Bourjois Sales Corp. v. Dorfman

The complaint in this action has been dismissed upon the authority of our decision in Doubleday, Doran Co. v. Macy Co. (269 N.Y. 272), decided January 7, 1936. Mr. Justice STEINBRINK at Special Term felt obliged to follow this case, although later, in the October term of the same year, the United States Supreme Court took a different view of the law in OldDearborn Distributing Co. v. Seagram-Distillers Corp. The justice was quite right as it is our duty to determine what we shall do with our former decision in the light of the more recent case.

In chapter 976 of the Laws of 1935 the Legislature undertook to prevent price cutting in the sale of commodities. In section 1 of the act a contract was declared to be legal which provides that a buyer of a commodity bearing the label, trade-mark, brand or name of the producer, will not resell such commodity except at the price stipulated by the vendor. This was nothing new as such contracts were legal under court decisions.

Section 2, however, went much further, and read:

"§ 2. Willfully and knowingly advertising, offering for sale or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provision of section one of this act, whether the person so advertising, offering for sale or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby."

Doubleday, Doran Company, Inc., the publisher, made a contract with Doubleday, Doran Book Shops, Inc., a seller and distributor, as to the price at which certain books could be sold. Later the publisher sold these books to R.H. Macy Co. without any contract or restriction as to price or even a request for a contract. When Macy Co. undertook to sell these books at its own figure, the publisher sought an injunction to compel Macy to sell the books at the price it had fixed with the other Doubleday corporation.

We thought this to be a clear case of unauthorized restriction upon the disposition of one's own property and unconstitutional within former decisions of the United States Supreme Court. That court has taken a different view in the case above mentioned,Old Dearborn Distributing Co. v. Seagram-Distillers Corp. (299 U.S. 183) (Dec. 7, 1936). The Illinois Free Trade Act there under review is similar to our own. The complaint in this appeal now before us is in no way different from that before the Supreme Court under the Illinois act, so that we feel it to be our duty to submit our own judgment to the rulings of the Supreme Court on the Constitution of the United States and the interpretation of its own decisions. (People ex rel. Tipaldo v. Morehead,270 N.Y. 233, 235.) True it is that the facts of the Doubleday case are much bolder than those in the Seagram case, and distinctions may be drawn, but these are matters of emphasis, not of principle. The Seeck Kade, Inc., v. Tomshinsky case (269 N.Y. 613), decided at the same time on the authority of the Doubleday case, was similar to the Seagram case in that the facts establishing good will were set forth in full. Had the Seagram case been decided before argument in the Doubleday case we certainly would have followed the Supreme Court's ruling on the Federal Constitution. We do so now by sustaining the complaint in this case and reversing the order of the Special Term.

The judgment should be reversed and the motion denied, with costs in all courts.

LEHMAN, HUBBS, LOUGHRAN and RIPPEY, JJ., concur; O'BRIEN, J., dissents; FINCH, J., taking no part.

Judgment reversed, etc.