Cook-Master, Inc. v. Nicro Steel Products

• Decision Date: 20 February 1950
• Docket Number: COOK-MASTE,I,Gen. No. 44897
• Citation: 339 Ill.App. 519,90 N.E.2d 657
• Parties: nc. v. NICRO STEEL PRODUCTS, Inc., et al.
• Court: United States Appellate Court of Illinois

Page 657

90 N.E.2d 657

339 Ill.App. 519

COOK-MASTER, Inc. v. NICRO STEEL PRODUCTS, Inc., et al.

Gen. No. 44897.

Appellate Court of Illinois, First District, First Division.

Feb. 20, 1950.

Pope & Ballard, Chicago (John R. Whitman, Chicago, James R. Oberly, Chicago, of counsel), for appellant.

Adcock & Fink, Chicago (Edmund D. Adcock, Chicago, Sheldon O. Collen, Chicago, Eli E. Fink, Chicago, of counsel), for appellees.

FEINBERG, Justice.

Plaintiff appeals from an order sustaining a motion to strike its second amended complaint, dismissing the action, and entering judgment against plaintiff.

The question upon this appeal is whether any of the six counts of the second amended complaint, claiming damages, allege a cause of action. Count I refers to a written contract and alleges a breach thereof. Count II refers to an oral contract concerning the same subject matter, and a breach thereof. Count III alleges unfair competition, the misappropriation of plaintiff's confidential information given to the defendants, and the misappropriation of the particular designs, sketches and specifications involving the subject matter of the oral contract. Count V refers to a like cause of action arising out of the written contract. Counts IV and VI refer to the same oral and written agreements respectively, and charge a conspiracy to maliciously and intentionally interfere with plaintiff's contractual relations, and to destroy plaintiff's organization and business.

Count I in substance alleges that plaintiff, prior to December 24, 1946, was organized for the sole purpose of marketing on a nationwide scale, direct to household users, certain sets of cooking utensils of plaintiff's own unique design and fabrication, especially adapted for waterless cooking, to be marketed under the name and trademark of 'Cook-Master'; that defendant corporation was engaged in the steel manufacturing and fabricating business but had never manufactured or sold products of the type and design referred to; that plaintiff and defendant corporation entered into negotiations for the manufacture by defendant of said cooking utensils, especially and execlusively for plaintiff; that during said negotiations plaintiff instructed defendant as to the manner in which said utensils would be made; that as a result of said negotiations the parties agreed that the price to be paid by plaintiff to defendant for each set of cooking utensils manufactured would be a reasonable price, and a maximum of $90 for each of the first 100 sets, to be made as sample sets and used as demonstrators by the selling force to be employed by plaintiff, and that the price for all other sets to be manufactured would be a reasonable price, and a maximum of $45 per set; that to evidence said understanding and agreement, plaintiff and defendant corporation entered into a written offer and acceptance, as follows:

'December 24, 1946

'Cook-Master, Inc.

'1800 E. Olive

'Milwaukee, Wisconsin

'Attn: Mr. M. L. Markey

'Gentlemen:

'This letter will confirm our understanding of this date, whereby we agree to manufacture for you exclusively the line itemized as follows:

1--1 quart Sauce Pan 20 gauge

1--2 quart Sauce Pan 20 gauge

1--3 quart Sauce Pan 20 gauge

1--4 quart Sauce Pan 19 gauge

4--covers 24 gauge

4--6 quart dutch oven 18 Gauge

1--dome cover 24 Gauge

1--insert for 2 quart 24 gauge

1--6"' skillet 16 gauge

1-10"' skillet 14 gauge

1--flat cover for 10"' skillet 24 gauge

1--12-cup vacuum coffee maker

'Above items to be made of 18-8 stainless steel.

'This line shall be copyrighted under the name 'Cook-Master' with the United States Patent Office and the 48 states, and we shall hold the copyrights and license you exclusively to use this name, and sell the products referred to above. In the event the name 'Cook-Master' shall have already been taken, the another name shall be applied for which you select and which we agree to use.

'We agree to make 100 sample sets in accordance with the above specifications and gauges, for your approval, and to be delivered to you on or about February 15th, 1947. Price of these samples shall be no more than $90.00 per set and shall be paid for as follows:

$5,000 with the order----

Balance upon delivery

'As per our conversation, we agree to accept your order for 2,000 sets as specified at a maximum price of $45.00 per set, delivery to be as per written request.

'This letter, when signed and accepted by you, shall constitute your agreement and contract with us.

