Petition for Writ of Certiorari — Jarboe Bros. Storage Warehouse, Inc. v. Allied Van Lines, Inc.

“UPREME COURT. BG. &

In THE

Supreme Court of the United States

OctToser TERM, 1968

c¢ =—_ See ee ee

JARBOE BROS. STORAGE WAREHOUSE, INC.,

Petitioner,

V.

ALLIED VAN LINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Howarp G. REAMER,

223 Equitable Building,

Baltimore, Maryland 21202,

Attorney for Petitioner.

The Daily Record Co., Baltimore, Md. 21203

Sie

.

INDEX

TABLE OF CONTENTS

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CONSTITUTIONAL PROVISIONS INVOLVED .......00..0000000.. 00.

STATEMENT OF THE CASE |..o...0.0...000..ccecccececeeeeees nites

REASONS FOR GRANTING THE WRIT .....0000.00.0..00.ccccccecceceeees

A Mla A Acs OO oe AR EOE RC Beye

APPENDICES:

Appendix A:

Jarboe Storage Warehouse, Inc. v. Allied Van

Lines, Inc., U. S. Court of Appeals for the

Fourth Circuit, No. 11,861 — Decided Septem-

Ep dale PR 2 ES ee eke Nee eS, ED ie

Appendix B:

Amendment 5, Constitution of the United States

REST. COC RRC re See! MRI

Amendment 14, Section 1, Constitution of the

United States of America ............0....00 cece

TABLE OF AUTHORITIES

Cases

Bayside Fish Flour Co. v. Gentry, 297 U.S. 422 ............

Central Bus Operators, Inc. v. Central Avenue Bus

Owners Association, 128 N.J. Eq. 177 0...

Nametra, Inc. v. American Society of Travel Agents,

ig UO ME I hace ss secsencspservncecmm pons vavsevone

Prudential Insurance Co. v. Cheek, 259 U.S. 530 ........

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In THE

Supreme Court of the United States

OctTosEerR TERM, 1968

en

JARBOE BROS. STORAGE WAREHOUSE, INC.,

Petitioner,

Vv.

ALLIED VAN LINES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Jarboe Bros. Storage Warelieuse, Inc., Petitioner, prays

that a writ of certiorari issue to review the judgment of the

United States Court of Appeals for the Fcurth Circuit

entered September 5, 1568, affirming the United States Dis-

trict Court for the District of Maryland. )

OPINION BELOW

The opinion of the Court of Appeals is reported as Jarboe

Bros. Storage Warehouse, Inc. v. Allied Van Lines, Inc.,

ae F. 2d ....., and it is printed as Appendix A hereto.

JURISDICTION

On September 5, 1968, after deliberating for six months

after oral argument the Court of Appeals for the Fourth

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Circuit affirmed the decision of the United States District

Court for the District of Maryland.

Jurisdiction to review the judgment in question by Writ

of Certiorari is conferred on this Court by 28 U.S.C.A.,

Section 1254(1).

QUESTION PRESENTED

1. Was the manner of cancellation of the contract be-

tween the Petitioner and the Respondent arbitrary and un-

reasonable and lacking in due process of law?

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

This case involves an important question of contract law

which relates to interstate commerce. It also involves the

due process clause of the Fifth and Fourteenth Amend-

ments.

STATEMENT OF THE CASE

On April 23, 1967, Jarboe Bros. Storage Warehouse, Inc.

(“Jarboe”) filed a Bill of Complaint for an injunction in

the Circuit Court of Baltimore City against Allied Van

Lines, Inc. (“Allied”) to enjoin the termination of a Non-

Carrier Agency Contract between Allied as Carrier and

Jarboe as Agent.

Thereafter Allied removed the case to the United States

District Court for the District of Maryland where it was

tried on August 21st to the 24th, 28th to the 29th, 1967,

before the Honorable Frank A. Kaufman.

