College Inn Food Products Co. v. Loudon Packing Co., 4926.

• Decision Date: 19 July 1933
• Docket Number: No. 4926.,4926.
• Citation: 65 F.2d 883
• Parties: COLLEGE INN FOOD PRODUCTS CO. v. LOUDON PACKING CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

65 F.2d 883 (1933)

COLLEGE INN FOOD PRODUCTS CO. v. LOUDON PACKING CO. et al.

No. 4926.

Circuit Court of Appeals, Seventh Circuit.

July 19, 1933.

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Edward Sonnenschein, Hugo Sonnenschein, David Levinson, and I. E. Ferguson, all of Chicago, Ill. (Robert G. Howlett, of Chicago, Ill., of counsel), for appellant.

Samuel D. Royse, Gilbert W. Gambill, and Frank J. Crawford, all of Terre Haute, Ind., and Frank C. Dailey, Perry E. O'Neal, George S. Dailey, and Robert A. Efroymson, all of Indianapolis, Ind., for appellees.

Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.

SPARKS, Circuit Judge (after stating the facts as above).

The issues presented by this appeal are (1) whether, after the parties had failed to agree upon a price for cocktails during the packing season of 1932, and after appellant had contracted with others for the manufacture of its cocktails for that packing season, the appellees were obligated under the first contract to refrain from selling tomato juice cocktail to others than appellant during the packing season of 1932, or under the second contract to refrain from selling the cocktails except under private label with the consent of appellant, (2) whether there was error in admitting in evidence certain interrogatories and answers thereto and refusing to order appellees to make further answers to certain interrogatories propounded by appellant, and (3) whether appellees were guilty of unfair competition.

It is contended by appellant that by virtue of section 8 of seller's promises under the first contract, the first issue must be decided in its favor, regardless of the fourth section of the mutual agreements, which provides that in case the parties are unable in any year to agree upon a price to be paid for the cocktails for the ensuing season, the seller shall be released from its obligations under the contract during that season; that section 8 is a negative covenant which is in no way connected with section 4, and that it was the intention of the parties that the seller should be bound thereby during all the time from the date of the first contract to August 1, 1933, irrespective of any failure to agree on price, and that, therefore, under the first contract the seller was not permitted to sell cocktails to anyone except appellant, during the entire time.

In this construction we think appellant is in error. All parts of the contract should be construed together if possible, and no reason is apparent why it cannot be done without violence to the plain and ordinary meaning of the words used. We think section 8 must be read in the light of section 4, and that when considered together they mean that section 8 was to be applied in each year for which the price had been agreed upon, and if for any year or years contemplated by the contract, the price was not fixed, then for that period section 8 was not applicable, for it was to operate only during the continuance of the contract. Without an agreement as to price the contract would never have become operative, and when, after it came into operation, there was a failure to agree on the price in one of the subsequent years, a hiatus in its operation was thereby created for that year, and during that time the seller was relieved from all of its obligations including the negative covenants. There is no doubt that a negative covenant can be enforced by injunction, but we find no case in which a defendant has been thus enjoined when according to the plain terms of the contract he had already been released from all obligations arising out of it by the occurrence or non-occurrence of some certain event.

Nor do we think the...