E. L. Husting Co. v. Coca-Cola Co.

• Decision Date: 06 December 1927
• Citation: 194 Wis. 311,216 N.W. 833
• Parties: E. L. HUSTING CO. v. COCA-COLA CO. ET AL.
• Court: Wisconsin Supreme Court

194 Wis. 311

216 N.W. 833

E. L. HUSTING CO.

v.COCA-COLA CO. ET AL.

Supreme Court of Wisconsin.

Dec. 6, 1927.

Appeal from a judgment of the circuit court for Milwaukee County; Charles L. Aarons, Circuit Judge. Reversed.

Action by the E. L. Husting Company against the Coca-Cola Company and others. From judgment dismissing action without prejudice, plaintiff appeals. Reversed and remanded for further proceedings.--[By Editorial Staff.]

In June, 1923, the plaintiff, a Wisconsin corporation, commenced this action by summons, naming as defendants the following corporations, all foreign, except as indicated, to wit: Coca-Cola Company; Western Coca-Cola Bottling Company, service upon which could not be obtained; Wisconsin Coca-Cola Bottling Company, licensed to do business in this state; Milwaukee Coca-Cola Bottling Company, a Wisconsin corporation.

All defendants other than the Western Company appeared and answered.

The following allegations taken from the various pleadings are deemed sufficient to present the matters here involved:

On January 10, 1917, the plaintiff made a written renewal contract with the nonappearing defendant, Western Coca-Cola Bottling Company, whereby the plaintiff received the exclusive right in the city and county of Milwaukee to bottle and sell; to use the trade-mark “Coca-Cola” and labels and designs in connection therewith; and with the right to purchase at a specified price sufficient Coca-Cola syrup for such purposes.

That the said Western Company had proper power and authority to make such contract for such exclusive right by reason of its contract and other relationship with the Coca-Cola Company, the parent company. Such contract was consented to, ratified, and approved by the parent company, it, however, expressly asserting that it assumed no liability thereunder, and did not become a party thereto.

That the plaintiff, in reliance upon said contract, did invest a large sum of money in plant, equipment, stoppers, labels, etc., for the carrying on by it of such contract and to operate thereunder, and in building up a sales and distributing organization, and in establishing a valuable good will. That on or about January 1, 1920, the Western Company, and continuously since, without just cause or legal excuse, refused to furnish plaintiff with any of the syrup or materials as in said contract provided, and that such cannot be purchased or obtained in the market except through said Western Company.

That the defendant Wisconsin Coca-Cola Bottling Company was organized in the state of Delaware, December 6, 1922, maintaining offices in Chicago and Milwaukee, and thereafter conducting its business with the advice and consent of the Western Company. That a short time thereafter the Milwaukee Coca-Cola Bottling Company was organized under the laws of Wisconsin. That some or all persons interested in the Wisconsin Company were interested in said Milwaukee Company. That in March, 1923, and, as it is alleged, for the express purpose of evading the contract between plaintiff and the Western Company, supra, all defendants aiding and abetting, the said Western Company entered into a contract, which by subsequent assignments or agreements gave to the Wisconsin and Milwaukee Companies substantially the same rights as those alleged to have been given and secured to plaintiff by the contract of 1917, supra, except that a higher price was thereby being secured for its products by the parent company.

That the defendants all knew of the situation arising out of the execution of plaintiff's contract.

That from May 1, 1923, the Milwaukee Company maintained its plant and equipment in the city of Milwaukee, and is furnishing the trade in said city and county in a manner similar to that contemplated plaintiff should do under its contract.

That plaintiff suffered, and still suffers, large damage and loss of profits which it otherwise would have made. Its business and rights under its contract are irreparably destroyed. That its damages cannot be computed, and that, unless the defendants be restrained and enjoined from continuing the bottling and selling of said Coca-Cola products in the city and county of Milwaukee, the business of plaintiff in that regard will be wholly lost and destroyed. That plaintiff has no adequate or sufficient remedy at law. That it has suffered damage by reason of the wrongful acts and defaults of the defendant Western Company in the sum of $10,000.

