Argument for Plaintiff in Error.

197 U.S.

ville Iron Co. v. Harbison, 183 U. S. 13; Dayton Coal & Iron Co. v. Barton, 183 U. S. 23; Blake v. McClung, 172 U. S. 239; Ashley v. Ryan, 153 U. S. 436; Orient Ins. Co. v. Daggs, 172 U. S. 557; Hooper v. California, 155 U. S. 648; Hancock Mutual Life Ins. Co. v. Warren, 181 U. S. 73; Mutual Life Ins. Co. v. Spratley, 172 U. S. 602; New York Life Ins. Co. v. Cravens, 178 U. S. 389.

While the power of the State to impose terms upon a foreigncorporation seeking admission was distinctly recognized yet these cases are clearly distinguished from Connolly v. Union Sewer Pipe Co., and other cases in which this court has protected foreign corporations against unconstitutional state legislation.

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The contention that a corporation may be bound by a statute which violates the Federal Constitution is unsound, dangerous and contrary to many decisions of this court. Insurance Company v. French, 18 How. 404; Home Ins. Co. v. Morse, 20 Wall. 445; Barron v. Burnside, 121 U. S. 186; Southern Pacific Co. v. Denton, 146 U. S. 202; Barrow Steamship Co. v. Kane, 170 U. S. 100, 111. See also Chicago, M. & St. P. Ry. Co. v. Becker, 32 Fed. Rep. 849; Chattanooga R. & C. R. Co. v. Evans, 66 Fed. Rep. 809, 814; Reimers v. Seatco Mfg. Co., 70 Fed. Rep. 573. While these cases involved statutes which required foreign corporations, as one of the conditions imposed in granting the license, to refrain from removing such suits as might be brought against them, into the courts of the United States, that does not in any wise affect the principle. That provision is no more sacred than any other.

All of the Anti-Trust Laws of Texas are also in contravention of the Fourteenth Amendment for the reason that they necessarily deprive persons of liberty and property without due process of law, in that they deny all persons the right to make any contract, in the ordinary course of business and on ordinary business subjects, which tends to restrict competition or trade, commerce or business, or in any manner to affect prices. 2 Eddy on Comb. §§ 904 et seq.

197 U. S.

Argument for Plaintiff in Error.

The right of all persons to combine for the purpose of carrying on an ordinary business in the familiar and ordinary methods sanctioned by the continuous commercial usages of the Anglo-Saxon race and by the common law is one of the liberties protected by the Fourteenth Amendment and, as the corporation is in the State without conditions, to impair this liberty and the ability to conduct a merchandising or other business in the ordinary way, through the making of purIchases and sales and the fixing of prices, is clearly to work a deprivation of property without due process of law, and to impair the well recognized liberty of contract, involved in the acquiring, using and dealing with property, protected by that amendment to the Federal Constitution. L. S. & Mich. So. Ry. Co. v. Smith, 173 U. S. 684, 691; Louisville & Nashville R. R. Co. v. Kentucky, 161 U. S. 677, 695; Freund on Police Power, 715; Ballard v. Miss. Cot. Oil Co., 81 Mississippi, 507, 581; 2 Eddy on Comb. §§ 660 et seq.; § 2 of the Texas Act of 1899; Rev. Stat., Texas, art. 5313; Penal Code, Texas, arts. 976, 988a. If the law should be enforced it would drive every partnership out of Texas. Parsons, 3d ed., 6; 1 Kent Com. 23; Lindley on Part., 4th ed., 3; Queen Ins. Co. v. Texas, 86 Texas, 250, 264; Texas & Pacific Coal Co. v. Lawson, 89 Fed. Rep. 394; Matthews v. Ass'd Press, 136 N. Y. 333; Houck v. Anheuser-Busch, 88 Texas, 184; Welch v. Phelps &c. Co., 89 Texas, 653.

There is no basis for the assumption that the legislature could not have intended these results or effects, casting a blight over all business associations and-combinations. The acts are plain and unambiguous in terms. Art. 9, Penal Code, Texas; United States v. Fisher, 2 Cranch, 358, 399; McPherson v. Blacker, 146 U. S. 1, 27.

For other cases on the construction of the Texas Act, see Gates v. Hooper, 90 Texas, 563; Texas Brewing Co. v. Templeman, 90 Texas, 277; Fugua v. Pabst Brewing Co., 90 Texas, 298; and of similar statutes in other States, see Commonwealth v. Bavarian Brewing Co., 66 S. W. Rep. 1016; Am. Handle

Argument for Plaintiff in Error.

197 U. S.

Co. v. Standard Handle Co., 69 S. W. Rep. 709, 717; Ertz v. Produce Exchange, 84 N. W. Rep. 743; Anderson v. United States, 171 U. S. 604. And see where exclusive contracts to sell were held good, Williams v. Montgomery, 148 N. Y. 519; Brown v. Rounsavell, 78 Illinois, 589; Newell v. Meyendorf, 9 Montana, 254. As to liberty of contract see Allgeyer v. Louisiana, 165 U.. S. 578, 589; Butchers' Union v. Crescent City Co., 111 U. S. 746, 762.

The liberty of pursuit is one of the privileges of a citizen of the United States. Bertholf v. O'Reilly, 74 N. Y. 509; In re Jacobs, 98 N. Y. 98; People v. Marx, 99 N. Y. 377; People v. Gillson, 109 N. Y. 389; Forster v. Scott, 136 N. Y. 577; Purdy v. Erie R. R. Co., 162 N. Y. 42, 49; Printing Co. v. Sampson, L. R. 19 Eq. 462; Godcharles v. Wigeman, 113 Pa. St. 431; Palmer v. Tingle, 45 N. E. Rep. 313.

