We need not refer to many other authorities announcing the same rules. So long as competition is regarded as the life of trade, all combinations, contracts, arrangements, or agreements made to stifle it, or which may have that effect, are regarded as unlawful, save as heretofore stated, where connected incidentally with some other contract as of purchase or sale or with contracts of employment, etc., so long as their restraints are reasonable and just. But, where disconnected with some other contract and made enforceable by fine or penalty, we think they come within the ban of the law.

True it is that each of the members of this association might have concluded not to sell any of his hogs to the plaintiff, and, perhaps, all might have agreed in advance not to do so. This would have been

freedom of trade. But here there is freedom of trade in form, but annexed to that freedom is a fine or penalty for exercising such freedom. This is restraint of trade, or rather restraint of competition. That such fine or penalty made the society an illegal one is to our minds too clear for argument. Plaintiff was placed at a disadvantage and could not compete with the society in purchasing hogs from its members, and the members were not free to deal with plaintiff. If they dealt with him, he either forfeited his profits, by reason of having to pay too much for his hogs, or they forfeited a part of the purchase price as a penalty for selling to another. To our minds, this was undue restraint of competition, or, as the term is now understood, "restraint of trade." *** The decree of the trial court was as follows: * That the defendant corporation, Ole Ellingson, manager and treasurer, A. T. Holton, president, and Ed. Sellman, secretary, of said corporation, and each of them, their servants, agents, officers, directors, and employés, be and the same are hereby perpetually restrained and enjoined from exacting, collecting, receiving, or in any manner accepting any sum or amount whatever from any bid made by any competitor upon the general market at Decorah, Iowa, and vicinity, as an inducement or condition upon which said sellers shall or may sell or dispose of live stock to plaintiff, his servants, agents, or employés, and that plaintiff have judgment against defendants for costs."

*

This sufficiently guarded the rights of the defendants. It seems to be correct, and it is affirmed.

WASHINGTON CRANBERRY GROWERS' ASS'N v. MOORE.

(Supreme Court of Washington, 1921. 117 Wash. 430, 201 P. 773, 25 A. L. R. 1077.)

Action by the Washington Cranberry Growers' Association against. A. B. Moore, to restrain the breach of a contract. From judgment granting a permanent injunction, defendant appeals.

MAIN, J. The purpose of this action was to restrain the breach of a contract. The trial resulted in a permanent injunction, from which the defendant appeals.

The Washington Cranberry Association is a corporation organized under the laws of this state, and is engaged in the business of marketing cranberries for those with whom it has contracts, and in some instances for independent growers. The appellant had entered into a contract with the corporation by which he agreed to deliver to it all the cranberries grown by him in Pacific county on land owned by him. The contract provides as follows:

"Witnesseth: That the grower, for and in consideration of one dollar paid him by the association, receipt of which is hereby acknowledged, and of the covenants and agreements herein contained, hereby nominates, appoints and agrees to employ the association as exclusive sales agents for the purpose of selling and marketing the entire crop of cranberries now growing or which shall be grown for shipment by the grower or for him, or in which he may have any interest as landlord or tenant, upon all these certain tracts of land situated in Pacific county, Washington, described as follows: Metes and bounds in section 27, township 16 north of range 11 west of Willamette meridian, during the year 1916 and every year thereafter continually, provided, however that the grower may cancel this contract on the 15th day of January in any year by giving notice in writing to the association in writing at least 15 days prior to that date. Upon giving notice the grower shall, prior to said 15th day of January, pay any and all indebtedness due from him to the association and deliver his copy of the said contract to the manager of the association, and the same shall thereupon be canceled.

"The grower agrees at his own expense to cultivate, care for and harvest said crops. All fruit to be delivered by the grower at the warehouse of packing station of the association, at such place and at such time and in such manner as may be designated by the said association, which shall give notice to the grower for such delivery.

"In the event that grower shall fail to fulfill any or all of the requirements set forth in the foregoing paragraph, the association through its manager shall give to the grower written notice setting forth. the default of the grower, and in event the defaults so specified shall not have been overcome or corrected within ten (10) days following delivery of such written notice to grower, it is mutually agreed that the association may consider this contract as canceled, and shall be relieved from further responsibility with regard to marketing the grower's fruit hereunder.

