Cummings-Landau Laundry Mach. Co. v. Koplin

Decision Date11 May 1944
Docket Number27422.,Nos. 27396,s. 27396
Citation386 Ill. 368,54 N.E.2d 462
PartiesCUMMINGS-LANDAU LAUNDRY MACHINERY CO. v. KOPLIN et al.
CourtIllinois Supreme Court

OPINION TEXT STARTS HERE

Action by Cummings-Landau Laundry Machinery Company against Harry Koplin and others to restrain defendants from violating the terms of an exclusive sales contract, wherein an interlocutory order awarding writ of injunction was granted and defendant's motion to dissolve the injunction was denied. Plaintiff subsequently filed petitions for rule on defendants to show cause why they should not be held in contempt for violation of the injunction and upon hearing defendants were found guilty of contempt and ordered to pay a fine. To review the judgment of the Appellate Court, 316 Ill.App. 306, 44 N.E.2d 613, reversing the order of the Superior Court overruling motion to dissolve injunction, plaintiffs bring error, and from the judgment of the Appellate Court, 319 Ill.App. 252, 48 N.E.2d 781, which reversed the order of the Superior Court finding defendants guilty of contempt, plaintiffs were permitted to appeal.

Writ of error dismissed, and judgment of Appellate Court, reversing the contempt order, reversed, and judgment of Superior Court affirmed.Appeal from and Error to First Division, Appellate Court, First District, on Appeals from Superior Court, Cook County; John C. Lewe, Judge.

Gurman & Eberle and Poppenhusen, Johnston, Thompson & Raymond, all of Chicago (Floyd E. Thompson and Samuel P. Gurman, both of Chicago, of counsel), for plaintiff in error and appellant.

Levinson, Becker, Peebles & Swiren, of Chicago (Don M. Peebles, Herbert Portes, and Theodore R. Sherwin, all of Chicago, of counsel), for defendants in error and appellees.

SMITH, Chief Justice.

In 1935, The Zephyr Laundry Machinery Company, hereinafter referred to as Zephyr, was engaged in the business of manufacturing laundry and dry-cleaning machinery and equipment. These products were sold under the trade name of ‘Zephyr.’ At the same time, Murray Cohn was engaged in the business of selling similar machinery and equipment. On December 2, 1935, these parties entered into an agreement which was therein designated as a sales agreement for exclusive territory. Under this agreement, Cohn agreed to purchase from Zephyr, and Zephyr agreed to sell to him, laundry and drycleaning machinery, parts, accessories and equipment. It was recited in the contract, that it was agreed, and, for the purposes of the contract it should be considered as having been made in the city of Chicago, and all sales thereunder likewise made in the city of Chicago. The agreement was to be in force for a term of three years. It contained an automatic renewal clause for like three-year periods, successively. It was provided, however, that during the second three-year renewal period, either party might terminate the contract upon giving to the other party one hundred and twenty days' notice of the intention so to do.

By the contract Zephyr granted to Cohn the sole and exclusive right to the sale and distribution of all laundry and drycleaning machinery, parts, accessories and equipment, manufactured or sold by it, or its subsidiaries, or any corporation, firm or partnership which it controlled, or its successors or assigns, in certain territory described, in certain States enumerated in the contract. The contract contained further provisions relating in detail to the manner in which the purchases should be made and as to payment therefor. It is contended that it gave to Zephyr the power to fix the prices at which the machinery and equipment should be sold by Cohn.

In May, 1937, Cohn assigned the contract to Cummings-Landau Laundry Machinery Company. This company will hereinafter be referred to as Cummings-Landau. In January, 1940, Zephyr assigned its interest in the contract to Harry Koplin, doing business as The Zephyr Company. This assignment was consented to by Cummings-Landau. The record indicates that at all times Zephyr belonged to Koplin and Cummings-Landau belonged to Cohn. Koplin was doing business interchangeably in the name of the corporation, in his own name individually, and in the name of the corporation as a trade name. The same is true of Cohn. He was doing business in his own name individually, and in the corporate name of Cummings-Landau, interchangeably. It is apparent that the real parties, at all times, were Koplin on one side and Cohn on the other. The corporations, if there were such, and the corporate names, on both sides, were used only as a convenience, or alter ego of the individuals.

