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Bak-A-Lum Corp. v. Alsco Inc.

Decided: July 21, 1961.

BAK-A-LUM CORPORATION OF AMERICA, A NEW JERSEY CORPORATION, PLAINTIFF,
v.
ALSCO, INC., A CORPORATION OF THE STATE OF DELAWARE AND DULY AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW JERSEY, AND WISCO, INCORPORATED, A CORPORATION OF THE STATE OF MICHIGAN, DEFENDANTS



Herbert, J.s.c.

Herbert

The plaintiff has applied for an interlocutory injunction against alleged violations of its agreement to distribute Alsco products in fourteen counties of New Jersey. Answering affidavits have been filed for the defendant Alsco, Inc. No papers have been filed and no appearances entered for the other defendant, Wisco, Incorporated, a Michigan corporation.

In addition to the complaint, its supporting affidavits and the affidavits for Alsco, I have been furnished with a copy of the complaint filed in the Law Division, Passaic County, on June 20, 1961, by Alsco, Inc. against Bak-A-Lum Corporation of America (the present plaintiff), a copy of a notice of motion returnable on July 13th in the Law Division to consolidate this action with the one brought by Alsco, Inc., as plaintiff, and photostatic copies of pages 7 and 8 of an S.E.C. registration statement of Alsco, Inc., giving, among other things, information about the parent-subsidiary relationship between Alsco, Inc. and Wisco, Incorporated.

Attached to the complaint of Bak-A-Lum is a copy of the agreement dated February 5, 1958 between that company and Alsco, Inc. Paragraph 1 of that agreement reads in part as follows:

"The Manufacturer [Alsco, Inc.] hereby appoints the Distributor [Bak-A-Lum Corporation of America] as its sole and exclusive distributor of its baked enamel finish aluminum siding and accessories thereto and of its other siding products and accessories thereto, which are now manufactured, sold or distributed by the Manufacturer or which may hereafter be manufactured, sold or distributed by the Manufacturer, in the following territory only * * *."

The territory is described by using the names of fourteen counties.

There are also in the agreement provisions that terms of payment by the plaintiff "shall be 45 days net delivered * * *," that the plaintiff will obtain from the defendant Alsco, Inc. all its requirements of aluminum siding and accessories, that the term of the distributorship shall run from February 5, 1958 to February 28, 1978, and that if the plaintiff fails to order and take at least $125,000 of Alsco's products in any fiscal year either party may terminate the agreement by giving notice to do so within thirty days after the year's end. Another provision which Alsco cites as important for present purposes is found in paragraph 8. There it is stipulated that if the plaintiff's rights as distributor are infringed upon, Alsco will, upon notice from the plaintiff of the infringement, take appropriate steps to protect the plaintiff; and if Alsco fails to do so, then the plaintiff may take and prosecute at Alsco's expense such action as is necessary.

The affidavit of William Diamond, the plaintiff's president, lists specific instances of sales or attempted sales of Alsco products contrary to the agreement that the plaintiff was to be exclusive distributor. In five of these instances Alsco products were involved under the name Wisco. Reliance Home Improvement Company of North Arlington, Bergen

County (in the plaintiff's territory) is identified as the source, or at least a principal source, in retail channels of these so-called "Wisco" products. In several cases the "Wisco" label was merely pasted over the "Alsco" label on packages delivered to the job sites where the siding was being installed.

With considerable particularity the affidavits of Murray Gilbert and Nat M. Naroden, filed by the plaintiff, corroborate and elaborate upon what Mr. Diamond's affidavit charges about the sale of siding in the plaintiff's exclusive territory under the name "Wisco."

These "Wisco" transactions are not denied, except insofar as they are covered by a general denial of contract violations. Mr. Green, Sales Manager of the Clifton, New Jersey division of Alsco has ...


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