20

it was held to apply to transportation companies only, and not to companies exploiting a patent for an air-brake upon railway cars.2 It is scarcely necessary again to remind the reader that the statutes of States prescribing the mode of serving process on corporations furnish an exclusive mode of effecting such service in the courts of the United States,subject, however, to the rule that jurisdiction of the action against the corporation must otherwise exist under the constitution and laws of the United States, since it is not competent for the legislatures of the States to confer jurisdiction upon courts of the United States.21

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IV. Service Upon Agent Appointed to Receive Service Under a State Statute.-Statutes relating to service of process on corporations being in general exclusive, if the law of the domestic State requires the foreign corporation, as the condition of doing business in the State, to appoint an agent within the domestic State and empower him to receive service of process in actions against it, and lodge evidence of such appointment with the secretary or other officer of the State, then, unless the statute is in its language permissive, so as to admit of other modes of service, service must be had upon that officer alone, or there will be no jurisdiction of an action against the corporation;22 and service in conformity with the general statutes relating to service of process on corporations will not give jurisdiction.23 So, where a for

20 Carpenter v. Westinghouse Air-Brake Co., 32 Fed. Rep. 434.

21 6 Thomp. Corp. §§ 7502, 8023.

22 Baile v. Equitable Fire Ins. Co., 68 Mo. 617; Stone v. Travelers' Ins. Co., 78 Mo. 655.

23 Oland v. Agricultural Ins. Co., 69 Md. 248, 12 Cent. Rep. 881, 14 Atl. Rep. 669; Rehm v. German Ins. Sav. Inst., 125 Ind. 135, 25 N. E. Rep. 173. It follows that where a foreign insurance company has appointed such an agent, service of process upon one of its local agents will not be sufficient. Baile v. Equitable Fire Ins. Co., 68 Mo. 617; Gates v. Tusten, 89 Mo. 13; Rehm v. German Ins. Sav. Inst., 125 Ind. 135, 25 N. E. Rep. 173. So, a return of service of proc ess of garnishment "by delivering a summons of garnishment in writing to H. N. B., one of the agents of said company," does not show a formal service upder the Missouri statute (R. S. Mo. 1879, § 6013), which requires foreign insurance companies doing business within Missouri to appoint and authorize some person who shall be a resident of the State to acknowledge or receive service of process," etc. The reason is that the statute plainly contemplates that but one agent or attorney shall be designated by the foreign insurance company. Gates v. Tusten, 89 Mo. 13, 19. But where the sheriff returned that he had

eign corporation has appointed a State officer as its attorney to receive service of process against it in compliance with the domestic statute, a service upon one who was its agent prior to such appointment will not support jurisdiction of the action.24 If the foreign corporation fails to make the designation required by the statute, but, nevertheless, by entering the State to do business there, renders itself amenable to its judicial process, then service may be obtained upon it in any mode recognized by any other statute, or by the principles of the common law. 25 On the other hand, a service upon the agent appointed in pursuance of a State statute is sufficient to sustain a personal judgment against the corporation which will be good everywhere.26

V. Principles which Govern in the Absence of Statutes.-The statutes of the States providing for the service of process upon corporations, foreign and domestic, present such a variety of detail as to preclude any attempt at examination in a single article. The remaining space allotted to this article will therefore be consumed in an attempt to state the general principles which govern concerning such service, in the absence of statutes, in so far as they have not already been stated. Where there is no governing statute, then, under the principles of the common law, the service must, in order to bind the corporation, be made upon an officer or agent sustaining such relation to it as to be capable of receiving notice for it in respect of the matter of the suit.27 At common law this officer was the head officer of the corporation,-in the

served the summons on H. P., "State agent" of the company, it was held that the return showed a good service, since the words "State agent" sufficiently designated H. P. as the person appointed by the company to receive service of process under the above statute. Stone v. Travelers' Ins. Co., 78 Mo. 655.

