Commercial Law Commons^™

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 …

Regulation Of Business-Federal Trade Commission Act-Legality Of Offers Of ''Free Goods" Upon Agreement To Purchase Other Merchandise, Alan Reeve Hunt S.Ed.

Michigan Law Review

On June 30, 1948 the Federal Trade Commission issued a complaint against Walter J. Black, Inc., a corporation doing business as the Classics Club and the Detective Book Club. The Commission charged that use by the respondent of the word "free" in its advertising was false, misleading, and deceptive. The alleged deception consisted in the fact that in order to obtain the books designated as "free" the prospective purchaser was required to join respondent's club and thereby obligated himself to purchase at least four books a year from the respondent. The hearing examiner in his initial decision found that respondent's …

Regulation Of Business - Proof Of Seller's Costs In Robinson-Patman Act Buyer Proceedings, Arthur M. Wisehart S.Ed.

Michigan Law Review

The purposes of this comment are to analyze the holding of the Court in the Automatic Canteen case and to relate the language of the opinion to the more general problem of defining the extent of buyer responsibility under section 2(f). As a preliminary matter, however, it is necessary to examine the pertinent statutory provisions. Section 2(f) of the Robinson-Patman Act makes it unlawful for buyers in interstate commerce" ... knowingly to induce or receive a · discrimination in price which is prohibited by this section." In other words, it prohibits buyers from knowingly inducing or receiving the benefit of …

Agency - Apparent Authority Of Sales Agent, William D. Keeler

Michigan Law Review

Defendant's agent, a consignee of automobiles for sale, received from plaintiff a used truck, and agreed to apply the proceeds from the sale of the truck to the purchase price of a new automobile, to be sold and delivered to plaintiff when available. Defendant's agent sold the truck and absconded with the proceeds from such sale. Plaintiff sued for the value of the truck, and the lower court rendered judgment in his favor. On appeal, held, affirmed. The acts of the agent bound the defendant, although the agency contract gave only express authority to sell new automobiles. Correa v. …

Labor Law - Objects Of Union Action - Organization Of Managers Of Retail Chain Stores As Proper Object, John F. Dodge Jr., S.Ed.

Michigan Law Review

The owner and operator of retail food stores located throughout the nation brought action to enjoin strike activities by the defendant union, which sought recognition as bargaining agent for managers and clerks in the local stores. Both clerks and store managers had been members of the defendant local unions since 1937, and the latter, acting under certification as bargaining representative for both groups of employees under the National Labor Relations Act, had negotiated contracts with the plaintiff covering managers and clerks continuously since that time. Upon the refusal of the plaintiff to include the store managers in the contract, or …

Securities - Rights Of Used Car Purchasers Under Trust Receipt Financing, Walter H. Weiner S.Ed.

Michigan Law Review

The recent enactment of the Uniform Trust Receipts Act: by the Michigan legislature was an important and much needed revision in the Michigan law of chattel security. Although the UTRA has been referred to as a " . . . perplexing maze of technical phrases ... ," it is submitted that the act contains a clear presentation of the changes which are to be effected, and should go far in freeing the financing of goods in the flow of commerce from some anachronistic shackles. The particular intent of this comment is to explore the impact of the UTRA and other …

Sales - Uniform Trust Receipts Act - Strict Requirement Of Accuracy In Designating Trustee In Filing Under The Act, John W. Hupp S.Ed.

Michigan Law Review

Plaintiff and E. R. Millen Co., Inc., entered into a financing arrangement whereby plaintiff agreed to finance the wholesale purchase of various types of electrical appliances by E. R. Millen Co., Inc. Plaintiff promptly recorded a statement of trust receipt financing setting forth that the plaintiff "is or expects to be engaged in financing under trust receipt transactions the acquisitions by the trustee, E. R. Millen Company." The statement then designated the trustee's business address. This trust receipts arrangement was in operation for about a year when E. R. Millen Co., Inc., made a general assignment of all of its …

Constitutional Law - Commerce Clause - State Statute Requiring Interstate Motor Carrier To Secure A Permit, Marvin O. Young S.Ed.

