Clausen & Sons, Inc. v. Theo. Hamm Brewing Co.
Decision Date | 31 May 1968 |
Docket Number | No. 19053.,19053. |
Citation | 395 F.2d 388 |
Parties | CLAUSEN & SONS, INC., a Minnesota Corporation, Appellant, v. THEO. HAMM BREWING CO., a Minnesota Corporation, Appellee. |
Court | U.S. Court of Appeals — Eighth Circuit |
Elliot S. Kaplan, of Robins, Davis & Lyons, Minneapolis, Minn., for appellant; M. Arnold Lyons and Sidney Kaplan, on the brief.
Lawrence J. Hayes, of Maun, Hazel, Green, Hayes, Simon & Aretz, St. Paul, Minn., for appellee; Joseph A. Maun and John A. Murray, on the brief.
Before VOGEL, Senior Circuit Judge, LAY, Circuit Judge, and BECKER, District Judge.
Clausen & Sons brings a suit in two counts against Theo. Hamm Brewing Co. Count I relates to a treble damage action based upon the Sherman Act §§ 1 and 2 (15 U.S.C. §§ 1 and 2) and the Clayton Act, §§ 2 and 3 (15 U.S.C. §§ 13 and 14). Count II, with which we are concerned here, relates to an alleged breach of contract. Hamm sought a summary judgment dismissal of both counts under Fed.R.Civ.P. 56. The trial court overruled defendant's motion as to the antitrust claim but sustained its motion as to Count II. The court certified under Fed.R.Civ.P. 54(b) that there was no just reason for delay of the entry of dismissal on Count II and plaintiff appealed.
We reverse and remand to the district court with directions to reinstate Count II.
Plaintiff alleges that it had been a wholesale distributor of defendant's products since 1911. Clausen states that in 1950 an oral contract was made with Hamm to become an exclusive Hamm's beer distributor for an area defined as Southern Minneapolis and contiguous suburbs. In reliance upon said contract Clausen alleges (1) they discontinued all competitors' products; (2) purchased and maintained inventories, sales, advertising, warehouse space, personnel and facilities as a Hamm's exclusive distributor; (3) that Clausen was to remain the exclusive distributor as long as Clausen performed its undertaking. It is alleged that in April 1963 Hamm terminated its oral agreement.
The trial court sustained Hamm's motion for summary judgment on the ground that the contract pleaded was terminable at will since on its face there existed a "lack of mutuality of obligation."
We need not repeat in detail our concern of summary dismissal under Rule 56. If there exists the slightest doubt as to a factual dispute or "genuine issue of fact," summary judgment should be denied. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); Williams v. Chick, 373 F.2d 330 (8 Cir. 1967); Larsen v. General Motors Corp., 391 F.2d 495, 8 Cir., March 11, 1968.
Hamm does not dispute this rule but nevertheless urges that under the pleadings and Minnesota law there exists no doubt that it is entitled to a summary judgment. We disagree.
"Mutuality of obligation" is only a semantical exercise surrounding the real determinant of a contract, namely, consideration. The Minnesota Supreme Court has acknowledged this:
See also Reichert v. Pure Oil Co., 164 Minn. 252, 204 N.W. 882, 884 (1925), discussing mutuality of obligation (consideration) as opposed to mutuality of remedy (a prerequisite for specific performance).
Summary dismissal, in view of the allegations of the complaint, in our opinion contravenes the spirit of Fed. R.Civ.P. 8. Rule 8(a) prescribes a simplified pleading: "(2) A short and plain statement of the claim showing that the pleader is entitled to relief * * *." The clear purpose of the rule is to give notice to the other party and not to formulate issues or fully summarize the facts involved. See Conley v. Gibson, 355 U.S. 41, 45-48, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
But Hamm argues under the facts pleaded that consideration is totally lacking and cannot possibly be proved under the facts alleged. Analysis disputes this.
