Florida-Georgia Chemical Co. v. National Laboratories, Inc., FLORIDA-GEORGIA

• Decision Date: 23 May 1963
• Docket Number: No. E-29,FLORIDA-GEORGIA,E-29
• Citation: 153 So.2d 752
• Parties: CHEMICAL CO., Inc., Appellant, v. NATIONAL LABORATORIES, INC., F. Nolan Parham, and Jacksonville Paper Co., d/b/a Capital Paper Company, Appellees.
• Court: Florida District Court of Appeals

Page 752

153 So.2d 752

FLORIDA-GEORGIA CHEMICAL CO., Inc., Appellant, v. NATIONAL LABORATORIES, INC., F. Nolan Parham, and Jacksonville Paper Co., d/b/a Capital Paper Company, Appellees.

No. E-29.

District Court of Appeal of Florida, First District.

May 23, 1963.

Wilfred C. Varn, of Ervin, Pennington & Varn, Tallahassee, for appellant.

Harry Lewis Michaels of Ausley, Ausley, McMullen, O'Bryan, Michaels & McGehee, Tallahassee, for appellees.

RAWLS, Judge.

Florida-Georgia Chemical Company appealed from a final judgment dismissing its third amended complaint and assigned as error the final judgment and a previous order transferring the original complaint to the law side of the court. Two points are argued on appeal:

1. Does appellant's original complaint state a cause of action in equity which will support the granting of injunctive relief?

2. Does appellant's third amended complaint state a cause of action at law?

Briefly, the original complaint was framed in four counts alleging that: Florida-Georgia Chemical Company had an exclusive right-to-sell agreement with National Laboratories to sell 'N.L. products' in the Tallahassee area; pursuant to the agreement Florida-Georgia Chemical promoted N.L. products by great expenditures of time and money; defendant National Laboratories breached the agreement by increasing its prices, requiring plaintiff to utilize the services of defendant F. Nolan Parham (National Laboratories' Field Representative) and plaintiff complied with these requirements to protect its heavy investment; Parham and National Laboratories learned the names of plaintiff's customers by falsely representing that reports (containing customers' names) were necessary for marketing and statistical purposes when they actually intended and did use the same in directly competing with plaintiff; and while plaintiff enjoyed the exclusive right to sell N.L. products, National Laboratories further breached the agreement by allowing other distributors to sell N.L. products in plaintiff's territory. The complaint further alleged that the defendants did and still are maliciously interfering with plaintiff's business by persuading plaintiff's customers through the use of false representations to refrain from doing business with plaintiff; that the defendants conspired to interfere with plaintiff's business by a combination restricting trade contrary to F.S. Chapter 542, F.S.A.; and that unless enjoined and restrained defendants will continue similar unlawful interference with plaintiff's business.

The relief sought in these four counts is 1. damages for breach of contract, 2. damages for the tort of malicious interference with plaintiff's business, 3. damages for injuries resulting from an illegal combination in restraint of trade, and 4. an injunction restraining further interference. Although an action to enjoin tort feasors from malicious interference may be brought either at law or in equity ¹ but coupled as it was in this complaint with causes of actions essentially legal in nature and for which adequate relief is available at law, the trial court properly transferred the cause to the law side of the court.

Therefore, the only pertinent question before this court is, Did the third amended complaint state a cause of action? This complaint is framed in two counts. The first alleged that defendant National Laboratories, hereafter called National, in 1954 orally granted the plaintiff an exclusive right to sell National's products within a 150 mile radius of Tallahassee, Florida. National agreed to sell its products to plaintiff at its published distributor's price list with stipulated quantity discounts, and pursuant to said agreement the plaintiff in 1954 and subsequent years spent large sums of money to advertise National's products. The plaintiff further alleged that in 1960 while the agreement was in effect National breached same by refusing to grant plaintiff further discounts and by permitting other dealers and distributors to sell National's products within the said geographic area.

As to this count the trial court, noting that the parties agreed that there was no termination date for the oral exclusive sales agency agreement, found that the contract was terminable at will by either party and held that such an agreement did not support an action for breach. As authority the trial court cited Meredith v. John Deere Plow Co. ² which in turn relied upon the principle stated in the DuPont cases ³ to the effect that such contracts are terminable at will by either party and '* * * the termination of the contract * * * is not a breach of the contract and will not sustain an action for damages.' This court accepts that principle. The factual situation set forth in the first DuPont case states: 'On October 27, 1930, the DuPont Company gave notice to the Reno Company of the termination of the contract effective the December 1st following, and it was this termination by the DuPont Company which the Reno Company asserts constituted a breach of the contract.' [Emphasis supplied] Therefore, these cases by the terms of the principles stated therein hold that exclusive sales contracts so lacking in mutuality of obligation or certainty of consideration may be terminated by either party at will, but termination thereof does not constitute a breach of the contract and so will not sustain an action for damages for such termination.

However, the question raised by the allegations of the complaint in the instant case is not whether National had the right to terminate, but whether it is responsible for damages resulting from a breach of the agreement while the same is still in effect. The above cases for obvious reasons are not controlling in the instant cause.

The general rule as repeatedly stated is that a contract for an indefinite period, which by its nature is not deemed to be perpetual, may be terminated at will on giving...