it does not prohibit discrimination in price between purchasers of commodities by reason of difference in grade, quality, or quantity. [10] Since the burden of the plaintiff's declaration is that the defendants discriminated in price in case of sales in tank cars over sales in tank trucks or tank wagons, it is obvious that such discrimination is permitted under the proviso in section 2 and is not in itself unlawful. Many of the other practices of the defendants set forth in the declaration have been held not to be unlawful. Federal Trade Commission v. Sinclair Refining Co., 261 U. S. 463, 43 S. Ct. 450, 67 L. Ed. 746; Standard Oil Company of New York v. Federal Trade Commission (C. C. A.) 273 F. 478, 482, 17 A. L. R. 389. [11] It is urged, however, that the added condition in case of sales at tank car prices, that the buyer must agree not to sell the products of a competitor of the defendants, is a violation of section 3 of the Clayton Act, since by so stipulating competition is lessened between the plaintiff and other retailers in the competitive territory and thereby a tendency to create a monopoly results. We think it cannot be said that the declaration contains sufficient allegations to warrant the conclusion as a matter of law that a monopoly in the northeastern territory may result from such a stipulation. It is alleged that the defendants have sold gasoline in the northeastern section of the country for a number of years and originally had a monopoly in this territory; but taking the pleadings more strongly against the plaintiff, as we must, they now control less than half of the retailers' outlets in that section, the remainder being controlled by, or devoted to the sale of, gasoline by competitive companies which, it is alleged, pursue similar methods in selling their products. [12] The question is, where [whether] the requirement that a sale of gasoline in tank cars and at a less price than in case of delivery in smaller quantities by tank trucks will only be made in case the retailer agrees to sell only the defendants' products, results in a lessening of competition in interstate transactions between the plaintiff and stations operated by the Standard Companies and by others in the same competitive territory, to the damage of the plaintiff? It is obvious from his declarations that the defendants' policy does not affect the amount of sales by the plaintiff of the defendants' products, but only his profits, [270] since the inference is clear that he has supplied all demands of his customers for "Socony" gasoline, though at a less profit than if he could buy on the tank car market. He does not allege, however, in his amended declaration, that he is equipped to accept gasoline at his filling station in tank cars, or that his profits are so small that he must give up supplying his customers with "Socony" products. The inference is also clear that he buys and sells the products of other integrated or independent companies on the same terms as those of the defendants. There is obviously no discrimination in terms or price between him and other retail customers of the defendants. He is offered the same terms by the defendants as any other retail customer; and since it is alleged that all retailers sell at the same price, which is posted on their pumps at their retail outlets, and that the selling price of all gasoline is the same. at least throughout Massachusetts, competition in price, therefore, cannot result as between him and other retailers, though they deal exclusively in "Socony" products. "Competition" is defined as: "The effort of two or more parties, acting independently, to secure the custom of a third party by the offer of the most favorable terms." Webster's Dictionary. "The struggle between rivals for the same trade at the same time; the act of seeking or endeavoring to gain what another is endeavoring to gain at the same time." 12 C. J. 237. This, according to the plaintiff's declaration, his competitors are not seeking to do by offering more favorable terms of sale of Socony products to purchasers. While we think it is alleged with substantial certainty that the defendants have fixed lower prices for their products in case of the importation of gasoline in tank-car lots direct to their customers, provided the customer agrees to deal only in their products, yet it does not appear, owing to there being no competition in price between the plaintiff and other retailers of gasoline, that the result of defendants' policy is to substantially lessen competition in gasoline and other petroleum products between the plaintiff and stations operated by the Standard Companies, or those dealing exclusively in defendants' products, in the same competitive territory. If the plaintiff chooses to sell petroleum products of other competing companies of the defendants rather than to deal in the defendants' products exclusively, it does not follow, as a matter of law, that a refusal by the defendants to sell gasoline to the plaintiff at tank-car prices constitutes a violation of the Clayton Act by the defendants. The judgments of the district court are affirmed, with costs. PROGRESS CORPORATION v. GREEN ET AL. (Supreme Court, Appellate Term, First Department. June 10, 1937) [298 N. Y. S. 154] 1. TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION. The Federal act prohibiting price discriminations in sales of goods to competitors is penal in character and must be strictly construed (Federal Robinson-Patman Price Discrimination Act, 15 U. S. C. A., §§ 13, 13a, 13b, 21a). 