by him for enforcement. The court of appeals held that a contracting retailer can maintain the action in order to prevent interference by the defendant with the contractual relations of the plaintiff and that a contracting retailer is a person damaged within the purview of the statute.

Where an attempt was made to incorporate an organization for the purpose of enforcing resale price restrictions, the application for approval of the petition for a corporate charter was denied. In re Fair Trade Enforcement Service, Inc., 100 N. Y. L. J. 1937 (Sup. Ct. Kings County, Oct. 26. 1938), 3 CCH, 25165. It has been held that a group of retailers, all members of a trade association, suing as individuals, may join in one action to enforce a resale price restriction against a single retailer. Pekarne v. J. Rothstein Sons, Inc., 99 N. Y. L. J. 2978 (Sup. Ct. Kings County, June 18, 1938), 3 CCH 25140.

It has been held that actual damage need not be shown by the owner or producer. Injury will be presumed upon proof of unlawful price cutting. Calvert Distillers Corp. v. Nussbaum, supra; Calvert Distillers Corp. v. Stockman, supra. In like manner, injury to a contracting retailer has been presumed upon proof of unlawful price cutting by a competing retailer. Port Chester Wine & Liquor Shop, Inc., v. Miller Bros. Fruiterers, Inc., supra; Weisstein v. Freeman's Wines & Liquors, Inc., 169 Misc. 391, 7 N. Y. Supp. (2d) 234 (1938). But where plaintiff retailer is not within the same competitive area as defendant, actual damage must be proved in order to sustain the action. Gordon J. Weil, Inc., v. Gimbel Bros., Inc., 101 N. Y. L. J. 2528 (Sup. Ct. Westchester County, May 31, 1939, 3 CCH 25273; Steinberg v. Wall Street Liquor Corp., 101 N. Y. L. J. 669 (Sup. Ct. N. Y. County, Feb. 9, 1939), 3 CCH 25217.

Defenses to Suit for Violation of Fair Trade Contracts.

The courts have frequently applied the equitable doctrine of "clean hands" in actions to enforce resale price agreements. Under this rule, it has been held that the producer or distributor need not sue all violators to enforce fair trade contracts. Schenley Distributors, Inc., v. Stockman, 99 N. Y. L. J. 1020 (Sup. Ct., N. Y. County, Feb. 28, 1938), 3 CCH 25110. The statute does not require but merely permits suit for injunction and strict enforcement is not a condition precedent to equitable relief. Calvert Distillers Corp. v. Stockman, supra; National Distillers Products Corp. v. Columbus Circle Liquor Store, 166 Misc. 719, 2 N. Y. Supp. (2d) 319 (1938). But the producer or distributor cannot act arbitrarily in enforcing observance of fixed prices. There must be a reasonable and diligent. effort to prevent price cutting uniformly, through legal process if

necessary. Calvert Distillers Corp. v. Nussbaum Liquor Store, supra. Some courts have stated that as a contracting retailer can enforce the restriction himself, the failure of the producer or distributor to prevent price cutting is no defense. Calvert Distillers Corp. v. Stockman, supra; National Distillers Products Corp. v. Martell's Wine & Liquor Store, Inc., 100 N. Y. L. J. 979 (Sup. Ct. N. Y. County, Oct. 4, 1938), 3 CCH 25162. The general rule, however, seems to be that the producer or distributor, while using discretion, must take reasonable steps to enforce resale price restrictions uniformly. Calvert Distillers Corp. v. Nussbaum, supra; Calvert Distillers Corp. v. Stockman, supra; Schenley Distributors, Inc., v. Wall Street Liquor Corp., 99 N. Y. L. J. 3009 (Sup. Ct. N. Y. County, June 21, 1938), 3 CCH 25141; Gordon J. Weil, Inc., v. Gimbel Bros., Inc., supra.

That competitors are cutting prices and plaintiff has failed to restrain them is no defense unless there is a showing of bad faith on the part of the plaintiff. Wilson Distilling Co., Inc., v. Gelb, 101 N. Y. L. J. 1790 (Sup. Ct. N. Y. County, Apr. 18, 1939), 3 CCH 25246. The validity of the defense that defendant was forced to cut prices to meet competition will depend upon the prior efforts of the defendant to compel uniform observance of the price restrictions. Where it is shown that defendant had called upon the distributor to prevent price cutting and no action had been taken, the court has upheld the defense and denied an injunction. Schimpf v. R. H. Macy & Co., supra; Ferran v. Woodside Wine & Liquor Store, 101 N. Y. L. J. 408 (Sup. Ct. Queens County, Jan. 25, 1939), 3 CCH 25201. Where the defendant has not taken prior steps to compel observance of prices, an injunction will be granted. Weisstein v. Sokolin & Co., 100 N. Y. L. J. 1564 (Sup. Ct. N. Y. County, Nov. 9, 1938), 3 CCH 25170. Where the distributor has made diligent efforts to compel enforcement, the defense is insufficient and will not justify price cutting. Calvert Distillers Corp. v. Goldstein, supra. Where the distributor acquiesced in price cutting, made to meet competition, but asked defendant not to advertise the cut price, an injunction will be denied. Wilson Distilling Co. v. Stockman, 11 N. Y. Supp. (2d) 51 (Sup. Ct. N. Y. County, 1939).

