Commercial Law Commons^™

Sales - Credit Sales - Application Of Usury Statute, Jerome S. Traum S.Ed.

Michigan Law Review

Plaintiff bought a tractor from defendant's agent for $2950 and received a trade-in allowance of $1180, leaving an unpaid balance of $1770. Defendant's agent agreed to arrange for a loan from defendant for the balance of the purchase price, without stating a time price for the tractor different from the cash price previously discussed. The loan was made, and plaintiff signed a note and chattel mortgage in the amount of $2161.84, payable in two annual installments. The $391.84 excess over the balance due exceeded the maximum legal rate of interest allowed by Nebraska's Installment Loan Act. Plaintiff later sued in …

Antitrust Considerations In Motor Carrier Mergers, Carl H. Fulda

Michigan Law Review

Unification of separate independent business enterprises in a single organization may raise important questions of antitrust policy. The entity which emerges may have acquired, as a result of such unification, a market position of such significance that a substantial lessening of competition or even the creation of a monopoly becomes not only possible but probable. This would be apparent whenever opportunities for buyers of the products or services of the new single unit to shop freely, and to make independent decisions as to prices, channels of purchases and selection of suppliers were to be seriously curtailed, or where such curtailment …

Regulation Of Business - Sherman Act - Expansion Of Per Se Doctrine Over Tying Agreements, Max H. Bergman S.Ed.

Michigan Law Review

Through congressional grant defendant's predecessor acquired approximately forty million acres of land, consisting of every alternate section in a twenty to forty mile wide belt on each side of its railroad track from Lake Superior to Puget Sound. Defendant sold about thirty-seven million acres of its holdings and leased the balance. Many of the sales contracts and most of the leases, together covering several million acres of land, contained "preferential routing" clauses which compelled the grantee or lessee to ship all commodities produced or manufactured on the land over defendant's lines, unless competitors' rates were lower or, in some instances, …

Municipal Corporations - Police Power - Sundy Closing Ordinances, David A. Nelson

Michigan Law Review

The City of Chattanooga passed an ordinance making in unlawful "for any person, firm, corporation, or association operating a general merchandise store, department store, hardware, jewelry, furniture, grocery store, super market, meat market, or other similar establishments in the City of Chattanooga, Tennessee, to open such place of business on Sunday; or to sell or offer for sale, give away, or deliver any merchandise, groceries, hardware, jewelry, furniture, meat, produce, or other similar commodities or articles, on Sunday." Plaintiffs brought this action for a declaratory judgment that the ordinance was unconstitutional and for other relief. In the lower court the …

Guided Tour In A Civil Law Library: Sources And Basic Legal Materials In French Civil And Commercial Law, G. M. Razi

Michigan Law Review

Lawyers everywhere rely upon their books with eagerness and confidence. The larger their libraries, the better equipped they feel to answer the questions of their clients. The composition of an average library differs somewhat in France and in the United States. In this country the law reports, in their familiar, substantial and elegant bindings, are displayed on the prominent shelves, while in Europe, the law reports-often merely paper bound-are relegated to some corner. The front place is reserved for the leather bindings and the gilt letters of the treatises bearing the names of outstanding authors in the various fields of …

Regulation Of Business - Refusals To Deal - Use To Effectuate Resale Price Maintenance, Raymond J. Dittrich, Jr. S.Ed.

Michigan Law Review

This comment will examine the legal questions arising from a manufacturer's exercise of his right to maintain resale prices by refusing to deal with price cutters in an attempt to determine whether this exists only as an abstract right, or whether it can be translated into legally effective business practices.

Negligence - Duty Of Care - Manufacturer's Duty To Warn Of Obvious Dangers, George R. Haydon Jr.

Michigan Law Review

Plaintiff purchased a "Lithe-Line" exerciser, a rubber rope forty inches long with a loop on each end, manufactured by defendant Helena Rubenstein, Inc. With the exerciser plaintiff received a leaflet of instructions stating that "anybody" could reduce with it, and containing sketches and descriptions of eight exercises. While plaintiff was lying on the floor with the rope under her feet doing one of the exercises, the rope slipped off her feet and snapped back, hitting her in the eye and causing partial loss of vision. She sued the manufacturer for negligence, alleging that the exerciser was inherently dangerous when used …

Sales - Breach Of Warranty - Notice Required By Section 49 Of Uniform Sales Act Must Be Given To Seller Or His Agent, Thomas A. Troyer S.Ed.

Michigan Law Review

Defendant corporation ordered certain boiler burner units through Burke, the selling agent of a boiler manufacturer. The order having been transmitted by Burke to plaintiff, the manufacturer's exclusive distributer in the area, the burner units were delivered. Defendant discovered certain defects in their specifications, notified Burke to this effect, and withheld payment of part of the purchase price. In an action by plaintiff for this unpaid balance of the agreed price, defendant asserted plaintiff's breach of warranty by way of recoupment. On appeal of the trial court's judgment for plaintiff, held, affirmed. Defendant could not successfully claim breach of …

Regulation Of Business - Patents - Effect Of Section 271 On The Doctrine Of Contributory Infringement, Robert W. Steele S.Ed.