At the close of Jarboe’s case, upon motion of Allied, pur-

suant to Rule 41 (B) of the Federal Rules of Civil Pro-

cedure, Judge Kaufman dismissed the case. Jarboe ap-

pealed to the United States Court et Appeals for the Fourth

2 Pedra

3

Circuit, and some six months after argument of the case the

decision of the United States District Court was affirmed

by the United States Court of Appeals for the Fourth

Circuit.

Jarboe or its predecessor has been an agent of Allied

for more than 20 years. In 1961, Lester J. Feit acquired all

the outstanding stock of Jarboe and became its President.

Lester J. Feit was the President of Jarboe at a time in

i965, when he submitted false and inflated bids for the

hauling and transportation of goods, and sent the same

through the mails. The transportation involved was en-

tirely within the State of Maryland, and the moves that

were contemplated and ultimately made were completely

within the boundaries of the State. However, because of

his use of the mails and the fact that Urban Renewal, a gov-

ernmental agency, was to pay the cost of the moves, he was

indicted by the Federal Government on three counts, to all

of which he pleaded guilty on November 2, 1966, and was

fined a total of $21,000.00 which he paid. At the time of

Feit’s conviction Jarboe was an Allied agent pursuant to

No. 1, Non-Carrier Agency Contract dated January 16,

1953, as amended August 8, 1963, reading in part as follows:

“1, Carrier for the term hereof covenants:

“1.1 To constitute and employ subject to its reason-

able rules and regulations from time to time estab-

lished the said Jarboe Bros. Storage Whses. as its Agent

to solicit, to estimate the weight, size and charges of, to

collect charges for and to book, register, pack, crate,

prepare for transportation, receive, load, transfer, un-

load, store, warehouse and deliver for and in behalf

of Carrier, shipments of commodities which the Carrier

has authority to transport and as from time to time

directed by Carrier to provide equipinent and to bill

and haul such or other shipments of such commodities;

* * * * oa *

“2. Agent, for such term, accepts such agency em-

ployment at such compensation and covenants:

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4

“2.1 To perform and discharge loyally, diligently and

efficiently, all the duties and responsibilities of such

agency and employment, under Carrier's complete and

exclusive control, direction and supervision and in

strict compliance with Carrier’s then reasonable rules

and regulations, as well as with all Jaws, orders and

regulations of competent governmental authority.

a * * * ak *

“3. The Parties mutually covenant:

“3.1 The term hereof shall be for a period of one (1)

year from date and thereafter until terminated as fol-

lows: Agent may terminate this contract with or with-

out cause upon ninety (90) days written notice to

Carrier; Carrier may terminate this contract upon ten

(10) days notice to Agent if and only if

Agent for a period of ninety (90) days after notice

by the Carrier so to do shall fail or refuse to cure

or remedy any breach by him of this agreement

claimed by the Carrier in such notice, unless with-

in such period the Agent shall either

(1) demand arbitration as provided in section 3.2

hereof, in which case the contract may be ter-

minated by the Carrier if Agent shall fail fully

to comply with the award of such arbitration

within thirty (30) days after notice so to do;

or

(2) file an action or suit in a court of competent

jurisdiction to enjoin such termination in

which case the contract may be terminated

by the Carrier if and only if there shall be no

final decree or judgment of such court enjoin-

ing such termination.”

Allied Van Lines is the culmination of a need of a num-

ber of independent warehousermen for an organization

which would allow them to engage efficiently and economi-

cally in the interstate movement of household goods, the

purpose being to have a national organization to service

their needs in interstate commerce, the most important

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5

need being to utilize their equipment and employees fur-

ther by providing both outgoing and return loads when

they were engaged in interstate transportation of house-

hold goods. Prior to this a warehouseman would, for ex-

ample, ship a load of goods from Baltimore to Chicago and

return empty. By having a central organization such as

Allied the warehouseman would report bookings to Allied

who in turn would book return shipments using the equip-

ment and employees of the Agent.

