*1 for declara- 8 U.S.C.A. § now establishing nation- tory judgments appellants. citizenship
ality trial be- consolidated were The cases alleged paternity appellants cause the grandfather
through common together. After they raised were claimed Dimock, re- evidence, hearing the unsatis-
lying on what he considered
factory appellants’ testi- character regard sur- mony childhood their contradic-
roundings, and evasions testimony respect to tions their States, held their life in the United allegations paternity their opportunity
proved. Since wit- judge to hear and observe trial case, significant in such
nesses is most finding will be we have held that “only circum- most unusual versed Cir., Dong Sep Dulles, 2 stances.” Lee af- 265. record 220 F.2d reversing Judge Di- no basis for fords findings his conclusion
mock’s their plaintiffs failed to sustain proof. of Civil Federal Rules
burden of 52(a), 28 U.S.C.A.
Procedure
Affirmed.
RUDD-MELIKIAN, INC., Defendant-
Appellant, MERRITT, doing
Henry business T. Service Plaintiff- Coffee Appellee.
No. 13858. Appeals Court of States
United Circuit. Sixth
Oct. *2 don, McKenzie, Gray
William A. Ohio, Ritchey, Cincinnati, Head & appellant. Eldred, & El-
Marshall P. of Brown dred, Louisville, Ky., appellee. ,* MILLER and Before O’SULLIVAN Judges, BOYD, Circuit District Judge. Jr., MILLER, SHACKELFORD Cir- Judge. cuit doing Appellee, Henry Merritt, busi- T. brought ness as Coffee Service action in the United District Court States for the Western to' District damages $15,- recover in the amount of alleged 202.98 for on breach of contract part appellant, Rudd-Melikian, of the Inc. Jurisdiction claimed reason diversity citizenship and the amount involved. Section Title 28 U.S.C.A. purposes opinion For the of this following present, are facts sufficient to By the issues. written March. contract of appointed appellee a operator appellant’s- distributor namely, vending products, ma coffee Kafe” chines “Kwik coffee. Under agreed appellee buy 60‘ “Coffee Cub” machines delivered' and, accepted at stated intervals on 1953. The June contract re deposit quired that amake $1,500.00, appellant of to be credited on price and, purchase machines, in the event breached the con tract, by appellant liqui be retained damages. dated resell, subject operate or to certain re strictions, purchased the machines “in territory only: described County, Kentucky, Jefferson State Floyd Clark State Indiana.” directly counties Indiana across * Judge designation. heard, At the time this ease was He became a Circuit sitting April Judge, O’Sullivan was a District many were unsatis- Louisville, installations Jefferson River Ohio factory, liked was well but that coffee Kentucky. Appellee
County,
eventually
well received.
serv
would
install,
efficient
and render
maintain
stating:
ap
him
This letter closed
ice
sold
*3
for all machines
times
at all
pellant,
keep on hand
and to
acceptance
further ma-
"As
of
spare parts and
adequate supply of
pur-
you
require
from
would
chines
n commoditiessufficient
re
to meet
employ-
of a
truck and
chase
second
Appel
purchasers.
quirements
its
of
man, which
route
ment of a second
pub
appellee, at
to
lant
to sell
finance,
presently unable to
we are
supply
avail
was
prices
lished
when the
machines
please
ship further
do
requirements of Kwik
able, his total
request.
noti-
our
We will
without
coffee,
specially prepared
Kafe
a blend
you
fy
progress
we
and when
of our
dispensing
appellant’s
for
in
coffee
use
operation
our
are able to extend
he would
Appellee
machines.
accepting
machines.”
more
ap
except
in
for use
not sell said coffee
May
Appellant
replied by letter of
sold
dispensing machines
pellant’s coffee
holding
shipment
units
up
of
was
that it
produced
n appellee.
operated by
delivery May,
for
grant
of 30
policy
entered
extensions
was
to
time this contract
At the
of
days
ex-
exceed two
a contract
time and not to
existence
a
there was
during
1952, by
similar
21,
a
a
months
which
tensions
six
November
granted
to
appellant
extension
desire for
and that notice of a
days
County,
given
in ad-
for
at least
L. Manus
Jefferson
should
John
Floyd
shipping
Kentucky,
date. The
proposed
Counties
and
vance of the
and Clark
31,
January
By
of
letter also stated:
in Indiana.
assigned
appellee the
1953,
to
Territory
Manus
plan to
our
will
have
“I
operate and sell
to
Manager
your area, Mr. Wm.
for
Kentucky.
