Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MARATHON PETROLEUM CO. v. CHRONISTER OIL

June 8, 1988

MARATHON PETROLEUM CO., FORMERLY KNOWN AS MARATHON OIL COMPANY, AN OHIO CORPORATION, PLAINTIFF,
v.
CHRONISTER OIL COMPANY, AN ILLINOIS CORPORATION, GRADY M. CHRONISTER, AND LINDA K. CHRONISTER, DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, District Judge:

OPINION

Ex turpi contractu actio non oritur.

A contract founded upon an illegal consideration cannot be enforced.

Marathon Petroleum Company filed this diversity action under 28 U.S.C. § 1332 seeking monetary and injunctive relief against Chronister Oil Company and its proprietors, Grady and Linda Chronister, as a result of their retail sale of gasoline allegedly prohibited by a noncompetition agreement.

In accordance with Fed.R.Civ.P. 52, the Court on July 9, 1987, denied Marathon's application for a preliminary injunction for failure to establish a reasonable likelihood of success on the merits. Because the contract appeared to be an illegal covenant in restraint of trade under Illinois law, the Court directed Marathon to show cause why its complaint should not be dismissed.

Now before the Court is Plaintiff's motion for reconsideration of the July 9 order and discharge of the rule to show cause.

For the following reasons, the motion is denied and the case dismissed.

I

Defendants in September 1981 agreed to sell Russell Stewart Oil Company certain real and personal properties situated throughout Illinois in exchange for payment of $9,639,072.93. Of that amount, the assets purchase agreement allocated $1,623,000 to land, $3,113,772.93 to buildings, and $4,902,300 to equipment and other tangible property. Included in the sale were two Springfield self-service gas stations consisting mainly of fuel pumps, cashiers booths, and restrooms.

At the closing of the deal on October 1, Stewart Oil notified Defendants that as the buyer it had assigned all rights and duties arising under the contract to Marathon, 50% owner of the assignor. The same day, Marathon and Chronister entered into a noncompetition agreement pursuant to ¶ 14 of the sales accord. For $300,000 consideration payable over ten years, Defendants assented to the following:

    Sellers will not compete with Marathon Oil Company,
  or any subsidiary or affiliate of Marathon, or the
  successors or assigns of any of them, directly or
  indirectly, as principal, agent, employee, officer,
  director, shareholder, partner or otherwise, in the
  operation of retail sales outlets of gasoline or
  other motor fuel at any place within the State of
  Illinois, Rock County, Wisconsin, and the City of St.
  Louis, Missouri, for a period of 10 years from date
  of execution hereof. . . .

Shortly thereafter, Plaintiff deeded the Springfield concerns to Stewart Oil, its affiliate and successor under the restrictive covenant. Today these establishments continue to operate at 1100 West Jefferson Street and 1801 North Grand Avenue East under their original trade name of "Super Gas," which Defendants assigned to Plaintiff per the agreement. Following the transaction, Stewart Oil opened a third station with the same name and features at 1901 West Jefferson Street.

Marathon to date has remitted $280,000 consistent with the restrictive covenant. But despite their unflinching acceptance of the petroleum company's remuneration, Defendants, with over 90% of the payments in tow, have now reentered the retail gasoline market in Springfield and sought to undercut their competitor's prices. Currently, Defendants are managing two "QIK-N-EZ" stations located on the corners of Chatham Road and Monroe Street, and Stevenson ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.