Red Wing Shoe Co. v. Shepherd Safety Shoe Corp.
| Decision Date | 03 December 1947 |
| Docket Number | No. 9277.,9277. |
| Citation | 164 F.2d 415 |
| Parties | RED WING SHOE CO. v. SHEPHERD SAFETY SHOE CORPORATION. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Robert G. Dreffein and Louis Goldman, both of Chicago, Ill., for appellant.
John H. Bishop, Robert J. Burdett, John M. Falasz, and Bishop, Mitchell & Burdett, all of Chicago, Ill., for appellee.
Before SPARKS and MAJOR, Circuit Judges, and LINDLEY, District Judge.
This appeal is from a judgment declaring a contract void for indefiniteness and uncertainty. The principal questions raised are whether a contract for an exclusive agency, if valid, obligates a manufacturer to continue to manufacture all the types of goods it made at the time the contract was entered into, and, if not valid, whether the agent designated by it is entitled to recover for alleged breaches in the manufacturer's performance during the period when the parties purported to operate under it.
The contract in controversy was entered into in December, 1933, between a shoe manufacturer and a distributor whom we shall designate as Red Wing and Shepherd. We set it forth in the margin, omitting paragraphs not here material, and abridging the names of the parties.1
The complaint alleges that at the time the contract was executed, appellee Red Wing was manufacturing a complete line of shoes including work, dress and safety shoes, boots, oxfords and specialty items such as golf shoes and bedroom slippers. It further alleges, and appellant denies, that shortly after the signing of the contract, the arrangement relating to prices was modified, and the parties orally agreed that the price to be paid Red Wing for all shoes should be determined by adding 6% to its estimated costs for labor and materials for safety shoes, and that Shepherd itself fixed the prices at which it sold safety shoes to its customers.
The complaint further alleged that Red Wing continued to make and Shepherd to sell the same types of shoes as in 1933 until 1941, when Red Wing's production was sharply curtailed as a result of war time restrictions and regulations; that as a result of these restrictions and controls, the shoe industry generally entered upon a program of specialization, with particular factories concentrating their entire productive capacity upon fewer and similar types and styles of shoes, and thus absorbing increased costs for labor and materials; that appellee, following this general trend, determined to eliminate several of the types and styles of shoes it had previously manufactured; that it notified Shepherd of this decision by letter of November 19, 1945, stating that it was standardizing its production and had entirely discontinued certain lines.
Correspondence attached to the bill of complaint shows that controversy developed as to the construction of the contract generally, with Red Wing asserting its right to discontinue several types and styles previously manufactured by it and sold by Shepherd, and the latter insisting upon its right to have all orders filled and Red Wing's obligation to carry a floor stock of safety shoes adequate to meet requirements for prompt shipment to its accounts.
By letter of February 18, 1946, Red Wing restated its intention to discontinue the lines, but agreed to fill all orders for those types and styles until June 1, 1946, in a volume equivalent to the volume previously made for Shepherd. It then, on February 19, 1946, filed suit for a declaration of its rights under the contract, asking that it be held not obligated to continue manufacture of the types and styles it made when the contract was entered into, that Shepherd was not entitled to specify the styles to be manufactured by Red Wing, that the latter's election to discontinue certain styles did not constitute a breach of the contract, assuming it to be valid, and that the notice of the election to discontinue certain styles was reasonable as to time. Appellant counterclaimed for a judgment construing the contract adversely to appellee's prayer, enjoining appellee from refusing to carry out the terms of the contract as construed by appellant, and asking for damages for alleged breach of the contract. The judgment was entered following pre-trial conference on the pleadings.
Although appellee did not, in its bill of complaint, ask to have the contract declared void, but merely to have its rights and obligations thereunder construed, on appeal it contends that the contract is void for lack of mutuality, but that if the court should not so find, then that it retained the right thereunder to determine for itself what types and styles of shoes it would manufacture.
Regardless of the validity or invalidity of the contract, we think there can be no doubt that appellee, by its terms, did not abrogate its right to determine what kind of shoes it would manufacture. The contract did not provide that Red Wing must make shoes for Shepherd to sell, but that Shepherd would, during the period of the agreement, devote itself exclusively to the sale of shoes and safety shoes manufactured by Red Wing, and that Red Wing agreed that Shepherd should have the sole and exclusive right to sell shoes manufactured by it. The promises to carry a floor stock to meet the requirements of Shepherd, and to fill and ship orders, must be read in conjunction with the description of the subject matter of the contract, which was in general terms, "shoes and safety shoes manufactured by Red Wing." Shepherd at no time bound itself to sell any amount of any particular style or type of shoe or safety shoe, hence Red Wing cannot be held obligated to manufacture any particular type or style of shoe or safety shoe. Appellant vigorously contends that this is a "service" contract. If so, then it seems clear that appellant, as the exclusive agent of appellee, was obligated to devote itself exclusively to the sale of whatever shoes its principal manufactured, instead of the latter's being compelled to continue manufacturing whatever appellant ordered. This being the case, we think Red Wing was wholly within its rights in discontinuing certain specified styles of shoes theretofore manufactured by it.
While appellee did not, in its bill of complaint, challenge the validity of the contract under which the two parties were doing business, the...
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...they alleged to have extended, to any other loan to be made or to any other future agreement. (See, Red Wing Shoe Co. v. Shepherd Safety Shoe Corp. (7th Cir. 1947), 164 F.2d 415, 418-19.) The effort on appeal to convert the alleged agreements into an option which was accepted by the part pe......
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...N.J.Eq. 171, 53 A.2d 191. The cases of Anderson & Brown Co. v. Anderson, 7 Cir., 1947, 161 F.2d 974, and Red Wing Shoe Co. v. Shepherd Safety Shoe Corp., 7 Cir., 1947, 164 F.2d 415, are directly in point. In the former case, the plaintiff sought the same relief as plaintiff in this case. Th......
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