Pepsi-Cola Co. v. Wright

• Decision Date: 09 March 1939
• Docket Number: 12547.
• Citation: 2 S.E.2d 73,187 Ga. 723
• Parties: PEPSI-COLA CO. et al. v. WRIGHT.
• Court: Georgia Supreme Court

2 S.E.2d 73

187 Ga. 723

PEPSI-COLA CO. et al. v. WRIGHT.

No. 12547.

Supreme Court of Georgia

March 9, 1939

On April 16, 1938, H. H. Wright instituted an action against Pepsi-Cola Company, a corporation of the State of Delaware Pepsi-Cola Company of Georgia, a Georgia corporation Pepsi-Cola Distributing Company, W. E. McLemore, and certain other individuals. The petition as amended alleged in substance the following: The Pepsi-Cola Company, a corporation created in Delaware with its principal office in New York, contemplated establishment of an agency and plant in the City of Atlanta to engage in the manufacture of syrups and the bottling of beverages and distributing the soft drink known as 'Pepsi-Cola.' At the same time, H. H. Wright had an established business in Atlanta, of distributing beverages of the Big Boy Bottling Company, a corporation. In these circumstances the Pepsi-Cola Company and Wright signed a paper as follows: 'Georgia, Fulton County. This agreement made and entered into this 28th day of May, 1934, by and between H. H. Wright * * * party of the first part, and Pepsi-Cola Company, * * * party of the second part, witnesseth: For and in consideration of the mutual covenants herein contained, the parties hereto by these presents enter into the following agreement: Whereas, party of the first part is engaged in the business of distributing beverages of the Big Boy Bottling Company of Atlanta in and around the vicinity of the City of Atlanta, and whereas party of the second part is engaged in the business of manufacturing syrups or bottled beverages, and the bottling and distribution of the soft drink known as Pepsi-Cola: It is agreed that party of the second part will bottle the various beverages of the Big Boy Bottling Company of Atlanta, party of the first part to pay 8¢ per case of 12 bottles 28-oz. size, otherwise known as the quart size, and party of the first part to pay 8¢ per case of 24 bottles of smaller size. It is further agreed that the party of the first party is to furnish the syrup, bottles, crowns, and cases for the bottling of said beverages. It is further agreed that the above-stipulated price includes storage space in the plant of party of the second part for the goods bottled for the party of the first part, it being understood, however, that should the party of the second part need the space for any reason, then party of the first part shall secure other space for the storage of the bottled goods, after same have been bottled by party of the second part. It is further agreed that party of the first part shall act as one of the jobbers for party of the second part in and around the vicinity of Atlanta, and party of the first part to pay 50¢ per case, plus 50¢ deposit on bottles and case, for goods secured from party of the second part. It is further agreed that this agreement shall continue for a period of five years from date, unless otherwise agreed between the party of the first part and party of the second part.'

Wright, the first party to the contract, 'organized a sales force' and purchased a 'fleet of trucks' for transportation of Pepsi-Cola to the retail trade, and in virtue of the said agreement 'to act as one of the jobbers' of the second party, proceeded to carry on that business, he being at that time the only one so engaged. Thereafter, Pepsi-Cola Company of Georgia, chartered on August 22, 1934, took over the operation of the plant of said second party in Atlanta, and for and in behalf of the second party proceeded to furnish the first party with the Pepsi-Cola product in accordance with the contract. The jobbers' business prospered greatly, and in 1937 the said Pepsi-Cola Company and the Pepsi-Cola Company of Georgia and their officers named above as defendants, realizing the success of that business, 'entered into a combination and conspiracy' to form among themselves a distributing organization to be put in competition with the said first party, and destroy his said business. In pursuance of 'said combination and conspiracy' said parties, under pretense of co-operating with said first party, induced him to disclose to them confidential information, such as the names and addresses of all his customers, and the routes and schedules of his several trucks (such information to be used solely as advertising matter to be sent to customers to stimulate sales of Pepsi-Cola). The said persons 'represented to' petitioner 'that if he would purchase from' the said second party 'advertising signs and posters of said product at an expense * * * of $1100 that he would be the sole distributor of Pepsi-Cola in the City of Atlanta and vicinity with the exception of three or four companies,' and that said first party 'would receive all of the benefits which would accrue.'

Relying on such representations the first party purchased the signs and furnished the above information as to his routes and customers. Soon thereafter the 'said conspirators' demanded that said first party 'add five' trucks to his 'fleet' of trucks, and employ additional salesmen for sale of Pepsi-Cola, with a threat that unless complied with they would cause a new competing distributing organization to come into the territory. The said business of the first party did not justify the expense incident to compliance with the demand and it was refused. Whereupon, the said persons organized the Pepsi-Cola Distributing Company which, being equipped with trucks, drivers and salesmen, proceeded to compete with the first party in said business. It employed Webb, one of the sales agents of the first party, and caused him to go among the customers of the first party and by means of his personal acquaintance induce them to trade with it. It caused its salesmen and truck drivers to go over the routes of the first party in advance of his drivers, and by false statements induce his customers to permit them to pick up empty Pepsi-Cola crates and bottles on which he had paid the deposit, and to refill the orders of the customers. Among the false statements of the drivers to the customers were that 'the old driver had been changed to a different route,' 'the old driver had gone home sick,' and in one instance that the said first party's 'driver would handle only mixed drinks in the future,' and 'that they would handle Pepsi-Cola exclusively.' In furtherance of said combination and conspiracy to...