24 Laflin v. Travelers' Ins. Co., 121 N. Y. 713, 31 N. Y. St. Rep. 900, 24 N. E. Rep. 934. On the contrary, where the company made such an appointment, but the superintendent of insurance refused to admit it to do business in the State, after which its application was withdrawn, a service of summons on the superintendent of insurance was inoperative to give jurisdiction against the company. Richardson V. Western Home Ins. Co., 8 N. Y. Supp. 873.

25 Compare Morrison v. National Rubber Co., 13 Civ. Proc. Rep. (N. Y.) 233.

VI. Agency of Person in Whom Process Served must Appear of Record.-That the person on whom the process was served sustains such a relation to the corporation as to affect it with notice, under the principles of the preceding section, must in some way appear of record. 32 In some jurisdictions it is error to render a judgment by default, without proof being made to the court that the person upon whom the service was made sustained the relation to the corporation indicated above.83 Thus, although the process is returned as having been served upon the president of the corporation, it is necessary that proof of his official character should be made to the court, to support a judgment by default, and the sheriff's return alone does not prove the fact.3 So, an acceptance of service by the secretary of a corporation is not of itself sufficient evidence that he bears such a relation to the corporation as will make the service effectual to give jurisdiction against the corporation, although the governing statute permits the service to be made upon the secretary of a corporation. "That he was the secretary must be shown."'35 This is analogous to the general rule that agency cannot be proved by the mere unsworn declarations of the agents.36 But where the judgment entry contains the recital that service was proved to the satisfaction of

34

28 1 Tidd Prac. 116; People v. Cairo, 50 Ill. 154. 23 Dock v. Elizabethtown, etc. Man. Co., 34 N. J. L. 312.

30 Heltzell v. Chicago, etc. R. Co., 77 Mo. 315, 317. 31 5 Thomp. Corp. § 5195.

32 Sturtevant v. Milwaukee, etc. R. Co., 11 Wis. 61. 33 Bank v. Walker, Minor (Ala.), 391; Lyon v. Lorant, 3 Ala. 151; Wetumpka, etc. R. Co. v. Cole, 6 Ala. 655; Talladega Ins. Co. v. McCullough, 42 Ala. 667; Oxford Iron Co. v. Spradley, 42 Ala. 24; Talladega Ins. Co. v. Woodward, 44 Ala. 287.

34 Wetumpka, etc. R. Co. v. Cole, 6 Ala. 655.

35 Talladega Ins. Co. v. Woodward, 44 Ala. 287. See also Hebel v. Amazon Ins. Co., 33 Mich. 400.

36 4 Thomp. Corp. § 4880.

the court, this must be construed, in favor of the judgment, to mean that evidence was introduced tending to show that the person accepting service was the secretary of the company, as he described himself.37

VII. Service on Particular Officers.-In the absence of statute a service on a single director will not be good, for he is not an agent of the corporation, the agency of the directors being a joint agency exercised only when sittingtogether as a board;38 though there are statutes validating this mode of service.39 Service upon an officer who has resigned or otherwise entirely vacated his office will not confer jurisdiction;40 though it may be otherwise in cases of an ineffectual attempt to vacate the office, and where the resignation has not been accepted, since public officers cannot vacate their offices at pleasure.42 Service upon the president of a business corporation will in most cases be sufficient; since the law, in general ascribes to him the character of chief managing or executive officer.44 Service on a managing agent,

37 Talladega Ins. Co. v. Woodward, 44 Ala. 287. The same practice obtains in Louisiana, where the corporation defendant can appear specially for the purpose of objecting to the mode of service, absurd as this may seem. See Collier v. Morgan's R. Co., 41 La. Ann. 37, 5 South. Rep. 637. In this case a domestic railroad company was allowed to trifle with justice by coming into court for the purpose of showing that the person on whom process against it had been served was not in fact its secretary, as the sheriff had returned. Compare Jacobs v. Sartorius, 3 La. Ann. 9. The true rule ought to be that if a defendant whose residence is within the jurisdiction comes into court to make such an objection, he comes for all purposes; and many courts so hold. As to whether the return of the officer.is conclusive as to the fact of agency, see the discussion in 6 Thomp. Corp. § 7507.