Prior to 1928, a number of independent warehousemen

were associated in an organization known as the National

Furniture Warehousemen’s Association and through this

organization, Allied was organized in 1928 as a non-profit

Delaware Corporation for the principal purpose of engag-

ing in the interstate movement of used household goods and

the voting stock of Allied was held and voted by the

Association.

Upon passage of the Motor Carrier Act in 1935, Jarboe

and many other independent warehousemen of the Allied

group applied for and received from the Interstate Com-

merce Commission, rights to operate as common carriers

by motor vehicles of household goods in interstate com-

merce in the territories in which they had carried on op-

erations. Jarboe secured such rights in eleven states and

the District of Columbia.

In 1936 Allied applied for a certificate of public conveni-

ence and necessity authorizing its operations in interstate

and foreign commerce as a common carrier by motor vehi-

cles of household goods. In 1939, Allied also applied for

a certificate as a new operation. In September of 1940 both

applications were denied by the Interstate Commerce

Commission.

From 1936 to 1945 Allied sought status as a motor carrier

under the Act and submitted various schemes to convince

the Interstate Commerce Commission that Allied would

exercise the required dominion and control over shipments

moving in interstate and foreign commerce. None of the

plans involved the surrender by the Allied members of

their rights as motor carriers in interstate and foreign

commerce. The Interstate Commerce Commission rejected

these applications.

Finally in 1945, Allied Van Lines and the independent

warehousemen joined in an application before the Inter-

state Commerce Commission. In this application the indi-

vidual members agreed to assign their interstate rights to

Allied and Allied agreed in return to enter into an AVL-1 —

contract, lease the members equipment, and each member

would obtain one share of voting stock of Allied. The share

of stock had a book value of $10.00 and must be surrendered

for that sum when a holder is no longer an Agent. It is

important to recognize at this point, that Jarboe perma-

nently deprived itself of any right to conduct interstate

business other than through Allied by surrendering its in-

terstate right to Allied in return for the AVL-1 contract.

The principal party who was responsible for drawing up

the AVL-1 contract was an attorney by the name of John

R, Turney, Esq. Mr. Turney was a specialist in interstate

commerce matters. Mr. Turney testified before the Inter-

state Commerce Commission on behalf of Allied regarding

the nature of ‘the transaction and the rights assigned by

members and the contract they received from Allied.

Mr. Turney was questioned by tise Commission in regard

to cancellation of a contract between Allied and an Agent.

Mr. Turney testified that the contract provided for reason-

able rules and regulations to be made by Allied and would

BL are a oe AE a ee — ne

7

put the question of reasonable rules and regulations to a

determination by a court or Board of arbitrators.

The AVL-1 contract allegedly breached by Jarboe is set

forth as follows:

“2.1 To perform and discharge loyally, diligently and

efficiently, all the duties and responsibilities of such

agency and employment, under Carrier’s complete arid

exclusive control, direction and supervision and in

strict compliance with Carrier’s then reasonable rules

and regulations, as well as with all laws, orders and

regulations of competent governmental authority.”

It is important to note at this time that this contract

referred exclusively to interstate shipment of household

goods and did not deai in any way with intrastate shipment.

On December 2, 1966, J. Dayton Ford, General Counsel

of Allied wrote to Feit that his adjudication of guilt placed

him in breach of his agency contract and that his agency

had been rendered incapable of performing its duties.

After the receipt of Mr. Ford’s letter Jarboe wrote to

Allied asking what it could do to remedy any breach of

which it was guilty, and had expressed a willingness fully

to perform under the contract. After further correspond-

ence, on April 13, 1967, notice of cancellation was sent to

Jarboe. As a result of action by Allied, Jarboe filed suit

for an injunction to enjoin the termination of the contract.

