Sec 443

An agreement by parties capable of influencing a sale by auction to suppress competition at such sale is void, and as between the parties will not be enforced.1 Hence a sheriff's sale was set aside where coming forward, there is no more reason why an article should not be bought by six persons than that it should not be bought by one person.1

Agreement to suppress bids at aucit appeared that the purchaser had deterred others from bidding by claiming that he was bidding as the representative of the family;1 though fraud in such cases must be substantively proved.2 For the same reason the courts have held invalid an agreement to suppress competition in bidding in answer to proposals for a public work;3 and hence a combination of contractors, by which the privilege of bidding is secured by one, the others to share the profits, is in conflict with the policy of the law, and a letting on unreasonable terms thus induced will be held inoperative.4 But when parties cannot singly purchase a property at public sale, or are partners in a public enterprise in which they cannot sever, or desire to make a purchase larger than individual bidders could ordinarily afford, an agreement between them to combine to make a purchase has nothing in it unlawful.5 "The mere fact that an arrangement, fairly entered into, with honest motives, for the preservation of existing rights and property, may incidentally restrict competition at a public or judicial sale, does not, we think, make the arrangement illegal."6

R., 20 L. J. Ch. 90,102; 17 Q. B. 652; 2 MacN. & G. 324; 4 De G. M. & G. 115. In Charlton v. R. R., 5 Jur. N. S. 1097, it was said by Sir W. P. Wood, V.-C, that "an agreement that the profits and loss (of two roads) shall be brought into one common fund, and the net receipts divided, without the authority of an act of parliament, appears to me so clearly and palpably illegal, that I do not think the court ought to hesitate in its views in that respect; otherwise it might be that all the railways in the kingdom might be collected in one large joint-stock concern." The question of public policy was waived. As holding that such consolidations cannot be sustained, see Central R. R. v. Collins, 40 Ga. 582. But while a consolidation was thus held ultra vires, it is otherwise as to an agreement between two competing roads to divide traffic on a reasonable basis, and equity will not enjoin such an arrangement. "When," said Sir W.P.Wood, "in an application for an injunction in a case of this class (Hare v. R. R., 2 Johns. & H. 80), in the judgment of the directors and of the company assembled in general meeting, it is found advantageous to give up certain contingent profits in order to secure certain other profits expected from the arrangement, an individual shareholder does not seem to have any right to treat such a contract as an injury to himself."

In Stanton v. Allen, 5 Denio, 434, a combination of all the leading proprietors of boats on the New York canals to fix rates, suppress competition, and pool profits was held invalid; and, though this conclusion in part rested on the New York statute that, "if two or more persons shall conspire to commit any act injurious to trade or commerce, they shall be deemed guilty of a misdemeanor," it is sustained also on common law reasoning. See Marsh v. Russell, 66 N. Y. 288; Clancey v. Salt Co., 62 Barb. 395; Hartford R. R. v. N. Y. R. R., 3 Robt. 411. That pooling when it destroys competition among carriers is against the policy of the law, see further Currier v. R. R., 48 N. H. 321; State v. R. R., 29 Conn. 538; Peoria R. R. v. Coal Co., 68 111. 489; Stewart v. Trans. Co., 17 Minn. 372, cited in an article on this topic in 10 West. Jurist, 336.

1 Supra, sec 268; Levi v. Levi, 6 C. & P. 239; Cocks v. Izard, 7 Wal. 559; Toler v. Armstrong, 4 Wash. C. C. 297; 11 Wheat. 258; Gardiner v. Morse, 25 Me. 140; Phippen v. Stickney, 3 Met. 387; Thompson v. Davis, 13 Johns. 112; Troup v. Wood, 4 Johns. Ch. 228; Brisbane v. Adams, 3 N. Y. 129; Atche-son v. Mallon, 43 N. Y. 147; Wheeler v. Wheeler, 5 Lans. 355; Bank of the Metropolis v. Sprague, 5 C. E. Greene, 159; Slingluff v. Eckel, 24 Penn. St. 472; Wood v. Hudson, 5 Munf. 423; Ray v. Mackin, 100 111. 246; Hannah v. Fife, 27 Mich. 172; Ingram v. Ingram, 4 Jones N. C. 188; Hamilton v. Hamilton, 2 Rich. Eq. 355; Wooton v. Hinkle, 20 Mo. 290; Hook v. Turner, 22 Mo. 333; Turner v. Adams, 46 Mo. 95; James v. Fulcrod, 5 Tex. 512; Jenkins v. Frink, 30 Cal. 586. As to auction sales in general, see supra, sec 25 6; as to puffers, supra, sec 167.