First, Minnesota has long recognized the principle that consideration may be a detriment incurred, and that it is not required that consideration pass from the promisee to the promisor to be valid. Ellingson v. State Bank of Hoffman, 182 Minn. 510, 234 N.W. 867, 868 (1931); Home Supply Co. v. Ostrom, 164 Minn. 99, 204 N.W. 647 (1925); West v. Kidd, 184 Minn. 494, 239 N.W. 157, 158 (1931); Estrada v. Hanson, 215 Minn. 353, 10 N.W.2d 223 (1943). The court in Home Supply Co. v. Ostrom, supra, 204 N.W. at 647, stated:
Thus, Clausen's theory that it was obligated to invest substantially in Hamm's advertising, products, sales personnel, buildings, etc. was not considered by the lower court in his opinion. Reliance upon Victor Talking Machine Co. v. Lucker, 128 Minn. 171, 150 N.W. 790 (1915); Hoover v. Perkins Windmill & Axe Co., 41 Minn. 143, 42 N.W. 866 (1889); and especially E. I. DuPont deNemours & Co. v. Claiborne-Reno Co., 64 F.2d 224, 89 A.L.R. 238 (8 Cir. 1933) is of little help. In those cases, the consideration by detrimental reliance was either not alleged or not proved.1
Secondly, it may be that the trial court upon proof will find sufficient evidence to justify contractual liability by way of promissory estoppel. See Albachten v. Bradley, 212 Minn. 359, 3 N.W.2d 783 (1942); Northern Drug Co. v. Abbett, 205 Minn. 65, 284 N.W. 881, 882, 121 A.L.R. 1349 (1939). Under this theory liability may ensue even if the detriment incurred by one party is not bargained for, if it can be shown that the promisor should reasonably have expected its promise to induce another's detrimental action.2
Because of the indefiniteness of the duration of Clausen's alleged obligations, the lower court found the contract to be terminable at will.3 Even assuming the evidence would show an unqualified unilateral right by Clausen to terminate4 this would not necessarily deprive the agreement of its essential consideration. Minnesota has long recognized the principle that where a contract is supported by valuable consideration (such as a detriment incurred in exchange for a promise, as in the instant case), then a right of one party to terminate it at will does not render it invalid for lack of mutuality. Willgohs v. Buerman, ...
To continue reading
Request your trial-
Cecil Corley Motor Co., Inc. v. General Motors Corp.
...171 F.Supp. 665 (D.Mass.1959); Clausen & Sons v. Theo. Hamm Brewing Co., 284 F.Supp. 148 (D.Minn.1967), rev'd on other grounds, 395 F.2d 388 (8th Cir. 1968); Cook v. Ralston Purina Co., 366 F.Supp. 999 (M.D.Ga.1973); a supplier's offering favorable real estate transactions and terms of fina......
-
Sons of Thunder, Inc. v. Borden, Inc.
...in bad faith. Id. at 1387. See also B.E. deTreville v. Outboard Marine Corp., supra, 439 F.2d at 1100; Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388, 391 (8th Cir.1968); Rees v. Bank Bldg. and Equip. Corp., 332 F.2d 548 (7th Cir.), cert. denied, 379 U.S. 932, 85 S.Ct. 332, 13......
-
US v. Conservation Chemical Co.
...if there is even the slightest doubt as to a factual dispute on any genuine issue of material fact. Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388, 389 (8th Cir.1968). Judicial reluctance to grant summary judgment is common, and prompted one court to Summary judgment, with eve......
-
United States v. Conservation Chemical Co.
...if there is even the slightest doubt as to a factual dispute or any genuine issue of material fact. Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388, 389 (8th Cir.1968). The burden is on the party seeking judgment to establish the right to a judgment with such clarity as to leav......
-
State Regulation of Franchising: the Washington Experience Revisited
...Jack Daniel Distillery, Lem Motlow, Prop., Inc., 454 F.2d 442, 448-49 (9th Cir. 1972); Clausen and Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388, 390-91 (8th Cir. 1968); Lund v. Arbonne Int'l, Inc., 887 P.2d 817, 820 (Or. App. 1994); cf. Puretest Ice Cream, Inc. v. Kraft, Inc., 806 F.2......
-
Employment at Will and the Discharged Employee in Colorado
...Only in Good Faith," 93 H.L.Rev. 1816-44 (1980). 24. Weiner, supra, note 5, citing Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388 (1968); Meurer Steel Barrel Co. v. Martin, 1 F.2d 687, 688 (3d Cir. 1924); McCall Co. v. Wright, 198 NY 143, 153-154 (1910). See, 1 Williston, Cont......
-
CHAPTER 2 MARKETING STRATEGY AND THE LAWYER: DIFFERENT METHODS OF SELLING AND HEDGING USED IN THE MINING INDUSTRY
...233 F.2d 762 (5th Cir. 1956); Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 284 F.Supp. 148 (D. Minn. 1967) rev'd on other grounds, 395 F.2d 388 (8th Cir. 1968); Lang's Bowlarama, Inc. v. AMF Inc., 377 F.Supp. 405 (D.R.I. 1974); Craig v. Sun Oil Co., 515 F.2d 221 (10th Cir. 1975), cert. d......
-
Franchise Termination Restrictions: A Guide for Practitioners and Policy Makers
...Pa.1974); Garlock v. Motz Tire &Rubber Co., 192 Mich. 665, 159 N.W.344 (1916).60 See, e.g., Clausen &Sons, Inc. v. Theo. Hamm Brewing Co.,395 F.2d 388,391(8th Cir. 1968): "[U]nder Minnesota law where anexclusive franchise dealer under an implied contract, terminable onnotice, has at the ins......