County,
equipment in Jefferson
Guthrie,
you
fu-
near
call on
bought thirty
appellant's ma-
way
you
any
possi-
ture
assist
approximately
Manus at
chines from
ble.
agreement to
a related
each. In
$625.00
your
meet with
“We trust this will
appel-
appellant and
the contract between
approval
to hear-
look forward
case, appel-
present
lee involved
ing
you
near future.”
in the
from
written
into a
and Manus entered
lant
appellee
Under date of June
by which the contract
stating:
appellant,
wrote
appellee was
Manus
cancelled
n assigned
no misunderstand-
there be
thirty
on
“Lest
machines
a credit of
you May
sixty
ing
my
obligation
about
letter
total
purchase
a
his
accept
purchase
unable to
we are
machines, by
reason of
delivery
When
of more machines.
thirty
This
from Manus.
machines
oper-
accept
appellant
position to
are in
we
provided
also
you
notify
immedi-
appellee
thirty
more I will
ate
machines to
sell
would
ately.”
operated
territory previously
in the
assigned to Manus.
an incorrect
referred to was
The date
May 7,
to the letter of
bought
reference
30, 1953, appellee
April
ten
On
appellant.
con-
more machines
Thereafter, correspondence
ex-
delivery
for
and ac-
tract
ceptance
changed
period
a
between
over
May 20,
on
of ten machines
months,
appellee
advised
which
ten machines on
another
June
appellant of additional locations which
20, 1953.
obtained, which he considered ex-
he had
converting
necessity
By
May 7, 1953, appellee
cellent,
letter
ad-
machines,
into dime
that he had
machines
vised
encountered nickel
gross
good
installing
gradual
in the machine
deal of resistance to
increase
a
By
existed,
letter March
machines where
service
of the business.
other
1954, appellee
jury,
of his small work-
advised
The case
tried
which
converting
necessity
capital,
turned
$7,044.98
verdict
amount
operated
on two
appellee.
appeal
seven machines
This
sug-
operation
dime, and
nickels
gested
followed.
him to
appellant authorize
recover,
order
it was
against
deposit
$1,000.00 on
draw
necessary
obtained under
cannisters,
parts,
appellant for
contract of March
an exclu-
im-
conversion
“in order
mechanisms
sive
operate
franchise to
in the Louis-
prove
and our revenues.”
our service
ville area. The
District
was of
request
by letter of
denied
This
opinion that the
construction of the
*4
22, 1954,
April
which stated:
respect
question
tract
in that
you
we will
Court,
“This
to inform
law for
is
the
which view is con-
your
comply
not be able to
quest
with
curred
parties.
the
The District
any
deposit monies
jury
to credit
instructed the
thi
from
may
company
you
contract,
this
have with
the
the
nature
anything
against your
contract,
purchase
territory,
the
the restricted
according
equipment
con-
to the
the actions of the
surround-
policy
firm
of our
tract. This
the
is a
execution of
the
know,
and,
company
there
far as
intended
as
and was an
exclusive
exceptions
gave
it.”
no
to
tract
appellee
have been
to the
exclu-
the
enjoy
sive
to
the fruits
fran-
the
correspondence
reference
made no
This
chise
the
within
restricted district.
the con-
to
a breach or cancellation
Appellant
tract.
this
contends
construc-
tion of the contract
erroneous
ap-
Under date of October
given
that the
appellee
franchise
pellant’s
appellee that
counsel wrote
was not
It
exclusive one.