REASONS FOR GRANTING THE WRIT

This is a case which involves a contract between Allied

Van Lines, one of the largest household movers in the

United States, with 1,195 agencies and branches, including

160 outside of the United States, and one of its agents. It,

therefore, involves an important question of contract law

which relates to interstate commerce under the commerce

8

clause of the Constitution of the United States. More im-

portant, however, there has been a complete lack of due

process under the Fifth and Fourteenth Amendments of the

Constitution of the United States. The guarantee of due

process protects property rights and certainly the contract

between Allied and Jarboe was a valid contract and as such

a property right which would come under the protection

ef the due process clause. The denial of a vested right

is a deprivation of property without due process of law. See

Bayside Fish Flour Co. v. Gentry, 297 U.S. 422, and Pru-

dential Insurance Co. v. Cheek, 259 U.S. 530.

The Board of Directors of Allied was without power to

remove Jarboe as an Agent by the cancellation of its con-

tract. If, however, they had that right due process re-

quired that Jarboe be given full and formal notice of the

charges, a hearing and an opportunity to defend the

charges, in addition to confront the witnesses against it.

See Nametra, Inc. v. American Society of Travel Agents,

Inc., 211 N.Y.S. 2d 655, and Central Bus Operators, Inc. v.

Central Avenue Bus Owners Association, 128 N.J. Eq. 177,

15 A. 2d 608.

It is argued that simply because the injunction proceed-

ing was heard in Court and both sides were aired this

would satisfy due process, however, this still does not take

away the right of Jarboe to have an intra-corporate hear-

ing. The AVL-1 contract provided that the agent would

have a right to cure or remedy any breach of a contract

within ninety days of notice by Allied, however, other than

a casual suggestion by counsel for Allied, Jarboe was never

given an opportunity tv find out what did constitute a cur-

ing of the breach. This again would constitute a deprivation

of property without due process.

9

When Jarboe became an agent ior Allied it irrevocably

gave up rights to operate in eleven states in interstate

commerce. These rights inured to the benefit of Allied and

remain a property right vested in them. Certainly if the

Interstate Commerce Commission were to file charges

against Jarboe, if Jarboe still retained the interstate rights,

Jarboe would be entitled to a hearing before the Interstate

Commerce Commission and if dissatisfied with their find-

ings, could then go into Federal Court for a decision as to

the validity of their findings. There admittedly was no

notice of the charges given to Jarboe prior to the meeting

of the Board of Directors of Allied on November 16th-

18th, 1966, when it was decided that the contract of Jarboe

was to be cancelled. This was unilateral action arbitrary

and unreasonable and completely lacking in due process of

law. It was, therefore, illegal and a nullity.

CONCLUSION

The Petition for Writ of Certiorari should be granted.

Respectfully submitted,

Howarp G, REAMER,

223 Equitable Building,

Baltimore, Maryland 21202,

Attorney for Petitioner.

la

APPENDIX A

UNITED States COuRT OF APPEALS

For THE FourtuH Circuit

No. 11,861

JARBOE Bros. STORAGE WAREHOUSES, INC.,

Appellant,

Vv.

ALLIED VAN LInNEs, INc.,

Appellee.

APPEAL FROM THE UNITED STATES Districr Court

FOR THE DistTrRicT OF MARYLAND, AT BALTIMORE

(Frank A. Kaurman, District Judge)

(Argued March 7, 1968 Decided September 5, 1968.)

Before Haynsworth, Chief Judge, Butzner, Circuit Judge,

and Merhige, District Judge.

Hamilton O’Dunne (Patrick A. O’Doherty on brief) for

Appellant, and Francis D. Murnaghan, Jr., (Joseph H.

