Dairy Queen, Inc. v. Wood

PETITIONER: Dairy Queen, Inc.
RESPONDENT: Wood
LOCATION: Southern District Court of New York

DOCKET NO.: 244
DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 369 US 469 (1962)
ARGUED: Feb 19, 1962 / Feb 20, 1962
DECIDED: Apr 30, 1962

Facts of the case

Question

Media for Dairy Queen, Inc. v. Wood

Audio Transcription for Oral Argument - February 20, 1962 in Dairy Queen, Inc. v. Wood

Audio Transcription for Oral Argument - February 19, 1962 in Dairy Queen, Inc. v. Wood

Earl Warren:

Number 244, Dairy Queen, Incorporated, Petitioner, versus Honorable Harold K. Wood, et al.

Mr. Egnal.

Michael H. Egnal:

Mr. Chief Justice and may it please the Court.

This case involves the right to a trial by jury in a civil action.

The District Court judge denied the demand for a jury trial and his reasons briefly were that upon a consideration of the issues raised in the complaint and answer, he concluded that the action was purely equitable although he found that this complaint included a demand for the payment of $60,000, allegedly do by reason of the breach of contract of a facts or rather scan.

The petitioner in this case held a franchise for the use of the trademark, Dairy Queen, in the State of Pennsylvania.

And this agreement was made in October of 1949.

The agreement provided that the total consideration for the payment of this franchise was $150,000, which a thousand was paid at the execution of the agreement and the balance was to be paid from the proceeds, 50% of the proceeds of the sale of sub-franchises provided that beginning with October of 1955, there was to be paid not less than $18,625 per annum.

This payment was made regularly until October of 1954, and it was not made at that time.

But the parties in January of 1955 reached a normal agreement that thereafter, the obligation of the petitioner was to merely pay 50% of the sales of sub-franchises and there would no longer be any need to meet this annual minimum payment.

This continued for six years thereafter.

The parties were harmonious until August of 1960 when the plaintiff in the action below, took the position that there was now due and owing the entire balance which was some $60,000 payable under the contract and the contention of the petitioner raised that was a repudiation of the oral agreement which had modified the original written agreement and which had been implemented for some six years.

John M. Harlan II:

You're the respondent or the defendant, original defendant (Voice Overlap)

Michael H. Egnal:

Yes sir.

That is correct sir.

John M. Harlan II:

And your defense was this alleged oral agreement?

Michael H. Egnal:

Yes sir, made in January of 1955, and as I say, implemented for the next six years.

Now, when the complaint was filed, it -- or I'm ahead of myself.

In August of 1960, the position of the plaintiff below changed and it then demanded the payment of the balance to one of the contract which was indicated by a letter.

That's Exhibit C attached to the complaint.

And in that letter, it expressly recited that unless you pay the balance due and owing under the contract, we will consider that a material breach and we will cancel the franchise.

That position was not recognized by the petitioner and subsequently a complaint was filed.

In the complaint, it was sort to enjoin on the theory that the -- that the franchise had been cancelled by this x-party declaration of the plaintiff below to cancel the franchise, restrain the petitioner from many further use of the trademark and they will restrain the petitioner from collecting any moneys which it would be an incident of a continued use of the franchise and for a judgment of the amount due and owing under the contract.

Our position briefly is that while there was cloth in this complaint, some equitable attire that basically, before there could be any equitable relief, this plaintiff had to establish that there was a breach of a contract, that there was an amount due under the contract.In other words, he would have to sustain the -- the legal course of action.

And if that could be sustained, he would then become entitled to equitable relief.

John M. Harlan II:

What is the equitable relief or the equitable attire, whatever that phrase that you (Voice Overlap)?

Michael H. Egnal:

Well he -- in his prayers, in his prayers, he uses the conventional prayers that would be found in a complaint equity asking that the Court enjoin this defendant, the petitioner, from any further use of a trade name.

He uses a phrase that the Court should grant an accounting for the amount due and owing under the contract and uses the -- the terminology which is peculiar to equity proceeding.

That is what I mean by the attire.

Now, we take the position that regardless of how much there is in evaluating this complaint, how much there maybe a scribe for the legal course of action, if there is a legal course of action involved in this preceding, a right to a jury trial cannot be denied.