Flowers v. W. T. Smith. Lumber Co.

ANDEESON, J. — -“It may be conceded as being the general rule in all the states, as well as in England, that contracts in general restraint of trade are void as against public policy.” —24 Am. & Eng. Ency. Law (2d Ed.) 842; Harris v. Theus, 149 Ala. 133, 43 South. 131, 10 L. R. A. (N. S.) 204, and cases there cited. There are a few instances when contracts have been upheld by the courts, notwithstanding they had a tendency to restrain trade, such as sales of a stock or business and [511] the good will of the vendor, with an obligation not to engage in a similar business or calling in the same locality. Contracts of this kind have been upheld and enforced upon the theory that they did not generally, but only partially, restrain trade, and only to the extent of protecting the purchaser in the enjoyment and use of the business purchased, and Avhich was not otherwise injurious to the public. Contracts, hoAvever, Avhose chief, if not sole, aim is to stifle competition and create a monopoly, Avill not be enforced, because they are contrary to public policy. And in considering such contracts “courts will not stop to inquire as to the degree of injury inflicted upon the public. It is enough to knoAV that the inevitable tendency of such contracts is injurious to the public.” —Arnold v. Jones Cotton Co.. 152 Ala. 501, 44 So. 662, 12 L. R. A. (N. S.) 150. The manifest purpose of the contract under consideration is an attempt by the parties thereto to parcel out betAveen themselves a large area of timber land, by a dividing line running, in an easterly direction for many ‘miles, and partially through two counties, and to rid the one of the other as a competitor in the purchase of timber on the respective sides of said line reserved to each of them, Avith no confines in distance from said line north for the one and from said line south to the other, thus stifling competition, and thereby injuring the public by keeping dOAvn the price of timber, through a pool or combination. “You get what timber you can south of said line at your own price, and Ave get it north of said line at our price.” It matters not that they conveyed each other-certain tracts of land contemporaneous with the execution of the contract, as that did not amount to such a sale of the business and good will as to bring the transaction Avithin the protective influence of the laAv. These conveyances simply exchanged certain hold [512] íngs, so as to place the same on their respective sides of the dividing line, and were but a step in furtherance of the scheme to parcel this vast territory between the two in such a manner as to remove any competition between them' in acquiring timber for their respective mills. As the contract is contrary to public policy, and is therefore void, a breach of same is not actionable at law; and, as the defendant was entitled to the general charge, any errors that may have been committed during the trial, if any there were, were without injury to the appellants, and the judgment of the circuit court is accordingly affirmed. Affirmed. Tyson, C. J., and Dowdell and McClellan, JJ., concur.