Michigan Law Review

Prior to 1952 the judiciary had sole control of questions involving the infringement of patents. The courts evolved their own concepts and rules of interpretation without legislative guidance. The Patent Act of 1952 marked a radical departure from this policy. Section 271 of the new patent act is an attempt on the part of Congress to codify the doctrine of contributory infringement. Prior to the enactment of this section there was considerable doubt as to the scope of this doctrine and even as to its continued existence. Supreme Court recognition of the defense of patent misuse appears to have diluted …

Regulation Of Business - Robinson-Patman Act - Injury To Competition Between Buyers Of Auto Parts, A. Duncan Whitaker S.Ed.

Michigan Law Review

Petitioner manufactured and sold automobile parts to distributors who resold them to jobbers in interstate commerce. The products were classified into three lines: leaf spring line, coil action line, and piston ring line. A progressive, cumulative discount was given in each line, based upon the aggregate yearly purchases of either a single buyer or a group-buying organization. The Federal Trade Commission charged petitioner with price discrimination in violation of the Robinson-Patman Act. Every customer who testified at the hearing denied that he had been injured competitively by the petitioner's pricing practices. Nevertheless, in view of the substantial price differentials, the …

Trademarks - Extraterritorial Application Of The Lanham Act, William R. Luney S.Ed.

Michigan Law Review

Plaintiff, an American corporation, had manufactured and sold women's undergarments in the United States and Canada since 1917, under a U.S. registered trademark, "Vanity Fair." Defendant, a Canadian corporation, had registered the same trademark in Canada in 1915, and for this reason plaintiff's application for a Canadian trademark was denied in 1919. From 1945 to 1953, defendant purchased plaintiff's trademarked goods for resale in Canada. In 1953, defendant began selling goods of Canadian manufacture with its own Vanity Fair trademark, and threatened its competitors in Canada with infringement suits if they continued to sell plaintiff's trademarked goods. In an action …

Administrative Law - Judicial Review - Ripeness For Revew Of An Interstate Commerce Commission Order, Robert Knauss

Michigan Law Review

In order to operate in interstate commerce, motor carriers must obtain a certificate of public necessity and convenience from the Interstate Commerce Commission and must obey the Interstate Commerce Act. However, motor vehicles used in carrying " . . . agricultural . . . commodities (not including manufactured goods) . . ." may operate free of the act. The commission on its own initiative investigated the meaning of the term "agricultural commodities," and after two years published a seventy-one page list classifying certain commodities as within or not within the exemption. Petitioner, an interstate trucker of various commodities listed as …

Patents - Misuse Doctrine - Exclusive Distributorship Agreements As Patent Misuse, Howard N. Nemerovski

Michigan Law Review

In a suit for infringement of a storm window patent, defendant claimed that relief should be denied because plaintiff allegedly misused the suit patent by requiring its wholesale distributors to maintain sales organizations devoted exclusively to the sale of plaintiff's windows, and by restraining the distributors from offering merchandise for sale in competition with any article manufactured or distributed by plaintiff. The patent did not comprise an element of the distributor agreements, but was mentioned therein. The trial court denied relief, sustaining the defense of misuse of the suit patent. On appeal, held, affirmed. A patentee's right does not …

Constitutional Law - Interstate Commerce - Power Of States To Recalculate Aircraft Operating In Interstate Commerce, Robert W. Steele

Michigan Law Review

Defendant village, located one mile from Idlewild Airport, passed an ordinance prohibiting air flight over the town at less than 1,000 feet. Plaintiffs brought suit to enjoin enforcement of the ordinance, with Civil Aeronautics Board intervening as· plaintiff. The Civil Aeronautics Act of 1938 gives the CAB the authority to regulate aircraft in navigable air space, and the authority to define navigable airspace by setting minimum altitudes for flight. The CAB minimum altitude rules provide that aircraft flying over congested areas shall not be operated below 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet, except …

Sales - Contributory Negligence - Use As A Defense In Action For Breach Of Implied Warranty, Thomas S. Erickson

Michigan Law Review

Defendant installed an oil burner in plaintiff's apartment building. The burner failed to function properly and exploded two months after installation. There was no evidence that the furnace was repaired subsequent to the explosion. Plaintiff continued to use the furnace for four years until a second explosion caused considerable damage to the building. Upon inspection, the cause of the explosions was found to be a defective system of heating and piping the oil. Plaintiff brought this action for breach of implied warranty to install the furnace in a good and workmanlike manner and recovered consequential damages. On appeal, held, …

