Lund v. E. D. Etnyre & Co.

242 N.E.2d 611, 103 Ill. App. 2d 158, 1968 Ill. App. LEXIS 1410
CourtAppellate Court of Illinois
DecidedDecember 10, 1968
DocketGen. 68-28
StatusPublished
Cited by9 cases

This text of 242 N.E.2d 611 (Lund v. E. D. Etnyre & Co.) 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
Lund v. E. D. Etnyre & Co., 242 N.E.2d 611, 103 Ill. App. 2d 158, 1968 Ill. App. LEXIS 1410 (Ill. Ct. App. 1968).

Opinion

MR. JUSTICE MORAN

delivered the opinion of the court.

Plaintiff brought suit for an accounting for commissions that were allegedly due him on the sale of certain machines. The defendant filed a motion to dismiss the complaint under section 48 of the Civil Practice Act (HI Rev Stats 1967, c 110, § 48 (g)). The sole ground of the motion was that the agreement sued upon by the plaintiff violated the Statute of Frauds, in that it was an agreement which could not have been performed within one year. Section 48 provides that, where the grounds for dismissal do not appear on the face of the pleading attacked, as here they did not, the motion may be supported by affidavits, and that procedure was followed here. Defendant filed affidavits in support of its motion, and the plaintiff filed counteraffidavits. The trial court then entered an order granting defendant’s motion and dismissing the complaint with prejudice. Plaintiff appeals from that order.

The basic facts of the case, as they appear from the complaint and the affidavits, are simple. The plaintiff, Harold Lund, was at one time employed by the Koehring Company, a manufacturer of road building equipment. One type of machine manufactured by Koehring was a “chipspreading” machine, the function of which is to spread rock chips on a road surface which has been freshly sprayed with liquid bitumen or asphalt. It appears that plaintiff played a major role in the design and manufacture of the chipspreader marketed by Koehring and, while he was employed by this company, he executed a restrictive covenant not to compete, which, so far as it is relevant to this case, purported to restrict him from engaging in the design or manufacture of any competing chipspreader at any time before September 1,1962.

In January of 1960, plaintiff voluntarily left the employ of Koehring, and began corresponding with one of defendant’s officers concerning the possibility of going to work for defendant. Finally, on June 20, 1960, as a result of a meeting at defendant’s offices in Oregon, Illinois, plaintiff was hired by the defendant. The defendant was represented at this meeting by Joseph McCoy and Horace H. Etnyre, two of its officers. Both sides agree that an oral agreement was entered into at that time, whereby plaintiff was employed at a salary to work for the defendant in areas which were apparently outside the scope of his restrictive covenant with Koehring. Plaintiff alleges, and the supporting affidavit of McCoy (who is no longer employed by defendant) confirms, that it was further agreed at this meeting of June 20, 1960 that, as soon as plaintiff was free of his restrictive covenant with Koehring, he would design a chipspreading machine to be marketed by the defendant, and that he would receive a royalty of $200 on each machine sold by defendant. The affidavit of Horace H. Etnyre admits that the matter of a chipspreading machine was discussed, but states that it was deferred until a later time, and denies that the royalty agreement claimed by plaintiff was made.

Plaintiff began work pursuant to the oral agreement, and was paid his regular salary. Then, in May of 1962, about four months before the restrictive covenant expired, plaintiff began work on the design of a chip-spreader. Plaintiff alleges that he began this work at the request of defendant, and this is not denied by defendant. Plaintiff alleges, and defendant does not deny, that he did design the chipspreader, that the machine was manufactured according to his design, and was ready for marketing by the fall of 1963. It is further alleged and undenied, that since that time a substantial number of the machines designed by plaintiff have been sold by the defendant, and that defendant has refused to pay any royalties to plaintiff. He left defendant’s employ largely because of this refusal.

Although it is not dispositive of any question before us, it is of interest to note that plaintiff and defendant were sued by Koehring in the federal court, based upon alleged patent infringement, misappropriation of trade secrets, and other unfair competition. Koehring Co. v. E. D. Etnyre & Co., 254 F Supp 334 (1966). One of the grounds of the complaint in that case was the breach of the restrictive covenant, and, although the court found that Koehring had failed to prove a case of patent infringement, misappropriation of trade secrets or the like, it did find Lund and Etnyre liable for breach of the restrictive covenant, and entered judgment against them, jointly, for $2,475 as the amount found due as liquidated damages under the provisions of the restrictive covenant. The court, at pp 362-363, further found that Koehring had failed to show any actual damages proximately resulting from Lund’s breach of the restrictive covenant.

On the facts set forth in the complaint and the opposing affidavits, we think the law in regard to the applicability of the Statute of Frauds is clear. The pro-

vision involved is the part of section 1 (Ill Rev Stats 1959, c 59, § 1), which provides:

“That no action shall be brought . . . upon any agreement that is not to be performed within the space of one year from the making thereof, unless the promise or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.”

Plaintiff does not dispute that the clear terms of the oral agreement in regard to the royalties provided that he was not to start work on the chipspreader until after September 1, 1962, the date his covenant expired. Thus, the date that he would begin performance on the chip-spreader design was more than two years after June 20, 1960, the date the oral agreement was made. Plaintiff argues that, since he could have started designing the chipspreader immediately, as a physical matter, notwithstanding the terms of his agreement, this means that the agreement “could” have been performed within the year. In support of his position, he cites authorities for the proposition that, if the agreement is capable of performance within a year, the Statute does not apply. Plaintiff misunderstands this line of cases, however, because they are not referring to a physical possibility of doing the work contemplated in a shorter time than that specified in the agreement. Rather, it is a question of whether, ;pursuant to the terms of the agreement, performance is possible within a year. “The Statute does not apply if it appears from a reasonable interpretation of the terms of the agreement that it is capable of being performed within a year.” (Emphasis added.) Hall v. Gruesen, 22 Ill App 2d 465, 470, 161 NE2d 345 (1959). Here, on plaintiff’s own allegations, he could not have performed the agreement within a year of its making because, by its terms, he was not to start until more than two years after its making. It is, of course, the date the agreement is made, rather than the date performance is started, that marks the beginning of the year. Thus, even though plaintiff might have completed design of the chipspreader in less than a year, once he got started, (as it appears he actually did), this is irrelevant. The relevant inquiry is whether he could have performed the agreement according to its terms within a year from the date of the agreement. The rule is illustrated by Sinclair v.

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Bluebook (online)
242 N.E.2d 611, 103 Ill. App. 2d 158, 1968 Ill. App. LEXIS 1410, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lund-v-e-d-etnyre-co-illappct-1968.