Dawn to Dusk, Limited v. Frank Brunckhorst Co.

• Decision Date: 19 April 1965
• Citation: 23 A.D.2d 780,258 N.Y.S.2d 746
• Parties: DAWN TO DUSK, LTD., Respondent, v. FRANK BRUNCKHORST CO., Boar's Head Provision Co., Inc., Appellants, and Andrew Vaccaro, Defendant.
• Court: New York Supreme Court — Appellate Division

Page 746

258 N.Y.S.2d 746

23 A.D.2d 780

DAWN TO DUSK, LTD., Respondent, v. FRANK BRUNCKHORST CO., Boar's Head Provision Co., Inc. Appellants, and Andrew Vaccaro, Defendant.

Supreme Court, Appellate Division, Second Department.

April 19, 1965.

Safir & Kahn, New York City, for appellant. Jesse Safir, New York City, of Counsel.

Pfingst & Berry, Babylon, for respondent. Joseph P. Pfingst, Babylon, of counsel--without a brief.

Before BELDOCK, P. J., and CHRIST, HILL, RABIN and BENJAMIN, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages based on an alleged violation by the defendants of section 340 of the General Business Law, the defendants Frank Brunckhorst Co. and Boar's Head Provision Co., Inc. appeal from an order of the Supreme Court, Suffolk County, entered September 9, 1964, which denied their motion to dismiss the complaint on the ground that it fails to state a cause of action as to them (CPLR 3211, subd. [a], par. 7).

Order reversed, with $10 costs and disbursements; motion of the said defendants to dismiss the complaint as to them granted; and complaint dismissed as to said defendants, with leave to plaintiff, if so advised, to serve an amended complaint within thirty days after entry of the order hereon.

The three defendants are, respectively, Boar's Head Provision Co., Inc., a manufacturer of processed meats; Frank Brunckhorst Co., the manufacturer's exclusive distributor; and Andrew Vaccaro, a jobber who is the exclusive sub-distributor of the manufacturer's products within a designated geographical area. Thus, the relationship among the three defendants is a vertical one. The complaint alleges that these three defendants, among themselves, agreed that none of them would sell a certain product of the manufacturer to the plaintiff or to any person or firm who would furnish the same to plaintiff. The complaint further alleges that the defendant jobber Vaccaro advised plaintiff that it could purchase the product from him 'at a stipulated price' and 'only if the plaintiff dealt solely through' him as the jobber.

Not every agreement or combination which is in restraint of trade is proscribed by the statute (General Business Law, § 340). The criterion is whether the restraint is unreasonable (New York Bank Note Co. v. Hamilton Bank Note Engraving and Printing Co., 180 N.Y. 280, 293, 73 N.E. 48, 52; Barns v. Dairymen's League Co-operative Ass'n, 220 App.Div. 624, 640, 222 N.Y.S. 294, 306; New York Clothing Mfrs. Exch. v. Textile Fin. Ass'n, 238 App.Div. 444, 451, 265 N.Y.S. 105, 112; Larido Corp. v. Crusader Mfg. Co., 4 Misc.2d 231, 236, 155 N.Y.S.2d 715, 720; Hickok Mfg. Co. v. Fairley Trading Corp., Sup., 117 N.Y.S.2d 874; Dougherty and S. T. Corp. v. Rockaway Operating Co., 163 Misc. 806, 812, 298 N.Y.S. 242, 248; 37 N.Y.Jur., Monopolies, §§ 9-11). An agreement or arrangement among parties in a vertical relationship, which restricts the territory within which the buyer, here the defendant jobber Vaccaro, may resell the goods in question does not violate section 340 of the General Business Law (see Stemmerman v. Kelly, 150 App.Div. 735, 135 N.Y.S. 827; Revlon Products Corp. v. Bernstein, 204 Misc. 80, 119 N.Y.S.2d 60; Liedermann v. Voco, Sup., 73 N.Y.S.2d 462; Simpson & Duesenberg, 8 N.Y. Contract Law, § 2910; 36 Am.Jur., Monopolies, condemnations, etc., § 33 [supplement]). Nor is it violative of the statute because it fixes the jobber's price to his customers and prohibits the distribution of the goods to any dealers who would resell the goods to plaintiff (Marsich v. Eastman Kodak Co., 244 App.Div. 295, 296, 279 N.Y.S. 140, 142, affd. 269 N.Y. 621, 200 N.E. 27; Port Chester Wine & Liquor Shop v. Miller Bros. Fruiterers, 253 App.Div. 188, 194, 1 N.Y.S.2d 802, 808).

Clearly...