2. SALES. Complete avoidance of payment for goods purchased on ground of illegality of sale under Federal Price Discrimination Act is not available as defense to action for agreed price, in view of remedies provided by such act, where contract is valid under general law and enforceable by itself (Federal Robinson-Patman Price Discrimination Act, 15 U. S. C. A., §§ 13, 13a, 13b, 21a). (The syllabus was taken from 298 N. Y. S. 154) Cross-appeals from municipal court, Borough of Manhattan, first district. Action by the Progress Corporation against Charles Green and another, copartners. From two orders of the municipal court denying plaintiff's and defendants' motions for judgments on the pleadings, all parties appeal. Order denying plaintiff's motion reversed and motion granted, with leave to defendant to serve an amended answer, and appeal from order denying defendants' motion dismissed. [155] Argued May term, 1937, before LYDON, HAMMER, and FRANKENTHALER, JJ. Abraham M. Lowenthal, of New York City, for plaintiff-appellantrespondent. Seymour Joseph, of New York City, for defendants-respondentsappellants. PER CURIAM: [1, 2] Defendants' defense to plaintiff's suit for the agreed price of goods admittedly sold is by way of complete avoidance of payment upon the ground of alleged illegality under the Federal Robinson-Patman Price Discrimination Act (15 U. S. C. A., §§ 13, 13a, 13b, 21a) amending the Clayton Antitrust Act (38 Stat. 730). Both parties moved for judgment on the pleadings. The claim, which is regarded as admitted, is that plaintiff has discriminated in price against defendants by charging them more than their competitors to whom plaintiff also sold identical merchandise. The act is penal in character and must be strictly construed. Under it certain remedies are provided, viz, cease and desist order of the Federal Trade Commission, injunction suit by the United States Attorney General, criminal prosecution, and suit by a private person for injunction or damages. Most, if not all, of these remedies are enforceable only in the Federal courts. The agreement of sale was valid under the general law and by itself unquestionably enforceable. It was not inherently illegal so as to bring it within the rule that courts will not enforce illegal contracts or compel wrongdoing. While the alleged agreement of preferential price and terms to competitors, as well as that of the discriminatory price and terms, would necessarily have to be shown to establish a violation under the act, upon such proof the remedies provided are injunction and damages, and complete avoidance is not available. As no counterclaim for damages is asserted and the countermotions present only the issue of complete illegality and require a decision directly on that alone, it is therefore, unnecessary to decide the point made of lack of jurisdiction of the court to apply the provisions of the act. Order denying plaintiff's motion reversed, with $10 costs, and motion granted, with leave to defendant to serve an amended answer within six days after service of order entered hereon upon payment of said costs. Appeal from order denying defendants' motion dismissed. All concur. INDEX (The letters "d" and "n" in page references indicate, respectively, "dissenting opinion" and "note" Abandonment of Wrongful Practice. See Discontinuance, etc. Access to Records. See Books, Papers, Correspondence, etc.; Documents antitrust laws, noninterference with, by section 7_ as embracing only clear cases_- as violation of Clayton Act.... Attorney General's jurisdiction over_ Page 27 27 536 276d 36 court's duty to determine lessening of competition by--- 132 61 divestment of physical assets. See Assets or Property, Physical. 59, 61, 62 Export Trade Act, pro tanto repeal of section 7-- 83 43 Federal Trade Commission, powers in. See Divestment of Stock or for investment only. 27, 536 injury to public in_. insolvency or financial stringency of competitor as affecting----- 59, 61, 62 jurisdiction of Federal Trade Commission and Department of Justice 32, 36 lack of competition between corporations involved. 57, 534, 535 "may be" to substantially lessen competition, etc., construed‒‒‒‒‒‒‒ 57, 532 necessity of corporations being engaged in commerce and competition under section 7---- percentage of competition under section 7-- probable lessening of competition necessary to prohibition of_____ 534, 535 reorganization as device to evade sections 7 and 11, Clayton Act_. restraint of commerce by -- "rule of reason" under section 7. style and quality of shoes as affecting competition under. subsidiaries, formation of, in__. substantial lessening of competition, defined___ 60 33 57 substantial lessening of competition or tendency to monopoly in. See substantiality of competition prior to-- 20 57 when accompanied by merger of assets_. 238 Act to Regulate Commerce: Communications Act of 1934 included in_. Federal Trade Commission jurisdiction limited by--- Acts of Congress: See also where indexed under respective names of statutes. Page 6 6, 11, 33 16 from which Federal Trade Commission derives its powers.. 1 Adequacy of Remedy at Law: under Federal Trade Commission Act---- 67 552 264, 278d 577 Agents of Federal Trade Commission: access to documentary evidence by- Agreements: Clayton Act exemptions as to. in motion-picture industry. in resale price maintenance. as amounting to conspiracy_. prescribing minimum prices, legalized by Miller-Tydings Act--- Advertising Agency: exemption from liability for false advertisement__. Advertising Service Charge: illegality of discrimination as to---- Agreements Excluding Competitor (sec. 3, Clayton Act). See Tying Agriculture, exemption from antitrust laws__. 27 Agriculture, Secretary of, powers of Federal Trade Commission ap- Agricultural and Fishery Associations: exemptions of, from Clayton Act. Federal Trade Commission powers under__. Air Carriers: excluded from Federal Trade Commission jurisdiction_-_. when payment of, illegal under Robinson-Patman Act____. as prima facie evidence_. Federal Trade Commission as master in chancery to formulate_ as defined in Federal Trade Commission Act___ as distinguishing between direct and indirect effects on interstate Clayton Act as included in____. as not regulating competitive practices_ Clayton Act as supplement to, or part of... Clayton Act list of____. Clayton Act not to interfere with Federal Trade Commission Act as supplement to, or part of. Federal Trade Commission order not to absolve liability under___ Federal Trade Commission as master in chancery to formulate 16,35 13 35 314 21n 479 391 6, 33 50 24, 49 incipient violations of, as unfair methods of competition. See Incipiency. injunction, competitor's private right under___. 37 |