EXERCYCLE OF MICHIGAN, INC., v. Wayson
| Decision Date | 12 February 1965 |
| Docket Number | No. 14621.,14621. |
| Citation | 341 F.2d 335 |
| Parties | EXERCYCLE OF MICHIGAN, INC., Plaintiff-Appellee, v. George B. WAYSON and Hale & Hearty, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Bernard H. Puckowitz, Chicago, Ill., for appellants.
Martin L. Bogot, Chicago, Ill., Hugo Sonnenschein, Jr., Chicago, Ill., Martin, Craig, Chester & Sonnenschein, Chicago, Ill., of counsel, for appellee.
Before SCHNACKENBERG and KILEY, Circuit Judges, and GRANT, District Judge.
Plaintiff, suing as third party beneficiary, had judgment for $22,324.50 in this diversity suit for an accounting,1 based on claims of breach of defendants' contract and of malicious interference with plaintiff's business and contract rights. Defendants appeal, and we affirm the judgment.
Exercycle Corporation of New York sells its machines through a national system of territorial distributorships. During the period in question here, each contract between Exercycle Corporation and the various distributors, including those of plaintiff and defendants, granted the distributor an exclusive right to sell exercycles within a specified area and each contract contained a provision similar to that of clause 11 of defendants' contract. In that clause the distributor agree "Not to sell Exercycles in any territory other than that assigned to him by the Company under clause 1."
Defendants' contract, entered into on December 21, 1955, giving them the exclusive distributorship in Greater Chicago and nearby cities, was, with modifications not material here, in effect from that time until the trial. From time to time defendants were given non-exclusive rights to sell and advertise in other territories, but never in plaintiff's territory, which included the state of Michigan and the area within a fifty mile radius of Toledo, Ohio. Plaintiff's contract was in effect from October 15, 1955, until the franchise was surrendered pending suit.
There is no merit in defendants' claim that the district court lacked diversity jurisdiction. The complaint alleged that the "amount in controversy" exceeds $10,000 and claimed damages in excess of $50,000. The actual damages found were well in excess of $10,000. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Seth v. British Overseas Airways Corp., 329 F.2d 302, 305 (1st Cir. 1964).
The district court found, on conflicting evidence, that early in January 1958 plaintiff protested to defendants about the latter's invasion of plaintiff's territory, that in November 1958 Exercycle Corporation "reminded" defendants that Michigan was plaintiff's exclusive territory in which no other distributor could sell exercycles, but that defendants continued selling in Michigan, and that beginning in 1957 defendants sold 123 exercycles in that state. The court found also that clause 11 in defendants' contract was for the purpose of protecting plaintiff's exclusive territorial rights. Those findings are supported by the evidence and are not clearly erroneous. F.R.Civ.P. 52(a).
Defendants claim that plaintiff failed to prove its case because plaintiff's president and principal witness, Donald Harris, was impeached. Any inconsistencies in the testimony of the witness were a matter of credibility for the district court to resolve. On the findings made, the district court concluded that defendants' sales in plaintiff's territory were in violation of plaintiff's third party rights in clause 11 of defendants' contract with Exercycle Corporation.
We are not persuaded by defendants' argument that the contract did not contemplate third party benefits, and that they were unaware of the terms of other distributorship contracts. Since they knew of the national scope of Exercycle Corporation's business and the territorial limitation of their own franchise, they knew, or should have known, that beyond the limits of their own was another's territory and that they transgressed these boundaries at their peril.
The clause prohibiting defendants from selling in other than their assigned territory, as the district court found, was intended for the protection of other distributors, including plaintiff. This purpose was primary, and not merely...
To continue reading
Request your trial
-
Bonner v. Coughlin
...of recovery. Story Parchment Co. v. Paterson Parchment Co., 282 U.S. 555, 565-566, 51 S.Ct. 248, 75 L.Ed. 544; Exercycle of Michigan, Inc. v. Wayson, 341 F.2d 335 (7th Cir. 1965).12 The Fourth Amendment reads as follows:"The right of the people to be secure in their persons, houses, papers,......
-
Vojak v. Jensen
...329, 336, 377; National School Studios v. Superior School Photo Service, 40 Wash.2d 263, 242 P.2d 756, 762, 763; Exercycle of Michigan, Inc. v. Waysen, 7 Cir., 341 F.2d 335, 337. This insistence that plaintiff must first establish a sound foundation upon which the jury may assess his loss o......
-
Lundell Mfg. Co., Inc. v. American Broadcasting Companies, Inc.
...caused the damages, may not be heard to say that no damages may be awarded." Orkin, 160 N.W.2d at 430 (quoting Exercycle of Mich. Inc. v. Wayson, 341 F.2d 335, 337 (7th Cir. 1965)). The district court set aside the lost profits award for two reasons. First, it concluded that there were "tre......
-
Orkin Exterminating Co., Inc. (Arwell Division) v. Burnett
...damaged will not be precluded from recovering because of that fact.' Gallagher v. Vogel, supra, 61 N.W.2d at 250. In Exercycle of Michigan, Inc. v. Wayson, 341 F.2d 335, 337, plaintiff sought to recover damages for defendant's infringement upon his exclusive territory. There was evidence de......