Caterpillar Tractor Co., a Corporation v. Collins MacHinery Co., a Corporation

Appellant is a large concern, doing business on a nation-wide scale. In the sale and distribution of its products it establishes dealerships and allots to each dealer a certain territory within which to sell appellant’s machines, attachments and parts. Prior to June 13, 1952, Western Tractor and Equipment Co. (hereinafter “Western”) was distributor of appellant’s products in sixteen counties in the state of Washington. On that date appellant served notice on Western that the dealership was terminated. Three days later the parties to this suit signed a written agreement whereby appellee became appellant’s new distributor in nine of these counties. The written agreement was a uniform one used by appellant with all its distributors and identical in all relevant parts to the agreement appellant previously had with Western. We detail certain of its provisions which are of importance in the .solution of this appeal:

At the time appellant’s agreement with Western was cancelled on June 13, 1952, Western had on hand a considerable quantity of machines, attachments and parts. In addition Western had placed orders with appellant for thirteen additional machines; appellant had accepted all…