Plaintiff demanded judgment, in substance, that the Western and the Coca-Cola Companies be enjoined and restrained from furnishing the two other defendants, or either of them, with the products involved in the sale and distribution in Milwaukee city and county. That the Wisconsin and Milwaukee Companies, and each of them, be restrained from carrying on said business or using the trade-mark, labels, etc., in connection with such products. That it have judgment against the Western Company for $10,000 damages, and such other relief as may be meet and proper.

The three appearing defendants by way of supplemental answer, and as a special defense and plea in abatement, alleged, in effect, that the said Western Company so named as defendant, and not being subject to the jurisdiction of the court, is a necessary and indispensable party, without whose presence the court is unable to determine the issues in said actions; that plaintiff's cause of action as based on the contract of 1917 with said Western Company, and its demand for relief being predicated on the present existence and continuance of the said contract, yet that by reason of acts and transactions between the plaintiff and said Western Company such contract was lawfully terminated on or about January 1, 1920, and that its provisions have not been in force or effect since that time; that there has been no adjudication between plaintiff and said Western Company establishing plaintiff's claim that the contract still continues in force and effect; that, until such adjudication is had, the trial court has no jurisdiction to grant any of the relief prayed for against the answering defendants; and that no such adjudication between the plaintiff and the Western Company can be had in this action, because the Western Company has not been brought within the jurisdiction of the court.

Plaintiff's reply denied that the Western Company is a necessary and indispensable party; denied that the contract was legally terminated on or about January 1, 1920, or at any other time.

Upon the case being called for trial, the plaintiff requested a hearing and trial on the issues made by the said supplemental answer and reply as well as on all of the issues. Such request being denied, the answering defendants moved the court to dismiss the action upon the ground that a necessary party defendant, to wit, the Western Company, is not subject to the jurisdiction of the court. The court, upon the record and pleadings, ordered dismissal of the action without prejudice to the plaintiff's right to bring further action against the proper parties.

From the judgment plaintiff appeals.William L. Tibbs and Brooke Tibbs, both of Milwaukee, for appellant.

Fawsett, Smart & Shea, of Milwaukee, for respondents.

ESCHWEILER, J.

The trial court dismissed this case upon the theory that, inasmuch as the plaintiff, in order to obtain any relief whatsoever as against any herein named defendant, must rely upon the continuance in force of its contract of January 10, 1917, with the Western Company, and since neither the Wisconsin nor Milwaukee companies came into existence earlier than March, 1922, and could have had no part in the alleged breach by the Western Company in January, 1920, therefore the vital question as to whether or not there had been a breach by the Western Company of the obligations on its part under the contract of 1917 could not be determined in this action, unless and except said Western Company was brought within the court's jurisdiction, or an express adjudication be first had in some court wherein the Western Company was a party.

[1] This position of the trial court was evidently taken upon the view that the Western Company was an indispensable party rather than merely a proper party, and for that reason that a legislative mandate compelled him to order the Western Company brought in as a defendant, and then because of the nonresidence of the Western Company and the impossibility of obtaining legal service upon it, this action as against the appearing defendants must go down.

The statute so considered (section 260.19 [1], Stats.) provides, in substance, that controversies between parties then before the court may be determined when it can be done without prejudice to the rights of others or by saving their rights; but that, “when a complete determination of the controversy cannot be had without the presence of other parties, or any persons not parties to the action have such interests in the subject-matter of the controversy as require them to be made parties for their due protection, the court shall order them to be brought in, * * *”

We are satisfied, however, that no such all compelling effect should be given, under the circumstances disclosed in this record, to this statute, and, furthermore, that the Western Company, although the only party to any contract with the plaintiff, is nevertheless not an indispensable party to this action, even though relief is asked in the form of money damages against the Western Company and relief by way of restraint upon the other and appearing defendants.

On the first point we think that a statute such as the one here invoked, even though mandatorily and expressly requiring our courts to make some third person a party to a pending action, carries with it, by implication and by force of necessity, the limitation that it is intended to apply only to such third persons who are so...