383 Thomp. Corp., § 3908. But see 5 Thomp. Corp., § 5220 et seq.; and for a statement of the principle of the text, see Dock v. Elizabethtown, etc. Man. Co., 34 N. J. L. 312, 317.

39 6 Thomp. Corp., § 7508. See, also, 6 Thomp. Corp., § 8035.

40 Amy v. Watertown, 130 U. S. 301. See, also, Watertown v. Robinson, 59 Wis. 513, s. C., on subsequent appeal, 69 Wis. 230. Compare Worts v. Watertown, 14 Fed. Rep. 534. As to service where the agency has expired but the business is not wound up, see 6 Thomp. Corp., § 8040.

41 Badger v. United States, 93 U. S. 599, 604.

42 Edwards v. United States, 103 U. S. 471, 473; 6 Thomp. Corp., § 7510.

43 Meriwether v. Bank of Hamburg, Dudley (S. C.), 36; Conner v. Southern Ex. Co., 37 Ga. 397; Clark v. Chapman, 45 Ga. 486; Steiner v. Central Railroad, 60 Ga. 552; Southern Ex. Co. v. Skipper, 85 Ga. 565, 11 S. E. Rep. 871.

44 Note a difference of theory on this question, 4 Thomp. Corp., § 4617 et seq. As to service upon the

although he may not be the president, will be a good service both at common law and under many statutes; 15 though there are differences of interpretation as to who are to be deemed managing agents under such statutes. 46 Statutes of the States have widened the modes of service until in some States upon any

service may even be had agent or employee;47 upon a person in the employ of the corporation, having its property in charge ;48 upon any agent in actions growing out of the business of his agency;49 upon any person doing business for the corporation;50 or even upon individual stockholders. 51 In default of space to pursue this interesting subject further, the writer again ventures to refer to a recent work where it is treated with a great deal of detail.52 SEYMOUR D. THOMPSON.

St. Louis, Mo.

"principal officer" under a statute, see 6 Thomp. Corp., § 8036.

45 As to such statutes, see 6 Thomp. Corp., § 8037. 46 See, for cases of this character: Doty v. Michigan Cent. R. Co., 8 Abb. Pr. (N. Y.) 427; Carr v. Commercial Bank, 19 Wis. 272; Parke v. Commonwealth Ins. Co., 44 Pa. St. 422; Bain v. Globe Ins. Co., 9 How. Pr. (N. Y.) 448; Donadi v. New York, etc. Ins. Co., 2 E. D. Smith (N. Y.), 519; Flynn v. Hudson R. R. Co., 6 How. Pr. (N. Y.) 308; Bank of Commerce v. Rutland, etc. R. Co., 10 How. Pr. (N. Y.) 1; American Express Co. v. Johnson, 17 Ohio St. 641. As to who are not managing agents to receive such service, see 6 Thomp. Corp., § 7513. Similar questions of interpretation have arisen under statutes providing for service upon a general agent. See 6 Thomp. Corp., § 7515. Service upon secretary, or secretary and treasurer. 6 Thomp. Corp., § 7515. Service upon station agents of railway companies. 6 Thomp. Corp., § 7517. 47 6 Thomp. Corp., § 7516.

carry on the business in its or his own name, as theretofore, for the benefit of the association, and render regular statements to the association. The agreement was to cover all business done by any of its members in the State, and provided that any member violating the contract should pay to the association a certain amount as liquidated damages: Held, that the contract did not create a monopoly to unduly restrict the business of stevedoring, in contravention of public policy.

VAN FLEET, J.: In this case the defendants appealed to this court from the judgment and from an order denying a motion for a new trial. The appeal from the judgment was heretofore dismissed, and the order denying a new trial affirmed, in department. Herriman v. Menzies, 44 Pac. Rep. 660. Subsequently the order dismissing the appeal from the judgment was, upon petition therefor, set aside, and a hearing of the motion ordered in banc. Since the last order, the appeal from the judgment has been submitted upon the merits, but without a waiver of said motion to dismiss.

