House of Seagram, Inc., Seagram Distillers Co. Division v. Assam Drug Co., No. 10402

CourtSupreme Court of South Dakota
Writing for the CourtRENTTO; BIEGELMEIER; HANSON
Citation83 S.D. 320,159 N.W.2d 210
Decision Date24 May 1968
Docket NumberNo. 10402
PartiesThe HOUSE OF SEAGRAM, INC., SEAGRAM DISTILLERS COMPANY DIVISION, Plaintiff and Appellant, v. The ASSAM DRUG COMPANY and Fred Assam, Defendants and Respondents.

Page 210

159 N.W.2d 210
83 S.D. 320
The HOUSE OF SEAGRAM, INC., SEAGRAM DISTILLERS COMPANY
DIVISION, Plaintiff and Appellant,
v.
The ASSAM DRUG COMPANY and Fred Assam, Defendants and
Respondents.
No. 10402.
Supreme Court of South Dakota.
May 24, 1968.
Rehearing Denied July 10, 1968.

[83 S.D. 322]

Page 211

Willy, Pruitt & Matthews, Acie W. Matthews, Sioux Falls, for plaintiff and appellant.

Myrabo & Weisensee, Tony Weisensee, Lowell J. Noteboom, Canton, for defendants and respondents.

RENTTO, Judge.

Plaintiff is the manufacturer and exclusive distributor to a wholesaler located in South Dakota of certain alcoholic beverages which bear its trademark, brand or name. Such wholesaler sells directly to the defendants and to other retailers in the state. Plaintiff entered into contractual arrangements with various South Dakota retailers as authorized undre our Fair Trade Law, SDC Ch. 54.04, which agreements provided minimum retail resale prices below which retailers may not sell plaintiff's products.

Defendants were not parties to such contracts, but knew that plaintiff had entered into them with other retailers in the state and had been advised of the terms thereof and of the minimum fair trade bottle prices fixed by the plaintiff on its products. Nevertheless, defendants at various times offered for sale and sold such products at less than their minimum prices. In this litigation plaintiff seeks to enjoin defendants from continuing such sales. On plaintiff's motion for judgment on the pleadings, supplemented by a limited stipulation of facts, judgment was entered denying an injunction. From this judgment it appears.

In its Conclusion of Law I, the court stated that the injunctive relief sought by the plaintiff should be denied for the following reasons: '(1) Plaintiff has failed to show damage requiring the equitable relief of injunction. (2) Plaintiff has a full, adequate and complete remedy provided in Section 54.0402 of the fair [83 S.D. 323] trade act without resorting to injunctive relief. (3) Plaintiff, by knowingly permitting the flow of its liquor to defendant on the one hand while seeking injunctive relief against said defendant on the other, is coming into Court seeking equity with unclean hands.'

Page 212

Unfair competition is defined in SDC 54.0406 as follows:

'Willfully and knowingly advertising, offering for sale, or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of this chapter, whether the person so advertising, offering for sale, or selling is or is not a party to such contract'.

That section further provides that such competition is actionable at the suit of any person damaged thereby. Defendants seem to contend that under this provision plaintiff has no cause of action unless it has suffered financial loss. The authorities do not support this restricted view. Miles Laboratories v. Owl Drug Company, 67 S.D. 523, 295 N.W. 292, states that the manufacturer who has the right to fix the price and name the conditions under which its products will be sold 'is entitled to injunctive relief in case of violation of such conditions.' See also Kinsey Distilling Sales Co. v. Foremost Liquor Stores, 15 Ill.2d 182, 154 N.W.2d 290; 87 C.J.S. Trade-Marks, Trade-Names, and Unfair Competition § 262(1); 52 Am.Jur., Trademarks, Tradenames, etc. § 187.

The acts constituting unfair competition set out in SDC 54.0406 are considered an assault upon the good will of the manufacturer of the identified goods. The Fair Trade Law is designed to protect a producer from damage to his good will resulting from price cutting at the retail level. Remington Arms, Inc. v. Harris Berger, Inc., 208 Misc. 561, 144 N.Y.S.2d 751; Mead Johnson & Company v. Martin Wholesale Distributors, Inc., 408 Pa. 12, 182 A.2d 741. The proprietor of the good will is entitled to protection against one who attempts to deprive him of the benefits resulting from it.

The courts give him relief because he 'has a valuable interest in the good will of his trade or business, and in the [83 S.D. 324] trademarks adopted to maintain and extend it.' Old Dearborn Distributing Co. v. Seagram-Distillers Corporation, 299 U.S. 183, 57 S.Ct. 139, 81 L.Ed. 109. An injunction against injury to his good will, actual or threatened, does not require a showing of specific money damages to support it. Bristol-Myers Co. v. Picker, 302 N.Y. 61, 96 N.E.2d 177, 22 A.L.R.2d 1203; Mead Johnson & Company v. G-E-X Inc., of Albany, 37 Misc.2d 491, 235 N.Y.S.2d 951. Accordingly, it is our view that plaintiff is a person damaged by the unfair competitive practices of the defendants.

The trial court took the position that 'If Seagrams wishes to stop Assam from selling Seagrams at less than the minimum price, it need only direct the wholesaler supplying Seagrams products to Assam to stop further sales. If the wholesaler refuses, Seagram can stop its sales to the wholesaler.' This is sometimes referred to as the remedy of self-help. This holding underlies the reasons for denying injunctive relief set out in (2) and (3) of Conclusion of Law I. Since they share a common basis we will treat them together.

