Dail-Overland Co. v. Willys-Overland, Inc.

• Decision Date: 27 December 1919
• Docket Number: 212.
• Citation: 263 F. 171
• Parties: DAIL-OVERLAND CO. v. WILLYS-OVERLAND, Inc., et al.
• Court: U.S. District Court — Northern District of Ohio

263 F. 171

DAIL-OVERLAND CO. v. WILLYS-OVERLAND, Inc., et al.

No. 212.

United States District Court, N.D. Ohio, Western Division.

December 27, 1919

Supplemental Opinion, January, 1920.

Supplemental Opinion. [Copyrighted Material Omitted]

Tracy Chapman & Welles, of Toledo, Ohio, and F. C. Harding, of Greenville, N.C., for complainant.

Rathbun Fuller and James E. Kepperley, both of Toledo, Ohio, for nonresident defendants.

Daniel L. Cruice, of Chicago, Ill., and Rob. V. Phillips, of Toledo Ohio, for labor defendants.

KILLITS District Judge.

This cause is before the court upon the motions of the complainant and two nonresident defendants and cross-complainants for a permanent injunction, and also upon the motions of certain defendants, hereinafter described and designated as 'labor defendants,' to dismiss this cause, first, for alleged want of observance of certain general equity rules (198 F. xix, 115 C.C.A. xix); and, second, for want of jurisdiction. We will discuss the motions of the so-called labor defendants first.

The complaint was filed June 5, 1919, by the Dail-Overland Company, a North Carolina corporation, asserting that it is, and for several years last past has been, engaged in the business of selling and distributing exclusively Willys-Overland automobiles in 72 counties of North Carolina and 2 counties of South Carolina, at retail in the immediate vicinity of its place of business, and through agents selected by it in remoter parts of its territory; that its organization has become specially efficient through its business experience, having been built up with care through the selection of employes; that it has no other business, and that the losses by it anticipated on account of the things in the complaint set up cannot be adequately measured at law, because a continuance of the situation of which it complains entails the complete destruction of its organization and business.

The defendants are Willys-Overland, Incorporated, a Virginia corporation, the Willys-Overland Company, an Ohio corporation, Toledo Lodge No. 105, International Association of Machinists, the Automobile District Council, an association of sundry labor unions, these defendants having their places of business within this district, certain officers of these organizations and leaders of others union organizations, and active members thereof, most of whom are residents of this district. For brevity hereafter we will designate all the defendants in this case, other than the Willys-Overland, Incorporated, the Willys-Overland Company, and the Electric Auto-Lite Corporation, a Delaware corporation doing business in this district, and subsequently, through a cross-complaint, made a party defendant, as the 'labor defendants,' and for like reason the Willys-Overland, Incorporated, will be designated as 'Willys-Overland,' the defendant the Willys-Overland Company as the 'Overland,' and the Electric Auto-Lite Corporation as the 'Auto-Lite.' Pending this suit the latter corporation has been succeeded by the Willys Corporation; but we will continue the designation of the interest represented by the latter by the original term, the 'Auto-Lite.'

The complaint alleges that Willys-Overland is the organization through which, throughout the world, automobiles manufactured by the Overland are marketed exclusively; that the Overland has for years manufactured automobiles in large quantities in the city of Toledo; that in the fall of 1918 it announced to the motor trade that it was preparing to and would place upon the market during the year 1919 at least 180,000 automobiles through its said selling organization; that depending upon these assurances, about January 4, 1919, the complainant entered into a contract with the defendant the Willys-Overland for the purchase of 2,400 automobiles to be manufactured for the Willys-Overland by the Overland during the succeeding 10 months, to be delivered in monthly installments as specified under the terms of the contract.

A copy of the contract is attached and made a part of the complaint, marked Exhibit A. For the purpose of this memorandum, it is unnecessary to notice these terms further, except that one of the mutual covenants therein provided that, if the Willys-Overland should be unable 'for any cause to procure any automobiles, or automobiles in sufficient quantities to enable it to fill all of its contracts and orders, it shall have the right to prorate among all of its customers,' including complainant, 'such automobiles as it may be able to procure, based upon the number of automobiles contracted for by them respectively.'