H. Kaplan and James W. Tallant on brief) for Appellee.

Butzne_r, Circuit Judge:

After the president of Jarboe Bros. Storage Warehouses,

Inc., was convicted of a felony for submitting false trans-

portation bids, Allied Van Lines, Inc., canceled Jarboe’s

agency contract. Jarboe sued to enjoin cancellation. The

district court — conc'uding that Jarboe had breached the

2a

contract, that the breach had not been cured, and that the

procedure Allied followed in terminating the contract was

proper — granted Allied’s motion for dismissal under Fed-

eral Rule of Civil Procedure 41(b) and denied the injunc-

tion. We affirm.

Allied was formed as a not-for-profit corporation under

the general corporation laws of Delaware by a number of

independent warehousemen. It was designed to provide

nationwide business for individual carriers of household

goods, primarily by assuring that return loads would be

available on long distance hauls. In 1945, in order to permit

Allied to qualify as a carrier with the Interstate Commerce

Commission under the Motor Carrier Act, its individual

members agreed to assign their operating rights to trans-

port household goods in interstate or foreign commerce to

Allied for the nominal sum of one dollar. Each became a

stockholder in Allied by purchasing one share of its capital

stock for ten dollars and -ntered into a noncarrier agency

agreement with Allied. No dividends, other than possible

liquidating dividends upon dissolution of Allied, are pay-

able upon the common stock, and all revenues are returned

to the agents who originated them after deducting pro rata

the cost of Allied’s business. The agents agreed to sell to

Allied their shares of common stock at par value or book

value, whichever is greater, upon cessation of their agen-

cies. Although Allied conducts intrastate operations in 13

states, it is primarily an interstate carrier. It is not licensed

to carry on intrastate business in Maryland.

Jarboe transferred to Allied its interstate rights for

eleven states and the District of Columbia. In turn, it re-

ceived a share of common stock and a non-carrier agency

contract. Allied did not purchase Jarboe’s intrastate busi-

ness. In 1961 Lester J. Feit acquired all the outstanding

stock of Jarboe and became its president.

In 1966 the United States District Court for the District

of Maryland fined Feit $21,000 and imposed an 18 months

suspended sentence upon his plea of guilty to an indictment

charging mail fraud and submitting false bids to a federal

agency. Feit, as president of Jarboe, had submitted infiated

_

bids for the intrastate moving of three companies dislo-

cated by federal urban renewal projects. He had used

Jarkoe’s stationery which displayed the Allied name and

mark. To make his bids seem competitive, Feit had forged

higher bids on the stationery of another Allied agent, Cap-

ital Moving & Storage Co. This stationery also bore Allied’s

name and mark. Jarboe’s truck bearing Allied’s name was

used in connection with one of the moves.

%

Jarboe first contends the contract was not breached be-

cause it imposed obligations on the parties only when

Jarboe was handling a shipment in interstate or foreign

commerce, and here the hauls were entirely within Mary-

land. We reject this argument.

An agent impliedly covenants that he will conduct him-

self with such decency that he will not injure his employer.

See 9 Williston, Contracts, Sec. 1014A (3d ed. 1967). This

duty of good conduct has been summarized as follows:

“Unless otherwise agreed, an agent is subject to a duty

not to conduct himself with such impropriety that he

brings disrepute upon the principal or upon the busi-

ness in which he is engaged. ...” Restatement (Second)

of Agency, Sec. 380 (1958).

The commission of a serious crime is mentioned in the

Restatement comment as one type of ccnduct that may

breach the agent’s duty. Feit’s use of Allied’s name to

achieve his illegal advantage clearly violated the implied

duty of good conduct Jarboe owed Allied.

Feit’s. crime also breached paragraph 2 of the agency

contract, in which Jarboe covenanted:

“To perform and discharge loyally, diligently and

efficiently, all the duties and responsibilities of such

agency and employment, under Carrier’s complete and

exclusive control, direction and supervision and in

strict compliance with Carrier’s then reasonable rules

and regulations, as well as with all laws, orders and

regulations of competent governmental authority.”

Pe en ee,

4a

The fact that the fraud involved intrastate shipments does

not absolve Jarboe. Allied conducts intrastate operations

in a number of states and uses the same contracts, drivers’

manual, rules and regulations, offices and personnel for

them as it does for interstate business. Its agents use their

equipment and vehicles for both interstate and intrastate

shipments. The agency contract did not expressly restrict

Jarboe’s rights and duties te interstate shipments. Jarboe

had the right to use its stationery and vehicles bearing

_\llied’s name and mark in the transaction of its intrastate

business. And the public had no way of telling whether

Jarboe was acting in its own capacity or for Allied.

YI.

Jarboe next contends that even if the contract were

breached, Allied’s board of directors wrongfully took the

position that Feit’s conviction was a breach that could not

be cured. It relies on paragraph 3 of the contract, which

provides:

“3. The Parties mutually covenant:

“3.1 The term hereof shall be for a period of one

(1) year from date and thereafter until terminated as

follows: Agent may terminate this contract with or

without cause upon ninety (90) days written notice

<o Carrier; Carrier may terminate this contract upon

ten (10) days notice to Agent if and only if

“Agent for a period of ninety (90) days after

notice by the Carrier so to do shali fail or refuse

to cure or remedy any breach by him of this agree-

ment claimed by the Carrier in such notice, unless

within such period the Agent shall either

“(1) demand arbitration as provided in section

3.2 hereof, in which case the contract may be

terminated by the Carrier if Agent shall fail

fully to comply with the award of such arbi-

tration within thirty (30) days after notice

so to do; or

5a

“(2) file an action or suit in « court of competent

jurisdiction to enjoin such termination in

which case the contract may be terminated

by the Carrier if and only if there shall be no

final decree or judgment of such court en-

joining such termination.”

The district judge properly held this paragraph entitled

Jarboe to an opportunity to cure the breach. But his find-

ings of fact do not support Jarboe’s contention that the

board of directors tock the position that the breach was

incurable. The trial judge found, first, that Jarboe was

given an opportunity to cure the breach and, second, that it

did not do so. These two findings are amply supported by

the record and are therefore binding on us under Rule 52

of the Federal Rules of Civil Procedure.

A month after Feit had pleaded guilty, the general

counsel of Allied, at the direction of the board of directors,

wrote Jarboe that Feit’s conviction breached the agency

contract. He also told Jarboe that its failure to remedy

the breach within 90 days would result in termination of

the contract ten days after the expiration of the 90-day

period. Jarboe’s secretary replied that Jarboe would en-

deavor to cure the breach by performing loyally, diligently

and efficiently all the duties and responsibilities of the

agency and that unless it failed to do so within 90 days,

the contract could not be canceled. Later Jarboe’s counsel

suggested that some period of probation be worked out.

As a possible cure, Allied’s counsel suggested devestiture

of Feit’s interest, an end to his relationship, and 2 change

in agency name. Jarboe took no steps to do this. It con-

tinued Feit in control of its business. It also rejected

Allied’s offer to substitute a contract thet could be can-

celed by Allied for cause without affording Jarboe an op-

portunity to remedy any breach. In the meantime, Jarboe

was disqualified by the army from carrying household

goods. Finally, on April 27, 1967, almost five months after

its initial notice, Allied as hs the agency contract.

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Jarboe next argues that the procedure adopted to cancel

its contract was arbitrary and illegal. It contends that can-

cellation, carrying with it the obligation to surrender stock,

is not permitted by the law of Delaware where Allied is

incorporated. It also asserts that even if the contract could

be canceled, the board of directors did not have the author-

ity to do so. In support of its position it relies on Frezzo

v. Delaware Mushroom Co-op., 38 Del. Ch. 370, 152 A. 2d

303 (1959), which held that a corporation organized under

Delaware statutes creating agricultural associations was

not empowered to expel a member. Jarboe also relies on

State ex rel. Boldt v. St. Cloud Milk Producers’ Ass’n, 201

Minr. 1, 273 N.W. 603 (1937), which held that, in the ab-

sence of a bylaw, the board of directors of a co-operative

created under Minnesota’s Co-operative Marketing Act

could not expel a member.