This view is obviously based on the premise that plaintiff has a fair trade contract with its distributor in which the distributor agrees not to resell plaintiff's fair trade commodities to any retailer unless the retailer in turn agrees not to sell the same at not less than a stipulated price. Such agreements are permitted under SDC 54.0402(3), but the pleadings and the stipulation on which this matter was submitted make no mention of such contract. The only contracts referred to therein are the retail price maintenance agreements between the plaintiff and various South Dakota retailers.

The Supreme Court of Illinois in Kinsey Distilling Sales Co. v. Foremost

Page 213

Liquor Stores, supra, answering a similar contention, wrote the following:

'Defendants maintain, further, that plaintiff has an adequate remedy of self-help. The sole authority cited to sustain its contention is Calvert Distillers Co. v. Wish, D.C., 162 F.Supp. 364, which expressed the view that the simple expedient of refusing to sell fair-traded products [83 S.D. 325] to retailers who refuse to enter into its fair trade agreement would afford an aggrieved party such as the present plaintiff an adequate remedy. Here, the plaintiff does not sell to retailers. The only practicable way, therefore, for plaintiff to stop the sale of its products to defendants would be a requirement that its distributors refuse to deal with them. But, as pointed out in General Electric Co. v. R. H. Macy & Co., 199 Misc. 87, 103 N.Y.S.2d 440, 449: 'Nor is there any requirement that General Electric change its system of merchandising through distributors. Similarly, there is no requirement that General Electric enter into agreements with distributors to cut off violators. Indeed, the latter course may involve General Electric in a violation of the Anti-Trust Laws. (Citations.) The policy of the Fair Trade Law allowing vertical price fixing runs directly counter to the policy of the anti-trust law and the common law. It represents a small area situate in otherwise prohibited territory. Provisions for enforcement are contained in the statute. To...

To continue reading

Request your trial
14 practice notes
  • Canton Lutheran Church v. SOVIK, MATHRE, ETC., Civ. No. 79-4068.
    • United States
    • United States District Courts. 8th Circuit. United States District Courts. 8th Circuit. District of South Dakota
    • 13 Febrero 1981
    ...Educational Assn. v. Aberdeen Board 507 F. Supp. 878 of Education, 215 N.W.2d 837 (S.D.1974); House of Seagrams, Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 (1968). This court must therefore carefully examine the issues to determine whether the constitutional questions present here ......
  • Weegar v. Bakeberg, No. 18647
    • United States
    • Supreme Court of South Dakota
    • 8 Febrero 1995
    ...439 N.W.2d 117 (S.D.1989); Baldwin v. First Bank of the Black Hills, 362 N.W.2d 85 (S.D.1985); House of Seagram Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 KONENKAMP, Justice (concurring specially). I wholeheartedly agree with the majority's reasoning and result. Yet I fear the majo......
  • Poppen v. Walker, No. 18374
    • United States
    • Supreme Court of South Dakota
    • 9 Agosto 1994
    ...N.W.2d 117 (S.D.1989); Baldwin v. First Nat. Bank of the Black Hills, 362 N.W.2d 85 (S.D.1985); House of Seagram, Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 (1968). The constitutional issue need only be decided if the trial court's factual determination would be that video poker an......
  • Wolff v. Secretary of South Dakota Game, Fish and Parks Dept., No. 19057
    • United States
    • Supreme Court of South Dakota
    • 19 Octubre 1995
    ...full trial, trial court found ordinance not mandatory which Supreme Court found mandatory); House of Seagram, Inc. v. Assam Drug Co., 83 S.D. 320, 326-28, 159 N.W.2d 210, 214 (1968) (denial of injunction after presentation to trial court on admitted facts); Holmes v. Miller, 71 S.D. 258, 26......
  • Request a trial to view additional results
14 cases
  • Canton Lutheran Church v. SOVIK, MATHRE, ETC., Civ. No. 79-4068.
    • United States
    • United States District Courts. 8th Circuit. United States District Courts. 8th Circuit. District of South Dakota
    • 13 Febrero 1981
    ...Educational Assn. v. Aberdeen Board 507 F. Supp. 878 of Education, 215 N.W.2d 837 (S.D.1974); House of Seagrams, Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 (1968). This court must therefore carefully examine the issues to determine whether the constitutional questions present here ......
  • Weegar v. Bakeberg, No. 18647
    • United States
    • Supreme Court of South Dakota
    • 8 Febrero 1995
    ...439 N.W.2d 117 (S.D.1989); Baldwin v. First Bank of the Black Hills, 362 N.W.2d 85 (S.D.1985); House of Seagram Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 KONENKAMP, Justice (concurring specially). I wholeheartedly agree with the majority's reasoning and result. Yet I fear the majo......
  • Poppen v. Walker, No. 18374
    • United States
    • Supreme Court of South Dakota
    • 9 Agosto 1994
    ...N.W.2d 117 (S.D.1989); Baldwin v. First Nat. Bank of the Black Hills, 362 N.W.2d 85 (S.D.1985); House of Seagram, Inc. v. Assam Drug Co., 83 S.D. 320, 159 N.W.2d 210 (1968). The constitutional issue need only be decided if the trial court's factual determination would be that video poker an......
  • Wolff v. Secretary of South Dakota Game, Fish and Parks Dept., No. 19057
    • United States
    • Supreme Court of South Dakota
    • 19 Octubre 1995
    ...full trial, trial court found ordinance not mandatory which Supreme Court found mandatory); House of Seagram, Inc. v. Assam Drug Co., 83 S.D. 320, 326-28, 159 N.W.2d 210, 214 (1968) (denial of injunction after presentation to trial court on admitted facts); Holmes v. Miller, 71 S.D. 258, 26......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT