Business deal

“ The formation of corporations for business or manufacturing purposes has never been regarded as in the nature of a contract in restraint of trade or commerce. The same may be said of the contract of partnership. ”

“ But, independently of any such stipulations, each partner possesses an equal and general power and authority, in behalf of the firm, to transact any business within the scope and objects of the partnership, and in the course of its trade and business. ”

“ Justice Story said that the doctrine that each partner may bind the firm by bills of exchange, promissory notes, and other negotiable instruments is generally limited to partnerships in trade and commerce, and does not apply to other partnerships unless it is the common custom or usage of such business to bind the firm by negotiable instruments, or it is necessary for the due transaction thereof. ”

“ You make him the offer to give or take three thousand dollars, and I will supply the money. But you ought, by all means, to add a stipulation, that whoever goes out shall sign a written agreement not to go into the same business for at least ten years to come. If you don't do this, he can take his three thousand dollars and start another establishment upon as large a scale as the one you have, and seriously affect your operations. ”

“ That was their reason and now, why did your company contract? Because they wanted to assure themselves of a market for a certain per cent of their pack so that their operations would not be so speculative.
You know, no business that is purely speculative is fundamentally sound.
Now this contract arrangement between your company and the jobber was not philanthropic on either side. For years this custom has existed in the industry and has been found to be fashioned along the lines of sound economics. ”

“ We realize that such information, gathered and disseminated among the members of a trade or business, may be the basis of agreement or concerted action to lessen production arbitrarily or to raise prices beyond the levels of production and price which would prevail if no such agreement or concerted action ensued, and those engaged in commerce were left free to base individual initiative on full information of the essential elements of their business. ”

“ In this contract it is distinctly understood by the parties interested that the partnership only pertains to that of merchandising, and has no connection in any shape or manner with any business the said Lord and Williams may have jointly or severally outside. Any trade or business they may be able to direct to the new concern they shall do so, any profits to be derived from same to be considered identical with those arising from business with other parties. ”

“ Acts performed by one of the partners, in respect to the partnership concerns, and in the usual course of its business, differ in nothing, so far as their legal consequences are concerned, from those transactions in which they all concur; and for the reason, that, by the commercial law, each partner of a trading firm is presumed to be intrusted by his copartners with a general authority in all the partnership affairs. ”

“ ¶The first essential in determining how to deal with the great industrial combinations is knowledge of the facts—publicity. In the interest of the public, the Government should have the right to inspect and examine the workings of the great corporations engaged in interstate business. Publicity is the only sure remedy which we can now invoke. What further remedies are needed in the way of governmental regulation, or taxation, can only be determined after publicity has been obtained, by process of law, and in the course of administration. ”

“ If a partnership was engaged in selling dry goods, a partner could hardly bind his partners by making a contract with a person for a quantity of iron, unless it was needed in rebuilding the store, or in some other connection with the business. He can make and indorse negotiable paper that is used in connection with the business. Suppose he borrows money on his own note and he gives the money to his firm, is it responsible for the amount? ”

“ A partnership is an association formed by contract between two or more persons, for joining their money, labor, or skill, in lawful business, the profits to be divided and the loss to be borne by the partners in certain proportions. It is a partnership if one furnishes the funds and the other performs the labor; or if, when no money is necessary, each agrees to do his share of the labor. A partnership or association of this kind is denominated a firm, or house.
§2. The act of any one of the firm is considered the act of all, and binds all; and either of them is liable for all the debts. ”

“ In these limited partnerships, as they are termed, the special partners are liable only to the amount stated in the terms of partnership. The other partners, called general partners, whose names only are used, and who transact the business, are liable for all the debts contracted, as in ordinary partnerships. ”

“ A general application of the Act to all combinations of business and capital organized to suppress commercial competition is in harmony with the spirit and impulses of the times which gave it birth. 'Trusts' and 'monopolies' were the terror of the period. ”

“ In manufacturing, mining, and many wholesale trades, employers' associations have held annual or more frequent meetings at which agreements have been made as to prices, amount of production, terms of sale, length of (p. 295) credit, and other such matters. In some cases formal combinations have been made of all the operators in one trade, with provisions for enforcing trade agreements. In such a case all competition comes to an end in that particular trade, so far as the subjects of agreement extend. ”

“ When the existence of an alleged partnership arrangement is challenged by outsiders, the question arises whether the partners really and truly intended to join together for the purpose of carrying on business and sharing in the profits or losses or both. ”

“ PARTNERSHIP 66. In General. A party may trade and enter into contracts by himself, or he may associate with himself others. A person is not obliged by law to transact business solely by himself. He is permitted, for the purpose of having labor, capital and skill joined in one enterprise, to combine with others. ”

“ Generally, in the industrial combinations called 'trusts,' the principal business is the sale of goods in many States and in foreign markets; in other words, the interstate and foreign business far exceeds the business done in any one State. ”

“ They should, of course, provide for as many contingencies as can be foreseen, such as the nature, name and place of business, when the relation is to commence and when to terminate, what capital shall be contributed by each, what the share of each in the profits and losses shall be, what the powers of the partners as between themselves shall be, whether the business shall be continued after the death of one or more of the partners and how it shall be wound up. ”