'Very truly yours,

'NICRO STEEL PRODUCTS, INC.

'By (signed) HARRY WOHL

'Harry Wohl

'President

'ACCEPTED:

'COOK-MASTER, INC.

'By (Signed) THEODORE N. GOULD, Pres.' (Italics ours.)

It is further alleged in Count I that plaintiff paid $5,000 to defendant upon the execution of said written offer and acceptance, and that it was then and there mutually understood and agreed between the parties that acceptance by plaintiff of said written offer constituted a promise by plaintiff to purchase from defendant the sets of cooking utensils in the amount and under the terms contained in said written offer; that plaintiff, in reliance upon said agreement, expended large sums of money in establishing a sales organization to sell said cooking utensils direct to household users, and in the advertising, demonstrating and promotion of the sale of such sets of cooking utensils; that defendant corporation knew that plaintiff was expending said large sums of money, in reliance upon defendant's promise to manufacture for and sell exclusively to plaintiff the 2100 sets of utensils referred to in said written offer; that subsequent to said written offer, and on February 25, 1947 the parties orally agreed as follows: Plaintiff was to pay and defendant was to accept an additional sum of $4,000 as a further consideration for defendant's promise to sell exclusively to plaintiff 2,000 additional sets, and that said additional sum of $4,000 would be accepted by defendant as full and complete payment of the first 100 sets as well as earnest money; that plaintiff paid to defendant the additional sum of $4,000, and defendant then and there agreed to manufacture exclusively and sell to plaintiff said 2,000 additional sets, and plaintiff promised and agreed to purchase said 2,000 additional sets at an agreed price of $45 per set in cash, upon delivery to plaintiff's place of business in Milwaukee, Wisconsin; that said price was then and there agreed upon, and it was further mutually agreed that deliveries would be made by defendant and accepted by plaintiff at the rate of 400 complete sets per month, starting between the 10th and 20th days of June, 1947, the exact time to be according to plaintiff's specific instructions, and that then and there the plaintiff appproved and accepted and first 100 sample demonstrator sets; that following said agreements, plaintiff, in reliance thereon, sent its trained salesmen into various communities in several states to solicit and take orders, on especially printed order blanks, for sets of cooking utensils; that said salesmen succeeded in taking orders for sets, aggregating 1500 in number, in a period of four months, and accepted deposits from customers thereon; that plaintiff thereby became and was obligated to pay to the several salesmen for their services, expenses and commissions, large sums of money, aggregating $85,000; that said defendant corporation, through its officers and agents, had full knowledge at all times of said facts so alleged; that deliveries of over 300 of said sets were promised by plaintiff to its customers during the month of June, 1947, and several hundred more for delivery during each of the months of July, August and September, 1947, all of which defendant had full knowledge at all times; that plaintiff on or about May 1, 1947, submitted to said defendants its written schedule of deliveries for the 2,000 sets, specifying the number of sets to be delivered during the periods designated; that defendant, during the months of May, June, July, August and September, 1947, manufactured 2,000 sets of said cooking utensils, according to plaintifff's design and specifications; that defendant was able to and could have delivered 2,000 such sets to plaintiff in accordance with its agreement, but defendant did not deliver said cooking utensils and, without cause, refused to make any deliveries whatsoever to plaintiff; that had defendant delivered the 2,000 sets, plaintiff readily would have sold and delivered to purchasers the said 2,000 sets before the bringing of the action, and would have made a profit thereon of not less than $60,000; that plaintiff was at no time in default, and was at all times ready, willing and able to accept said sets of cooking utensils, according to the schedule submitted, and was ready, able and willing to pay the agreed purchase price of $45 per set upon delivery thereof; that notwithstanding the several demands made upon defendant to deliver said sets, defendant vexatiously, maliciously and completely without justification refused to accept said tenders or to deliver said sets in accordance with its agreement with plaintiff.

Court II is substantially the same as Count I, except that it refers to the oral agreement concerning the same subject matter.

Count III, in addition to alleging the facts set up in Count II, charged that defendants Wohl, Fallis, Wiley and Schraeger, individually and as officers and agents of said defendant corporation, after the alleged agreements made between the defendant corporation and plaintiff, organized and incorporated a new company know as Flavor-Seal Cookware, Inc. (for convenience hereinafter referred to as Flavor-Seal), and the same officers, agents and employees of the defendant corporation were put in charge and control of Flavor-Seal; that said individual defendants, and in concert with one another, repudiated each and every obligation and agreement of defendant corporation with plaintiff; that Flavor-Seal...