“your
dated
Sales Contract
Distributor’s
out that nowhere in the contract
being
as
is considered
March
provided that the franchise was to
anbe
moneys
deposit
there-
breach
the
Appellant
exclusive
relies
the
one.
under are declared
in accord-
forfeited
parol
prohibiting
evidence rule as
the
Appellee
ance
the terms thereof.”
with
adding
pro-
Court from
to the contract
only
a forfeiture
letter as
visions not contained in the
in-
written
deposit and not
a termination
of his
strument itself.
oper-
franchise.
continued to
He
and also
ate the machines
continued
do not consider
issue
this
buying
appellant.
parts
involving
as one
evidence rule.
began
appellee
In 1955
to make efforts
If
contract
that the fran
one,
to sell
business.
testified
any
chise was a nonexclusive
evi
these
that in
efforts
assisted
par
dence directed to
fact that
vice-president
orally agreed
and his assist-
ties had
franchise
Chicago
one,
ant
to Louis-
came from
who
was to
would not
attempted
possible
competent
to
ville and
interest
have been
in that
it would
taking
purchasers
appellee’s
over
attempt
vary
been an
have
oral
through
franchise. This continued
evidence the terms of a written instru
October, 1956,
of 1956.
summer
About
ment. But
the written contract con
negotiations
being
provision
while
carried on
no
tained
as to whether it was
Grocery Company,
with the Louisville
an exclusive franchise or a nonexclusive
appeared
pros- one,
to be an interested
which
and the evidence an this
did
pect,
vary
learned that
any provision
not
contradict
given franchise for the Louisville area
the written
Under contract.
Ken
Koffee-Break,
tucky law,
controlling
Inc. This terminated
in negotiations
ease,
the Louisville
with
can
be an ex
Grocery Company.
present
though
The
action
one
clusive
even
there is no ex
damages
press
followed.
provision written
compelled
Company v.
resort to
consideration of
effect.
White
Parley Co.,
66, 292
S.W.
P.
circumstances
W.
472, 474,
indicating
participants
541. In that case
conduct of the
52 A.L.R.
said,
interpretation.”
“The
Appeals
their
See
Morris
Court of
also:
prepared
Coleman,
Ky. 837,
Company
appears
Shoe
have been
contract
by appellant,
specifically 840,
S.W.
which case
and does
express
written
exclusive contract.
no
provide that it is an
contained
however,
whole,
respect
provision
are
to whether
provisions
Its
as a
employment
any
view.”
other
inconsistent with
construing
year
period
case as
of a
will
in that
terminable at the
party.
one,
referred
of either
the Court
who
appellee,
which the
limited area in
Appellant has
to no Ken-
referred us
agent
appellant, was
was the sales
tucky
ruling
case
conflict with the
operate,
authorized to
fact
White
P. W.
required
other
handle
Co., supra,
might
and even we
not be
if
parts there-
commercial motor cars
ruling,
in
quired
we are re-
by appel-
*5
except
for
those manufactured
accept
purposes
it
the
parties in
lant,
action
the
to the
Kausch,
present
the
case. Milan v.
6
considering
exclusive
an
the contract as
Cir.,
Doggrell
263, 266;
194 F.2d
v.
agency during its term.
Co., Cir.,
Southern Box
6
F.2d 310.
208
recognize
said in
that what was
construed
is
A contract
Farley
Company
v.
P.
White
W.
give
as to ascertain
as whole so
a
Co., supra,
ruling
was not a
on an issue
parties,
intent
to the true
effect
dispute
parties,
which was in
between the
the
under which
and the circumstances
change
ruling
but this does not
into
the
the conduct
was executed
by
unnecessary
statement
the Court
parties thereafter can
the
which
In
should be treated
dictum.
as
determining
their
by
what
in
the Court
Farley
ease,
order for
recover in that
being a viola
was, without it
intention
necessary
it was
that
contract be
Holliday
rule.
evidence
tion of the
construed as an exclusive franchise. Dis-
Ky. 45, 48-49,
Sphar,
89 S.W.2d
v.
262
necessary
puted
undisputed,
it was a
Insurance Co.
Life
National
Lincoln
controlling
ruling
upon
that had
effect
a
Ky. 566, 575,
Means,
95 S.W.2d
264
v.
the
decision.
fact that counsel did
of the mean
In the determination
disagree
ruling by
proposed
awith
ambiguous
ing
con
an indefinite
against
change
him did not
the
ruling
the
Court
placed
interpretation
the
tract, the
unnecessary
statement
giv
parties
themselves
to be treated as dictum.
the Court
Un-
vary
weight by
great
Court,
not to
en
City,
Co.,
etc.,
ion Pacific Co.v. Mason
R.
instrument, but
the written
terms
160, 166,
199
26 S.Ct.
50 L.Ed.
U.S.
wording
that which the
definite
make
Maryland
Casualty Co.,
Fouts v.
indefinite. Jones
has left
of the contract
Cir.,
357, 359,
F.2d
certiorari denied
936; Billips
Linkes, Ky., 267 S.W.2d
v.
v.