Michigan Law Review

Petitioner brought an action in an Arkansas state court to enjoin enforcement of a state statute which required all contract carriers using the highways of the state to secure a permit from the state Public Service Commission. The Arkansas Supreme Court found that five driver-owners who had been arrested while transporting petitioner's product in interstate commerce without such a permit were "contract carriers" within the meaning of the statute. Neither petitioner nor any of the drivers had applied for a state permit. Under the terms of the statute, granting of the permit was contingent on certain factors, such as the …

Regulation Of Business--Robinson-Patman Act--Defenses Of In Pari Delicto And Changed Market Conditions, William K. Davenport

Michigan Law Review

A group of businessmen in Santa Rosa, New Mexico, organized a boycott against all bread except that baked by plaintiff, the sole baker in Santa Rosa, to induce him not to move his bakery out of town; plaintiff agreed to this plan. Defendant, who sold in interstate commerce, thereupon halved his bread prices in Santa Rosa while maintaining them in other towns, in order to defeat the boycott and preserve the town as a market. Plaintiff brought an action for treble damages under section 2(a) of the Robinson-Patman Act for injuries suffered from this price discrimination. The federal district court …

Constitutional Law-Commerce Clause-State Regulation Of Interstate Commerce, William O. Allen

Michigan Law Review

The City of Madison enacted an ordinance prohibiting the sale within the municipality's jurisdiction of milk not pasteurized and bottled within five miles of the city's central square. Plaintiff, an Illinois corporation engaged in distributing milk and milk products in Illinois and Wisconsin, had its pasteurization plant in Illinois, approximately sixty-five miles from Madison. After it had been denied a permit to distribute milk in Madison, plaintiff brought an action for a declaratory judgment as to the validity of the ordinance. The ordinance was upheld by the Wisconsin Supreme Court as a reasonable exercise of the municipality's police power. On …

Extraterritorial Effects Of Confiscations And Expropriations, Ignaz Seidl-Hohenvelden

Michigan Law Review

The study of the problem of extraterritorial effects of confiscations and expropriations from the point of view of Comparative Law has special practical importance. There are hardly any codified rules applicable to foreign confiscations and expropriations, either in statutory law countries or in common law countries. Hence, decisions have to be based largely on generally accepted rules of public and private international law. Such general acceptance can only be proved by a comparative analysis of foreign as well as of domestic precedents.

Extraterritorial Effects Of Confiscations And Expropriations, Ignaz Seidl-Hohenvelden

Michigan Law Review

The study of the problem of extraterritorial effects of confiscations and expropriations from the point of view of Comparative Law has special practical importance. There are hardly any codified rules applicable to foreign confiscations and expropriations, either in statutory law countries or in common law countries. Hence, decisions have to be based largely on generally accepted rules of public and private international law. Such general acceptance can only be proved by a comparative analysis of foreign as well as of domestic precedents.

Robinson-Patman Act--Validity Of Functional Discounts, Charles Myneder S.Ed.

Michigan Law Review

The Robinson-Patman Act was an effort by Congress to rid the business community of unfair pricing practices. Since the act did not expressly refer to functional discounts, the continuing legality of their usage was an open question. It is the purpose of this comment to measure the extent to which the trade discount has been affected by the act as interpreted by the Federal Trade Commission and the courts.

Partnerships-Dissolution-Sufficiency Of Notice To Prior Creditors, Paul M.D. Harrison S.Ed.

Michigan Law Review

Plaintiff brought suit on account for merchandise sold and delivered, alleging that the defendants were liable as partners. The defendants admitted that they had dealt with the plaintiff while they were a partnership, but averred that a corporation was formed which took over the partnership and that the merchandise in question had been purchased by the corporation. The trial judge instructed the jury that plaintiff must have notice or knowledge of the dissolution of the partnership to relieve defendants of personal liability, and that mere notice of the formation of the corporation was immaterial. Held, judgment for plaintiff affirmed. …

Judgments-Collateral Estoppel By A Lower Court Judgment When Appeal Therefrom Is Dismissed Because The Case Has Become Moot, John C. Walker S.Ed.

