Sperry & Hutchinson Co. v. Pommer

• Decision Date: 08 October 1912
• Citation: 199 F. 309
• Parties: SPERRY & HUTCHINSON CO. v. POMMER et al.
• Court: U.S. District Court — Northern District of New York

199 F. 309

SPERRY & HUTCHINSON CO. v. POMMER et al.

United States District Court, N.D. New York.

October 8, 1912

Randall J. Le Boeuf, of Albany, N.Y. (D. J. Lyons and John Hall Jones, both of New York City, of counsel), for complainant.

Goldfogle Cohn & Lind, of New York City (Henry M. Goldfogle and Alfred D. Lind, both of New York City, of counsel), for defendants.

RAY District Judge.

The complainant moves for a preliminary injunction on the bill of complaint and affidavits filed, which allege in substance that the defendants are interfering with complainant's lawful contracts and inducing certain customers, parties to said contracts, to violate same to the great damage of the complainant; that defendants are interfering with the complainant's business in furnishing its trading stamps to merchants who are under exclusive contract with the complainant to use its stamps; and that by false representations the defendants through their agents maliciously made are damaging the complainant's business to the profit of said defendants.

The complainant makes or causes to be made its trading stamps which are known as the 'Green Trading Stamps.' The defendants make or cause to be made and used their trading stamps which are known as the 'Palace Trading Stamps.' The complainant furnishes to its subscribers or those merchants under contract with it its Green Trading Stamps in pads which may contain 1,000 or 5,000 stamps, and the complainant's canvassers explain to householders that by making their purchases at these stores of said subscribers they will receive a trading stamp or stamps in accordance with the amount of the purchase, and that when a sufficient number are collected or received by the householder in this way that said stamps will be redeemed by the complainant at its premium store. The canvassers of the complainant deliver to the householders who are willing to receive them trading stamp books in blank for the convenient retention of said stamps until the required number have been collected. When the required number of these stamps has been received by the customer, he or she may go to the premium store of the complainant and there receive a premium in the form of some article of merchandise such as silverware, glassware curtains, rugs, pictures, etc., claimed to correspond in value with the stamps collected in exchange for such stamps.

The specific object of this form of advertising is to attract customers to the stores of the complainant's subscribers with whom the complainant has contracts to use their stamps exclusively, and to have such customers pay cash on all purchases.

The defendants, the owners and makers and distributors of the Palace Trading Stamps, are engaged in the same business, and the complainant and the defendants are therefore competitors in this business. After the stamps have been delivered to the merchant for use, there are, of course, three parties to a complete transaction; that is, the party furnishing the stamps to the merchant, the merchant who distributes the stamps, and the customer who pays cash for the goods, and the customer who receives the stamp and as a consideration for paying cash for his purchase of the merchant is eventually to receive some article of some value as a so-called premium.

The complainant alleges that it has entered into valid, written contracts with certain merchants in the city of Albany by which it has agreed to furnish these merchants its Green Trading Stamps and give the premiums to the customers of such merchants when they become entitled thereto, and that such merchants have agreed on their part to use the Green Trading Stamps of the complainant exclusively. The complainant contends that these contracts are valid and binding and violate no law. The complainant also contends that the defendants, engaged in the same business of furnishing stamps to merchants and supplying premiums to the customers of such merchants who make cash purchases, have unlawfully and wrongfully and maliciously interfered with the complainant's business and contracts with merchants to complainant's great damage in substantially the following manner, viz.: That defendants have gone to the merchants with whom complainant has such contracts, and, by false representations and statements maliciously made, induced such merchants to disregard their contracts with the complainant and to enter into a contract or agreement with the defendants by which they are to use the Palace Trading Stamps either wholly or in part, and that they have induced these merchants to take and use such Palace Trading Stamps and discontinue the use in whole or in part of said Green Trading Stamps. The allegation is that the defendants have in such cases, and whenever and wherever they could, furnished such Palace Stamps, and that in many cases same have been used by merchants in violation of their contracts with the complainant, and that in some instances merchants have wholly broken and disregarded their contracts with the complainant.

The defendants deny that they have made any false or untrue representations or statements to these merchants or to any of them, and deny that they have done anything to induce these merchants to violate or disregard their contracts with the complainant. The defendants allege and claim that they have the right to compete with the complainant in this business and to furnish their stamps to these merchants for use in the mode and manner and for the purposes aforesaid, so long as they make no false representations or statements, and so long as they do nothing for the purpose of inducing these merchants to break or disregard their contracts with the complainant. The defendants deny that they have said or done anything which has or will induce the merchants to violate or break their contracts with the complainant, unless it be that the mere offering to furnish their stamps to these merchants has that effect. The defendants contend that, even if the complainant has a valid contract...