U.S.
S.Ct.
L.Ed. 995.
6, 7;
Ky.,
Easter v.
Hughes,
S.W.2d
Johnson,
Company
After granting contract, judge sider an ex said the contract as trial such, appellee, the franchise to the that he clusive determined that contract, jury District told the “from also of this pretense that there was semblance or nature of the restricted no obligation territory, parties fulfilled his actions sixty by the take the contract, machines covered that con- the execution of of the con tract.” which was a breach part giving appellant the tract on describing preamble, After the usual to terminate the as and “distributor” “seller” time, and that unless waived respectively, pro- us breach, appellee could not recover. vides : jury He left of wheth to the hereby appoints DIS- “SELLER er there was waiver of the breach TRIBUTOR and DISTRIBUTOR by appellant proceed an election hereby accepts appointment aas despite are the breach. We operator of the DISTRIBUTOR and opinion was suffi the evidence products, viz., Seller’s RUDD-MELI- jury. Chi cient to take this cago Sugar to the issue KIAN, vending INC., machines Sugar Co. Refin American v. coffee, upon and sub- ‘KWIK KAFE’ Cir., F.2d certiorari 7 176 ject to the and conditions terms 948, 486, denied L. U.S. 70 94 338 S.Ct. * * contained, hereinafter O’Bryan Mengel 584; Company, Ed. v. 6 S.W.2d Corp. Merritt, assigned A Natural Gas Indiana Gas distributor, as follows: Cir., Corp., Chemical F.2d DIS- “TERRITORY ASSIGNED 317 U.S.
A.L.R.
certiorari denied
agrees to
TRIBUTOR: Distributor
Pasquel
L.Ed.
S.Ct.
operate
subject
resell,
Owen,
Cir.,
F.2d
below,
strictions noted
the machines
exceptions
by appellant
taken
No
purchased under
*7
question of
to the instructions on the
waiver,
any other Rudd-Melikian machines
they
subject
are not
to
may
acquire
it
in the
de-
view at this time. Rule
Rules of Civil
territory only:
scribed
County,
Jefferson
Procedure, 28 U.S.C.A.
Kentucky,
State of
Clark
judgment
Floyd
The
is affirmed.
in the
Indiana.
State of
needed attribute
from the
judge
contract
is
had an exclusive
clusive contract or
ed
ship
tial
his contract
tract
ing).
I
O’SULLIVAN,
cannot
to
or from the
found, must, therefore,
ruled
jury.
exclusive franchise and so
appellee’s recovery.
language employed
to be
agree
with
as a
that Merritt’s distributor-
Nowhere in the
an exclusive
of
matter of law
appellant.
Circuit
conduct of the
distributorship
that
exclusiveness,
franchise
did
provide
Such
the con-
in one.
The trial
(dissent-
that
plaintiff
parties.
Merritt
implied
if
charg-
an
essen-
under
it is
The
ex-
to
lows that
tract
territory assigned to him
right
us
Here,
be exclusive. He concedes that the con-
tention that
siveness is
not
limited to a certain
The
to the counties
to
Other
[*]
no
refers to exclusiveness or
expression
use the trademark “Kwik
only place
persuaded
provision
[*]
is
to deal in
*»
clear and
than
he has such
in the seller’s
seller,
his
claiming
mentioned, appellee points
where the
of the
that because
distributorship
implication
unambiguous.
territory,
Rudd-Melikian,
contract
right
that because the
contract grant
was
products
exclusively.
containing
non-exclu-
of an in-
appellee’s
of
towas
limited
Kafe.”
right
I am
fol-
is
grant
is
((
position
It
our
con-
was to
careful to
state that
by
meaning
itself,
plain
tract
trademark.
of the
“non-exclusive” use
language
therein,
contained
Mer-
Having
appellee,
in mind that
granted
to
en-
asking
ritt,
his
operate
and sell coffee
construction,
dowed,
judicial
by
vending
appellant
of
machines
ex-
quality
does
territory described in
contract.”
said
inquire
press,
wheth-
proper
think it
by
accomplished
such
what
er
he has
appellee, however,
insists that the
in-
By
been
struction
within
could have
interpretation
trial court’s
of the con-
contracting parties.
tentions of the
properly
tract was
aided
considera-
buy
ma-
his
he
background
tion
of
of
complete this
chines. He refused to
negotia-
statements
made
of
purchase.
representation
His
tions
preceded
which
its execution.
appellant
himto
was unsatisfactory
There
Merritt’s
was received
evidence
appellant.