The appeal from the judgment involves but one question,-whether the complaint states a cause of action. The objection urged is that the contract which forms the basis of the action, and under which the accounting is asked, is contrary to public policy, and void. The contract is set out in hæc verba. It provides for the formation of an association between several firms and individuals engaged in the business of stevedoring in the city of San Francisco under the name of the Master Stevedores' Association, "to govern and control the business of master stevedores, to be carried on by its members, and to divide the profits and losses of said business so carried on." The association is to continue five years. Certain officers, consisting of president, vice-president, and secretary, whose duties are defined, and a standing committee for the auditing of accounts of the members, are provided for. The association is given power through a majority vote of its members to "fix a schedule of prices or charges for any and all work as stevedores to be done and performed by its members, and they hereby agree that they will each of them observe and abide by such schedule of prices or charges, and that none of them will do or perform any such work at or for less or lower prices, or suffer or allow any discount to be made therefrom, except as may be allowed or authorized by the association." "(9) Each of the firms and parties hereto is to carry on the business of master stevedores, according to the provisions of this agreement, in their own names as heretofore, for the benefit of this association; and each agree to do so in an efficient and economical manner, and that their disbursements shall be subject to examination and approval or disapproval as herein provided.” Each member is required to keep full and correct accounts of the business done by him, including all receipts and disbursements, and render statements thereof at stated intervals to the association. The agreement covers all business done by

any of the members in San Francisco and the other ports in the State, and provides that any member violating any provision of the contract shall pay to the association a certain amount as liquidated damages.

It is contended that the contract contemplates an illegal scheme and combination to stifle competition in the stevedoring business, and is in restraint of trade, and that its effect is to create a monopoly; and that in these respects it contravenes public policy, and is opposed to good morals, and so constitutes no proper basis for an action either at law or in equity. We are unable to coincide in this construction of the contract, or to perceive anything therein which renders it invalid upon the grounds stated. The objection that its effect is to create a monopoly in and unduly restrict the business of stevedoring does not find support in its terms. A monopoly exists where all or so nearly all of an article of trade or commerce within a community or district is brought within the hands of one man or set of men as to practically bring the handling or production of the commodity or thing within such single control, to the exclusion of competition or free traffic therein. Anything less than this is not monopoly. Webster defines it as "the sole power of dealing in any species of goods," and Bouvier as "the abuse of free commerce, by which one or more individuals have procured the advantage of selling all of a particular kind of merchandise." And these definitions accord with that given by later writers. Spell. Trusts, § 133. An agreement, the purpose or effect of which is to create a monopoly, is unlawful if it relate to some staple commodity, or thing of general requirement and use or of necessity, and not something of mere luxury or convenience. Assuming that the business of stevedoring is a thing which is the proper subject of a monopoly within this definition, there is nothing in this agreement to render it obnoxious to that objection, nor anything to show that it will operate to unlawfully restrain trade. It nowhere appears therefrom that the parties to this contract, by the combination of their business interests provided for, are in the control, or anything like the control, of that business in San Francisco, to an extent to enable them to exclude competition therein, or control the price of such labor or business. There is absolutely nothing to show that they comprise more than the most insignificant part or fraction, either in number or volume of business, of those engaged in that trade in this community. We are not at liberty to indulge in inferences which would restrict the parties in their right to combine their interests. Parties are to be given the widest latitude to make contracts with reference to their private interests (Printing Co. v. Sampson, L. R. 19 Eq. 465), and the invalidity of such contracts is never to be inferred, but must be clearly made to appear. Appellant says that the purpose of this contract is expressly declared as that of "con

