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App. Div.]

FIRST DEPARTMENT, JULY TERM, 1903.

upon therefor." The agreement, as construed by the court in that case, was: "The manufacturer says to the jobbers of the country, I manufacture a medicine that I will sell for one dollar a bottle, and it is my desire that it shall be sold at that price per bottle throughout the country. If you will take consignments of this medicine from me, billed to you, at that price per bottle, I will allow you a rebate of ten per cent, and if I find that you are selling at a lower price than billed to you, I will allow no rebate. If this arrangement. is not satisfactory to you, I prefer to keep my manufactured stock on hand. These are the only conditions under which I will ship my manufactured article." Thus the only effect of the agreement was that the manufacturers or proprietors refused to allow a rebate on the price that they had fixed for their goods to those dealers who refused to sell at the retail price fixed, and the reason that the plaintiff objected to this plan is thus stated by Judge HAIGHT: "The meaning of these allegations is obvious. It is that the plaintiff or the firm of John D. Park & Sons, of which the plaintiff is successor, could command large capital, and by reason of this they could purchase proprietary goods in larger quantities and more cheaply than the other wholesale and jobbing druggists, and that by reason of the adoption of the contract plan the plaintiff was unable to so do. Under the contract plan the prices of these goods were made uniform for fixed quantities, and dealers possessing large capital and thereby enabled to purchase in large quantities, could not purchase for a less sum than the ordinary wholesale and jobbing druggist, and not being able to purchase for a less sum, could not handle the goods more cheaply." Chief Judge PARKER, in his concurring opinion, also emphasizes this as the object of the combination when he says that it was discovered that the "manufacturers have favorites to whom they will give a larger rebate than to wholesale dealers as a class, and generally the favorite is the person or corporation buying the greatest amount of goods, as strong firms or corporations like this plaintiff with a business of such dimensions that it claims damages in this case of one-half million of dollars. *That there are wholesale dealers who for the purpose of getting clients away from their competitors will give them some part of such extra rebate. To remedy this difficulty was the leading object of the association, and it was sought to be accomplished by

*

*

FIRST DEPARTMENT, JULY TERM, 1903.

[Vol. 85. placing all the wholesalers upon an equality so that one should have no advantage over the other in dealing with retail dealers, a result which seems altogether desirable because it is in the line of fair dealing." And in discussing the threats that it is alleged were made against the plaintiff by the defendants it was stated that those threats were nothing more than a notice to the trade that the plaintiff "is outside of the association and prefers to stay out of it rather than be bound by the rules and regulations which other members of the trade regard as fairest and best to all, and insisting that the penalties of such a course shall be meted out to him, namely, that he shall not be allowed any rebate upon any of the manufacturers goods so long as he shall retain that position," and "it will be seen, therefore, that this is a controversy between opponents in business, neither side trying to help the public. Nor will the public be the gainer by the success of either." The dissenting opinions in that case are based solely upon the nature of the combination or arrangements between the defendants. As I understand it there was no substantial dispute about the law, but the difference arose as to the construction to be given to the agreement which it was sought to have declared illegal. Judge MARTIN in his dissenting opinion examines the authorities in this State and it is quite unnecessary for us to discuss them here. The cases to which he calls attention on pages 34, 35 and 37 of the report seem to me to condemn the arrangement or combination now under discussion. Thus, in People v. Fisher (14 Wend. 9) Chief Justice SAVAGE says that the owner of an article was not required to sell it for any particular price or for less than a stated price, but he had no right to state the price at which others should sell their goods, and that all combinations to effect such a purpose were illegal. In Curran v. Galen (152 N. Y. 33) it was held that contracts or arrangements with employers to coerce other workingmen to become members of the organization and to come under its rules and conditions under the penalty of the loss of their positions and of deprivation of employment are against public policy and unlawful, and are in conflict with the principles of public policy which prohibits monopoly or exclusive privileges. In Judd v. Harrington (139 N. Y. 105) an agreement, the real purpose of which was to suppress competition in an article of food, was forbidden by public policy and void. Cummings v. Union Blue

FIRST DEPARTMENT, JULY TERM, 1903.

App. Div.]