He abandoned
testimony
preliminary
that in
conversa-
coffee,
the sale
use
the blend of
representatives
tions with
defend-'
appel-
being promoted
which
company
ant
if
it was
to him that
stated
(His
lant, in
favor
another brand.
distributorship,
he took a
he would have
ap-
require
him to use
did
competition.
control his own
pellant’s
exclusively.)
sold
He
coffee
repre-
He said that he told defendant’s
purchase
some of
did
the machines he
buy
sentatives that
so
he went
far as
if
trial,
and at
the time of the
owned
sixty machines, he would have to have an
original
pur-
which he had
exclusive franchise in the area in which
operation
His
not success-
chased.
operate.
he was
The conversations
unpaid
ful
he had
dunned for
been
subject
which
exclusive con-
pur-
parts
accounts for
and coffee he had
part
tract was discussed
from,
appellant.
through,
chased
negotiations
preceded
execution
term,
pro-
contract had
fixed
no
but
the contract.
insists that the
that it
vided
was to remain
force “so
unambiguous,
clear and
long as
gations contained in this
fulfills
obli-
distributor
all
proper
likewise insists that it was
agreement.”
the trial court to
take
consideration
He
able
overcome his own breach
negotiations
preliminary
these
in arriv-
refusing
buy
of the contract in
parties. Ap-
at the intention of the
number of machines he had contracted
says:
pellee
claim
had ir-
appellee’s
“It
contention
revocably waived
his breach
contract.
*8
given only
when consideration is
Notwithstanding the serious failure of
contract,
of
the
the
is
enterprise
hands,
employs
in his
the
granted by
clear that
was
claim of
his
exclusiveness to forever for-
the contract an exclusive franchise
appellant,
damages
pays
the
unless it
bid
assigned territory.
within the
It is
contract,
doing
breach of
from
busi-
necessary,
not
in order to reach this
n
territory.
in the
ness
Louisville
interpretation,
to consider
cir-
the
Both
concedethat the construc
cumstances
the execu-
of
was
tion
the contract
a matter of law
tion of the contract. When such
judge.
determined
the trial
considered,
circumstances are
ever,
how-
Mfg. Distributing
Cliffs
Laurel
v.Co.
were,
they properly
rather
as
Ky.
Prichard,
762,
contradicting any part
than
Edwards,
Ky. Johnson
contract, they
written
demonstrate
Wigging
Harlan Fuel
S.W.2d
v. Co.
par-
that it was
intention of
the
Ky. 546,
ton, 203
said torship, Merritt, lawyer practicing distributorship. án whereby Manus contract drew a brought upon Merritt suit the written give distributor- to ship. Merritt an exclusive pro- contract and his claim that it carefully provided: The contract vided him an claiming fraud, exclusive distributor- ship. to ex- He is Merritt nor is he “Whereas desires seeking clusively operate, and lease said he reform a sell claims products trademark to use said entered into mistake. and Kentucky, Wigmore, County, history reviewing in * * after Jefferson hereby grants emphasizing *. Manus evidence rule and right, merely evidence, that it is not and exclusive rule of Merritt sole operate, privilege law, but one of franchise substantive states: sell, said Rudd- and lease vend all jural “When a act is embodied Inc., Melikian, products in Jefferson single memorial, all utter- other Kentucky.” County, topic parties ances on that are legally purpose immaterial for the any repre- There is no evidence determining what are the terms anything to sentative of defendant had Wigmore, Evidence, their act.” 9 § negotiations Merritt do with the between (3rd Ed., p. 1940) 76. knowledge any or had Manus whereby expressed The rule is above of the contract C.J.S. as fol- sought Merritt an exclusive lows: to obtain “ * * * distributorship Manus. The can- excep- with certain * * * agreement by de- cellation the Manus fraud, such as tions acci- fendant did not until after mistake, ambiguity, occur parol or dent, or negotiated directly be- tract had been not admissible extrinsic evidence is * ** plaintiff defendant Merritt tween vary, the terms add March, some time in provisions written instru- or by showing ment, the intentions negotia- testifying concerning parties, their real or tions for a Rudd- direct subject matter, with reference get Melikian, told he of his desire different from what to have been expressed perfectly made exclusive contract: “I writing, for where clear at that time that if we went that far, deliberately put parties have have to we would have writing engagements their area, and he made