Michigan Law Review

The United States sued defendant in two counts for violation of OPA price regulations. The first count asked for an injunction to restrain further violations while the second sought treble damages for past violations. By agreement of the parties the injunction issue was tried first. The trial court found that there had been no violation of price regulations and dismissed the bill. This phase of the case was appealed by the government as a final order. The appeal was dismissed on the ground that the injunction issue had become moot, the particular commodity having been decontrolled in the interim. The …

The Proposed New Uniform Sales Act, John Barker Waite

Michigan Law Review

A complete Uniform Commercial Code has been formulated by committees acting under joint auspices of the American Law Institute and the National Conference of Commissioners on Uniform State Laws. While the Code is apparently not yet ready for presentation to state legislatures for enactment, it has been offered to the public for discussion of its merits. Its scope is comprehensive. As now tentatively proposed, it comprises presumably complete statutes covering Sales, Commercial Paper, Letters of Credit, Foreign Banking, Documents of Title, Secured Transactions, Investment Securities. If adopted it would displace the present Uniform Sales Act, the Uniform Negotiable Instruments Act, …

Contracts-Duty To Mitigate Damages Upon Anticipatory Breach Of Forward Contract Of Sale, William F. Snyder

Michigan Law Review

The theory of our law in regard to damages for breach of contract has been to give the innocent party as nearly as possible what he would have received had the contract been performed. To this end, our courts have worked out a rough formula which has been described by Professor Grismore as follows:

" ... The promisee is, in general, entitled to recover the economic equivalent of the performance promised, at the time and place fixed in the contract, plus any losses incurred or gains prevented through not receiving it, less any savings that have resulted to the promisee …

Corporations-Separation Of The Voting Power From Legal And Beneficial Ownership Of Corporate Stock, Richard V. Ehrick S.Ed.

Michigan Law Review

The Supreme Court of Michigan recently decided the case of Ecclestone v. Indialantic, Inc., the important facts being as follows: in June, 1942, defendant Emmons, owner of 451 shares of the common stock of Indialantic, Inc., a Florida corporation, transferred his entire holding to the Detroit Orthopedic Clinic in payment of an antecedent debt, reserving to himself, however, the sole right to vote the stock until the assets of the corporation were substantially liquidated. In March, 1946, with notice of this reservation of the right to vote, the plaintiff purchased all of these shares from the Clinic and thereby …

Partnerships-Sale Of Goodwill-Right Of Retiring Partner To Eject Partnership From Leased Premises, Paul W. Eaton, Jr.

Michigan Law Review

Plaintiff, owning a one-third interest in a partnership, sold his interest to the other partners, among them the defendant. Included in the sale was the goodwill of the partnership. The reversion in the property leased by the partnership was subsequently acquired by plaintiff, who notified defendant to vacate the premises upon termination of the lease. Defendant refused, and plaintiff brought a forcible entry and detainer action, recovering judgment in the trial court. On appeal, held, affirmed. Stone v. Lerner, (Colo. 1948) 195 P. (2d) 964.

Trade Regulations-Deceptive Practices, Earl R. Boonstra

Michigan Law Review

Petitioner, an importer, distributed catalogs among some 25,000 retailers describing his porcelain line as follows: "IMPORTED Hand Decorated 'Du Barry' Porcelain," and " 'Du BARRY' Porcelain table lamps are nationally famous as reproductions of rare, original French and English 'old pieces.'" The Federal Trade Commission found that the advertising impliedly represented that the origin was French or British, whereas the products were made in Japan. A cease and desist order was issued prohibiting use of the legend, "Imported-Du Barry,'' or any other legend suggesting French origin, without clearly disclosing the fact of import from Japan. Held, affirmed. The order …

Bills And Notes-Personal Liability Of Agent Who Signs Note Which Principal Has No Legal Power To Execute, N. S. Peterman S.Ed.

