, for plaintiff in error. T. L. Nugent and John W. Wray, for defendant in error.

DENMAN, J.

In the former opinion (32 S. W. 871), setting aside the submission, and referring this case back for argument, sufficient has been stated to indicate the nature of the contract and the issues presented in the pleadings based thereon. The first question we will consider is whether the contract created a trust within the meaning of chapter 117, p. 141, of the Acts of 1889, which provides "that a trust is a combination of capital, skill, or acts by two or more persons, firms, corporations or associations of persons, or of either two or more of them for either, any or all of the following purposes: First, to create or carry out restrictions in trade; * * * third, to prevent competition in * * * sale or purchase * * * of * * * commodities"; and declares "that any contract or agreement in violation of the provisions of this act shall be absolutely void, and not enforceable in law or equity." The portion of the act above quoted denounces as void and prohibits the enforcement at law or in equity of every contract whereby a combination of capital, skill, or acts is formed "to create or carry out restrictions in trade," or "to prevent competition in the sale or purchase of commodities." The statute ignores the common-law distinction between restrictions which are reasonable and those which are not, and commodities which are of prime necessity and those which are not. Houck v. Association, 88 Tex. 185, 30 S. W. 869; Association v. Houck (Tex. Civ. App.) 27 S. W. 692. It relieves the courts of the difficulty of determining whether, in a particular case, any effect will be given such a contract by declaring that it "shall be absolutely void, and not enforceable, either in law or equity." Beer v. Landman, 88 Tex. 450, 31 S. W. 805. The word "combination," as used in the statute, means "union" or "association." It is clear that the contract provided for and contemplated a union or association of capital and acts by the coal company and Lawson. The former furnished the place of business; agreed that during the term of the lease it would not permit any other saloon to do business at Thurber, that it would pay off its employés in checks, instead of money, and would redeem weekly such of said checks as Lawson might take in for liquors sold; and the latter agreed to conduct the business, to furnish monthly statements thereof, and pay the former two-thirds of the profits in return for the use of the premises and the exclusive privileges guarantied by the contract. Thus the contract provided, not only for the union or association by the parties of their capital, but also for their united and associated action, during the entire term, in furtherance of the common object, and was, therefore, a "combination of capital" and "acts." In order, however, for the contract to be within the inhibition of the statute, the combination must have been formed for one of the purposes therein specified. Was its purpose either "to create or carry out restrictions in trade" or "to prevent competition in sale or purchase of commodities"? This court has held that, as here used, the word "trade" means "traffic," which is defined to be "the passing of goods and commodities from one person to another for an equivalent in goods or money," and the word "commodities" means "any movable or tangible thing that is ordinarily produced or used as subject of barter or sale," Queen Ins. Co. v. State, 86 Tex. 250, 24 S. W. 397. It is clear, then, that the dealing in liquors contemplated by the contract is a "trading" and their purchase and sale is of "commodities" within the statute. 88 Tex. 185, 30 S. W. 869; 27 S. W. 692, supra. It is apparent from the face of the contract that the purpose of the parties in entering into the combination evidenced thereby was, as far as they might be able, (1) to restrain any other person from entering into the business of selling liquors to the people of Thurber during the lease; (2) to prevent the employés of the company from purchasing liquors from any one other than Lawson; and (3) to influence such employés to squander their earnings in the saloon, erected and maintained, under the terms of the contract, principally for the benefit of the employer. This is all apparent from the agreement not to permit any one else to sell liquors on the company's lands, added to the very extraordinary agreement that the company should, during the term of the lease, which might have been 10 years, issue checks to its laborers, instead of paying money, and...