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June 27, 1955


Appeal, No. 24, May T., 1955, from judgment of Court of Common Pleas of Dauphin County, Sept. T., 1952, No. 310, in case of Burche Co. v. General Electric Company and Commonwealth of Pennsylvania. Judgment affirmed.


Francis B. Haas, Jr., with him Samuel A. Schreckengaust, Jr., and McNees, Wallace & Nurick, for appellant.

John McI. Smith, with him Ernest S. Burch, James H. Stewart, Jr., and Nauman, Smith, Shissler & Hall, for appellee.

Harry F. Stambaugh, with him Herbert B. Cohen, Attorney General, for intervenor, appellee.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Arnold

[ 382 Pa. Page 371]


This case arose on a declaratory judgment under a case stated. The Commonwealth of Pennsylvania was given leave to intervene as a party defendant. The court below pronounced judgment in favor of the defendant and the plaintiff appeals.

Burche Co. operates a retail department store in the City of Harrisburg. The General Electric Company, a foreign corporation duly authorized to transact business in Pennsylvania, manufactures as large variety

[ 382 Pa. Page 372]

    of electric fixtures and appliances under the brand and trade name of "General (GE) Electric." These commodities are widely advertised and are in open competition in Pennsylvania with those of the same general class manufactured by others. The General Electric Company has expended large sums of money in promoting and advertising these commodities both in Pennsylvania and throughout the United States. It expended for such advertising during the three year period from 1949 to 1951 an amount in excess of $6,000,000, thereby developing a valuable reputation and good will for such commodities and for the trade-mark under which they are produced and sold. General Electric engages in price regulation of its commodities by means of a minimum retail price agreement commonly known as "fair trade contracts," and it has entered into such agreements with other retailers doing business in Pennsylvania.

The plaintiff has been notified by the defendant of the existence of fair trade agreements with other retailers, and also of the stipulated minimum retail prices for the commodities established under these agreements. It has not entered into a fair trade agreement with the defendant, but admits it has wilfully, intentionally and knowingly advertised, offered for sale and sold these commodities at prices below the stipulated retail minimum.

The Act of 1935, P.L. 266, as amended by the Act of 1941, P.L. 128, 73 PS ยง 7, provides, inter alia: "No contract relating to the sale or resale of a commodity which bears, or the label or content of which bears, or the vending equipment from which said commodity is sold to the consumer bears the trade-mark, brand or the name of the producer or owner of such commodity, and which is in fair and open competition with commodities of the same general class produced by others,

[ 382 Pa. Page 373]

    shall be deemed in violation of any law of the State of Pennsylvania by reason of any of the following provisions which may be contained in such contract: (a) That the buyer will not resell such commodity, except at the price stipulated by the vendor. (b) That the buyer of such commodity require upon his resale of such commodity that the purchaser from him agree that such purchaser will not in turn resell except at the price stipulated by the vendor of the buyer."

The plaintiff contends that this Act as applied to it is unconstitutional because it had not signed a minimum retail price maintenance agreement with the defendant. It must be conceded that generally such acts are held constitutional. See Bristol-Myers Company v. Lit Brothers, Inc. 336 Pa. 81, 6 A.2d 843; Lentheric, Inc. v. F. W. Woolworth Co., 338 Pa. 523, 13 A.2d 12;*fn1 Old Dearborn Distributing Company v. Seagram-Distillers Corporation, 299 U.S. 183, cited in Bristol-Myers Company v. Lit Brothers, Inc. 336 Pa. 81, 6 A.2d 843.*fn2 The Act is a valid exercise of the police power:

[ 382 Pa. Page 374]

    in Schwegmann Bros. v. Calvert Distillers Corp., supra, passage of the McGuire Act in 1952 removed the final barrier to Complete interstate application of the New York statute. Under such circumstances it has long been well established that the Constitution does not require a State statute to be re-enacted in order to be effective, Matter of Rahrer, 140 U.S. 545, ..." See also Sturges v. Crowninshield, 17 U.S. 122.*fn3


Judgment affirmed at the cost of the appellant.

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