Venable v. J. Engel Co., Inc.

Delaplaine, J. delivered the opinion of the Court. This suit was brought by J. Engel & Co., Inc., wholesale jeweler with principal place of business in Baltimore, to restrain T. Bryce Venable, trading in Pocomoke City and Crisfield as Venable’s Jewelry Store, from wilfully and knowingly advertising, offering for sale or selling any Hamilton watches at less than the minimum resale prices established by contract made in pursuance of the Fair Trade Act. Code 1939, Code Supp. 1947, art. 83, secs. 102-110. By the contract made January 12, 1948, complainant as regional wholesale distributor for the Hamilton Watch Company, of Lancaster, Pennsylvania, appointed defendant a retailer of Hamilton watches, and defendant promised that he would not advertise, offer for sale or sell any of these watches at less than established rmnimnm prices.

Subsequently defendant employed the National Sales Company, of New York, to promote a price reduction sale at his stores. A representative of that company, ⁵⁴⁷ after inspecting defendant’s stock of jewelry and watches, made plans for a sale to commence May 27, 1948. He designed a double-page advertisement for insertion in the Eastern Shore News, a newspaper published in Onancock, Virginia, and selling about 500 copies on the Eastern Shore of Maryland. He also distributed thousands of copies of the advertisement in the form of handbills.

The advertisement contained ten small pictures of watches. In connection with these pictures was the following statement: “During this sale you can buy a good dependable watch. Reductions range up to 1/2 off.” On the dial of one of the pictures was the word “Hamilton” in very small letters. When the attention of Otho Thompson, a competitor of defendant in Pocomoke City, was called to the word “Hamilton” in tiny letters on the picture, he mailed the advertisement to the Hamilton Watch Company at Lancaster, and that company thereupon forwarded it to complainant at Baltimore.

On June 16 complainant instituted suit for an injunction in the Circuit Court for Worcester County, alleging that defendant had violated the terms of the resale price contract. Defendant denied the allegation. At the trial of the case he asserted that he was not aware that the word “Hamilton” was on one of the illustrations in the advertisement until June 16, when he was notified of the institution of the suit. He explained that the representative of the National Sales Company had prepared the copy for the advertisement, listing the prices exactly as given to him, and that he had left blank spaces for the cuts to be furnished by the Eastern Shore News for pictures of jewelry and watches.

Section 107 of the Fair Trade Act provides that wilfully 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 the Act, whether the person so advertising, offering ⁵⁴⁸ for sale or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby. It is unquestioned that a court of equity may grant injunctive relief in a proper case for violation of a resale price contract made pursuant to the Fair Trade Act. Goldsmith v. Mead Johnson & Co., 176 Md. 682 , 7 A. 2d 176 , 125 A. L. R. 1339; Hutzler Bros. Co. v. Remington Putnam Book Co., 186 Md. 210 , 46 A. 2d. 101, 163 A. L. R. 884.

In the instant case complainant failed to produce any evidence that defendant had ever offered for sale or sold any Hamilton watches below the minimum prices established by the. resale price contract. During the period of the price reduction sale, defendant had five Hamilton watches on display in the window of his jewelry store in Pocomoke City, but he declared that he did not sell one Hamilton watch during the sale. John G. Evans, of Atlantic City, employed as a traveling salesman by complainant, saw the five Hamilton watches in the window about the time of the institution of the suit, and admitted on the stand that the price marked on the card for each watch was the established price. Thompson, defendant’s competitor, claimed that the word “reduced” appeared on each card; but complainant’s traveling salesman substantiated the testimony of defendant that the word “no.w,” and not the word “reduced,” was on the card with the established