“ It was argued that the people of any section would only use a given amount of any standard product, and that the expense which the various manufacturers were incurring in competing among themselves for their respective shares in that trade might be materially reduced by an agreement through which the extraordinary efforts to sell in competition with each other should be abandoned and each manufacturer receive the share of the sales to which his proportion of production would entitle him. ”

“ These interstitial pecuniary relations, between the several concerns or branches of industry that make up the comprehensive industrial system at large, involve credit relations of greater or less duration. The bargaining, by means of which industry is managed and the interstitial relations adjusted, takes the form of contracts for future performance. All industrial concerns of appreciable size are constantly involved in such contracts, which are, on an average, of considerable magnitude and duration, and commonly extend in several directions. ”

“ Such as are venders of goods and merchandise will not take the advantage of the scarcity of goods that may be occasioned by this association, but will sell the same at the rate we have been respectively accustomed to do for twelve months last past: and if any vender of goods or merchandise shall sell any such goods on higher terms, or shall in any manner or by any device whatsoever depart from this agreement, no person ought, nor will any of us deal with any such person, or his or her factor or agent at any time hereafter, for any commodity whatever. ”

“ We do not mean to imply that a wholesaler's course of business based on anticipation of needs of specific customers, rather than on prior orders or contracts, might not at times be sufficient to establish that practical continuity in transit necessary to keep a movement of goods 'in commerce' within the meaning of the Act. ”

“ Yet a requirement contract may escape censure if only a small share of the market is involved, if the purpose of the agreement is to insure to the customer a sufficient supply of a commodity vital to the customer's trade or to insure to the supplier a market for his output and if there is no trend toward concentration in the industry. ”

“ Realities must dominate the judgment. The mere fact that the parties to an agreement eliminate competition between themselves is not enough to condemn it. 'The legality of an agreement or regulation cannot be determined by so simple a test, as whether it restrains competition. Every agreement concerning trade, every regulation of trade, restrains.' Chicago Board of Trade v. United States, supra. The familiar illustrations of partnerships, and enterprises fairly integrated in the interest of the promotion of commerce, at once occur. ”

“ We now have the concurrence of both Houses in advance in a distinct and definite offer of free entry to our ports of specific articles. The Executive is not required to deal in conjecture as to what Congress will accept. Indeed, this reciprocity provision is more than an offer. Our part of the bargain is complete; delivery has been made; and when the countries from which we receive sugar, coffee, tea, and hides have placed on their free lists such of our products as shall be agreed upon as an equivalent for our concession, a proclamation of that fact completes the transaction ”

“ Manufacturing or trading companies may also affect prices by joining together in forming a trust or other combination, and by making agreements in restraint of trade and commerce, which, when carried out, affect the interests of the public. ”

“ Hence there was nothing to hinder a merchant from entering into contracts with organized consumers, to sell his business to them, and retain the management at an agreed salary, under such rules and regulations for the conduct of the business as they might adopt. ”

“ And whereas, both parties of the first and third parts have confidence and reliance in the integrity, business capacity, and ability of the several persons named as parties of the second part hereto, and confidently believe that said persons have large interests as well in the Union Pacific railroad company as in the Credit Mobiler of America, they will execute and perform the said contract, and faithfully hold the proceeds thereof to the just use and benefit of the parties entitled thereto. ”

“ The subject of Commercial Law is of great and growing importance in the multiplying relations of mankind. Every new tie of commerce gives new occasion for its application. Besides the general principles of the Law of Contracts, it comprehends the Law of Bailments, Agency, Partnership, Bills of Exchange and Promissory Notes, Shipping, and Insurance,—branches of inexpressible interest to lawyers, merchants, and indeed to every citizen. ”

“ Of course, the business man does, in a way, look upon the partnership as a separate commercial entity. The very fact that the members of the firm are all general agents for the firm, and that the members are individually liable for all of the debts of the [Pg 168] firm, shows that the law does not carry the entity theory into practice in partnerships as it does in corporations. ”

“ The difficulty, however, is that the principle is excessively broad: any significant multi-employer agreement on economic matters 'affects competition' with respect to prices and services to the public, even if it is a collective bargaining agreement or an employer agreement collateral thereto. ”

“ Economic arrangements between companies standing in a supplier-customer relationship are characterized as 'vertical.' The primary vice of a vertical merger or other arrangement tying a customer to a supplier is that, by foreclosing the competitors of either party from a segment of the market otherwise open to them, the arrangement may act as a 'clog on competition,' Standard Oil Co. ”

“ The right of the partners, under the articles of copartnership, as well as under the general law, to make a transfer or assignment of their interest in the profits of the firm, should not be confounded with the right of the firm to make an assignment of the contract, so far as the state is concerned. ”

“ The agreement (of which that for a partnership was but a portion) was that they should combine their interests; that they should put in bids known to each; that they should conceal the fact of their combination; that they should put in fictitious bids, without expectation or purpose of having them taken; that, if the contract were procured, they should perform the work as partners, and share expenses and divide profits. No division of that contract into two periods, the one prior and the other subsequent to the written agreement between the parties, can be made. ”