Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/297

 PART III.] ACTS WITHIN THE CORPORATE POWERS. [§ 3096'. tees to the holders of the trust certificates, tends to the creation of a monopoly to control production as well as prices, and is against public policy." " Where all, or a majority, of the stockholders comprising a corporation, do an act which is designed to affect the property and business of the company, and which, through the control their numbers give them over the selection and conduct of the corporate agencies, does affect the property and business of the company in the same manner as if it had been a formal resolu- tion of its board of directors ; and the act so done is ultra vires of the corporation and against public policy, and was done by them in their individual capacity for the purpose of concealing their real purpose and object, the act should be regarded as the act of the corporation ; and to prevent the abuse of corporate power, may be challenged as such by the state in a proceeding in quo warranto" l § 309<2. These matters took different forms in other cases; but the principle applied was the same, i. e., that monopolies are against public policy. Thus the agreement of two gas com- panies doing business in Chicago to divide the territory of the city between them, surrender their respective gas-mains to each other within the district mutually abandoned, and bind them- selves not to sell gas within ea.ch other's districts, is void be- cause creating a monopoly. 2 Subsequently the Supreme Court of Illinois, laying down the broad principle that whatever tends to create a monopoly or prevent competition between those engaged in a business of a public character is unlawful, held it to be against public policy and unlawful to form a corporation for the purpose of controlling all the corporations engaged in the same kind of business ; the court sustained a quo warranto against a corporation formed to buy up the stock of and control the gas companies of Chicago. 3 And it is held in New York, 1 State v. Standard Oil Co., 49 O. St. 137, 184. 2 Chicago Gas Light Co. v. People's Gas Light Co., 121 111. 530. See, also, State v. Portland Natural Gas Co., 153 Ind. 483. 8 People v. Chicago Gas Trust Co., 130 111. 268. See, also, Harding ». v. Nebraska Distilling Co., 29 Neb. 700; and compare Scranton Electric Co.'s Appeal, 122 Pa. St. 154 ; Bruns- wick Gas Light Co. v. United Gas, etc., Co., 85 Me. 532; Buckeye Mar- ble, etc., Co. v. Harvey, 20 S. W. Rep. (Tenn. ) 427; Stater. American Cotton Oil Trust, 40 La. Ann. 8; Am. Glucose Co., 182 111. 551; State I Richardson v. Ruhl (Diamond Match 277