Neither of these cases is applicable. A contract expressly

permits the termination of Jarboe’s agency and outlines

the procedure to accomplish this. In the cases cited by

Jarboe no similar contracts existed. Furthermore, the gen-

eral corporation law of Delaware provides for management

of a corporation by its board of directors and authorizes

the board to secure the fidelity of its agents.1 Also, Allied’s

certificate of incorporation provides that if the holder of

stock ceases to be an agent, he shall offer his stock for sale

to the corporation. Finally, the provisions in the contract

which allow the cancellation of the agency agreement and

the consequent re-purchase of stock held by the agent do

not violate public policy, as Jarboe contends. They are

reasonable, contractual sanctions to insure the honesty of

Allied’s agents.

Jarboe also urges that Aliied’s failure to proceed under

section 27 of its bylaws invalidates the cancellation of the

contract. Section 27 creates a complaint committee to con-

sider and report to the board of directors all complaints

made against agents. After notice to the agent anc a hear-

1 Del. Code Ann. tit. 8, ch. 1, Secs. 141(a), 142(c), (1953).

ee ee ee . —<_-_.

Ta

ing, the committee may make recommendations for pen-

alties, including cancellation of the agent’s contract. The

board of directors is authorized to review the recommenda-

tions, together with the objections of the agent, and en-

force the penalty. The bylaws, however, do not require

that this procedure be followed in every case. They make

it “supplemental to and not in limitation of the general

powers of the Board of Directors of the Corporation te deal

with particular agents and circumstances so as to protect

and enhance the best interests of the Corporation . . .”

The contract entitled Jarboe to notice and a hearing

before its agency was terminated. These requirements

were satisfied. Allied gave specific notice of the reason for

the cancellation in the letter written by its general counsel.

By contract the parties had dispensed with an intra-cor-

porate hearing, and substituted proceedings before an arbi-

trator or a court at the option of the agent. Jarboe elected

to have its hearing before a court.? The district judge was

alert to the critical part the application for an injunction

played in the contractual and corporate relationship of the

parties. Over Allied’s protests, he declined to apply such

conventional defenses as an adequate remedy at law and

unclean hands. He correctly interpreted the contract to

require an independent appraisal of the conduct of both

parties in order to determine whether termination was

permissible.

The judgment is

AFFIRMED.

2 Jarboe appeared with counsel before the Allied board of directors

in February 1967 to oppose the termination of its contract. While the

opportunity afforded Jarboe to present its position at this intra-

corporate meeting lends support to Allied’s contention that Jarboe

was not denied due process, the case does not turn on the adequacy

of this hearing.

8a

APPENDIX B

AMENDMENTS TO THE CONSTITUTION OF THE

UNITED STATES OF AMERICA

ARTICLE V

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indict-

ment of a Grand Jury, except in cases arising in the land

or naval forces, or in the militia, when in actual service

in time of war or public danger; nor shall any person be

subject for the same offense to be twice put in jeopardy

of life or limb; nor shall be compelled in any criminal

case to be a witness against himself, nor be deprived of life,

liberty, or property, without due process of law; nor shall

private property be taken for public use, without just

compensation.

ARTICLE XIV — SEcTION 1

All persons born or naturalized in the United States, and

subject to the jurisdiction thereof, are citizens of the

United States and of the State wherein they reside. No

State shall make or enforce any law which shall abridge

the privileges or immunities of citizens of the United

States; nor shall any State deprive any person of life, lib-

erty, or property, without due process of law; nor deny

to any person within its jurisdiction the equal protection

of the laws.

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= : ms bs 8 a

> aa

4. Soe

= i

,\ =e

i

>. oa

aa. 2

Se

rw eer

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