"The grower fully understands that the purpose, among others, of this agreement, is to maintain and increase to its greatest efficiency the association as well as the Central Selling Agency, with which it is now or hereafter may be affiliated, and to accomplish this purpose it is necessary that he shall strictly and fully comply with and perform the stipulations and agreements on his part agreed herein to be performed, and therefore he hereby stipulates and agrees that he will not sell or otherwise dispose of his said fruit to any other firm, person, or corporation other than the aforesaid association; and it is hereby further mutually agreed that, inasmuch as it is impossible at this time to fix and estimate the actual damage which will be sustained by the association in the event that the grower shall fail to abide by his agreement to market his said fruit through the association, such damages are hereby estimated and agreed upon as one dollar per box for each box of cranberries grown or sold by the grower, which sum shall be allowed in any action brought by the second party to recover damages for the breach of this agreement by the grower should the association elect, as it may elect, to bring such action.

"In consideration of its appointment as exclusive sales agent of growers'. fruit crop, as above set forth, and in further consideration of the agreements made by the grower with the association as hereinbefore set forth, the association agrees to receive, ship and sell all of said fruit

to the best possible advantage. To promptly remit returns therefor, less its regular charge for aforesaid services and for any other deduction, including money, due for advances for supplies furnished by the association to the grower, which indebtedness grower agrees may be treated by the association as a first lien on the proceeds from his fruit, and payment therefor to be deducted accordingly.

"In witness whereof the association has caused this contract to be signed and sealed in its name and behalf by its president and its secretary, and all other parties have hereto affixed their individual signatures. Washington Cranberry Growers' Association, C. K. Cooper, President. Attest: W. M. Rounds, Secretary. A. B. Moore."

The Columbia River Cranberry Association is a corporation engaged in the same business as that of the Washington Cranberry Association, as is also the Oregon Cranberry Association, a corporation. After the contract above referred to was made the three corporations named entered into a contract whereby there was created what is referred to as the Pacific Cranberry Exchange, and appointed one L. S. Martin as the exclusive agent for the sale of all berries controlled by the three corporations. The cranberry exchange was composed of three members, a representative of each of the corporations. In the contract they are referred to as "the associations." It is provided that the cranberries shall be delivered f. o. b. cars at points designated by Martin, and that he agrees that:

"He will immediately upon acceptance by his representative of cranberries, upon surrender of bill of lading, advance to the Pacific Cranberry Exchange, the agent of said associations, the sum of $2.00 per box of the size heretofore indicated, said bill of lading hereinbe fore mentioned shall be forwarded by said Pacific Cranberry Exchange, with draft attached to the Bank of California, of Portland, Or.

"The representatives of the said L. S. Martin shall have access to the warehouses of the associations and to the warehouses or storerooms of the individual members of the associations, to determine the quantity, conditions and quality of berries available at any given time. A representative of the Pacific Cranberry Exchange may at any reasonable time have access to the books of the said L. S. Martin, at his offices in Portland, Or., for the purpose of checking sales and returns made by the said L. S. Martin.

"All returns shall be made to the Pacific Cranberry Exchange, the agent of said associations, on or before thirty days after the expiration of the month in which the berries are shipped to the said L. S. Martin.

"The associations agree that the said L. S. Martin shall receive a five per cent. commission on all gross sales of all berries sold by it to jobbers in the states of Oregon and Washington, and six and one-half per cent. on all other berries sold by the said L. S. Martin, and the said L. S. Martin hereby agrees to accept said commissions in full settlement for his services in the sale of said berries.

"The said L. S. Martin shall only be liable for actual negligence on his part, and no liability shall be attached to him by reason of damages caused to the associations or to individual members thereof, by strikes, embargo, shortage of equipment, or any other cause beyond the control of said L. S. Martin by use of reasonable diligence.

"It is understood and agreed that the fullest co-operation of the associations and of the Pacific Cranberry Exchange will be extended

to the said L. S. Martin in the handling and marketing of said berries. "All sales shall be made at the market price, or at a price to be mutually agreed upon by said L. S. Martin and the Pacific Cranberry Exchange.

In Pacific county there were approximately 80 cranberry growers, and 60 of these had contracts with the respondent similar to the one set out. After the contract was entered into and during the year 1920 the appellant produced 1,300 boxes of cranberries and 500 of these were sold to parties other than the contract provided. As above stated, this action was brought to restrain the appellant from selling cranberries to parties other than the respondent. The appellant makes three principal contentions: First, that the contract is void at common law as against public policy; second, that it is contrary to article 12, section 22, of the Constitution of this state which is a section covering the matter of monopolies and trusts; and, third, that the contract is void as being in contravention of the Sherman Anti-Trust Act passed by the federal Congress on July 2, 1890. (U. S. Comp. St. §§ 88208823, 8827-8830). To determine whether the contract is void for any of the reasons stated it is necessary to read the contract in connection with the procedure under it and the result which was produced thereby. The appellant contends that a monopoly is created, trade restrained, the output of cranberries limited, and prices are controlled. It may be admitted that if this is the effect of the contract and the business transacted under it, it would be void and unenforceable. The contract required the appellant to deliver all cranberries grown by him to the respondent for marketing until it should be terminated in accordance with the terms therein stated. The purposes of the contract, among others as stated therein, are to maintain to its greatest efficiency the association, as well as the Central Selling Agency with which it is now or may be hereafter affiliated. The corporation is made the exclusive sales agent for the growers' fruit crop. The evidence shows that the purpose of entering into the contracts of which the one above set out is one was as follows:

