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Goodman v. Motor Products Corp.

SEPTEMBER 16, 1959.

MANUEL GOODMAN, PLAINTIFF-APPELLANT,

v.

MOTOR PRODUCTS CORPORATION, A NEW YORK CORPORATION, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Lake county; the Hon. BERNARD M. DECKER, Judge, presiding. Judgment affirmed.

PRESIDING JUSTICE WRIGHT DELIVERED THE OPINION OF THE COURT.

This is a civil action for damages arising out of a breach of an alleged contract granting to the plaintiff, Manuel Goodman, exclusive rights to distribute in foreign markets appliances of the defendant, Motor Products Corporation. The case has been twice tried before a jury.

The first trial resulted in a jury verdict in the amount of $130,000 in favor of the plaintiff. The trial court thereafter granted defendant's motion for judgment notwithstanding the verdict, and in the alternative, for a new trial. Thereupon an appeal was taken by the plaintiff to this court and this court in Goodman v. Motor Products Corp., 9 Ill. App.2d 57, 132 N.E.2d 356, set aside the judgment notwithstanding the verdict and remanded the case for a new trial. The second trial produced a verdict and judgment for the plaintiff in the amount of $800, from which judgment plaintiff has taken this present appeal.

Following the remandment of the case for a new trial, the plaintiff filed his first amended complaint consisting of two counts. Count I was for damages arising out of the breach of an express contract and Count II was added for the first time seeking recovery in quantum meruit on the theory of a breach of an implied contract. On motion of the defendant, Count II of the first amended complaint was stricken for failure to state a cause of action.

Plaintiff contends that the trial court erred in striking Count II of the first amended complaint for the reason that said count stated a cause of action in quantum meruit and that he should have been permitted to elect his theory of recovery at the close of the evidence. Plaintiff also contends that the time that would constitute reasonable or due notice of termination by the defendant of the distributorship is a question of fact for the jury, and that the trial court erred in rejecting evidence offered by the plaintiff on this question and in instructing the jury as a matter of law that the notice of termination given by defendant was reasonable.

The controlling facts were determined by this court and set out at great length in Goodman v. Motor Products Corp., supra. We state herein briefly the facts necessary to a consideration of the legal questions presented on this appeal.

Plaintiff, Manuel Goodman, was an exporter who for most of his life had been engaged in the business of foreign trade. The defendant, Motor Products Corporation, was a New York Corporation licensed to do business in Illinois. It carried on divers lines of manufacturing through numerous divisions and in particular operated a branch in North Chicago, Illinois, known as the Deep-freeze Appliance Division, devoted to the manufacture and sale of Deep-freeze appliances.

In 1940, the defendant entered the freezer and refrigerator market, and one Willard L. Morrison, who had invented the low temperature machine known as the Deep-freeze and had developed the same in the plant located in North Chicago, Illinois, the Deep-freeze Appliance Division of the defendant corporation, was placed in charge of that department of the corporation.

After reading an article which depicted Morrison as the inventor of a new successful food freezer and the head of the organization manufacturing them, the plaintiff called on Morrison in October, 1940, to inquire about selling the machines in the foreign market. After several days of discussion, an oral agreement was reached which was substantially as follows:

Plaintiff was to have the exclusive rights to sell Deep-freeze products in all countries in the world outside of the continental United States so long as he devoted his full time and attention thereto, personally or through corporations organized and controlled by him, and gave adequate representation; plaintiff was to refrain from the distribution and sale of any competitive products so long as the agreement was in effect; plaintiff was to devote his time and best efforts, personally or through corporations organized and controlled by him, exclusively to the distribution and sale of Deep-freeze products in countries of the world outside the continental United States to the exclusion of any other business interest which he might theretofore have had; in the event plaintiff failed to devote his time and best efforts exclusively to the distribution and sale of products manufactured and/or sold by the Deepreeze Appliance Division of the defendant corporation, the agreement would terminate and plaintiff would get out of the appliance business; plaintiff was to have the right of the use of the word "Deep-freeze" in his corporate name for so long as he did not sell a competitive product. In the event defendant discontinued the manufacture and sale of products through its Deep-freeze Division, although continuing manufacture of other products, the agreement would thereupon terminate.

Plaintiff commenced selling and distributing appliances immediately after he and Morrison had settled the terms governing the conduct of the parties and was given a desk in the North Chicago factory. He continued to distribute the products of the defendant corporation when they were available from 1940 to 1953.

Plaintiff's allocation of the appliances during the war years, 1940 to 1945, was limited, and his orders far exceeded his supply. During the years 1945 to 1950, plaintiff continued to distribute the appliances and was the distributor of the company's products in the foreign market. In the fall of 1951, Ben G. Sanderson, Sales Manager of the defendant corporation, phoned plaintiff to say that he wanted to withdraw Canada from the plaintiff's territory. Plaintiff consented to this withdrawal of Canada from his territory on the basis of being promised by Sanderson he would be given preferential rights to distribute air conditioners, which were to be manufactured by defendant, in tropical and subtropical regions.

In the fall of 1952, a domestic distributor of the defendant corporation, known as Radio City Distributing Company, of Dallas, Texas, sold a one-half carload of Deep-freeze freezers and refrigerators to Jose R. Santos, an appliance dealer in Monterrey, Mexico. At the direction of said Radio City Distributing Company, the defendant corporation caused the shipment of these appliances to Laredo, Texas, for transportation across the border. In the early part of 1953, one Joe Davis, District Manager of the defendant corporation in Texas, made arrangements with the same Jose R. Santos, the former customer of Radio City Distributing Company, to act as distributor for the defendant corporation in Mexico and sold a quantity of appliances to him for resale in Mexico.

The defendant notified the plaintiff in writing, by registered mail, in July of 1953 that his distributorship was terminated as of November 28, 1953, and refused subsequent to that ...


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