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Whiting Stoker Co. v. Chicago Stoker Corporation.

December 3, 1948

WHITING STOKER CO.
v.
CHICAGO STOKER CORPORATION.



Author: Lindley

Before MAJOR, Chief Judge, MINTON, Circuit Judge, and LINDLEY, District Judge.

LINDLEY, District Judge.

Defendant appeals from an adverse judgment in an action brought for a declaratory judgment upon a contract dated September 2, 1944, under which plaintiff was purchaser and defendant seller of a going business engaged in manufacturing, selling and servicing stokers. Ignoring provisions of no moment here, briefly, defendant sold to plaintiff with covenants of warranty and obligated itself to refrain, for a period of 30 years, from using its trade-names, and, for a like period, from making stokers like those previously made. In return, plaintiff was to pay immediately certain sums of money and, in addition, certain emoluments based on its net sales of stokers during the next 15 years. Plaintiff agreed also to provide parts and service for maintenance of stokers previously sold by defendant.

The crucial contractual provisions, in so far as the present action is concerned, are those relating to the inventory of parts in the hands of defendant at the time of the execution of the contract, in pertinent part, as follows:

Paragraph A-2

"A. The Seller agrees:

"2. To sell, set over, transfer and assign to the Buyer, * * *, $25,000.00 worth of stoker parts to be selected from the Seller's present stock thereof * * *; and to grant to the Buyer the right and option to purchase within one year from the date hereof the remainder of said stock of parts."

Paragraph B-2

"B. The Buyer agrees:

"2. To purchase and pay for, additionally, immediately upon the execution of this contract, $25,000.00 worth of stoker parts to be selected from the Seller's present stock * * *; and to purchase and pay for within one year from date hereof all of that portion of the remainder of said stock of parts which can reasonably be utilized by the buyer, * * *."

Paragraph B-4

"B. The Buyer agrees:

"4. To refrain from manufacturing or purchasing elsewhere any such stoker parts or sub-assemblies until that portion of the Seller's and Whiting Corporation's*fn1 stock of stokers, parts and sub-assemblies which can reasonably be ...


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