Kling Bros. Engineering Works v. Whiting Corp.

51 N.E.2d 1004, 320 Ill. App. 630, 1943 Ill. App. LEXIS 674
CourtAppellate Court of Illinois
DecidedDecember 13, 1943
DocketGen. No. 42,705
StatusPublished
Cited by5 cases

This text of 51 N.E.2d 1004 (Kling Bros. Engineering Works v. Whiting Corp.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kling Bros. Engineering Works v. Whiting Corp., 51 N.E.2d 1004, 320 Ill. App. 630, 1943 Ill. App. LEXIS 674 (Ill. Ct. App. 1943).

Opinion

Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiff, Kling Bros. Engineering Works, filed its complaint in chancery against defendant, Whiting Corporation, praying that what it claimed to be an alleged contract entered into June 5, 1935, between plaintiff and the Quiekwork Company, a corporation, and its successor defendant Whiting Corp. be decreed to be null and void, and that defendant be enjoined from interfering with plaintiff’s manufacturing business by communicating with its customers, etc. On motion of defendant Whiting, Carl, Olaf, Paul and Alfred Kling, Howard J. Aagaard and Benton W. Packer were made additional parties to the suit. Summons was issued and they filed their appearance as “counterclaim defendants.” Defendant Whiting filed its answer denying the invalidity of the contract and its counterclaim, praying an accounting for the work which had been done under the contract, and for damages for the breach thereof by plaintiff. The cause was referred to a master in chancery who took the evidence, made up his report and found the contract was not enforceable, lacked consideration and mutuality, and that it was in restraint of trade and illegal. Objections were filed by "Wbiting; they were overruled and ordered to stand as exceptions. February 1, 1943, a decree was entered dismissing the complaint and the counterclaim for want of equity, and taxing one-half of the costs to each party. Defendant Whiting appeals from that part of the decree dismissing its counterclaim and taxing one-half of the master’s fees against it. Plaintiff filed notice of a cross-appeal from that portion of the decree which dismissed its complaint and ordered it to pay one-half of the master’s fees.

Counsel for the Whiting Corp., in their brief say: “The sole issue involved is the validity of an agreement between the Klings and the Quickwork Company, to which Whiting is successor in interest,” and this seems to be the position of counsel for Kling Bros.

The record discloses that H. Collier Smith secured a patent on Quickwork rotary shears in 1910 or 1911, and was engaged in manufacturing the shears at St. Marys, Ohio, until his death in 1932. The shears were sold under the name of “Quickwork” all over the United States and many other countries. He was also engaged in manufacturing and selling power hammers. After Mr. Smith’s death his widow and son and the cross-defendant, Benton W. Packer, managed the business which was afterward moved to Chicago, and in 1935, the Klings approached Quickwork with a view to securing orders for the manufacture of Quick-work shears and hammers. Klings operated a job shop in Chicago and were experienced manufacturers of heavy machinery, manufacturing for distributors such as Joseph T. Ryerson & Son, Scully Steel and Iron Co., and others.

On June 5, 1935, the contract in question was executed by the Klings and the Quickwork Company. The pertinent provisions of it are: “It is the intention of this agreement to create a working arrangement between the Kling Bros. Engineering Works and The Qniekwork Company whereby the Kling Bros. Engineering Works will build certain machinery and parts for same on the order of The Quickwork Company and will in consideration of these orders protect the interests of The Quickwork Company in regard to the' building or sale of similar equipment not authorized by The Quickwork Company.”

That as a means of protecting the Quickwork Company’s interest Kling Bros, and its officers and stockholders who signed the agreement, bound themselves and their successors “not to build, sell, have built or sold or in any manner take part in or assist in any enterprise the practical effect of which would be to the detriment of The Quickwork Company, its successors . . . by competing with this Company in the supplying of the machinery described below or parts hereof.” Then follows a description of “rotary shearing or flanging machinery . . . Mechanically operated power hammers similar to those now being supplied to the industry by The Quickwork Company.” Then follows a recitation that while it is apparent that in all probability it will be for the best interest of the Quickwork Co. to have all of its machinery made by one builder, “The Quickwork Company does not agree to have all of its machinery built by the Kling Bros. Engineering Works” nor all of the parts of machinery, nor any specified part of its machinery built by the Kling Bros, for any specified length of time; that the agreement as to terms, prices and deliveries will have to be agreed upon by the parties as they arise; that all the patterns, drawings and jigs supplied by the Quickwork Co. for the use of the Kling Bros. Engineering Works, in the execution of the company’s orders are to be stored by the Kling Bros, in a suitable manner if so requested by Quick-work. And that they shall be immediately available to Quickwork upon request and will remain the sole property of Quickwork; that the work to be done by Kling Bros., unless specifically specified in an individual transaction shall be of the highest order— highest quality and first-class workmanship, etc.,

“This agreement shall be considered as being in force as long as the Kling Bros. Engineering Works continue to build the above machinery of parts therefor on the order of The Quickwork Company, its successors . . . and for an additional period of ten (10) years thereafter.”

After the execution of the contract, Quickwork placed many substantial orders for the manufacture of machines with Kling Bros, and delivered to the Klings drawings, jigs and technical information. Such orders were given, and manufactured by the Klings for about 6 years under the agreement, Quick-work paying Kling Bros, as high as $60,000 in one year and more than $200,000 altogether, for the manufacturing the Klings did. Early in 1940, Quickwork sold out to Whiting and the arrangement continued until early in 1941, when Kling Bros, employed two former employees of the Quickwork company and of Whiting.

On April 1, 1941, Kling Bros, wrote the following letter addressed to “The Quickwork Company, c/o Whiting Corporation, Harvey, Illinois. Gentlemen: Under date of June 5th, 1935, certain recitals were executed between your company and the undersigned. Inasmuch as your company has now ceased doing business, we are herewith notifying you that no further construction work will be performed under the arrangement referred to., and that said arrangement is herewith cancelled. ’ ’ Counsel for Whiting, in reply wrote Kling Bros, on April 4, 1941, acknowledging receipt of the letter, regretting that the Klings found it necessary to stop doing construction work under the contract of June 5, 1935, and hoping that the Klings’ decision might be reconsidered, and continuing: “If no further work is to be done by you, we assume that the ten-year period provided by the June 5, 1935, contract will begin to run when all of the work which you now have in process is completed and delivered. . . .

“It is not our understanding that the arrangement of June 5, 1935, is or can be canceled by you.” To this letter plaintiff replied April 14, 1941, stating that all work then in process would be completed by the Klings for Whiting, and the letter continues: “Inasmuch as the item Kling Bros. Engineering Works is manufacturing for your client is one that has no patent rights attaching thereto, and is therefore manufacturable by anyone, Kling Bros.

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Bluebook (online)
51 N.E.2d 1004, 320 Ill. App. 630, 1943 Ill. App. LEXIS 674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kling-bros-engineering-works-v-whiting-corp-illappct-1943.