trolling the business of stevedoring," and that this implies an improper restriction of that business and a monopoly. But the language of the contract is, "to govern and control the business of master stevedores, to be carried on by its members." This is a very different thing from a combination to control the entire business of stevedoring. Combinations between individuals or firms for the regulation of prices, and of competition in business, are not monopolies, and are not unlawful as in restraint of trade, so long as they are reasonable, and do not include all of a commodity or trade, or create such restrictions as to materially affect the freedom of commerce. Say the Supreme Court of Illinois, in People's Gaslight & Coke Co. v. Chicago Gaslight & Coke Co., 20 Ill. App. 492: "The tendency of the courts is to regard contracts in partial restraint of competition with less disfavor than formerly. and the strictness of the ancient rule has been greatly modified by the modern cases. Maule, J., in Proctor v. Sargent, 2 Scott, N. R. 289, remarked that: 'Many persons who are well informed upon the subject entertain an opinion that the public would be better served if, by permitting restrictions of this kind, encouragement were held out to individuals to embark large capitals in trade, and that it would be expedient to allow parties to enter into any description of contract for that purpose that they might find convenient.' Greenhood, Pub. Pol. 689, and cases cited." And in Shrainka v. Scharringhausen, 8 Mo. App. 522, it is said: "The old doctrine of the common law that contracts in restraint of trade are void is no longer to be rigorously insisted upon precisely as it was insisted upon in the earlier cases in which it was announced. It has been modified by the more recent decisions, as the laws of trade have become better understood during the development of our commercial system, and the changes which have been introduced in the social system. Presbury Fisher, 18 Mo. 50; Long v. Towl, 42 Mo. 545. It is not that contracts in restraint of trade are any more legal or enforceable now than they were at any former period, but that the courts look differently at the question as to what is a restraint of trade."

We find nothing in the terms of the present agreement which would necessarily work an unreasonable restriction in the manner of conducting the business in question, or which would necessarily interfere with the freedom or right of others not parties to the contract to engage in and carry on such business. The parties themselves, it is true, have combined their business as severally carried on by them, and have agreed to be bound by a schedule or rate of charges to be fixed by the association; but this in itself is not an unlawful restraint of trade so long as it does not appear that the rates to be charged are unreasonable, or the restriction such as to preclude a fair competition with others engaged in the business. In Collins v. Locke, 4 App. Cas. 674,

it is held that where the object of an agreement was to parcel out the stevedoring business of the port of Melbourne among the parties to it, and so prevent competition, at least among themselves, and reasonably keep up the price, it was not invalid, though its effect might be to create a partial restraint upon the power of the parties to exercise their trade. In Association v. Walsh, 2 Daly, 1, where an agreement not materially unlike the present was entered into between master stevedores, fixing a rate of prices to be charged by the members in their business, and making a penalty for any member doing work for less, and an action was brought to enforce such penalty for a default by one of the members, it was held that such an association was not an unlawful combination, as injurious to trade or commerce, nor the restrictions unlawful, as being in restraint of trade. "An agreement between a number of persons to act concertedly in fixing prices at which they will sell a particular product in a particular city is not illegal, as being in restraint of trade, unless it appears that they have a monopoly of that product." Ray, Contract. Lim. p. 223, and cases there cited. See, also. People's Gaslight & Coke Co. v. Chicago Gaslight & Coke Co., supra; Skrainka v. Scharringhausen, supra; Ontario Salt Co. v. Merchants' Salt Co., 18 Grant (U. C.), 542; Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. Rep. 629. In Ontario Salt Co. v. Merchants' -Salt Co., supra, speaking of an agreement of similar import between salt manufacturers to keep up the price of that commodity, it is said: "I know of no rule of law ever having existed which prohibited a certain number (not all) of the producers of a staple commodity agreeing not to sell below a certain price; and nothing more than this has been agreed to by the parties here." We find nothing necessarily inconsistent with the doctrine of these cases in the cases cited by appellants. In the case of Factor Co. v. Adler, 90 Cal. 117, 27 Pac. Rep. 37, the language relied upon has express reference to contracts "entered into with the object and view of controlling and necessarily suppressing the supply, and thereby enhancing the price of articles of actual necessity." In Lumber Co. v. Hayes, 76 Cal. 387, 393, 18 Pac. Rep. 391, 393, in the language of the court: "The very essence and mainspring of the agreementthe illegal object-'was to form a combination among all the manufacturers of lumber at or near Felton, for the sole purpose of increasing the price of lumber, limiting the amount thereof to be manufactured, and give plaintiff control of all lumber manufactured.'" In Vulcan Powder Co. v. Hercules Powder Co., 96 Cal. 510, 31 Pac. Rep. 581, the contract precluded the parties absolutely from shipping to, or selling the commodity within, a large part of the territory of the United States, and restricted the output of the powder within the territory wherein the parties were at liberty to sell; and it was held that the contract was void, as in restraint of trade. The

cases from other States relied upon are as clearly distinguishable from the present as are the foregoing. After a careful review of all the authorities, we are unable to say from the terms of the present contract that it, to any extent, trenches upon the rule of public policy Invoked, or that there is anything within its provisions which should preclude the parties thereto from enforcing it. This conclusion renders the motion to dismiss the appeal of no consequence. The judgment is affirmed.

NOTE.-Contracts between employers and traders whose effect is to restrain the freedom of trade or the free employment of labor are illegal and void. Law. son on Contracts, § 331. Hooker v. Vandewater, 4 Denio, 349; Morris Run Coal Co. v. Barclay, 68 Pa. St. 173; Hartford, etc. R. R. Co. v. New York, etc. R. R. Co., 3 Rob. (N. Y.) 416; Clancy v. Onondaga, etc. Co., 62 Barb. 375; Kurtz v. Citizen's Coal Co., 72 Pa. St. 392; Arnott v. Coal Co., 68 N. Y. 558, 23 Amer. Rep. 190; Santa Clara, etc. Co. v. Hayes, 76 Cal. 387; Oregon Steam Nav. Co. v. Hale, 1 Wash. 283; Wiggins Ferry Co. v. R. R. Co., 5 Mo. App. 347; Stewart v. R. R. Co., 38 N. J. L. 505. The following may be said to fall under this rule: An agreement between the members of an association of salt manufacturers that no members should sell any salt during the life of the association except at retail at the fac tory, and at prices fixed by a committee. Cent. Ohio Salt Co. v. Guthrie, 35 Ohio St. 666. A contract between a railroad company and a telegraph company, that the former will not allow any other telegraph company to construct a line along its road. Western Union Tel. Co. v. Amer. Union Tel. Co., 65 Ga. 160, 38 Amer. Rep. 781; Western Union Tel. Co. v. R. R. Co., 3 McCrary, 130; Western Union Tel. Co. v. Tel. Co., 23 Fed. Rep. 12; Balt., etc. Tel. Co. v. West. Union Tel. Co., 24 Fed. Rep. 319. But see West. Union Tel. Co. v. Tel. Co., 7 Biss. 367; West. Union Tel. Co. v. R. R. Co., 86 Ill. 246, 29 Amer. Rep. 28. An agreement by members of a carrying association, the terms of which are that no one should carry freight for less than the rate fixed by the association, without regard to the question whether the rate was reasonable or not. Sayre v. Benevolent Assoc., 1 Duvall, 143, 85 Am. Dec. 613; Stanton v. Allen, 5 Denio, 584, 49 Am. Dec. 282; Hooker v. Vandewater, 4 Denio, 349, 47 Am. Dec. 258. A contract entered into between two gas companies that one of them shall discontinue for a hundred years the manufacture and sale of illuminating gas in a city in which it had been granted by the legislature the right to manufacture and sell such gas. Chicago Gas Light Co. v. Gas Light Co., 121 Ill. 530, 2 Amer. St. Rep. 124. agreement between two large coal mining companies that one would take all the coal the other should mine, and the other should not sell to any third par ties. Arnott v. Coal Co., 68 N. Y. 558, 23 Amer. Rep. 190. A grant of the "exclusive" right of way and privilege to construct and maintain tubing for the transportation of oil through a tract of two thousand acres of land. West Virginia Trans. Co. v. Obio River Pipe Line Co., 22 W. Va. 660, 46 Amer. Rep. 527. An agreement by several commercial firms by which they bound themselves for the term of three months not to sell any India cotton bagging except with the consent of a majority of them. India Assoc. v. Koch, 14 La. Ann. 168. An agreement between the grain dealers of a town which purported to be a contract of partnership for the purpose of dealing in

An