In re Mellman

295 P.2d 109, 140 Cal. App. 2d 65, 1956 Cal. App. LEXIS 2217
CourtCalifornia Court of Appeal
DecidedMarch 20, 1956
DocketCrim. No. 5563
StatusPublished

This text of 295 P.2d 109 (In re Mellman) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Mellman, 295 P.2d 109, 140 Cal. App. 2d 65, 1956 Cal. App. LEXIS 2217 (Cal. Ct. App. 1956).

Opinion

SHINN, P. J.

Habeas corpus. A writ was heretofore issued, return filed and hearing has been had at which it was stipulated that the petition should be considered as a traverse to the return.

Petitioner Murray Mellman was imprisoned by virtue of a judgment and commitment for contempt issued by the Superior Court of Los Angeles County. The procéeding in the superior court was initiated by affidavits from which it appeared that on November 1, 1950, in an action of Sunbeam Corp. v. Mart, also known as Masters Mart, Inc., the defendant corporation, its officers, directors, agents and employees, were restrained by a judgment entered by consent from selling, offering for sale or advertising for sale any Sunbeam commodity at prices below those stipulated in plaintiff’s fair trade contract entered into between plaintiff and its retailers pursuant to sections 16900 to 16905 of the Business and Professions Code, as set out in a price supplement which was made a part of the decree by reference.1

[67]*67The corporation and Mellman, its president, were accused of having made 21 separate sales of Sunbeam products in violation of the injunction. Upon the hearing in response to an order to show cause why they should not be punished for contempt, a stipulation was entered into between plaintiff and the citees with the approval of the court. The following material facts were established for the purposes of the hearing, namely, that the sales described in the affidavit were made as alleged therein; that the persons making said sales and affidavits were acting as employees of Western States Bureau of Investigation which was to pay said persons for their services pursuant to Sunbeam’s having engaged the bureau to have said purchases made and witnessed; that Mellman as president of the corporation had full knowledge of the provisions of the injunction; that all prior records and files in the action might be considered by the court and that the right to present oral testimony was waived. The court made findings that the corporation and Mellman separately wilfully, deliberately and contemptuously violated said injunction on 21 separate occasions between December 7, 1954, and May 2, 1955, by knowingly selling and permitting to be sold a fair-traded Sunbeam commodity, an appliance bearing Sunbeam’s trademark, brand or name, at less than the fair trade price as required therefor by said injunction and that said sales were not within any exception provided in said injunction. The corporation was fined $200 for each of 21 contempts and Mellman was fined $100 for each thereof with a proviso that if said fine be not paid by Mellman he serve one day in the Los Angeles County jail for each $2.00 of said fine until the same should be fully paid or served and in addition thereto, Mellman was sentenced to serve five days in the county jail.

Petitioner’s principal contention is that the purchases, although below the stipulated prices, were not violative of the injunction because the purchasers were acting on behalf of Sunbeam, being operatives of an.investigating bureau employed and paid by Sunbeam for the purpose of ascertaining whether the injunction was being violated. It is argued that the purpose of the fair trade laws is to protect the property rights in a trade name or trademark by permitting the producer to control by contract the price of the article to the ultimate consumer, and that when the producer, himself, buys the article at less than the agreed retail price he is not harmed and has no right to complain.

[68]*68Petitioner says “Where, however, the producer, either directly or indirectly purchases his own product from the retailer not for the purpose of resale and not as the ultimate consumer of such product such purchases do not come within the scope and purpose of the Fair Trade Act and cannot constitute a contempt of the injunction issued against petitioner.”

Petitioner has cited no authority which lends support to his contention. Sunbeam calls attention to a number of cases in which courts have had an opportunity to consider the significance of purchases made by a producer in the course of his investigations of suspected violations of injunctions by retailers or as affecting the producer’s right to an injunction. Among them are Revere Copper & Brass, Inc. v. Stern (N.Y. Sup.Ct., 1954), 1954 Trade Cases No. 67636, -N.Y.S.2d -; General Elec. Co. v. Automobile Assn. of New Jersey (1955), 37 N.J. Super. 477 [117 A.2d 673], 1955 Trade Cases No. 68199; Lionel Corp. v. Klein (1955), - Del.Ch. - [114 A.2d 652], 1955 Trade Cases No. 68085; Seagram Distillers Corp. v. New Cut Rate Liquors, Inc. (C.A. 7, 1955), 221 F.2d 815. In these and other cases the employment of “shoppers” by the producer has been regarded as somewhat of a routine procedure in the enforcement of fair trade contracts and sometimes as essential, when other evidence of violations is unavailable, for protection of the producer against the claim that he had lost his rights under his contracts by failing to assert them. (See General Elec. Co. v. Home Utilities Co., Inc. (D.C.Md., 1955), 131 F.Supp. 838, affd. (C.A. 4, 1955) 227 F.2d 384.)

It may be that a court might in some circumstances discharge a citee upon an accusation for contempt if the conduct of his adversary had intentionally led him into a technical violation of an injunction, but even in such a case the question would not go to the jurisdiction of the court. However, there is no such situation here. All Sunbeam did was furnish an opportunity for the corporation and its agents to sell Sunbeam’s products at prices fixed by them and they were fixed without any connivance on the part of the purchasers. It was the conduct of the sellers that was under review and their acts were none the less wilful and intentional because, unknown to them, the purchasers of the articles were acting on behalf of Sunbeam.

The injunction made no exception of sales made to Sunbeam or its agents nor did it incorporate all or any part [69]*69of the contract by reference or otherwise. The 21 sales were made in violation of express and clear provisions of the injunction. They did not fall within the exception which related to closing out sales. If other exceptions had been deemed desirable the time to request or demand them was at the time of trial and before entry of judgment. To read into the injunction other exceptions would be modification, not interpretation. The judgment as it stands is final and conclusive. It does not permit sales to Sunbeam or its agents at less than the stipulated prices; it prohibits them.

It is immaterial whether Sunbeam’s rights in its trademarks and trade brands were affected by the 21 sales in question. Sunbeam had rights under the contract, as they were declared in the injunction, the principal one being that the contract be not breached by the retailer. Every sale made at prices below those stipulated in the injunction was by force of the injunction a breach of the agreement and of Sunbeam’s right to hold the retailer to its terms.

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Related

General Electric Co. v. Automobile Ass'n of NJ
117 A.2d 673 (New Jersey Superior Court App Division, 1955)
General Electric Company v. Home Utilities Company
131 F. Supp. 838 (D. Maryland, 1955)
Lionel Corp. v. Klein
114 A.2d 652 (Court of Chancery of Delaware, 1955)

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Bluebook (online)
295 P.2d 109, 140 Cal. App. 2d 65, 1956 Cal. App. LEXIS 2217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-mellman-calctapp-1956.