The Coca-Cola Bottling Co. v. The Coca-Cola Co.
Decision Date | 08 November 1920 |
Docket Number | 389. |
Citation | 269 F. 796 |
Parties | THE COCA-COLA BOTTLING CO. v. THE COCA-COLA CO. |
Court | U.S. District Court — District of Delaware |
[Copyrighted Material Omitted] [Copyrighted Material Omitted]
H. H Ward, of Wilmington, Del., John A. Sibley and Charles T. Hopkins, both of Atlanta, Ga., and Frank Spurlock and James B. Sizer, both of Chattanooga, Tenn., for complainant.
William S. Hilles and Robert H. Richards, both of Wilmington, Del., Samuel B. Adams, of Savannah, Ga., and Clifford L. Anderson and Robert C. Alston, both of Atlanta, Ga., for defendant.
The defendant, The Coca-Cola Company, a Delaware corporation, taking the position that a contract made between The Coca-Cola Company, a Georgia corporation predecessor in title of the defendant, of the one part, and J. B. Whitehead and B. F. Thomas, through whom complainant claims, of the other part, was a contract at will, with the right in either party to terminate the same upon reasonable notice, gave notice to the complainant that the contract would 'stand terminated' on a specified subsequent day. Thereupon the complainant, denying the contract to be terminable at the will of either party without the consent of the other, filed its bill of complaint, praying for an injunction, a decree for specific performance, and other and general relief. The case is now before the court upon defendant's motion to dismiss the bill, under equity rule 29, and also upon complainant's motion for a preliminary injunction as prayed by the bill. The defendant's motion will be first considered, and, as it must be disposed of solely upon the allegations of the bill, the substance of such allegations, so far as deemed material to a proper consideration of this motion, will be stated.
The Georgia corporation was organized in 1892, and became the sole owner of a secret process or formula under which it manufactured from the time of its organization until the year 1919 a syrup used in making a drink which it called Coca-Cola. It also adopted and used the words 'Coca-Cola' as a common-law trade-mark. By the year 1899 the Georgia corporation had become solely entitled to use the trade-name and trade-mark 'Coca-Cola.' Until the latter year the syrup manufactured by it had been used only as the base for a drink served at soda fountains for immediate consumption. During that year a contract was made between J. B. Whitehead and B. F. Thomas, of the first part, and the Georgia corporation, of the second part, which, as amended shortly after its execution, reads (with the exception of the numbers preceding each paragraph, here added for convenience of reference), so far as material to the issues raised by the pending motions, as follows:
Coca-Cola Bottling Company, to which Whitehead and Thomas were authorized by the contract to transfer their rights thereunder, was organized under the laws of the state of Tennessee in December, 1899. Whitehead and Thomas conveyed to it all their rights under the contract and became its principal stockholders. Complying with the contract, Coca-Cola Bottling Company established a plant in the city of Atlanta, Ga., 'for the purpose of bottling a mixture of Coca-Cola syrup and preparation with carbonic acid and water. ' It established another at Chattanooga, Tenn. At each of these plants it commenced at its own expense the production of carbonated bottled Coca-Cola. The demand for the bottled product rapidly increased, both in volume and as to territory. The two plants in Atlanta and Chattanooga were unable to do more than meet the demand in those two cities, and as the contract required that the increased demand should be supplied new plants were necessary. At this stage of the business, with the consent of the Georgia corporation, a division was made of the territory embraced in the contract. Coca-Cola Bottling Company retained the Chattanooga plant and certain of the territory, while the Atlanta plant and the remainder of the territory was acquired by the complainant, The Coca-Cola Bottling Company. Each of these bottling companies thereafter proceeded to carry out in its respective territory all the provisions of the contract. Within a few years the complainant, by the expenditure of much time, money, and energy, procured the establishment of many additional plants, now numbering 588, each supplying a defined area with the bottled drink. The additional plants were established under contracts made, with the consent of the Georgia corporation, between the complainant and the owners of the respective local plants. The value of the physical properties now held and owned by the local bottlers in the territory of the complainant is approximately $10,500,000 (and in the territory of Coca-Cola Bottling Company is approximately $10,000,000), while the value of the tangible properties of the defendant amounts approximately to only $5,000,000. On April 24, 1915, at which time a very large proportion of the local plants had been established, the contract above set out was by mutual consent amended (with the exception of the numbers prior to each paragraph which are here added for convenience of reference), thus:
By striking out paragraph 5 and substituting the following in lieu thereof:
(5) 'Party of the first part agrees to buy from party of the second part such bottlers' syrup as may be necessary to fully supply said territory with bottled Coca-Cola; and party of the second part agrees to manufacture for and sell to party of the first...
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