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U.S. Supreme Court

Old Dearborn Co. v. Seagram-Distillers Corp., 299 U.S. 183 (1936)

Old Dearborn Distributing Co. v. Seagram-Distillers Corp.

No. 226

Argued November 12, 13, 1936

Decided December 7, 1936*

299 U.S. 183


1. Section 1 of the Fair Trade Act of Illinois sanctions contracts of sale or resale of commodities identified by the trademark, brand, or name of the producer or owner, which are in fair competition with commodities of the same general class produced by others, notwithstanding that such contracts stipulate (a) that the buyer will not resell except at the price stipulated by the vendor, and (b) that the producer or vendee of such a commodity shall require, upon the sale to another, that he agree in turn not to resell except at the price stipulated by such producer or vendee. Section 2 provides that willfully and knowingly advertising, offering for sale, or selling any commodity at less than the price stipulated in any contract made consistently with § 1, whether the person doing so is or is not a party to the contract, shall constitute unfair competition, giving rise to a right of action in favor of anyone damaged thereby. As applied to a dealer who, with full knowledge of an existing price restriction imposed by contract between a producer chanroblesvirtualawlibrary

Page 299 U. S. 184

and other dealers, acquired a stock of the commodity covered by such restriction and resold the same without regard thereto, thus subjecting himself to liability under § 2 of the Act, held:

(1) The Act does not infringe the doctrine of previous decisions of this Court dealing with legislative price-fixing; those decisions constitute no authority for holding that prices in respect of "identified" goods may not be fixed under legislative leave by contract between the parties. P. 299 U. S. 192.

(2) The Act does not violate the due process of law clause of the Fourteenth Amendment as an unlawful delegation of power to private persons to control the disposition of the property of others. Distinguishing: Eubank v. Richmond, 226 U. S. 137; Seattle Trust Co. v. Roberge, 278 U. S. 116, and Carter v. Carter Coal Co., 298 U. S. 238. Pp. 299 U. S. 193-194.

(3) The Act is not arbitrary, unfair, or unreasonable. P. 299 U. S. 194.

(4) The essence of the statutory prohibition is not the mere disposal of the commodity, but the use of the trademark, brand, or name in accomplishing such disposition. There is nothing in the Act to preclude the purchaser from removing the mark or brand from the commodity -- thus separating the physical property, which he owns, from the goodwill, which is the property of another -- and then selling the commodity at his own price, provided he can do so without utilizing the goodwill as an aid to that end. Pp. 299 U. S. 194-195.

(5) The Act does not deny the equal protection of the laws in violation of the Fourteenth Amendment by conferring a privilege upon the producers and owners of goods identified by trademark, brand, or name which it denies in the case of unidentified goods. The classification is reasonable. P. 299 U. S. 197.

2. Considering the statute as a whole, the phrases "fair and open competition" in § 1, and "any commodity" and "any contract entered into pursuant to the provisions of § 1" in § 2, are not fatally vague and uncertain. P. 299 U. S. 196.

3. Where, in determining whether the factual background justifies the particular legislation, the question as to what the facts establish is a fairly debatable one, this Court accepts the legislative determination in that respect. P. 299 U. S. 195.

363 Ill. 559, 2 N.E. 2d 929; 363 Ill. 610, 2 N.E. 2d 940, affirmed.

Appeals from decrees of the state supreme court in two cases, sustaining the validity under the Federal Constitution of provisions of the Fair Trade Act of Illinois. chanroblesvirtualawlibrary

Page 299 U. S. 185

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