Michigan Law Review

Defendant gave a note, signed by him in his representative capacity as village president, to plaintiff in payment for services rendered to the village. Defendant signed after he was authorized to do so by a resolution of the village board of trustees. The facts showed that the parties understood the village to be the primary obligor on the note. Actually, the village had no legal power to make such notes and could not have been indebted by them. Plaintiff sued defendant as an individual and won a verdict in the trial court. On appeal, held, reversed. Defendant having signed …

Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer

Michigan Law Review

Defendants, administrators of the estate of the deceased partner, agreed with the surviving partner to continue the partnership hotel business, with the approval of the probate court. After some operation, the surviving partner sued to compel the administrators to sell him the interest of the deceased at a value to be judicially determined. Defendants cross-complained, asking the court to liquidate the business and award them the amount of the interest of the deceased in the proceeds. Held, reversing the decree below, the assets of the dissolved partnership should be liquidated, in accord with defendants' prayer. Zach v. Schulman, …

Corporations-Particular Language And Circumstances Making Preferred Dividends Cumulative, Albert B. Perlin, Jr.

Michigan Law Review

The Securities and Exchange Commission filed a plan and requested an order under the Public Utilities Holding Company Act of 1935 to carry out the dissolution of the X company, a Delaware corporation, whose sole income-producing asset was the common stock of the Y company, a Kentucky corporation. The dissolution plan contemplated distributing to the shareholders of the Delaware company its holdings of the Kentucky company stock according to a pro-rata distribution ratio, based on the Class A Common and Class B Common stock of the Delaware company. Certain holders of the Class A Common shares of the Delaware company …

Process-Obtaining Personal Jurisdiction Over Foreign Corporation By Service Of Process On Local Sales Agent, F. William Hutchinson S.Ed.

Michigan Law Review

Defendant, a Texas manufacturing corporation, employed a corporate agent to solicit orders in New York. The agent maintained a showroom, used defendant's name on its office door and stationery, and paid all the expenses of the New York business out of sales commissions. All orders were subject, to acceptance by the defendant and were filled from Texas. In an action for trade-mark infringement brought in the New York state court and removed to the federal district court, service of summons and complaint was made upon the manager of the New York agency. The district court quashed the service and dismissed …

Interstate Commerce-Freight-Rate Discrimination-Action By The Interstate Commerce Commission And The Supreme Court, John F. Buchman, Iii

Michigan Law Review

The attack upon alleged discrimination against industrial development of the South, Southwest, and West by the maintenance of higher freight-rates on shipments from those sections to the greater markets of the North and East has followed two plans: (1) complaint to the Interstate Commerce Commission to remedy the discrimination by the exercise of its power over the rates themselves; (2) anti-trust action against the agencies through which the rates are initiated. The second plan of attack is illustrated by prosecutions brought by the Department of Justice Anti-Trust Division against forty-seven western railroads for illegal conspiracy to set unfair freight-rates, and …

Price Discriminations And Their Justifications Under The Robinson-Patman Act Of 1936, John T. Haslett

Michigan Law Review

The Robinson-Patman Act was approved by the President on June 19, 1936. The purpose of the act was to amend section 2 of the Clayton Act, which prohibited price discriminations in interstate commerce. Congress, by amending section 2 of the Clayton Act, broadened the scope of the section by extending its purposes and prohibitions to price discriminations not formerly covered and by prohibiting other forms of discrimination which give favored purchasers undue cost advantages over their non-favored competitors. It also reduced the extent of requisite competitive injury.

Corporations-Effect Of Merger Upon Apparent Rights Of Stockholders Under Preferred Stock Contracts, Charles M. Soller S.Ed.

Michigan Law Review

It is the purpose of this comment to examine the effect of merger upon some of the provisions of the preferred stock contract.