Richards v. Am. Desk & Seating Co.

• Citation: 87 Wis. 503,58 N.W. 787
• Court: United States State Supreme Court of Wisconsin
• Decision Date: 10 April 1894
• Parties: RICHARDS v. AMERICAN DESK & SEATING CO.

87 Wis. 503

58 N.W. 787

RICHARDS

v.AMERICAN DESK & SEATING CO.

Supreme Court of Wisconsin.

April 10, 1894.

Appeal from circuit court, Manitowoc county; N. S. Gilson, Judge.

Action by William D. Richards, assignee, etc., against American Desk & Seating Company. From an order overruling a demurrer to defendant's counterclaim, plaintiff appeals. Reversed.

The plaintiff sues as assignee of the Manitowoc Manufacturing Company, a Wisconsin corporation, which was engaged in the manufacture and sale of school, church, and opera-house furniture, and other furniture and specialties, and the defendant is an Illinois corporation, and during the times named in the pleadings was engaged in buying, selling, and manufacturing the same kinds of furniture. The action is brought for the recovery of $10,000 for goods, wares, and merchandise of the kind above mentioned, sold and delivered by the plaintiff's assignor to the defendant. The defendant set up two counterclaims for damages, in all in the sum of $370,000, for alleged breaches of two certain written agreements executed by the plaintiff's assignor and the defendant; one of them, dated February 8, 1889, was to terminate February 1, 1894, and the other and material one was made June 18, 1890, and was to continue in force until December 31, 1894. The question presented was whether these contracts were valid or void as against public policy, as being in restraint of trade. By the first contract it was agreed that the plaintiff's assignor should make, in such quantities and kinds as might be ordered by the defendant, and deliver the same free on board at Chicago, Ill., opera and church chairs, pews, settees, bank, church, hall, lodge, office, store, and school furniture, including store stools, measuring machines, goods and book shelves, and other specialties, all of which were “to be made for and sold to the defendant only, during the term of this contract,” and the defendant agreed “to purchase $250,000 worth of goods under this contract” of the plaintiff's assignor. By the second contract the plaintiff's assignor was to make and deliver to the defendant, free on board at Chicago, goods manufactured by it, in such quantities and kinds as might be ordered by the defendant, of substantially the same character as provided in the first contract, and the orders of the defendant were to have a preference over all other work. After making provisions with regard to patterns and other matters not material to the present question, it was stipulated that the prices to be paid by the defendant, except for the iron parts or castings, should not exceed the prices charged by any other responsible manufacturer for like goods, and prices were specified for the iron parts. It was agreed that, if the plaintiff's assignor fulfilled the covenants on its part, the defendant should purchase of the plaintiff's assignor “during the period of this contract, and under its terms, goods or other articles to the amount of not less than $200,000,” specifying the time and manner of payment for the same, and that, “during the term of this contract, the party of the first part (plaintiff's assignor) shall not sell, either directly or indirectly, any of the goods or articles of the several kinds hereinbefore agreed to be made for and delivered to the party of the second part, within the following described territory, west of and including the following counties in Wisconsin: Ashland, Price, Taylor, Clark, Jackson, Monroe, Vernon, and Richland, and south of and including the following counties: Iowa, Dane, Jefferson, Waukesha, and Milwaukee; in Michigan, all the territory south of and including the following counties: Muskegon, Kent, Montcalm, Gratiot, Saginaw, Tuscola, and Huron; and all of the following named states and territories: Illinois, Indiana, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Arkansas, Missouri, Iowa, Minnesota, North Dakota, South Dakota, Nebraska, Kansas, Indian Territory, Texas, New Mexico, Colorado, Wyoming, Montana, Washington, Idaho, Oregon, Nevada, Utah, California, Arizona, and Mexico. Nor shall the party of the first part, during the term of this contract, sell any of said goods or articles to any person, firm, or corporation whom it knows, or has good reason to believe, intends to resell the same within said territory.” It was further agreed “that, during the term of this contract, the party of the second part (the defendant) shall not sell, either directly or indirectly, any of the goods or articles of the several kinds hereinbefore agreed to be made for and delivered to it (except as hereinafter expressly provided) within the following described territory: In Wisconsin, all of the territory east of the following counties: Ashland, Price, Taylor, Clark, Jackson, Monroe, Vernon, and Richland, and north of the following counties: Iowa, Dane, Jefferson, Waukesha, and Milwaukee; in Michigan, all of the territory north of the following counties: Muskegon, Kent, Montcalm, Gratiot, Saginaw, Tuscola, and Huron; and all of the following states and territories: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, West Virginia, Virginia, North Carolina, Tennessee, Kentucky, and Ohio. Nor shall the party of the second part, during the term of this contract, sell any of said goods or articles to any person, firm, or corporation whom it knows, or has good reason to believe, intends to resell the same within said last-described territory: provided, however, and it is expressly agreed, that the party of the second part, or its agents, may sell in any part of the United States the desk known as the ‘Yale desk,’ school apparatus and settees, and bank, office, and store furniture, and that any sale of said Yale desk, or any school apparatus or settees, or any bank, office, or store furniture, in any state or territory by the party of the second part, or any of its agents, shall not be deemed a violation of this contract or any of its provisions. * * * A sum equal to twenty-five per cent. of the amount of any sale made by either of the parties in violation of the provisions of the contract, as liquidated damages, and not as a penalty, shall be paid by the party making any such sale, to the other party, but the delivery by either of the parties within the territory of the other, under and in performance of any existing contract, shall not be construed as a violation of this contract.” It was further agreed that each of the parties should transfer to the other any agency or agencies it might then have, and the good will of any business it may have established, within the territory of the other as thus defined; the plaintiff's assignor was to pay to the defendant a commission of 5 per cent. on the amount received for any goods or articles which might be thereafter delivered by it to any person, firm, or corporation within the territory of the party of the second part, under any then existing contracts; and, further, that the first-named contract should not be in force thereafter, but that this contract or any of its provisions should not be construed “as waiving or...