Dr Miles Medical Company v. John Park Sons Company
Decision Date | 03 April 1911 |
Docket Number | No. 72,72 |
Parties | DR. MILES MEDICAL COMPANY, Petitioner, v. JOHN D. PARK & SONS COMPANY |
Court | U.S. Supreme Court |
This is a writ of certiorari to review a judgment of the circuit court of appeals for the sixth circuit which affirmed a judgment of the circuit court, dismissing, on demurrer, the bill of complaint for want of equity. 90 C. C. A. 579, 164 Fed. 803.
The complainant, Dr. Miles Medical Company, an Indiana corporation, if engaged in the manufacture and sale of proprietary medicines, prepared by means of secret methods and formulas, and identified by distinctive packages, labels, and trademarks. It has established an extensive trade throughout the United States and in certain foreign countries. It has been its practice to sell its medicines to jobbers and wholesale druggists, who in turn sell to retail druggists for sale to the consumer. In the case of each remedy, it has fixed not only the price of its own sales to jobbers and wholesale dealers, but also the wholesale and retail prices. The bill alleged that most of its sales were made through retail druggists, and that the demand for its remedies largely depended upon their good will and commendation, and their ability to realize a fair profit; that certain retail establishments, particularly those known as department stores, had inaugurated a 'cutrate' or 'cut-price' system which had caused 'much confusion, trouble, and damage' to the complainant's business, and 'injuriously affected the reputation' and 'depleted the sales' of its remedies; that this injury resulted 'from the fact that the majority of retail druggists as a rule cannot, or believe that they cannot, realize sufficient profits' by the sale of the medicines 'at the cut-prices announced by the cut-rate and department stores,' and therefore are 'unwilling to, and do not keep' the medicines 'in stock,' or, 'if kept in stock, do not urge or favor sales thereof, but endeavor to foist off some similar remedy or substitute, and from the fact that in the public mind an article advertised or announced at 'cut' or 'reduced' price from the established price suffers loss of reputation and becomes of inferior value and demand.'
It was further alleged that for the purpose of protecting 'its trade sales and business' and of conserving 'its good will and reputation,' the complainant had established a method 'of governing, regulating, and controlling the sale and marketing' of its remedies, which is thus described in the bill:
'Contracts in writing were required to be executed by all jobbers and wholesale druggists to whom your orator sold its aforesaid remedies, medicines, and cures, of the following tenor and effect:
'Consignment Contract—Wholesale.
'The Dr. Miles Medical Company.
'This agreement made by and between The Dr. Miles Medical Company, a corporation, of Elkhart, Indiana, hereafter referred to as the proprietor, and _____ _____ hereinafter referred to as the consignee, witnesseth:
'Medicines of which the retail price is $1, $8 per dozen.
'Medicines (if any) of which the retail price is 50 cents, $4 per dozen.
'Medicines of which the retail price is 25 cents, $2 per dozen.
'Freight on all orders, the invoice price of which amounts to $100 or more, to be prepaid by the proprietor; otherwise, freight to be paid by consignee.
'It is further agreed that the consignee shall furnish the proprietor from time to time upon demand full statements of the stock of goods of the proprietor on hand on any date specified, and that a failure to furnish such statements within ten days from date of such demand shall be a sufficient cause for the cancelation of this agreement, and a demand for the return of the consigned goods.
'It is further agreed that the proprietor will cause each retail package of its goods to be identified by a number, and said consignee hereby agrees to furnish the said proprietor full reports upon proper cards or blanks furnished by said proprietor of the disposition of each dozen or fraction of such goods by means of the identifying numbers, specifying the names and addresses of the retail agents to whom such goods have been delivered and the dates of such delivery, and to send such reports to said proprietor at least semimonthly, and at any other time on the request of said proprietor.
'It is agreed that the goods of said proprietor shall be sold by said consignee only to the said retail or wholesale agents of said proprietor, as per list furnished, at not less than the following prices, to wit:
'Medicines of which the retail price is $1, $8 per dozen.
'Medicines (if any) of which the retail price is 50 cents, $4 per dozen.
'Medicines of which the retail price is 25 cents, $2 per dozen.
'Provided, that said consignee may allow a cash discount not exceeding 1 per cent, if paid within ten days from date of invoice, and that when sales at one time and at one invoice amount to $15 or more, the said consignee may allow 3 per cent trade discount, and if said purchase amounts to $50 or more, 5 per cent trade discount, all without cost to the proprietor, and if such $50 quantity shall be shipped direct to the retail purchaser from the laboratory of said proprietor, on the order from said wholesale distributing agent, freight will be prepaid by the proprietor, but not otherwise.
'This contract will take effect when the original, duly signed by the consignee, has been received and accepted by The Dr. Miles Medical Company, at Elkhart, Indiana.
'Done under our hands _____ ___, A. D. 1907.
'Fill in date on above line.
'The Dr. Miles Medical Company.
'_____ _____, wholesale dealer.
'Sign your name on above line.
'And written contracts were required with all retailers of your orator's said proprietary remedies, medicines, and cures, as follows:
'Retail Agency Contract.
'The Dr. Miles Medical Company.
'This agreement between The Dr. Miles Medical Company of Elkhart Indiana, and _____ _____, of _____ _____,
'Retailer's name on above line. Town. State. 'hereinafter referred to as retail agent, witnesseth:
'Appointed Agent.
'The said Dr. Miles Medical Company hereby appoints said retail dealer as one of the retail distributing agents of its proprietary medicines, and agrees that said retail agent may purchase the proprietary medicines manufactured by said Dr. Miles Medical Company (each retail package of which the said company will cause to be identified by a number) at the following prices, to wit:
'Wholesale Prices.
'Medicines of which the retail price is $1, $8 per dozen.
'Medicines of which the retail price is 50 cents, $4 per dozen.
'Medicines...
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