Appellant, House of Crane, Inc., defendant below (hereinafter referred to as Crane) filed a counterclaim to which appellee H. Fendrich, Inc. (hereinafter referred to as Fendrich) filed a demurrer. The demurrer was sustained to the counterclaim and Crane refused to plead further. Judgment was thereupon entered for plaintiff-appellee upon appellant's counterclaim. The issues framed by Fendrich's complaint against Crane and the answer thereto are not before this Court upon appeal.
Crane's counterclaim against Fendrich in essence alleged that Crane, as well as its predecessor in interest, since 1894, was engaged in the business of wholesale distribution of cigars. Crane distributed a brand of cigar manufactured by Fendrich in 1905 and thereafter, both in the Indianapolis and Evansville areas. Crane, it was alleged, undertook to distribute a second brand manufactured by Fendrich and after many years of concentrated effort in promotion, Crane succeeded in establishing that particular brand as a sales leader. Over a period of many years Fendrich would assign territory to
Crane alleged further that starting in 1960, Fendrich commenced a course of conduct to impair and undermine Crane's effort to promote and sell Fendrich's cigars and permitted and encouraged other distributors within Crane's theretofore exclusive territory. In some instances, it was claimed, Fendrich sold cigars directly to large drugstore chains and other retail outlets. Crane asserted that Fendrich's "unwarranted" actions so damaged the profitability of Crane's business that Crane was forced to notify Fendrich in 1964 that it was discontinuing its wholesale cigar jobbing operation. Crane sought damages against Fendrich for the alleged contract breach in the sum of $750,000.00.
It is to be noted that the counterclaim does not allege that said "contract" was reduced to writing at any time during the continuance of Crane's business relationship with Fendrich. To the contrary, it would appear from the totality of the counterclaim allegations that the relationship between the parties grew gradually, somewhat like Topsy, and that the privilege and responsibilities of the respective parties existed
Fendrich demurred to the counterclaim on the ground that it did not state facts sufficient to constitute a cause of action or a setoff against Fendrich. By reason of our opinion here, we need consider only one basis upon which the demurrer was predicated as set forth in its memorandum attached thereto. Fendrich asserts that the alleged exclusive franchise agreement was invalid and unenforceable for the reason that there was no time fixed during which such agreement was to operate nor were there any provisions for termination of such an agreement.
Appellant Crane readily admits that the agreement did not specify a definite time or prescribe conditions which would determine the duration of the contract but argues that the absence of such specification does not render the agreement terminable by either party at will. In support thereof, appellant cites Federal cases from the Northern District of California and from the Third, Fourth & Ninth Circuits in addition to cases from Washington and North Carolina. Such cases are of no persuasive effect, however, in the light of a case decided by the 7th Circuit Court of Appeals, which case was reported subsequent to the full briefing of this appeal but prior to the oral argument held.
We deem the per curiam opinion in Bell v. Speed Queen (7th Cir.1969), 407 F.2d 1022, to correctly state the law of Indiana in this matter. It would serve no useful purpose to belabor the rationale of the Bell case or to exhaustively distinguish those authorities relied upon by Crane. The following language from the holding in the Bell case is, we think, dispositive of the question before us:
Likewise in International Shoe Co. v. Lacy (1944), 114 Ind.App. 641, 53 N.E.2d 636, and Grimn v. Baumgart, 121 Ind.App. 626, 96 N.E.2d 915, rehearing denied, 97 N.E.2d 871 (1951) the courts said that exclusive agency contracts which contained no date or method of termination were terminable at will, or unenforceable for lack of mutuality. See Grand Lodge Hall Associates v. Moore (1945), 224 Ind. 575, 70 N.E.2d 19, 22, aff'd per curiam, 330 U.S. 808 (1947); Uniform Commercial Code § 2-309(2) [Burns' § 19-2-309(2)]. Annot., Distributorship Contract — Termination, 19 A.L.R.3d 196 (1968).
We now, therefore, affirm the decision and judgment of the court below and assess the costs hereof against appellant House of Crane, Inc.
Lowdermilk, C.J., Carson and Cooper, JJ., concur.
NOTE. — Reported in 256 N.E.2d 578.