In October, 1941, the Federal Excise Tax went into effect, and Friden, fearing the possibility of double taxation, felt that it was necessary for the factory to do the billing, that the appellants should no longer buy their inventory outright, and that theĬommission should be reduced from 50 to 40% in view of the reduction in necessary bookkeeping and capital outlay on the part of the distributors.
Their business grew from a volume of a little more than $23,000 in 1935, to a volume of over $80,000 in 1941, and the percentage of Friden business to their total business grew from 14.6% to a peak of 80%. The appellants built up their sales organization and operated without incident until October, 1941. The assignment of territory was confirmed in writing by Lund, and in a letter from Friden, the manufacturer’s president, the hope was expressed that the association would of long standing and mutually beneficial. Promptly the appellants began the development of the Cincinnati distributorship in territory which included besides Cincinnati, 8 counties in Ohio, 3 in Kentucky and 2 in Indiana. On June 13, 1935, at a meeting arranged by Lund in Louisville, they paid Gaylord $2350 for the machines. Lund would consider no compromise, however, and the appellants finally agreed. The appellants demurred on the ground the machines were old and mechanically imperfect. Lund, however, insisted upon their purchase of the machines which they had on consignment from Gaylord. There was also a provision that in case of termination of the distributorship the factory reserved the option of taking over the inventory at 50% of list prices for new or unsold equipment, and a representation that the sales plan enables every distributor an opportunity to establish himself in his own business with a freedom and independence impossible when employed by a branch office organization.īach testified that after going over the plan Lund said to him, “On this plan, we can’t nor nobody else can check you out this is yours individually as long as you live and do a good job right through.” The appellants were willing to take over the Cincinnati territory. “Sales Organization: Exclusive sale-franchises will be assigned to Distributors upon a basis that will enable them to create for themselves an Independent Business that should not only be profitable, but permanent as well.” The sales plan contained the following provision: The plan provided that machines were to be sold to distributors at list prices less 50% discount, the distributor to do the servicing with repair parts furnished by Friden during the guarantee period, and Friden furnishing national advertising. They reviewed in detail a sales plan under which it was proposed that they operate. In May, 1935, Gaylord decided to make no more purchases from Friden until imperfections in machines already purchased were corrected, and in June of that year, Lund, Friden’s general manager, negotiated with the appellants for taking over the Cincinnati distributorship directly. The Cincinnati territory was occupied by Gaylord from whom they secured a sub-agency and from whom they obtained replacement parts.
After making such findings and announcing conclusions of law, the district court again dismissed the cause upon its merits, and this appeal followed.Īppellants were partners in the sale and repair of accounting machines, when in 1943 they learned of the Friden calculator which had just been put upon the market. An earlier appeal was remanded for findings of fact, 148 F.2d 407. Permanent injunction was denied and the cause dismissed. Appellants promptly sued to restrain interference with their franchise. The corporate appellee is a manufacturer of calculating machines and the appellants were its distributors in the Cincinnati area from Juntil on the manufacturer undertook to dissolve the arrangement and appoint appellee Gunderson as its distributor in the territory. Van Duzer, of Cleveland, Ohio, Carl Phares and Smith Warder, all of Cincinnati, Ohio, on the brief), for appellees.īefore HICKS, SIMONS, and ALLEN, Circuit Judges. Jacobs, of Cincinnati, Ohio, and Ashley M.
Ritchey, all of Cincinnati, Ohio, on the brief), for appellants.Ĭarl M. Graydon, both of Cincinnati, Ohio (Joseph S. From a decree granting defendants’ motion to dismiss at conclusion of the plaintiffs’ evidence, the plaintiffs appeal. Gunderson to restrain interference by defendants with plaintiffs’ alleged franchise to distribute calculating machines manufactured by the Friden Calculating Machine Company, Inc. Hoppmire against the Friden Calculating Machine Company, Inc., and A.J. Circuit Court of Appeals, Sixth Circuit.Īppeal from the District Court of the United States for the Southern District of Ohio, Western Division John H.
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