As to the so called truck store act, the coal weighing act, and other similar legislation held unconstitutional in Illinois, see Frorer v. People, 141 Illinois, 171; Ramsey v. People, 142 Illinois, 380; Harding v. People, 160 Illinois, 459; Ritchie v. People, 155 Illinois, 98; Braceville Coal Co. v. People, 147. Illinois, 66.

And in other States similar legislation has been pronounced unconstitutional because violating this fundamental constitutional right of freedom of contract. Kuhn v. Detroit, 70 Michigan, 534; Spry Lumber Co. v. Trust Co., 77 Michigan, 199; State v. Loomis, 115 Missouri, 307; State v. Julow, 129 Missouri, 163; State v. Goodwill, 33 W. Va. 179; Ex parte Kuback, 85 California, 274; Low v. Rees' Printing Co., 41 Nebraska, 127; In re Eight Hour Law, 21 Colorado, 29; Commonwealth v. Perry, 155 Massachusetts, 117; 2 Eddy on Comb: §§ 660-673.

The legislature cannot under pretense of exercising its police power prohibit harmless acts not immediately concerning the health and welfare of the people, and all such acts are subject to judicial examination and possible condemnation. 22 Am. & Eng. Ency. of Law, 936; People v. Gillson, 109 N. Y.

197 U. 8.

Argument for Plaintiff in Error.

389, 400; 2 Tiedeman, Police Powers, § 1, and pp. 197, 233; Colon v. Lisk, 153 N. Y. 188, and cases cited; Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 558; Opinions of Justices, 163 Massachusetts, 596; Anderson v. United States, 171 U. S. 604.

As to history of anti-monopoly laws, see Thorold Roger's Economical Interpretation of History, referring to statutes of 37 Edw. III, fixing prices; also as to wages, 23 Edw. III, 1349; 34 Edw. III, 1360; also statutes of 3 Hen. IV, C. 1; 15 Hen. IV, C. 6; 5 Eliz., C. 4; 5 & 6 Edw. VI, C. 14. See also instances in Pickering's Statutes; see also Albert Stickney on State Control of Trade and Commerce, citing Stat. of 7 & 8 Vict., C. 24; Law of Criminal Conspiracies and Agreements, by R. S. Wright, p. 12, n. 6. As to the right to form partnerships, see Mitchel v. Reynolds, 1 Smith L. C. 511, and as to early cases under the Buttle Act against joint-stock companies, see Lindley on Partnership, 6. For American cases in regard to restriction of commerce and right of persons to associate for business purposes, see Hooker v. Vandewater, 4 Denio, 349; People v. Fisher, 14 Wend. 9; Stanton v. Allen, 5 Denio, 434; Commonwealth v. Carlisle, Brightly, 36; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666.

As to cases of contracts between competing companies which did not unite their capital, skill or acts, but only agreed as to prices and production and the pooling of their receipts, see United States v. Trans-Missouri Freight Association, 58 Fed. Rep. 58, 70; Emery v. The Ohio Candle Co., 47 Ohio St. 320; Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173; India Bagging Association v. Kock & Co., 14 La. Ann. 168; United States v. Jellico Coal Co., 46 Fed. Rep. 432; Lumber Co. v. Hayes, 76 California, 387; Craft v. McConoughy, 79 Illinois, 346; Gibbs v. Gas Co., 130 U. S. 396.

As to distinctions between legal and illegal contracts in restraint of competition, see Marsh v. Russell, 66 N. Y. 288; Phippen v. Stickney, 3 Met. 384; Lorillard v. Clyde, 86 N. Y. 384; Shade Co. v. Cushman, 143 Massachusetts, 353; Craft v.

Argument for Defendant in Error.

197 U. S.

McConoughy, 79 Illinois, 346; Diamond Match Co. v. Roeber, 106 N. Y. 473; Leslie v. Lorrilland, 110 N. Y. 519, 534; Matthews v. Associated Press, 136 N. Y. 333; Jones v. Fell, 5 Florida, 510; Railroad Tax Cases, 13 Fed. Rep. 722, 743; United States v. Addyston Pipe & Steel Co., 85 Fed. Rep. 271, 290. The cases decided by this court under the Federal Anti-Trust Act show that the liberty to contract is guaranteed by the Constitution and yields only to the paramount power of Congress over interstate commerce. United States v. Joint Traffic Assn., 171 U. S. 505, 559; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211; Northern Securities Co. v. United States, 193 U. S. 197, 351.

Mr. C. K. Bell, Attorney General for the State of Texas, for defendant in error in this case and in No. 38:

It has been held by the Supreme Court of the State of Texas that the laws of 1889 and 1895 were valid and constitutional enactments. But after Connolly v. Union Sewer Pipe Co., 184 U. S. 540, the decisions theretofore rendered by the appellate courts of Texas, upholding the laws mentioned so far as it was sought under them to collect penalties, were overruled and the laws held to be nugatory when penalties were sought to be collected for a violation of their provisions. The law of 1899 contained no exemption in favor of any class, and this law has been held by the Supreme Court of Texas, in State v. Laredo Ice Co., 96 Texas, 461, to be a valid and constitutional enactment.

The questions in this case are, first, is the Anti-Trust Act of Texas of 1899 constitutional; and, second, conceding that the acts of 1889 and 1895 are not constitutional to the extent of warranting the collection of penalties for a violation of their provisions, is it within the power of the courts to forfeit the permit which authorizes a foreign corporation to transact business in the State of Texas for committing the acts which by such statutes they are prohibited from committing under penalty of forfeiting such permits?