An injunction will be denied where it is shown that the plaintiff is also guilty of price cutting. Kline v. Davega-City Radio, 168 Misc. 185, 4 N. Y. Supp. (2d) 541 (1938); Golden Gate Wine & Liquor Corp. v. Polignani, Inc., 100 N. Y. L. J. 2257 (Sup. Ct. N. Y. County, Dec. 20, 1938), 3 CCH 25187; Gurock v. Brandiewine Stores, Inc., 101 N. Y. L. J., 38 (Sup. Ct. Westchester County, Jan. 3, 1939), 3 CCH 25190.

An injunction has been denied where the defendant alleged that his price cutting was unintentional. Johnson & Johnson v. Webster

Cut Rate Drug Stores, Inc., 98 N. Y. L. J. 2184 (Sup. Ct. N. Y. County, Dec. 14, 1937), 3 CCH 25089; National Distillers Products Corp. v. Brandiewine Stores, Inc., 99 N. Y. L. J. 601 (Sup. Ct. Westchester County, Feb. 3, 1938), 3 CCH 25103.

Where the producer or distributor discriminates in prices to wholesalers or retailers, an injunction will be denied. Calvert Distillers Corp. v. Nussbaum Liquor Store, supra; Lucien Lelong, Inc. v. H. Mahr & Co., supra; Gillette Safety Razor Co. v. Green, 167 Misc. 251, 3 N. Y. Supp. (2d) 822 (1938). See also Wilson Distilling Co., Inc. v. Stockman, supra.

Where plaintiff has agreed not to sell to anyone who does not in turn agree to maintain the price established, defendant, party to plaintiff's breach of this contract, cannot raise plaintiff's breach as a defense to an action for price cutting. Seagram-Distillers Corp. v. Seyopp Corp., supra.

B. PROHIBITION OF SALES BELOW COST No provisions.

C. ANTIDISCRIMINATION LEGISLATION

1. General Prohibitory Laws

No provisions.

2. Special Prohibitory Laws
Penal Law (McKinney)

Sec. 515. Discrimination against person or class in price for admission. If a person who owns, occupies, manages, or controls a building, park, inclosure, or other place, opens the same to the public generally at stated periods or otherwise, he shall not discriminate against any person or class of persons in the price charged for admission thereto. A person violating the provisions of this section is guilty of a misdemeanor.

NORTH CAROLINA

REGULATION OF PRICE COMPETITION

A. RESALE PRICE MAINTENANCE

Code Ann. (Michie, 1939)

Sec. 5126 (k). Definitions.-The following terms, as used in this article, are hereby defined as follows:

(a) "Commodity" means any subject of commerce.

(b) "Producer" means any grower, baker, maker, manufacturer, bottler, packer, converter, processor, or publisher.

(c) "Wholesaler" means any person selling a commodity other than a producer or retailer.

(d) "Retailer" means any person selling a commodity to consumers for use.

(e) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a business trust, or any unincorporated organization. "Person" shall not include the State of North Carolina or any of its political subdivisions. (1937, c. 350, sec. 1.)

Sec. 5126 (1)1 Authorized contracts relating to sale or resale.— No contract relating to the sale or resale of a commodity which bears,

'In challenging the validity of the Fair Trade Act, the court held that the act is not in violation of due process because of the fact that the statute delegates the power to fix resale price on another's property. "The statute is not a delegation of power to private persons to control the disposition of property of others, because the restrictions already imposed with notice runs with the acquisition of the purchased property and conditions it." As to the contention that the act was in violation of Art. II, sec. 29, of the State constitution, which provides that the general assembly shall not pass any local, private, or special act regulating labor, trade, mining, or manufacturing, the court held that an act excepting from its operation articles not identified by name or brand or producer or distributor and not in free competition with commodities of same general class, is not unconstitutional as special legislation. The classification of a statute renders it unconstitutional as special legislation only when it has no basis in reasoning or is arbitrary and capricious. The exceptions in this act are reasonable and well grounded. Ely Lilly & Co. v. Saunders, 216 N. C. 163, 4 8. E. (2d) 528 (1939).