Case Name: L. E. Waterman Company, Respondent, v. Arthur A. Waterman and Edward L. Gibson, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898
Citations: 27 A.D. 133
Docket Number: 
Parties: L. E. Waterman Company, Respondent, v. Arthur A. Waterman and Edward L. Gibson, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 27
Pages: 133–135

Head Matter:
L. E. Waterman Company, Respondent, v. Arthur A. Waterman and Edward L. Gibson, Appellants.
A contract by purchasers from a manufacturing company not to sell the goods below the list price—what is notpo'oof of its violation swffiaient to sustain an injunction.
In an action brought by a company manufacturing fountain pens, to restrain parties dealing in pens from selling the company's pens below the list price at which its customers had contracted to sell them, a letter written by such ■dealers to the company, in which it is stated that, in order to introduce their own pens, without making the purchase a hardship to dealers already stocked with pens, the writers had, in a considerable ■ number of cases, consented to ■ credit parts of the stock of these dealers, and that, in order to realize upon the pens so taken, they must give a discount, and containing an offer to sell these pens, thus taken, at a discount of twenty per cent to the manufacturing company rather than to attempt to put them on the general market, does not show that the writers were purchasing the pens at less than the list price. In such a case the court cannot say that rival dealers might not be willing to lose twenty per cent in order to introduce their own pens.
Appeal by the defendants, Arthur A. Waterman and another, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 11th day of February, 1898, continuing a preliminary injunction until the trial of the action.
This action was brought to obtain a perpetual injunction restraining the defendants from selling or disposing of any of the fountain pens manufactured by the plaintiff then in their custody, or from attempting to purchase any of said pens from any of the plaintiff’s customers at less than the list priego to recover such pens as were at the time in the defendants’ possession, and for money damages.
Robert C. Taylor, for the appellants. .
Charles M. Demond, for the respondent.

Opinion:
Rumsey, J.:
It may be conceded, without so deciding, that the contract between the plaintiff and its customers, by which the customers were not to sell its pens at retail below the list price, was a valid one, and not only bound the customers, but gave to the plaintiff the right to restrain persons buying from the customers whoywith knowledge of that contract, induced customers to sell at less. than the list price in violation of it. The plaintiff bases its right to an injunction here upon its claim that the defendants, knowing of this contract, committed this act for the purpose of ruining the business which the plaintiff had built up. It will be seen that it is essential, for the plaintiff to prove the fact that the defendants were purchasing pens from the customers of plaintiff at a price less than that which they had agreed to charge, and unless it make's that proof it entirely fails in its case.
' The learned justice at the Special Term, who granted this injunction, conceded that there was no direct proof on that point, but he thought that, from all the facts, a reasonable presumption arose that the defendants were making these purchases at less than the list price. In that we do not agree with him.' No affidavit of any customer is presented upon this motion, and the only facts which are made to appear upon that point are, that the plaintiff's president suspected that the defendants were thus purchasing pens at less than the list price, with the object of accumulating a number of these pens and flooding the market with them at prices less than the plaintiff's prices,- so as to injure the plaintiff's business. He says that this suspicion had grown into á certainty upon the receipt of a letter which the defendants wrote to his company. This letter, however, contained no indication of any such fact, but was. a statement that the defendants, in endeavoring to introduce their pens without making the purchase a matter of hardship to dealers already stocked with fountain pens, had consented, in a considerable number of cases, to crediting parts of the dealers' stocks, and that to realize upon the pens so taken it would -be-necessary to give a discount. The letter then continued by offering to sell the pens thus taken at a discount of twenty' per cent to the plaintiff, rather than to attempt to put them on the general market. It was inferred by the learned justice at the Trial Term, from this proposition, that the defendants had taken these pens at less than the list price, because, as he said, it would be a violent presumption that traders voluntarily do a losing business. Without attempting to dispute the fact that there is no presumption of that kind, it must be observed that such .a presumption does not necessarily arise in this case. The facts are not before us from which any presumption can arise, whether, upon the= whole transaction with customers, the taking of the plaintiff's pens, at the list price would cause a loss to defendants; or, if it would result, in a loss in the particular case, it is impossible to say or even to presume that the- defendants would not be willing to incur that loss for the purpose of introducing their own pens. Such acts on the part of dealers are not unknown, and are sometimes regarded as good business operations, and in the absence of any proof that the price agreed on between the customer and the defendants was not less than the list price which the customer agreed to take, it is impossible to say that the customer had been induced to idolate his contract with the plaintiff. For this reason the injunction should, not have been granted.
We have not considered as we might the defects in the nature of the testimony offered on behalf of the plaintiff; but in examining the affidavit we have taken for granted that the facts stated in it were within the knowledge of the affiant, although the manner of stating these facts and the nature of the facts themselves, render it somewhat improbable that such is the case. But without considering that matter further, it is sufficient to say that, giving the affidavit of the plaintiff all the probative force claimed for it" it does not establish the essential fact mentioned above, and for that reason the-order continuing the injunction is reversed, with ten dollars costs and disbursements, and the motion to continue the injunction is denied, with ten dollars costs.
Yan Brunt, P. J., Barrett,. Ingraham and McLaughlin, J.J." concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.