Before the corporation was organized certain growers at times put upon the market cranberries of an inferior grade, and this caused merchants to refuse to buy berries from Pacific county. In order to avoid this situation it was necessary to enter upon an advertising campaign to stimulate the use of berries and to cause berries of uniform grade to be placed upon the market. Another purpose was to secure a uniform price and avoid flooding any one market, as would be done if a large quantity of berries was shipped to a particular point at one time. Under the selling agency the quantity of berries going to any one market was regulated, and in this way tended to maintain or "hold up," as the evidence shows, the price. It was also for the purpose of enabling all growers to receive for their berries a uniform price. There is nothing in the contract or the operation under it that limits the production or controls the price in any particular locality.

While the selling agency was located in Portland the berries handled through the cranberry exchange representing the three corporations came in direct competition with eastern berries, as well as with the berries of independent growers. The cranberry association controlled. about 2 per cent. of the berries produced in the United States, the independent growers 32 per cent., and the American Cranberry Exchange, which was an organization operating in New York and Chi

cago, 65 per cent. The berries sold through the selling agency in Portland created by the three corporations sold at the market price, and the berries were shipped by the corporations to such points as Martin, the selling agent, designated. The evidence is that the price of the berries in the various markets was fixed and controlled by the American Cranberry Exchange. If the Pacific berries could not be sold for the same price as the Eastern berries, the selling agent, after conferring with the members of the exchange, would sell for a lesser price. The contract and the delivery of berries under it not resulting in limiting the production, controlling or fixing of the price in any particular market, cannot be said to be void as against public policy, or under the constitutional provision above referred to or under the Anti-Trust Act.

The question as to when a contract is a restraint of trade was fully discussed in Fisher Flouring Mills Co. v. Swanson, 76 Wash. 649, 137 P. 144, 51 L. R. A. (N. S.) 522. It was there recognized that it was difficult to state the rule which would cover all cases, and that the circumstances of each particular case and the situation of the parties in addition to the effect on the public welfare must be considered in determining the validity of a contract.

* * *

In Finck v. Schneider Granite Co., 187 Mo. 244, 86 S. W. 213, 106 Am. St. Rep. 452, it was stated that in determining the validity at common law of a combination claiming to be in restraint of trade the true test is "whether they afford fair and just protection to the parties [thereto], or whether they are so broad as to 'interfere with the interests of the public." In United States v. Addyston Pipe & Steel Co., 85 F. 271, 29 C. C. A. 141, 46 L. R. A. 122, in determining whether a contract was void at common law or under the Anti-Trust Act the test applied was whether there was a reasonable restraint of trade, "considering whether the restraint is such only as to afford a fair protection of the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public. Whatever restraint is larger than the necessary protection of the party requires can be of no benefit to either. It can only be oppressive. It is, in the eye of the law, unreasonable. Whatever is injurious to the interests of the public is void on the ground of public policy."

A large number of cases are cited in the briefs where contracts have been held void as being a restraint of trade, but it does not seem necessary to review these in detail. So far as we are informed, no case holds that a contract is void which does not limit the production or control or fix the price in a particular market. As above pointed out the contract here under consideration, considered in connection with the evidence showing the operation under it, neither limits the production nor fixes the price. The cases of Mill & Lumber Co. v. Hayes, 76 Cal. 387, 18 P. 391, 9 Am. St. Rep. 211, and Cravens v. CarterCrume Co., 92 F. 479, 34 C. C. A. 479, are cases where the combinations there in question limited the production and increased the price. and are therefore not in point in this case.

The next question which arises is whether the respondent is entitled to injunctive relief. The appellant contends that there should be recourse only for damages. The purpose of the action was not to enforce specific performance directly, but to accomplish that indirect result by restraining the appellant from selling berries to any other person than the respondent. It will be admitted that if the contract by its terms shows an intent to rely upon damages, or if there is an