On April 14, 1941, Cummings-Landau filed the complaint in cause No. 27396, against Zephyr and Koplin and others, doing business under various trade names. The complaint alleged that the defendants had violated the exclusive sales provisions of the contract of December 2, 1935, and that the defendants had engaged in making sales of the character mentioned in the contract, in Cummings-Landau's exclusive territory, in competition with it, in violation thereof. The prayer of the complaint was that a permanent injunction issue, restraining Zephyr and Koplin from making sales or interfering with the exclusive agency granted to Cummings-Landau by the contract, in the territory described in the contract. It also asked for judgment for damages and for a temporary writ of injunction.

On May 28, 1941, after answers were filed, and upon a hearing in which counsel for both parties participated, a temporary injunction was granted as prayed in the complaint. Thereafter, on May 1, 1942, a motion was filed by Zephyr, Koplin and others, to dissolve the temporary injunction. Upon a hearing the motion was denied. From the order denying the motion to dissolve the injunction, an appeal was taken to the Appellate Court, First District, by Zephyr and Koplin.

Cause No. 27422 originated in a petition filed in the pending suit, on January 9, 1942, by Cummings-Landau for a rule on Zephyr and Koplin to show cause why they should not be held in contempt for a violation of the temporary injunction. An answer was filed to this petition. Upon a hearing on March 31, 1942, the court found Zephyr and Koplin guilty of contempt. They were ordered, jointly, to pay a fine of $3,000. It was further ordered that Koplin stand committed to the county jail until the fine was paid. An appeal from that order was taken by Zephyr and Koplin to the Appellate Court for the First District.

On the appeal from the order denying the motion to dissolve the injunction, the Appellate Court held that the contract violated the Sherman Anti-Trust Act, 15 U.S.C.A. § 1. 316 Ill.App. 306, 44 N.E.2d 613. This holding was based on the provisions of the contract relative to the prices at which the machinery and equipment should be sold by Cohn. It reversed the order of the superior court, overruling the motion to dissolve the injunction. To reverse that decision of the Appellate Court, the writ of error was sued out of this court by Cummings-Landau in cause No. 27396.

On the appeal from the order adjudging Zephyr and Koplin guilty of contempt, the Appellate Court held that inasmuch as it had held the contract invalid on the appeal from the order denying the motion to dissolve the injunction, the contempt proceedings abated. It was of the opinion that the parties could not be held in contempt, because the order granting the injunction had been reversed. It reversed the order of the trial court. 319 Ill.App. 252, 48 N.E.2d 781. On petition of Cummings-Landau we granted leave to appeal from that judgment of the Appellate Court. This is cause No. 27422. The two cases have been consolidated for opinion in this court.

We will first dispose of cause No. 27396, which is here on writ of error. As already stated, this case was heard by the Appellate Court on an appeal of Zephyr and Koplin from the order of the trial court overruling their motion to dissolve the temporary injunction. The appeal was taken under section 78 of the Civil Practice Act, Ill.Rev.Stat.1943, c. 110, § 202 The order denying the motion to dissolve the injunction was an interlocutory order, from which the right of appeal is allowed by that section. There was, therefore, no right of an appeal to this court from the judgment of the Appellate Court. Said section expressly so provides. Cummings-Landau, however, seeks to sustain the jurisdiction of this court on writ of error on the ground that a constitutional question is involved, which question first arose in the Appellate Court, under the rule announced by this court in several cases.

The rule is well settled that where a constitutional question first arises in the Appellate Court, this court has jurisdiction to review the judgment of the Appellate Court, on writ of error. This rule was not changed by the Practice Act. Goodrich v. Sprague, 376 Ill. 80, 32 N.E.2d 897;Corcoran v. City of Chicago, 373 Ill. 567, 27 N.E.2d 451;Burket v. Reliance Bank & Trust Co., 366 Ill. 98, 7 N.E.2d 850;Spencer v. Chicago City R. Co., 366 Ill. 120, 7 N.E.2d 862.

A motion was made in this court to dismiss the writ of error on the ground that no constitutional question is involved, arising out of the judgment of the Appellate Court. The motion was taken with the case. We will first direct out attention to the disposition of that motion.

The constitutional question relied upon by plaintiff in error is its assertion that because the Appellate Court held the contract on which the suit was based invalid, it was thereby denied due process of law, in violation of section 2 of article II of the Constitution, Smith-Hurd Stats., and section 1 of the Fourteenth Amendment to the Federal Constitution. The argument is that the validity of the contract was not involved in the order overruling the motion to dissolve the injunction, that being the order from which the appeal was taken. It is further contended that the Appellate Court had no right to determine that question;...

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