Buckingham Corp. v. Modern Liquors, Inc.

306 N.E.2d 650, 15 Ill. App. 3d 845, 1973 Ill. App. LEXIS 1751
CourtAppellate Court of Illinois
DecidedNovember 7, 1973
DocketNo. 57653
StatusPublished
Cited by1 cases

This text of 306 N.E.2d 650 (Buckingham Corp. v. Modern Liquors, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buckingham Corp. v. Modern Liquors, Inc., 306 N.E.2d 650, 15 Ill. App. 3d 845, 1973 Ill. App. LEXIS 1751 (Ill. Ct. App. 1973).

Opinion

Mr. JUSTICE DIERINGER

delivered the opinion of the court:

The plaintiff, The Euckingham Corporation, alleged the defendants, Modern Liquors, Inc., and Monarch Liquors, Inc., both doing business as Foremost Liquors, violated certain provisions of the Illinois Fair Trade Act. (Ill. Rev. Stat, ch. 121½, §§188-191). Following a hearing in the Circuit Court of Cook County, the court entered a permanent injunction wherein the defendants were restrained from wilfully and knowingly advertising, offering for sale or selling Cutty Sark Scotch Whisky below the Fair Trade prices specifically set forth in the injunction. The defendants appeal from the injunctive relief granted the plaintiff.

The issues presented for review are: (1) whether the activities of the plaintiff, a foreign corporation, constitute the transaction of intrastate business within the State of Illinois thereby requiring the plaintiff to obtain a certificate of authority from the Secretary of State prior to instituting a civil suit in Illinois; (2) whether the trial court erred in finding the plaintiff’s product is in fair and open competition; (3) whether the evidence supports the trial court’s finding that the defendants wilfully and knowingly advertised the plaintiff’s product at less than Fair Trade prices; (4) whether the plaintiff’s “minimum” Fair Trade prices are valid and enforceable under the Illinois Fair Trade Act; (5) whether the trial court erred in striking the defendants’ allegation that the plaintiff’s action constituted both State and Federal anti-trust violations; and (6) whether the injunction issued by the trial court is specific as to its terms.

On December 29, 1971, The Euckingham Corporation filed a complaint in the Circuit Court of Cook County requesting temporary and permanent injunctive relief. The complaint alleged the defendants wilfully and knowingly advertised and offered for sale fifths of Cutty Sark Scotch Whisky at $6.19 per fifth when the Fair Trade price was $6.59 per fifth. The defendants filed a verified answer to the plaintiff’s complaint wherein they denied the allegations set forth and also raised certain affirmative defenses to which the plaintiff replied. Thereafter, a hearing was held at which the plaintiff presented evidence in support of its allegations. The evidence presented by the plaintiff consisted of the Fair Trade Agreement executed by the plaintiff which was still in full force and effect at the time of the hearing as well as investigative reports which reflected the defendants were selling the plaintiff’s product at $6.19 per fifth rather than the Fair Trade price of $6.59 per fifth. During the course of the plaintiffs presentation of evidence, the defendants attempted to support the affirmative defenses which they had raised by cross-examination of the plaintiffs witnesses who were testifying concerning the documents presented by the plaintiff. The defendants especially attempted to prove their allegation that the plaintiff was carrying on intrastate business in Illinois by cross-examination of representatives of the Walter J. Jahn Co., a Florida corporation licensed to do business in Illinois, which had been retained by the plaintiff to perform certain advertising and promotional activities regarding the plaintiff’s product, Cutty Sark Scotch Whisky.

The first issue presented for review is whether the activities of the plaintiff, a Delaware corporation, constitute the transaction of intrastate business within Illinois thereby requiring the plaintiff to obtain a certificate of authority from the State as a prerequisite to instituting a civil action in Illinois.

The defendants contend the plaintiff, a Delaware corporation, is engaged in the transaction of intrastate business within Illinois, and thus may not bring this action in an Illinois court without first having obtained a certificate of authority from the Secretary of State (Ill. Rev. Stat. 1971, ch. 32, §§ 157.102, 157.125). The defendants base this contention on evidence presented during the hearing which reflects the plaintiff corporation has engaged the Walter J. Jahn Co., a Florida corporation licensed to do business in Illinois, to perform certain advertising and promotional services within the State. The defendants attempt to establish that such activity by the plaintiff amounts to the conduct of direct intrastate business and, as such, the plaintiff required a certificate of authority prior to instituting this action. In support of this contention the defendants urge this court to apply the decision in Eli Lilly and Co. v. Sav-On Drugs, Inc. (1961), 366 U.S. 276, 6 L.Ed.2d 288, 81 S.Ct. 1316, where the United States Supreme Court held the combined direct activities of the plaintiff in the State of New Jersey amounted to intrastate business which required the plaintiff to have a certificate of authority to do business in the state.

The record does not support the defendants’ contention. Moreover, we find any application of the principle set forth in the Eli Lilly decision to be inappropriate to the instant situation. It is most apparent to this court that the plaintiff is engaged in interstate business rather than intrastate business and is therefore protected from having to acquire a certificate of authority to do business in Illinois by the Commerce Clause of the United States Constitution. Furthermore, the record reflects the plaintiff hired the Walter J. Jahn Co. to merely carry on promotional activity in regard to its product not to act as its agent. This is most clearly exemplified in the fact that the plaintiff retained the basic activity of accepting orders from Illinois liquor wholesalers. We therefore reject the defendants’ contention not only that the plaintiff was transacting intrastate business without a certificate of authority, but also that the plaintiff could not initiate this action in an Illinois court.

The second issue presented for review is whether the trial court erred in finding the plaintiff’s product is in fair and open competition.

The defendants contend the trial court erred in issuing its injunction since as a basic finding of fact upon which the injunction issued, the court found the plaintiff’s product to be in “fair and open competition with commodities of the same general class produced by others, and sold and distributed throughout Illinois.” The defendants base this contention on their assertion that the record is devoid of any statement in support of this fact and once having alleged such fact, failure to prove the allegation is a fatal defect to the case.

The record reflects tire trial court not only heard the plaintiff allege its product, Cutty Sark Scotch Whisky, is in fair and open competition in Illinois but also was presented evidence to make the allegation a very apparent fact. Moreover, defense counsel more than adequately aided the court in arriving at its finding where during the cross-examination of William Walsh, an employee of the Walter J. Jahn Co., defense counsel offered as an exhibit for identification purposes the February, 1972, issue of the Illinois Beverage Journal listing the Fair Trade prices of certain scotch whiskys including Cutty Sark and questioned Mr. Walsh regarding the exhibit and the ownership of the other brands listed in the exhibit, none of which is owned by the plaintiff.

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Related

Buckingham Corp. v. Vesolowski
307 N.E.2d 699 (Appellate Court of Illinois, 1973)

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Bluebook (online)
306 N.E.2d 650, 15 Ill. App. 3d 845, 1973 Ill. App. LEXIS 1751, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buckingham-corp-v-modern-liquors-inc-illappct-1973.