New-York tribune., 1919-01-23
Court Rules Agency
Policy of Goodyear
Companies Is Legal
Knocks Out Dealers Suit:
No Price Fixing or Other
Violation of Sherman Law
in Refusal to Sell, lie Saws

Judge Augustus n Hand has sus-
/ tanned a demurrer filed by Lewis E.
Kelsey, counsel for the Goodyear re
and Rubber Company. and the Good
year Tire and Rubber Company. Inc.
of New York, in suit brought against
the two companies by Harold P. Baran.
dealer in automobile supplies. The
decision was declared yesterday bv
friends of the concern to vindicate the
policy of F. A. Seiberling, president of
the Goodyear Tire and Rubber Com.
pany, of establishing service stations
for the distribution of its wares.
The Goodyear Tire and Rubber Com
pany is the manufacturer, and tho
Goodyear Tire and Rubber Companu
INC of New York, is the selling agen..
MI Baran had been Goodyear agent
under agreement to sell GOODYEAR
wares IN accordance with the GOODYEAR
service station policy After complaints
had been received from tire users. Mr.
Baran was dropped arom 1ne list Of
service station dealers. He brought
SUIT to recover damages under the Shcr-
man act and the Clayton act
The Goodyear companies, Mr.. Barsn
alleged. conspired to obtain mononolv
and restrain trade and commerce in
their tires. He asserted that they
selected the dealers who should soil
the tires, forbade them to sell to otbc,
dealers and instructed them to soil
only at tho prices and terms fxad IN
der penalty of forfeit;ng their posi.
tlons as agents, and that they did
establish system of espionago and
black lsting' in order TO enforce tbe:,.
rules. Mr.. Baran also ALLEGED tbat
the Goodyear companies refused to
make adjustments. repairs or allow
ances on Goodyear products axccnt
through their accredited agents.
Stations for Benefit of Public
II was the contention of counsel for
lne delendants that the service station
system had been established for tbo
benefit of the public as we'll as for
that OF the companies; that dealers
"ere selected with view to their civ
ing adVlce to customers CONCERNING +ha
care OF tlres and so getting the mavi
mum service from Goodvear products
~ is 10 be noticed at the outset"
sald the decision. which was rendered
.ase friday, that there is no allera-
..on mat either defendant had
monopoly in automobile tires and ar
ceFsorles or even did large percen-
taFe of the business in such Good
wlthln any part of the United Stats
ne alleged combination or consnirac,,
oet"een principal and agent. if obnox.
I1 I2us at law. must be so because What
Ihey have together done would hof.a
been ILLEGAL if dor, bv the Oqrj nr;ro;sa, nav1
Hione. The real question which re-.
mans mans -. therefore. whether: A re-
1usal OF manufacturer to sell -
dealers - 'eil %
,"lal Who will not maintain suggest,
".(bl Will sell to other dealers and
M no? merely TO the consumer, is yio-
lat1nn OF the Sherman act.
There is no restriction uno,, +;4,.
alleged. The, selected dealers who cot
INC merchandise could do as tbov
pieased with it. No agreement among
lhe dealers to fix prices or restrict
sales to the consumer is set forth. The
so!e gravamon of The action is the al
tempts Of the defendants to prevent
pflce cutting by refusing to sell to
deaieTs who did not maintain the sug-
gested prices
No Merit in Allegation
Enforcing the Sherman act according
to literal interpretation Of it. the
court continued, would invoke II
ag2lns: NEARLY every commercial on
terprise." 1t could be INTERPRETED. the
declslon went on: only in the light of
the decisions made under it.
NO decision to which he was re-
ferred sad Judge Hand. prevents a
single trader from rejecting a custom
er because he did not like the prices
at which the customer resold.v The
opposite had been held he said. in the
cases of the Great Atlantic and Pacific
lea Company against the Cream of
Wheat Company and the United States
against the Colgate company.
An allegation by Mr.. Baran that the
Good~e9r concerns had more favorable
rriccs for automobile manufacturers
than Tor dealers was held to be with
out merit as an evidence of restraint
OF trade or creation OF a monopoly.
Every manufpcturer holds monop-
olv IN The goods Of his own manu-
tacture.' said JUDGE Hand "but there
is no allegation that the defendants
nave monopoly 'in any line Of com
meTce; to rse the term OF The Clayton
acti Manufacturers Of autom Nbiles or
,llnarily would buv tires in much
larger CuHrtitics than dealers. and
cor seGuently the defendants could gen
orally afford to sell to such manu-
facturers a lower prices than to deal
ers. The rlanufacturers sell to dealers
and The latter to the consumer. There
IS apparently no competition between
the. manufacturers of tires and the
dealers: nor is It alleged that any ex-
lists. The differentiation in price would
not therefore substantially lessen COM
PETITION"
Cant Carnon+or,S oo+,,ro