Great Atlantic & Pacific Tea Co. v. Cream of Wheat Co.

• Decision Date: 10 November 1915
• Citation: 227 F. 46
• Parties: GREAT ATLANTIC & PACIFIC TEA CO. v. CREAM OF WHEAT CO.
• Court: U.S. Court of Appeals — Second Circuit

227 F. 46

GREAT ATLANTIC & PACIFIC TEA CO. v. CREAM OF WHEAT CO.

United States Court of Appeals, Second Circuit.

November 10, 1915

Griggs Baldwin & Baldwin, of New York City (Martin Conboy, Joseph F Collins, and Frank A. Clary, all of New York City, of counsel), for appellant.

Joseph J. Baker, of New York City (Rome G. Brown, of Minneapolis Minn., of counsel), for appellee.

Before LACOMBE, COXE, and ROGERS, Circuit Judges.

LACOMBE Circuit Judge.

Briefly summarized the facts are these: In the production of wheat flour from wheat, there is a sort of by-product, known as 'purified middlings.' It is produced by every flouring mill in the United States engaged in the manufacture of wheat flour; it is a staple commodity regularly quoted and dealt in in all grain markets. Defendant buys 'purified middlings,' selecting such as it thinks grade high in quality. Without submitting them to any process or treatment without adding anything to them, it puts up the middlings which it selects in packages and offers its selection to the trade under the name 'Cream of Wheat.' That name identifies packages containing middlings of defendant's selection, and it has protected its trade-name for such selection by a copyright covering the carton in which the cereal is packed. Either because it has used good judgment in its selection, or because it has well advertised its trade-mark, it finds a ready market for its packages. Its particular selection, however, amounts to less than 1 per cent. of the total purified middlings bought and sold in this country.

With an exception which will be referred to later, defendant makes no sales to consumers or to retailers, but confines its sales exclusively to wholesalers, to whom it charges two prices, $3.95 per case in car load lots and $4.10 per case in less than car load lots. To each purchaser from it, it sends a circular requesting such purchaser to sell to the retail trade only at a price of $4.50 per case, adding to this request the statement that it does not intend to waive the right to refuse at any time to supply any dealer who shall fail to comply with any request made by it, the infringement of which defendant may deem prejudicial to the interests of the consumer, to defendant's own business, or to the trade at large. Complainant contends that defendant's course of conduct is a violation of the Sherman Anti-Trust Act and that under the recent Clayton Act this suit may be instituted and maintained by complainant.

That branch of the case has been most elaborately argued; it was discussed by the District Judge. We do not find it necessary to go into it, as we are satisfied that complainant is not entitled to the relief now asked for.

As was stated before, defendant has elected not to sell to consumers or retailers, but to confine its sales exclusively to wholesalers. There is nothing unusual about such a course of business, and certainly it is no offense against common law statutes, public policy, or good morals for a trader to confine his sales to persons who will buy from him in large quantities. A 'wholesaler' is one who buys in comparatively large quantities and who sells, usually in smaller quantities, but never to the ultimate consumer of an individual unit. He sells either to a 'jobber' (a sort of middleman) or to a 'retailer'; the latter being the one who sells to the consumer. The 'large' quantities bought by the wholesaler may vary greatly-- from a fraction of a car load to many car loads; the character,...