Torts - Liability Of Supplier Of Chattel - Proof Of Manufacturer's Negligence, Whitmore Gray

Michigan Law Review

Plaintiff service station operator brought an action to recover for injuries resulting from the explosion of one of defendant manufacturer's tires. The tire, while admittedly new, had been purchased by a third party some eighteen months before being brought to the plaintiff for mounting. In addition to his own testimony, the only evidence supporting plaintiff's claim of negligence was expert testimony that such an explosion could be caused by defective wire in the bead when a tire was inflated to normal pressure, and also that there was opportunity for negligence in defendant's manufacturing processes. The district court set aside the …

Restitution-Unjust Enrichment-Right Of Defaulting Purchaser To Recover Part Payment, Theodore J. St. Antoine S.Ed.

Michigan Law Review

Plaintiff made a prepayment of $59,946.67, or twenty-five percent, on twenty printing presses which it was purchasing for shipment to Russia. Before their delivery a federal regulation was promulgated under which plaintiff was denied an export license. Plaintiff therefore rejected tender of the presses, and defendant vendor sold them to a third party for $18,765 more than the contract price to plaintiff. Plaintiff sued to recover its down payment and the profit resulting from defendant's resale. On appeal from a judgment for defendant, held, reversed and remanded. A defaulting purchaser is entitled to restitution of its payments in excess …

Taxation - Federal Income Tax - Treatment Of Gains From Commodity Futures Transactions Of Manufacturing Consumer, Neil Flanagin S.Ed.

Michigan Law Review

Taxpayer, a manufacturer of products made from corn, purchased and sold corn futures contracts as a part of its regular buying program in order to protect itself against a possible shortage of raw materials. Taxpayer contended that the gains realized on these transactions should receive capital asset treatment. The Tax Court and the court of appeals held that the gains constituted ordinary income. On appeal, held, affirmed. The transactions, though not true hedges, were entered into for business purposes and as an integral part of taxpayer's operations. Consequently, they should be treated the same as hedges, and the gains …

Regulation Of Business - Fair Trade Laws - Application Of The Mcguire Act To Mail Order Sales Emanating In A Non-Fair Trade Jurisdiction, Lawrence W. Sperling S.Ed.

Michigan Law Review

Defendant's store was located in the District of Columbia, a jurisdiction which does not have a statute permitting resale price maintenance. The defendant sent advertising and made mail order sales of plaintiff's product to consumers in Maryland, at prices below the resale price established by the plaintiff in accordance with the Maryland Fair Trade Act. Plaintiff sued to enjoin such advertising and sales on the ground that they were violations of the Maryland statute. On defendant's motion to dismiss, held, overruled without prejudice. On the main point in issue, however, the court ruled that neither the Maryland Fair Trade …

Constitutional Law - Interstate Commerce - Validity Of Segregation In Interstate Railway Facilities, Robert W. Steele

Michigan Law Review

The defendant, St. Louis and San Francisco Railway Company, maintained separate accommodations in railway coaches and terminal waiting-rooms for white and Negro passengers. Section 3 (1) of the Interstate Commerce Act makes it unlawful for a rail carrier to subject any person to any unreasonable prejudice or disadvantage. Plaintiff association joined with seventeen individual parties in filing a complaint with the Interstate Commerce Commission charging the carrier with violating the provisions of this act and in seeking an order requiring it to cease and desist from using these discriminatory practices. Held, assignment of accommodations on the basis of race …

Sales - Transfer Of Title - Effect Of Motor Vehicle Act, Charles G. Williamson, Jr. S.Ed.

Michigan Law Review

Plaintiffs, wholesale automobile dealers in New Mexico and Colorado, each sold a used car to a Utah dealer. The wholesalers forwarded drafts, with certificates of title attached, for payment by the dealer. The dealer sold the cars from his lot without ever having paid the drafts, and, consequently, without ever having. obtained the foreign title certificates. Plaintiffs brought replevin against the purchasers of the autos and recovered judgments. On appeal, held, reversed. The wholesalers knew that the purchaser was a used car dealer. They had transferred more than mere possession and clothed him with apparent ownership. Therefore, under the …

Antitrust Policy In Distribution, Kendall B. Debevoise

Michigan Law Review

The American genius lies quite as much in distribution as in manufacturing. Other peoples have demonstrated equal or greater creative ability in many fields. And it is debatable whether their talents are any less at mass production given adequate economic demand. But they have nowhere shown the American genius for distribution. It is axiomatic that if you manufacture in Detroit and your potential customer lives in New York, you need mutual friends. We seem to have figured out better ways to provide better friends for this purpose than any other nation.

But manufacturing came first. Someone had to build a …

The Antitrust Laws In Foregin Commerce, Robert A. Nitschke

Michigan Law Review

The Sherman Act applies to trade or commerce "with foreign nations." Are there differences in the act's application to foreign trade compared with its application to domestic commerce? The Attorney General's National Committee to Study the Antitrust Laws was constituted at a time when this question was pressing for an answer.

