Court Opinion

ID: 5359014
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:15:54.610959+00
Date Added: 2024-06-11T08:29:50.781615
License: Public Domain

Callahan, J.
(dissenting). While I have some sympathy from an economic viewpoint with the construction of the statute con*353tended for in the prevailing opinion, I do not believe that such construction is legally warranted. The New York Fair Trade Act (Laws of 1935, chap. 976, as amd.) provides a scheme to prevent unfair competition by authorizing contracts to be made requiring dealers not to resell commodities except at prices stipulated and by prohibiting as unfair competition the resale of such commodities below the stipulated prices by those who have knowledge of the prices fixed.
Plaintiff is' now attempting by indirection through an alleged enforcement of this statute to prohibit the resale of any fractional quantity of its commodity. It is attempting to do this by the device of providing in a contract that no fraction of the article sold will be resold for less than a fixed price. In other words the buyer of an ounce of plaintiff’s commodity, if it wishes to resell one-tenth of an ounce must charge the same price that it would for a full ounce, for the resale price fixed for any fractional part of the ounce is the same as the resale price fixed for the whole ounce. This would seem to me to be a restraint upon alienation not contemplated by the Fair Trade Act as now written and, therefore, an illegal restraint. (Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 404.)
In Prestonettes, Inc. v. Coty (264 U. S. 359) it was held that a seller of goods had not that degree of control over the method of repackaging or merchandising of its product by a purchaser thereof sufficient to prevent smaller quantities (vials of cologne) being made up by such purchaser from larger packages and sold under the original trade-mark. The court said that a purchaser had the right, by virtue of its ownership of the goods, to compound or change what it had bought, divide either the original or modified product and sell as so divided, and that the existence of a trade-mark would have no bearing on that right, when the trade-mark was used in a way that did not deceive the public.
It is true that the court in that case indicated that it was not passing on a case of unfair competition.
Although the basis of plaintiff’s claim herein is unfair competition, that claim rests solely on an alleged violation of the provisions of the Fair Trade Act.
While the Supreme Court of the United States said in Old Dearborn Co. v. Seagram Corp. (299 U. S. 183) that the Fair Trade Acts were intended to protect good will by upholding agreements fixing resale prices, this did not amount to a holding that good will may be protected by restricting the quantities in which a commodity may be resold, in the absence at least of a statute permitting that restriction.
*354We need not consider the power of the Legislature to provide such a restriction. The question before us is not one of power but one of construction, and as I read the law we have no statute which authorizes a seller to limit the quantity in which his goods may be sold. Therefore, to attempt to regulate resales quantitively by a contract ostensibly fixing fractional resale prices is unwarranted under the Fair Trade Act.
Judgment should be directed for the defendant.
Martin, P. J., concurs.
Judgment directed in favor of plaintiff, with costs. Settle order on notice.