Court Opinion

ID: 9627271
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:41:18.56487+00
Date Added: 2024-06-11T18:06:44.422464
License: Public Domain

Hall, J.
(dissenting): I dissent from the opinion of the court. I do not believe that G. S. 1949, 50-306 can accurately be described as a grant of legislative price fixing power to private individuals.
Trade-marks, brand names and the goodwill connected with them were recognized, before the advent of fair trade laws, as valuable property rights entitled to protection against those who would impair theff value (Lanham Act, 15 U. S. C. A. § 1051 et seq.; G. S. 1949, 81-101 et seq.). Fair trade legislation was designed to protect the trade-mark owner from impairment of the value of the mark and goodwill from unscrupulous retail competition.
*499The soundness of this protection with its resulting retail price maintenance is not a subject of universal agreement. It has been vigorously debated by the Congress and state legislatures. There are those who maintain that such resale price maintenance is beneficial to manufacturers, retailers and consumers; there are those who assert it is unsound. (See, generally, General Electric Co. v. Klein, Del., 106 A. 2d 206, and authorities cited therein.)
As is stated by the majority opinion, it is not the province of this court to pass upon the wisdom of the Fair Trade Law or to assemble and comment upon the conflicting arguments. Where the questions of fact are fairly debatable, this court cannot substitute its judgment for that of the legislature, but must accept and carry into effect its declared policy. (State, ex rel., v. Sage Stores Co., 157 Kan. 404, 141 P. 2d 655; Denton v. West, 156 Kan. 186, 131 P. 2d 886; Hunt v. Eddy, 150 Kan. 1, 90 P. 2d 747; Smith v. Fuest, 125 Kan. 341, 263 Pac. 1069.)
Following this premise, I cannot agree that the Fair Trade Law constitutes an unlawful delegation of power to the owner-of the trade-mark or brand. Trade-mark ownership is a property right distinct from ownership of goods and title to the trade-mark does not pass by sale of the product. The nonsigner clause of the Law does not place a restriction upon the sale of a commodity as such, but imposes a restriction because the commodity is identified by the trade-mark, brand or name of the producer or owner. Retailers may sell these products at any price they choose if they remove or obliterate the distinguishing trade-mark or brand name (G. S. 1949, 50-305 [b]). The manufacturers power to set prices is merely a means of effectuating the legislative policy of protecting the value and goodwill of the owner’s trade-mark, ownership of which is, at all times, in him. The price-fixing effect is simply a method by which the owner of the trade-mark can protect his property interest in the mark. The majority opinion can be sustained only if it is assumed that the retailer has the right to use the trademark as he chooses, contrary to the legislative judgment that unrestrained price cutting impairs the value of the mark. In Old Dearborn Co. v. Seagram Corp., 299 U. S. 183, 81 L. Ed. 109, 57 S. Ct. 139, the Supreme Court of the United States characterized this as follows:
“. . . The essence of the statutory violation then consists not in the bare disposition of the commodity, but in a forbidden use of the trade-mark, brand or name in accomplishing such disposition. The primary aim of the *500law is to protect the property — namely, the good will — of the producer, which he still owns. The price restriction is adopted as an appropriate means to that perfectly legitimate end, and not as an end in itself.” (p. 193.)
The grant of power to the trade-mark owner grows out of a basic property right. This power is not unregulated. Fair trading is allowed only where the fair-traded commodity “is in free and open competition with commodities of the same general class produced or distributed by others” (G. S. 1949, 50-302). Thus the manufacturers prices are fixed by competition with other commodities and not by his arbitrary whim or caprice (Concurring opinion, Shakespeare Co. v. Sporting Goods Co., 334 Mich. 109, 120, 54 N. W. 2d 268; Adams, Resale Price Maintenance: Fact and Fancy, 64 Yale L. J. 967, 972 [June, 1955]).
Finally it must be noted that fair trade laws have been held constitutional by the highest courts of a number of jurisdictions, including those which have considered the matter recently. (Scovill Mfg. Co. v. Skaggs Etc. Drug Stores, 45 C. 2d 881, 291 P. 2d 936; Burroughs Wellcome & Co. v. Johnson Wholesale Perfume Co., 128 Conn. 596, 24 A. 2d 841; General Electric Co. v. Klein, supra; Home Utilities Co. v. Revere, 209 Md. 610, 122 A. 2d 109; General Electric Co. v. Kimball Jewelers, Inc., 333 Mass. 665, 132 N. E. 2d 652; W. A. Sheaffer Pen Co. v. Barrett, et al., 209 Miss. 1, 45 So. 2d 838; Lionel Corp. v. Grayson-Robinson Stores, 15 N. J. 191, 104 A. 2d 304; General Elec. Co. v. Masters, Inc., 307 N. Y. 229, 120 N. E. 2d 802; Lilly & Co. v. Saunders, 216 N. C. 163, 4 S. E. 2d 528; Burche Co., Aplnt. v. General Elec. Co., 382 Pa. 370, 115 A. 2d 361; Miles Lab., Inc. v. Owl Drug Co., 67 S. D. 523, 295 N. W. 292; Seagram Distillers v. Corenswet, 198 Tenn. 644, 281 S. W. 2d 657; Sears v. Western Thrift Stores, 10 Wn. 2d 372, 116 P. 2d 756; Bulova Watch Co. v. Anderson, 270 Wis. 21, 70 N. W. 2d 243.)
I would hold that the Kansas Fair Trade Act is fully valid and enforceable and would affirm the judgment of the district court.