During the 1920's and 1930's, the international cartel movement was in full Hood. American companies participated in some of these international arrangements, often in the belief that they were a necessary condition for world trade and upon the legal premise that restrictions adjunctive to patent and know-how licenses were …

Legislation - Application Of Merchantile License Tax To Lawyers, Edward H. Hoenicke

Michigan Law Review

The Philadelphia City Council passed an ordinance entitled "An Ordinance--To provide for revenue by imposing a mercantile license tax on persons engaging in certain businesses including manufacturing, professions, occupations, trades, vocations, and commercial activities in the City of Philadelphia. . . ." Under this ordinance the city required lawyers to register, pay a registration fee, and pay a tax on a percentage of their gross volume of business; thereupon, "mercantile licenses" were issued to them. The city charter required each ordinance to deal with one subject only and to express that subject in the title. The application of the ordinance …

Labor Law - Organizational Picketing In Industries Not Affecting Interstate Commerce, Arne Hovdesven

Michigan Law Review

Representatives of defendant union approached plaintiff, proprietor of a small liquor store, with information that they planned to initiate an organizational campaign to obtain the membership of the store's three clerks, none of whom were members of any union at that time. Subsequent to this meeting, a picket line of two men was established and was maintained without any acts of violence, for over nineteen months until halted by a permanent injunction issued by the New York Supreme Court, Appellate Division. The union did not make any demands upon plaintiff to sign a contract or to recognize it as bargaining …

Sales - Conditional Sales - Punitive Damages For Forcible Repossession Of Chattel, William G. Cloon, Jr. S.Ed.

Michigan Law Review

Plaintiff purchased a truck under a conditional sales contract which was assigned to the defendant finance company. He drove the truck to the place of business of the defendant to adjust differences between the two parties, but when he attempted to leave after no agreement had been reached, he discovered that the keys had been removed from the truck. When informed that the truck had been repossessed, the plaintiff produced another set of keys but was unable to leave with the truck. The testimony of the plaintiff that an agent of the defendant seized his hand to prevent the unlocking …

Bills And Notes - Holder In Due Course - Notice Of Infirmity In Instrument To Finance Company Closely Connected To Dealer, William G. Cloon, Jr. S.Ed.

Michigan Law Review

The defendant purchased a car from a dealer who represented it to be a new demonstrator. In fact, the car was a used one. The defendant executed a negotiable note for the balance of the purchase price and a chattel mortgage on forms which were furnished the dealer by the plaintiff finance company. The dealer handled the paper, but the plaintiff was to finance the sale and the note was payable at the office of the plaintiff. Both the bill of sale and the chattel mortgage described the car as a new demonstrator. The note was indorsed in blank by …

Responsibilities In The Transfer Of Stock, Francis T. Christy

Michigan Law Review

During the past few years there have been increasing efforts on the part of a number of organized groups to establish statutory definitions of the responsibilities of corporations and their transfer agents in the transfer of stock. Among these groups are the Commission on Uniform State Laws, which sponsored the Uniform Fiduciaries Act, the American Law Institute and the National Conference of Commissioners on Uniform State Laws, which have jointly produced the new Uniform Commercial Code, the Committee on Simplification of Security Transfers of the Real Property, Probate and Trust Law Section of the American Bar Association, of which Committee …

Constitutional Law - Commerce Clause - Federal Jurisdiction In Trade-Mark Infringement Proceedings Under The Lanham Act, Richard R. Dailey

Michigan Law Review

Plaintiff's trade-mark, "Minute Maid," had been registered under the Lanham Act in 1952 and had been used in interstate commerce in connection with the sale of frozen fruit juice concentrates since that time. Defendant's trade-mark consisted in part of the words "Minute Made." Defendant used its mark wholly within the State of Florida in the processing and sale of frozen meat products. Both plaintiff and defendant were Florida corporations. In a suit for trade-mark infringement, jurisdiction of the federal district court depended. on the provisions of the Lanham Act. The complaint alleged damage to plaintiff's good will established in interstate …

Impact Of The Commercial Code On Liability Of Parties To Negotiable Instruments In Michigan, Roy L. Steinheimer Jr.

Michigan Law Review

Since the Uniform Commercial Code is now effective in Pennsylvania and is under active consideration by official bodies in other states, it seems appropriate to investigate in some detail the impacts which this proposed legislation would have upon the accumulated business, legislative and judicial understanding and experience in the commercial law area in a specific jurisdiction. As an illustration of the problems which will be faced by judges, lawyers and businessmen in any jurisdiction which adopts the code, the writer has chosen to analyze some impacts which the code would have on commercial law in Michigan. Space limitations make it …