Wagner Electric Corp. v. Hydraulic Brake Co.

This is a suit in equity brought by the complainant corporation to cancel a bonus agreement entered into by it and the defendant company. The relief is sought upon the broad ground that the consideration for the contract has failed. Specifically, it is alleged that because the defendant company has been acquired by Bendix Aviation Corporation, a holding and parent company of Bendix Brake Company, the principal competitor of plaintiff in the automobile brake industry, as a result there has been produced a continuing con *838 flict of interests that has operated to bring about failure of the consideration of the bonus agreement.

Throughout this memorandum, plaintiff will, for brevity, be called “Wagner,” defendant will be denominated “Hydraulic,” and the Bendix entities will be referred to as “Bendix.”

Defendant, a California corporation, is the owner and developer of United States and foreign patents for actuating vehicle braking equipment on automobiles. The inventions involved in this suit relate chiefly to hydraulic means of transferring the driver’s effort from the brake pedal to the friction elements such as brake shoes or brake bands to bring such elements into engagement…