it obliga- legal import a such terms as perfectly clear to us that did take if we any tion, uncertainty toas without sixty we would have machines engage- object extent of their the ment, exclusive franchise in these three areas.” contemporane- previous all representative He told of the of Rudd- agreements negotiations ous * * exhibiting printed * Melikian to him the presumed are or consid- being form of offered to him. merged in, or su- to have been ered He stated: out that the “I by, perseded the written nothing being said about ex- engagement whole clusive.” un- and the extent of their dertaking conclusively presumed counsel, On examination his own writing, to have been reduced up was asked to sum the items * * * regard- writing being verbally, appear did not “which or were agree- only evidence of the ed as not touched the written contract.” ment.” C.J.S. Evidence § He answered: “First and foremost pp. (1942). 816-822 fact that we would have dealing distributorship contract here.” This was are not here with the ne- cessity seeking help statement a clear that Merritt to find knew out some
935 usage giving Co., 1938, local urban Development a or custom words Electric meaning. Williston, peculiar in dis- 765; 332 Pa. or cussing Peer 2 A.2d William ing Beatty, 1898, & the rule that Co. v. 107 Iowa arriving may Taylor 325; be shown in 77 .circumstances N.W. Aultman & Co. v. contract, Joplin, 1886, Ky.Law of a proper 62; at construction Rep. In 8 subject as Road concludes the follows: diana riage Mach. v. Lebanon Car Co. Implement Co., 1904, 78 S.W. however, mind, kept in “It must be Ky.Law Rep. 25 1763. only purpose for which such that the in an ac- ever admissible evidence is The similarity of Dahath case interpret tion is to on the contract Electric Co. De- v. Suburban Electric writing. far as the evidence So velopment Co., supra, to the case bar meaning not the to show tends warrants a short discussion its facts writing wholly un- an intention Pennsylvania and the conclusion expressed writing, it is irrele- Supreme contended There was Court. Contracts, Williston, vant.” § expressly providing contract not (Rev. 1936). Ed. for an distributorship should Kentucky. Falls be Such is the law of construed to intend such. As this Wrecking City Machinery case, v. Co. the distributor limited in the Ky. 726, Walter, operate. which he He was to required v. Northeast Lumber appliances to service the Ky. 454, Harris, 1927, 455. S.W. sold him as distributor. He was re- agreed, as, Under- ferred This Cincinnati to in' court has the contract “the dealer” territory Emery Agency Thomas Co. and in writers J. certain instances the al- Memorial, Cir., 1937, F.2d as, lotted to tory.” him “his terri- was described sought The distributor to show one evidence rule is Whether the that he promised had been an exclusive law, pur- of evidence or substantive agency and that that was the understand- pose here prevent what ing negotiations preceded accomplish. seeks Whether the making the sylvania of the contract. The Penn- negotiation Merritt tract under between emphasized court that the con- provide, or was to Rudd-Melikian deliberately tract had been entered into distributorship provide, not by businessmen, holding that the critically subject conspicuouslyand preliminary sup- could not conversations negotiations carried of discussion in the exclusiveness, ply missing term of contracting parties. between and that the contract could be con- finally discussed, and When the terms intending strued such the court said: integrated formal, agreed upon, in a “ * * * parties to this con- unambiguous, admittedly docu- written provision tract, businessmen, competent ment, vitally this desired agen- they contemplated asserting missing. party that we cy, would we think have so missing provision should read agreement. It could the written lawyer practicing was a properly justly not be concluded who, prepared previous document in a they important left this most him, carefully clearly spelled out feature out to be noticeably term absent read into it inference.” upon. we do not think should now sued supply I missing provision. such grant- appellant’s hold would that the distributorship cited cases relevant another annotation, any found at contract with 126 A.L.R. a breach of King support and that motion for above conclusion: grant- Dillon, 1908, directed verdict should have been Powder Colo. Co. Electric Co. 96 P. Dahath v. Sub ed.