Bulova Watch Co. v. Sattler's, Inc.

• Decision Date: 17 August 1955
• Citation: 208 Misc. 257,143 N.Y.S.2d 742
• Parties: BULOVA WATCH COMPANY, Inc., Plaintiff, v. SATTLER'S, Inc. and Arthur Langsam, Defendants.
• Court: New York Supreme Court

Page 742

143 N.Y.S.2d 742

208 Misc. 257

BULOVA WATCH COMPANY, Inc., Plaintiff, v. SATTLER'S, Inc. and Arthur Langsam, Defendants.

Supreme Court, Special Term, Erie County.

Aug. 17, 1955.

McMahon & Crotty, Buffalo (Thomas P. McMahon, Buffalo, of counsel), for plaintiff.

Diebold & Millonzi, Buffalo (Robert I. Millonzi, Buffalo, of counsel), for defendants.

MARSH, Justice.

Plaintiff Bulova Watch Co., Inc., is a manufacturer and distributor of nationally known and advertised watches and timepieces. As such, it has entered into fair trade agreements with retailers in New York State stipulating certain minimum retail resale prices for its various lines of merchandise bearing its name and trade mark. Notice of such agreements with the current price list was given defendant Sattlers, Inc., a department store including a jewelry department in Buffalo, New York.

Subsequent to such notice, Sattler's, Inc., entered into an agreement with the defendant Arthur Langsam representing Arthur Langsam, Jewelers, concerning the proposed sale of certain jewelry constituting the stock of Arthur Langsam, Jewelers, of Minneapolis, Minnesota which they were closing out following a chapter 11 voluntary bankruptcy, U.S.C. tit. 11, ch. 11, 11 U.S.C.A. § 701 et seq.

Under the agreement, it was provided that:

1. Langsam would move their entire jewelry stock from St. Paul, Minn., where their business had for many years been conducted, to the premises of the defendant, Sattler's, Inc. at Buffalo, New York. 2. The close-out sale of the stock involved would be conducted in space provided by defendant Sattler's, Inc. on their first floor.

3. All sales and stock help would be provided, supervised and paid by Sattler's subject to reimbursement by Langsam.

4. All advertising, with an agreed minimum stipulated, would be paid for by Langsam, but prepared and supervised as to form, content and media by Sattler's.

5. Sattler's would have the sole right to arbitrate and compromise and pay all claims by customers subject to a charge-back to Langsam.

6. Sattler's would receive 13% of all sales after excluding sales and excise taxes.

In pursuance of the agreement aforesaid, defendant Sattler's prepared advertising copy for the proposed sale which has been submitted to the Court and which offers Bulova watches as well as other 'fair trade' watch lines at a price below the stipulated 'fair trade' minimum retail resale prices.

Plaintiff seeks a temporary injunction restraining the defendant from advertising, offering for sale and selling any of the lines of merchandise manufactured and sold by plaintiff at prices less than those fixed by fair trade agreement.

Section 369-b of the General Business Law, L.1940, c. 195, § 3, eff. March 19, 1940, defines unfair competition made actionable under the statute as follows:

'Wilfully 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 three hundred sixty-nine-a, 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.'

Subdivision 2(a) of § 369-a of General Business Law permits sale without reference to fair trade prices 'In closing out the owner's stock for the purpose of discontinuing delivering any...