The complaint further says that allotments in full, without deduction, of automobiles were made and delivered under this contract for the first four months of 1919, and that the allotment for the month of May, 1919, had been agreed upon, with certain deliveries thereon already made, and that, depending upon said allotment, the complainant had reallotted and had caused to be engaged and marketed through its territory the automobiles expected to be delivered to it because thereof, and that, because of the defaults by Willys-Overland, further in the complaint set up, complainant had been unable to meet its aforesaid engagements with its customers. It is also alleged that under the contract referred to it bought and kept on hand repair parts in large quantities, to be distributed within its territory for the repair of Overland automobiles, and that, because of the defaults in question, its stock of repair parts had been greatly depleted and its business therein very greatly interrupted and injured. It is further averred: That approximately 97 per cent. of all the automobiles and parts thereof manufactured by the Overland for years past, and, under orders to be filled during the year 1919, sold and engaged to be sold to the various distributors throughout the automobile market, were shipped and were to be shipped in interstate commerce to purchasers beyond the state of Ohio; that, shortly before May, 1919, the labor defendants, among them especially the defendants named as officers of the several organizations made defendants hereto, and other persons whose names were to complainant unknown, entered into an unlawful and wrongful combination and conspiracy in unlawful restraint of trade and commerce in automobiles and parts thereof among the different states of the United States; that in furtherance of said conspiracy the said defendants combined and conspired together to drive out of interstate trade and commerce and to restrain and prevent all interstate commerce in any of the manufactures of the Overland, by hampering, preventing, and interfering with the manufacture, loading, and shipment thereof in interstate commerce, so that such products of the Overland could not become a subject or commodity of interstate trade and commerce, nor enter into interstate competition with the products of other automobile companies located in other states, and that in carrying out the said unlawful combination and conspiracy the said labor defendants made demands upon the Overland for changes in wages, working hours, and conditions which it was well known to the defendant conspirators the Overland could not grant, and at the same time meet the contracts it had theretofore entered into through the Willys-Overland, its selling agent, with its various customers, including complainant, and maintain its business; that to meet said demands would amount to a destruction of the business of the Overland; that said demands were rejected by the Overland; that, although the terms and conditions of employment proposed and maintained by the Overland were satisfactory to the great majority of its employes, on May 5, 1919, the labor defendants induced a minority of the employes of the Overland to refuse to comply with the Overland's regulations, and to stop work before the regular hour for the ceasing of work for the day, and to refuse to return to work upon the conditions of employment established by the Overland; that by violence, intimidation, mobs, and riots these defendants attempted to prevent and did in a large part succeed in preventing the Overland from employing other persons, instead of its said employes who had ceased to work for it as aforesaid, and that by persuasion, threats, and coercion, still further pursuing the said alleged conspiracy, said labor defendants have sought and are seeking to induce large numbers of the employes of the Overland, who were and are satisfied with the terms and conditions of employment by the latter established, to break their contracts and to refuse to continue in the service of the defendant the Overland, unless the latter should consent to the terms of employment attempted to be imposed by said labor defendants; that by such conduct the labor defendants have prevented the manufacture and shipment in interstate commerce of large numbers of automobiles and automobile parts which the defendant the Overland could and otherwise would have shipped in interstate commerce to various distributors, including the complainant.

That, notwithstanding the controversy aforesaid, the defendant Overland kept its factory open on the 6th, 7th, and 8th days of May, 1919; that on the last-named day, however, as a result of the activities of the alleged conspirators and in further pursuit of their aforesaid conspiracy the labor defendants, and many other persons sympathizing with them, congregated in large numbers about the factory of the Overland,

of violence thereat as to intimidate the loyal employes of the Overland and to compel the closing of its said factory that May 26, 1919, the factory was reopened with approximately 1,200 loyal employes; that the number thereof increased...