Stone Co. (164 N. Y. 401) is but an application of this same principle. Judge LANDON, in delivering the opinion of the court, there says: "But the case before us is of a different kind. It is one of such a combination among many dealers as threatened a monopoly, with which the individual would be practically powerless to compete, and the many consumers who would be severally exposed and coerced would be either compelled to submit to its exactions or to forego the purchase of the commodity of customary use needful to them, and but for this monopoly obtainable in the market at a reasonable price. The same evil principle pervades both large and small combinations; all are alike offenders, differing in degree, but not in kind. And hence it is that contracts by which the parties to them combine for the purpose of creating a monopoly in restraint of trade, to prevent competition, to control and thus to limit production, to increase prices and maintain them are contrary to sound public policy and are void." And in Cohen v. Berlin & Jones Envelope Co. (166 N. Y. 292) the same principle was applied. There the court say: "The contract gave and was intended to give the parties of the second part, through the Standard Envelope Company, the exclusive right to fix prices at which manufacturers of envelopes should sell their output during the term fixed by the contract, the object being to secure a better price for the goods manufactured. Such a contract threatens a monopoly whereby trade in a useful article may be restrained and its price unreasonably enhanced, and it matters not that the parties to it may have so moderately advanced prices that the sum exacted for the product seems to some persons reasonable, for the scope of the contract, and not the possibility of self-restraint of the parties to it, is the test of its validity.'" And Judge CULLEN says in the Park Case (supra): "But the scheme adopted goes further. It requires the manufacturer not only to sell at the same price to each jobber, but to compel each jobber to sell to the consumer at the same price by refusing to sell goods to any one who would not comply with these requirements. It is in this respect that the agreement is vicious and operates in restraint of trade, for it destroys competition among the jobbers." There is no statement in the prevailing opinions in that case that would uphold the scheme if its effect had been as thus described by Judge CULLEN, and I do not think this case is an

FIRST DEPARTMENT, JULY TERM, 1903.

[Vol. 85. authority for holding that the arrangement as here alleged would have been legal at common law, but however that may be, it is, I think, clearly within the statute.

It is not seriously disputed but that books are an article or commodity of common use, and a further discussion of this question is quite unnecessary. We have the plain terms of the statute. We have a combination expressly organized for an object which the statute declares as against public policy, illegal and void. We have the fact that such a combination or arrangement has been and is being applied to prevent the plaintiffs from continuing their business, and has caused them large damage for which they have no adequate remedy at law; and it seems to follow that, such a condition being admitted, the plaintiffs are entitled to some relief. In my view of the case the complaint stated a cause of action and the demurrer was improperly sustained.

The judgment should, therefore, be reversed, with costs, and the demurrers overruled, with costs, with leave to the defendants to withdraw demurrers and to answer, upon payment of costs of this court and in the court below.

PATTERSON and LAUGHLIN, JJ., concurred; VAN BRUNT, P. J., and MCLAUGHLIN, J., dissented.

MCLAUGHLIN, J. (dissenting):

The question here presented cannot be distinguished in principle from the question presented in Park & Sons Co. v. Nat. Druggists' Assn. (54 App. Div. 223; affd., 175 N. Y. 1). In that case the manufacturers of certain proprietary articles entered into an agreement which, in effect, was to maintain the price put upon such articles by the respective manufacturers thereof. Here, the publishers of copyrighted books have entered into a similar agreement for the purpose of maintaining the price which the respective publishers put thereon. There is also an allegation in this complaint to the effect that the agreement related to uncopyrighted as well as copyrighted books, but as I read this complaint, I do not think that allegation adds anything to the one relating to the copyrighted books, because there is no allegation in it to the effect that the plaintiffs have by the act of the defendants been prevented from purchasing all the uncopyrighted books which they desire from per

App. Div.]

FIRST DEPARTMENT, JULY TERM, 1903.

sons not members of the American Publishers' Association, or that the sale of uncopyrighted books will, by reason of the acts of any of the defendants, be restricted in any way.

Applying, therefore, the principle laid down in the Park case to the facts set out in the complaint, it necessarily follows, as it seems to me, that the judgment appealed from is right and must be affirmed.

VAN BRUNT, P. J.:

I concur with Mr. Justice McLAUGHLIN. I do not see why a seller of property in respect to which he has a monopoly cannot impose any conditions as to its resale that he sees fit.

Judgment reversed, with costs, and demurrers overruled, with costs, with leave to defendants to withdraw demurrers and to answer on payment of costs in this court and in the court below.

WILLIAM G. ROSE, Respondent, v. SETH Low, as Mayor of the City of New York, and Others, Appellants.

Competition in the making of contracts for street pavements in New York citywhat arrangement for the obtaining of a supply of a patented article by any bidder does not constitute "a fair and reasonable opportunity for competition." Section 1554 of the revised New York charter (Laws of 1901, chap. 466), which provides: "Except for repairs, no patented pavement shall be laid, and no patented article shall be advertised for, contracted for or purchased, except under such circumstances that there can be a fair and reasonable opportunity for competition, the conditions to secure which shall be prescribed by the board of estimate and apportionment," is designed to prevent the laying of patented pavements unless under circumstances insuring a fair and reasonable opportunity for competition, except where the patented pavement is desired for the purpose of repairing an existing patented pavement, to which case the condition as to the opportunity for competition does not apply.

If the municipal authorities decide to lay a pavement of a certain general character, complying with the requirements specified by them, the section does not prohibit the owners of a patented pavement, complying with the specified requirements, from bidding upon and being awarded the contract, as those able to lay the same character of pavement can enter into competition with the owner of the patented pavement and thus create the condition contemplated by the section.

The section, however, prohibits the municipal authorities from advertising for proposals to pave a street with a particular patented pavement, although such

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